What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-04-24 compared with 2026-01-23 · 136 added, 71 removed, 252 unchanged (45% of the section changed)

10 unchanged sentences

Summary of Performance

● Our net sales increased 21.7% in the first quarter of fiscal 2026 due to sales growth in the Industrial Solutions and Transportation Solutions segments.

● Our net sales increased 14.5% and 18.0% in the second quarter and first six months of fiscal 2026, respectively, as compared to the same periods of fiscal 2025 due to sales growth in both the Industrial Solutions and Transportation Solutions segments.

Richards Manufacturing Co.

(“Richards Manufacturing”), which was acquired in the third quarter of fiscal 2025, contributed net sales of $107 million.

On an organic basis, our net sales increased 15.0% in the first quarter of fiscal 2026 as compared to the same period of fiscal 2025.

(“Richards Manufacturing”), which was acquired in the third quarter of fiscal 2025, contributed net sales of $120 million and $227 million in the second quarter and first six months of fiscal 2026, respectively.

On an organic basis, our net sales increased 7.2% and 11.0% in the second quarter and first six months of fiscal 2026, respectively, as compared to the same periods of fiscal 2025.

● Our net sales by segment were as follows:

● Transportation Solutions —Our net sales increased 10.0% in the first quarter of fiscal 2026 due primarily to sales increases in the automotive end market and, to a lesser degree, the commercial transportation end market.

● Industrial Solutions —Our net sales increased 38.2% in the first quarter of fiscal 2026 primarily as a result of sales growth in the digital data networks and energy end markets.

● In December 2025, our Board of Directors declared a regular quarterly cash dividend of $0.71 per ordinary share, payable on March 13, 2026, to shareholders of record on February 20, 2026.

● Net cash provided by operating activities was $865 million in the first quarter of fiscal 2026.

In the second quarter of fiscal 2026, we expect our net sales to be approximately $4.7 billion, as compared to $4.1 billion in the second quarter of fiscal 2025.

This increase is due to sales growth in both the Industrial Solutions segment, which will continue to benefit from the fiscal 2025 acquisition of Richards Manufacturing, and the Transportation Solutions segment.

In the second quarter of fiscal 2026, we expect diluted earnings per share from continuing operations to be approximately $2.26 per share.

This outlook reflects the positive impact of foreign currency exchange rates on net sales and earnings per share of approximately $180 million and $0.05 per share, respectively, in the second quarter of fiscal 2026 as compared to the same period of fiscal 2025 and includes the impact of currently enacted tariffs and our planned mitigation of those tariffs.

● Transportation Solutions —Our net sales increased 4.7% and 7.3% in the second quarter and first six months of fiscal 2026, respectively, due primarily to sales increases in the automotive and commercial transportation end markets.

● Industrial Solutions —Our net sales increased 27.0% and 32.2% in the second quarter and first six months of fiscal 2026, respectively, primarily as a result of sales growth in the digital data networks, energy, and automation and connected living end markets.

● In March 2026, our Board of Directors declared a regular quarterly cash dividend of $0.78 per ordinary share, payable on June 12, 2026, to shareholders of record on May 22, 2026.

● Net cash provided by operating activities was $1,812 million in the first six months of fiscal 2026.

In the third quarter of fiscal 2026, we expect our net sales to be approximately $5.0 billion, as compared to $4.5 billion in the third quarter of fiscal 2025.

This increase is due to sales growth in both the Industrial Solutions and Transportation Solutions segments.

Additionally, we expect our sales in both the Industrial Solutions and Transportation Solutions segments to increase in the third quarter of fiscal 2026 as compared to the second quarter of fiscal 2026.

In the third quarter of fiscal 2026, we expect diluted earnings per share from continuing operations to be approximately $2.44 per share.

This outlook reflects the positive impact of foreign currency exchange rates on net sales and earnings per share of approximately $51 million and $0.02 per share, respectively, in the third quarter of fiscal 2026 as compared to the same period of fiscal 2025.

Also, this outlook is based on foreign currency exchange rates and commodity prices that are consistent with current levels.

During the first six months of fiscal 2026, we acquired one business for a cash purchase price of $200 million, net of cash acquired.

