Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of September 26, 2025. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 26, 2025.
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Richards Manufacturing Acquisition
We acquired Richards Manufacturing on April 1, 2025. For additional information regarding the acquisition, see Note 4 to the Consolidated Financial Statements.
SEC guidance permits management to omit an assessment of an acquired business’ internal control over financial reporting from management’s assessment of internal control over financial reporting for a period not to exceed one year from the date of acquisition. We are in the process of integrating the Richards Manufacturing operations within our internal control structure. Accordingly, we have excluded Richards Manufacturing from our annual assessment of internal control over financial reporting as of September 26, 2025.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded our internal control over financial reporting was effective as of September 26, 2025.
As discussed above, management has excluded Richards Manufacturing from the assessment of internal control over financial reporting. Richards Manufacturing represented 8% of total assets and 1% of total net sales on the Consolidated Financial Statements as of and for the fiscal year ended September 26, 2025.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies and procedures may deteriorate.
Deloitte & Touche LLP, an independent registered public accounting firm, has issued an attestation report on our internal control over financial reporting as of September 26, 2025, which is included in this Annual Report.
Changes in Internal Control Over Financial Reporting
During the quarter ended September 26, 2025, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
Rule 10b5-1 Trading Arrangements
In the quarter ended September 26, 2025, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted or terminated a plan for the purchase or sale of our securities intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or a non-Rule 10b5-1 trading arrangement for the purchase or sale of our securities, within the meaning of Item 408 of Regulation S-K except the following:
● In the quarter ended September 26, 2025, Terrence R. Curtin , Chief Executive Officer and Director , adopted a plan for the sale of our securities intended to satisfy the affirmative defense conditions of Rule 10b5 - 1(c). Mr. Curtin’s plan was adopted August 20, 2025 and expires January 9, 2026 , and provides for the potential sale of up to (i) 50% of the net ordinary shares that vest in December 2025 pursuant to the performance stock unit award granted to Mr. Curtin in November 2022, with such sale to occur no earlier than December 18, 2025 and (ii) potential sale of the remaining net ordinary shares that vest in December 2025 pursuant to the performance stock unit award granted to Mr. Curtin in November 2022, with such sale to occur no earlier than December 19, 2025.
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● In the quarter ended September 26, 2025, Heath A. Mitts , Chief Financial Officer and Director , adopted a plan for the sale of our securities intended to satisfy the affirmative defense conditions of Rule 10b5-1(c). Mr. Mitts’s plan was adopted August 21, 2025 and expires December 31, 2025 , and provides for the potential sale of up to (i) 50% of the net ordinary shares that vest in December 2025 pursuant to the performance stock unit award granted to Mr. Mitts in November 2022, with such sale to occur no earlier than December 18, 2025 and (ii) potential sale of the remaining net ordinary shares that vest in December 2025 pursuant to the performance stock unit award granted to Mr. Mitts in November 2022, with such sale to occur no earlier than December 19, 2025.
The trading plans described above were entered into during an open insider trading window and were in compliance with our insider trading policies and procedures. Actual sale transactions will be disclosed publicly in filings with the SEC in accordance with applicable securities laws, rules, and regulations.
Appointment of Director
On November 10, 2025, our board of directors appointed Kenneth Washington as a director of the Company, and the number of directors constituting the full board was increased from 12 to 13. Mr. Washington’s appointment to the board is effective November 17, 2025. Mr. Washington was appointed to serve on the management, development, and compensation committee of the board and will receive compensation for services as a non-employee director consistent with the compensation generally provided to our other non-employee directors. There are no arrangements or understandings between the new director and any other person pursuant to which he was selected as a director, and there are no transactions involving the Company and the new director that we would be required to report pursuant to Item 404(a) of Regulation S-K.
Mr. Washington will enter into standard indemnification agreements with us and TE Connectivity Corporation, our wholly-owned subsidiary. Our form of deed of indemnification and form of indemnification agreement with TE Connectivity Corporation were filed as Exhibit 10.2 and Exhibit 10.3, respectively, to our Form 8-K filed with the SEC on September 30, 2024.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not Applicable.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information concerning directors, executive officers, and corporate governance may be found under the captions “Agenda Item No. 1—Election of Directors,” “Nominees for Election,” “Corporate Governance,” “The Board of Directors and Board Committees,” and “Executive Officers” in our definitive proxy statement for our 2026 Annual General Meeting of Shareholders (the “2026 Proxy Statement”), which will be filed with the SEC within 120 days after the close of our fiscal year. Such information is incorporated herein by reference. The information in the 2026 Proxy Statement under the caption “Delinquent Section 16(a) Reports” is incorporated herein by reference.
Code of Ethics
We have adopted a guide to ethical conduct, which applies to all employees, officers, and directors. Our Guide to Ethical Conduct meets the requirements of a “code of ethics” as defined by Item 406 of Regulation S-K and applies to our Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer, as well as all other employees and directors. Our Guide to Ethical Conduct also meets the requirements of a code of business conduct and ethics under the listing standards of the NYSE. Our Guide to Ethical Conduct is posted on our website at www.te.com under the heading “About TE—Corporate Responsibility—Corporate Responsibility Disclosures—Ethics and Compliance.” We also will provide a copy of our Guide to Ethical Conduct to shareholders upon request. We intend to disclose any amendments to our Guide to Ethical Conduct, as well as any waivers for executive officers or directors, on our website.
Insider Trading Policies and Procedures
We have adopted insider trading policies and procedures governing the purchase, sale, and/or other dispositions of our securities by directors, officers, and employees, or by us, that are reasonably designed to promote compliance with insider trading laws, rules, and regulations, and the listing standards of the NYSE. Copies of such policies and procedures can be found in Exhibits 19.1 and 19.2.
ITEM 11. EXECUTIVE COMPENSATION
Information concerning executive compensation may be found under the captions “Compensation Discussion and Analysis,” “Management Development and Compensation Committee Report,” “Compensation Committee Interlocks and Insider Participation,” “Executive Officer Compensation,” “CEO Pay Ratio,” and “Compensation of Non-Employee Directors” in our 2026 Proxy Statement. Such information is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information in our 2026 Proxy Statement under the caption “Security Ownership of Certain Beneficial Owners and Management” is incorporated herein by reference.
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Equity Compensation Plan Information
The following table provides information as of fiscal year end 2025 with respect to ordinary shares issuable under our equity compensation plans:
Number of securities
remaining available for
Number of securities
future issuance under
to be issued upon
Weighted ‑ average
equity compensation
exercise of outstanding
exercise price of
plans (excluding
options, warrants
outstanding options,
securities reflected
and rights
warrants and rights
in column (a))
Plan Category
(a)
(b) (3)
(c) (4)
Equity compensation plans approved by security holders (1)
5,743,975
$
128.23
21,069,449
Equity compensation plans not approved by security holders (2)
97,300
86.02
—
Total
5,841,275
21,069,449
(1) Includes securities issuable upon exercise of outstanding options and rights under the TE Connectivity plc 2024 Stock and Incentive Plan, amended and restated as of September 30, 2024 (the “2024 Plan”); the TE Connectivity plc 2007 Stock and Incentive Plan, amended and restated as of September 30, 2024 (the “2007 Plan”); and the TE Connectivity plc Savings Related Share Plan, amended and restated as of September 30, 2024. The 2024 Plan provides for the award of annual performance bonuses and long-term performance awards, including share options; restricted, performance, and deferred share units; and other share-based awards (collectively, “Awards”) to board members, officers, and non-officer employees. The 2024 Plan provides for a maximum of 19,939,500 ordinary shares to be issued as Awards, subject to adjustment as provided under the terms of the plan. No additional grants will be made from the 2007 Plan and previously granted awards under the 2007 Plan will continue to be settled in our ordinary shares.
(2) In connection with an acquisition in fiscal 2011, we assumed equity awards issued under plans sponsored by the acquired business and the remaining pool of shares available for grant under the plans. Subsequent to the acquisition, we registered 6,764,455 shares related to the plans via Forms S-3 and S-8. Those plans have since expired, and no additional grants will be made from them. Previously granted awards under the plans will continue to be settled in our ordinary shares.
(3) Does not take into account restricted, performance, or deferred share unit awards that do not have exercise prices.
(4) Includes securities remaining available for future issuance under the 2024 Plan; the TE Connectivity plc Savings Related Share Plan, amended and restated as of September 30, 2024; and the TE Connectivity plc Employee Stock Purchase Plan, amended and restated as of September 30, 2024. The 2024 Plan applies a weighting of 1.80 to outstanding nonvested restricted, performance, deferred share units, and other share-based awards. The remaining shares issuable under the 2024 Plan and the TE Connectivity plc Savings Related Share Plan are increased by forfeitures and cancellations, among other factors. Amounts include 842,034 shares remaining available for issuance under our TE Connectivity plc Savings Related Share Plan and 2,522,788 shares remaining available for issuance under our TE Connectivity plc Employee Stock Purchase Plan.
ITEM 13 . CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information in our 2026 Proxy Statement under the captions “Corporate Governance,” “The Board of Directors and Board Committees,” and “Certain Relationships and Related Transactions” is incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information in our 2026 Proxy Statement under the caption “Agenda Item No. 2—Appointment of Auditors and Authority to Set Remuneration” is incorporated herein by reference.
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PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) 1. Financial Statements. See “Part II. Item 8. Financial Statements and Supplementary Data”
2.
Financial Statement Schedule. See “Part II. Item 8. Financial Statements and Supplementary Data”
3.
Exhibit Index:
Exhibit
Incorporated by Reference Herein
Number
Description
Form
Exhibit
Date Filed with the SEC
2.1
Merger Agreement between TE Connectivity Ltd. and TE Connectivity plc
Current Report on Form 8-K
2.1
March 18, 2024
2.2
Transaction Agreement, dated February 11, 2025, by and among OCM Power V AIV Holdings (Delaware), L.P., OCM Power VI AIV Holdings (Delaware), L.P., OCM Power V Relay CTB, LLC, OCM Power VI Relay CTB, LLC , Relay Holding, LLC, TE Connectivity Corporation, Stella I LLC, TE Connectivity PLC, and OCM Power V AIV Holdings (Delaware), L.P. (1)
Quarterly Report on Form 10-Q for the quarterly period ended March 28, 2025
2.1
April 28, 2025
3.1
Memorandum and Articles of Association of TE Connectivity plc, dated September 30, 2024
Current Report on Form 8-K
3.1
September 30, 2024
4.1
*
Description of Registrant’s Securities
4.2(a)
Indenture among Tyco Electronics Group S.A., as issuer, Tyco Electronics Ltd., as guarantor, and Deutsche Bank Trust Company Americas, as trustee, dated September 25, 2007
Annual Report on Form 10-K for the fiscal year ended September 28, 2007
4.1(a)
December 14, 2007
4.2(b)
Third Supplemental Indenture among Tyco Electronics Group S.A., as issuer, Tyco Electronics Ltd., as guarantor, and Deutsche Bank Trust Company Americas, as trustee, dated September 25, 2007
Annual Report on Form 10-K for the fiscal year ended September 28, 2007
4.1(d)
December 14, 2007
4.2(c)
Thirteenth Supplemental Indenture among Tyco Electronics Group S.A., as issuer, TE Connectivity Ltd., as guarantor, and Deutsche Bank Trust Company Americas, as trustee, dated January 28, 2016
Current Report on Form 8-K
4.1
January 28, 2016
4.2(d)
Fourteenth Supplemental Indenture among Tyco Electronics Group S.A., as issuer, TE Connectivity Ltd., as guarantor, and Deutsche Bank Trust Company Americas, as trustee, dated August 3, 2017
Current Report on Form 8-K
4.2
August 3, 2017
4.2(e)
Seventeenth Supplemental Indenture among Tyco Electronics Group S.A., as issuer, TE Connectivity Ltd., as guarantor, and Deutsche Bank Trust Company Americas, as trustee, dated February 16, 2021
Current Report on Form 8-K
4.1
February 16, 2021
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Exhibit
Incorporated by Reference Herein
Number
Description
Form
Exhibit
Date Filed with the SEC
4.2(f)
Eighteenth Supplemental Indenture among Tyco Electronics Group S.A., as issuer, TE Connectivity Ltd., as guarantor, and Deutsche Bank Trust Company Americas, as trustee, dated February 4, 2022
Current Report on Form 8-K
4.1
February 4, 2022
4.2(g)
Nineteenth Supplemental Indenture among Tyco Electronics Group S.A., as issuer, TE Connectivity Ltd., as guarantor, and Deutsche Bank Trust Company Americas, as trustee, dated February 13, 2023
Current Report on Form 8-K
4.1
February 13, 2023
4.2(h)
Twentieth Supplemental Indenture among Tyco Electronics Group S.A., as issuer, TE Connectivity Ltd., as guarantor, and Deutsche Bank Trust Company Americas, as trustee, dated August 2, 2024
Current Report on Form 8-K
4.1
August 2, 2024
4.2(i)
Twenty First Supplemental Indenture among Tyco Electronics Group S.A., TE Connectivity Ltd., TE Connectivity plc, TE Connectivity Switzerland Ltd., and Deutsche Bank Trust Company Americas, dated September 24, 2024
Current Report on Form 8-K
4.1
September 30, 2024
4.2(j)
Amended and Restated Indenture among Tyco Electronics Group S.A., as issuer, TE Connectivity plc, as parent guarantor, TE Connectivity Switzerland Ltd., as additional guarantor, and Deutsche Bank Trust Company Americas, as trustee, dated January 31, 2025
Current Report on Form 8-K
4.1
January 31, 2025
4.2(k)
First Supplemental Indenture among Tyco Electronics Group S.A., as issuer, TE Connectivity plc, as parent guarantor, TE Connectivity Switzerland Ltd., as additional guarantor, and Deutsche Bank Trust Company Americas, as trustee, dated January 31, 2025
Current Report on Form 8-K
4.2
January 31, 2025
4.2(l)
Second Supplemental Indenture among Tyco Electronics Group S.A., as issuer, TE Connectivity plc, as parent guarantor, TE Connectivity Switzerland Ltd., as additional guarantor, and Deutsche Bank Trust Company Americas, as trustee, dated May 6, 2025
Current Report on Form 8-K
4.1
May 6, 2025
4.2(m)
Third Supplemental Indenture among Tyco Electronics Group S.A., as issuer, TE Connectivity plc, as parent guarantor, TE Connectivity Switzerland Ltd., as additional guarantor, and Deutsche Bank Trust Company Americas, as trustee, dated May 9, 2025
Current Report on Form 8-K
4.1
May 9, 2025
4.2(n)
Fourth Supplemental Indenture among Tyco Electronics Group S.A., as issuer, TE Connectivity plc, as parent guarantor, TE Connectivity Switzerland Ltd., as additional guarantor, and Deutsche Bank Trust Company Americas, as trustee, dated May 9, 2025
Current Report on Form 8-K
4.2
May 9, 2025
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Exhibit
Incorporated by Reference Herein
Number
Description
Form
Exhibit
Date Filed with the SEC
10.1
Second Amended and Restated Five-Year Senior Credit Agreement, dated April 24, 2024, by and among Tyco Electronics Group S.A., as borrower, TE Connectivity Ltd., as parent guarantor, the lenders party thereto, and Bank of America, N.A., as administrative agent
Current Report on Form 8-K
10.1
April 25, 2024
10.2
Assumption and Joinder Agreement, dated September 24, 2024, by TE Connectivity plc, TE Connectivity Switzerland Ltd. , and Bank of America, N.A., as administrative agent under that certain Second Amended and Restated Credit Agreement, dated April 24, 2024
Current Report on Form 8-K
10.1
September 30, 2024
10.3
‡
TE Connectivity Annual Incentive Plan (as Amended and Restated)
Annual Report on Form 10-K for the fiscal year ended September 27, 2024
10.3
November 12, 2024
10.4
‡
TE Connectivity plc 2007 Stock and Incentive Plan (Amended and Restated as of September 30, 2024)
Current Report on Form 8-K
10.7
September 30, 2024
10.5
‡
TE Connectivity plc 2010 Stock and Incentive Plan (Amended and Restated as of September 30, 2024)
Current Report on Form 8-K
10.9
September 30, 2024
10.6
‡
TE Connectivity plc 2024 Stock and Incentive Plan (Amended and Restated as of September 30, 2024)
Current Report on Form 8-K
10.5
September 30, 2024
10.7
‡
TE Connectivity plc Employee Stock Purchase Plan (Amended and Restated as of September 30, 2024)
Current Report on Form 8-K
10.6
September 30, 2024
10.8
‡
Form of Option Award Terms and Conditions
Quarterly Report on Form 10-Q for the quarterly period ended December 24, 2010
10.3
January 24, 2011
10.9
‡
Form of Option Award Terms and Conditions for Option Grants Beginning in November 2017
Annual Report on Form 10-K for the fiscal year ended September 29, 2017
10.8
November 14, 2017
10.10
‡
Form of Option Award Terms and Conditions for Option Grants Beginning in November 2019
Annual Report on Form 10-K for the fiscal year ended September 27, 2019
10.8
November 12, 2019
10.11
‡
Form of Option Award Terms and Conditions for Option Grants Beginning in November 2020
Quarterly Report on Form 10-Q for the quarterly period ended December 25, 2020
10.1
January 28, 2021
10.12
‡
Form of Option Award Terms and Conditions for Option Grants Beginning in November 2021
Annual Report on Form 10-K for the fiscal year ended September 30, 2022
10.11
November 15, 2022
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Exhibit
Incorporated by Reference Herein
Number
Description
Form
Exhibit
Date Filed with the SEC
10.13
‡
Form of Option Award Terms and Conditions for Option Grants Beginning in November 2024
Current Report on Form 8-K
10.10
September 30, 2024
10.14
‡
Form of Restricted Stock Unit Award Terms and Conditions for RSU Grants Beginning in November 2021
Annual Report on Form 10-K for the fiscal year ended September 30, 2022
10.14
November 15, 2022
10.15
‡
Form of Restricted Stock Unit Award Terms and Conditions for RSU Grants Beginning in November 2024
Current Report on Form 8-K
10.11
September 30, 2024
10.16
‡
Form of Performance Stock Unit Award Terms and Conditions for Performance Cycles Starting in and After Fiscal Year 2022
Annual Report on Form 10-K for the fiscal year ended September 30, 2022
10.17
November 15, 2022
10.17
‡
Form of Performance Stock Unit Award Terms and Conditions for Performance Cycles Starting in and After Fiscal Year 2024
Current Report on Form 8-K
10.12
September 30, 2024
10.18
‡
TE Connectivity Change in Control Severance Plan for Certain U.S. Executives (Amended and Restated as of September 30, 2024)
Annual Report on Form 10-K for the fiscal year ended September 27, 2024
10.20
November 12, 2024
10.19
‡
TE Connectivity Severance Plan for U.S. Executives (Amended and Restated as of September 30, 2024)
Annual Report on Form 10-K for the fiscal year ended September 27, 2024
10.21
November 12, 2024
10.20
‡*
TE Connectivity Supplemental Savings and Retirement Plan (Amended and Restated as of January 1, 2025)
10.21
‡
TE Connectivity plc Savings Related Share Plan (Amended and Restated as of September 30, 2024)
Current Report on Form 8-K
10.8
September 30, 2024
10.22
Form of Deed of Indemnification for directors and executive officers of TE Connectivity plc
Current Report on Form 8-K
10.2
September 30, 2024
10.23
Form of Indemnification for directors and executive officers of TE Connectivity plc
Current Report on Form 8-K
10.3
September 30, 2024
10.24
‡
Employment Agreement between Terrence R. Curtin and Tyco Electronics Corporation dated December 15, 2015, as amended
Annual Report on Form 10-K for the fiscal year ended September 27, 2024
10.26
November 12, 2024
10.25
‡
Employment Agreement between Heath A. Mitts and Tyco Electronics Corporation dated September 30, 2016, as amended
Annual Report on Form 10-K for the fiscal year ended September 27, 2024
10.28
November 12, 2024
10.26
‡
Employment Agreement between John S. Jenkins and Tyco Electronics Corporation dated December 15, 2015, as amended
Annual Report on Form 10-K for the fiscal year ended September 27, 2024
10.29
November 12, 2024
10.27
‡
Employment Agreement between Shad Kroeger and TE Connectivity Corporation dated February 23, 2018
Quarterly Report on Form 10-Q for the quarterly period ended December 25, 2020
10.4
January 28, 2021
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Exhibit
Incorporated by Reference Herein
Number
Description
Form
Exhibit
Date Filed with the SEC
10.28
‡
Employment Agreement between Aaron Stucki and TE Connectivity Corporation dated October 1, 2020, as amended
Annual Report on Form 10-K for the fiscal year ended September 27, 2024
10.31
November 12, 2024
19.1
TE Insider Trading and Communications with the Public Policy
Annual Report on Form 10-K for the fiscal year ended September 27, 2024
19.1
November 12, 2024
19.2
TE Connectivity plc Policy Relating to Open Market Securities Repurchases and Compliance with Insider Trading Securities Laws
Annual Report on Form 10-K for the fiscal year ended September 27, 2024
19.2
November 12, 2024
21.1
*
Subsidiaries of TE Connectivity plc
22.1
*
Guaranteed Securities
23.1
*
Consent of Independent Registered Public Accounting Firm
24.1
*
Power of Attorney
31.1
*
Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2
*
Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1
**
Certification by the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
97.1
TE Connectivity plc Incentive-Based Compensation Recovery Policy
Annual Report on Form 10-K for the fiscal year ended September 27, 2024
97.1
November 12, 2024
101.INS
*
Inline XBRL Instance Document (2)
101.SCH
*
Inline XBRL Taxonomy Extension Schema Document
101.CAL
*
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
*
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
*
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
*
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104
*
Cover Page Interactive Data File (3)
‡
Management contract or compensatory plan or arrangement
*
Filed herewith
**
Furnished herewith
53
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(1) The schedules to this agreement have been omitted pursuant to Item 601(a)(5) and Item 601(b)(2) of Regulation S-K. We will furnish copies of any of the omitted schedules to the SEC upon its request; however, we may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any schedule so furnished.
(2) The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
(3) Formatted in Inline XBRL and contained in exhibit 101
ITEM 16. FORM 10-K SUMMARY
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
TE CONNECTIVITY PLC
By:
/s/ Heath A. Mitts
Heath A. Mitts
Executive Vice President
and Chief Financial Officer
(Principal Financial Officer)
Date: November 10, 2025
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Terrence R. Curtin
Chief Executive Officer and Director
November 10, 2025
Terrence R. Curtin
(Principal Executive Officer)
/s/ Heath A. Mitts
Executive Vice President,
Heath A. Mitts
Chief Financial Officer and Director
November 10, 2025
(Principal Financial Officer)
/s/ Reuben M. Shaffer
Senior Vice President and
Reuben M. Shaffer
Corporate Controller
November 10, 2025
(Principal Accounting Officer)
*
Director
November 10, 2025
Jean-Pierre Clamadieu
*
Director
November 10, 2025
Carol A. Davidson
*
Director
November 10, 2025
Lynn A. Dugle
*
Director
November 10, 2025
Sam Eldessouky
*
Director
November 10, 2025
William A. Jeffrey
*
Director
November 10, 2025
Syaru Shirley Lin
*
Director
November 10, 2025
Abhijit Y. Talwalkar
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Signature
Title
Date
*
Director
November 10, 2025
Mark C. Trudeau
*
Director
November 10, 2025
Dawn C. Willoughby
*
Director
November 10, 2025
Laura H. Wright
*
John S. Jenkins, Jr., by signing his name hereto, does sign this document on behalf of the above noted individuals, pursuant to powers of attorney duly executed by such individuals, which have been filed as Exhibit 24.1 to this Report.
By:
/s/ John S. Jenkins, Jr.
John S. Jenkins, Jr.
Attorney-in-fact
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TE CONNECTIVITY PLC
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Reports of Independent Registered Public Accounting Firm (PCAOB ID No. 34 )
58
Consolidated Statements of Operations for the Fiscal Years Ended September 26, 2025, September 27, 2024, and September 29, 2023
61
Consolidated Statements of Comprehensive Income for the Fiscal Years Ended September 26, 2025, September 27, 2024, and September 29, 2023
62
Consolidated Balance Sheets as of September 26, 2025 and September 27, 2024
63
Consolidated Statements of Shareholders’ Equity for the Fiscal Years Ended September 26, 2025, September 27, 2024, and September 29, 2023
64
Consolidated Statements of Cash Flows for the Fiscal Years Ended September 26, 2025, September 27, 2024, and September 29, 2023
65
Notes to Consolidated Financial Statements
66
Schedule II—Valuation and Qualifying Accounts
104
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of TE Connectivity plc
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of TE Connectivity plc (formerly TE Connectivity Ltd.) and subsidiaries (the "Company") as of September 26, 2025 and September 27, 2024, the related consolidated statements of operations, comprehensive income, shareholders’ equity, and cash flows, for each of the three years in the period ended September 26, 2025, and the related notes and the schedule listed in the Index at Item 15(a)2 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 26, 2025 and September 27, 2024, and the results of its operations and its cash flows for each of the three years in the period ended September 26, 2025, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of September 26, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated November 10, 2025, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Income Taxes — Realizability of Deferred Tax Assets — Refer to Notes 2 and 15 to the financial statements
Critical Audit Matter Description
The Company recognizes deferred income taxes for temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. A valuation allowance is provided to offset deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Future realization of deferred tax assets depends on the existence of sufficient taxable income of the appropriate character prior to expiration. Sources of taxable income include future reversals of deferred tax assets and liabilities, expected future taxable income, taxable income in prior carryback years if permitted under the tax law, and tax planning strategies. Management has determined that it is more likely than not that sufficient taxable income will be generated in the future to
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realize a portion of its deferred tax assets, and therefore, a valuation allowance of $8.8 billion has been recorded to offset the Company’s gross deferred tax assets as of September 26, 2025 of $11.8 billion.
We identified the realizability of certain deferred tax assets as a critical audit matter because of the Company’s tax structure and the significant judgments and estimates made by management to determine that sufficient taxable income will be generated in the future prior to expiration to realize a portion of its deferred tax assets. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our income tax specialists, when performing audit procedures to evaluate the appropriateness of qualifying tax planning strategies and the reasonableness of management’s estimates of taxable income prior to expiration.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the determination that it is more likely than not that sufficient taxable income will be generated in the future to realize certain deferred tax assets included the following, among others:
• We tested the effectiveness of controls over management’s estimates of the realization of the deferred tax assets, including those over the estimates of taxable income, the approval of tax planning strategies and the determination of whether it is more likely than not that the deferred tax assets will be realized prior to expiration.
• We evaluated the reasonableness of management’s assessment of the significance and weighting of negative evidence and positive evidence that is objectively verifiable.
• We evaluated management’s ability to accurately estimate taxable income by comparing actual results to management’s historical estimates and evaluating whether there have been any changes that would impact management’s ability to continue accurately estimating taxable income.
• We tested the reasonableness of management’s estimates of taxable income by comparing the estimates to:
– Historical taxable income.
– Internal communications to management and the board of directors.
– Management’s history of carrying out its stated plans and its ability to carry out its plans considering contractual commitments, available financing, or debt covenants.
• We evaluated whether the estimates of future taxable income were consistent with evidence obtained in other areas of the audit.
• We evaluated whether the taxable income in prior carryback years was of the appropriate character and available under the tax law.
• With the assistance of our income tax and other specialists, we evaluated (1) the appropriateness of qualifying tax planning strategies, including that they were prudent, feasible and would more likely than not result in the realization of deferred tax assets and (2) management’s assessment that sufficient taxable income will be generated in the future to realize a portion of the deferred tax assets prior to expiration.
/s/ Deloitte & Touche LLP
Philadelphia, Pennsylvania
November 10, 2025
We have served as the Company’s auditor since 2007.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of TE Connectivity plc
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of TE Connectivity plc and subsidiaries (the “Company”) as of September 26, 2025, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 26, 2025, based on criteria established in Internal Control—Integrated Framework (2013) issued by COSO.
As described in Management’s Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Richards Manufacturing Co., which was acquired on April 1, 2025, and whose financial statements constitute 8% of total assets and 1% of total net sales of the consolidated financial statement amounts as of and for the fiscal year ended September 26, 2025. Accordingly, our audit did not include the internal control over financial reporting at Richards Manufacturing Co.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the fiscal year ended September 26, 2025, of the Company and our report dated November 10, 2025, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Deloitte & Touche LLP
Philadelphia, Pennsylvania
November 10, 2025
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TE CONNECTIVITY PLC
CONSOLIDATED STATEMENTS OF OPERATIONS
Fiscal Years Ended September 26, 2025, September 27, 2024, and September 29, 2023
Fiscal
2025
2024
2023
(in millions, except per share data)
Net sales
$
17,262
$
15,845
$
16,034
Cost of sales
11,183
10,389
10,979
Gross margin
6,079
5,456
5,055
Selling, general, and administrative expenses
1,866
1,732
1,670
Research, development, and engineering expenses
829
741
708
Acquisition and integration costs
47
21
33
Restructuring and other charges, net
126
166
340
Operating income
3,211
2,796
2,304
Interest income
83
87
60
Interest expense
( 77 )
( 70 )
( 80 )
Other expense, net
( 13 )
( 16 )
( 16 )
Income from continuing operations before income taxes
3,204
2,797
2,268
Income tax (expense) benefit
( 1,361 )
397
( 364 )
Income from continuing operations
1,843
3,194
1,904
Income (loss) from discontinued operations, net of income taxes
( 1 )
( 1 )
6
Net income
$
1,842
$
3,193
$
1,910
Basic earnings per share:
Income from continuing operations
$
6.21
$
10.40
$
6.04
Income (loss) from discontinued operations
—
—
0.02
Net income
6.20
10.40
6.06
Diluted earnings per share:
Income from continuing operations
$
6.16
$
10.34
$
6.01
Income (loss) from discontinued operations
—
—
0.02
Net income
6.16
10.33
6.03
Weighted-average number of shares outstanding:
Basic
297
307
315
Diluted
299
309
317
See accompanying Notes to Consolidated Financial Statements.
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TE CONNECTIVITY PLC
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Fiscal Years Ended September 26, 2025, September 27, 2024, and September 29, 2023
Fiscal
2025
2024
2023
(in millions)
Net income
$
1,842
$
3,193
$
1,910
Other comprehensive income:
Currency translation
( 46 )
131
261
Adjustments to unrecognized pension and postretirement benefit costs, net of income taxes
33
( 37 )
20
Gains on cash flow hedges, net of income taxes
21
76
65
Other comprehensive income
8
170
346
Comprehensive income
1,850
3,363
2,256
Less: comprehensive income attributable to noncontrolling interests
( 7 )
( 7 )
( 9 )
Comprehensive income attributable to TE Connectivity plc
$
1,843
$
3,356
$
2,247
See accompanying Notes to Consolidated Financial Statements.
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TE CONNECTIVITY PLC
CONSOLIDATED BALANCE SHEETS
As of September 26, 2025 and September 27, 2024
Fiscal Year End
2025
2024
(in millions, except
share data)
Assets
Current assets:
Cash and cash equivalents
$
1,255
$
1,319
Accounts receivable, net of allowance for doubtful accounts of $ 44 and $ 32 , respectively
3,403
3,055
Inventories
2,699
2,517
Prepaid expenses and other current assets
609
740
Total current assets
7,966
7,631
Property, plant, and equipment, net
4,312
3,903
Goodwill
7,126
5,801
Intangible assets, net
2,227
1,174
Deferred income taxes
2,507
3,497
Other assets
943
848
Total assets
$
25,081
$
22,854
Liabilities, redeemable noncontrolling interests, and shareholders' equity
Current liabilities:
Short-term debt
$
852
$
871
Accounts payable
2,021
1,728
Accrued and other current liabilities
2,247
2,147
Total current liabilities
5,120
4,746
Long-term debt
4,842
3,332
Long-term pension and postretirement liabilities
767
810
Deferred income taxes
198
199
Income taxes
414
411
Other liabilities
1,010
870
Total liabilities
12,351
10,368
Commitments and contingencies (Note 12)
Redeemable noncontrolling interests
145
131
Shareholders' equity:
Preferred shares, $ 1.00 par value, 2 shares authorized, none outstanding as of September 26, 2025
—
—
Ordinary class A shares, € 1.00 par value, 25,000 shares authorized, none outstanding as of September 26, 2025
—
—
Ordinary shares, $ 0.01 par value, 1,500,000,000 shares authorized, 302,889,075 shares issued and common shares, CHF 0.57 par value, 316,574,781 shares authorized and issued , respectively
3
139
Accumulated earnings
13,932
14,533
Ordinary shares and common shares held in treasury, at cost, 8,330,931 and 16,656,681 shares, respectively
( 1,356 )
( 2,322 )
Accumulated other comprehensive income
6
5
Total shareholders' equity
12,585
12,355
Total liabilities, redeemable noncontrolling interests, and shareholders' equity
$
25,081
$
22,854
See accompanying Notes to Consolidated Financial Statements.
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TE CONNECTIVITY PLC
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
Fiscal Years Ended September 26, 2025, September 27, 2024, and September 29, 2023
Common/
Accumulated
Common/
Ordinary Shares
Other
Total
Ordinary Shares
Held in Treasury
Contributed
Accumulated
Comprehensive
Shareholders'
Shares
Amount
Shares
Amount
Surplus
Earnings
Income (Loss)
Equity
(in millions)
Balance at fiscal year end 2022
331
$
146
( 13 )
$
( 1,681 )
$
—
$
12,832
$
( 495 )
$
10,802
Net income
—
—
—
—
—
1,910
—
1,910
Other comprehensive income
—
—
—
—
—
—
337
337
Share-based compensation expense
—
—
—
—
123
—
—
123
Dividends
—
—
—
—
—
( 737 )
—
( 737 )
Exercise of share options
—
—
1
43
—
—
—
43
Restricted share award vestings and other activity
—
—
1
109
( 123 )
33
—
19
Repurchase of common shares
—
—
( 8 )
( 946 )
—
—
—
( 946 )
Cancellation of treasury shares
( 9 )
( 4 )
9
1,095
—
( 1,091 )
—
—
Balance at fiscal year end 2023
322
$
142
( 10 )
$
( 1,380 )
$
—
$
12,947
$
( 158 )
$
11,551
Net income
—
—
—
—
—
3,193
—
3,193
Other comprehensive income
—
—
—
—
—
—
163
163
Share-based compensation expense
—
—
—
—
127
—
—
127
Dividends
—
—
—
—
—
( 782 )
—
( 782 )
Exercise of share options
—
—
1
89
—
—
—
89
Restricted share award vestings and other activity
—
—
—
213
( 127 )
( 81 )
—
5
Repurchase of common shares
—
—
( 14 )
( 1,991 )
—
—
—
( 1,991 )
Cancellation of treasury shares
( 6 )
( 3 )
6
747
—
( 744 )
—
—
Balance at fiscal year end 2024
316
$
139
( 17 )
$
( 2,322 )
$
—
$
14,533
$
5
$
12,355
Change in place of incorporation
—
( 136 )
—
—
—
136
—
—
Cancellation of treasury shares
( 17 )
—
17
2,322
—
( 2,322 )
—
—
Net income
—
—
—
—
—
1,842
—
1,842
Other comprehensive income
—
—
—
—
—
—
1
1
Share-based compensation expense
—
—
—
—
149
—
—
149
Dividends
—
—
—
—
—
( 628 )
—
( 628 )
Exercise of share options
2
—
—
—
182
—
—
182
Restricted share award vestings and other activity
2
—
—
—
( 331 )
371
—
40
Repurchase of ordinary shares
—
—
( 8 )
( 1,356 )
—
—
—
( 1,356 )
Balance at fiscal year end 2025
303
$
3
( 8 )
$
( 1,356 )
$
—
$
13,932
$
6
$
12,585
See accompanying Notes to Consolidated Financial Statements.
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TE CONNECTIVITY PLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
Fiscal Years Ended September 26, 2025, September 27, 2024, and September 29, 2023
Fiscal
2025
2024
2023
(in millions)
Cash flows from operating activities:
Net income
$
1,842
$
3,193
$
1,910
(Income) loss from discontinued operations, net of income taxes
1
1
( 6 )
Income from continuing operations
1,843
3,194
1,904
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
Depreciation and amortization
838
826
794
Deferred income taxes
938
( 789 )
( 77 )
Non-cash lease cost
145
134
129
Provision for losses on accounts receivable and inventories
58
57
76
Share-based compensation expense
149
127
123
Impairment of held for sale businesses
—
—
74
Other
80
71
101
Changes in assets and liabilities, net of the effects of acquisitions and divestitures:
Accounts receivable, net
( 341 )
( 134 )
( 146 )
Inventories
( 160 )
( 30 )
( 45 )
Prepaid expenses and other current assets
91
25
17
Accounts payable
290
159
( 1 )
Accrued and other current liabilities
( 35 )
( 165 )
21
Income taxes
147
( 83 )
17
Other
96
85
145
Net cash provided by operating activities
4,139
3,477
3,132
Cash flows from investing activities:
Capital expenditures
( 936 )
( 680 )
( 732 )
Proceeds from sale of property, plant, and equipment
11
16
4
Acquisition of businesses, net of cash acquired
( 2,628 )
( 339 )
( 110 )
Proceeds from divestiture of businesses, net of cash retained by businesses sold
—
59
48
Other
( 15 )
( 6 )
22
Net cash used in investing activities
( 3,568 )
( 950 )
( 768 )
Cash flows from financing activities:
Net decrease in commercial paper
( 255 )
( 75 )
( 40 )
Proceeds from issuance of debt
2,231
348
499
Repayment of debt
( 580 )
( 352 )
( 591 )
Proceeds from exercise of share options
182
89
43
Repurchase of ordinary/common shares
( 1,347 )
( 2,062 )
( 945 )
Payment of ordinary/common share dividends to shareholders
( 803 )
( 760 )
( 725 )
Other
( 57 )
( 57 )
( 34 )
Net cash used in financing activities
( 629 )
( 2,869 )
( 1,793 )
Effect of currency translation on cash
( 6 )
—
2
Net increase (decrease) in cash, cash equivalents, and restricted cash
( 64 )
( 342 )
573
Cash, cash equivalents, and restricted cash at beginning of fiscal year
1,319
1,661
1,088
Cash, cash equivalents, and restricted cash at end of fiscal year
$
1,255
$
1,319
$
1,661
Supplemental cash flow information:
Interest paid on debt, net
$
34
$
64
$
75
Income taxes paid, net of refunds
276
475
425
See accompanying Notes to Consolidated Financial Statements.
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TE CONNECTIVITY PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The Consolidated Financial Statements reflect the consolidated operations of TE Connectivity plc and its subsidiaries and have been prepared in United States (“U.S.”) dollars in accordance with accounting principles generally accepted in the U.S. (“GAAP”).
Description of the Business
TE Connectivity plc (“TE Connectivity” or the “Company,” which may be referred to as “we,” “us,” or “our”) is a global industrial technology leader creating a safer, sustainable, productive, and connected future. As 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, energy networks, automated factories, data centers enabling artificial intelligence, and more.
We operate through two reportable segments:
● Transportation Solutions —The Transportation Solutions segment is a leader in connectivity and sensor technologies. Our products, which must withstand harsh conditions, are used in the automotive, commercial transportation, and sensors markets.
● Industrial Solutions —The Industrial Solutions segment is a leading supplier of products that connect and distribute power, data, and signals. Our products are used in the digital data networks; automation and connected living; aerospace, defense, and marine; energy; and medical markets.
See Note 20 for additional information regarding our segments and new segment structure.
Use of Estimates
The preparation of the Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Actual results could differ from these estimates.
Fiscal Year
We have a 52- or 53-week fiscal year that ends on the last Friday of September. Fiscal 2025, 2024, and 2023 ended on September 26, 2025, September 27, 2024, and September 29, 2023, respectively. Fiscal 2025, 2024, and 2023 were each 52 weeks in length. For fiscal years in which there are 53 weeks, the fourth fiscal quarter includes 14 weeks, with the next occurrence taking place in fiscal 2028.
Change in Place of Incorporation
During fiscal 2024, our board of directors and shareholders approved a change in our jurisdiction of incorporation from Switzerland to Ireland. In connection with the change, TE Connectivity Ltd., our former parent entity, entered into a merger agreement with TE Connectivity plc, its then wholly-owned subsidiary and a public limited company incorporated under Irish law. Under the merger agreement, TE Connectivity Ltd. merged with and into TE Connectivity plc, which was the surviving entity, in order to effect our change in jurisdiction of incorporation from Switzerland to Ireland. The merger was completed on September 30, 2024, thereby changing our jurisdiction of incorporation from Switzerland to Ireland. Shareholders received one ordinary share of TE Connectivity plc for each common share of TE Connectivity Ltd. held immediately prior to the merger. Effective for fiscal 2025, we are organized under the laws of Ireland. We have not had and do not anticipate any material changes in our operations or financial results as a result of the merger and change in place of incorporation.
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TE CONNECTIVITY PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
2. Summary of Significant Accounting Policies
Principles of Consolidation
We consolidate entities in which we own or control more than 50 % of the voting shares or otherwise control through similar rights. All intercompany transactions have been eliminated. The results of companies acquired or disposed of are included on the Consolidated Financial Statements from the effective date of acquisition or up to the date of disposal.
Revenue Recognition
We account for revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers , which is a single, comprehensive, five-step revenue recognition model. Our revenues are generated principally from the sale of our products. Revenue is recognized as performance obligations under the terms of a contract, such as a purchase order with a customer, are satisfied; generally this occurs with the transfer of control. We transfer control and recognize revenue when we ship product to our customers, the customers accept and have legal title for the product, and we have a right to payment for such product. Revenue is measured as the amount of consideration that we expect to receive in exchange for those products and excludes taxes assessed by governmental authorities and collected from customers concurrent with the sale of products. Shipping and handling costs are treated as fulfillment costs and are included in cost of sales. Since we typically invoice our customers when we satisfy our performance obligations, we do not have material contract assets or contract liabilities. Our credit terms are customary and do not contain significant financing components that extend beyond one year of fulfillment of performance obligations. We apply the practical expedient of ASC 606 with respect to financing components and do not evaluate contracts in which payment is due within one year of satisfaction of the related performance obligation. Since our performance obligations to deliver products are part of contracts that generally have original durations of one year or less, we have elected to use the optional exemption to not disclose the aggregate amount of transaction prices associated with unsatisfied or partially satisfied performance obligations. See Note 20 for net sales disaggregated by industry end market and geographic region which is summarized by segment and that we consider meaningful to depict the nature, amount, timing, and uncertainty of revenue and cash flows affected by economic factors.
Our standard terms of sale generally warrant that our products will conform to our, or mutually agreed to, specifications and that our products will be free from material defects in materials and workmanship for a limited time. In certain instances, we may sell products to customers under terms other than our standard terms. We do not account for warranties as separate performance obligations. Amounts accrued for warranty claims were $ 28 million and $ 34 million at fiscal year end 2025 and 2024, respectively.
Although products are generally sold at fixed prices, certain distributors and customers receive incentives or awards, such as sales rebates, return allowances, scrap allowances, and other rights, which are accounted for as variable consideration. We estimate these amounts in the same period revenue is recognized based on the expected value to be provided to customers and reduce revenue accordingly. Our estimates of variable consideration and ultimate determination of the estimated amounts to include in the transaction price are based primarily on our assessment of anticipated performance and historical and forecasted information that is reasonably available to us.
Inventories
Inventories are recorded at the lower of cost or net realizable value using the first-in, first-out cost method.
Property, Plant, and Equipment, Net
Property, plant, and equipment is recorded at cost less accumulated depreciation. Maintenance and repair expenditures are charged to expense when incurred. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, which are 10 to 20 years for land improvements, 5 to 40 years for buildings and improvements, and 1 to 15 years for machinery and equipment.
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TE CONNECTIVITY PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
We periodically evaluate, when events and circumstances warrant, the net realizable value of property, plant, and equipment and other long-lived assets, relying on several factors including operating results, business plans, economic projections, and anticipated future cash flows. When indicators of potential impairment are present, the carrying values of the asset group are evaluated in relation to the operating performance and estimated future undiscounted cash flows of the underlying asset group. Impairment of the carrying value is recognized whenever anticipated future undiscounted cash flow estimates are less than the carrying value of the asset. Fair value estimates are based on assumptions concerning the amount and timing of estimated future cash flows and discount rates, reflecting varying degrees of perceived risk.
Goodwill and Other Intangible Assets
We account for goodwill and other intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other .
Intangible assets include both indeterminable-lived residual goodwill and determinable-lived identifiable intangible assets. Intangible assets with determinable lives primarily include customer relationships and intellectual property, consisting of patents, trademarks, and unpatented technology. Recoverability estimates range from 1 to 50 years and costs are generally amortized on a straight-line basis. Evaluations of the remaining useful lives of determinable-lived intangible assets are performed on a periodic basis and when events and circumstances warrant.
At fiscal year end 2025, we had four reporting units, all of which contained goodwill. There were two reporting units in both the Transportation Solutions and Industrial Solutions segments. When changes occur in the composition of one or more reporting units, goodwill is reassigned to the reporting units affected based on their relative fair values.
Goodwill impairment is evaluated by comparing the carrying value of each reporting unit to its fair value on the first day of the fourth fiscal quarter of each year or more frequently if events or changes in circumstances indicate that the asset may be impaired. In assessing a potential impairment, management relies on several reporting unit-specific factors including operating results, business plans, economic projections, anticipated future cash flows, transactions, and marketplace data. There are inherent uncertainties related to these factors and management’s judgment in applying these factors to the impairment analysis.
When testing for goodwill impairment, we identify potential impairment by comparing the fair value of a reporting unit with its carrying amount. If the carrying amount of a reporting unit exceeds its fair value, a goodwill impairment charge will be recorded for the amount of the excess, limited to the total amount of goodwill allocated to the reporting unit.
Fair value estimates used in the goodwill impairment tests are calculated using an income approach based on the present value of future cash flows of each reporting unit. The income approach is supported by a guideline analysis (a market approach). These approaches incorporate several assumptions including future growth rates, discount rates, income tax rates, and market activity in assessing fair value and are reporting unit specific. Changes in economic and operating conditions impacting these assumptions could result in goodwill impairments in future periods.
Research and Development
Research and development expenditures are expensed when incurred and are included in research, development, and engineering expenses on the Consolidated Statements of Operations. Research and development expenses include salaries, direct costs incurred, and building and overhead expenses. The amounts expensed in fiscal 2025, 2024, and 2023 were $ 699 million, $ 621 million, and $ 593 million, respectively.
Income Taxes
Income taxes are computed in accordance with the provisions of ASC 740, Income Taxes . Deferred tax liabilities and assets are recognized for the expected future tax consequences of events that have been reflected on the Consolidated Financial Statements. Deferred tax liabilities and assets are determined based on the differences between the book and tax bases of particular assets and liabilities and operating loss carryforwards using tax rates in effect for the years in which the differences are expected to reverse. A valuation allowance is provided to offset deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
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The calculation of our tax liabilities includes estimates for uncertainties in the application of complex tax regulations across multiple global jurisdictions where we conduct our operations. Under the uncertain tax position provisions of ASC 740, we recognize liabilities for tax and related interest for issues in tax jurisdictions based on our estimate of whether, and the extent to which, additional taxes and related interest will be due. These tax liabilities and related interest are reflected net of the impact of related tax loss carryforwards, as such tax loss carryforwards will be applied against these tax liabilities and will reduce the amount of cash tax payments due upon the eventual settlement with the tax authorities. These estimates may change due to changing facts and circumstances. Due to the complexity of these uncertainties, the ultimate resolution may result in a settlement that differs from our current estimate of the tax liabilities and related interest.
Financial Instruments
Our financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, debt, and derivative financial instruments.
We account for derivative financial instrument contracts on the Consolidated Balance Sheets at fair value. For instruments not designated as hedges under ASC 815, Derivatives and Hedging , the changes in the instruments’ fair value are recognized currently in earnings. For instruments designated as cash flow hedges, the effective portion of changes in the fair value of a derivative is recorded in other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the underlying hedged item affects earnings. Amounts excluded from the hedging relationship are recognized currently in earnings. Changes in the fair value of instruments designated as fair value hedges affect the carrying value of the asset or liability hedged, with changes in both the derivative instrument and the hedged asset or liability being recognized currently in earnings. Changes in the fair value of instruments designated as hedges of net investment are recorded in currency translation, a component of accumulated other comprehensive income (loss).
We determine the fair value of our financial instruments using methods and assumptions that are based on market conditions and risks existing at each balance sheet date. Standard market conventions are used to determine the fair value of financial instruments, including derivatives.
The cash flows related to derivative financial instruments are reported in the operating activities section of the Consolidated Statements of Cash Flows.
Our derivative financial instruments present certain market and counterparty risks. Concentration of counterparty risk is mitigated, however, by our use of financial institutions worldwide, substantially all of which have long-term S&P, Moody’s, and/or Fitch credit ratings of A/A2 or higher. In addition, we utilize only conventional derivative financial instruments. We are exposed to potential losses if a counterparty fails to perform according to the terms of its agreement. With respect to counterparty net asset positions recognized at fiscal year end 2025, we have assessed the likelihood of counterparty default as remote. We currently provide guarantees from a wholly-owned subsidiary to the counterparties to our commodity swap derivatives. The likelihood of performance on the guarantees has been assessed as remote. For all other derivative financial instruments, we are not required to provide, nor do we require counterparties to provide, collateral or other security.
Fair Value Measurements
ASC 820, Fair Value Measurements and Disclosures , specifies a fair value hierarchy based upon the observable inputs utilized in valuation of certain assets and liabilities. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. Fair value measurements are classified under the following hierarchy:
● Level 1— Quoted prices in active markets for identical assets and liabilities.
● Level 2— Quoted prices in active markets for similar assets and liabilities, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.
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● Level 3— Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flows methodologies, and similar techniques that use significant unobservable inputs.
Derivative financial instruments measured at fair value on a recurring basis are generally valued using level 2 inputs.
Financial instruments other than derivative instruments include cash and cash equivalents, accounts receivable, accounts payable, and debt. These instruments are recorded on the Consolidated Balance Sheets at book value. For cash and cash equivalents, accounts receivable, and accounts payable, we believe book value approximates fair value due to the short-term nature of these instruments. See Note 10 for disclosure of the fair value of debt. The following is a description of the valuation methodologies used for the respective financial instruments:
● Cash and cash equivalents— Cash and cash equivalents are valued at book value, which we consider to be equivalent to unadjusted quoted prices (level 1).
● Accounts receivable— Accounts receivable are valued based on the net value expected to be realized. The net realizable value generally represents an observable contractual agreement (level 2).
● Accounts payable— Accounts payable are valued based on the net value expected to be paid, generally supported by an observable contractual agreement (level 2).
● Debt— The fair value of debt, including both current and non-current maturities, is derived from quoted market prices or other pricing determinations based on the results of market approach valuation models using observable market data such as recently reported trades, bid and offer information, and benchmark securities (level 2).
Pension Plans
The funded status of our defined benefit pension plans is recognized on the Consolidated Balance Sheets and is measured as the difference between the fair value of plan assets and the projected benefit obligation at the measurement date. The projected benefit obligation represents the actuarial present value of benefits projected to be paid upon retirement factoring in estimated future compensation levels. The fair value of plan assets represents the current market value of cumulative company and participant contributions made to irrevocable trust funds, held for the sole benefit of participants, which are invested by the trustees of the funds. The benefits under our defined benefit pension plans are based on various factors, such as years of service and compensation.
Net periodic pension benefit cost is based on the utilization of the projected unit credit method of calculation and is charged to earnings on a systematic basis over the expected average remaining service lives of current participants, or, for inactive plans, over the remaining life expectancy of participants.
The measurement of benefit obligations and net periodic benefit cost is based on estimates and assumptions determined by our management. These valuations reflect the terms of the plans and use participant-specific information such as compensation, age, and years of service, as well as certain assumptions, including estimates of discount rates, expected returns on plan assets, rates of compensation increases, interest crediting rates, and mortality rates.
Share-Based Compensation
We determine the fair value of share awards on the date of grant. Share options are valued using the Black-Scholes-Merton valuation model; restricted share awards and performance awards are valued using our end-of-day share price on the date of grant. The fair value is expensed ratably over the expected service period, with an allowance made for estimated forfeitures based on historical employee activity. Estimates regarding the attainment of performance criteria are reviewed periodically; the cumulative impact of a change in estimate regarding the attainment of performance criteria is recorded in the period in which that change is made.
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Earnings Per Share
Basic earnings per share is computed by dividing net income by the basic weighted-average number of ordinary shares outstanding. Diluted earnings per share is computed by dividing net income by the weighted-average number of ordinary shares outstanding adjusted for the potentially dilutive impact of share-based compensation arrangements.
Leases
We account for leases in accordance with ASC 842, Leases . We have facility, land, vehicle, and equipment leases that expire at various dates. We determine if a contract qualifies as a lease at inception. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The right to control the use of an asset includes the right to obtain substantially all of the economic benefits of the identified asset and the right to direct the use of the identified asset.
Lease right-of-use (“ROU”) assets and lease liabilities are recognized at the commencement date of the lease based on the present value of remaining lease payments over the lease term. Lease ROU assets represent our right to use the underlying assets for the lease term and lease liabilities represent the obligation to make lease payments arising from the leases. We do not recognize ROU assets or lease liabilities that arise from short-term leases. Since our lease contracts do not contain a readily determinable implicit rate, we determine a fully-collateralized incremental borrowing rate that reflects a similar term to the lease and the economic environment of the applicable country or region in which the asset is leased.
We have elected to account for fixed lease and non-lease components in our real estate leases as a single lease component; other leases generally do not contain non-lease components. The non-lease components in our real estate leases include logistics services, warehousing, and other operational costs. Many of these costs are variable, fluctuating based on services provided, such as pallets shipped in and out of a location or square footage of space occupied. These costs, and any other variable rental costs, are excluded from our ROU assets and lease liabilities and are expensed as incurred. Some of our leases may include options to either renew or early terminate the lease. The exercise of these options is generally at our sole discretion and would only occur if there is an economic, financial, or business reason to do so. Such options are included in the lease term if we determine it is reasonably certain they will be exercised.
Currency Translation
For our non-U.S. dollar functional currency subsidiaries, assets and liabilities are translated into U.S. dollars using fiscal year end exchange rates. Sales and expenses are translated at average monthly exchange rates. Foreign currency translation gains and losses are included as a component of accumulated other comprehensive income (loss) within equity. Gains and losses resulting from foreign currency transactions are included in earnings.
Restructuring Charges
Restructuring activities involve employee-related termination costs, facility exit costs, and asset impairments resulting from reductions-in-force, migration of facilities or product lines from higher-cost to lower-cost countries, or consolidation of facilities within countries. We recognize termination costs based on requirements established by severance policy, government law, or previous actions. Facility exit costs generally reflect the accelerated rent expense for ROU assets, expected lease termination costs, or costs that will continue to be incurred under the facility lease without future economic benefit to us. Restructuring activities often result in the disposal or abandonment of assets that require an acceleration of depreciation or impairment reflecting the excess of the assets’ carrying values over fair value.
The recognition of restructuring costs require that we make certain judgments and estimates regarding the nature, timing, and amount of costs associated with the planned exit activity. To the extent our actual results differ from our estimates and assumptions, we may be required to revise the estimated liabilities, requiring the recognition of additional restructuring costs or the reduction of liabilities already recognized. At the end of each reporting period, we evaluate the
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remaining accrued balances to ensure these balances are properly stated and the utilization of the reserves are for their intended purpose in accordance with developed exit plans.
Contingent Liabilities
We record a loss contingency when the available information indicates it is probable that we have incurred a liability and the amount of the loss is reasonably estimable. When a range of possible losses with equal likelihood exists, we record the low end of the range. The likelihood of a loss with respect to a particular contingency is often difficult to predict, and determining a meaningful estimate of the loss or a range of loss may not be practicable based on information available. In addition, it is not uncommon for such matters to be resolved over many years, during which time relevant developments and new information must continuously be evaluated to determine whether a loss is probable and a reasonable estimate of that loss can be made. When a loss is probable but a reasonable estimate cannot be made, or when a loss is at least reasonably possible, disclosure is provided.
Recently Issued Accounting Pronouncements
In September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software , to simplify accounting for internal-use software costs. The update will allow for capitalization of costs when management authorizes and commits to funding a project and it is probable that the project will be completed and the software will be used as intended. The amendments are effective for us in fiscal 2029; however, early adoption is permitted. We are currently assessing the impact that adoption will have on our Consolidated Financial Statements.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, to improve disclosures about the nature of expenses in commonly presented financial statement captions. The amendments are effective for our fiscal 2028 Annual Report and subsequent interim periods; however, early adoption is permitted. The amendments can be applied either prospectively or retrospectively to all periods presented in the financial statements. We are currently assessing the impact that adoption will have on our Consolidated Financial Statements.
In March 2024, the U.S. Securities and Exchange Commission (“SEC”) issued its final climate disclosure rules, The Enhancement and Standardization of Climate-Related Disclosures for Investors , which require all registrants to provide certain climate-related information in their registration statements and annual reports. The rules require disclosure of, among other things, material climate-related risks, activities to mitigate or adapt to such risks, governance and oversight of such risks, material climate targets and goals, and Scope 1 and/or Scope 2 greenhouse gas emissions, on a phased-in basis, when those emissions are material. In addition, the final rules require certain disclosures in the notes to the financial statements, including the effects of severe weather events and other natural conditions. The rules are effective for us on a phased-in timeline starting in fiscal 2026; however, in April 2024, the SEC issued an order to voluntarily stay its final climate rules. We continue to monitor developments pertaining to the rules and any potential impacts on our Consolidated Financial Statements.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures through improvements to disclosures related primarily to the rate reconciliation and income taxes paid information. The amendments are effective for us in fiscal 2026. We are currently assessing the impact that adoption will have on our Consolidated Financial Statements.
Recently Adopted Accounting Pronouncement
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. We adopted this update, on a retrospective basis, for our fiscal 2025 Annual Report. Adoption did not have a material impact on our Consolidated Financial Statements. See Note 20 for additional information regarding our reportable segments.
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3. Restructuring and Other Charges, Net
Net restructuring and other charges consisted of the following:
Fiscal
2025
2024
2023
(in millions)
Restructuring charges, net
$
113
$
144
$
260
(Gain) loss on divestitures and impairment of held for sale business, net
( 1 )
( 10 )
77
Costs related to change in place of incorporation
11
20
—
Other charges, net
3
12
3
Restructuring and other charges, net
$
126
$
166
$
340
Restructuring Charges, Net
Net restructuring charges by segment were as follows:
Fiscal
2025
2024
2023
(in millions)
Transportation Solutions
$
69
$
62
$
145
Industrial Solutions
44
82
115
Restructuring charges, net
$
113
$
144
$
260
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Activity in our restructuring reserves was as follows:
Balance at
Balance at
Beginning
Currency
End
of Fiscal
Changes in
Cash
Non-Cash
Translation
of Fiscal
Year
Charges
Estimate
Payments
Items
and Other
Year
(in millions)
Fiscal 2025 Activity:
Fiscal 2025 Actions:
Employee severance
$
—
$
93
$
—
$
( 24 )
$
—
$
6
$
75
Property, plant, and equipment
—
3
—
—
( 3 )
—
—
Total
—
96
—
( 24 )
( 3 )
6
75
Fiscal 2024 Actions:
Employee severance
72
2
( 4 )
( 42 )
—
—
28
Property, plant, and equipment
—
1
2
—
( 3 )
—
—
Total
72
3
( 2 )
( 42 )
( 3 )
—
28
Fiscal 2023 Actions:
Employee severance
116
2
( 25 )
( 52 )
—
( 1 )
40
Facility and other exit costs
—
2
—
( 4 )
—
2
—
Total
116
4
( 25 )
( 56 )
—
1
40
Pre-Fiscal 2023 Actions:
Employee severance
70
9
26
( 73 )
—
( 2 )
30
Facility and other exit costs
15
6
( 4 )
( 12 )
—
( 1 )
4
Total
85
15
22
( 85 )
—
( 3 )
34
Total fiscal 2025 activity
$
273
$
118
$
( 5 )
$
( 207 )
$
( 6 )
$
4
$
177
Fiscal 2024 Activity:
Fiscal 2024 Actions:
Employee severance
$
—
$
79
$
—
$
( 9 )
$
—
$
2
$
72
Property, plant, and equipment
—
7
—
—
( 7 )
—
—
Total
—
86
—
( 9 )
( 7 )
2
72
Fiscal 2023 Actions:
Employee severance
187
18
( 16 )
( 79 )
—
6
116
Facility and other exit costs
2
7
—
( 9 )
—
—
—
Property, plant, and equipment
—
13
—
—
( 13 )
—
—
Total
189
38
( 16 )
( 88 )
( 13 )
6
116
Pre-Fiscal 2023 Actions:
Employee severance
127
16
( 4 )
( 74 )
—
5
70
Facility and other exit costs
4
18
10
( 17 )
—
—
15
Property, plant, and equipment
—
( 2 )
( 2 )
—
4
—
—
Total
131
32
4
( 91 )
4
5
85
Total fiscal 2024 activity
$
320
$
156
$
( 12 )
$
( 188 )
$
( 16 )
$
13
$
273
Fiscal 2023 Activity:
Fiscal 2023 Actions:
Employee severance
$
—
$
238
$
—
$
( 50 )
$
—
$
( 1 )
$
187
Facility and other exit costs
—
3
—
( 1 )
—
—
2
Property, plant, and equipment
—
6
—
—
( 6 )
—
—
Total
—
247
—
( 51 )
( 6 )
( 1 )
189
Pre-Fiscal 2023 Actions:
Employee severance
220
13
( 8 )
( 110 )
—
12
127
Facility and other exit costs
8
7
6
( 17 )
—
—
4
Property, plant, and equipment
—
3
( 8 )
—
5
—
—
Total
228
23
( 10 )
( 127 )
5
12
131
Total fiscal 2023 activity
$
228
$
270
$
( 10 )
$
( 178 )
$
( 1 )
$
11
$
320
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Fiscal 2025 Actions
During fiscal 2025, we initiated a restructuring program associated with footprint consolidation and cost structure improvements in both of our segments. In connection with this program, we recorded restructuring charges of $ 96 million during fiscal 2025. We expect to complete all restructuring actions commenced during fiscal 2025 by the end of fiscal 2032 and to incur additional charges of approximately $ 13 million related primarily to facility exit costs in the Industrial Solutions segment.
Fiscal 2024 Actions
During fiscal 2024, we initiated a restructuring program to optimize our manufacturing footprint and improve the cost structure of the organization. In connection with this program, during fiscal 2025 and 2024, we recorded net restructuring charges of $ 1 million and $ 86 million, respectively. We expect additional charges related to fiscal 2024 actions will be insignificant.
Fiscal 2023 Actions
During fiscal 2023, we initiated a restructuring program associated with cost structure improvements across our segments. In connection with this program, during fiscal 2025, 2024, and 2023, we recorded net restructuring credits of $ 21 million, charges of $ 22 million, and charges of $ 247 million, respectively. We expect that any additional charges related to fiscal 2023 actions will be insignificant. Credits in fiscal 2025 are primarily administrative adjustments to multi-wave actions that spanned the fiscal 2023 and pre-fiscal 2023 periods.
The following table summarizes cumulative charges incurred for the fiscal 2023 program by segment as of fiscal year end 2025:
Cumulative
Charges
Incurred
(in millions)
Transportation Solutions
$
122
Industrial Solutions
126
Total
$
248
Pre-Fiscal 2023 Actions
During fiscal 2025, 2024, and 2023, we recorded net restructuring charges of $ 37 million, $ 36 million, and $ 13 million, respectively, related to pre-fiscal 2023 actions. We expect that any additional charges related to restructuring actions commenced prior to fiscal 2023 will be insignificant. Charges in fiscal 2025 are primarily administrative adjustments to multi-wave actions that spanned the fiscal 2023 and pre-fiscal 2023 periods.
Total Restructuring Reserves
Restructuring reserves included on the Consolidated Balance Sheets were as follows:
Fiscal Year End
2025
2024
(in millions)
Accrued and other current liabilities
$
163
$
233
Other liabilities
14
40
Restructuring reserves
$
177
$
273
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Divestitures
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, during fiscal 2023, we recorded a pre-tax impairment charge of $ 68 million when the business was reclassified to held for sale. Prior to divestiture, the business was reported in our Transportation Solutions segment.
We sold three businesses for net cash proceeds of $ 48 million during fiscal 2023. In connection with the divestitures, we recorded pre-tax impairment charges and a net pre-tax loss on sales, which totaled to a net charge of $ 9 million. Prior to divestiture, the businesses were reported in our Industrial Solutions segment.
