TE Connectivity plc 10-Q

ITEM 1. FINANCIAL STATEMENTS TE CONNECTIVITY LTD. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ Quarters Ended ​ ​ ​ December 29, ​ December 30, ​ ​ 2023 2022 ​ ​ (in millions, except per share data) ​ Net sales ​ $ 3,831 ​ $ 3,841 ​ Cost of sales ​ 2,507 ​ 2,654 ​ Gross margin ​ 1,324 ​ 1,187 ​ Selling, general, and administrative expenses ​ 424 ​ ​ 392 ​ Research, development, and engineering expenses ​ 173 ​ ​ 173 ​ Acquisition and integration costs ​ 8 ​ ​ 9 ​ Restructuring and other charges, net ​ 21 ​ ​ 111 ​ Operating income ​ ​ 698 ​ ​ 502 ​ Interest income ​ ​ 22 ​ ​ 9 ​ Interest expense ​ ( 18 ) ​ ​ ( 21 ) ​ Other expense, net ​ ( 3 ) ​ ​ ( 5 ) ​ Income from continuing operations before income taxes ​ 699 ​ 485 ​ Income tax (expense) benefit ​ 1,105 ​ ​ ( 87 ) ​ Income from continuing operations ​ 1,804 ​ 398 ​ Loss from discontinued operations, net of income taxes ​ ( 1 ) ​ ​ ( 1 ) ​ Net income ​ $ 1,803 ​ $ 397 ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic earnings per share: ​ ​ ​ ​ ​ ​ ​ Income from continuing operations ​ $ 5.80 ​ $ 1.26 ​ Loss from discontinued operations ​ — ​ — ​ Net income ​ 5.80 ​ 1.25 ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted earnings per share: ​ ​ ​ ​ ​ ​ ​ Income from continuing operations ​ $ 5.76 ​ $ 1.25 ​ Loss from discontinued operations ​ — ​ — ​ Net income ​ 5.76 ​ 1.24 ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average number of shares outstanding: ​ ​ ​ ​ ​ ​ ​ Basic ​ 311 ​ ​ 317 ​ Diluted ​ 313 ​ ​ 319 ​ See Notes to Condensed Consolidated Financial Statements. ​ 1 Table of Contents TE CONNECTIVITY LTD. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ Quarters Ended ​ ​ ​ December 29, ​ December 30, ​ ​ 2023 2022 ​ ​ (in millions) ​ Net income ​ $ 1,803 ​ $ 397 ​ Other comprehensive income: ​ ​ ​ ​ ​ ​ ​ Currency translation ​ 163 ​ ​ 305 ​ Adjustments to unrecognized pension and postretirement benefit costs, net of income taxes ​ ( 18 ) ​ ​ 2 ​ Gains on cash flow hedges, net of income taxes ​ 28 ​ ​ 69 ​ Other comprehensive income ​ 173 ​ 376 ​ Comprehensive income ​ ​ 1,976 ​ ​ 773 ​ Less: comprehensive income attributable to noncontrolling interests ​ ​ ( 4 ) ​ ​ ( 9 ) ​ Comprehensive income attributable to TE Connectivity Ltd. ​ $ 1,972 ​ $ 764 ​ See Notes to Condensed Consolidated Financial Statements. ​ 2 Table of Contents TE CONNECTIVITY LTD. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 29, ​ September 29, ​ ​ 2023 2023 ​ ​ (in millions, except share ​ ​ ​ data) ​ Assets ​ ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 1,170 ​ $ 1,661 ​ Accounts receivable, net of allowance for doubtful accounts of $ 37 and $ 30 , respectively ​ 2,828 ​ 2,967 ​ Inventories ​ 2,783 ​ 2,552 ​ Prepaid expenses and other current assets ​ 660 ​ 712 ​ Total current assets ​ 7,441 ​ 7,892 ​ Property, plant, and equipment, net ​ 3,854 ​ 3,754 ​ Goodwill ​ 5,836 ​ 5,463 ​ Intangible assets, net ​ 1,278 ​ 1,175 ​ Deferred income taxes ​ 3,852 ​ 2,600 ​ Other assets ​ 810 ​ 828 ​ Total assets ​ $ 23,071 ​ $ 21,712 ​ Liabilities, redeemable noncontrolling interests, and equity ​ ​ ​ ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ ​ ​ ​ Short-term debt ​ $ 613 ​ $ 682 ​ Accounts payable ​ 1,690 ​ 1,563 ​ Accrued and other current liabilities ​ 1,708 ​ 2,218 ​ Total current liabilities ​ 4,011 ​ 4,463 ​ Long-term debt ​ 3,585 ​ 3,529 ​ Long-term pension and postretirement liabilities ​ 744 ​ 728 ​ Deferred income taxes ​ 188 ​ 185 ​ Income taxes ​ 380 ​ 365 ​ Other liabilities ​ 914 ​ 787 ​ Total liabilities ​ 9,822 ​ 10,057 ​ Commitments and contingencies (Note 9) ​ ​ ​ ​ ​ ​ ​ Redeemable noncontrolling interests ​ ​ 108 ​ ​ 104 ​ Equity: ​ ​ ​ ​ ​ ​ ​ TE Connectivity Ltd. shareholders' equity: ​ ​ ​ ​ ​ ​ ​ Common shares, CHF 0.57 par value, 322,470,281 shares authorized and issued ​ 142 ​ ​ 142 ​ Accumulated earnings ​ 14,678 ​ 12,947 ​ Treasury shares, at cost, 13,050,787 and 10,487,742 shares, respectively ​ ( 1,695 ) ​ ( 1,380 ) ​ Accumulated other comprehensive income (loss) ​ 11 ​ ( 158 ) ​ Total TE Connectivity Ltd. shareholders' equity ​ ​ 13,136 ​ ​ 11,551 ​ Noncontrolling interests ​ ​ 5 ​ ​ — ​ Total equity ​ 13,141 ​ 11,551 ​ Total liabilities, redeemable noncontrolling interests, and