The acquisition includes certain earn-out provisions based on business performance for which we have estimated the acquisition-date fair value to be approximately $150 million.

The acquired business has been reported as part of our Industrial Solutions segment from the date of acquisition.

Results of Operations

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Quarters Ended

Six Months Ended

($ in millions)

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The following table provides an analysis of the change in our net sales by segment:

Change in Net Sales for the Quarter Ended December 26, 2025

versus Net Sales for the Quarter Ended December 27, 2024

Change in Net Sales for the Quarter Ended March 27, 2026

Change in Net Sales for the Six Months Ended March 27, 2026

versus Net Sales for the Quarter Ended March 28, 2025

versus Net Sales for the Six Months Ended March 28, 2025

Organic Net Sales

Growth (Decline)

($ in millions)

1 unchanged sentence

Industrial Solutions

Net sales increased $833 million, or 21.7%, in the first quarter of fiscal 2026 as compared to the first quarter of fiscal 2025 due to organic net sales growth of 15.0%, the positive impact of 4.0% from acquisitions, and the positive impact of foreign currency translation of 2.7% due to the strengthening of certain foreign currencies.

Richards Manufacturing, which was acquired in the third quarter of fiscal 2025, contributed net sales of $107 million in the first quarter of fiscal 2026.

Net sales increased $601 million, or 14.5%, in the second quarter of fiscal 2026 as compared to the second quarter of fiscal 2025 due to organic net sales growth of 7.2%, the positive impact of foreign currency translation of 4.4% due to the strengthening of certain foreign currencies, and the positive impact of 2.9% from an acquisition.

Richards Manufacturing, which was acquired in the third quarter of fiscal 2025, contributed net sales of $120 million in the second quarter of fiscal 2026.

Net pricing actions positively affected organic net sales by $45 million in the second quarter of fiscal 2026.

In the first six months of fiscal 2026, net sales increased $1,434 million, or 18.0%, as compared to the first six months of fiscal 2025 due to organic net sales growth of 11.0%, the positive impact of foreign currency translation of 3.6% due to the strengthening of certain foreign currencies, and the positive impact of 3.4% from acquisitions.

Richards Manufacturing contributed net sales of $227 million in the first six months of fiscal 2026.

Net pricing actions positively affected organic net sales by $51 million in the first six months of fiscal 2026.

See further discussion of net sales below under “Segment Results.”

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Approximately 60% of our net sales were invoiced in currencies other than the U.S.

dollar in the first quarter of fiscal 2026.

dollar in the first six months of fiscal 2026.

The following table presents our net sales and the percentage of total net sales by geographic region (1) :

Quarters Ended

Six Months Ended

($ in millions)

1 unchanged sentence

The following table provides an analysis of the change in our net sales by geographic region:

Change in Net Sales for the Quarter Ended December 26, 2025

versus Net Sales for the Quarter Ended December 27, 2024

Change in Net Sales for the Quarter Ended March 27, 2026

Change in Net Sales for the Six Months Ended March 27, 2026

versus Net Sales for the Quarter Ended March 28, 2025

versus Net Sales for the Six Months Ended March 28, 2025

Organic Net Sales

($ in millions)

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Quarters Ended

Six Months Ended

($ in millions)

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As a percentage of net sales

Gross margin increased $379 million in the first quarter of fiscal 2026 as compared to the same period of fiscal 2025 due primarily to higher volume and improved manufacturing productivity.

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

We use a wide variety of raw materials in the manufacture of our products.

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Quarters Ended

Six Months Ended

We expect to purchase approximately 190 million pounds of copper, 105,000 troy ounces of gold, 1.8 million troy ounces of silver, and 14,000 troy ounces of palladium in fiscal 2026.

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Quarters Ended

Six Months Ended

($ in millions)

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Selling, General, and Administrative Expenses.

Selling, general, and administrative expenses increased $111 million in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025 due primarily to increased selling expenses to support higher sales levels, higher incentive compensation costs, incremental expenses attributable to recently acquired businesses, and the impact of cost inflation.

Selling, general, and administrative expenses increased $82 million and $193 million in the second quarter and first six months of fiscal 2026, respectively, as compared to the same periods of fiscal 2025 due primarily to increased selling expenses to support higher sales levels, higher incentive compensation costs, the negative impact of foreign currency translation, and the release of reserves associated with trade compliance matters in the second quarter of fiscal 2025.

