TE Connectivity plc 10-K

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 29, 2023. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 29, 2023. 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 29, 2023. 44 Table of Contents 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 29, 2023, which is included in this Annual Report. Changes in Internal Control Over Financial Reporting During the quarter ended September 29, 2023, 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 29, 2023, 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 29, 2023, Terrence R. Curtin , Chief Executive Officer and Executive 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 17, 2023 and expires December 29, 2023 , and provides for the potential sale of up to (i) 50% of the net common shares that vest in December 2023 pursuant to the performance stock unit award granted to Mr. Curtin in November 2020, with such sale to occur no earlier than December 18, 2023 and (ii) potential sale of the remaining net common shares that vest in December 2023 pursuant to the performance stock unit award granted to Mr. Curtin in November 2020, with such sale to occur no earlier than December 19, 2023 . ​ ● In the quarter ended September 29, 2023, Aaron K. Stucki , President, Communications Solutions , adopted a plan for the sale of our securities intended to satisfy the affirmative defense conditions of Rule 10b5 - 1(c). Mr. Stucki’s plan was adopted August 22, 2023 and expires January 31, 2025 , and provides for the potential exercise and related sale of (i) stock options representing up to 5,000 common shares, with such sale to occur no earlier than November 21, 2023, (ii) stock options representing up to 8,750 common shares, with such sale to occur no earlier than November 21, 2023, and (iii) stock options representing up to 5,000 common shares, with such sale to occur no earlier than November 21, 2023 . 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. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not Applicable. 45 Table of Contents 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 2024 Annual General Meeting of Shareholders (the “2024 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 2024 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 “Corporate Responsibility—Disclosures.” 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. 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,” and “Compensation of Non-Employee Directors” in our 2024 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 2024 Proxy Statement under the caption “Security Ownership of Certain Beneficial Owners and Management” is incorporated herein by reference. Equity Compensation Plan Information The following table provides information as of fiscal year end 2023 with respect to common 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) ​ 7,223,872 ​ $ 107.36 ​ 12,555,452 ​ Equity compensation plans not approved by security holders (2) ​ 415,435 ​ 82.54 ​ — ​ Total ​ 7,639,307 ​ ​ 12,555,452 ​ (1) Includes securities issuable upon exercise of outstanding options and rights under the TE Connectivity Ltd. 2007 Stock and Incentive Plan, amended and restated as of September 17, 2020 (the “2007 Plan”), and the Tyco Electronics Limited Savings Related Share Plan. The 2007 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 2007 Plan provides for a maximum of 69,843,452 common shares to be issued as Awards, subject to adjustment as provided under the terms of the 2007 Plan. 46 Table of Contents (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 TE Connectivity common 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 2007 Plan, the Tyco Electronics Limited Savings Related Plan, and the Employee Stock Purchase Plan. The 2007 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 2007 Plan and the Tyco Electronics Limited Savings Plan are increased by forfeitures and cancellations, among other factors. Amounts include 869,176 shares remaining available for issuance under our Tyco Electronics Limited Savings Related Share Plan and 3,445,482 shares remaining available for issuance under our Employee Stock Purchase Plan. ITEM 13 . CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information in our 2024 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 2024 Proxy Statement under the caption “Agenda Item No. 7—Election of Auditors—Agenda Item No. 7.1” is incorporated herein by reference. ​ 47 Table of Contents 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 Stock Purchase Agreement, dated as of September 16, 2018, by and between Tyco Electronics Group S.A. and Crown Subsea AcquisitionCo LLC (1) ​ Current Report on Form 8-K ​ 2.1 ​ September 17, 2018 3.1 ​ Articles of Association of TE Connectivity Ltd., as amended and restated ​ Current Report on Form 8-K ​ 3.1 ​ March 20, 2023 3.2 ​ Organizational Regulations of TE Connectivity Ltd., as amended and restated ​ Current Report on Form 8-K ​ 3.1 ​ December 12, 2022 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) ​ Tenth Supplemental Indenture among Tyco Electronics Group S.A., as issuer, TE Connectivity Ltd., as guarantor, and Deutsche Bank Trust Company Americas, as trustee, dated July 31, 2014 ​ Current Report on Form 8-K ​ 4.2 ​ July 31, 2014 4.2(d) ​ 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(e) ​ 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(f) ​ Sixteenth 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 14, 2020 ​ Current Report on Form 8-K ​ 4.1 ​ February 14, 2020 48 Table of Contents ​ ​ ​ ​ Exhibit ​ ​ ​ Incorporated by Reference Herein Number Description Form Exhibit Date Filed with the SEC 4.2(g) ​ 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 4.2(h) ​ 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(i) ​ 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 10.1 Amended and Restated Five-Year Senior Credit Agreement, dated as of November 14, 2018, 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 ​ November 14, 2018 10.2 ​ First Amendment to Amended and Restated Credit Agreement, dated as of June 1, 2021, 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 ​ June 1, 2021 10.3 ​ Second Amendment to Amended and Restated Credit Agreement, dated as of October 14, 2022, 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 ​ Annual Report on Form 10-K for the fiscal year ended September 30, 2022 ​ 10.3 ​ November 15, 2022 10.4 ‡ TE Connectivity Ltd. Annual Incentive Plan (as amended and restated) ​ Annual Report on Form 10-K for the fiscal year ended September 24, 2021 ​ 10.3 ​ November 9, 2021 10.5 ‡ TE Connectivity Ltd. 2007 Stock and Incentive Plan (amended and restated as of September 17, 2020) ​ Annual Report on Form 10-K for the fiscal year ended September 24, 2021 ​ 10.4 ​ November 9, 2021 10.6 ‡ TE Connectivity Ltd. Employee Stock Purchase Plan (amended and restated as of September 22, 2021) ​ Annual Report on Form 10-K for the fiscal year ended September 24, 2021 ​ 10.5 ​ November 9, 2021 49 Table of Contents ​ ​ ​ ​ Exhibit ​ ​ ​ Incorporated by Reference Herein Number Description Form Exhibit Date Filed with the SEC 10.7 ‡ 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 10.8 ‡ 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 10.9 ‡ 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 10.10 ‡ 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 10.11 ‡ 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 10.12 ‡ Form of Restricted Stock Unit Award Terms and Conditions for RSU Grants Beginning in November 2020 ​ Quarterly Report on Form 10-Q for the quarterly period ended December 25, 2020 ​ 10.2 ​ January 28, 2021 10.13 ‡ 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 10.14 ‡ Form of Performance Stock Unit Award Terms and Conditions for Performance Cycles Starting in and After Fiscal Year 2019 ​ Annual Report on Form 10-K for the fiscal year ended September 27, 2019 ​ 10.15 ​ November 12, 2019 10.15 ‡ Form of Performance Stock Unit Award Terms and Conditions for Performance Cycles Starting in and After Fiscal Year 2021 ​ Quarterly Report on Form 10-Q for the quarterly period ended December 25, 2020 ​ 10.3 ​ January 28, 2021 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 ‡ TE Connectivity Change in Control Severance Plan for Certain U.S. Executives (amended and restated as of December 17, 2014) ​ Annual Report on Form 10-K for the fiscal year ended September 25, 2015 ​ 10.10 ​ November 10, 2015 10.18 ‡ TE Connectivity Severance Plan for U.S. Executives (amended and restated as of September 13, 2018) ​ Annual Report on Form 10-K for the fiscal year ended September 28, 2018 ​ 10.15 ​ November 13, 2018 50 Table of Contents ​ ​ ​ ​ Exhibit ​ ​ ​ Incorporated by Reference Herein Number Description Form Exhibit Date Filed with the SEC 10.19 ‡ Tyco Electronics Ltd. Deferred Compensation Plan for Directors ​ Annual Report on Form 10-K for the fiscal year ended September 28, 2007 ​ 10.16 ​ December 14, 2007 10.20 ‡* TE Connectivity Supplemental Savings and Retirement Plan (amended and restated as of January 1, 2022) ​ ​ ​ ​ ​ ​ 10.21 ‡ TE Connectivity Ltd. Savings Related Share Plan (amended and restated as of March 14, 2018) ​ Current Report on Form 8-K ​ 10.1 ​ March 14, 2018 10.22 Form of Indemnification Agreement ​ Annual Report on Form 10-K for the fiscal year ended September 30, 2016 ​ 10.17 ​ November 15, 2016 10.23 ‡ TE Connectivity Ltd. 2010 Stock and Incentive Plan (amended and restated as of March 9, 2017) ​ Annual Report on Form 10-K for the fiscal year ended September 29, 2017 ​ 10.20 ​ November 14, 2017 10.24 ‡* Employment Agreement between Terrence R. Curtin and Tyco Electronics Corporation dated December 15, 2015 ​ ​ ​ ​ ​ ​ 10.25 ‡* Employment Agreement between Steven T. Merkt and Tyco Electronics Corporation dated December 15, 2015 ​ ​ ​ ​ ​ ​ 10.26 ‡ Employment Agreement between Heath A. Mitts and Tyco Electronics Corporation dated September 30, 2016 ​ Current Report on Form 8-K ​ 10.1 ​ October 3, 2016 10.27 ‡* Employment Agreement between John S. Jenkins and Tyco Electronics Corporation dated December 15, 2015 ​ ​ ​ ​ ​ ​ 10.28 ‡ 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 10.29 ‡ Employment Agreement between Aaron Stucki and TE Connectivity Corporation dated October 1, 2020 ​ Quarterly Report on Form 10-Q for the quarterly period ended December 30, 2022 ​ 10.1 ​ January 27, 2023 10.30 ​ Credit Support Agreement dated November 2, 2018 by and between Tyco Electronics Group S.A. and Crown Subsea Communications Holding, Inc. ​ Annual Report on Form 10-K for the fiscal year ended September 27, 2019 ​ 10.28 ​ November 12, 2019 21.1 * Subsidiaries of TE Connectivity Ltd. ​ ​ ​ ​ ​ ​ 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 ​ ​ ​ ​ ​ ​ 51 Table of Contents ​ ​ ​ ​ Exhibit ​ ​ ​ Incorporated by Reference Herein Number Description Form Exhibit Date Filed with the SEC 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 Ltd. Incentive-Based Compensation Recovery Policy ​ ​ ​ ​ ​ ​ 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 (1) The schedules to the Stock Purchase Agreement have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K. We will furnish copies of such schedules to the SEC upon its request; provided, however, that 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. ​ 52 Table of Contents ​ ​ 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 LTD. ​ ​ ​ ​ By: /s/ Heath A. Mitts ​ ​ Heath A. Mitts ​ ​ Executive Vice President ​ ​ and Chief Financial Officer ​ ​ (Principal Financial Officer) Date: November 13, 2023 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 13, 2023 Terrence R. Curtin ​ (Principal Executive Officer) ​ ​ ​ ​ /s/ Heath A. Mitts ​ Executive Vice President, ​ ​ Heath A. Mitts ​ Chief Financial Officer, and Director ​ November 13, 2023 ​ (Principal Financial Officer) ​ ​ ​ ​ ​ ​ /s/ Robert J. Ott ​ Senior Vice President and ​ ​ Robert J. Ott ​ Corporate Controller ​ November 13, 2023 ​ (Principal Accounting Officer) ​ ​ ​ ​ ​ ​ * ​ Director ​ November 13, 2023 Jean-Pierre Clamadieu ​ ​ ​ ​ ​ ​ ​ * ​ Director ​ November 13, 2023 Carol A. Davidson ​ ​ ​ ​ ​ ​ ​ * ​ Director ​ November 13, 2023 Lynn A. Dugle ​ ​ ​ ​ ​ ​ ​ * ​ Director ​ November 13, 2023 William A. Jeffrey ​ ​ ​ ​ ​ ​ ​ ​ ​ * ​ Director ​ November 13, 2023 Syaru Shirley Lin ​ ​ ​ ​ ​ ​ ​ * ​ Director ​ November 13, 2023 Thomas J. Lynch ​ ​ ​ ​ ​ ​ ​ * ​ Director ​ November 13, 2023 Abhijit Y. Talwalkar ​ ​ ​ ​ ​ ​ ​ 53 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ Signature Title Date ​ ​ ​ ​ ​ * ​ Director ​ November 13, 2023 Mark C. Trudeau ​ ​ ​ ​ ​ ​ ​ * ​ Director ​ November 13, 2023 Dawn C. Willoughby ​ ​ ​ ​ ​ ​ ​ ​ ​ * ​ Director ​ November 13, 2023 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 ​ ​ ​ ​ ​ ​ 54 Table of Contents TE CONNECTIVITY LTD. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS ​ ​ Page Reports of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ) 56 Consolidated Statements of Operations for the Fiscal Years Ended September 29, 2023, September 30, 2022, and September 24, 2021 ​ 59 Consolidated Statements of Comprehensive Income for the Fiscal Years Ended September 29, 2023, September 30, 2022, and September 24, 2021 ​ 60 Consolidated Balance Sheets as of September 29, 2023 and September 30, 2022 ​ 61 Consolidated Statements of Shareholders’ Equity for the Fiscal Years Ended September 29, 2023, September 30, 2022, and September 24, 2021 ​ 62 Consolidated Statements of Cash Flows for the Fiscal Years Ended September 29, 2023, September 30, 2022, and September 24, 2021 ​ 63 Notes to Consolidated Financial Statements ​ 64 Schedule II—Valuation and Qualifying Accounts ​ 100 ​ ​ ​ 55 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of TE Connectivity Ltd. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of TE Connectivity Ltd. and subsidiaries (the "Company") as of September 29, 2023 and September 30, 2022, the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows, for each of the three years in the period ended September 29, 2023, and the related notes and the schedule listed in the Index at Item 15 (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 29, 2023 and September 30, 2022, and the results of its operations and its cash flows for each of the three years in the period ended September 29, 2023, 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 29, 2023, 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 13, 2023, 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 56 Table of Contents realize a portion of its deferred tax assets, and therefore, a valuation allowance of $7.4 billion has been recorded to offset the Company’s gross deferred tax assets as of September 29, 2023 of $10.2 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 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 13, 2023 We have served as the Company’s auditor since 2007. ​ 57 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of TE Connectivity Ltd. Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of TE Connectivity Ltd. and subsidiaries (the “Company”) as of September 29, 2023, 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 29, 2023, based on criteria established in Internal Control—Integrated Framework (2013) issued by COSO. 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 29, 2023, of the Company and our report dated November 13, 2023 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 13, 2023 ​ 58 Table of Contents TE CONNECTIVITY LTD. CONSOLIDATED STATEMENTS OF OPERATIONS Fiscal Years Ended September 29, 2023, September 30, 2022, and September 24, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ 2023 2022 2021 ​ ​ (in millions, except per share data) ​ Net sales ​ $ 16,034 ​ $ 16,281 ​ $ 14,923 ​ Cost of sales ​ 10,979 ​ 11,037 ​ 10,036 ​ Gross margin ​ 5,055 ​ 5,244 ​ 4,887 ​ Selling, general, and administrative expenses ​ ​ 1,670 ​ ​ 1,584 ​ ​ 1,512 ​ Research, development, and engineering expenses ​ ​ 708 ​ ​ 718 ​ ​ 677 ​ Acquisition and integration costs ​ ​ 33 ​ ​ 45 ​ ​ 31 ​ Restructuring and other charges, net ​ ​ 340 ​ ​ 141 ​ ​ 233 ​ Operating income ​ ​ 2,304 ​ ​ 2,756 ​ ​ 2,434 ​ Interest income ​ ​ 60 ​ ​ 15 ​ ​ 17 ​ Interest expense ​ ​ ( 80 ) ​ ​ ( 66 ) ​ ​ ( 56 ) ​ Other income (expense), net ​ ​ ( 16 ) ​ ​ 28 ​ ​ ( 17 ) ​ Income from continuing operations before income taxes ​ 2,268 ​ 2,733 ​ 2,378 ​ Income tax expense ​ ​ ( 364 ) ​ ​ ( 306 ) ​ ​ ( 123 ) ​ Income from continuing operations ​ 1,904 ​ 2,427 ​ 2,255 ​ Income from discontinued operations, net of income taxes ​ ​ 6 ​ ​ 1 ​ ​ 6 ​ Net income ​ $ 1,910 ​ $ 2,428 ​ $ 2,261 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations ​ $ 6.04 ​ $ 7.51 ​ $ 6.83 ​ Income from discontinued operations ​ 0.02 ​ — ​ 0.02 ​ Net income ​ 6.06 ​ 7.52 ​ 6.85 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations ​ $ 6.01 ​ $ 7.47 ​ $ 6.77 ​ Income from discontinued operations ​ 0.02 ​ — ​ 0.02 ​ Net income ​ 6.03 ​ 7.47 ​ 6.79 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average number of shares outstanding: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ ​ 315 ​ ​ 323 ​ ​ 330 ​ Diluted ​ ​ 317 ​ ​ 325 ​ ​ 333 ​ See Notes to Consolidated Financial Statements. ​ 59 Table of Contents TE CONNECTIVITY LTD. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Fiscal Years Ended September 29, 2023, September 30, 2022, and September 24, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ 2023 2022 2021 ​ ​ (in millions) ​ Net income ​ $ 1,910 ​ $ 2,428 ​ $ 2,261 ​ Other comprehensive income (loss): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Currency translation ​ 261 ​ ( 510 ) ​ 144 ​ Adjustments to unrecognized pension and postretirement benefit costs, net of income taxes ​ 20 ​ 259 ​ 138 ​ Gains (losses) on cash flow hedges, net of income taxes ​ 65 ​ ( 95 ) ​ ( 3 ) ​ Other comprehensive income (loss) ​ 346 ​ ( 346 ) ​ 279 ​ Comprehensive income ​ ​ 2,256 ​ ​ 2,082 ​ ​ 2,540 ​ Less: comprehensive (income) loss attributable to noncontrolling interests ​ ​ ( 9 ) ​ ​ 19 ​ ​ ( 2 ) ​ Comprehensive income attributable to TE Connectivity Ltd. ​ $ 2,247 ​ $ 2,101 ​ $ 2,538 ​ See Notes to Consolidated Financial Statements. ​ 60 Table of Contents TE CONNECTIVITY LTD. CONSOLIDATED BALANCE SHEETS As of September 29, 2023 and September 30, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year End ​ ​ 2023 2022 ​ ​ (in millions, except ​ ​ ​ share data) ​ Assets ​ ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 1,661 ​ $ 1,088 ​ Accounts receivable, net of allowance for doubtful accounts of $ 30 and $ 45 , respectively ​ 2,967 ​ 2,865 ​ Inventories ​ 2,552 ​ 2,676 ​ Prepaid expenses and other current assets ​ 712 ​ 639 ​ Total current assets ​ 7,892 ​ 7,268 ​ Property, plant, and equipment, net ​ 3,754 ​ 3,567 ​ Goodwill ​ 5,463 ​ 5,258 ​ Intangible assets, net ​ 1,175 ​ 1,288 ​ Deferred income taxes ​ 2,600 ​ 2,498 ​ Other assets ​ 828 ​ 903 ​ Total assets ​ $ 21,712 ​ $ 20,782 ​ Liabilities, redeemable noncontrolling interests, and shareholders' equity ​ ​ ​ ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ ​ ​ ​ Short-term debt ​ $ 682 ​ $ 914 ​ Accounts payable ​ 1,563 ​ 1,593 ​ Accrued and other current liabilities ​ 2,218 ​ 2,125 ​ Total current liabilities ​ 4,463 ​ 4,632 ​ Long-term debt ​ 3,529 ​ 3,292 ​ Long-term pension and postretirement liabilities ​ 728 ​ 695 ​ Deferred income taxes ​ 185 ​ 244 ​ Income taxes ​ 365 ​ 304 ​ Other liabilities ​ 787 ​ 718 ​ Total liabilities ​ 10,057 ​ 9,885 ​ Commitments and contingencies (Note 12) ​ ​ ​ ​ ​ ​ ​ Redeemable noncontrolling interests ​ ​ 104 ​ ​ 95 ​ Shareholders' equity: ​ ​ ​ ​ ​ ​ ​ Common shares, CHF 0.57 par value, 322,470,281 shares authorized and issued , and 330,830,781 shares authorized and issued , respectively ​ 142 ​ 146 ​ Accumulated earnings ​ 12,947 ​ 12,832 ​ Treasury shares, at cost, 10,487,742 and 12,749,540 shares, respectively ​ ( 1,380 ) ​ ( 1,681 ) ​ Accumulated other comprehensive loss ​ ( 158 ) ​ ( 495 ) ​ Total shareholders' equity ​ 11,551 ​ 10,802 ​ Total liabilities, redeemable noncontrolling interests, and shareholders' equity ​ $ 21,712 ​ $ 20,782 ​ See Notes to Consolidated Financial Statements. ​ 61 Table of Contents TE CONNECTIVITY LTD. CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY Fiscal Years Ended September 29, 2023, September 30, 2022, and September 24, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ Total ​ ​ ​ Common Shares ​ Treasury Shares ​ Contributed ​ Accumulated ​ Comprehensive ​ Shareholders' ​ ​ Shares Amount Shares Amount Surplus Earnings Income (Loss) Equity ​ ​ (in millions) ​ Balance at fiscal year end 2020 339 ​ $ 149 ( 8 ) ​ $ ( 669 ) ​ $ — ​ $ 10,348 ​ $ ( 445 ) ​ $ 9,383 ​ Net Income — ​ — — ​ — ​ — ​ 2,261 ​ — ​ 2,261 ​ Other comprehensive income — ​ — — ​ — ​ — ​ — ​ 277 ​ 277 ​ Share-based compensation expense — ​ — — ​ — ​ 94 ​ — ​ — ​ 94 ​ Dividends — ​ — — ​ — ​ — ​ ( 656 ) ​ — ​ ( 656 ) ​ Exercise of share options — ​ — 2 ​ 167 ​ — ​ — ​ — ​ 167 ​ Restricted share award vestings and other activity — ​ — 1 ​ 89 ​ ( 94 ) ​ 17 ​ — ​ 12 ​ Repurchase of common shares — ​ — ( 7 ) ​ ( 904 ) ​ — ​ — ​ — ​ ( 904 ) ​ Cancellation of treasury shares ( 3 ) ​ ​ ( 1 ) ​ 3 ​ ​ 262 ​ ​ — ​ ​ ( 261 ) ​ ​ — ​ — ​ Balance at fiscal year end 2021 336 ​ $ 148 ( 9 ) ​ $ ( 1,055 ) ​ $ — ​ $ 11,709 ​ $ ( 168 ) ​ $ 10,634 ​ Net income — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ 2,428 ​ ​ — ​ 2,428 ​ Other comprehensive loss — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 327 ) ​ ( 327 ) ​ Share-based compensation expense — ​ ​ — ​ — ​ ​ — ​ ​ 119 ​ ​ — ​ ​ — ​ 119 ​ Dividends — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ ( 714 ) ​ ​ — ​ ( 714 ) ​ Exercise of share options — ​ ​ — ​ — ​ ​ 54 ​ ​ — ​ ​ — ​ ​ — ​ 54 ​ Restricted share award vestings and other activity — ​ ​ — ​ 1 ​ ​ 20 ​ ​ ( 119 ) ​ ​ 116 ​ ​ — ​ 17 ​ Repurchase of common shares — ​ ​ — ​ ( 10 ) ​ ​ ( 1,409 ) ​ ​ — ​ ​ — ​ ​ — ​ ( 1,409 ) ​ Cancellation of treasury shares ( 5 ) ​ ​ ( 2 ) ​ 5 ​ ​ 709 ​ ​ — ​ ​ ( 707 ) ​ ​ — ​ — ​ 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 ​ See Notes to Consolidated Financial Statements. ​ 62 Table of Contents TE CONNECTIVITY LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS Fiscal Years Ended September 29, 2023, September 30, 2022, and September 24, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ 2023 2022 2021 ​ ​ (in millions) ​ Cash flows from operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 1,910 ​ $ 2,428 ​ $ 2,261 ​ Income from discontinued operations, net of income taxes ​ ( 6 ) ​ ( 1 ) ​ ( 6 ) ​ Income from continuing operations ​ 1,904 ​ 2,427 ​ 2,255 ​ Adjustments to reconcile income from continuing operations to net cash provided by operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ 794 ​ 785 ​ 769 ​ Deferred income taxes ​ ( 77 ) ​ ( 147 ) ​ ( 354 ) ​ Non-cash lease cost ​ ​ 129 ​ ​ 131 ​ ​ 120 ​ Provision for losses on accounts receivable and inventories ​ 76 ​ 70 ​ 46 ​ Share-based compensation expense ​ 123 ​ 119 ​ 94 ​ Impairment of held for sale businesses ​ ​ 74 ​ ​ 14 ​ ​ 16 ​ Other ​ 101 ​ 9 ​ ( 77 ) ​ Changes in assets and liabilities, net of the effects of acquisitions and divestitures: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accounts receivable, net ​ ( 146 ) ​ 200 ​ ( 518 ) ​ Inventories ​ ( 45 ) ​ ( 41 ) ​ ( 556 ) ​ Prepaid expenses and other current assets ​ 17 ​ 50 ​ ( 19 ) ​ Accounts payable ​ ( 1 ) ​ ( 396 ) ​ 560 ​ Accrued and other current liabilities ​ 21 ​ ( 398 ) ​ 173 ​ Income taxes ​ 17 ​ 32 ​ 106 ​ Other ​ 145 ​ ( 387 ) ​ 61 ​ Net cash provided by operating activities ​ 3,132 ​ 2,468 ​ 2,676 ​ Cash flows from investing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital expenditures ​ ( 732 ) ​ ( 768 ) ​ ( 690 ) ​ Proceeds from sale of property, plant, and equipment ​ 4 ​ 106 ​ 86 ​ Acquisition of businesses, net of cash acquired ​ ( 110 ) ​ ( 220 ) ​ ( 423 ) ​ Proceeds from divestiture of businesses, net of cash retained by businesses sold ​ ​ 48 ​ ​ 16 ​ ​ ( 4 ) ​ Other ​ 22 ​ ( 12 ) ​ ( 6 ) ​ Net cash used in investing activities ​ ( 768 ) ​ ( 878 ) ​ ( 1,037 ) ​ Cash flows from financing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net increase (decrease) in commercial paper ​ ( 40 ) ​ 370 ​ — ​ Proceeds from issuance of debt ​ 499 ​ 588 ​ 661 ​ Repayment of debt ​ ( 591 ) ​ ( 558 ) ​ ( 708 ) ​ Proceeds from exercise of share options ​ 43 ​ 54 ​ 167 ​ Repurchase of common shares ​ ( 945 ) ​ ( 1,412 ) ​ ( 831 ) ​ Payment of common share dividends to shareholders ​ ( 725 ) ​ ( 685 ) ​ ( 647 ) ​ Other ​ ( 34 ) ​ ( 41 ) ​ ( 28 ) ​ Net cash used in financing activities ​ ( 1,793 ) ​ ( 1,684 ) ​ ( 1,386 ) ​ Effect of currency translation on cash ​ 2 ​ ( 21 ) ​ 5 ​ Net increase (decrease) in cash, cash equivalents, and restricted cash ​ 573 ​ ( 115 ) ​ 258 ​ Cash, cash equivalents, and restricted cash at beginning of fiscal year ​ 1,088 ​ 1,203 ​ 945 ​ Cash, cash equivalents, and restricted cash at end of fiscal year ​ $ 1,661 ​ $ 1,088 ​ $ 1,203 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Supplemental cash flow information: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest paid on debt, net ​ $ 75 ​ $ 58 ​ $ 58 ​ Income taxes paid, net of refunds ​ 425 ​ 421 ​ 371 ​ See Notes to Consolidated Financial Statements. ​ ​ 63 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Presentation The Consolidated Financial Statements reflect the consolidated operations of TE Connectivity Ltd. 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 Ltd. (“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. Our broad range of connectivity and sensor solutions, proven in the harshest environments, enable advancements in transportation, industrial applications, medical technology, energy, data communications, and the home. We operate through three 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 industrial equipment; aerospace, defense, and marine; energy; and medical markets. ● Communications Solutions —The Communications Solutions segment is a leading supplier of electronic components for the data and devices and the appliances markets. 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 2023, 2022, and 2021 ended on September 29, 2023, September 30, 2022, and September 24, 2021, respectively. Fiscal 2023 and 2021 were each 52 weeks in length. Fiscal 2022 was 53 weeks in length. For fiscal years in which there are 53 weeks, the fourth fiscal quarter includes 14 weeks. 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 64 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 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 $ 25 million at both fiscal year end 2023 and 2022. 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. 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 intellectual property, consisting of patents, trademarks, and unpatented technology, and customer relationships. Recoverability estimates range from 1 to 50 years and costs are generally 65 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 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 2023, we had five reporting units, all of which contained goodwill. There were two reporting units in both the Transportation Solutions and Industrial Solutions segments and one reporting unit in the Communications Solutions segment. 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 2023, 2022, and 2021 were $ 593 million, $ 610 million, and $ 612 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. 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. 66 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) ​ 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. 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 2023, 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 and, prior to maturity, exchanged cash collateral with the counterparties to certain of our cross-currency swap contracts. 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. ● 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). 67 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) ● 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. Earnings Per Share Basic earnings per share is computed by dividing net income by the basic weighted-average number of common shares outstanding. Diluted earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding adjusted for the potentially dilutive impact of share-based compensation arrangements. Leases We account for leases in accordance with of 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. 68 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 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 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. 69 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Recently Issued Accounting Pronouncement In September 2022, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2022-04 to enhance transparency and introduce new disclosures related to an entity’s use of supplier finance programs in connection with the purchase of goods and services. The ASU requires us, as a buyer in a supplier finance program, to disclose the key terms of the program, the amount of obligations outstanding, the balance sheet presentation of such amounts, and a rollforward of the obligation activity during the annual period. This update is effective for us in the first quarter of fiscal 2024. We do not expect adoption to have a material impact on our Consolidated Financial Statements. 3. Restructuring and Other Charges, Net Net restructuring and other charges consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ 2023 2022 2021 ​ ​ (in millions) ​ Restructuring charges, net ​ $ 260 ​ $ 137 ​ $ 208 ​ Impairment of held for sale businesses and loss on divestitures, net ​ ​ 77 ​ ​ 4 ​ ​ 21 ​ Other charges, net ​ 3 ​ — ​ 4 ​ Restructuring and other charges, net ​ $ 340 ​ $ 141 ​ $ 233 ​ ​ Restructuring Charges, Net Net restructuring and related charges by segment were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ 2023 2022 2021 ​ ​ (in millions) ​ Transportation Solutions ​ $ 145 ​ $ 80 ​ $ 135 ​ Industrial Solutions ​ 70 ​ 34 ​ 50 ​ Communications Solutions ​ 45 ​ 23 ​ 23 ​ Restructuring charges, net ​ ​ 260 ​ ​ 137 ​ ​ 208 ​ Plus: charges included in cost of sales (1) ​ ​ — ​ ​ 16 ​ ​ — ​ Restructuring and related charges, net ​ $ 260 ​ $ 153 ​ $ 208 ​ (1) Charges included in cost of sales were attributable to inventory-related charges within the Industrial Solutions segment. ​ 70 Table of Contents TE CONNECTIVITY LTD. 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 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 ​ Fiscal 2022 Actions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee severance ​ ​ 108 ​ ​ 7 ​ ​ ( 7 ) ​ ​ ( 61 ) ​ ​ — ​ ​ 5 ​ ​ 52 ​ Facility and other exit costs ​ ​ 1 ​ ​ 7 ​ ​ 2 ​ ​ ( 10 ) ​ ​ — ​ ​ — ​ ​ — ​ Property, plant, and equipment ​ ​ — ​ ​ 3 ​ ​ — ​ ​ — ​ ​ ( 3 ) ​ ​ — ​ ​ — ​ Total ​ ​ 109 ​ ​ 17 ​ ​ ( 5 ) ​ ​ ( 71 ) ​ ​ ( 3 ) ​ ​ 5 ​ ​ 52 ​ Fiscal 2021 Actions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee severance ​ ​ 49 ​ ​ — ​ ​ 1 ​ ​ ( 21 ) ​ ​ — ​ ​ 4 ​ ​ 33 ​ Property, plant, and equipment ​ ​ — ​ ​ — ​ ​ ( 6 ) ​ ​ — ​ ​ 6 ​ ​ — ​ ​ — ​ Total ​ ​ 49 ​ ​ — ​ ​ ( 5 ) ​ ​ ( 21 ) ​ ​ 6 ​ ​ 4 ​ ​ 33 ​ Pre-Fiscal 2021 Actions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee severance ​ ​ 63 ​ ​ 6 ​ ​ ( 2 ) ​ ​ ( 28 ) ​ ​ — ​ ​ 3 ​ ​ 42 ​ Facility and other exit costs ​ ​ 7 ​ ​ — ​ ​ 4 ​ ​ ( 7 ) ​ ​ — ​ ​ — ​ ​ 4 ​ Property, plant, and equipment ​ ​ — ​ ​ — ​ ​ ( 2 ) ​ ​ — ​ ​ 2 ​ ​ — ​ ​ — ​ Total ​ ​ 70 ​ ​ 6 ​ ​ — ​ ​ ( 35 ) ​ ​ 2 ​ ​ 3 ​ ​ 46 ​ Total fiscal 2023 activity ​ $ 228 ​ $ 270 ​ $ ( 10 ) ​ $ ( 178 ) ​ $ ( 1 ) ​ $ 11 ​ $ 320 ​ Fiscal 2022 Activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2022 Actions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee severance ​ $ — ​ $ 126 ​ $ — ​ $ ( 15 ) ​ $ — ​ $ ( 3 ) ​ $ 108 ​ Facility and other exit costs ​ ​ — ​ ​ 2 ​ ​ — ​ ​ ( 1 ) ​ ​ — ​ ​ — ​ ​ 1 ​ Property, plant, and equipment and other non-cash charges ​ ​ — ​ ​ 33 ​ ​ — ​ ​ — ​ ​ ( 33 ) ​ ​ — ​ ​ — ​ Total ​ ​ — ​ ​ 161 ​ ​ — ​ ​ ( 16 ) ​ ​ ( 33 ) ​ ​ ( 3 ) ​ ​ 109 ​ Fiscal 2021 Actions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee severance ​ ​ 152 ​ ​ 2 ​ ​ ( 8 ) ​ ​ ( 83 ) ​ ​ — ​ ​ ( 14 ) ​ ​ 49 ​ Facility and other exit costs ​ ​ 2 ​ ​ 5 ​ ​ — ​ ​ ( 7 ) ​ ​ — ​ ​ — ​ ​ — ​ Property, plant, and equipment ​ ​ — ​ ​ 3 ​ ​ — ​ ​ — ​ ​ ( 3 ) ​ ​ — ​ ​ — ​ Total ​ ​ 154 ​ ​ 10 ​ ​ ( 8 ) ​ ​ ( 90 ) ​ ​ ( 3 ) ​ ​ ( 14 ) ​ ​ 49 ​ Pre-Fiscal 2021 Actions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee severance ​ ​ 135 ​ ​ — ​ ​ ( 17 ) ​ ​ ( 41 ) ​ ​ — ​ ​ ( 14 ) ​ ​ 63 ​ Facility and other exit costs ​ ​ 15 ​ ​ 8 ​ ​ ( 2 ) ​ ​ ( 13 ) ​ ​ — ​ ​ ( 1 ) ​ ​ 7 ​ Property, plant, and equipment ​ ​ — ​ ​ 4 ​ ​ ( 3 ) ​ ​ — ​ ​ ( 1 ) ​ ​ — ​ ​ — ​ Total ​ ​ 150 ​ ​ 12 ​ ​ ( 22 ) ​ ​ ( 54 ) ​ ​ ( 1 ) ​ ​ ( 15 ) ​ ​ 70 ​ Total fiscal 2022 activity ​ $ 304 ​ $ 183 ​ $ ( 30 ) ​ $ ( 160 ) ​ $ ( 37 ) ​ $ ( 32 ) ​ $ 228 ​ Fiscal 2021 Activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2021 Actions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee severance ​ $ — ​ $ 199 ​ $ ( 17 ) ​ $ ( 26 ) ​ $ — ​ $ ( 4 ) ​ $ 152 ​ Facility and other exit costs ​ — ​ ​ 4 ​ ​ — ​ ​ ( 2 ) ​ ​ — ​ ​ — ​ ​ 2 ​ Property, plant, and equipment ​ — ​ ​ 9 ​ ​ — ​ ​ — ​ ​ ( 9 ) ​ ​ — ​ ​ — ​ Total ​ — ​ ​ 212 ​ ​ ( 17 ) ​ ​ ( 28 ) ​ ​ ( 9 ) ​ ​ ( 4 ) ​ ​ 154 ​ Pre-Fiscal 2021 Actions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee severance ​ 273 ​ ​ 5 ​ ​ ( 9 ) ​ ​ ( 137 ) ​ ​ — ​ ​ 3 ​ ​ 135 ​ Facility and other exit costs ​ 12 ​ ​ 13 ​ ​ — ​ ​ ( 10 ) ​ ​ — ​ ​ — ​ ​ 15 ​ Property, plant, and equipment ​ ​ — ​ ​ 7 ​ ​ ( 3 ) ​ ​ — ​ ​ ( 4 ) ​ ​ — ​ ​ — ​ Total ​ 285 ​ 25 ​ ( 12 ) ​ ( 147 ) ​ ( 4 ) ​ 3 ​ 150 ​ Total fiscal 2021 activity ​ $ 285 ​ $ 237 ​ $ ( 29 ) ​ $ ( 175 ) ​ $ ( 13 ) ​ $ ( 1 ) ​ $ 304 ​ ​ 71 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Fiscal 2023 Actions During fiscal 2023, we initiated a restructuring program associated with cost structure improvements across all segments. In connection with this