equity ​ $ 23,071 ​ $ 21,712 ​ See Notes to Condensed Consolidated Financial Statements. ​ ​ 3 Table of Contents TE CONNECTIVITY LTD. CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Quarter Ended December 29, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ TE Connectivity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ Ltd. ​ Non- ​ ​ ​ ​ ​ ​ Common Shares ​ Treasury Shares ​ Contributed ​ Accumulated ​ Comprehensive ​ Shareholders' ​ controlling ​ Total ​ ​ Shares Amount Shares Amount Surplus Earnings Income (Loss) Equity Interests Equity ​ ​ (in millions) ​ Balance at September 29, 2023 322 ​ $ 142 ( 10 ) ​ $ ( 1,380 ) ​ $ — ​ $ 12,947 ​ $ ( 158 ) ​ $ 11,551 ​ $ — ​ $ 11,551 ​ Acquisition ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 5 ​ ​ 5 ​ Net income — ​ — — ​ — ​ — ​ 1,803 ​ — ​ 1,803 ​ — ​ 1,803 ​ Other comprehensive income — ​ — — ​ — ​ — ​ — ​ 169 ​ 169 ​ — ​ 169 ​ Share-based compensation expense — ​ — — ​ — ​ 34 ​ — ​ — ​ 34 ​ — ​ 34 ​ Exercise of share options — ​ — — ​ 11 ​ — ​ — ​ — ​ 11 ​ — ​ 11 ​ Restricted share award vestings and other activity — ​ — — ​ 94 ​ ( 34 ) ​ ( 72 ) ​ — ​ ( 12 ) ​ — ​ ( 12 ) ​ Repurchase of common shares — ​ — ( 3 ) ​ ( 420 ) ​ — ​ — ​ — ​ ( 420 ) ​ — ​ ( 420 ) ​ Balance at December 29, 2023 ​ 322 ​ $ 142 ( 13 ) ​ $ ( 1,695 ) ​ $ — ​ $ 14,678 ​ $ 11 ​ $ 13,136 ​ $ 5 ​ $ 13,141 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Quarter Ended December 30, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ TE Connectivity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ Ltd. ​ Non- ​ ​ ​ ​ ​ ​ Common Shares ​ Treasury Shares ​ Contributed ​ Accumulated ​ Comprehensive ​ Shareholders' ​ controlling ​ Total ​ ​ Shares Amount Shares Amount Surplus Earnings Loss Equity Interests Equity ​ ​ (in millions) ​ Balance at September 30, 2022 331 ​ $ 146 ( 13 ) ​ $ ( 1,681 ) ​ $ — ​ $ 12,832 ​ $ ( 495 ) ​ $ 10,802 ​ $ — ​ $ 10,802 ​ Net income ​ — ​ — — ​ — ​ — ​ 397 ​ — ​ 397 ​ — ​ 397 ​ Other comprehensive income — ​ — — ​ — ​ — ​ — ​ 367 ​ 367 ​ — ​ 367 ​ Share-based compensation expense — ​ — — ​ — ​ 32 ​ — ​ — ​ 32 ​ — ​ 32 ​ Exercise of share options — ​ — — ​ 11 ​ — ​ — ​ — ​ 11 ​ — ​ 11 ​ Restricted share award vestings and other activity — ​ — 1 ​ 49 ​ ( 32 ) ​ ( 29 ) ​ — ​ ( 12 ) ​ — ​ ( 12 ) ​ Repurchase of common shares — ​ — ( 2 ) ​ ( 233 ) ​ — ​ — ​ — ​ ( 233 ) ​ — ​ ( 233 ) ​ Balance at December 30, 2022 ​ 331 ​ $ 146 ( 14 ) ​ $ ( 1,854 ) ​ $ — ​ $ 13,200 ​ $ ( 128 ) ​ $ 11,364 ​ $ — ​ $ 11,364 ​ ​ See Notes to Condensed Consolidated Financial Statements. ​ ​ ​ 4 Table of Contents TE CONNECTIVITY LTD. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ Quarters Ended ​ ​ ​ December 29, ​ December 30, ​ ​ 2023 2022 ​ ​ (in millions) ​ Cash flows from operating activities: ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 1,803 ​ $ 397 ​ Loss from discontinued operations, net of income taxes ​ 1 ​ 1 ​ Income from continuing operations ​ 1,804 ​ 398 ​ Adjustments to reconcile income from continuing operations to net cash provided by operating activities: ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ 194 ​ 187 ​ Deferred income taxes ​ ( 1,217 ) ​ ( 35 ) ​ Non-cash lease cost ​ ​ 34 ​ ​ 34 ​ Provision for losses on accounts receivable and inventories ​ 42 ​ 51 ​ Share-based compensation expense ​ 34 ​ 32 ​ Other ​ 40 ​ 49 ​ Changes in assets and liabilities, net of the effects of acquisitions and divestitures: ​ ​ ​ ​ ​ ​ ​ Accounts receivable, net ​ 127 ​ ( 54 ) ​ Inventories ​ ( 282 ) ​ ( 324 ) ​ Prepaid expenses and other current assets ​ ( 48 ) ​ ( 86 ) ​ Accounts payable ​ 128 ​ 149 ​ Accrued and other current liabilities ​ ( 239 ) ​ ( 39 ) ​ Income taxes ​ 12 ​ 25 ​ Other ​ 90 ​ 194 ​ Net cash provided by operating activities ​ 719 ​ 581 ​ Cash flows from investing activities: ​ ​ ​ ​ ​ ​ ​ Capital expenditures ​ ( 151 ) ​ ( 183 ) ​ Proceeds from sale of property, plant, and equipment ​ 2 ​ 1 ​ Acquisition of businesses, net of cash acquired ​ ( 349 ) ​ ( 109 ) ​ Proceeds from divestiture of business, net of cash retained by business sold ​ ​ 38 ​ ​ — ​ Other ​ ( 8 ) ​ 26 ​ Net cash used in investing activities ​ ( 468 ) ​ ( 265 ) ​ Cash flows from financing activities: ​ ​ ​ ​ ​ ​ ​ Net decrease in commercial paper ​ ( 69 ) ​ ( 139 ) ​ Repayment of debt ​ ( 1 ) ​ ( 4 ) ​ Proceeds from exercise of share options ​ 11 ​ 11 ​ Repurchase of common shares ​ ( 476 ) ​ ( 287 ) ​ Payment of common share dividends to shareholders ​ ( 183 ) ​ ( 178 ) ​ Other ​ ( 27 ) ​ ( 24 ) ​ Net cash used in financing activities ​ ( 745 ) ​ ( 621 ) ​ Effect of currency translation on cash ​ 3 ​ 10 ​ Net decrease in cash, cash equivalents, and restricted cash ​ ( 491 ) ​ ( 295 ) ​ Cash, cash equivalents, and restricted cash at beginning of period ​ 1,661 ​ 1,088 ​ Cash, cash equivalents, and restricted cash at end of period ​ $ 1,170 ​ $ 793 ​ See Notes to Condensed Consolidated Financial Statements. ​ ​ 5 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. Basis of Presentation and Accounting Policies The unaudited Condensed Consolidated Financial Statements of TE Connectivity Ltd. (“TE Connectivity” or the “Company,” which may be referred to as “we,” “us,” or “our”) have been prepared in United States (“U.S.”) dollars, in accordance with accounting principles generally accepted in the U.S. (“GAAP”) and the instructions to Form 10-Q under the Securities Exchange Act of 1934. In management’s opinion, the unaudited Condensed Consolidated Financial Statements contain all normal recurring adjustments necessary for a fair presentation of interim results. The results of operations reported for interim periods are not necessarily indicative of the results of operations for the entire fiscal year or any subsequent interim period. The year-end balance sheet data was derived from audited financial statements, but does not include all of the information and disclosures required by GAAP. These financial statements should be read in conjunction with our audited Consolidated Financial Statements contained in our Annual Report on Form 10-K for the fiscal year ended September 29, 2023. Unless otherwise indicated, references in the Condensed Consolidated Financial Statements to fiscal 2024 and fiscal 2023 are to our fiscal years ending September 27, 2024 and ended September 29, 2023, respectively. Recently Issued Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, Segment Reporting (Topic 280)—Improvements to Reportable Segment Disclosures , which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendments are effective for our fiscal 2025 Annual Report and subsequent interim periods; however, early adoption is permitted. The amendments should be applied retrospectively to all periods presented in the financial statements. We are currently assessing the impact that adoption will have on our Condensed Consolidated Financial Statements. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740)—Improvement to Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures through improvements to disclosures related primarily to the rate reconciliation and income taxes paid information. The amendments are effective for us in fiscal 2026; however, early adoption is permitted. We are currently assessing the impact that adoption will have on our Condensed Consolidated Financial Statements. Recently Adopted Accounting Pronouncement In September 2022, the FASB issued ASU No. 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50)—Disclosure of Supplier Finance Program Obligations , 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. We adopted this update in the first quarter of fiscal 2024. Adoption did not have a material impact on our Condensed Consolidated Financial Statements. See Note 9 for additional information regarding our supply chain finance program. 6 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) 2. Restructuring and Other Charges, Net Net restructuring and other charges consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ Quarters Ended ​ ​ ​ December 29, ​ December 30, ​ ​ 2023 2022 ​ ​ (in millions) ​ Restructuring charges, net ​ $ 9 ​ $ 104 ​ Loss on divestiture and impairment of held for sale business ​ ​ 11 ​ ​ 6 ​ Other charges, net ​ 1 ​ 1 ​ Restructuring and other charges, net ​ $ 21 ​ $ 111 ​ ​ Restructuring Charges, Net Net restructuring and charges by segment were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ Quarters Ended ​ ​ ​ December 29, ​ December 30, ​ ​ 2023 2022 ​ ​ (in millions) ​ Transportation Solutions ​ $ 2 ​ $ 74 ​ Industrial Solutions ​ 6 ​ 6 ​ Communications Solutions ​ 1 ​ 24 ​ Restructuring charges, net ​ $ 9 ​ $ 104 ​ ​ Activity in our restructuring reserves was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at ​ ​ September 29, ​ ​ ​ ​ Changes in ​ Cash ​ Non-Cash ​ Currency ​ December 29, ​ ​ 2023 Charges Estimate Payments Items Translation 2023 ​ ​ (in millions) ​ Fiscal 2024 Actions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee severance ​ $ — ​ $ 5 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 5 ​ Fiscal 2023 Actions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee severance ​ ​ 187 ​ ​ — ​ ​ ( 8 ) ​ ​ ( 20 ) ​ ​ — ​ ​ 8 ​ ​ 167 ​ Facility and other exit costs ​ ​ 2 ​ ​ 1 ​ ​ — ​ ​ ( 3 ) ​ ​ — ​ ​ — ​ ​ — ​ Property, plant, and equipment ​ ​ — ​ ​ 4 ​ ​ — ​ ​ — ​ ​ ( 4 ) ​ ​ — ​ ​ — ​ Total ​ ​ 189 ​ ​ 5 ​ ​ ( 8 ) ​ ​ ( 23 ) ​ ​ ( 4 ) ​ ​ 8 ​ ​ 167 ​ Pre-Fiscal 2023 Actions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee severance ​ ​ 127 ​ ​ — ​ ​ 5 ​ ​ ( 23 ) ​ ​ — ​ ​ 4 ​ ​ 113 ​ Facility and other exit costs ​ ​ 4 ​ ​ 2 ​ ​ — ​ ​ ( 2 ) ​ ​ — ​ ​ — ​ ​ 4 ​ Total ​ ​ 131 ​ ​ 2 ​ ​ 5 ​ ​ ( 25 ) ​ ​ — ​ ​ 4 ​ ​ 117 ​ Total Activity ​ $ 320 ​ $ 12 ​ $ ( 3 ) ​ $ ( 48 ) ​ $ ( 4 ) ​ $ 12 ​ $ 289 ​ ​ 7 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Fiscal 2024 Actions During fiscal 2024, we initiated a restructuring program to optimize our manufacturing footprint and improve the cost structure of the organization, primarily in the Industrial Solutions and Transportation Solutions segments. During the quarter ended December 29, 2023, we recorded restructuring charges of $ 5 million in connection with this program. We expect to complete all restructuring actions commenced during the quarter ended December 29, 2023 by the end of fiscal 2025, and we expect additional charges related to actions commenced during the quarter ended December 29, 2023 will be insignificant. 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 the quarters ended December 29, 2023 and December 30, 2022, we recorded net restructuring credits of $ 3 million and charges of $ 105 million, respectively. We expect to complete all restructuring actions commenced during fiscal 2023 by the end of fiscal 2025, and to incur additional charges of approximately $ 24 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 December 29, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ Cumulative ​ Remaining ​ ​ ​ Expected ​ Charges ​ Expected ​ ​ Charges Incurred Charges ​ ​ (in millions) ​ Transportation Solutions ​ $ 153 ​ $ 138 ​ $ 15 ​ Industrial Solutions ​ 80 ​ 73 ​ 7 ​ Communications Solutions ​ 35 ​ 33 ​ 2 ​ Total ​ $ 268 ​ $ 244 ​ $ 24 ​ ​ Pre-Fiscal 2023 Actions During the quarters ended December 29, 2023 and December 30, 2022, we recorded net restructuring charges of $ 7 million and credits of $ 1 million, respectively, related to pre-fiscal 2023 actions. We expect that any additional charges related to restructuring actions commenced prior to fiscal 2023 will be insignificant. Total Restructuring Reserves Restructuring reserves included on the Condensed Consolidated Balance Sheets were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 29, ​ September 29, ​ ​ 2023 2023 ​ ​ (in millions) ​ Accrued and other current liabilities ​ $ 204 ​ $ 240 ​ Other liabilities ​ 85 ​ 80 ​ Restructuring reserves ​ $ 289 ​ $ 320 ​ ​ Divestiture During the quarter ended December 29, 2023, we sold one business for net cash proceeds of $ 38 million. In connection with the divestiture, we recorded a pre-tax loss on sale of $ 11 million. The business sold was reported in our Transportation Solutions segment. ​ 8 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) 3. Acquisitions During the quarter ended December 29, 2023, we acquired approximately 98.7 % of the outstanding shares of Schaffner Holding AG (“Schaffner”), a leader in electromagnetic solutions based in Switzerland, for CHF 505.00 per share in cash for a purchase price of CHF 302 million (equivalent to $ 349 million), net of cash acquired. As a result of the transaction, we recognized a noncontrolling interest with a fair value of $ 5 million as of the acquisition date. Due to the timing of the transaction, which was reported as part of our Industrial