Restructuring and Other Charges, Net.

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During fiscal 2026, we initiated a restructuring program to optimize our manufacturing footprint and improve the cost structure of our organization.

We incurred net restructuring charges of $10 million during the first quarter of fiscal 2026, of which $4 million related to our fiscal 2026 program.

Annualized cost savings related to the fiscal 2026 actions commenced during the first quarter of fiscal 2026 are expected to be approximately $3 million and are expected to be fully realized by the end of fiscal 2027.

We incurred net restructuring charges of $13 million during the first six months of fiscal 2026, of which $6 million related to our fiscal 2026 program.

Annualized cost savings related to the fiscal 2026 actions commenced during the first six months of fiscal 2026 are expected to be approximately $3 million and are expected to be fully realized by the end of fiscal 2027.

Cost savings will be reflected primarily in cost of sales and selling, general, and administrative expenses.

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Quarters Ended

Six Months Ended

($ in millions)

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Quarters Ended

Six Months Ended

(in millions)

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Quarters Ended

Six Months Ended

($ in millions)

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Interest Expense.

Interest expense increased $24 million in the first quarter of fiscal 2026 as compared to the first quarter of fiscal 2025 due primarily to higher average debt levels and cost of debt.

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

Income Taxes.

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Quarters Ended

Six Months Ended

($ in millions)

1 unchanged sentence

The following table provides an analysis of the change in the Transportation Solutions segment’s net sales by industry end market:

Change in Net Sales for the Quarter Ended December 26, 2025

versus Net Sales for the Quarter Ended December 27, 2024

Change in Net Sales for the Quarter Ended March 27, 2026

Change in Net Sales for the Six Months Ended March 27, 2026

versus Net Sales for the Quarter Ended March 28, 2025

versus Net Sales for the Six Months Ended March 28, 2025

Organic Net Sales

Growth (Decline)

($ in millions)

Commercial transportation

Net sales in the Transportation Solutions segment increased $224 million, or 10.0%, in the first quarter of fiscal 2026 from the first quarter of fiscal 2025 due to organic net sales growth of 7.0% and the positive impact of foreign currency translation of 3.0%.

Net price erosion negatively affected organic net sales by $22 million in the first quarter of fiscal 2026.

Net sales in the Transportation Solutions segment increased $108 million, or 4.7%, in the second quarter of fiscal 2026 from the second quarter of fiscal 2025 due primarily to the positive impact of foreign currency translation of 5.2%.

Net price erosion negatively affected organic net sales by $12 million in the second quarter of fiscal 2026.

Our organic net sales by industry end market were as follows:

● Automotive— Our organic net sales increased 6.5% in the first quarter of fiscal 2026 as a result of growth of 9.9% in the Asia–Pacific region and 3.9% in the EMEA region, partially offset by declines of 0.5% in the Americas region .

Our organic net sales growth in the Asia–Pacific and EMEA regions was due primarily to increased content per vehicle.

In the Americas region, our organic net sales declined due to declines in vehicle production , partially offset by increased content per vehicle .

● Commercial transportation— Our organic net sales increased 16.3% in the first quarter of fiscal 2026 due to growth in the Asia–Pacific and EMEA regions, partially offset by declines in the Americas region.

● Sensors— Our organic net sales decreased 2.3% in the first quarter of fiscal 2026 as a result of declines in transportation applications, partially offset by growth in industrial applications.

● Automotive— Our organic net sales decreased 3.8% in the second quarter of fiscal 2026 as a result of declines of 7.9% in the Americas region and 6.1% in the Asia–Pacific region, partially offset by growth of 1.5% in the EMEA region.

Overall, our organic net sales decreased due primarily to declines in global vehicle production, partially offset by increased content per vehicle.

● Commercial transportation— Our organic net sales increased 17.1% in the second quarter of fiscal 2026 due to growth across all regions.

● Sensors— Our organic net sales decreased 3.0% in the second quarter of fiscal 2026 as a result of declines in transportation applications, partially offset by growth in industrial applications.