program, during fiscal 2023, we recorded restructuring charges of $ 247 million. We expect to complete all restructuring actions commenced during fiscal 2023 by the end of fiscal 2026 and to incur additional charges of approximately $ 33 million related primarily to employee severance and facility exit costs. The following table summarizes expected, incurred, and remaining charges for the fiscal 2023 program by segment as of fiscal year end 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ Cumulative ​ Remaining ​ ​ ​ Expected ​ Charges ​ Expected ​ ​ Charges Incurred Charges ​ ​ (in millions) ​ Transportation Solutions ​ $ 164 ​ $ 144 ​ $ 20 ​ Industrial Solutions ​ 81 ​ 70 ​ 11 ​ Communications Solutions ​ 35 ​ 33 ​ 2 ​ Total ​ $ 280 ​ $ 247 ​ $ 33 ​ ​ Fiscal 2022 Actions During fiscal 2022, we initiated a restructuring program associated with footprint consolidation and cost structure improvements across all segments. In connection with this program, during fiscal 2023 and 2022, we recorded net restructuring charges of $ 12 million and restructuring and related charges of $ 161 million, respectively. We expect additional charges related to fiscal 2022 actions to be insignificant. Fiscal 2021 Actions During fiscal 2021, we initiated a restructuring program across all segments to optimize our manufacturing footprint and improve the cost structure of the organization. In connection with this program, during fiscal 2023, 2022, and 2021, we recorded net restructuring credits of $ 5 million, charges of $ 2 million, and charges of $ 195 million, respectively. We expect that any additional charges related to fiscal 2021 actions will be insignificant. Pre-Fiscal 2021 Actions During fiscal 2023, 2022, and 2021, we recorded net restructuring charges of $ 6 million, credits of $ 10 million, and charges of $ 13 million, respectively, related to pre-fiscal 2021 actions. We expect that any additional charges related to restructuring actions commenced prior to fiscal 2021 will be insignificant. Total Restructuring Reserves Restructuring reserves included on the Consolidated Balance Sheets were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year End ​ ​ 2023 2022 ​ ​ (in millions) ​ Accrued and other current liabilities ​ $ 240 ​ $ 182 ​ Other liabilities ​ 80 ​ 46 ​ Restructuring reserves ​ $ 320 ​ $ 228 ​ ​ ​ 72 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Divestitures During fiscal 2023, we sold three businesses for net cash proceeds of $ 48 million. 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. The businesses sold were reported in our Industrial Solutions segment. Additionally, during fiscal 2023, we recorded a pre-tax impairment charge of $ 68 million in connection with a held for sale business in our Transportation Solutions segment. We sold two businesses for net cash proceeds of $ 16 million and recognized a net pre-tax gain on sales of $ 10 million during fiscal 2022. The businesses sold were reported in our Transportation Solutions and Industrial Solutions segments. Additionally, during fiscal 2022, we recorded pre-tax impairment charges of $ 14 million in connection with held for sale businesses in our Industrial Solutions segment. During fiscal 2021, we sold two businesses which were reported in our Industrial Solutions segment. 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 $ 21 million. ​ ​ 4. Acquisitions During fiscal 2023, we acquired one business for a cash purchase price of $ 110 million, net of cash acquired. The acquisition was reported as part of our Industrial Solutions segment from the date of acquisition. We acquired three businesses for a combined cash purchase price of $ 245 million, net of cash acquired, during fiscal 2022. The acquisitions were reported as part of our Communications Solutions segment from the date of acquisition. During fiscal 2021, we acquired four businesses for a combined cash purchase price of $ 422 million, net of cash acquired. The acquisitions were reported as part of our Industrial Solutions segment from the date of acquisition. During fiscal 2022, we finalized the purchase price allocation of certain fiscal 2021 acquisitions, which included the recognition of $ 25 million of cash acquired, and the associated goodwill was reduced. See Note 7 for additional information. Pending Acquisition In August 2023, we entered into a definitive agreement under which we agreed to launch a public tender offer to acquire all 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 fair value of approximately CHF 320 million (equivalent to approximately $ 350 million). The tender offer commenced in September 2023. As of November 10, 2023, the completion of the initial offer period, the offer has been accepted for approximately 89 % of Schaffner’s outstanding shares. The offer is subject to customary closing conditions, including regulatory approvals, and is expected to be settled in the first quarter of fiscal 2024. 5. Inventories Inventories consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year End ​ ​ 2023 2022 ​ ​ (in millions) ​ Raw materials ​ $ 367 ​ $ 390 ​ Work in progress ​ 1,185 ​ 1,066 ​ Finished goods ​ 1,000 ​ 1,220 ​ Inventories ​ $ 2,552 ​ $ 2,676 ​ ​ ​ 73 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 6. Property, Plant, and Equipment, Net Net property, plant, and equipment consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year End ​ ​ 2023 2022 ​ ​ (in millions) ​ Property, plant, and equipment, gross: ​ ​ ​ ​ ​ ​ ​ Land and improvements ​ $ 116 ​ $ 106 ​ Buildings and improvements ​ 1,438 ​ 1,331 ​ Machinery and equipment ​ 8,311 ​ 7,727 ​ Construction in process ​ 625 ​ 609 ​ ​ ​ 10,490 ​ 9,773 ​ Accumulated depreciation ​ ( 6,736 ) ​ ( 6,206 ) ​ Property, plant, and equipment, net ​ $ 3,754 ​ $ 3,567 ​ ​ Depreciation expense was $ 607 million, $ 593 million, and $ 576 million in fiscal 2023, 2022, and 2021, respectively. 7. Goodwill The changes in the carrying amount of goodwill by segment were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Transportation ​ Industrial ​ Communications ​ ​ ​ ​ ​ Solutions Solutions Solutions Total ​ ​ (in millions) ​ Balance at fiscal year end 2021 (1) ​ $ 1,549 ​ $ 3,437 ​ $ 604 ​ $ 5,590 ​ Acquisitions ​ ​ — ​ ​ — ​ ​ 141 ​ ​ 141 ​ Purchase price adjustments ​ ​ — ​ ​ ( 91 ) ​ ​ — ​ ​ ( 91 ) ​ Currency translation and other ​ ( 110 ) ​ ( 228 ) ​ ( 44 ) ​ ( 382 ) ​ Balance at fiscal year end 2022 (1) ​ ​ 1,439 ​ ​ 3,118 ​ ​ 701 ​ ​ 5,258 ​ Acquisition ​ ​ — ​ ​ 75 ​ ​ — ​ ​ 75 ​ Currency translation and other ​ ​ 39 ​ ​ 70 ​ ​ 21 ​ ​ 130 ​ Balance at fiscal year end 2023 (1) ​ $ 1,478 ​ $ 3,263 ​ $ 722 ​ $ 5,463 ​ (1) At fiscal year end 2023, 2022, and 2021, accumulated impairment losses for the Transportation Solutions, Industrial Solutions, and Communications Solutions segments were $ 3,091 million, $ 669 million, and $ 489 million, respectively. During fiscal 2023 and 2022, we recognized goodwill of $ 75 million and $ 141 million, respectively, in connection with new acquisitions. Also during fiscal 2022, we recognized purchase price adjustments in connection with prior year acquisitions, including two acquisitions that closed late in the fourth quarter of fiscal 2021. See Note 4 for additional information regarding acquisitions. We completed our annual goodwill impairment test in the fourth quarter of fiscal 2023 and determined that no impairment existed. 74 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 8. Intangible Assets, Net Intangible assets consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 ​ ​ ​ Gross ​ ​ ​ ​ Net ​ Gross ​ ​ ​ ​ Net ​ ​ ​ Carrying ​ Accumulated ​ Carrying ​ Carrying ​ Accumulated ​ Carrying ​ ​ Amount Amortization Amount Amount Amortization Amount ​ ​ (in millions) ​ Customer relationships ​ $ 1,720 ​ $ ( 806 ) ​ $ 914 ​ $ 1,642 ​ $ ( 687 ) ​ $ 955 ​ Intellectual property ​ ​ 1,186 ​ ​ ( 938 ) ​ ​ 248 ​ ​ 1,174 ​ ​ ( 852 ) ​ ​ 322 ​ Other ​ 19 ​ ( 6 ) ​ 13 ​ 16 ​ ( 5 ) ​ 11 ​ Total ​ $ 2,925 ​ $ ( 1,750 ) ​ $ 1,175 ​ $ 2,832 ​ $ ( 1,544 ) ​ $ 1,288 ​ ​ Intangible asset amortization expense was $ 187 million, $ 192 million, and $ 193 million for fiscal 2023, 2022, and 2021, respectively. At fiscal year end 2023, the aggregate amortization expense on intangible assets is expected to be as follows: ​ ​ ​ ​ ​ ​ (in millions) Fiscal 2024 ​ $ 165 ​ Fiscal 2025 ​ ​ 147 ​ Fiscal 2026 ​ 142 ​ Fiscal 2027 ​ 124 ​ Fiscal 2028 ​ 92 ​ Thereafter ​ 505 ​ Total ​ $ 1,175 ​ ​ ​ ​ 9. Accrued and Other Current Liabilities Accrued and other current liabilities consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year End ​ ​ 2023 2022 ​ ​ (in millions) ​ Accrued payroll and employee benefits ​ $ 577 ​ $ 535 ​ Dividends payable to shareholders ​ 368 ​ 356 ​ Restructuring reserves ​ 240 ​ 182 ​ Income taxes payable ​ 140 ​ 162 ​ Lease liability ​ ​ 118 ​ ​ 126 ​ Deferred revenue ​ ​ 74 ​ ​ 63 ​ Share repurchase program payable ​ ​ 71 ​ ​ 70 ​ Interest payable ​ 28 ​ 28 ​ Other ​ 602 ​ 603 ​ Accrued and other current liabilities ​ $ 2,218 ​ $ 2,125 ​ ​ ​ 75 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 10. Debt Debt was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year End ​ ​ 2023 2022 ​ ​ (in millions) ​ Principal debt: ​ ​ ​ ​ ​ ​ ​ Commercial paper, at a weighted-average interest rate of 5.50 % and 3.45 %, respectively ​ $ 330 ​ $ 370 ​ 1.10 % euro-denominated senior notes due 2023 ​ ​ — ​ ​ 538 ​ 3.45 % senior notes due 2024 ​ ​ 350 ​ ​ 350 ​ 0.00 % euro-denominated senior notes due 2025 ​ ​ 582 ​ ​ 538 ​ 4.50 % senior notes due 2026 ​ ​ 500 ​ ​ — ​ 3.70 % senior notes due 2026 ​ ​ 350 ​ ​ 350 ​ 3.125 % senior notes due 2027 ​ ​ 400 ​ ​ 400 ​ 0.00 % euro-denominated senior notes due 2029 ​ ​ 582 ​ ​ 538 ​ 2.50 % senior notes due in 2032 ​ ​ 600 ​ ​ 600 ​ 7.125 % senior notes due 2037 ​ 477 ​ 477 ​ Other ​ ​ 75 ​ ​ 83 ​ ​ ​ ​ 4,246 ​ ​ 4,244 ​ Unamortized discounts, premiums, and debt issuance costs, net ​ ​ ( 35 ) ​ ​ ( 38 ) ​ Total debt ​ $ 4,211 ​ $ 4,206 ​ ​ During fiscal 2023, Tyco Electronics Group S.A. (“TEGSA”), our wholly-owned subsidiary, issued $ 500 million aggregate principal amount of 4.50 % senior notes due in February 2026. The 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. TEGSA has a five-year unsecured senior revolving credit facility (“Credit Facility”) with a maturity date of June 2026 and total commitments of $ 1.5 billion. The Credit Facility contains provisions that allow for incremental commitments of up to $ 500 million, an option to temporarily increase the financial ratio covenant following a qualified acquisition, and borrowings in designated currencies. TEGSA had no borrowings under the Credit Facility at fiscal year end 2023 or 2022. Borrowings under the Credit Facility bear interest at a rate per annum equal to, at the option of TEGSA, (1) the term secured overnight financing rate (“Term SOFR”) (as defined in the Credit Facility), (2) 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%, and (iii) the Term SOFR for a one-month interest period plus 1 %, (3) an alternative currency daily rate , or (4) an alternative currency term 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 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. TEGSA’s payment obligations under its senior notes, commercial paper, and Credit Facility are fully and unconditionally guaranteed on an unsecured basis by its parent, TE Connectivity Ltd. 76 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) At fiscal year end 2023, principal payments required for debt are as follows: ​ ​ ​ ​ ​ ​ ​ (in millions) Fiscal 2024 ​ $ 682 ​ Fiscal 2025 ​ 584 ​ Fiscal 2026 ​ 852 ​ Fiscal 2027 ​ 402 ​ Fiscal 2028 ​ — ​ Thereafter ​ 1,726 ​ Total ​ $ 4,246 ​ ​ The fair value of our debt, based on indicative valuations, was approximately $ 3,974 million and $ 3,990 million at fiscal year end 2023 and 2022, respectively. 