TE Connectivity plc 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Condensed Consolidated Financial Statements and the accompanying notes included elsewhere in this Quarterly Report on Form 10-Q. The following discussion may contain forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in these forward-looking statements as a result of many factors, including but not limited to those under the heading “Forward-Looking Information” and “Part II. Item 1A. Risk Factors.” Our Condensed Consolidated Financial Statements have been prepared in United States (“U.S.”) dollars, in accordance with accounting principles generally accepted in the U.S. (“GAAP”). The following discussion includes organic net sales growth (decline) which is a non-GAAP financial measure. See “Non-GAAP Financial Measure” for additional information regarding this measure. Overview 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. Summary of Performance ● 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 $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 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. 21 Table of Contents Outlook 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. Acquisition 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 $150 million. The acquired business has been reported as part of our Industrial Solutions segment from the date of acquisition. Results of Operations Net Sales The following table presents our net sales and the percentage of total net sales by segment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ For the ​ ​ ​ ​ Quarters Ended ​ ​ Six Months Ended ​ ​ ​ ​ March 27, ​ ​ March 28, ​ ​ March 27, ​ ​ March 28, ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ ​ ($ in millions) Transportation Solutions ​ $ 2,422 ​ 51 % ​ $ 2,314 ​ 56 % ​ $ 4,889 ​ 52 % ​ $ 4,557 ​ 57 % ​ Industrial Solutions ​ 2,322 49 ​ ​ 1,829 44 ​ ​ 4,524 48 ​ ​ 3,422 43 ​ ​ Total ​ $ 4,744 100 % ​ $ 4,143 100 % ​ $ 9,413 100 % ​ $ 7,979 100 % ​ The following table provides an analysis of the change in our net sales by segment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ​ ​ Net Sales ​ Organic Net Sales ​ ​ ​ ​ ​ ​ ​ Net Sales ​ Organic Net Sales ​ ​ ​ ​ ​ ​ ​ Growth ​ Growth (Decline) ​ Translation ​ Acquisition ​ ​ ​ Growth ​ Growth ​ ​ ​ Translation ​ ​ ​ Acquisitions ​ ​ ​ ​ ($ in millions) Transportation Solutions $ 108 4.7 % $ (12) (0.5) % $ 120 ​ $ — ​ $ 332 7.3 % $ 146 3.2 % $ 186 ​ $ — ​ Industrial Solutions 493 27.0 ​ 309 16.9 ​ 64 ​ 120 ​ 1,102 32.2 ​ 728 21.3 ​ 102 ​ 272 ​ Total $ 601 14.5 % $ 297 7.2 % $ 184 ​ $ 120 ​ $ 1,434 18.0 % $ 874 11.0 % $ 288 ​ $ 272 ​ 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 $51 million in the first six months of fiscal 2026. 22 Table of Contents See further discussion of net sales below under “Segment Results.” Net Sales by Geographic Region. Our business operates in three geographic regions—Asia–Pacific, Europe/Middle East/Africa (“EMEA”), and the Americas—and our results of operations are influenced by changes in foreign currency exchange rates. Increases or decreases in the value of the U.S. dollar, compared to other currencies, will directly affect our reported results as we translate those currencies into U.S. dollars at the end of each fiscal period. Approximately 60% of our net sales were invoiced in currencies other than the U.S. dollar in the first six months of fiscal 2026. The following table presents our net sales and the percentage of total net sales by geographic region (1) : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ For the ​ ​ ​ ​ Quarters Ended ​ ​ Six Months Ended ​ ​ ​ ​ March 27, ​ ​ March 28, ​ ​ March 27, ​ ​ March 28, ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ ​ ​ ($ in millions) ​ Asia–Pacific ​ $ 1,751 37 % ​ $ 1,542 37 % ​ $ 3,757 40 % ​ $ 3,145 40 % ​ EMEA ​ ​ 1,611 ​ 34 ​ ​ ​ 1,413 ​ 34 ​ ​ ​ 