In the first six months of fiscal 2026, net sales in the Transportation Solutions segment increased $332 million, or 7.3%, from the first six months of fiscal 2025 due to the positive impact of foreign currency translation of 4.1% and organic net sales growth of 3.2%.

Net price erosion negatively affected organic net sales by $34 million in the first six months of fiscal 2026.

Our organic net sales by industry end market were as follows:

● Automotive —Our organic net sales increased 1.3% in the first six months of fiscal 2026 as a result of growth of 2.6% in the EMEA region and 2.4% in the Asia–Pacific region, partially offset by declines of 4.4% in the Americas region.

Overall, our organic net sales growth was due primarily to increased content per vehicle, partially offset by declines in global vehicle production.

● Commercial transportation —Our organic net sales increased 16.7% in the first six months of fiscal 2026 primarily as a result of growth in the Asia–Pacific and EMEA regions.

● Sensors —Our organic net sales decreased 2.7% in the first six months of fiscal 2026 due to declines in transportation applications, partially offset by growth in industrial applications.

Operating Income.

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Quarters Ended

Six Months Ended

($ in millions)

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Operating margin

Operating income in the Transportation Solutions segment increased $55 million in the first quarter of fiscal 2026 as compared to the same period of fiscal 2025.

Excluding the items below, operating income increased in the first quarter of fiscal 2026 primarily as a result of higher volume.

Operating income in the Transportation Solutions segment increased $58 million and $113 million in the second quarter and first six months of fiscal 2026, respectively, as compared to the same periods of fiscal 2025.

Excluding the items below, operating income increased in the second quarter and first six months of fiscal 2026 primarily as a result of improved manufacturing productivity.

Quarters Ended

Six Months Ended

(in millions)

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Quarters Ended

Six Months Ended

($ in millions)

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The following table provides an analysis of the change in the Industrial Solutions segment’s net sales by industry end market:

Change in Net Sales for the Quarter Ended December 26, 2025

versus Net Sales for the Quarter Ended December 27, 2024

Change in Net Sales for the Quarter Ended March 27, 2026

Change in Net Sales for the Six Months Ended March 27, 2026

versus Net Sales for the Quarter Ended March 28, 2025

versus Net Sales for the Six Months Ended March 28, 2025

Organic Net Sales

Growth (Decline)

($ in millions)

2 unchanged sentences

Aerospace, defense, and marine

In the Industrial Solutions segment, net sales increased $609 million, or 38.2%, in the first quarter of fiscal 2026 as compared to the first quarter of fiscal 2025 due primarily to organic net sales growth of 26.3% and the positive impact of 9.5% from acquisitions.

Richards Manufacturing, which was acquired in the third quarter of fiscal 2025, contributed net sales of $107 million in the first quarter of fiscal 2026.

Net pricing actions positively affected organic net sales by $28 million in the first quarter of fiscal 2026.

In the Industrial Solutions segment, net sales increased $493 million, or 27.0%, in the second quarter of fiscal 2026 as compared to the second quarter of fiscal 2025 due to organic net sales growth of 16.9%, the positive impact of 6.6% from an acquisition, and the positive impact of foreign currency translation of 3.5%.

Richards Manufacturing, which was acquired in the third quarter of fiscal 2025, contributed net sales of $120 million in the second quarter of fiscal 2026.

Net pricing actions positively affected organic net sales by $57 million in the second quarter of fiscal 2026.

Our organic net sales by industry end market were as follows:

● Digital data networks —Our organic net sales increased 69.7% in the first quarter of fiscal 2026 due primarily to growth in artificial intelligence and cloud applications.

● Automation and connected living— Our organic net sales increased 11.6% in the first quarter of fiscal 2026 due primarily to growth in factory automation applications.

● Aerospace, defense, and marine— Our organic net sales increased 10.9% in the first quarter of fiscal 2026 primarily as a result of growth in the defense and commercial aerospace markets.

● Energy— Our organic net sales increased 14.6% in the first quarter of fiscal 2026 as a result of growth across all regions.

● Medical— Our organic net sales increased 5.3% in the first quarter of fiscal 2026 due primarily to growth in interventional medical applications.

● Digital data networks —Our organic net sales increased 46.1% in the second quarter of fiscal 2026 due primarily to growth in artificial intelligence and cloud applications.