11. Leases The components of lease cost were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ 2023 2022 2021 ​ (in millions) Operating lease cost ​ $ 129 ​ $ 131 ​ $ 120 ​ Variable lease cost ​ ​ 55 ​ ​ 52 ​ ​ 49 ​ Total lease cost ​ $ 184 ​ $ 183 ​ $ 169 ​ ​ Amounts recognized on the Consolidated Balance Sheets were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year End ​ ​ 2023 2022 ​ ​ ($ in millions) ​ Operating lease ROU assets: ​ ​ ​ ​ ​ ​ ​ Other assets ​ $ 390 ​ $ 424 ​ Operating lease liabilities: ​ ​ ​ ​ ​ ​ ​ Accrued and other current liabilities ​ $ 118 ​ $ 126 ​ Other liabilities ​ ​ 280 ​ ​ 308 ​ Total operating lease liabilities ​ $ 398 ​ $ 434 ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average remaining lease term (in years) ​ ​ 5.0 ​ ​ 5.3 ​ Weighted-average discount rate ​ ​ 3.0 % ​ 2.0 % ​ Cash flow information, including significant non-cash transactions, related to leases was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ 2023 2022 2021 ​ (in millions) Cash paid for amounts included in the measurement of lease liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments for operating leases (1) ​ $ 127 ​ $ 122 ​ $ 123 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ROU assets, including modifications of existing leases, obtained in exchange for operating lease liabilities ​ ​ 106 ​ ​ 135 ​ ​ 123 ​ (1) These payments are included in cash flows from operating activities, primarily in changes in accrued and other current liabilities. 77 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) At fiscal year end 2023, the maturities of operating lease liabilities were as follows: ​ ​ ​ ​ ​ ​ ​ (in millions) Fiscal 2024 ​ $ 118 ​ Fiscal 2025 ​ ​ 107 ​ Fiscal 2026 ​ ​ 71 ​ Fiscal 2027 ​ ​ 42 ​ Fiscal 2028 ​ ​ 30 ​ Thereafter ​ ​ 64 ​ Total lease payments ​ ​ 432 ​ Less: interest ​ ​ ( 34 ) ​ Present value of lease liabilities ​ $ 398 ​ ​ ​ 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, 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 We have been investigating our past compliance with relevant U.S. trade controls and have made voluntary disclosures of apparent trade controls violations to the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) and the U.S. State Department’s Directorate of Defense Trade Controls (“DDTC”). We are cooperating with the BIS and DDTC on these matters, and the resulting investigations are ongoing. We have also been contacted by the U.S. Department of Justice concerning aspects of these matters. We are unable to predict the timing and final outcome of the agencies’ investigations. An unfavorable outcome may include fines or penalties imposed in response to our disclosures, but we are not yet able to reasonably estimate the extent of any such fines or penalties. Although we have reserved for potential fines and penalties relating to these matters based on our current understanding of the facts, the investigations into these matters have yet to be completed and the final outcome of such investigations and related fines and penalties may differ from amounts currently reserved. 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 2023, we concluded that we would incur investigation and remediation costs at these sites in the reasonably possible range of $ 17 million to $ 45 million, and we accrued $ 20 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 78 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 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 2023, we had outstanding letters of credit, letters of guarantee, and surety bonds of $ 198 million, including letters of credit of $ 29 million associated with our divesture of the Subsea Communications business. In addition, at fiscal year end 2023, we had $ 27 million of performance guarantees associated with that divestiture. We contractually agreed to continue to honor letters of credit and performance guarantees related to the business’ projects that existed as of the date of sale; however, based on historical experience, we do not anticipate having to perform on these guarantees. 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. 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 . During fiscal 2015, we entered into cross-currency swap contracts, which were designated as cash flow hedges, to reduce our exposure to foreign currency exchange rate risk associated with certain intercompany loans. As of fiscal year end 2022, all such cross-currency swap contracts had been terminated or matured and were settled; additionally, all related collateral positions were settled. During fiscal 2023, we did not enter into any cross-currency swap contracts and there were no amounts outstanding. The impacts of our cross-currency swap contracts were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ 2022 2021 ​ ​ (in millions) Losses recorded in other comprehensive income (loss) ​ $ ( 7 ) ​ $ ( 6 ) ​ Gains (losses) excluded from the hedging relationship (1) ​ 70 ​ ( 6 ) ​ Gains reclassified from other comprehensive income (loss) into selling, general, and administrative expenses ​ ​ 2 ​ ​ — ​ (1) Gains and losses excluded from the hedging relationship are recognized prospectively in selling, general, and administrative expenses and are offset by losses and gains generated as a result of re-measuring certain intercompany loans to the U.S. dollar. 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 $ 1,709 million and $ 1,658 million at fiscal year end 2023 and 2022, 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 $ 3,806 million and $ 1,873 million at fiscal year end 2023 and 2022, respectively. Under the terms of these contracts, we receive interest in U.S. dollars at a weighted-average rate of 1.6 % per annum and pay no interest. Upon the maturity of these contracts at various dates through fiscal 2027, 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. 79 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) These cross-currency swap contracts were recorded on the Consolidated Balance Sheets as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year End ​ ​ 2023 2022 ​ ​ (in millions) Prepaid expenses and other current assets ​ $ 109 $ 55 ​ Other assets ​ 79 ​ 172 ​ Accrued and other current liabilities ​ ​ 4 ​ ​ — ​ Other liabilities ​ ​ 10 ​ ​ — ​ ​ The impacts of our hedge of net investment programs were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ 2023 2022 2021 ​ ​ (in millions) Foreign currency exchange gains (losses) on intercompany loans and external borrowings (1) ​ $ ( 162 ) ​ $ 516 ​ $ ( 12 ) ​ Gains (losses) on cross-currency swap contracts designated as hedges of net investment (1) ​ ( 29 ) ​ 265 ​ ( 22 ) ​ (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 use interest rate swap contracts to convert a portion of fixed rate debt into variable rate debt. 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. During fiscal 2022, we terminated forward starting interest rate swap contracts as a result of the issuance of our 2.50 % senior notes due in 2032. During fiscal 2023, we did not enter into any forward starting interest rate swap contracts and there were no amounts outstanding. The impacts of our forward starting interest rate swap contracts were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ 2022 2021 ​ ​ (in millions) Gains recorded in other comprehensive income (loss) ​ $ 13 $ 33 ​ ​ 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 commodities used in production. These contracts had an aggregate notional value of $ 459 million and $ 566 million at fiscal year end 2023 and 2022, respectively, and were designated as cash flow hedges. These commodity swap contracts were recorded on the Consolidated Balance Sheets as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year End ​ ​ 2023 2022 ​ ​ (in millions) Prepaid expenses and other current assets ​ $ 3 $ 2 ​ Accrued and other current liabilities ​ ​ 21 ​ ​ 77 ​ Other liabilities ​ ​ 5 ​ ​ 7 ​ ​ 80 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The impacts of our commodity swap contracts were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ 2023 2022 2021 ​ ​ (in millions) Gains (losses) recorded in other comprehensive income (loss) ​ $ 31 $ ( 86 ) $ 58 ​ Gains (losses) reclassified from accumulated other comprehensive income (loss) into cost of sales ​ ​ ( 39 ) ​ ​ 22 ​ ​ 92 ​ ​ 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 2023 and 2022. 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 ​ ​ ​ 2023 2022 2021 2023 2022 2021 ​ ​ ($ in millions) ​ ​ Operating expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Service cost ​ $ 29 ​ $ 38 ​ $ 48 ​ $ 9 ​ $ 8 ​ $ 12 ​ ​ Other (income) expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest cost ​ 60 ​ 32 ​ 30 ​ 38 ​ 26 ​ 30 ​ ​ Expected returns on plan assets ​ ( 48 ) ​ ( 55 ) ​ ( 57 ) ​ ( 38 ) ​ ( 47 ) ​ ( 52 ) ​ ​ Amortization of net actuarial loss ​ 6 ​ 24 ​ 32 ​ 4 ​ 3 ​ 9 ​ ​ Amortization of prior service credit ​ ( 4 ) ​ ( 5 ) ​ ( 6 ) ​ — ​ — ​ — ​ ​ Settlement and curtailment losses (gains) ​ ​ ( 2 ) ​ ​ ( 3 ) ​ ​ ( 2 ) ​ ​ — ​ ​ — ​ ​ 28 (1) ​ Net periodic pension benefit cost (credit) ​ $ 41 ​ $ 31 ​ $ 45 ​ $ 13 ​ $ ( 10 ) ​ $ 27 ​ ​ Weighted-average assumptions used to determine net pension benefit cost (credit) during the fiscal year: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Discount rate ​ 3.80 % 1.37 % 1.13 % 5.53 % 2.84 % 2.57 % ​ Expected returns on plan assets ​ 4.61 % 3.77 % 3.65 % 6.60 % 5.90 % 5.60 % ​ Rates of compensation increases ​ 2.62 % 2.53 % 2.50 % — % — % — % ​ (1) During fiscal 2021, we recognized a settlement charge of $ 28 million , which was recorded in net other income (expense) on the Consolidated Statement of Operations, in connection with the transfer of certain U.S. pension plan liabilities to an insurance company through the purchase of a group annuity contract. 81 Table of Contents TE CONNECTIVITY LTD. 