Solutions segment, we preliminarily allocated the purchase price to goodwill and identifiable intangible assets. Our valuation of identifiable intangible assets, assets acquired, and liabilities assumed is currently in process; therefore, the current allocation is subject to adjustment upon finalization of the valuations. The amount of these potential adjustments could be significant. We intend to initiate a squeeze-out procedure and delist the remaining Schaffner shares from SIX Swiss Exchange during fiscal 2024. We acquired one business for a cash purchase price of $ 109 million, net of cash acquired, during the quarter ended December 30, 2022. The acquisition was reported as part of our Industrial Solutions segment from the date of acquisition. 4. Inventories Inventories consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 29, ​ September 29, ​ ​ 2023 2023 ​ ​ (in millions) ​ Raw materials ​ $ 394 ​ $ 367 ​ Work in progress ​ 1,284 ​ 1,185 ​ Finished goods ​ 1,105 ​ 1,000 ​ Inventories ​ $ 2,783 ​ $ 2,552 ​ ​ ​ 5. Goodwill The changes in the carrying amount of goodwill by segment were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Transportation Industrial Communications ​ ​ ​ ​ Solutions ​ Solutions ​ Solutions ​ Total ​ ​ ​ (in millions) ​ September 29, 2023 (1) ​ $ 1,478 ​ $ 3,263 ​ $ 722 ​ $ 5,463 ​ Acquisition ​ ​ — ​ ​ 257 ​ ​ — ​ ​ 257 ​ Currency translation and other ​ 29 ​ 71 ​ 16 ​ 116 ​ December 29, 2023 (1) ​ $ 1,507 ​ $ 3,591 ​ $ 738 ​ $ 5,836 ​ (1) At December 29, 2023 and September 29, 2023, accumulated impairment losses for the Transportation Solutions, Industrial Solutions, and Communications Solutions segments were $ 3,091 million, $ 669 million, and $ 489 million, respectively. During the quarter ended December 29, 2023, we recognized goodwill in the Industrial Solutions segment in connection with an acquisition. See Note 3 for additional information regarding acquisitions. 9 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) 6. Intangible Assets, Net Intangible assets consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 29, 2023 ​ September 29, 2023 ​ ​ Gross ​ ​ Net Gross ​ ​ Net ​ ​ ​ Carrying ​ Accumulated ​ Carrying ​ Carrying ​ Accumulated ​ Carrying ​ ​ ​ Amount ​ Amortization ​ Amount ​ Amount ​ Amortization ​ Amount ​ ​ (in millions) ​ Customer relationships ​ $ 1,876 ​ $ ( 856 ) ​ $ 1,020 ​ $ 1,720 ​ $ ( 806 ) ​ $ 914 ​ Intellectual property ​ ​ 1,129 ​ ​ ( 884 ) ​ ​ 245 ​ ​ 1,186 ​ ​ ( 938 ) ​ ​ 248 ​ Other ​ 19 ​ ( 6 ) ​ 13 ​ 19 ​ ( 6 ) ​ 13 ​ Total ​ $ 3,024 ​ $ ( 1,746 ) ​ $ 1,278 ​ $ 2,925 ​ $ ( 1,750 ) ​ $ 1,175 ​ ​ Intangible asset amortization expense was $ 42 million and $ 46 million for the quarters ended December 29, 2023 and December 30, 2022, respectively. At December 29, 2023, the aggregate amortization expense on intangible assets is expected to be as follows: ​ ​ ​ ​ ​ ​ (in millions) Remainder of fiscal 2024 ​ $ 128 ​ Fiscal 2025 ​ ​ 161 ​ Fiscal 2026 ​ 154 ​ Fiscal 2027 ​ 135 ​ Fiscal 2028 ​ 102 ​ Fiscal 2029 ​ 95 ​ Thereafter ​ 503 ​ Total ​ $ 1,278 ​ ​ 7. Debt As of December 29, 2023, Tyco Electronics Group S.A. (“TEGSA”), our wholly-owned subsidiary, had $ 261 million of commercial paper outstanding at a weighted-average interest rate of 5.50 %. TEGSA had $ 330 million of commercial paper outstanding at a weighted-average interest rate of 5.50 % at September 29, 2023. The fair value of our debt, based on indicative valuations, was approximately $ 4,103 million and $ 3,974 million at December 29, 2023 and September 29, 2023, respectively. 8. Leases The components of lease cost were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ Quarters Ended ​ ​ December 29, ​ December 30, ​ ​ 2023 2022 ​ (in millions) Operating lease cost ​ $ 34 ​ $ 34 ​ Variable lease cost ​ ​ 12 ​ ​ 12 ​ Total lease cost ​ $ 46 ​ $ 46 ​ ​ 10 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Cash flow information, including significant non-cash transactions, related to leases was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ Quarters Ended ​ ​ ​ December 29, ​ December 30, ​ ​ 2023 2022 ​ (in millions) Cash paid for amounts included in the measurement of lease liabilities: ​ ​ ​ ​ ​ ​ ​ Payments for operating leases (1) ​ $ 34 ​ $ 32 ​ ​ ​ ​ ​ ​ ​ ​ ​ Right-of-use assets, including modifications of existing leases, obtained in exchange for operating lease liabilities ​ ​ 70 ​ ​ 35 ​ (1) These payments are included in cash flows from operating activities, primarily in changes in accrued and other current liabilities. 