3,051 ​ 32 ​ ​ ​ 2,642 ​ 33 ​ ​ Americas ​ 1,382 29 ​ ​ 1,188 29 ​ ​ 2,605 28 ​ ​ 2,192 27 ​ ​ Total ​ $ 4,744 100 % ​ $ 4,143 100 % ​ $ 9,413 100 % ​ $ 7,979 100 % ​ (1) Net sales to external customers are attributed to individual countries based on the legal entity that records the sale. The following table provides an analysis of the change in our net sales by geographic region: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ​ ​ ​ Net Sales ​ Organic Net Sales ​ ​ ​ ​ ​ ​ ​ Net Sales ​ Organic Net Sales ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Growth ​ ​ ​ Growth ​ ​ ​ Translation ​ ​ ​ Acquisition ​ ​ ​ Growth ​ ​ ​ Growth ​ Translation ​ Acquisitions ​ ​ ​ ​ ​ ($ in millions) Asia–Pacific ​ $ 209 13.6 % $ 167 10.8 % $ 42 ​ $ — ​ $ 612 19.5 % $ 559 ​ 17.8 % $ 53 ​ $ — ​ EMEA ​ ​ 198 ​ 14.0 ​ ​ 67 ​ 4.8 ​ ​ 131 ​ ​ — ​ ​ 409 15.5 ​ ​ 190 7.2 ​ ​ 219 ​ ​ — ​ Americas ​ 194 16.3 ​ 63 5.3 ​ 11 ​ 120 ​ 413 18.8 ​ 125 5.7 ​ 16 ​ 272 ​ Total ​ $ 601 14.5 % $ 297 7.2 % $ 184 ​ $ 120 ​ $ 1,434 18.0 % $ 874 ​ 11.0 % $ 288 ​ $ 272 ​ Cost of Sales and Gross Margin The following table presents cost of sales and gross margin information: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ ​ ​ For the ​ ​ ​ ​ ​ ​ ​ Quarters Ended ​ ​ ​ ​ ​ Six Months Ended ​ ​ ​ ​ ​ ​ ​ March 27, ​ ​ March 28, ​ ​ ​ ​ March 27, ​ ​ March 28, ​ ​ ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ Change ​ ​ ​ ​ 2026 ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ Change ​ ​ ​ ​ ​ ($ in millions) ​ Cost of sales ​ $ 2,999 ​ ​ $ 2,684 ​ ​ $ 315 ​ $ 5,929 ​ ​ $ 5,160 ​ ​ $ 769 ​ As a percentage of net sales ​ 63.2 % ​ 64.8 % ​ ​ ​ 63.0 % ​ 64.7 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross margin ​ $ 1,745 ​ ​ $ 1,459 ​ ​ $ 286 ​ $ 3,484 ​ ​ $ 2,819 ​ ​ $ 665 ​ As a percentage of net sales ​ 36.8 % ​ 35.2 % ​ ​ ​ 37.0 % ​ 35.3 % ​ ​ ​ 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. 23 Table of Contents We use a wide variety of raw materials in the manufacture of our products. Cost of sales and gross margin are subject to variability in raw material prices, which continue to fluctuate for many of the raw materials we use. The following table presents the average prices incurred related to copper, gold, silver, and palladium: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ For the ​ ​ ​ ​ ​ Quarters Ended ​ Six Months Ended ​ ​ ​ ​ ​ March 27, ​ March 28, ​ March 27, ​ March 28, ​ ​ ​ ​ ​ Measure ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ Copper Lb. ​ $ 4.55 ​ $ 4.22 $ 4.56 ​ $ 4.15 Gold Troy oz. ​ 3,405 ​ 2,459 3,302 ​ 2,390 Silver ​ Troy oz. ​ ​ 48.65 ​ ​ 28.01 ​ ​ 43.16 ​ ​ 27.77 ​ Palladium Troy oz. ​ 1,311 ​ 1,064 1,223 ​ 1,100 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. Operating Expenses The following table presents operating expense information: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ ​ ​ For the ​ ​ ​ ​ ​ ​ ​ Quarters Ended ​ ​ ​ ​ ​ Six Months Ended ​ ​ ​ ​ ​ ​ ​ March 27, ​ ​ March 28, ​ ​ ​ ​ March 27, ​ ​ March 28, ​ ​ ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ Change ​ ​ ​ ​ 2026 ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ Change ​ ​ ​ ​ ​ ($ in millions) ​ Selling, general, and administrative expenses ​ $ 536 ​ ​ $ 454 ​ ​ $ 82 ​ $ 1,074 ​ ​ $ 881 ​ ​ $ 193 ​ As a percentage of net sales ​ 11.3 % ​ 11.0 % ​ ​ ​ 11.4 % ​ 11.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Restructuring and other charges, net ​ $ 10 ​ ​ $ 45 ​ ​ $ (35) ​ $ 20 ​ ​ $ 95 ​ ​ $ (75) ​ Selling, General, and Administrative Expenses. 