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 ​ ​ ​ 2023 2022 2023 2022 ​ ​ ($ in millions) ​ ​ Change in benefit obligation: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Benefit obligation at beginning of fiscal year ​ $ 1,502 ​ $ 2,520 ​ $ 717 ​ $ 952 ​ ​ Service cost ​ 29 ​ 38 ​ 9 ​ 8 ​ ​ Interest cost ​ 60 ​ 32 ​ 38 ​ 26 ​ ​ Actuarial gains ​ ( 79 ) ​ ( 660 ) ​ ( 23 ) ​ ( 204 ) ​ ​ Benefits and administrative expenses paid ​ ( 73 ) ​ ( 82 ) ​ ( 67 ) ​ ( 65 ) ​ ​ Settlements and curtailments ​ ​ ( 38 ) ​ ​ ( 10 ) ​ ​ — ​ ​ — ​ ​ Currency translation ​ 105 ​ ( 353 ) ​ — ​ — ​ ​ Other ​ 3 ​ 17 ​ — ​ — ​ ​ Benefit obligation at end of fiscal year ​ 1,509 ​ 1,502 ​ 674 ​ 717 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in plan assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value of plan assets at beginning of fiscal year ​ 989 ​ 1,582 ​ 612 ​ 833 ​ ​ Actual returns on plan assets ​ ( 3 ) ​ ( 320 ) ​ 20 ​ ( 158 ) ​ ​ Employer contributions ​ 70 ​ 40 ​ 1 ​ 2 ​ ​ Benefits and administrative expenses paid ​ ( 73 ) ​ ( 82 ) ​ ( 67 ) ​ ( 65 ) ​ ​ Settlements ​ ​ ( 35 ) ​ ​ ( 10 ) ​ ​ — ​ ​ — ​ ​ Currency translation ​ 54 ​ ( 235 ) ​ — ​ — ​ ​ Other ​ 5 ​ 14 ​ — ​ — ​ ​ Fair value of plan assets at end of fiscal year ​ 1,007 ​ 989 ​ 566 ​ 612 ​ ​ Funded status ​ $ ( 502 ) ​ $ ( 513 ) ​ $ ( 108 ) ​ $ ( 105 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amounts recognized on the Consolidated Balance Sheets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other assets ​ $ 143 ​ $ 92 ​ $ — ​ $ — ​ ​ Accrued and other current liabilities ​ ​ ( 30 ) ​ ​ ( 25 ) ​ ​ ( 4 ) ​ ​ ( 4 ) ​ ​ Long-term pension and postretirement liabilities ​ ( 615 ) ​ ( 580 ) ​ ( 104 ) ​ ( 101 ) ​ ​ Net amount recognized ​ $ ( 502 ) ​ $ ( 513 ) ​ $ ( 108 ) ​ $ ( 105 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ) ​ $ ( 176 ) ​ $ ( 140 ) ​ $ ( 149 ) ​ ​ Prior service (cost) credit ​ ​ 9 ​ ​ 16 ​ ​ — ​ ​ ( 1 ) ​ ​ Total ​ $ ( 145 ) ​ $ ( 160 ) ​ $ ( 140 ) ​ $ ( 150 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average assumptions used to determine pension benefit obligation at fiscal year end: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Discount rate ​ 4.13 % 3.80 % 6.04 % 5.53 % ​ Rates of compensation increases ​ 2.68 % 2.62 % — % — % ​ ​ 82 Table of Contents TE CONNECTIVITY LTD. 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 ​ ​ 2023 2022 2023 2022 ​ ​ (in millions) ​ Current year net actuarial gain (loss) recorded in accumulated other comprehensive income (loss) ​ $ 16 ​ $ 350 ​ $ 5 ​ $ ( 1 ) ​ Amortization of net actuarial loss (1) ​ 6 ​ 21 ​ 4 ​ 3 ​ Current year prior service credit (cost) recorded in accumulated other comprehensive income (loss) ​ ( 1 ) ​ ( 5 ) ​ 1 ​ — ​ Amortization of prior service credit (1) ​ ( 6 ) ​ ( 5 ) ​ — ​ — ​ ​ ​ $ 15 ​ $ 361 ​ $ 10 ​ $ 2 ​ (1) Includes amounts reflected as settlement and curtailment losses (gains) in the above net periodic pension benefit cost (credit) table. In fiscal 2022, unrecognized actuarial gains recorded in accumulated other comprehensive income (loss) were primarily the result of higher discount rates, partially offset by unfavorable asset performance for our non-U.S. defined benefit pension plans as compared to fiscal 2021. 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 2023, 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 2023, 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 2023 2022 Target 2023 2022 Asset category: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equity securities 32 % 38 % 22 % 67 % 50 % 48 % ​ Fixed income 35 ​ 36 ​ 63 ​ 33 ​ 50 ​ 52 ​ ​ Other ​ 33 ​ 26 ​ 15 ​ — ​ — ​ — ​ ​ Total 100 % 100 % 100 % 100 % 100 % 100 % ​ ​ 83 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Our common shares are not a direct investment of our pension funds; however, the pension funds may indirectly include our shares. The aggregate amount of our common 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 $ 43 million and $ 27 million to our non-U.S. and U.S. pension plans, respectively, in fiscal 2024. We may also make voluntary contributions at our discretion. At fiscal year end 2023, 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 2024 ​ $ 88 ​ ​ 64 ​ Fiscal 2025 ​ 83 ​ ​ 61 ​ Fiscal 2026 ​ 83 ​ ​ 61 ​ Fiscal 2027 ​ 86 ​ ​ 60 ​ Fiscal 2028 ​ 93 ​ ​ 59 ​ Fiscal 2029-2033 ​ 511 ​ ​ 276 ​ ​ 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 ​ ​ 2023 2022 2023 2022 ​ ​ (in millions) ​ Accumulated benefit obligation ​ $ 1,446 ​ $ 1,434 ​ $ 674 ​ $ 717 ​ Pension plans with accumulated benefit obligations in excess of plan assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated benefit obligation ​ 643 ​ 598 ​ 674 ​ 717 ​ Fair value of plan assets ​ 42 ​ 43 ​ 566 ​ 612 ​ Pension plans with projected benefit obligations in excess of plan assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Projected benefit obligation ​ 742 ​ 689 ​ 674 ​ 717 ​ Fair value of plan assets ​ 91 ​ 84 ​ 566 ​ 612 ​ ​ 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 2023 ​ ​ ​ 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) ​ $ — ​ $ 185 ​ $ — ​ $ 185 ​ $ — ​ $ 153 ​ $ — ​ $ 153 ​ Fixed income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commingled fixed income funds (2) ​ — ​ 559 ​ — ​ 559 ​ — ​ 252 ​ — ​ 252 ​ Other (3) ​ — ​ 167 ​ — ​ 167 ​ — ​ 14 ​ — ​ 14 ​ Subtotal ​ $ — ​ $ 911 ​ $ — ​ 911 ​ $ — ​ $ 419 ​ $ — ​ 419 ​ Items to reconcile to fair value of plan assets (4) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 96 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 147 ​ Fair value of plan assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 1,007 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 566 ​ ​ 84 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year End 2022 ​ ​ ​ 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) ​ $ — ​ $ 159 ​ $ — ​ $ 159 ​ $ — ​ $ 161 ​ $ — ​ $ 161 ​ Fixed income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commingled fixed income funds (2) ​ — ​ 540 ​ — ​ 540 ​ — ​ 306 ​ — ​ 306 ​ Other (3) ​ — ​ 141 ​ — ​ 141 ​ — ​ 14 ​ — ​ 14 ​ Subtotal ​ $ — ​ $ 840 ​ $ — ​ 840 ​ $ — ​ $ 481 ​ $ — ​ 481 ​ Items to reconcile to fair value of plan assets (4) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 149 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 131 ​ Fair value of plan assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 989 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 612 ​ (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, structured products such as collateralized obligations and mortgage- and asset-backed securities, real estate investments, and hedge funds. 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). Real estate investments include investments in commingled real estate funds and are valued at net asset value which is calculated using unobservable inputs that are supported by little or no market activity (level 3). Hedge funds are valued at their net asset value which is calculated using unobservable inputs that are supported by little or no market activity (level 3). (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 $ 56 million, $ 59 million, and $ 60 million for fiscal 2023, 2022, and 2021, 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 2023 and 2022, total deferred compensation liabilities were $ 236 million and $ 206 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 $ 11 million and $ 13 million at fiscal year end 2023 and 2022, respectively, and the underfunded status of the 85 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) postretirement benefit plans was included primarily in long-term pension and postretirement liabilities on the Consolidated Balance Sheets. Activity during fiscal 2023, 2022, and 2021 was not significant. 15. Income Taxes Income Tax Expense Significant components of the income tax expense were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ 2023 2022 2021 ​ ​ (in millions) ​ Current income tax expense (benefit): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. Federal ​ $ 23 ​ $ 20 ​ $ 3 ​ U.S. State ​ — ​ ( 19 ) ​ 12 ​ Non-U.S. ​ 418 ​ 452 ​ 462 ​ ​ ​ ​ 441 ​ ​ 453 ​ ​ 477 ​ Deferred income tax expense (benefit): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. Federal ​ ( 90 ) ​ ( 90 ) ​ ( 24 ) ​ U.S. State ​ ( 6 ) ​ — ​ ( 15 ) ​ Non-U.S. ​ 19 ​ ( 57 ) ​ ( 315 ) ​ ​ ​ ​ ( 77 ) ​ ​ ( 147 ) ​ ​ ( 354 ) ​ Income tax expense ​ $ 364 ​ $ 306 ​ $ 123 ​ ​ The U.S. and non-U.S. components of income from continuing operations before income taxes were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ 2023 2022 2021 ​ ​ (in millions) ​ U.S. ​ $ ( 137 ) ​ $ ( 4 ) ​ $ ( 336 ) ​ Non-U.S. ​ 2,405 ​ 2,737 ​ 2,714 ​ Income from continuing operations before income taxes ​ $ 2,268 ​ $ 2,733 ​ $ 2,378 ​ ​ The reconciliation between U.S. federal income taxes at the statutory rate and income tax expense was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ 2023 2022 2021 ​ ​ (in millions) ​ Notional U.S. federal income tax expense at the statutory rate (1) ​ $ 476 ​ $ 574 ​ $ 499 ​ Adjustments to reconcile to the income tax expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. state income tax benefit, net ​ ( 5 ) ​ ( 15 ) ​ ( 2 ) ​ Tax law changes ​ ( 1 ) ​ 21 ​ 12 ​ Tax credits ​ ( 13 ) ​ ( 13 ) ​ ( 13 ) ​ Non-U.S. net earnings (2) ​ ( 58 ) ​ ( 105 ) ​ ( 71 ) ​ Change in accrued income tax liabilities ​ 47 ​ ( 14 ) ​ 37 ​ Valuation allowance ​ ( 47 ) ​ ( 37 ) ​ ( 353 ) ​ Legal entity restructurings and intercompany transactions ​ ​ ( 1 ) ​ ​ ( 123 ) ​ ​ 19 ​ Divestitures ​ ​ ( 17 ) ​ ​ — ​ ​ — ​ Excess tax benefits from share-based payments ​ ​ ( 6 ) ​ ​ ( 15 ) ​ ​ ( 21 ) ​ Other ​ ​ ( 11 ) ​ 33 ​ 16 ​ Income tax expense ​ $ 364 ​ $ 306 ​ $ 123 ​ (1) The U.S. federal statutory rate was 21 % for fiscal 2023, 2022, and 2021. (2) Excludes items which are separately presented. 86 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 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. The income tax expense for fiscal 2022 included a $ 124 million income tax benefit related to the tax impacts of certain intercompany transactions, a $ 64 million income tax benefit related primarily to a lapse of a statute of limitation, and a $ 51 million income tax benefit related to the release of a valuation allowance associated primarily with improved current and expected future operating profit and taxable income. In addition, the income tax expense for fiscal 2022 included $ 27 million of income tax expense related to the write-down of certain deferred tax assets to the lower corporate tax rate enacted in the canton of Schaffhausen and $ 12 million of income tax expense related to an income tax audit of an acquired entity. As we are entitled to indemnification of pre-acquisition period tax obligations under the terms of the purchase agreement, we recorded an associated indemnification receivable and other income of $ 11 million during fiscal 2022. The income tax expense for fiscal 2021 included a $ 353 million income tax benefit related to changes in valuation allowances, of which $ 327 million related to the net reduction in valuation allowances associated primarily with certain tax planning actions as well as improved current and expected future operating profit and taxable income. In addition, the income tax expense for fiscal 2021 included a $ 29 million income tax benefit related to an Internal Revenue Service approved change in the tax method of depreciating or amortizing certain assets and $ 23 million of income tax expense associated with the tax impacts of an intercompany transaction. 