9. 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 December 29, 2023, we concluded that we would incur investigation and remediation costs at these sites in the reasonably possible range of $ 17 million to $ 44 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. 11 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Guarantees In disposing of assets or businesses, we often provide representations, warranties, and/or indemnities to cover various risks including unknown damage to assets, environmental risks involved in the sale of real estate, liability for investigation and remediation of environmental contamination at waste disposal sites and manufacturing facilities, and unidentified tax liabilities and legal fees related to periods prior to disposition. We do not expect that these uncertainties will have a material adverse effect on our results of operations, financial position, or cash flows. At December 29, 2023, we had outstanding letters of credit, letters of guarantee, and surety bonds of $ 196 million, including letters of credit of $ 22 million associated with our divestiture of the Subsea Communications business. In addition, as of December 29, 2023, we had $ 26 million of performance guarantees associated with the 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. Supply Chain Finance Program We have an agreement with a financial institution that allows participating suppliers the ability to finance payment obligations. The financial institution has separate arrangements with the suppliers and provides them with the option to request early payment for invoices. We do not determine the terms or conditions of the arrangement between the financial institution and suppliers. Our obligation to suppliers, including amounts due and scheduled payment dates, are not impacted by the suppliers’ decisions to finance amounts under the arrangement and we are not required to post collateral with the financial institution. The outstanding payment obligations under our supply chain finance program, which are included in accounts payable on our Condensed Consolidated Balance Sheets, were $ 122 million and $ 109 million at December 29, 2023 and September 29, 2023, respectively. 10. Financial Instruments 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 Condensed Consolidated Statement of Operations within the next twelve months. Hedge of Net Investment We hedge our net investment in certain foreign operations using intercompany loans and external borrowings denominated in the same currencies. The aggregate notional value of these hedges was $ 2,792 million and $ 1,709 million at December 29, 2023 and September 29, 2023, 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 $ 3,599 million and $ 3,806 million at December 29, 2023 and September 29, 2023, 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 2028, 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. 12 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) These cross-currency swap contracts were recorded on the Condensed Consolidated Balance Sheets as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 29, ​ September 29, ​ ​ 2023 2023 ​ ​ (in millions) ​ Prepaid expenses and other current assets ​ $ 60 ​ $ 109 ​ Other assets ​ 35 ​ 79 ​ Accrued and other current liabilities ​ ​ 9 ​ ​ 4 ​ Other liabilities ​ ​ 59 ​ ​ 10 ​ ​ The impacts of our hedge of net investment programs were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ ​ Quarters Ended ​ ​ ​ December 29, ​ December 30, ​ ​ 2023 2022 ​ ​ (in millions) ​ Foreign currency exchange losses on intercompany loans and external borrowings (1) ​ $ ( 107 ) ​ $ ( 165 ) ​ Losses on cross-currency swap contracts designated as hedges of net investment (1) ​ ( 125 ) ​ ( 137 ) ​ (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. 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 $ 431 million and $ 459 million at December 29, 2023 and September 29, 2023, respectively, and were designated as cash flow hedges. These commodity swap contracts were recorded on the Condensed Consolidated Balance Sheets as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 29, ​ September 29, ​ ​ 2023 2023 ​ ​ (in millions) ​ Prepaid expenses and other current assets ​ $ 11 ​ $ 3 ​ Accrued and other current liabilities ​ ​ 6 ​ ​ 21 ​ Other liabilities ​ ​ 1 ​ ​ 5 ​ ​ The impacts of our commodity swap contracts were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ Quarters Ended ​ ​ ​ December 29, ​ December 30, ​ ​ 2023 2022 ​ ​ (in millions) ​ Gains recorded in other comprehensive income (loss) ​ $ 26 ​ $ 47 ​ Losses reclassified from accumulated other comprehensive income (loss) into cost of sales ​ ​ ( 4 ) ​ ​ ( 29 ) ​ ​ We expect that significantly all of the balance in accumulated other comprehensive income (loss) associated with commodity hedges will be reclassified into the Condensed Consolidated Statement of Operations within the next twelve months. 13 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) 11. Retirement Plans The net periodic pension benefit cost for all non-U.S. and U.S. defined benefit pension plans was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-U.S. Plans ​ U.S. Plans ​ ​ ​ For the ​ For the ​ ​ ​ Quarters Ended ​ Quarters Ended ​ ​ ​ December 29, ​ December 30, ​ December 29, ​ December 30, ​ ​ 2023 2022 2023 2022 ​ ​ (in millions) ​ Operating expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Service cost ​ $ 7 ​ $ 7 ​ $ 2 ​ $ 2 ​ Other (income) expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest cost ​ 15 ​ 14 ​ 10 ​ 9 ​ Expected returns on plan assets ​ ( 12 ) ​ ( 11 ) ​ ( 10 ) ​ ( 9 ) ​ Amortization of net actuarial loss ​ 1 ​ 1 ​ 1 ​ 1 ​ Amortization of prior service credit ​ ( 1 ) ​ ( 1 ) ​ — ​ — ​ Net periodic pension benefit cost ​ $ 10 ​ $ 10 ​ $ 3 ​ $ 3 ​ ​ During the quarter ended December 29, 2023, we contributed $ 12 million to our non-U.S. pension plans. 12. Income Taxes We recorded an income tax benefit of $ 1,105 million and expense of $ 87 million for the quarters ended December 29, 2023 and December 30, 2022, respectively. The income tax benefit for the quarter ended December 29, 2023 included an $ 874 million net income tax benefit associated with a ten-year tax credit obtained by a Swiss subsidiary and a $ 262 million income tax benefit related to the revaluation of deferred tax assets as a result of a corporate tax rate increase in Switzerland. In addition, the income tax benefit for the quarter ended December 29, 2023 included a $ 118 million income tax benefit associated with the tax impacts of a legal entity restructuring with related costs of $ 4 million recorded in selling, general, and administrative expenses for other non-income taxes. Although it is difficult to predict the timing or results of our worldwide examinations, we estimate that, as of December 29, 2023, 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 Condensed Consolidated Balance Sheet as of December 29, 2023. 13. Earnings Per Share The weighted-average number of shares outstanding used in the computations of basic and diluted earnings per share were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ Quarters Ended ​ ​ ​ December 29, ​ December 30, ​ ​ 2023 2022 ​ ​ (in millions) ​ Basic ​ 311 ​ 317 ​ Dilutive impact of share-based compensation arrangements ​ 2 ​ 2 ​ Diluted ​ 313 ​ 319 ​ ​ 14 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ Quarters Ended ​ ​ ​ December 29, ​ December 30, ​ ​ 2023 2022 ​ ​ (in millions) ​ Antidilutive share options 2 ​ 2 ​ ​ ​ 14. Equity Dividends We paid cash dividends to shareholders as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ Quarters Ended ​ December 29, December 30, ​ 2023 2022 Dividends paid per common share ​ $ 0.59 ​ $ 0.56 ​ ​ Upon shareholders’ approval of a dividend payment, we record a liability with a corresponding charge to equity. At December 29, 2023 and September 29, 2023, the unpaid portion of the dividends recorded in accrued and other current liabilities on the Condensed Consolidated Balance Sheets totaled $ 183 million and $ 368 million, respectively. Share Repurchase Program During the quarter ended December 29, 2023, our board of directors authorized an increase of $ 1.5 billion in our share repurchase program. Common shares repurchased under the share repurchase program were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ Quarters Ended ​ ​ ​ December 29, ​ December 30, ​ ​ 2023 2022 ​ ​ (in millions) ​ Number of common shares repurchased ​ 3 ​ 2 ​ Repurchase value $ 420 $ 233 ​ ​ At December 29, 2023, we had $ 1.8 billion of availability remaining under our share repurchase authorization. ​ 15. Share Plans Share-based compensation expense, which was included in selling, general, and administrative expenses on the Condensed Consolidated Statements of Operations, was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ Quarters Ended ​ ​ ​ December 29, ​ December 30, ​ ​ 2023 2022 ​ ​ (in millions) ​ Share-based compensation expense $ 34 $ 32 ​ ​ 15 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) As of December 29, 2023, there was $ 211 million of unrecognized compensation expense related to share-based awards, which is expected to be recognized over a weighted-average period of 1.9 years. During the quarter ended December 29, 2023, we granted the following share-based awards as part of our annual incentive plan grant: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Grant-Date ​ ​ Shares Fair Value ​ ​ (in millions) ​ ​ ​ ​ Share options ​ 0.9 ​ $ 39.77 ​ Restricted share awards ​ 0.4 ​ 131.77 ​ Performance share awards ​ 0.2 ​ ​ 131.77 ​ ​ As of December 29, 2023, we had six million shares available for issuance under the TE Connectivity Ltd. 2007 Stock and Incentive Plan, amended and restated as of December 12, 2023. Share-Based Compensation Assumptions The assumptions we used in the Black-Scholes-Merton option pricing model for the options granted as part of our annual incentive plan grant were as follows: ​ ​ ​ ​ ​ ​ Expected share price volatility 31 % Risk-free interest rate ​ 4.6 % ​ Expected annual dividend per share ​ $ 2.36 ​ ​ Expected life of options (in years) ​ 5.3 ​ ​ ​ ​ 16 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) 16. Segment and Geographic Data Net sales by segment (1) and industry end market (2) were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ Quarters Ended ​ ​ ​ December 29, ​ December 30, ​ ​ 2023 2022 ​ ​ (in millions) ​ Transportation Solutions: ​ ​ ​ ​ ​ ​ ​ Automotive ​ $ 1,776 ​ $ 1,649 ​ Commercial transportation ​ 356 ​ 348 ​ Sensors ​ 241 ​ 262 ​ Total Transportation Solutions ​ ​ 2,373 ​ ​ 2,259 ​ Industrial Solutions: ​ ​ ​ ​ ​ ​ ​ Industrial equipment ​ ​ 330 ​ ​ 434 ​ Aerospace, defense, and marine ​ 290 ​ 264 ​ Energy ​ 205 ​ 189 ​ Medical ​ ​ 200 ​ ​ 173 ​ Total Industrial Solutions ​ ​ 1,025 ​ ​ 1,060 ​ Communications Solutions: ​ ​ ​ ​ ​ ​ ​ Data and devices ​ ​ 279 ​ ​ 329 ​ Appliances ​ 154 ​ 193 ​ Total Communications Solutions ​ ​ 433 ​ ​ 522 ​ Total ​ $ 3,831 ​ $ 3,841 ​ (1) Intersegment sales were not material. (2) Industry end market information is presented consistently with our internal management reporting and may be revised periodically as management deems necessary. 17 Table of Contents TE CONNECTIVITY LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Net sales by geographic region (1) and segment were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ Quarters Ended ​ ​ ​ December 29, ​ December 30, ​ ​ 2023 2022 ​ ​ (in millions) ​ Europe/Middle East/Africa (“EMEA”): ​ ​ ​ ​ ​ ​ ​ Transportation Solutions ​ $ 867 ​ $ 812 ​ Industrial Solutions ​ 477 ​ 444 ​ Communications Solutions ​ 67 ​ 70 ​ Total EMEA ​ 1,411 ​ 1,326 ​ Asia–Pacific: ​ ​ ​ ​ ​ ​ ​ Transportation Solutions ​ ​ 1,012 ​ ​ 924 ​ Industrial Solutions ​ 147 ​ 189 ​ Communications Solutions ​ ​ 220 ​ ​ 294 ​ Total Asia–Pacific ​ 1,379 ​ 1,407 ​ Americas: ​ ​ ​ ​ ​ ​ ​ Transportation Solutions ​ ​ 494 ​ ​ 523 ​ Industrial Solutions ​ 401 ​ 427 ​ Communications Solutions ​ ​ 146 ​ ​ 158 ​ Total Americas ​ 1,041 ​ 1,108 ​ Total ​ $ 3,831 ​ $ 3,841 ​ (1) Net sales to external customers are attributed to individual countries based on the legal entity that records the sale. Operating income by segment was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 29, ​ December 30, ​ ​ 2023 2022 ​ ​ (in millions) ​ Transportation Solutions ​ $ 478 ​ $ 282 ​ Industrial Solutions ​ ​ 141 ​ ​ 156 ​ Communications Solutions ​ ​ 79 ​ ​ 64 ​ Total ​ $ 698 ​ $ 502 ​ ​ ​ ​ 18 Table of Contents ​