● Automation and connected living— Our organic net sales increased 8.2% in the second quarter of fiscal 2026 due primarily to growth in factory automation applications, partially offset by declines in the appliances market.

● Aerospace, defense, and marine— Our organic net sales increased 5.4% in the second quarter of fiscal 2026 primarily as a result of growth in the defense and commercial aerospace markets.

● Energy— Our organic net sales increased 11.2% in the second quarter of fiscal 2026 as a result of growth across all regions.

● Medical— Our organic net sales decreased 3.5% in the second quarter of fiscal 2026 due primarily to our strategic exit of a product line.

Net sales in the Industrial Solutions segment increased $1,102 million, or 32.2%, in the first six months of fiscal 2026 as compared to the first six months of fiscal 2025 due to organic net sales growth of 21.3%, the positive impact of 7.9% from acquisitions, and the positive impact of foreign currency translation of 3.0%.

Richards Manufacturing contributed net sales of $227 million in the first six months of fiscal 2026.

Net pricing actions positively affected organic net sales by $85 million in the first six months of fiscal 2026.

Our organic net sales by industry end market were as follows:

● Digital data networks —Our organic net sales increased 57.0% in the first six months of fiscal 2026 primarily as a result of growth in artificial intelligence and cloud applications.

● Automation and connected living— Our organic net sales increased 9.8% in the first six months of fiscal 2026 primarily as a result of growth in factory automation applications.

● Aerospace, defense, and marine— Our organic net sales increased 8.0% in the first six months of fiscal 2026 due primarily to growth in the defense and commercial aerospace markets.

● Energy— Our organic net sales increased 12.7% in the first six months of fiscal 2026 due to growth across all regions.

● Medical— Our organic net sales were flat in the first six months of fiscal 2026 primarily as a result of growth in interventional medical applications, offset by our strategic exit of a product line.

Operating Income.

1 unchanged sentence

Quarters Ended

Six Months Ended

($ in millions)

1 unchanged sentence

Operating margin

Operating income in the Industrial Solutions segment increased $218 million in the first quarter of fiscal 2026 as compared to the same period of fiscal 2025.

Excluding the items below, operating income increased in the first quarter of fiscal 2026 primarily as a result of higher volume.

Operating income in the Industrial Solutions segment increased $148 million and $366 million in the second quarter and first six months of fiscal 2026, respectively, as compared to the same periods of fiscal 2025.

Excluding the items below, operating income increased in the second quarter and first six months of fiscal 2026 primarily as a result of higher volume.

Quarters Ended

Six Months Ended

(in millions)

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Our ability to fund our future capital needs will be affected by our ongoing ability to generate cash from operations and may be affected by our access to capital markets, money markets, or other sources of funding, as well as the capacity and terms of our financing arrangements.

We believe that cash generated from operations and, to the extent necessary, these other sources of potential funding will be sufficient to meet our anticipated capital needs for the foreseeable future, including the repayment of $500 million of 4.50% senior notes and $350 million of 3.70% senior notes, both due in February 2026.

Also, we may use excess cash and other funding to acquire strategic businesses or product lines, reduce our outstanding debt, or return cash to shareholders through dividends on our ordinary shares or purchases of our ordinary shares pursuant to our authorized share repurchase program.

We may use excess cash to acquire strategic businesses or product lines, reduce our outstanding debt, or return cash to shareholders through dividends on our ordinary shares or purchases of our ordinary shares pursuant to our authorized share repurchase program.

We may also use excess cash and other funding to make strategic acquisitions.

The cost or availability of future funding may be impacted by financial market conditions.

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Cash Flows from Operating Activities

In the first quarter of fiscal 2026, net cash provided by operating activities decreased $13 million to $865 million from $878 million in the first quarter of fiscal 2025.

The decrease resulted primarily from the impact of changes in working capital levels, partially offset by higher pre-tax income.

The amount of income taxes paid, net of refunds, during the first quarters of fiscal 2026 and 2025 was $88 million and $49 million, respectively.

In the first six months of fiscal 2026, net cash provided by operating activities increased $281 million to $1,812 million from $1,531 million in the first six months of fiscal 2025.