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 ​ ​ 2023 2022 ​ ​ (in millions) ​ Deferred tax assets: ​ ​ ​ ​ ​ ​ ​ Accrued liabilities and reserves ​ $ 387 ​ $ 317 ​ Tax loss and credit carryforwards ​ 8,547 ​ 8,288 ​ Inventories ​ 78 ​ 62 ​ Intangible assets ​ ​ 519 ​ ​ 563 ​ Pension and postretirement benefits ​ 70 ​ 71 ​ Deferred revenue ​ 10 ​ 1 ​ Interest ​ 468 ​ 406 ​ Lease liabilities ​ ​ 84 ​ ​ 81 ​ Other ​ 15 ​ 2 ​ Gross deferred tax assets ​ 10,178 ​ 9,791 ​ Valuation allowance ​ ( 7,416 ) ​ ( 7,112 ) ​ Deferred tax assets, net of valuation allowance ​ ​ 2,762 ​ ​ 2,679 ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities: ​ ​ ​ ​ ​ ​ ​ Property, plant, and equipment ​ ( 96 ) ​ ( 101 ) ​ Write-down of investments in subsidiaries ​ ​ ( 95 ) ​ ​ ( 125 ) ​ Lease ROU assets ​ ​ ( 82 ) ​ ​ ( 79 ) ​ Other ​ ( 74 ) ​ ( 120 ) ​ Total deferred tax liabilities ​ ( 347 ) ​ ( 425 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax assets ​ $ 2,415 ​ $ 2,254 ​ ​ 87 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Our tax loss and credit carryforwards (tax effected) at fiscal year end 2023 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Expiration Period ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2029 ​ ​ ​ ​ ​ ​ ​ Through ​ Through ​ No ​ ​ ​ ​ Fiscal 2028 Fiscal 2043 Expiration Total ​ ​ (in millions) ​ U.S. Federal: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net operating loss carryforwards ​ $ 166 ​ $ 238 ​ $ 56 ​ $ 460 ​ Tax credit carryforwards ​ 56 ​ 109 ​ — ​ ​ 165 ​ U.S. State: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net operating loss carryforwards ​ 31 ​ 17 ​ 5 ​ ​ 53 ​ Tax credit carryforwards ​ 8 ​ — ​ 5 ​ ​ 13 ​ Non-U.S.: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net operating loss carryforwards ​ 121 ​ 6,321 ​ 1,374 ​ ​ 7,816 ​ Tax credit carryforwards ​ ​ — ​ ​ — ​ ​ 1 ​ ​ 1 ​ Capital loss carryforwards ​ ​ 2 ​ ​ — ​ ​ 37 ​ ​ 39 ​ Total tax loss and credit carryforwards ​ $ 384 ​ $ 6,685 ​ $ 1,478 ​ $ 8,547 ​ ​ The valuation allowance for deferred tax assets of $ 7,416 million and $ 7,112 million at fiscal year end 2023 and 2022, respectively, related principally to the uncertainty of the utilization of certain deferred tax assets, primarily tax loss and credit carryforwards in various jurisdictions. During fiscal 2023, we completed tax returns for certain non-U.S. entities which resulted in the recognition of additional deferred tax assets for tax loss carryforwards of $ 313 million. As we do not expect these subsidiaries to generate sufficient future taxable income to realize the deferred tax assets, we recognized a corresponding increase to the valuation allowance. 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 Swiss or non-Swiss 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 2023, certain subsidiaries had approximately $ 38.0 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 2023, we had approximately $ 2.6 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 Ltd., our Swiss 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. 88 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Uncertain Tax Positions The following table summarizes the activity related to unrecognized income tax benefits: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ 2023 2022 2021 ​ ​ (in millions) ​ Balance at beginning of fiscal year ​ $ 287 ​ $ 359 ​ $ 414 ​ Additions for tax positions related to prior years ​ 78 ​ 10 ​ 14 ​ Reductions for tax positions related to prior years ​ ( 1 ) ​ ( 17 ) ​ ( 77 ) ​ Additions for tax positions related to the current year ​ 107 ​ 37 ​ 50 ​ Current year acquisitions ​ ​ 1 ​ ​ — ​ ​ 4 ​ Settlements ​ ( 2 ) ​ ( 2 ) ​ ( 9 ) ​ Reductions due to lapse of applicable statutes of limitations ​ ( 16 ) ​ ( 100 ) ​ ( 37 ) ​ Balance at end of fiscal year ​ $ 454 ​ $ 287 ​ $ 359 ​ ​ The total amount of unrecognized tax benefits that, if recognized, would reduce income tax expense and the effective tax rate were $ 327 million, $ 272 million, and $ 378 million at fiscal year end 2023, 2022, and 2021, respectively. We record accrued interest and penalties related to uncertain tax positions as part of income tax expense (benefit). As of fiscal year end 2023 and 2022, we had $ 65 million and $ 54 million, respectively, of accrued interest and penalties related to uncertain tax positions on the Consolidated Balance Sheets, recorded primarily in income taxes. During fiscal 2023, 2022, and 2021, we recognized income tax expense of $ 11 million, $ 3 million, and $ 12 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. 89 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) As of fiscal year end 2023, under applicable statutes, the following tax years remained subject to examination in the major tax jurisdictions indicated: ​ ​ ​ ​ ​ Jurisdiction Open Years Brazil ​ 2018 through 2023 ​ China 2013 through 2023 ​ Czech Republic 2017 through 2023 ​ France ​ 2020 through 2023 ​ Germany 2012 through 2023 ​ Hong Kong 2017 through 2023 ​ India ​ 2012 through 2023 ​ Ireland ​ 2018 through 2023 ​ Italy 2017 through 2023 ​ Japan 2017 through 2023 ​ Luxembourg 2018 through 2023 ​ Mexico ​ 2018 through 2023 ​ Singapore 2017 through 2023 ​ South Korea ​ 2018 through 2023 ​ Spain 2019 through 2023 ​ Switzerland 2018 through 2023 ​ Thailand ​ 2021 through 2023 ​ United Kingdom 2021 through 2023 ​ U.S.—federal 2020 through 2023 ​ ​ 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 $ 30 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 2023. 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 ​ ​ 2023 2022 2021 ​ ​ (in millions) ​ Basic ​ 315 323 330 ​ Dilutive impact of share-based compensation arrangements ​ 2 2 3 ​ Diluted ​ 317 325 333 ​ ​ 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 common shares and inclusion would be antidilutive: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ 2023 2022 2021 ​ ​ (in millions) ​ Antidilutive share options ​ 1 1 ​ — ​ 90 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) ​ ​ 17. Shareholders’ Equity and Redeemable Noncontrolling Interest Common Shares We are organized under the laws of Switzerland. The rights of holders of our shares are governed by Swiss law, our Swiss articles of association, and our Swiss organizational regulations. The par value of our common shares is stated in Swiss francs (“CHF”); however, we use the U.S. dollar as our reporting currency on the Consolidated Financial Statements. Subject to certain conditions specified in our articles of association, we are authorized to increase our conditional share capital by issuing new shares in aggregate not exceeding 50 % of our authorized shares. As part of the Swiss corporate law reform, effective as of January 1, 2023, the concept of a capital band was introduced. Under a capital band, the articles of association may authorize the board of directors for a maximum period of five years to increase the ordinary share capital registered in the commercial register to a maximum of 150% and/or reduce it to a minimum of 50% of the share capital existing at the time of the introduction of the capital band. In March 2023, our shareholders approved, for a period of one year ending March 15, 2024, our board of directors’ authorization to issue additional new shares to a maximum of 120 % and/or reduce shares to a minimum of 80 % of the existing share capital, subject to certain conditions specified in our articles of association. Common Shares Held in Treasury At fiscal year end 2023, approximately 10 million common shares were held in treasury, of which 4 million were owned by one of our subsidiaries. At fiscal year end 2022, approximately 13 million common shares were held in treasury, of which 5 million 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. In fiscal 2023, 2022, and 2021, our shareholders approved the cancellation of eight and a half million, five million, and three 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. 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. Contributed surplus established for Swiss tax and statutory purposes (“Swiss Contributed Surplus”) is not impacted by our GAAP treatment. Swiss Contributed Surplus, subject to certain conditions, is a freely distributable reserve. As of fiscal year end 2023 and 2022, Swiss Contributed Surplus was CHF 3,562 million and CHF 4,239 million, respectively (equivalent to $ 2,454 million and $ 3,191 million, respectively). Dividends We paid cash dividends to shareholders of $ 2.30 , $ 2.12 , and $ 1.96 per share in fiscal 2023, 2022, and 2021, respectively. Under Swiss law, subject to certain conditions, dividends paid from reserves from capital contributions (equivalent to Swiss Contributed Surplus) are exempt from Swiss withholding tax. Dividends on our shares must be approved by our shareholders. 91 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Our shareholders approved the following dividends on our common shares: ​ ​ ​ ​ ​ ​ ​ Approval Date Annual Payment Per Share Payment Timing March 2020 ​ $ 1.92 , payable in four quarterly installments of $ 0.48 ​ Third quarter of fiscal 2020 Fourth quarter of fiscal 2020 First quarter of fiscal 2021 Second quarter of fiscal 2021 ​ March 2021 ​ $ 2.00 , payable in four quarterly installments of $ 0.50 ​ Third quarter of fiscal 2021 Fourth quarter of fiscal 2021 First quarter of fiscal 2022 Second quarter of fiscal 2022 ​ March 2022 ​ $ 2.24 , payable in four quarterly installments of $ 0.56 ​ Third quarter of fiscal 2022 Fourth quarter of fiscal 2022 First quarter of fiscal 2023 Second quarter of fiscal 2023 ​ March 2023 ​ $ 2.36 , payable in four quarterly installments of $ 0.59 ​ Third quarter of fiscal 2023 Fourth quarter of fiscal 2023 First quarter of fiscal 2024 Second quarter of fiscal 2024 ​ ​ Upon shareholders’ approval of a dividend payment, we record a liability with a corresponding charge to shareholders’ equity. At fiscal year end 2023 and 2022, the unpaid portion of the dividends recorded in accrued and other current liabilities on the Consolidated Balance Sheets totaled $ 368 million and $ 356 million, respectively. Share Repurchase Program In fiscal 2022, our board of directors authorized increases of $ 1.5 billion in our share repurchase program. Common shares repurchased under the share repurchase program were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ 2023 2022 2021 ​ ​ (in millions) ​ Number of common shares repurchased ​ ​ 8 ​ 10 ​ 7 ​ Repurchase value ​ $ 946 $ 1,409 $ 904 ​ ​ At fiscal year end 2023, we had $ 735 million of availability remaining under our share repurchase authorization. Redeemable Noncontrolling Interest We own 72 % of our First Sensor AG (“First Sensor”) subsidiary. 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 2023 and 2022. 92 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 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 2020 ​ $ 172 ​ $ ( 613 ) ​ $ ( 4 ) ​ $ ( 445 ) ​ Other comprehensive income (loss), net of tax: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive income before reclassifications ​ 144 ​ 120 ​ 84 ​ 348 ​ Amounts reclassified from accumulated other comprehensive income (loss) ​ — ​ 62 ​ ( 92 ) ​ ( 30 ) ​ Income tax (expense) benefit ​ ​ — ​ ​ ( 44 ) ​ ​ 5 ​ ​ ( 39 ) ​ Other comprehensive income (loss), net of tax ​ ​ 144 ​ ​ 138 ​ ​ ( 3 ) ​ ​ 279 ​ Less: other comprehensive income attributable to noncontrolling interests ​ ​ ( 2 ) ​ ​ — ​ ​ — ​ ​ ( 2 ) ​ Balance at fiscal year end 2021 ​ $ 314 ​ $ ( 475 ) ​ $ ( 7 ) ​ $ ( 168 ) ​ Other comprehensive income (loss), net of tax: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive income (loss) before reclassifications ​ ​ ( 510 ) ​ ​ 344 ​ ​ ( 76 ) ​ ​ ( 242 ) ​ Amounts reclassified from accumulated other comprehensive income (loss) ​ — ​ 19 ​ ( 26 ) ​ ( 7 ) ​ Income tax (expense) benefit ​ — ​ ( 104 ) ​ 7 ​ ( 97 ) ​ Other comprehensive income (loss), net of tax ​ ​ ( 510 ) ​ ​ 259 ​ ​ ( 95 ) ​ ​ ( 346 ) ​ Less: other comprehensive loss attributable to noncontrolling interests ​ ​ 19 ​ ​ — ​ ​ — ​ ​ 19 ​ 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 ) ​ (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 . 