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. We are committed to continuous productivity improvements, and we evaluate opportunities to simplify our global manufacturing footprint, migrate facilities to lower-cost regions, reduce fixed costs, and eliminate excess capacity. These initiatives are designed to help us maintain our competitiveness in the industry, improve our operating leverage, and position us for future growth. During fiscal 2026, we initiated a restructuring program to optimize our manufacturing footprint and improve the cost structure of our organization. We incurred net restructuring charges of $13 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. For fiscal 2026, we expect total restructuring charges to be approximately $100 million and total cash spend, which will be funded with cash from operations, to be approximately $110 million. See Note 2 to the Condensed Consolidated Financial Statements for additional information regarding net restructuring and other charges. 24 Table of Contents Operating Income The following table presents operating income and operating margin information: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ ​ ​ For the ​ ​ ​ ​ ​ ​ ​ Quarters Ended ​ ​ ​ ​ ​ Six Months Ended ​ ​ ​ ​ ​ ​ ​ March 27, ​ ​ March 28, ​ ​ ​ ​ March 27, ​ ​ March 28, ​ ​ ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ Change ​ ​ ​ ​ 2026 ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ Change ​ ​ ​ ​ ​ ($ in millions) ​ Operating income ​ $ 954 ​ ​ $ 748 ​ ​ $ 206 ​ $ 1,917 ​ ​ $ 1,438 ​ ​ $ 479 ​ Operating margin ​ 20.1 % ​ 18.1 % ​ ​ ​ 20.4 % ​ 18.0 % ​ ​ ​ Operating income included the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ For the ​ ​ ​ Quarters Ended ​ Six Months Ended ​ ​ ​ March 27, ​ March 28, ​ March 27, ​ March 28, ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ ​ ​ (in millions) ​ Acquisition-related charges: ​ ​ ​ ​ ​ ​ ​ ​ ​ Acquisition and integration costs ​ $ 8 ​ $ 9 ​ $ 11 ​ $ 14 ​ Charges associated with the amortization of acquisition-related fair value adjustments ​ — ​ 3 ​ 3 ​ 3 ​ ​ ​ 8 ​ 12 ​ 14 ​ 17 ​ Restructuring and other charges, net ​ 10 ​ 45 ​ 20 ​ 95 ​ Amortization expense ​ ​ 57 ​ ​ 41 ​ ​ 114 ​ ​ 80 ​ Total ​ $ 75 ​ $ 98 ​ $ 148 ​ $ 192 ​ See discussion of operating income below under “Segment Results.” Non-Operating Items The following table presents select non-operating information: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ ​ ​ For the ​ ​ ​ ​ ​ ​ ​ Quarters Ended ​ ​ ​ ​ ​ Six Months Ended ​ ​ ​ ​ ​ ​ ​ March 27, ​ ​ March 28, ​ ​ ​ ​ March 27, ​ ​ March 28, ​ ​ ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ Change ​ ​ ​ ​ 2026 ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ Change ​ ​ ​ ​ ​ ($ in millions) ​ Interest expense ​ $ 32 ​ ​ $ 14 ​ ​ $ 18 ​ $ 62 ​ ​ $ 20 ​ ​ $ 42 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax expense ​ ​ 87 ​ ​ ​ 742 ​ ​ ​ (655) ​ ​ 297 ​ ​ ​ 920 ​ ​ ​ (623) ​ Effective tax rate ​ 9.2 % ​ 98.3 % ​ ​ ​ 15.6 % ​ 63.0 % ​ ​ ​ Interest Expense. Interest expense increased $42 million in the first six months of fiscal 2026 as compared to the first six months of fiscal 2025 due primarily to higher average debt levels and cost of debt. Income Taxes. See Note 12 to the Condensed Consolidated Financial Statements for discussion of income taxes. ​ 25 Table of Contents Segment Results Transportation Solutions Net Sales. The following table presents the Transportation Solutions segment’s net sales and the percentage of total net sales by industry end market: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ For the ​ ​ ​ ​ Quarters Ended ​ ​ Six Months Ended ​ ​ ​ ​ March 27, ​ ​ March 28, ​ ​ March 27, ​ ​ March 28, ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ ​ ​ ($ in millions) ​ ​ Automotive ​ $ 1,762 ​ ​ ​ 73 % ​ $ 1,735 ​ ​ ​ 75 % ​ $ 3,647 ​ 75 % ​ $ 3,457 ​ 76 % ​ Commercial transportation ​ 433 18 ​ ​ 357 15 ​ ​ 803 16 ​ ​ 669 15 ​ ​ Sensors ​ 227 9 ​ ​ 222 10 ​ ​ 439 9 ​ ​ 431 9 ​ ​ Total ​ $ 2,422 100 % ​ $ 2,314 100 % ​ $ 4,889 100 % ​ $ 4,557 100 % ​ 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 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 ​ ​ ​ ​ ​ Net Sales ​ ​ ​ Organic Net Sales ​ ​ ​ ​ ​ ​ ​ ​ Net Sales ​ ​ ​ Organic Net Sales ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Growth ​ Growth (Decline) ​ Translation ​ Growth ​ Growth (Decline) ​ Translation ​ ​ ($ in millions) Automotive ​ $ 27 ​ 1.6 % $ (67) ​ (3.8) % $ 94 ​ $ 190 ​ 5.5 % $ 45 ​ 1.3 % $ 145 ​ Commercial transportation ​ 76 21.3 ​ 62 17.1 ​ 14 ​ 134 20.0 ​ 113 16.7 ​ 21 ​ Sensors ​ 5 2.3 ​ (7) (3.0) ​ 12 ​ 8 1.9 ​ (12) (2.7) ​ 20 ​ Total ​ $ 108 4.7 % $ (12) (0.5) % $ 120 ​ $ 332 7.3 % $ 146 3.2 % $ 186 ​ 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 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 $34 million in the first six months of fiscal 2026. Our organic net sales by industry end market were as follows: ● Automotive —Our organic net sales increased 1.3% in the first six months of fiscal 2026 as a result of growth of 2.6% in the EMEA region and 2.4% in the Asia–Pacific region, partially offset by declines of 4.4% in the Americas region. Overall, our organic net sales growth was due primarily to increased content per vehicle, partially offset by declines in global vehicle production. 26 Table of Contents ● Commercial transportation —Our organic net sales increased 16.7% in the first six months of fiscal 2026 primarily as a result of growth in the Asia–Pacific and EMEA regions. ● Sensors —Our organic net sales decreased 2.7% in the first six months of fiscal 2026 due to declines in transportation applications, partially offset by growth in industrial applications. Operating Income. The following table presents the Transportation Solutions segment’s operating income and operating margin information: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ ​ For the ​ ​ ​ ​ ​ ​ Quarters Ended ​ ​ ​ ​ Six Months Ended ​ ​ ​ ​ ​ ​ March 27, ​ March 28, ​ ​ ​ ​ March 27, ​ March 28, ​ ​ ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ Change ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ Change ​ ​ ​ ​ ​ ($ in millions) ​ Operating income ​ $ 503 ​ $ 445 ​ $ 58 ​ $ 1,004 ​ $ 891 ​ $ 113 ​ Operating margin ​ 20.8 % 19.2 % ​ ​ 20.5 % 19.6 % ​ ​ 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. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ For the ​ ​ ​ Quarters Ended ​ Six Months Ended ​ ​ ​ March 27, ​ March 28, ​ March 27, ​ March 28, ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ ​ ​ (in millions) ​ Restructuring and other charges, net ​ $ 1 ​ $ 33 ​ $ 5 ​ $ 65 ​ Amortization expense ​ ​ 18 ​ ​ 17 ​ ​ 36 ​ ​ 34 ​ Total ​ $ 19 ​ $ 50 ​ $ 41 ​ $ 99 ​ Industrial Solutions Net Sales. The following table presents the Industrial Solutions segment’s net sales and the percentage of total net sales by industry end market: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ For the ​ ​ ​ ​ Quarters Ended ​ ​ Six Months Ended ​ ​ ​ ​ March 27, ​ ​ March 28, ​ ​ March 27, ​ ​ March 28, ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ ​ ​ ($ in millions) ​ ​ Digital data networks ​ $ 714 ​ 31 % ​ $ 482 ​ 26 % ​ $ 1,421 ​ 32 % ​ $ 895 ​ 26 % ​ Automation and connected living ​ ​ 579 25 ​ ​ ​ 512 28 ​ ​ ​ 1,128 25 ​ ​ ​ 991 29 ​ ​ Aerospace, defense, and marine ​ ​ 408 ​ 17 ​ ​ ​ 374 ​ 21 ​ ​ ​ 789 ​ 17 ​ ​ ​ 708 ​ 21 ​ ​ Energy ​ 445 19 ​ ​ 279 15 ​ ​ 851 19 ​ ​ 495 14 ​ ​ Medical ​ ​ 176 8 ​ ​ ​ 182 ​ 10 ​ ​ ​ 335 ​ 7 ​ ​ ​ 333 ​ 10 ​ ​ Total ​ $ 2,322 100 % ​ $ 1,829 100 % ​ $ 4,524 100 % ​ $ 3,422 100 % ​ 27 Table of Contents 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 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 ​ ​ ​ Net Sales ​ Organic Net Sales ​ ​ ​ ​ ​ ​ Net Sales ​ Organic Net Sales ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Growth (Decline) ​ ​ ​ Growth (Decline) ​ ​ ​ Translation ​ ​ ​ Acquisition ​ ​ ​ Growth ​ ​ ​ Growth ​ ​ ​ Translation ​ ​ ​ Acquisitions ​ ​ ​ ​ ​ ($ in millions) Digital data networks ​ $ 232 ​ 48.1 % $ 222 ​ 46.1 % $ 10 ​ $ — ​ $ 526 ​ 58.8 % $ 510 ​ 57.0 % $ 16 ​ $ — ​ Automation and connected living ​ ​ 67 13.1 ​ ​ 42 8.2 ​ ​ 25 ​ ​ — ​ ​ 137 13.8 ​ ​ 97 ​ 9.8 ​ ​ 39 ​ ​ 1 ​ Aerospace, defense, and marine ​ 34 ​ 9.1 ​ ​ 21 ​ 5.4 ​ ​ 13 ​ ​ — ​ 81 ​ 11.4 ​ ​ 57 ​ 8.0 ​ ​ 24 ​ ​ — ​ Energy ​ ​ 166 59.5 ​ 31 11.2 ​ 15 ​ 120 ​ ​ 356 71.9 ​ 63 ​ 12.7 ​ 22 ​ ​ 271 ​ Medical ​ (6) (3.3) ​ (7) (3.5) ​ 1 ​ — ​ 2 0.6 ​ 1 ​ 0.4 ​ 1 ​ ​ — ​ Total ​ $ 493 27.0 % $ 309 16.9 % $ 64 ​ $ 120 ​ $ 1,102 ​ 32.2 % $ 728 21.3 % $ 102 ​ $ 272 ​ 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 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 $85 million in the first six months of fiscal 2026. Our organic net sales by industry end market were as follows: ● Digital data networks —Our organic net sales increased 57.0% in the first six months of fiscal 2026 primarily as a result of growth in artificial intelligence and cloud applications. ● Automation and connected living— Our organic net sales increased 9.8% in the first six months of fiscal 2026 primarily as a result of growth in factory automation applications. ● Aerospace, defense, and marine— Our organic net sales increased 8.0% in the first six months of fiscal 2026 due primarily to growth in the defense and commercial aerospace markets. 28 Table of Contents ● Energy— Our organic net sales increased 12.7% in the first six months of fiscal 2026 due to growth across all regions. ● Medical— Our organic net sales were flat in the first six months of fiscal 2026 primarily as a result of growth in interventional medical applications, offset by our strategic exit of a product line. Operating Income. The following table presents the Industrial Solutions segment’s operating income and operating margin information: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ ​ For the ​ ​ ​ ​ ​ ​ Quarters Ended ​ ​ ​ ​ Six Months Ended ​ ​ ​ ​ ​ ​ March 27, ​ March 28, ​ ​ ​ ​ March 27, ​ March 28, ​ ​ ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ Change ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ Change ​ ​ ​ ​ ​ ($ in millions) ​ Operating income ​ $ 451 ​ $ 303 ​ $ 148 ​ $ 913 ​ $ 547 ​ $ 366 ​ Operating margin ​ 19.4 % 16.6 % ​ ​ 20.2 % 16.0 % ​ ​ 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. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ For the ​ ​ ​ Quarters Ended ​ Six Months Ended ​ ​ ​ March 27, ​ March 28, ​ March 27, ​ March 28, ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ ​ ​ (in millions) ​ Acquisition-related charges: ​ ​ ​ ​ ​ ​ ​ ​ Acquisition and integration costs ​ $ 8 ​ $ 9 ​ $ 11 ​ $ 14 ​ Charges associated with the amortization of acquisition-related fair value adjustments ​ — ​ 3 ​ 3 ​ 3 ​ ​ ​ 8 ​ 12 ​ 14 ​ 17 ​ Restructuring and other charges, net ​ 9 ​ 12 ​ 15 ​ 30 ​ Amortization expense ​ ​ 39 ​ ​ 24 ​ ​ 78 ​ ​ 46 ​ Total ​ $ 56 ​ $ 48 ​ $ 107 ​ $ 93 ​ ​ ​ ​ ​ Liquidity and Capital Resources Our ability to fund our future capital needs will be affected by our ongoing ability to generate cash from operations and may be affected by our access to capital markets, money markets, or other sources of funding, as well as the capacity and terms of our financing arrangements. We believe that cash generated from operations and, to the extent necessary, these other sources of potential funding will be sufficient to meet our anticipated capital needs for the foreseeable future. We may use excess cash to acquire strategic businesses or product lines, reduce our outstanding debt, or return cash to shareholders through dividends on our ordinary shares or purchases of our ordinary shares pursuant to our authorized share repurchase program. We may also use excess cash and other funding to make strategic acquisitions. The cost or availability of future funding may be impacted by financial market conditions. We will continue to monitor financial markets and respond as necessary to changing conditions. We believe that we have sufficient financial resources and liquidity which will enable us to meet our ongoing working capital and other cash flow needs. Cash Flows from Operating Activities 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. 29 Table of Contents Cash Flows from Investing Activities 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 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 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. 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. The Credit Facility and our other debt agreements contain other customary covenants. None of our covenants are presently considered restrictive to our operations. As of 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. 30 Table of Contents 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 $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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ Six Months Ended ​ ​ ​ March 27, ​ March 28, ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ ​ ​ (in millions) ​ Number of ordinary shares repurchased ​ 4 ​ 4 ​ Repurchase value $ 818 $ 615 ​ At March 27, 2026, we had $3.6 billion of availability remaining under our share repurchase authorization. Summarized Guarantor Financial Information As discussed above, our senior notes, commercial paper, and Credit Facility are issued by TEGSA and are fully and unconditionally guaranteed on an unsecured basis by TEGSA’s parent, TE Connectivity Switzerland Ltd., and its parent, TE Connectivity plc. In addition to being the issuer of our debt securities, TEGSA owns, directly or indirectly, all of our operating subsidiaries. The following tables present summarized financial information, excluding investments in and equity in earnings of our non-guarantor subsidiaries, for TE Connectivity plc, TE Connectivity Switzerland Ltd., and TEGSA on a combined basis. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 27, ​ September 26, ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ ​ ​ (in millions) ​ Balance Sheet Data: ​ ​ ​ ​ ​ ​ ​ Total current assets ​ $ 1,038 ​ $ 1,236 ​ Total noncurrent assets (1) ​ 4,608 ​ 2,465 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current liabilities ​ 575 ​ 1,348 ​ Total noncurrent liabilities (2) ​ ​ 10,074 ​ ​ 10,033 ​ (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. 31 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ For the ​ ​ ​ Six Months Ended ​ Fiscal Year Ended ​ ​ ​ March 27, ​ September 26, ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ ​ ​ (in millions) ​ Statement of Operations Data: ​ ​ ​ ​ ​ ​ ​ Income (loss) from continuing operations ​ $ 181 ​ $ (197) ​ Net income (loss) ​ 181 ​ (197) ​ Guarantees In certain instances, we have guaranteed the performance of third parties and provided financial guarantees for uncompleted work and financial commitments. The terms of these guarantees vary with end dates ranging from fiscal 2026 through the completion of such transactions. The guarantees would be triggered in the event of nonperformance, and the potential exposure for nonperformance under the guarantees would not have a material effect on our results of operations, financial position, or cash flows. 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 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 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. Trade Compliance Matters As part of our ongoing internal compliance activities, we have been investigating compliance with relevant country of origin for import matters and recently made a voluntary disclosure to the U.S. Customs and Border Protection Agency regarding potential Section 301 unpaid duties, fees, and interest for certain imported products into the U.S. We are unable to predict the timing and final outcome of investigation into this matter. An unfavorable outcome may include unpaid duties, fees, interest, and penalties imposed in response to our disclosures. Based on currently available information, we have reserved an aggregate of $27 million related to this exposure. The investigation into this matter has yet to be completed and the final outcome of such investigation and related duties, fees, interest, and potential penalties may differ from amounts currently reserved. Critical Accounting Policies and Estimates The preparation of the Condensed 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 revenue and expenses. 32 Table of Contents Our accounting policies for revenue recognition, goodwill and other intangible assets, income taxes, and pension plans are based on, among other things, judgments and assumptions made by management. For additional information regarding these policies and the underlying accounting assumptions and estimates used in these policies, refer to “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” and the Consolidated Financial Statements and accompanying notes contained in our Annual Report on Form 10-K for the fiscal year ended September 26, 2025. There were no significant changes to this information during the first six months of fiscal 2026. Non-GAAP Financial Measure Organic Net Sales Growth (Decline) We present organic net sales growth (decline) as we believe it is appropriate for investors to consider this adjusted financial measure in addition to results in accordance with GAAP. Organic net sales growth (decline) represents net sales growth (decline) (the most comparable GAAP financial measure) excluding the impact of foreign currency exchange rates, and acquisitions and divestitures that occurred in the preceding twelve months, if any. Organic net sales growth (decline) is a useful measure of our performance because it excludes items that are not completely under management’s control, such as the impact of changes in foreign currency exchange rates, and items that do not reflect the underlying growth of the company, such as acquisition and divestiture activity. Organic net sales growth (decline) provides useful information about our results and the trends of our business. Management uses this measure to monitor and evaluate performance. Also, management uses this measure together with GAAP financial measures in its decision-making processes related to the operations of our reportable segments and our overall company. It is also a significant component in our incentive compensation plans. We believe that investors benefit from having access to the same financial measures that management uses in evaluating operations. The tables presented in “Results of Operations” and “Segment Results” provide reconciliations of organic net sales growth (decline) to net sales growth (decline) calculated in accordance with GAAP. Organic net sales growth (decline) is a non-GAAP financial measure and should not be considered a replacement for results in accordance with GAAP. This non-GAAP financial measure may not be comparable to similarly-titled measures reported by other companies. The primary limitation of this measure is that it excludes the financial impact of items that would otherwise either increase or decrease our reported results. This limitation is best addressed by using organic net sales growth (decline) in combination with net sales growth (decline) to better understand the amounts, character, and impact of any increase or decrease in reported amounts. Forward-Looking Information Certain statements in this Quarterly Report on Form 10-Q are “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. These statements are based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include, among others, the information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, potential growth opportunities, potential operating performance improvements, acquisitions, divestitures, the effects of competition, and the effects of future legislation or regulations. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believe,” “expect,” “plan,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “continue,” “may,” and “should,” or the negative of these terms or similar expressions. Forward-looking statements involve risks, uncertainties, and assumptions. Actual results may differ materially from those expressed in these forward-looking statements. Investors should not place undue reliance on any forward-looking statements. We do not have any intention or obligation to update forward-looking statements after we file this report except as required by law. 33 Table of Contents The following and other risks, which are described in greater detail in “Part I. Item 1A. 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, supply chain disruptions, and higher interest rates; ● conditions affecting demand for products in the industries we serve, particularly the automotive industry; ● risk of future goodwill impairment; ● pricing pressure and competition, including competitive risks associated with the pace of technological change; ● market acceptance of our new product introductions and product innovations and product life cycles; ● raw material availability, quality, and cost; ● product liability, warranty, and product recall claims and our ability to defend such claims; ● fluctuations in foreign currency exchange rates and impacts of offsetting hedges; ● financial condition and consolidation of customers and vendors; ● reliance on third-party suppliers; ● risks associated with current and future acquisitions and divestitures; ● global risks of business interruptions due to natural disasters or other disasters which have impacted and could continue to negatively impact our results of operations as well as customer behaviors, business, and manufacturing operations as well as our facilities and the facilities of our suppliers, and other aspects of our business; ● global risks of political, economic, and military instability, including the continuing military conflicts in certain parts of the world, and volatile and uncertain economic conditions and the evolving regulatory system in China; ● risks associated with cybersecurity incidents and other disruptions to our information technology infrastructure, including as a result of artificial intelligence; ● risks related to compliance with current and future environmental and other laws and regulations, including those related to climate change; ● risks related to the increasing scrutiny and expectations regarding environmental, social, and governance matters; ● risks associated with compliance with applicable antitrust or competition laws or applicable trade regulations; ● our ability to protect our intellectual property rights; ● risks of litigation, regulatory actions, and compliance issues; ● our ability to operate within the limitations imposed by our debt instruments; 34 Table of Contents ● the possible effects on us of various non-U.S. and U.S. legislative proposals and other initiatives that could materially increase our worldwide corporate effective tax rate, increase global cash taxes, and negatively impact our U.S. government contracts business; ● requirements related to chemical usage, hazardous material content, recycling, and other circular economy initiatives; ● various risks associated with being an Irish corporation; ● the impact of fluctuations in the market price of our shares; and ● the impact of certain provisions of our articles of association on unsolicited takeover proposals. There may be other risks and uncertainties that we are unable to predict at this time or that we currently do not expect to have a material adverse effect on our business.