The increase resulted primarily from higher pre-tax income, partially offset by the impact of changes in working capital levels and an increase in income tax payments.

The amount of income taxes paid, net of refunds, during the first six months of fiscal 2026 and 2025 was $223 million and $164 million, respectively.

Cash Flows from Investing Activities

Capital expenditures were $258 million and $205 million in the first quarters of fiscal 2026 and 2025, respectively.

Capital expenditures were $528 million and $435 million in the first six months of fiscal 2026 and 2025, respectively.

We expect fiscal 2026 capital spending levels to be approximately 6% of net sales.

We believe our capital funding levels are adequate to support new programs, and we continue to invest in our manufacturing infrastructure to further enhance productivity and manufacturing capabilities.

During the first quarter of fiscal 2025, we acquired two businesses for a combined cash purchase price of $325 million, net of cash acquired.

During the first six months of fiscal 2026, we acquired one business for a cash purchase price of $200 million, net of cash acquired.

We acquired two businesses for a combined cash purchase price of $321 million, net of cash acquired, during the first six months of fiscal 2025.

See Note 3 to the Condensed Consolidated Financial Statements for additional information regarding acquisitions.

Cash Flows from Financing Activities and Capitalization

Total debt at December 26, 2025 and September 26, 2025 was $5,708 million and $5,694 million, respectively.

Total debt at March 27, 2026 and September 26, 2025 was $5,655 million and $5,694 million, respectively.

See Note 7 to the Condensed Consolidated Financial Statements for additional information regarding debt.

Tyco Electronics Group S.A.

(“TEGSA”), our wholly-owned subsidiary, had no commercial paper outstanding at December 26, 2025 or September 26, 2025.

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.

TEGSA had no borrowings under the Credit Facility at December 26, 2025 or September 26, 2025.

During the second quarter of fiscal 2026, Tyco Electronics Group S.A.

(“TEGSA”), our wholly-owned subsidiary, issued $200 million aggregate principal amount of 4.50% senior notes due in February 2031 and $550 million aggregate principal amount of 4.875% senior notes due in February 2036.

The February 2031 senior notes represent a further issuance of TEGSA’s outstanding $450 million aggregate principal amount of 4.50% senior notes which were issued in fiscal 2025 and bring the total aggregate principal amount of the 4.50% senior notes due in February 2031 to $650 million.

The new notes are TEGSA’s unsecured senior obligations and rank equally in right of payment with all existing and any future senior indebtedness of TEGSA and senior to any subordinated indebtedness that TEGSA may incur.

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

At March 27, 2026, TEGSA had $100 million of commercial paper outstanding at a weighted-average interest rate of 4.0%.

TEGSA had no commercial paper outstanding at September 26, 2025.

TEGSA entered into a new five-year unsecured senior revolving credit facility (“Credit Facility”) in February 2026 with aggregate commitments of $3.0 billion, which refinanced and replaced in full TEGSA’s existing $1.5 billion five-year unsecured senior revolving credit facility (the “Replaced Credit Facility”).

The Credit Facility matures in February 2031 and contains provisions that allow for incremental commitments of up to $1.0 billion, subject to terms and conditions in the Credit Facility.

TEGSA had no borrowings under the Credit Facility at March 27, 2026 or the Replaced Credit Facility at September 26, 2025.

Borrowings under the Credit Facility bear interest at a rate per annum equal to, at the option of TEGSA, (1) with respect to borrowings in U.S.

dollars, (a) the term secured overnight financing rate (“Term SOFR”) (as defined in the Credit Facility) or (b) an alternate base rate equal to the highest of (i) Bank of America, N.A.’s base rate, (ii) the federal funds effective rate plus 1/2 of 1%, (iii) the Term SOFR for a one-month interest period plus 1%, and (iv) 1%, (2) with respect to borrowings in euro, the Euro Interbank Offered Rate, (3) with respect to borrowings in sterling, the Sterling Overnight Index Average Reference Rate, and (4) with respect to borrowings in yen, the Tokyo Interbank Offered Rate, plus, in each case, an applicable margin based upon the senior, unsecured, long-term debt rating of TEGSA.

TEGSA is required to pay an annual facility fee.