Change in Place of Incorporation
During fiscal 2025 and 2024, we incurred costs of $ 11 million and $ 20 million, respectively, related to our change in place of incorporation from Switzerland to Ireland. See Note 1 for additional information regarding the change.
4. Acquisitions
Richards Manufacturing Co.
On April 1, 2025, we acquired 100 % of Richards Manufacturing Co. (“Richards Manufacturing”), a U.S.-based producer of overhead and underground electrical and gas distribution products, for cash of approximately $ 2.3 billion, net of cash acquired. The acquired business has been reported as part of the energy business within our Industrial Solutions segment from the date of acquisition.
The Richards Manufacturing acquisition was accounted for under the provisions of ASC 805, Business Combinations . We have preliminarily allocated the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. We are in the process of completing the valuation of identifiable intangible assets, fixed assets, and pre-acquisition contingencies and, therefore, the fair values set forth below are subject to adjustment upon finalizing the valuations. The amount of these potential adjustments could be significant. We expect to complete the purchase price allocation during the third quarter of fiscal 2026.
The following table summarizes the preliminary allocation of the purchase price to the fair value of identifiable assets acquired and liabilities assumed at the date of acquisition, in accordance with the acquisition method of accounting:
(in millions)
Cash and cash equivalents
$
41
Accounts receivable
47
Inventories
165
Other current assets
6
Property, plant, and equipment
62
Goodwill
1,028
Intangible assets
1,120
Other noncurrent assets
4
Total assets acquired
2,473
Accounts payable
18
Other current liabilities
14
Deferred income taxes
87
Other noncurrent liabilities
6
Total liabilities assumed
125
Net assets acquired
2,348
Cash and cash equivalents acquired
( 41 )
Net cash paid
$
2,307
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The fair values assigned to intangible assets were preliminarily determined through the use of the income approach, specifically the relief from royalty and the multi-period excess earnings methods. Both valuation methods rely on management judgment, including expected future cash flows resulting from existing customer relationships, customer attrition rates, contributory effects of other assets utilized in the business, peer group cost of capital and royalty rates, and other factors. The valuation of tangible assets was derived using a combination of the income, market, and cost approaches. Significant judgments used in valuing tangible assets include estimated selling prices, costs to complete, and reasonable profit. Useful lives for intangible assets were determined based upon the remaining useful economic lives of the intangible assets that are expected to contribute directly or indirectly to future cash flows.
Intangible assets acquired consisted of the following:
Weighted-Average
Amortization
Amount
Period
(in millions)
(in years)
Customer relationships
$
1,000
20
Developed technology
90
16
Trade names and trademarks
30
10
Total
$
1,120
19
The acquired intangible assets are being amortized on a straight-line basis over their expected useful lives.
Goodwill of $ 1,028 million was recognized in the transaction, representing the excess of the purchase price over the fair value of the tangible and intangible assets acquired and liabilities assumed. This goodwill is attributable primarily to cost savings and other synergies related to operational efficiencies including the consolidation of manufacturing, marketing, and general and administrative functions. The goodwill has been allocated to the Industrial Solutions segment and approximately $ 600 million is deductible primarily for U.S. tax purposes through fiscal 2040.
During fiscal 2025, Richards Manufacturing contributed net sales of $ 179 million and operating income of $ 5 million to our Consolidated Statement of Operations. The operating income included acquisition costs of $ 25 million, charges of $ 7 million associated with the amortization of acquisition-related fair value adjustments related to acquired inventories, and integration costs of $ 3 million.
Pro Forma Financial Information
The following unaudited pro forma financial information reflects our consolidated results of operations had the Richards Manufacturing acquisition occurred at the beginning of fiscal 2024:
Fiscal
2025
2024
(in millions, except
per share data)
Net sales
$
17,444
$
16,193
Net income
1,844
3,155
Diluted earnings per share
$
6.17
$
10.21
The pro forma financial information is based on our preliminary allocation of the purchase price and therefore subject to adjustment upon finalizing the purchase price allocation. The significant pro forma adjustments, which are described below, are net of income tax expense (benefit) at the statutory rate.
Pro forma results for fiscal 2025 were adjusted to exclude $ 19 million of acquisition costs. Pro forma results for fiscal 2025 were also adjusted to include $ 39 million of interest expense based on pro forma changes in our capital structure and $ 17 million of charges related to the amortization of the fair value of acquired intangible assets.
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Pro forma results for fiscal 2024 were adjusted to include $ 56 million of interest expense based on pro forma changes in our capital structure, $ 34 million of charges related to the amortization of the fair value of acquired intangible assets, $ 19 million of acquisition costs, and $ 8 million of charges related to the fair value adjustment to acquisition-date inventories.
Pro forma results do not include any anticipated synergies or other anticipated benefits of the acquisition. Accordingly, the unaudited pro forma financial information is not necessarily indicative of either future results of operations or results that might have been achieved had the Richards Manufacturing acquisition occurred at the beginning of fiscal 2024.
Other Acquisitions
We acquired two additional businesses for a combined cash purchase price of $ 321 million, net of cash acquired, during fiscal 2025. The acquired businesses have been reported as part of our Industrial Solutions segment from the date of acquisition. Our valuation of identifiable intangible assets, assets acquired, and liabilities assumed is currently in process; therefore, the current allocation is subject to adjustment upon finalization of the valuations. The amount of these potential adjustments could be significant.
During the quarter ended December 29, 2023, we acquired approximately 98.7 % of the outstanding shares of Schaffner Holding AG (“Schaffner”), a leader in electromagnetic solutions based in Switzerland, for CHF 505.00 per share in cash for a purchase price of CHF 294 million (equivalent to $ 339 million), net of cash acquired. The acquired business has been reported as part of our Industrial Solutions segment from the date of acquisition. During the quarter ended June 28, 2024, we completed a squeeze-out of the remaining minority shareholders for $ 5 million and the Schaffner shares were delisted from the SIX Swiss Exchange.
We acquired one business for a cash purchase price of $ 110 million, net of cash acquired, during fiscal 2023. The acquired business has been reported as part of our Industrial Solutions segment from the date of acquisition.
5. Inventories
Inventories consisted of the following:
Fiscal Year End
2025
2024
(in millions)
Raw materials
$
420
$
328
Work in progress
1,078
1,063
Finished goods
1,201
1,126
Inventories
$
2,699
$
2,517
6. Property, Plant, and Equipment, Net
Net property, plant, and equipment consisted of the following:
Fiscal Year End
2025
2024
(in millions)
Property, plant, and equipment, gross:
Land and improvements
$
138
$
120
Buildings and improvements
1,692
1,571
Machinery and equipment
9,445
8,931
Construction in process
814
659
12,089
11,281
Accumulated depreciation
( 7,777 )
( 7,378 )
Property, plant, and equipment, net
$
4,312
$
3,903
78
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Depreciation expense was $ 648 million, $ 660 million, and $ 607 million in fiscal 2025, 2024, and 2023, respectively.
7. Goodwill
The changes in the carrying amount of goodwill by segment were as follows (1) :
Transportation
Industrial
Solutions
Solutions
Total
(in millions)
Balance at fiscal year end 2023 (2)
$
1,543
$
3,920
$
5,463
Acquisition
—
180
180
Currency translation and other
41
117
158
Balance at fiscal year end 2024 (2)
1,584
4,217
5,801
Acquisitions and purchase accounting adjustments
—
1,227
1,227
Currency translation
25
73
98
Balance at fiscal year end 2025 (2)
$
1,609
$
5,517
$
7,126
(1) In connection with the reorganization of our segments, goodwill was reallocated to reporting units using a relative fair value approach. See Notes 1 and 20 for additional information regarding our new segment structure.
(2) At fiscal year end 2025, 2024, and 2023, accumulated impairment losses for the Transportation Solutions and Industrial Solutions segments were $ 3,091 million and $ 1,158 million, respectively.
During fiscal 2025, we completed the acquisition of Richards Manufacturing and recognized $ 1,028 million of goodwill which benefits the Industrial Solutions segment. During fiscal 2025 and 2024, we recognized goodwill of $ 199 million and $ 180 million, respectively, in the Industrial Solutions segment in connection with other acquisitions. See Note 4 for additional information regarding acquisitions.
We completed our annual goodwill impairment test in the fourth quarter of fiscal 2025 and determined that no impairment existed.
8. Intangible Assets, Net
Net intangible assets consisted of the following:
Fiscal Year End
2025
2024
Gross
Net
Gross
Net
Carrying
Accumulated
Carrying
Carrying
Accumulated
Carrying
Amount
Amortization
Amount
Amount
Amortization
Amount
(in millions)
Customer relationships
$
3,033
$
( 1,118 )
$
1,915
$
1,901
$
( 948 )
$
953
Intellectual property
727
( 430 )
297
686
( 481 )
205
Other
23
( 8 )
15
23
( 7 )
16
Total
$
3,783
$
( 1,556 )
$
2,227
$
2,610
$
( 1,436 )
$
1,174
During fiscal 2025, the gross carrying amount of intangible assets increased by $ 1,120 million as a result of the acquisition of Richards Manufacturing. Intangible asset amortization expense was $ 190 million, $ 166 million, and $ 187 million for fiscal 2025, 2024, and 2023, respectively.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
At fiscal year end 2025, the aggregate amortization expense on intangible assets is expected to be as follows:
(in millions)
Fiscal 2026
$
227
Fiscal 2027
209
Fiscal 2028
172
Fiscal 2029
167
Fiscal 2030
157
Thereafter
1,295
Total
$
2,227
9. Accrued and Other Current Liabilities
Accrued and other current liabilities consisted of the following:
Fiscal Year End
2025
2024
(in millions)
Accrued payroll and employee benefits
$
787
$
657
Dividends payable to shareholders
209
390
Restructuring reserves
163
233
Income taxes payable
153
113
Lease liability
126
128
Deferred revenue
115
58
Interest payable
62
27
Other
632
541
Accrued and other current liabilities
$
2,247
$
2,147
10. Debt
Debt was as follows:
Fiscal Year End
2025
2024
(in millions)
Principal debt:
Commercial paper, at a weighted-average interest rate of 4.95 % at fiscal year end 2024
$
—
$
255
0.00 % euro-denominated senior notes due 2025
—
615
4.50 % senior notes due 2026
500
500
3.70 % senior notes due 2026
350
350
3.125 % senior notes due 2027
400
400
2.50 % euro-denominated senior notes due 2028
585
—
0.00 % euro-denominated senior notes due 2029
643
615
4.625 % senior notes due 2030
350
350
4.50 % senior notes due 2031
450
—
2.50 % senior notes due 2032
600
600
3.25 % euro-denominated senior notes due 2033
877
—
5.00 % senior notes due 2035
450
—
7.125 % senior notes due 2037
477
477
Other
71
76
5,753
4,238
Unamortized discounts, premiums, and debt issuance costs, net
( 59 )
( 35 )
Total debt
$
5,694
$
4,203
80
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TE CONNECTIVITY PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
During fiscal 2025, Tyco Electronics Group S.A. (“TEGSA”), our wholly-owned subsidiary, issued € 500 million aggregate principal amount of 2.50 % senior notes due in May 2028, $ 450 million aggregate principal amount of 4.50 % senior notes due in February 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 has a five-year unsecured senior revolving credit facility (“Credit Facility”) with a maturity date of April 2029 and aggregate commitments of $ 1.5 billion. The Credit Facility contains provisions that allow for incremental commitments of up to $ 500 million and borrowings in designated currencies. TEGSA had no borrowings under the Credit Facility at fiscal year end 2025 or 2024.
Borrowings under the Credit Facility bear interest at a rate per annum equal to, at the option of TEGSA, (1) with respect to revolving loans denominated 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 / 2 of 1%, (iii) the Term SOFR for a one-month interest period plus 1 %, and (iv) 1 %, and (2) with respect to revolving loans determined in an alternative currency, (a) an alternative currency daily rate or (b) an alternative currency term rate , as applicable, 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.
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.
Payment obligations under TEGSA’s senior notes, commercial paper, and Credit Facility are fully and unconditionally guaranteed on an unsecured basis by TEGSA’s parent, TE Connectivity Switzerland Ltd., and its parent, TE Connectivity plc.
At fiscal year end 2025, principal payments required for debt were as follows:
(in millions)
Fiscal 2026
$
852
Fiscal 2027
402
Fiscal 2028
585
Fiscal 2029
643
Fiscal 2030
350
Thereafter
2,921
Total
$
5,753
The fair value of our debt, based on indicative valuations, was approximately $ 5,725 million and $ 4,190 million at fiscal year end 2025 and 2024, respectively.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
11. Leases
The components of lease cost were as follows:
Fiscal
2025
2024
2023
(in millions)
Operating lease cost
$
145
$
134
$
129
Variable lease cost
57
53
55
Total lease cost
$
202
$
187
$
184
Amounts recognized on the Consolidated Balance Sheets were as follows:
Fiscal Year End
2025
2024
($ in millions)
Operating lease ROU assets:
Other assets
$
479
$
433
Operating lease liabilities:
Accrued and other current liabilities
$
126
$
128
Other liabilities
365
313
Total operating lease liabilities
$
491
$
441
Weighted-average remaining lease term (in years)
5.7
5.5
Weighted-average discount rate
3.4
%
3.4
%
Cash flow information, including significant non-cash transactions, related to leases was as follows:
Fiscal
2025
2024
2023
(in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Payments for operating leases (1)
$
148
$
141
$
127
ROU assets, including modifications of existing leases, obtained in exchange for operating lease liabilities
183
180
106
(1) These payments are included in cash flows from operating activities, primarily in changes in accrued and other current liabilities.
At fiscal year end 2025, the maturities of operating lease liabilities were as follows:
(in millions)
Fiscal 2026
$
126
Fiscal 2027
107
Fiscal 2028
86
Fiscal 2029
62
Fiscal 2030
50
Thereafter
117
Total lease payments
548
Less: interest
( 57 )
Present value of lease liabilities
$
491
82
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TE CONNECTIVITY PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
12. Commitments and Contingencies
Legal Proceedings
In the normal course of business, we are subject to various legal proceedings and claims, including patent infringement claims, product liability matters, employment disputes, disputes on agreements, other commercial disputes, environmental matters, antitrust claims, trade compliance matters, and tax matters, including non-income tax matters such as value added tax, sales and use tax, real estate tax, and transfer tax. Although it is not feasible to predict the outcome of these proceedings, based upon our experience, current information, and applicable law, we do not expect that the outcome of these proceedings, either individually or in the aggregate, will have a material effect on our results of operations, financial position, or cash flows.
Environmental Matters
We are involved in various stages of investigation and cleanup related to environmental remediation matters at a number of sites. The ultimate cost of site cleanup is difficult to predict given the uncertainties regarding the extent of the required cleanup, the interpretation of applicable laws and regulations, and alternative cleanup methods. As of fiscal year end 2025, we concluded that we would incur investigation and remediation costs at these sites in the reasonably possible range of $ 18 million to $ 44 million, and we accrued $ 23 million as the probable loss, which was the best estimate within this range. We believe that any potential payment of such estimated amounts will not have a material adverse effect on our results of operations, financial position, or cash flows.
Guarantees
In disposing of assets or businesses, we often provide representations, warranties, and/or indemnities to cover various risks including unknown damage to assets, environmental risks involved in the sale of real estate, liability for investigation and remediation of environmental contamination at waste disposal sites and manufacturing facilities, and unidentified tax liabilities and legal fees related to periods prior to disposition. We do not expect that these uncertainties will have a material adverse effect on our results of operations, financial position, or cash flows.
At fiscal year end 2025, we had outstanding letters of credit, letters of guarantee, and surety bonds of $ 219 million.
Supply Chain Finance Program
We have an agreement with a financial institution that allows participating suppliers the ability to finance payment obligations. The financial institution has separate arrangements with the suppliers and provides them with the option to request early payment for invoices. We do not determine the terms or conditions of the arrangement between the financial institution and suppliers. Our obligation to suppliers, including amounts due and scheduled payment dates, are not impacted by the suppliers’ decisions to finance amounts under the arrangement and we are not required to post collateral with the financial institution. Outstanding payment obligations under our supply chain finance program are included in accounts payable on our Consolidated Balance Sheets. The changes in our payment obligations were as follows:
Fiscal
2025
(in millions)
Balance at beginning of fiscal year
$
105
Invoices confirmed during the fiscal year
514
Invoices paid during the fiscal year
( 458 )
Balance at end of fiscal year
$
161
13. Financial Instruments and Fair Value Measurements
We use derivative and non-derivative financial instruments to manage certain exposures to foreign currency, interest rate, investment, and commodity risks.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Foreign Currency Exchange Rate Risk
As part of managing the exposure to changes in foreign currency exchange rates, we utilize cross-currency swap contracts and foreign currency forward contracts, a portion of which are designated as cash flow hedges. The objective of these contracts is to minimize impacts to cash flows and profitability due to changes in foreign currency exchange rates on intercompany and other cash transactions. We expect that significantly all of the balance in accumulated other comprehensive income (loss) associated with the cash flow hedge-designated instruments addressing foreign exchange risks will be reclassified into the Consolidated Statement of Operations within the next twelve months .
Hedge of Net Investment
We hedge our net investment in certain foreign operations using intercompany loans and external borrowings denominated in the same currencies. The aggregate notional value of these hedges was $ 4,212 million and $ 2,417 million at fiscal year end 2025 and 2024, respectively.
We also use a cross-currency swap program to hedge our net investment in certain foreign operations. The aggregate notional value of the contracts under this program was $ 5,671 million and $ 5,367 million at fiscal year end 2025 and 2024, respectively. Under the terms of these contracts, we receive interest in U.S. dollars at a weighted-average rate of 2.0 % per annum and pay no interest. Upon the maturity of these contracts at various dates through fiscal 2029, we will pay the notional value of the contracts in the designated foreign currency and receive U.S. dollars from our counterparties. We are not required to provide collateral for these contracts.
These cross-currency swap contracts were recorded on the Consolidated Balance Sheets as follows:
Fiscal Year End
2025
2024
(in millions)
Prepaid expenses and other current assets
$
11
$
31
Other assets
23
11
Accrued and other current liabilities
97
51
Other liabilities
193
99
The impacts of our hedge of net investment programs were as follows:
Fiscal
2025
2024
2023
(in millions)
Foreign currency exchange losses on intercompany loans and external borrowings (1)
$
( 163 )
$
( 112 )
$
( 162 )
Losses on cross-currency swap contracts designated as hedges of net investment (1)
( 89 )
( 194 )
( 29 )
(1) Recorded as currency translation, a component of accumulated other comprehensive income (loss), and offset by changes attributable to the translation of the net investment.
Interest Rate and Investment Risk Management
We issue debt, as needed, to fund our operations and capital requirements. Such borrowings can result in interest rate exposure. To manage the interest rate exposure, we may use interest rate swap contracts to convert a portion of fixed rate debt into variable rate debt. Also, we may utilize forward starting interest rate swap contracts to manage interest rate exposure in periods prior to the anticipated issuance of fixed rate debt. We also utilize investment swap contracts to manage earnings exposure on certain nonqualified deferred compensation liabilities.
Commodity Hedges
As part of managing the exposure to certain commodity price fluctuations, we utilize commodity swap contracts. The objective of these contracts is to minimize impacts to cash flows and profitability due to changes in prices of
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TE CONNECTIVITY PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
commodities used in production. These contracts had an aggregate notional value of $ 569 million and $ 488 million at fiscal year end 2025 and 2024, respectively, and were designated as cash flow hedges. These commodity swap contracts were recorded on the Consolidated Balance Sheets as follows:
Fiscal Year End
2025
2024
(in millions)
Prepaid expenses and other current assets
$
73
$
52
Other assets
7
4
Accrued and other current liabilities
—
1
The impacts of our commodity swap contracts were as follows:
Fiscal
2025
2024
2023
(in millions)
Gains recorded in other comprehensive income (loss)
$
78
$
102
$
31
Gains (losses) reclassified from accumulated other comprehensive income (loss) into cost of sales
54
19
( 39 )
We expect that significantly all of the balance in accumulated other comprehensive income (loss) associated with commodity hedges will be reclassified into the Consolidated Statement of Operations within the next twelve months .
Fair Value Measurements
Financial instruments recorded at fair value on a recurring basis, which consist of marketable securities and derivative instruments not discussed above, were immaterial at fiscal year end 2025 and 2024.
14. Retirement Plans
Defined Benefit Pension Plans
We have several contributory and noncontributory defined benefit retirement plans covering certain of our non-U.S. and U.S. employees, designed in accordance with local customs and practice.
The net periodic pension benefit cost (credit) for all non-U.S. and U.S. defined benefit pension plans was as follows:
Non-U.S. Plans
U.S. Plans
Fiscal
Fiscal
2025
2024
2023
2025
2024
2023
($ in millions)
Operating expense:
Service cost
$
31
$
28
$
29
$
7
$
7
$
9
Other (income) expense:
Interest cost
61
63
60
33
39
38
Expected returns on plan assets
( 58 )
( 53 )
( 48 )
( 45 )
( 38 )
( 38 )
Amortization of net actuarial loss
6
5
6
4
4
4
Amortization of prior service credit
( 4 )
( 4 )
( 4 )
—
—
—
Settlement and curtailment losses (gains) and other
5
( 1 )
( 2 )
—
—
—
Net periodic pension benefit cost (credit)
$
41
$
38
$
41
$
( 1 )
$
12
$
13
Weighted-average assumptions used to determine net pension benefit cost (credit) during the fiscal year:
Discount rate
3.59
%
4.13
%
3.80
%
4.94
%
6.04
%
5.53
%
Expected returns on plan assets
4.96
%
5.08
%
4.61
%
7.69
%
7.10
%
6.60
%
Rates of compensation increases
2.59
%
2.68
%
2.62
%
—
%
—
%
—
%
85
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TE CONNECTIVITY PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
The following table represents the changes in benefit obligation and plan assets and the net amount recognized on the Consolidated Balance Sheets for all non-U.S. and U.S. defined benefit pension plans:
Non-U.S. Plans
U.S. Plans
Fiscal
Fiscal
2025
2024
2025
2024
($ in millions)
Change in benefit obligation:
Benefit obligation at beginning of fiscal year
$
1,778
$
1,509
$
700
$
674
Service cost
31
28
7
7
Interest cost
61
63
33
39
Actuarial (gains) losses
( 91 )
112
( 5 )
57
Benefits and administrative expenses paid
( 79 )
( 75 )
( 64 )
( 77 )
Settlements and curtailments
( 30 )
( 15 )
—
—
Currency translation
36
106
—
—
Other
6
50
—
—
Benefit obligation at end of fiscal year
1,712
1,778
671
700
Change in plan assets:
Fair value of plan assets at beginning of fiscal year
1,217
1,007
607
566
Actual returns on plan assets
7
124
41
94
Employer contributions
51
45
18
24
Benefits and administrative expenses paid
( 79 )
( 75 )
( 64 )
( 77 )
Settlements
( 28 )
( 15 )
—
—
Currency translation
3
82
—
—
Other
1
49
—
—
Fair value of plan assets at end of fiscal year
1,172
1,217
602
607
Funded status
$
( 540 )
$
( 561 )
$
( 69 )
$
( 93 )
Amounts recognized on the Consolidated Balance Sheets:
Other assets
$
191
$
182
$
—
$
—
Accrued and other current liabilities
( 40 )
( 34 )
( 1 )
( 2 )
Long-term pension and postretirement liabilities
( 691 )
( 709 )
( 68 )
( 91 )
Net amount recognized
$
( 540 )
$
( 561 )
$
( 69 )
$
( 93 )
Pre-tax amounts included in accumulated other comprehensive income (loss) which have not yet been recognized in net periodic pension benefit cost:
Net actuarial loss
$
( 154 )
$
( 204 )
$
( 132 )
$
( 137 )
Prior service (cost) credit
( 2 )
5
—
—
Total
$
( 156 )
$
( 199 )
$
( 132 )
$
( 137 )
Weighted-average assumptions used to determine pension benefit obligation at fiscal year end:
Discount rate
4.06
%
3.59
%
5.29
%
4.94
%
Rates of compensation increases
2.61
%
2.59
%
—
%
—
%
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TE CONNECTIVITY PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
The pre-tax amounts recognized in accumulated other comprehensive income (loss) for all non-U.S. and U.S. defined benefit pension plans were as follows:
Non-U.S. Plans
U.S. Plans
Fiscal
Fiscal
2025
2024
2025
2024
(in millions)
Current year net actuarial gain (loss) recorded in accumulated other comprehensive income (loss)
$
41
$
( 55 )
$
1
$
( 1 )
Amortization of net actuarial loss
9
5
4
4
Current year prior service cost recorded in accumulated other comprehensive income (loss)
( 2 )
—
—
—
Amortization of prior service credit
( 5 )
( 4 )
—
—
$
43
$
( 54 )
$
5
$
3
In fiscal 2025, unrecognized actuarial gains recorded in accumulated other comprehensive income (loss) were primarily the result of higher discount rates and favorable asset performance for our U.S. defined benefit pension plans, partially offset by unfavorable asset performance for our non-U.S. defined benefit pension plans as compared to fiscal 2024. In fiscal 2024, unrecognized actuarial losses recorded in accumulated other comprehensive income (loss) were primarily the result of lower discount rates, partially offset by favorable asset performance for our non-U.S. defined benefit pension plans as compared to fiscal 2023.
In determining the expected returns on plan assets, we consider the relative weighting of plan assets by class and individual asset class performance expectations.
The investment strategies for non-U.S. and U.S. pension plans are governed locally. Our investment strategy for our pension plans is to manage the plans on a going concern basis. Current investment policy is to achieve a reasonable return on assets, subject to a prudent level of portfolio risk, for the purpose of enhancing the security of benefits for participants. Projected returns are based primarily on pro forma asset allocation, expected long-term returns, and forward-looking estimates of active portfolio and investment management.
At fiscal year end 2025, the long-term target asset allocation in our U.S. plans’ master trust is 25 % return-seeking assets and 75 % liability-hedging assets. Return-seeking assets, including non-U.S. and U.S. equity securities, are assets intended to generate returns in excess of pension liability growth. Liability-hedging assets, including government and corporate bonds, are assets intended to have characteristics similar to pension liabilities and are used to better match asset cash flows with expected obligation cash flows. Asset re-allocation to meet that target is occurring over a multi-year period based on the funded status. We expect to reach our target allocation when the funded status of the plans exceeds 110 %. Based on the funded status of the plans as of fiscal year end 2025, our target asset allocation is 67 % return-seeking and 33 % liability-hedging.
Target weighted-average asset allocation and weighted-average asset allocation for non-U.S. and U.S. pension plans were as follows:
Non-U.S. Plans
U.S. Plans
Fiscal
Fiscal
Fiscal
Fiscal
Year End
Year End
Year End
Year End
Target
2025
2024
Target
2025
2024
Asset category:
Equity securities
28
%
36
%
40
%
67
%
52
%
54
%
Fixed income
44
37
36
33
48
46
Other
28
27
24
—
—
—
Total
100
%
100
%
100
%
100
%
100
%
100
%
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TE CONNECTIVITY PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Our ordinary shares are not a direct investment of our pension funds; however, the pension funds may indirectly include our shares. The aggregate amount of our ordinary shares would not be considered material relative to the total pension fund assets.
Our funding policy is to make contributions in accordance with the laws and customs of the various countries in which we operate as well as to make discretionary voluntary contributions from time to time. We expect to make the minimum required contributions of approximately $ 55 million and $ 15 million to our non-U.S. and U.S. pension plans, respectively, in fiscal 2026. We may also make voluntary contributions at our discretion.
At fiscal year end 2025, benefit payments, which reflect future expected service, as appropriate, are expected to be paid as follows:
Non-U.S. Plans
U.S. Plans
(in millions)
Fiscal 2026
$
103
$
61
Fiscal 2027
101
60
Fiscal 2028
104
60
Fiscal 2029
110
58
Fiscal 2030
115
57
Fiscal 2031-2035
589
261
Presented below is the accumulated benefit obligation for all non-U.S. and U.S. pension plans as well as additional information related to plans with an accumulated benefit obligation in excess of plan assets and plans with a projected benefit obligation in excess of plan assets.
Non-U.S. Plans
U.S. Plans
Fiscal Year End
Fiscal Year End
2025
2024
2025
2024
(in millions)
Accumulated benefit obligation
$
1,643
$
1,700
$
671
$
700
Pension plans with accumulated benefit obligations in excess of plan assets:
Accumulated benefit obligation
742
743
671
700
Fair value of plan assets
50
50
602
607
Pension plans with projected benefit obligations in excess of plan assets:
Projected benefit obligation
856
856
671
700
Fair value of plan assets
123
113
602
607
We value our pension assets based on the fair value hierarchy of ASC 820, Fair Value Measurements and Disclosures . Details of the fair value hierarchy are described in Note 2. The following table presents our defined benefit pension plans’ asset categories and their associated fair value within the fair value hierarchy:
Fiscal Year End 2025
Non-U.S. Plans
U.S. Plans
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
(in millions)
Equity:
Commingled equity funds (1)
$
—
$
257
$
—
$
257
$
—
$
182
$
—
$
182
Fixed income:
Commingled fixed income funds (2)
—
648
—
648
—
257
—
257
Other (3)
—
180
—
180
—
31
—
31
Subtotal
$
—
$
1,085
$
—
1,085
$
—
$
470
$
—
470
Items to reconcile to fair value of plan assets (4)
87
132
Fair value of plan assets
$
1,172
$
602
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Fiscal Year End 2024
Non-U.S. Plans
U.S. Plans
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
(in millions)
Equity:
Commingled equity funds (1)
$
—
$
205
$
—
$
205
$
—
$
184
$
—
$
184
Fixed income:
Commingled fixed income funds (2)
—
711
—
711
—
275
—
275
Other (3)
—
181
—
181
—
2
—
2
Subtotal
$
—
$
1,097
$
—
1,097
$
—
$
461
$
—
461
Items to reconcile to fair value of plan assets (4)
120
146
Fair value of plan assets
$
1,217
$
607
(1) Commingled equity funds are pooled investments in multiple equity-type securities. Fair value is calculated as the closing price of the underlying investments, an observable market condition, divided by the number of shares of the fund outstanding.
(2) Commingled fixed income funds are pooled investments in multiple fixed income-type securities. Fair value is calculated as the closing price of the underlying investments, an observable market condition, divided by the number of shares of the fund outstanding.
(3) Other investments are composed of insurance contracts, derivatives, short-term investments, and structured products such as collateralized obligations and mortgage- and asset-backed securities. Insurance contracts are valued using cash surrender value, or face value of the contract if a cash surrender value is unavailable (level 2), as these values represent the amount that the plan would receive on termination of the underlying contract. Derivatives, short-term investments, and structured products are marked to fair value using models that are supported by observable market-based data (level 2).
(4) Items to reconcile to fair value of plan assets include certain investments containing no significant redemption restrictions that were measured at net asset value (“NAV”) using the NAV practical expedient available in ASC 820 and amounts receivable or payable for unsettled transactions and cash balances, both of which are considered to be carried at book value.
Defined Contribution Retirement Plans
We maintain several defined contribution retirement plans, the most significant of which is located in the U.S. These plans include 401(k) matching programs, as well as qualified and nonqualified profit sharing and share bonus retirement plans. Expense for the defined contribution plans is computed as a percentage of participants’ compensation and was $ 53 million, $ 57 million, and $ 56 million for fiscal 2025, 2024, and 2023, respectively.
Deferred Compensation Plans
We maintain nonqualified deferred compensation plans, which permit eligible employees to defer a portion of their compensation. A record-keeping account is set up for each participant and the participant chooses from a variety of measurement funds for the deemed investment of their accounts. The measurement funds correspond to several funds in our 401(k) plans and the account balance fluctuates with the investment returns on those funds. At fiscal year end 2025 and 2024, total deferred compensation liabilities were $ 310 million and $ 285 million, respectively, and were recorded in other liabilities on the Consolidated Balance Sheets. See Note 13 for additional information regarding our risk management strategy related to deferred compensation liabilities.
Postretirement Benefit Plans
In addition to providing pension and 401(k) benefits, we also provide certain health care coverage continuation for qualifying retirees from the date of retirement to age 65 or lifetime, as applicable. The accumulated postretirement benefit obligation was $ 10 million and $ 11 million at fiscal year end 2025 and 2024, respectively, and the underfunded status of the postretirement benefit plans was included primarily in long-term pension and postretirement liabilities on the Consolidated Balance Sheets. Activity during fiscal 2025, 2024, and 2023 was not significant.
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15. Income Taxes
Income Tax Expense (Benefit)
Significant components of the income tax expense (benefit) were as follows:
Fiscal
2025
2024
2023
(in millions)
Current income tax expense:
U.S. Federal
$
22
$
23
$
23
U.S. State
6
4
—
Non-U.S.
395
365
418
423
392
441
Deferred income tax expense (benefit):
U.S. Federal
47
( 49 )
( 90 )
U.S. State
5
3
( 6 )
Non-U.S.
886
( 743 )
19
938
( 789 )
( 77 )
Income tax expense (benefit)
$
1,361
$
( 397 )
$
364
The U.S. and non-U.S. components of income from continuing operations before income taxes were as follows:
Fiscal
2025
2024
2023
(in millions)
U.S.
$
( 70 )
$
( 96 )
$
( 137 )
Non-U.S.
3,274
2,893
2,405
Income from continuing operations before income taxes
$
3,204
$
2,797
$
2,268
The reconciliation between U.S. federal income taxes at the statutory rate and income tax expense (benefit) was as follows:
Fiscal
2025
2024
2023
(in millions)
Notional U.S. federal income tax expense at the statutory rate (1)
$
673
$
587
$
476
Adjustments to reconcile to the income tax expense (benefit):
U.S. state income tax expense (benefit), net
9
6
( 5 )
Tax law changes
—
( 260 )
( 1 )
Tax credits
( 24 )
( 982 )
( 13 )
Non-U.S. net (earnings) loss (2)
40
( 15 )
( 58 )
Change in accrued income tax liabilities
38
160
47
Valuation allowance
617
328
( 47 )
Legal entity restructurings and intercompany transactions
2
( 234 )
( 1 )
Divestitures
( 1 )
—
( 17 )
Excess tax benefits from share-based payments
( 22 )
( 8 )
( 6 )
Other
29
21
( 11 )
Income tax expense (benefit)
$
1,361
$
( 397 )
$
364
(1) The U.S. federal statutory rate was 21 % for fiscal 2025, 2024, and 2023.
(2) Excludes items which are separately presented.
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The income tax expense for fiscal 2025 included $ 574 million of income tax expense related to a net increase in the valuation allowance for certain deferred tax assets associated with a ten-year tax credit obtained by a Swiss subsidiary in fiscal 2024. See “Global Minimum Tax” below for additional information regarding the impact of guidance issued by the Organisation for Economic Co-operation and Development (“OECD”) in January 2025 on the ten-year tax credit obtained by a Swiss subsidiary. In addition, the income tax expense for fiscal 2025 included $ 44 million of income tax expense related to an increase in the valuation allowance for certain U.S. tax loss and credit carryforwards.
The income tax benefit for fiscal 2024 included a $ 636 million net income tax benefit associated with the $ 972 million ten-year tax credit obtained by a Swiss subsidiary discussed above, reduced by a $ 336 million valuation allowance related to the amount of the tax credit that was not expected to be realized. In addition, the income tax benefit for fiscal 2024 included a $ 262 million income tax benefit related to the revaluation of deferred tax assets as a result of a corporate tax rate increase in Switzerland, as well as a $ 118 million income tax benefit associated with the tax impacts of a legal entity restructuring with related costs of $ 4 million recorded in selling, general, and administrative expenses for other non-income taxes.
The income tax expense for fiscal 2023 included a $ 49 million income tax benefit related to a decrease in the valuation allowance for certain U.S. tax loss and credit carryforwards.
Deferred Tax Assets and Liabilities
Deferred income taxes result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. The components of the net deferred income tax asset were as follows:
Fiscal Year End
2025
2024
(in millions)
Deferred tax assets:
Accrued liabilities and reserves
$
461
$
417
Tax loss, credit, and other tax attribute carryforwards
9,638
10,075
Inventories
61
81
Intangible assets
883
884
Pension and postretirement benefits
57
84
Deferred revenue
5
10
Interest
562
524
Lease liabilities
92
85
Other
4
3
Gross deferred tax assets
11,763
12,163
Valuation allowance
( 8,821 )
( 8,285 )
Deferred tax assets, net of valuation allowance
2,942
3,878
Deferred tax liabilities:
Property, plant, and equipment
( 108 )
( 93 )
Write-down of investments in subsidiaries
( 231 )
( 244 )
Lease ROU assets
( 90 )
( 84 )
Other
( 204 )
( 159 )
Total deferred tax liabilities
( 633 )
( 580 )
Net deferred tax assets
$
2,309
$
3,298
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Our tax loss, credit, and other tax attribute carryforwards (tax effected) at fiscal year end 2025 were as follows:
Expiration Period
Fiscal 2031
Through
Through
No
Fiscal 2030
Fiscal 2045
Expiration
Total
(in millions)
U.S. Federal:
Net operating loss
$
138
$
203
$
58
$
399
Tax credit
46
109
—
155
U.S. State:
Net operating loss
14
13
6
33
Tax credit
2
1
6
9
Non-U.S.:
Net operating loss
47
6,428
1,281
7,756
Tax credit
1
1,033
1
1,035
Notional interest deduction
—
—
159
159
Capital loss
—
2
90
92
Total tax loss, credit, and other tax attribute carryforwards
$
248
$
7,789
$
1,601
$
9,638
The valuation allowance for deferred tax assets of $ 8,821 million and $ 8,285 million at fiscal year end 2025 and 2024, respectively, related principally to the uncertainty of the utilization of certain deferred tax assets, primarily tax loss, credit, and other tax attribute carryforwards in various jurisdictions. During fiscal 2025, the valuation allowance increased primarily, as discussed above, by $ 574 million related to the portion of a tax credit obtained by a Swiss subsidiary in fiscal 2024 not expected to be realized as a result of new guidance issued by the OECD in January 2025. We believe that we will generate sufficient future taxable income to realize the income tax benefits related to the remaining net deferred tax assets on the Consolidated Balance Sheet.
We have provided income taxes for earnings that are currently distributed as well as the taxes associated with several subsidiaries’ earnings that are expected to be distributed in the future. No additional provision has been made for Irish or non-Irish income taxes on the undistributed earnings of subsidiaries or for unrecognized deferred tax liabilities for temporary differences related to basis differences in investments in subsidiaries, as such earnings are expected to be permanently reinvested, the investments are essentially permanent in duration, or we have concluded that no additional tax liability will arise as a result of the distribution of such earnings. As of fiscal year end 2025, certain subsidiaries had approximately $ 37.7 billion of cumulative undistributed earnings that have been retained indefinitely and reinvested in our global manufacturing operations, including working capital; property, plant, and equipment; intangible assets; and research and development activities. A liability could arise if our intention to permanently reinvest such earnings were to change and amounts are distributed by such subsidiaries or if such subsidiaries are ultimately disposed. It is not practicable to estimate the additional income taxes related to permanently reinvested earnings or the basis differences related to investments in subsidiaries. As of fiscal year end 2025, we had approximately $ 3.5 billion of cash, cash equivalents, and intercompany deposits, principally in our subsidiaries, that we have the ability to distribute to TEGSA, our Luxembourg subsidiary, which is the obligor of substantially all of our debt, and to TE Connectivity plc, our Irish parent company, 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.
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Uncertain Tax Positions
The following table summarizes the activity related to unrecognized income tax benefits:
Fiscal
2025
2024
2023
(in millions)
Balance at beginning of fiscal year
$
652
$
454
$
287
Additions for tax positions related to prior years
6
8
78
Reductions for tax positions related to prior years
( 18 )
( 4 )
( 1 )
Additions for tax positions related to the current year
97
214
107
Settlements
( 2 )
( 5 )
( 2 )
Reductions due to lapse of applicable statutes of limitations
( 16 )
( 15 )
( 15 )
Balance at end of fiscal year
$
719
$
652
$
454
The total amount of unrecognized tax benefits that, if recognized, would reduce income tax expense and the effective tax rate were $ 533 million, $ 485 million, and $ 327 million at fiscal year end 2025, 2024, and 2023, respectively.
We record accrued interest and penalties related to uncertain tax positions as part of income tax expense (benefit). As of fiscal year end 2025 and 2024, we had $ 89 million and $ 80 million, respectively, of accrued interest and penalties related to uncertain tax positions on the Consolidated Balance Sheets, recorded primarily in income taxes. During fiscal 2025, 2024, and 2023, we recognized income tax expense of $ 9 million, $ 15 million, and $ 11 million, respectively, related to interest and penalties on the Consolidated Statements of Operations.
We file income tax returns on a unitary, consolidated, or stand-alone basis in multiple state and local jurisdictions, which generally have statutes of limitations ranging from 3 to 4 years . Various state and local income tax returns are currently in the process of examination or administrative appeal.
Our non-U.S. subsidiaries file income tax returns in the countries in which they have operations. Generally, these countries have statutes of limitations ranging from 3 to 10 years . Various non-U.S. subsidiary income tax returns are currently in the process of examination by taxing authorities.
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As of fiscal year end 2025, under applicable statutes, the following tax years remained subject to examination in the major tax jurisdictions indicated:
Jurisdiction
Open Years
Brazil
2020 through 2025
China
2015 through 2025
Czech Republic
2017 through 2025
France
2018 through 2025
Germany
2015 through 2025
Hong Kong
2019 through 2025
India
2012 through 2025
Ireland
2020 through 2025
Italy
2020 through 2025
Japan
2019 through 2025
Luxembourg
2020 through 2025
Mexico
2020 through 2025
Morocco
2022 through 2025
Singapore
2020 through 2025
South Korea
2019 through 2025
Spain
2021 through 2025
Switzerland
2021 through 2025
Thailand
2023 through 2025
United Kingdom
2023 through 2025
U.S.—federal
2022 through 2025
In most jurisdictions, taxing authorities retain the ability to review prior tax years and to adjust any net operating loss and tax credit carryforwards from these years that are utilized in a subsequent period.
Although it is difficult to predict the timing or results of our worldwide examinations, we estimate that approximately $ 130 million of unrecognized income tax benefits, excluding the impact relating to accrued interest and penalties, could be resolved within the next twelve months.
We are not aware of any other matters that would result in significant changes to the amount of unrecognized income tax benefits reflected on the Consolidated Balance Sheet as of fiscal year end 2025.
Other Income Tax Matters
Global Minimum Tax
The OECD and participating countries continue to enact the 15% global minimum tax. The global minimum tax is a significant structural change to the international taxation framework and more than 50 countries have thus far enacted some or all elements of the tax. Ireland has implemented elements of the OECD’s global minimum tax rules, which were effective for us beginning in fiscal 2025.
In January 2025, the OECD released new guidance for the global minimum tax rules which impacted the realizability of certain deferred tax assets associated with a ten-year tax credit obtained by a Swiss subsidiary in fiscal 2024. The January 2025 OECD guidance was enacted into law in Switzerland and as a result, as discussed above, during fiscal 2025, we recorded income tax expense of $ 574 million related to a net increase in the valuation allowance for deferred tax assets representing the amount of the Swiss subsidiary’s tax credits not expected to be realized.
We anticipate further legislative activity and administrative guidance. We continue to closely monitor the evolving global minimum tax framework and assess the implications in the jurisdictions in which we operate.
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One Big Beautiful Bill Act (“OBBBA”)
On July 4, 2025, the OBBBA was enacted. The OBBBA includes significant changes to U.S. tax law, including modifications to international tax provisions, making bonus depreciation permanent, enabling domestic research cost expensing, and adjusting the business interest expense limitation. We do not believe the implications of the OBBBA will have a material impact on our Consolidated Financial Statements.
16. Earnings Per Share
The weighted-average number of shares outstanding used in the computations of basic and diluted earnings per share were as follows:
Fiscal
2025
2024
2023
(in millions)
Basic
297
307
315
Dilutive impact of share-based compensation arrangements
2
2
2
Diluted
299
309
317
The following share options were not included in the computation of diluted earnings per share because the instruments’ underlying exercise prices were greater than the average market prices of our shares and inclusion would be antidilutive:
Fiscal
2025
2024
2023
(in millions)
Antidilutive share options
1
1
1
17. Shareholders’ Equity and Redeemable Noncontrolling Interest
Ordinary Shares
Effective for fiscal 2025, we are organized under the laws of Ireland. The rights of holders of our shares are governed by Irish law and our Irish articles of association. The par value of our ordinary shares is stated in U.S. dollars.
As discussed in Note 1, pursuant to the terms of a merger agreement between TE Connectivity Ltd. and TE Connectivity plc, shareholders received one ordinary share in the share capital of TE Connectivity plc for each common share of TE Connectivity Ltd. held immediately prior to the merger and change in place of incorporation.
Our articles of association authorize our board of directors to allot and issue shares up to the maximum of our authorized but unissued share capital for a period of five years from September 30, 2024. This authorization will need to be renewed by shareholder resolution upon its expiration and at periodic intervals thereafter.
The authorized but unissued share capital may be increased or reduced by way of an ordinary resolution of shareholders. The shares comprising the authorized share capital may be divided into shares of such par value as the resolution shall prescribe.
Ordinary Shares Held in Treasury
At fiscal year end 2025, approximately 8 million ordinary shares were held in treasury. At fiscal year end 2024, approximately 17 million common shares were held in treasury, all of which were owned by one of our subsidiaries. Shares held both directly by us and by our subsidiary are presented as treasury shares on the Consolidated Balance Sheets.
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All treasury shares held as of September 27, 2024 were cancelled at the beginning of fiscal 2025 following our change in place of incorporation. See Note 1 for additional information regarding our change in place of incorporation.
In fiscal 2024 and 2023, our shareholders approved the cancellation of six million and eight and a half million shares, respectively, purchased under our share repurchase program. These capital reductions by cancellation of shares were subject to a notice period, filing with the commercial register in Switzerland, and other requirements.
Authorized Share Capital
In connection with our merger and change in place of incorporation, we converted 25,000 ordinary shares to ordinary class A shares and issued certain preferred shares to facilitate the merger. The ordinary class A shares and preferred shares were re-acquired and cancelled following the merger. No preferred shares and no ordinary class A shares were outstanding at September 26, 2025.
Our authorized share capital consisted of 1,500,000,000 ordinary shares with a par value of $ 0.01 per share, two preferred shares with a par value of $ 1.00 per share, and 25,000 ordinary class A shares with a par value of € 1.00 per share as of September 26, 2025. The authorized share capital includes 25,000 ordinary class A shares with a par value of € 1.00 per share in order to satisfy statutory requirements for the incorporation of all Irish public limited companies.
Contributed Surplus
As a result of cumulative equity transactions, including dividend activity and treasury share cancellations, our contributed surplus balance was reduced to zero with residual activity recorded against accumulated earnings as reflected on the Consolidated Statement of Shareholders’ Equity. To the extent that the contributed surplus balance continues to be zero, the impact of future transactions that normally would have been recorded as a reduction of contributed surplus will be recorded in accumulated earnings.
As an Irish company, dividends are made from accumulated realized profits as defined under Irish company law. As of fiscal year end 2025, Irish accumulated realized profits were approximately $ 47 billion.
Dividends
We paid cash dividends to shareholders of $ 2.72 , $ 2.48 , and $ 2.30 per ordinary/common share in fiscal 2025, 2024, and 2023, respectively.
Following our change in place of incorporation, dividends on our ordinary shares, if any, may be declared on a quarterly basis by our board of directors, as provided by Irish law. Shareholder approval is no longer required for interim dividends.
In September 2025 , our board of directors declared a regular quarterly cash dividend of $ 0.71 per ordinary share, payable on December 12, 2025 , to shareholders of record on November 21, 2025 . At fiscal year end 2025 and 2024, dividends payable to shareholders of $ 209 million and $ 390 million, respectively, were recorded in accrued and other current liabilities on the Consolidated Balance Sheets.
Share Repurchase Program
In fiscal 2025, our board of directors authorized an increase of $ 2.5 billion in our share repurchase program. Shares repurchased under the share repurchase program were as follows:
Fiscal
2025
2024
2023
(in millions)
Number of ordinary/common shares repurchased
8
14
8
Repurchase value
$
1,356
$
1,991
$
946
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At fiscal year end 2025, we had $ 1.4 billion of availability remaining under our share repurchase authorization.
Redeemable Noncontrolling Interest
We owned approximately 71 % of our First Sensor AG (“First Sensor”) subsidiary as of fiscal year end 2025. The noncontrolling interest holders can elect either (1) to remain First Sensor shareholders and receive recurring annual compensation of € 0.56 per First Sensor share or (2) to put their First Sensor shares in exchange for compensation of € 33.27 per First Sensor share. As the exercise of the put right by First Sensor noncontrolling interest shareholders is not within our control, our First Sensor noncontrolling interest balance is recorded as redeemable noncontrolling interest outside of equity on the Consolidated Balance Sheets as of fiscal year end 2025 and 2024.
18. Accumulated Other Comprehensive Income (Loss)
The changes in each component of accumulated other comprehensive income (loss) were as follows:
Foreign
Unrecognized
Gains (Losses)
Accumulated
Currency
Pension and
on Cash
Other
Translation
Postretirement
Flow
Comprehensive
Adjustments (1)
Benefit Costs
Hedges
Income (Loss)
(in millions)
Balance at fiscal year end 2022
$
( 177 )
$
( 216 )
$
( 102 )
$
( 495 )
Other comprehensive income, net of tax:
Other comprehensive income before reclassifications
251
21
31
303
Amounts reclassified from accumulated other comprehensive income (loss)
10
4
38
52
Income tax expense
—
( 5 )
( 4 )
( 9 )
Other comprehensive income, net of tax
261
20
65
346
Less: other comprehensive income attributable to noncontrolling interests
( 9 )
—
—
( 9 )
Balance at fiscal year end 2023
$
75
$
( 196 )
$
( 37 )
$
( 158 )
Other comprehensive income (loss), net of tax:
Other comprehensive income (loss) before reclassifications
130
( 56 )
102
176
Amounts reclassified from accumulated other comprehensive income (loss)
1
4
( 18 )
( 13 )
Income tax (expense) benefit
—
15
( 8 )
7
Other comprehensive income (loss), net of tax
131
( 37 )
76
170
Less: other comprehensive income attributable to noncontrolling interests
( 7 )
—
—
( 7 )
Balance at fiscal year end 2024
$
199
$
( 233 )
$
39
$
5
Other comprehensive income (loss), net of tax:
Other comprehensive income (loss) before reclassifications
( 46 )
40
77
71
Amounts reclassified from accumulated other comprehensive income (loss)
—
8
( 53 )
( 45 )
Income tax expense
—
( 15 )
( 3 )
( 18 )
Other comprehensive income (loss), net of tax
( 46 )
33
21
8
Less: other comprehensive income attributable to noncontrolling interests
( 7 )
—
—
( 7 )
Balance at fiscal year end 2025
$
146
$
( 200 )
$
60
$
6
(1) Includes hedges of net investment foreign currency exchange gains or losses which offset foreign currency exchange losses or gains attributable to the translation of the net investments .
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19. Share Plans
Our equity compensation plans, of which the 2024 Stock and Incentive Plan, amended and restated as of September 30, 2024 (the “2024 Plan”), is the primary plan, provide for the award of annual performance bonuses and long-term performance awards, including share options; restricted, performance, and deferred share units; and other share-based awards (collectively, “Awards”) and allow for the use of unissued shares or treasury shares to be used to satisfy such Awards. As of fiscal year end 2025, the 2024 Plan provided for a maximum of 20 million ordinary shares to be issued as Awards, subject to adjustment as provided under the terms of the plan. A total of 18 million of the shares remained available for issuance under the 2024 Plan as of fiscal year end 2025.
Share-Based Compensation Expense
Share-based compensation expense, which was included in selling, general, and administrative expenses on the Consolidated Statements of Operations, was as follows:
Fiscal
2025
2024
2023
(in millions)
Share-based compensation expense
$
149
$
127
$
123
We recognized a related tax benefit associated with our share-based compensation arrangements of $ 29 million, $ 25 million, and $ 25 million in fiscal 2025, 2024, and 2023, respectively.
Restricted Share Awards
Restricted share awards, which are generally in the form of restricted share units, are granted subject to certain restrictions. Conditions of vesting are determined at the time of grant. All restrictions on an award will lapse upon death or disability of the employee. If the employee satisfies retirement requirements, all or a portion of the award may vest, depending on the terms and conditions of the particular grant. Recipients of restricted share units have no voting rights, but do receive dividend equivalents. For grants that vest through passage of time, the fair value of the award at the time of the grant is amortized to expense over the period of vesting. The fair value of restricted share awards is determined based on the closing value of our shares on the grant date. Restricted share awards generally vest in increments over a period of four years as determined by the management development and compensation committee of our board of directors.
Restricted share award activity was as follows:
Weighted-Average
Grant-Date
Shares
Fair Value
Nonvested at fiscal year end 2024
1,429,201
$
133.29
Granted
623,197
153.48
Vested
( 598,705 )
133.56
Forfeited
( 127,510 )
137.10
Nonvested at fiscal year end 2025
1,326,183
$
142.44
The weighted-average grant-date fair value of restricted share awards granted during fiscal 2025, 2024, and 2023 was $ 153.48 , $ 135.32 , and $ 124.92 , respectively.
The total fair value of restricted share awards that vested during fiscal 2025, 2024, and 2023 was $ 80 million, $ 73 million, and $ 54 million, respectively.
As of fiscal year end 2025, there was $ 91 million of unrecognized compensation expense related to nonvested restricted share awards, which is expected to be recognized over a weighted-average period of 1.7 years.
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Performance Share Awards
Performance share awards, which are generally in the form of performance share units, are granted with pay-out subject to vesting requirements and certain performance conditions that are determined at the time of grant. Based on our performance, the pay-out of performance share units can range from 0 % to 200 % of the number of units originally granted. The grant-date fair value of performance share awards is expensed over the period of performance once achievement of the performance criteria is deemed probable. Recipients of performance share units have no voting rights but do receive dividend equivalents. Performance share awards generally vest after a period of three years as determined by the management development and compensation committee of our board of directors.
Performance share award activity was as follows:
Weighted-Average
Grant-Date
Shares
Fair Value
Outstanding at fiscal year end 2024
467,998
$
136.11
Granted
160,802
153.44
Vested
( 140,229 )
157.49
Forfeited
( 2,343 )
131.77
Outstanding at fiscal year end 2025
486,228
$
135.69
The weighted-average grant-date fair value of performance share awards granted during fiscal 2025, 2024, and 2023 was $ 153.44 , $ 129.05 , and $ 120.06 , respectively.
The total fair value of performance share awards that vested during fiscal 2025, 2024, and 2023 was $ 22 million, $ 20 million, and $ 17 million, respectively.
As of fiscal year end 2025, there was $ 30 million of unrecognized compensation expense related to nonvested performance share awards, which is expected to be recognized over a weighted-average period of 1.1 years.
Share Options
Share options are granted to purchase our shares at prices which are equal to or greater than the market price of the shares on the date the option is granted. Conditions of vesting are determined at the time of grant. All restrictions on the award will lapse upon death or disability of the employee. If the employee satisfies retirement requirements, all or a portion of the award may vest, depending on the terms and conditions of the particular grant. Options generally vest and become exercisable in equal annual installments over a period of four years and expire ten years after the date of grant.
Share option award activity was as follows:
Weighted-Average
Weighted-Average
Remaining
Aggregate
Exercise
Contractual
Intrinsic
Shares
Price
Term
Value
(in years)
(in millions)
Outstanding at fiscal year end 2024
5,383,285
$
112.33
Granted
733,000
153.11
Exercised
( 1,903,343 )
94.21
Forfeited
( 96,346 )
137.72
Outstanding at fiscal year end 2025
4,116,596
$
127.38
6.5
$
369
Vested and expected to vest at fiscal year end 2025
4,051,465
$
127.12
6.5
$
364
Exercisable at fiscal year end 2025
2,213,966
$
116.03
5.2
$
224
The weighted-average exercise price of share option awards granted during fiscal 2025, 2024, and 2023 was $ 153.11 , $ 131.86 , and $ 124.56 , respectively.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
The total intrinsic value of options exercised during fiscal 2025, 2024, and 2023 was $ 157 million, $ 59 million, and $ 30 million, respectively. We received cash related to the exercise of options of $ 182 million, $ 89 million, and $ 43 million in fiscal 2025, 2024, and 2023, respectively.
As of fiscal year end 2025, there was $ 26 million of unrecognized compensation expense related to nonvested share options granted under our share option plans, which is expected to be recognized over a weighted-average period of 1.5 years.
Share-Based Compensation Assumptions
The grant-date fair value of each share option grant was estimated using the Black-Scholes-Merton option pricing model. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs. We employ our historical share volatility when calculating the grant-date fair value of our share option grants using the Black-Scholes-Merton option pricing model. Currently, we do not have exchange-traded options of sufficient duration to employ an implied volatility assumption in the calculation and therefore rely solely on the historical volatility calculation. The average expected life was based on the contractual term of the option and expected employee exercise and post-vesting employment termination behavior. The risk-free interest rate was based on U.S. Treasury zero-coupon issues with a remaining term that approximated the expected life assumed at the date of grant. The expected annual dividend per share was based on our expected dividend rate. The recognized share-based compensation expense was net of estimated forfeitures, which are based on voluntary termination behavior as well as an analysis of actual option forfeitures.
The weighted-average grant-date fair value of options granted and the weighted-average assumptions we used in the Black-Scholes-Merton option pricing model were as follows:
Fiscal
2025
2024
2023
Weighted-average grant-date fair value
$
46.38
$
39.79
$
35.90
Assumptions:
Expected share price volatility
31
%
31
%
31
%
Risk-free interest rate
4.4
%
4.6
%
4.0
%
Expected annual dividend per share
$
2.60
$
2.36
$
2.24
Expected life of options (in years)
5.3
5.3
5.1
20. Segment and Geographic Data
Effective for fiscal 2025, we reorganized our management and segments to align the organization around our current strategy. Our businesses in the former Communications Solutions segment have been moved into the Industrial Solutions segment. Also, the appliances and industrial equipment businesses have been combined to form the automation and connected living business. In addition, we realigned certain product lines and businesses from the Industrial Solutions and former Communications Solutions segments to the Transportation Solutions segment. We now operate through two reportable segments: Transportation Solutions and Industrial Solutions. Our segments are organized based on several factors, including differences in markets, products, and customers. See Note 1 for a description of our segments. The following segment information reflects the new segment reporting structure. Prior period segment results have been recast to conform to the new segment structure.
Segment performance is evaluated by our chief operating decision maker (“CODM”), the Chief Executive Officer, based primarily on net sales and operating income. On a regular basis, the CODM considers segment results in combination with budget-to-actual variances, segment performance reviews, trends and forecasts, and the overall economic environment to assess segment performance, make decisions, and determine how to allocate capital and other resources to the segments.
Costs specific to a segment are charged to the segment, and corporate expenses, such as headquarters administrative costs, are allocated to the segments based on each segment’s share of total operating income. Intersegment sales are not material. Corporate assets are allocated to the segments based on each segment’s share of total segment assets.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
No single customer accounted for a significant amount of our net sales in fiscal 2025, 2024, or 2023.
As we are not organized by product or service, it is not practicable to disclose net sales by product or service.
Net sales by segment and industry end market were as follows:
Fiscal
2025
2024
2023
(in millions)
Transportation Solutions:
Automotive
$
7,052
$
7,039
$
7,038
Commercial transportation
1,425
1,456
1,525
Sensors
911
986
1,112
Total Transportation Solutions
9,388
9,481
9,675
Industrial Solutions:
Digital data networks
2,208
1,274
1,162
Automation and connected living
2,147
1,994
2,352
Aerospace, defense, and marine
1,483
1,344
1,178
Energy
1,344
919
883
Medical
692
833
784
Total Industrial Solutions
7,874
6,364
6,359
Total
$
17,262
$
15,845
$
16,034
Net sales by geographic region and segment were as follows:
Fiscal
2025
2024
2023
(in millions)
Asia–Pacific:
Transportation Solutions
$
4,118
$
3,709
$
3,447
Industrial Solutions
2,434
1,658
1,709
Total Asia–Pacific
6,552
5,367
5,156
Europe/Middle East/Africa (“EMEA”):
Transportation Solutions
3,282
3,600
3,897
Industrial Solutions
2,460
2,299
2,311
Total EMEA
5,742
5,899
6,208
Americas:
Transportation Solutions
1,988
2,172
2,331
Industrial Solutions
2,980
2,407
2,339
Total Americas
4,968
4,579
4,670
Total
$
17,262
$
15,845
$
16,034
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
The following table presents operating results and other data by reportable segment:
Transportation
Industrial
Solutions
Solutions
Total
(in millions)
As of or for the fiscal year ended September 26, 2025
Net sales
$
9,388
$
7,874
$
17,262
Less:
Cost of sales
6,151
5,032
11,183
Selling, general, and administrative expenses
892
974
1,866
Research, development, and engineering expenses
452
377
829
Other segment items (1)
75
98
173
Operating income
$
1,818
$
1,393
$
3,211
Depreciation
$
405
$
243
$
648
Amortization
70
120
190
Capital expenditures
495
441
936
Segment assets (2)
5,975
4,439
10,414
As of or for the fiscal year ended September 27, 2024
Net sales
$
9,481
$
6,364
$
15,845
Less:
Cost of sales
6,220
4,169
10,389
Selling, general, and administrative expenses
874
858
1,732
Research, development, and engineering expenses
440
301
741
Other segment items (1)
67
120
187
Operating income
$
1,880
$
916
$
2,796
Depreciation
$
451
$
209
$
660
Amortization
71
95
166
Capital expenditures
431
249
680
Segment assets (2)
5,758
3,717
9,475
As of or for the fiscal year ended September 29, 2023
Net sales
$
9,675
$
6,359
$
16,034
Less:
Cost of sales
6,702
4,277
10,979
Selling, general, and administrative expenses
840
830
1,670
Research, development, and engineering expenses
432
276
708
Other segment items (1)
214
159
373
Operating income
$
1,487
$
817
$
2,304
Depreciation
$
398
$
209
$
607
Amortization
92
95
187
Capital expenditures
471
261
732
Segment assets (2)
5,762
3,511
9,273
(1) Other segment items consist of acquisition and integration costs and net restructuring and other charges .
(2) Segment assets are composed of accounts receivable, inventories, and net property, plant, and equipment.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
The following table presents a reconciliation of segment assets to total assets:
Fiscal Year End
2025
2024
2023
(in millions)
Total segment assets
$
10,414
$
9,475
$
9,273
Other current assets
1,864
2,059
2,373
Other noncurrent assets
12,803
11,320
10,066
Total assets
$
25,081
$
22,854
$
21,712
Net sales and net property, plant, and equipment by geographic region were as follows:
Property, Plant, and
Net Sales (1)
Equipment, Net
Fiscal
Fiscal Year End
2025
2024
2023
2025
2024
2023
(in millions)
Asia–Pacific:
China
$
4,610
$
3,571
$
3,182
$
970
$
844
$
794
Other Asia–Pacific
1,942
1,796
1,974
373
332
294
Total Asia–Pacific
6,552
5,367
5,156
1,343
1,176
1,088
EMEA:
Switzerland
3,860
3,906
4,111
15
7
6
Germany
193
236
405
592
586
637
Other EMEA
1,689
1,757
1,692
1,134
1,060
965
Total EMEA
5,742
5,899
6,208
1,741
1,653
1,608
Americas:
U.S.
4,408
4,020
4,107
1,085
953
933
Other Americas
560
559
563
143
121
125
Total Americas
4,968
4,579
4,670
1,228
1,074
1,058
Total
$
17,262
$
15,845
$
16,034
$
4,312
$
3,903
$
3,754
(1)
Net sales to external customers are attributed to individual countries based on the legal entity that records the sale .
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SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
Fiscal Years Ended September 26, 2025, September 27, 2024, and September 29, 2023
Additions
Balance at
Charged to
Acquisitions,
Write-offs
Balance at
Beginning of
Costs and
Divestitures,
and
End of
Description
Fiscal Year
Expenses
and Other
Deductions
Fiscal Year
(in millions)
Fiscal 2025:
Allowance for doubtful accounts receivable
$
32
$
22
$
1
$
( 11 )
$
44
Valuation allowance on deferred tax assets
8,285
954
—
( 418 )
8,821
Fiscal 2024:
Allowance for doubtful accounts receivable
$
30
$
15
$
2
$
( 15 )
$
32
Valuation allowance on deferred tax assets
7,416
916
—
( 47 )
8,285
Fiscal 2023:
Allowance for doubtful accounts receivable
$
45
$
( 1 )
$
—
$
( 14 )
$
30
Valuation allowance on deferred tax assets
7,112
406
—
( 102 )
7,416
104