19. Share Plans Our equity compensation plans, of which the TE Connectivity Ltd. 2007 Stock and Incentive Plan, amended and restated as of September 17, 2020 (the “2007 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 2023, the 2007 Plan provided for a maximum of 70 million shares to be issued as Awards, subject to adjustment as provided under the terms of the plan. A total of 8 million shares remained available for issuance under the 2007 Plan as of fiscal year end 2023. 93 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Share-Based Compensation Expense Share-based compensation expense, which was included primarily in selling, general, and administrative expenses on the Consolidated Statements of Operations, was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ 2023 2022 2021 ​ ​ (in millions) ​ Share-based compensation expense ​ $ 123 $ 119 $ 94 ​ ​ We recognized a related tax benefit associated with our share-based compensation arrangements of $ 25 million, $ 24 million, and $ 19 million in fiscal 2023, 2022, and 2021, 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 2022 1,420,606 ​ $ 123.25 ​ Granted 699,297 ​ 124.92 ​ Vested ( 512,210 ) ​ 105.97 ​ Forfeited ( 128,418 ) ​ 130.21 ​ Nonvested at fiscal year end 2023 1,479,275 ​ $ 129.48 ​ ​ The weighted-average grant-date fair value of restricted share awards granted during fiscal 2023, 2022, and 2021 was $ 124.92 , $ 150.99 , and $ 112.54 , respectively. The total fair value of restricted share awards that vested during fiscal 2023, 2022, and 2021 was $ 54 million, $ 44 million, and $ 43 million, respectively. As of fiscal year end 2023, there was $ 87 million of unrecognized compensation expense related to nonvested restricted share awards, which is expected to be recognized over a weighted-average period of 1.6 years. 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. 94 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Performance share award activity was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-Average ​ ​ ​ ​ ​ Grant-Date ​ ​ Shares Fair Value Outstanding at fiscal year end 2022 469,433 ​ $ 114.88 ​ Granted 205,266 ​ 120.06 ​ Vested ​ ( 185,091 ) ​ ​ 90.31 ​ Forfeited ( 18,264 ) ​ 123.87 ​ Outstanding at fiscal year end 2023 471,344 ​ $ 126.44 ​ ​ The weighted-average grant-date fair value of performance share awards granted during fiscal 2023, 2022, and 2021 was $ 120.06 , $ 157.56 , and $ 105.86 , respectively. The total fair value of performance share awards that vested during fiscal 2023, 2022, and 2021 was $ 17 million, $ 12 million, and $ 10 million, respectively. As of fiscal year end 2023, there was $ 19 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 common shares at prices which are equal to or greater than the market price of the common 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 2022 5,351,354 ​ $ 100.21 ​ ​ ​ ​ ​ ​ Granted 935,500 ​ 124.56 ​ ​ ​ ​ ​ ​ Exercised ( 524,778 ) ​ 77.80 ​ ​ ​ ​ ​ ​ Forfeited ( 143,427 ) ​ 124.60 ​ ​ ​ ​ ​ ​ Outstanding at fiscal year end 2023 5,618,649 ​ $ 105.73 6.3 ​ $ 127 ​ Vested and expected to vest at fiscal year end 2023 5,530,138 ​ $ 105.36 6.2 ​ $ 127 ​ Exercisable at fiscal year end 2023 3,288,569 ​ $ 92.31 5.1 ​ $ 109 ​ ​ The weighted-average exercise price of share option awards granted during fiscal 2023, 2022, and 2021 was $ 124.56 , $ 157.02 , and $ 106.52 , respectively. The total intrinsic value of options exercised during fiscal 2023, 2022, and 2021 was $ 30 million, $ 49 million, and $ 49 million, respectively. We received cash related to the exercise of options of $ 43 million, $ 54 million, and $ 167 million in fiscal 2023, 2022, and 2021, respectively. As of fiscal year end 2023, there was $ 29 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 1.4 years. 95 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 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 ​ ​ ​ ​ 2023 2022 2021 Weighted-average grant-date fair value ​ $ 35.90 ​ $ 37.51 ​ $ 22.21 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assumptions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Expected share price volatility 31 % 29 % 28 % ​ Risk-free interest rate ​ 4.0 % 1.2 % 0.5 % ​ Expected annual dividend per share ​ $ 2.24 ​ $ 2.00 ​ $ 1.92 ​ ​ Expected life of options (in years) ​ 5.1 ​ 5.1 ​ 5.4 ​ ​ ​ ​ ​ 20. Segment and Geographic Data Effective for fiscal 2023, we realigned certain product lines from the Industrial Solutions segment to the Communications Solutions segment. We continue to operate through three reportable segments: Transportation Solutions, Industrial Solutions, and Communications Solutions. See Note 1 for a description of the segments in which we operate. The following segment information reflects our current segment reporting structure. Prior period segment results have been restated to conform to the current segment reporting structure. As a result of the realignment, $ 30 million of net sales and $ 13 million of operating income for fiscal 2022 were reflected in the Communications Solutions segment. Segment performance is evaluated based on net sales and operating income. Generally, we consider all expenses to be of an operating nature and, accordingly, allocate them to each reportable segment. Costs specific to a segment are charged to the segment. Corporate expenses, such as headquarters administrative costs, are allocated to the segments based on segment operating income. Intersegment sales are not material. Corporate assets are allocated to the segments based on segment assets. 96 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Net sales by segment and industry end market (1) were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ 2023 2022 2021 ​ ​ (in millions) ​ Transportation Solutions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Automotive ​ $ 6,951 ​ $ 6,527 ​ $ 6,379 ​ Commercial transportation ​ 1,525 ​ 1,582 ​ 1,467 ​ Sensors ​ 1,112 ​ 1,110 ​ 1,128 ​ Total Transportation Solutions ​ ​ 9,588 ​ ​ 9,219 ​ ​ 8,974 ​ Industrial Solutions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Industrial equipment ​ ​ 1,706 ​ ​ 1,904 ​ ​ 1,397 ​ Aerospace, defense, and marine ​ ​ 1,178 ​ ​ 1,087 ​ ​ 1,035 ​ Energy ​ ​ 883 ​ ​ 804 ​ ​ 738 ​ Medical ​ ​ 784 ​ ​ 695 ​ ​ 674 ​ Total Industrial Solutions ​ ​ 4,551 ​ ​ 4,490 ​ ​ 3,844 ​ Communications Solutions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Data and devices ​ ​ 1,162 ​ ​ 1,606 ​ ​ 1,198 ​ Appliances ​ ​ 733 ​ ​ 966 ​ ​ 907 ​ Total Communications Solutions ​ ​ 1,895 ​ ​ 2,572 ​ ​ 2,105 ​ Total ​ $ 16,034 ​ $ 16,281 ​ $ 14,923 ​ (1) Industry end market information is presented consistently with our internal management reporting and may be revised periodically as management deems necessary. Net sales by geographic region and segment were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ 2023 2022 2021 ​ ​ (in millions) ​ Europe/Middle East/Africa (“EMEA”): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Transportation Solutions ​ $ 3,848 ​ $ 3,490 ​ $ 3,570 ​ Industrial Solutions ​ ​ 2,046 ​ ​ 1,862 ​ ​ 1,586 ​ Communications Solutions ​ ​ 314 ​ ​ 355 ​ ​ 315 ​ Total EMEA ​ ​ 6,208 ​ ​ 5,707 ​ ​ 5,471 ​ Asia–Pacific: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Transportation Solutions ​ ​ 3,439 ​ ​ 3,537 ​ ​ 3,466 ​ Industrial Solutions ​ ​ 732 ​ ​ 827 ​ ​ 703 ​ Communications Solutions ​ ​ 985 ​ ​ 1,407 ​ ​ 1,205 ​ Total Asia–Pacific ​ ​ 5,156 ​ ​ 5,771 ​ ​ 5,374 ​ Americas: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Transportation Solutions ​ ​ 2,301 ​ ​ 2,192 ​ ​ 1,938 ​ Industrial Solutions ​ ​ 1,773 ​ ​ 1,801 ​ ​ 1,555 ​ Communications Solutions ​ ​ 596 ​ ​ 810 ​ ​ 585 ​ Total Americas ​ ​ 4,670 ​ ​ 4,803 ​ ​ 4,078 ​ Total ​ $ 16,034 ​ $ 16,281 ​ $ 14,923 ​ ​ 97 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Operating income by segment was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ 2023 2022 2021 ​ ​ (in millions) ​ Transportation Solutions ​ $ 1,451 ​ $ 1,534 ​ $ 1,526 ​ Industrial Solutions ​ ​ 602 ​ ​ 607 ​ ​ 469 ​ Communications Solutions ​ ​ 251 ​ ​ 615 ​ ​ 439 ​ Total ​ $ 2,304 ​ $ 2,756 ​ $ 2,434 ​ ​ No single customer accounted for a significant amount of our net sales in fiscal 2023, 2022, or 2021. As we are not organized by product or service, it is not practicable to disclose net sales by product or service. Depreciation and amortization and capital expenditures were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization ​ Capital Expenditures ​ ​ ​ Fiscal ​ Fiscal ​ ​ 2023 2022 2021 2023 2022 2021 ​ ​ (in millions) ​ Transportation Solutions ​ $ 484 ​ $ 505 ​ $ 512 ​ $ 468 ​ $ 483 ​ $ 487 ​ Industrial Solutions ​ 210 ​ 194 ​ 189 ​ 171 ​ 153 ​ 121 ​ Communications Solutions ​ 100 ​ 86 ​ 68 ​ 93 ​ 132 ​ 82 ​ Total ​ $ 794 ​ $ 785 ​ $ 769 ​ $ 732 ​ $ 768 ​ $ 690 ​ ​ Segment assets and a reconciliation of segment assets to total assets were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment Assets ​ ​ ​ Fiscal Year End ​ ​ 2023 2022 2021 ​ ​ (in millions) ​ Transportation Solutions ​ $ 5,678 ​ $ 5,530 ​ $ 5,791 ​ Industrial Solutions ​ 2,623 ​ 2,428 ​ 2,275 ​ Communications Solutions ​ 972 ​ 1,150 ​ 1,151 ​ Total segment assets (1) ​ 9,273 ​ 9,108 ​ 9,217 ​ Other current assets ​ 2,373 ​ 1,727 ​ 1,824 ​ Other non-current assets ​ 10,066 ​ 9,947 ​ 10,421 ​ Total assets ​ $ 21,712 ​ $ 20,782 ​ $ 21,462 ​ (1) Segment assets are composed of accounts receivable, inventories, and net property, plant, and equipment. 98 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 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 ​ ​ 2023 2022 2021 2023 2022 2021 ​ ​ (in millions) ​ EMEA: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Switzerland ​ $ 4,111 ​ $ 3,709 ​ $ 3,616 ​ $ 6 ​ $ 16 ​ $ 41 ​ Germany ​ 405 ​ 561 ​ 417 ​ 637 ​ 597 ​ 599 ​ Other EMEA ​ ​ 1,692 ​ ​ 1,437 ​ ​ 1,438 ​ ​ 965 ​ ​ 821 ​ ​ 937 ​ Total EMEA ​ 6,208 ​ 5,707 ​ 5,471 ​ 1,608 ​ 1,434 ​ 1,577 ​ Asia–Pacific: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ China ​ ​ 3,182 ​ ​ 3,589 ​ ​ 3,297 ​ ​ 794 ​ ​ 779 ​ ​ 755 ​ Other Asia–Pacific ​ 1,974 ​ 2,182 ​ 2,077 ​ 294 ​ 296 ​ 377 ​ Total Asia–Pacific ​ 5,156 ​ 5,771 ​ 5,374 ​ 1,088 ​ 1,075 ​ 1,132 ​ Americas: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. ​ ​ 4,107 ​ ​ 4,280 ​ ​ 3,615 ​ ​ 933 ​ ​ 947 ​ ​ 960 ​ Other Americas ​ 563 ​ 523 ​ 463 ​ 125 ​ 111 ​ 109 ​ Total Americas ​ 4,670 ​ 4,803 ​ 4,078 ​ 1,058 ​ 1,058 ​ 1,069 ​ Total ​ $ 16,034 ​ $ 16,281 ​ $ 14,923 ​ $ 3,754 ​ $ 3,567 ​ $ 3,778 ​ (1) Net sales to external customers are attributed to individual countries based on the legal entity that records the sale. ​ ​ ​ ​ ​ 99 Table of Contents TE CONNECTIVITY LTD. SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS Fiscal Years Ended September 29, 2023, September 30, 2022, and September 24, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for doubtful accounts receivable ​ $ 45 ​ ​ ( 1 ) ​ ​ — ​ ​ ( 14 ) ​ $ 30 ​ Valuation allowance on deferred tax assets ​ 7,112 ​ ​ 406 ​ ​ — ​ ​ ( 102 ) ​ 7,416 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for doubtful accounts receivable ​ $ 41 ​ $ 15 ​ $ ( 7 ) ​ $ ( 4 ) ​ $ 45 ​ Valuation allowance on deferred tax assets ​ 2,729 ​ 4,463 ​ — ​ ( 80 ) ​ 7,112 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for doubtful accounts receivable ​ $ 29 ​ $ 15 ​ $ 1 ​ $ ( 4 ) ​ $ 41 ​ Valuation allowance on deferred tax assets ​ 4,429 ​ 31 ​ — ​ ( 1,731 ) ​ 2,729 ​ ​ ​ ​ 100