Based on the applicable credit ratings of TEGSA, this fee ranges from 5.0 to 12.5 basis points of the lenders’ commitments under the Credit Facility.

The Credit Facility contains a financial ratio covenant providing that if, as of the last day of each fiscal quarter, our ratio of Consolidated Total Debt to Consolidated EBITDA (as defined in the Credit Facility) for the then most recently concluded period of four consecutive fiscal quarters exceeds 3.75 (or temporarily 4.25 following a qualified acquisition) to 1.0, an Event of Default (as defined in the Credit Facility) is triggered.

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None of our covenants are presently considered restrictive to our operations.

As of December 26, 2025, we were in compliance with all of our debt covenants and believe that we will continue to be in compliance with our existing covenants for the foreseeable future.

As of March 27, 2026, we were in compliance with all of our debt covenants and believe that we will continue to be in compliance with our existing covenants for the foreseeable future.

In addition to the Credit Facility, TEGSA is the borrower under our senior notes and commercial paper.

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.

Payments of ordinary share dividends to shareholders were $209 million and $189 million in the first quarters of fiscal 2026 and 2025, respectively.

In December 2025, our Board of Directors declared a regular quarterly cash dividend of $0.71 per ordinary share, payable on March 13, 2026, to shareholders of record on February 20, 2026.

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

In March 2026, our Board of Directors declared a regular quarterly cash dividend of $0.78 per ordinary share, payable on June 12, 2026, to shareholders of record on May 22, 2026.

In the second quarter of fiscal 2026, our Board of Directors authorized an increase of $3.0 billion in our share repurchase program.

Ordinary shares repurchased under the share repurchase program were as follows:

Quarters Ended

Six Months Ended

(in millions)

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Repurchase value

At December 26, 2025, we had $983 million of availability remaining under our share repurchase authorization.

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

Summarized Guarantor Financial Information

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In addition to being the issuer of our debt securities, TEGSA owns, directly or indirectly, all of our operating subsidiaries.

The following tables present summarized financial information, excluding investments in and equity

in earnings of our non-guarantor subsidiaries, for TE Connectivity plc, TE Connectivity Switzerland Ltd., and TEGSA on a combined basis.

The following tables present summarized financial information, excluding investments in and equity in earnings of our non-guarantor subsidiaries, for TE Connectivity plc, TE Connectivity Switzerland Ltd., and TEGSA on a combined basis.

September 26,

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Total noncurrent liabilities (2)

(1) Includes $3,158 million and $2,444 million as of December 26, 2025 and September 26, 2025, respectively, of intercompany loans receivable from non-guarantor subsidiaries.

(2) Includes $6,219 million and $5,001 million as of December 26, 2025 and September 26, 2025, respectively, of intercompany loans payable to non-guarantor subsidiaries.

Quarter Ended

(1) Includes $4,531 million and $2,444 million as of March 27, 2026 and September 26, 2025, respectively, of intercompany loans receivable from non-guarantor subsidiaries.

(2) Includes $4,401 million and $5,001 million as of March 27, 2026 and September 26, 2025, respectively, of intercompany loans payable to non-guarantor subsidiaries.

Six Months Ended

Fiscal Year Ended

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We do not expect that these uncertainties will have a material adverse effect on our results of operations, financial position, or cash flows.

At December 26, 2025, we had outstanding letters of credit, letters of guarantee, and surety bonds of $245 million.

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

Commitments and Contingencies

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Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” and the Consolidated Financial Statements and accompanying notes contained in our Annual Report on Form 10-K for the fiscal year ended September 26, 2025.

There were no significant changes to this information during the first quarter of fiscal 2026.

There were no significant changes to this information during the first six months of fiscal 2026.

Non-GAAP Financial Measure

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Risk Factors,” in our Annual Report on Form 10-K for the fiscal year ended September 26, 2025, and in this report, could cause our results to differ materially from those expressed in forward-looking statements:

● conditions in the global or regional economies and global capital markets, and cyclical industry conditions, including recession, inflation, tariffs, and higher interest rates;

● conditions in the global or regional economies and global capital markets, and cyclical industry conditions, including recession, inflation, tariffs, supply chain disruptions, and higher interest rates;

● conditions affecting demand for products in the industries we serve, particularly the automotive industry;

26 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis