TE Connectivity plc 10-Q

ITEM 1. FINANCIAL STATEMENTS TE CONNECTIVITY PLC CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ Quarters Ended ​ ​ ​ December 27, ​ December 29, ​ ​ 2024 2023 ​ ​ (in millions, except per share data) ​ Net sales ​ $ 3,836 ​ $ 3,831 ​ Cost of sales ​ 2,476 ​ 2,507 ​ Gross margin ​ 1,360 ​ 1,324 ​ Selling, general, and administrative expenses ​ 427 ​ ​ 424 ​ Research, development, and engineering expenses ​ 188 ​ ​ 173 ​ Acquisition and integration costs ​ 5 ​ ​ 8 ​ Restructuring and other charges, net ​ 50 ​ ​ 21 ​ Operating income ​ ​ 690 ​ ​ 698 ​ Interest income ​ ​ 23 ​ ​ 22 ​ Interest expense ​ ( 6 ) ​ ​ ( 18 ) ​ Other expense, net ​ ( 1 ) ​ ​ ( 3 ) ​ Income from continuing operations before income taxes ​ 706 ​ 699 ​ Income tax (expense) benefit ​ ( 178 ) ​ ​ 1,105 ​ Income from continuing operations ​ 528 ​ 1,804 ​ Loss from discontinued operations, net of income taxes ​ — ​ ​ ( 1 ) ​ Net income ​ $ 528 ​ $ 1,803 ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic earnings per share: ​ ​ ​ ​ ​ ​ ​ Income from continuing operations ​ $ 1.77 ​ $ 5.80 ​ Net income ​ 1.77 ​ 5.80 ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted earnings per share: ​ ​ ​ ​ ​ ​ ​ Income from continuing operations ​ $ 1.75 ​ $ 5.76 ​ Net income ​ 1.75 ​ 5.76 ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average number of shares outstanding: ​ ​ ​ ​ ​ ​ ​ Basic ​ 299 ​ ​ 311 ​ Diluted ​ 301 ​ ​ 313 ​ See Notes to Condensed Consolidated Financial Statements. ​ 1 Table of Contents TE CONNECTIVITY PLC CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ Quarters Ended ​ ​ December 27, December 29, ​ 2024 2023 ​ ​ (in millions) ​ Net income ​ $ 528 ​ $ 1,803 ​ Other comprehensive income (loss): ​ ​ ​ ​ ​ ​ ​ Currency translation ​ ( 166 ) ​ ​ 163 ​ Adjustments to unrecognized pension and postretirement benefit costs, net of income taxes ​ ( 9 ) ​ ​ ( 18 ) ​ Gains (losses) on cash flow hedges, net of income taxes ​ ( 56 ) ​ ​ 28 ​ Other comprehensive income (loss) ​ ( 231 ) ​ 173 ​ Comprehensive income ​ ​ 297 ​ ​ 1,976 ​ Less: comprehensive (income) loss attributable to noncontrolling interests ​ ​ 9 ​ ​ ( 4 ) ​ Comprehensive income attributable to TE Connectivity plc ​ $ 306 ​ $ 1,972 ​ See Notes to Condensed Consolidated Financial Statements. ​ 2 Table of Contents TE CONNECTIVITY PLC CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 27, ​ September 27, ​ ​ 2024 2024 ​ ​ (in millions, except share ​ ​ ​ data) ​ Assets ​ ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 1,254 ​ $ 1,319 ​ Accounts receivable, net of allowance for doubtful accounts of $ 34 and $ 32 , respectively ​ 2,912 ​ 3,055 ​ Inventories ​ 2,619 ​ 2,517 ​ Prepaid expenses and other current assets ​ 734 ​ 740 ​ Total current assets ​ 7,519 ​ 7,631 ​ Property, plant, and equipment, net ​ 3,759 ​ 3,903 ​ Goodwill ​ 5,835 ​ 5,801 ​ Intangible assets, net ​ 1,177 ​ 1,174 ​ Deferred income taxes ​ 3,270 ​ 3,497 ​ Other assets ​ 881 ​ 848 ​ Total assets ​ $ 22,441 ​ $ 22,854 ​ Liabilities, redeemable noncontrolling interests, and shareholders' equity ​ ​ ​ ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ ​ ​ ​ Short-term debt ​ $ 920 ​ $ 871 ​ Accounts payable ​ 1,859 ​ 1,728 ​ Accrued and other current liabilities ​ 1,694 ​ 2,147 ​ Total current liabilities ​ 4,473 ​ 4,746 ​ Long-term debt ​ 3,285 ​ 3,332 ​ Long-term pension and postretirement liabilities ​ 778 ​ 810 ​ Deferred income taxes ​ 203 ​ 199 ​ Income taxes ​ 396 ​ 411 ​ Other liabilities ​ 773 ​ 870 ​ Total liabilities ​ 9,908 ​ 10,368 ​ Commitments and contingencies (Note 9) ​ ​ ​ ​ ​ ​ ​ Redeemable noncontrolling interests ​ ​ 124 ​ ​ 131 ​ Shareholders' equity: ​ ​ ​ ​ ​ ​ ​ Preferred shares, $ 1.00 par value, 2 shares authorized, none outstanding as of December 27, 2024 ​ ​ — ​ ​ — ​ Ordinary class A shares, € 1.00 par value, 25,000 shares authorized, none outstanding as of December 27, 2024 ​ ​ — ​ ​ — ​ Ordinary shares, $ 0.01 par value, 1,500,000,000 shares authorized, 300,840,538 shares issued and common shares, CHF 0.57 par value, 316,574,781 shares authorized and issued , respectively ​ 3 ​ ​ 139 ​ Accumulated earnings ​ 12,933 ​ 14,533 ​ Ordinary shares and common shares held in treasury, at cost, 2,074,979 and 16,656,681 shares, respectively ​ ( 310 ) ​ ( 2,322 ) ​ Accumulated other comprehensive income (loss) ​ ( 217 ) ​ 5 ​ Total shareholders' equity ​ 12,409 ​ 12,355 ​ Total liabilities, redeemable noncontrolling interests, and shareholders' equity ​ $ 22,441 ​ $ 22,854 ​ See Notes to Condensed Consolidated Financial Statements. ​ ​ 3 Table of Contents TE CONNECTIVITY PLC CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Quarter Ended December 27, 2024 ​ ​ ​ ​ ​ ​ ​ Common/ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ Common/ ​ Ordinary Shares ​ ​ ​ ​ ​ ​ Other ​ Total ​ ​ ​ Ordinary Shares ​ Held in Treasury ​ Contributed ​ Accumulated ​ Comprehensive ​ Shareholders' ​ ​ Shares Amount Shares Amount Surplus Earnings Income (Loss) Equity ​ ​ (in millions) Balance at September 27, 2024 316 ​ $ 139 ( 17 ) ​ $ ( 2,322 ) ​ $ — ​ $ 14,533 ​ $ 5 ​ $ 12,355 ​ Change in place of incorporation ​ — ​ ​ ( 136 ) ​ — ​ ​ — ​ ​ — ​ ​ 136 ​ ​ — ​ ​ — ​ Cancellation of treasury shares ​ ( 17 ) ​ ​ — ​ 17 ​ ​ 2,322 ​ ​ — ​ ​ ( 2,322 ) ​ ​ — ​ ​ — ​ Net income — ​ — — ​ — ​ — ​ 528 ​ — ​ 528 ​ Other comprehensive loss — ​ — — ​ — ​ — ​ — ​ ( 222 ) ​ ( 222 ) ​ Share-based compensation expense — ​ — — ​ — ​ 35 ​ — ​ — ​ 35 ​ Exercise of share options 1 ​ — — ​ — ​ 34 ​ — ​ — ​ 34 ​ Restricted share award vestings and other activity 1 ​ — — ​ — ​ ( 69 ) ​ 58 ​ — ​ ( 11 ) ​ Repurchase of ordinary shares — ​ — ( 2 ) ​ ( 310 ) ​ — ​ — ​ — ​ ( 310 ) ​ Balance at December 27, 2024 ​ 301 ​ $ 3 ( 2 ) ​ $ ( 310 ) ​ $ — ​ $ 12,933 ​ $ ( 217 ) ​ $ 12,409 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Quarter Ended December 29, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Shares ​ ​ ​ ​ ​ ​ Other ​ Total ​ ​ ​ Common Shares ​ Held in Treasury ​ Contributed ​ Accumulated ​ Comprehensive ​ Shareholders' ​ ​ Shares Amount Shares Amount Surplus Earnings Income (Loss) Equity ​ ​ (in millions) Balance at September 29, 2023 322 ​ $ 142 ( 10 ) ​ $ ( 1,380 ) ​ $ — ​ $ 12,947 ​ $ ( 158 ) ​ $ 11,551 ​ Net income ​ — ​ — — ​ — ​ — ​ 1,803 ​ — ​ 1,803 ​ Other comprehensive income — ​ — — ​ — ​ — ​ — ​ 169 ​ 169 ​ Share-based compensation expense — ​ — — ​ — ​ 34 ​ — ​ — ​ 34 ​ Exercise of share options — ​ — — ​ 11 ​ — ​ — ​ — ​ 11 ​ Restricted share award vestings and other activity — ​ — — ​ 94 ​ ( 34 ) ​ ( 72 ) ​ — ​ ( 12 ) ​ Repurchase of common shares — ​ — ( 3 ) ​ ( 420 ) ​ — ​ — ​ — ​ ( 420 ) ​ Balance at December 29, 2023 ​ 322 ​ $ 142 ( 13 ) ​ $ ( 1,695 ) ​ $ — ​ $ 14,678 ​ $ 11 ​ $ 13,136 ​ ​ ​ See Notes to Condensed Consolidated Financial Statements. ​ ​ 4 Table of Contents TE CONNECTIVITY PLC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ Quarters Ended ​ ​ ​ December 27, ​ December 29, ​ ​ 2024 2023 ​ ​ (in millions) ​ Cash flows from operating activities: ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 528 ​ $ 1,803 ​ Loss from discontinued operations, net of income taxes ​ — ​ 1 ​ Income from continuing operations ​ 528 ​ 1,804 ​ Adjustments to reconcile income from continuing operations to net cash provided by operating activities: ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ 186 ​ 194 ​ Deferred income taxes ​ 98 ​ ( 1,217 ) ​ Non-cash lease cost ​ ​ 34 ​ ​ 34 ​ Provision for losses on accounts receivable and inventories ​ 41 ​ 42 ​ Share-based compensation expense ​ 35 ​ 34 ​ Other ​ 12 ​ 40 ​ Changes in assets and liabilities, net of the effects of acquisitions and divestitures: ​ ​ ​ ​ ​ ​ ​ Accounts receivable, net ​ 146 ​ 127 ​ Inventories ​ ( 118 ) ​ ( 282 ) ​ Prepaid expenses and other current assets ​ 68 ​ ( 48 ) ​ Accounts payable ​ 150 ​ 128 ​ Accrued and other current liabilities ​ ( 295 ) ​ ( 239 ) ​ Income taxes ​ 30 ​ 12 ​ Other ​ ( 37 ) ​ 90 ​ Net cash provided by operating activities ​ 878 ​ 719 ​ Cash flows from investing activities: ​ ​ ​ ​ ​ ​ ​ Capital expenditures ​ ( 205 ) ​ ( 151 ) ​ Proceeds from sale of property, plant, and equipment ​ 1 ​ 2 ​ Acquisition of businesses, net of cash acquired ​ ( 325 ) ​ ( 349 ) ​ Proceeds from divestiture of business, net of cash retained by business sold ​ ​ — ​ ​ 38 ​ Other ​ ( 8 ) ​ ( 8 ) ​ Net cash used in investing activities ​ ( 537 ) ​ ( 468 ) ​ Cash flows from financing activities: ​ ​ ​ ​ ​ ​ ​ Net increase (decrease) in commercial paper ​ 90 ​ ( 69 ) ​ Repayment of debt ​ — ​ ( 1 ) ​ Proceeds from exercise of share options ​ 34 ​ 11 ​ Repurchase of ordinary/common shares ​ ( 303 ) ​ ( 476 ) ​ Payment of ordinary/common share dividends to shareholders ​ ( 189 ) ​ ( 183 ) ​ Other ​ ( 27 ) ​ ( 27 ) ​ Net cash used in financing activities ​ ( 395 ) ​ ( 745 ) ​ Effect of currency translation on cash ​ ( 11 ) ​ 3 ​ Net decrease in cash, cash equivalents, and restricted cash ​ ( 65 ) ​ ( 491 ) ​ Cash, cash equivalents, and restricted cash at beginning of period ​ 1,319 ​ 1,661 ​ Cash, cash equivalents, and restricted cash at end of period ​ $ 1,254 ​ $ 1,170 ​ See Notes to Condensed Consolidated Financial Statements. ​ ​ 5 Table of Contents TE CONNECTIVITY PLC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. Basis of Presentation The unaudited Condensed Consolidated Financial Statements of TE Connectivity plc (“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 27, 2024. Unless otherwise indicated, references in the Condensed Consolidated Financial Statements to fiscal 2025 and fiscal 2024 are to our fiscal years ending September 26, 2025 and ended September 27, 2024, respectively. Change in Place of Incorporation The merger between TE Connectivity Ltd., our former parent entity, and TE Connectivity plc, its wholly-owned subsidiary, was completed on September 30, 2024. TE Connectivity plc, a public limited company incorporated under Irish law, was the surviving entity and, as a result, our jurisdiction of incorporation changed from Switzerland to Ireland. Shareholders received one ordinary share of TE Connectivity plc for each common share of TE Connectivity Ltd. held immediately prior to the merger and change in place of incorporation. Effective for fiscal 2025, we are organized under the laws of Ireland. We do not anticipate any material changes in our operations or financial results as a result of the merger and change in place of incorporation. New Segment Structure Effective for fiscal 2025, we reorganized our management and segments to align the organization around our fiscal 2025 strategy. Our businesses in the former Communications Solutions segment have been moved into the Industrial Solutions segment. Also, the appliances and industrial equipment businesses have been combined to form the automation and connected living business. In addition, we realigned certain product lines and businesses from the Industrial Solutions and former Communications Solutions segments to the Transportation Solutions segment. The following represents the new segment structure: ● Transportation Solutions —This segment contains our automotive, commercial transportation, and sensors businesses. ● Industrial Solutions —This segment contains our aerospace, defense, and marine; medical; energy; digital data networks (historically referred to as data and devices); and automation and connected living businesses. ​ 6 Table of Contents TE CONNECTIVITY PLC 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 27, ​ December 29, ​ ​ 2024 2023 ​ ​ (in millions) ​ Restructuring charges, net ​ $ 43 ​ $ 9 ​ Loss on divestiture ​ ​ — ​ ​ 11 ​ Costs related to change in place of incorporation ​ ​ 10 ​ ​ — ​ Other charges (credits), net ​ ( 3 ) ​ 1 ​ Restructuring and other charges, net ​ $ 50 ​ $ 21 ​ ​ Restructuring Charges, Net Net restructuring charges by segment were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ Quarters Ended ​ ​ ​ December 27, ​ December 29, ​ ​ 2024 2023 ​ ​ (in millions) ​ Transportation Solutions ​ $ 26 ​ $ 2 ​ Industrial Solutions ​ 17 ​ 7 ​ Restructuring charges, net ​ $ 43 ​ $ 9 ​ ​ Activity in our restructuring reserves was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at ​ ​ September 27, ​ ​ ​ ​ Changes in ​ Cash ​ Non-Cash ​ Currency ​ December 27, ​ ​ 2024 Charges Estimate Payments Items Translation 2024 ​ ​ (in millions) ​ Fiscal 2025 Actions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee severance ​ $ — ​ $ 27 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 27 ​ Property, plant, and equipment ​ ​ — ​ ​ 3 ​ ​ — ​ ​ — ​ ​ ( 3 ) ​ ​ — ​ ​ — ​ Total ​ ​ — ​ ​ 30 ​ ​ — ​ ​ — ​ ​ ( 3 ) ​ ​ — ​ ​ 27 ​ Fiscal 2024 Actions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee severance ​ ​ 72 ​ ​ 2 ​ ​ — ​ ​ ( 11 ) ​ ​ — ​ ​ ( 4 ) ​ ​ 59 ​ Property, plant, and equipment ​ ​ — ​ ​ — ​ ​ 2 ​ ​ — ​ ​ ( 2 ) ​ ​ — ​ ​ — ​ Total ​ ​ 72 ​ ​ 2 ​ ​ 2 ​ ​ ( 11 ) ​ ​ ( 2 ) ​ ​ ( 4 ) ​ ​ 59 ​ Pre-Fiscal 2024 Actions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee severance ​ ​ 186 ​ ​ 9 ​ ​ ( 2 ) ​ ​ ( 26 ) ​ ​ — ​ ​ ( 9 ) ​ ​ 158 ​ Facility and other exit costs ​ ​ 15 ​ ​ 1 ​ ​ — ​ ​ ( 5 ) ​ ​ — ​ ​ ( 1 ) ​ ​ 10 ​ Property, plant, and equipment ​ ​ — ​ ​ 1 ​ ​ — ​ ​ — ​ ​ ( 1 ) ​ ​ — ​ ​ — ​ Total ​ ​ 201 ​ ​ 11 ​ ​ ( 2 ) ​ ​ ( 31 ) ​ ​ ( 1 ) ​ ​ ( 10 ) ​ ​ 168 ​ Total Activity ​ $ 273 ​ $ 43 ​ $ — ​ $ ( 42 ) ​ $ ( 6 ) ​ $ ( 14 ) ​ $ 254 ​ ​ 7 Table of Contents TE CONNECTIVITY PLC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Fiscal 2025 Actions During fiscal 2025, we initiated a restructuring program associated with footprint consolidation and cost structure improvements in both of our segments. During the quarter ended December 27, 2024, we recorded restructuring charges of $ 30 million in connection with this program. We expect to complete all restructuring actions commenced during the quarter ended December 27, 2024 by the end of fiscal 2032 and to incur additional charges of approximately $ 10 million related primarily to facility exit costs in the Industrial Solutions segment. Fiscal 2024 Actions During fiscal 2024, we initiated a restructuring program to optimize our manufacturing footprint and improve the cost structure of the organization. In connection with this program, during the quarters ended December 27, 2024 and December 29, 2023, we recorded net restructuring charges of $ 4 million and $ 5 million, respectively. We expect to complete all restructuring actions commenced during fiscal 2024 by the end of fiscal 2025 and anticipate that additional charges related to actions commenced during fiscal 2024 will be insignificant. Pre-Fiscal 2024 Actions During the quarters ended December 27, 2024 and December 29, 2023, we recorded net restructuring charges of $ 9 million and $ 4 million, respectively, related to pre-fiscal 2024 actions. We expect to incur additional charges of approximately $ 10 million in connection with the restructuring actions commenced prior to fiscal 2024. Total Restructuring Reserves Restructuring reserves included on the Condensed Consolidated Balance Sheets were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 27, ​ September 27, ​ ​ 2024 2024 ​ ​ (in millions) ​ Accrued and other current liabilities ​ $ 219 ​ $ 233 ​ Other liabilities ​ 35 ​ 40 ​ Restructuring reserves ​ $ 254 ​ $ 273 ​ ​ 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 in the quarter ended December 29, 2023. The business sold was reported in our Transportation Solutions segment. Change in Place of Incorporation During the quarter ended December 27, 2024, we incurred costs of $ 10 million related to our change in place of incorporation from Switzerland to Ireland. See Note 1 for additional information regarding the change. ​ 3. Acquisitions During the quarter ended December 27, 2024, we acquired two businesses for a combined cash purchase price of $ 325 million, net of cash acquired. The acquired businesses have been reported as part of our Industrial Solutions segment from the date of acquisition. Our valuation of identifiable intangible assets, assets acquired, and liabilities assumed is 8 Table of Contents TE CONNECTIVITY PLC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) currently in process; therefore, the current allocation is subject to adjustment upon finalization of the valuations. The amount of these potential adjustments could be significant. During the quarter ended December 29, 2023, we acquired approximately 98.7 % of the outstanding shares of Schaffner Holding AG, 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. The acquired business has been reported as part of our Industrial Solutions segment from the date of acquisition. 4. Inventories Inventories consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 27, ​ September 27, ​ ​ 2024 2024 ​ ​ (in millions) ​ Raw materials ​ $ 357 ​ $ 328 ​ Work in progress ​ 1,127 ​ 1,063 ​ Finished goods ​ 1,135 ​ 1,126 ​ Inventories ​ $ 2,619 ​ $ 2,517 ​ ​ ​ 5. Goodwill The changes in the carrying amount of goodwill by segment were as follows (1) : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Transportation Industrial ​ ​ ​ ​ Solutions ​ Solutions ​ Total ​ ​ ​ (in millions) ​ September 27, 2024 (2) ​ $ 1,584 ​ $ 4,217 ​ $ 5,801 ​ Acquisitions ​ ​ — ​ ​ 225 ​ ​ 225 ​ Currency translation ​ ( 52 ) ​ ( 139 ) ​ ( 191 ) ​ December 27, 2024 (2) ​ $ 1,532 ​ $ 4,303 ​ $ 5,835 ​ (1) In connection with the reorganization of our segments, goodwill was reallocated to reporting units using a relative fair value approach. See Note 1 for additional information regarding our new segment structure. (2) At December 27, 2024 and September 27, 2024, accumulated impairment losses for the Transportation Solutions and Industrial Solutions segments were $ 3,091 million and $ 1,158 million, respectively. During the quarter ended December 27, 2024, we recognized goodwill in the Industrial Solutions segment in connection with recent acquisitions. See Note 3 for additional information regarding acquisitions. 9 Table of Contents TE CONNECTIVITY PLC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) 6. Intangible Assets, Net Intangible assets consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 27, 2024 ​ September 27, 2024 ​ ​ Gross ​ ​ Net Gross ​ ​ Net ​ ​ ​ Carrying ​ Accumulated ​ Carrying ​ Carrying ​ Accumulated ​ Carrying ​ ​ ​ Amount ​ Amortization ​ Amount ​ Amount ​ Amortization ​ Amount ​ ​ (in millions) ​ Customer relationships ​ $ 1,885 ​ $ ( 927 ) ​ $ 958 ​ $ 1,901 ​ $ ( 948 ) ​ $ 953 ​ Intellectual property ​ ​ 634 ​ ​ ( 430 ) ​ ​ 204 ​ ​ 686 ​ ​ ( 481 ) ​ ​ 205 ​ Other ​ 23 ​ ( 8 ) ​ 15 ​ 23 ​ ( 7 ) ​ 16 ​ Total ​ $ 2,542 ​ $ ( 1,365 ) ​ $ 1,177 ​ $ 2,610 ​ $ ( 1,436 ) ​ $ 1,174 ​ ​ Intangible asset amortization expense was $ 39 million and $ 42 million for the quarters ended December 27, 2024 and December 29, 2023, respectively. At December 27, 2024, the aggregate amortization expense on intangible assets is expected to be as follows: ​ ​ ​ ​ ​ ​ (in millions) Remainder of fiscal 2025 ​ $ 122 ​ Fiscal 2026 ​ ​ 157 ​ Fiscal 2027 ​ 139 ​ Fiscal 2028 ​ 106 ​ Fiscal 2029 ​ 99 ​ Fiscal 2030 ​ 91 ​ Thereafter ​ 463 ​ Total ​ $ 1,177 ​ ​ 7. Debt As of December 27, 2024, Tyco Electronics Group S.A. (“TEGSA”), our wholly-owned subsidiary, had $ 345 million of commercial paper outstanding at a weighted-average interest rate of 4.50 %. TEGSA had $ 255 million of commercial paper outstanding at a weighted-average interest rate of 4.95 % at September 27, 2024. Payment obligations under TEGSA’s senior notes, commercial paper, and five-year unsecured senior revolving credit facility are fully and unconditionally guaranteed on an unsecured basis by TEGSA’s parent, TE Connectivity Switzerland Ltd., and its parent, TE Connectivity plc. The fair value of our debt, based on indicative valuations, was approximately $ 4,126 million and $ 4,190 million at December 27, 2024 and September 27, 2024, respectively. 10 Table of Contents TE CONNECTIVITY PLC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) 8. Leases The components of lease cost were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ Quarters Ended ​ ​ ​ December 27, ​ December 29, ​ ​ 2024 2023 ​ (in millions) Operating lease cost ​ $ 34 ​ $ 34 ​ Variable lease cost ​ ​ 15 ​ ​ 12 ​ Total lease cost ​ $ 49 ​ $ 46 ​ ​ Cash flow information, including significant non-cash transactions, related to leases was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ Quarters Ended ​ ​ ​ December 27, ​ December 29, ​ ​ 2024 2023 ​ (in millions) Cash paid for amounts included in the measurement of lease liabilities: ​ ​ ​ ​ ​ ​ ​ Payments for operating leases (1) ​ $ 35 ​ $ 34 ​ ​ ​ ​ ​ ​ ​ ​ ​ Right-of-use assets, including modifications of existing leases, obtained in exchange for operating lease liabilities ​ ​ 30 ​ ​ 70 ​ (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. State Department’s Directorate of Defense Trade Controls (“DDTC”). We are cooperating with the DDTC in its ongoing investigation. We are unable to predict the timing and final outcome of the agency’s investigation. 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 investigation into these matters has yet to be completed and the final outcome of such investigation 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 11 Table of Contents TE CONNECTIVITY PLC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) required cleanup, the interpretation of applicable laws and regulations, and alternative cleanup methods. As of December 27, 2024, we concluded that we would incur investigation and remediation costs at these sites in the reasonably possible range of $ 18 million to $ 43 million, and we accrued $ 21 million as the probable loss, which was the best estimate within this range. We believe that any potential payment of such estimated amounts will not have a material adverse effect on our results of operations, financial position, or cash flows. Guarantees In disposing of assets or businesses, we often provide representations, warranties, and/or indemnities to cover various risks including unknown damage to assets, environmental risks involved in the sale of real estate, liability for investigation and remediation of environmental contamination at waste disposal sites and manufacturing facilities, and unidentified tax liabilities and legal fees related to periods prior to disposition. We do not expect that these uncertainties will have a material adverse effect on our results of operations, financial position, or cash flows. At December 27, 2024, we had outstanding letters of credit, letters of guarantee, and surety bonds of $ 185 million, including letters of credit of $ 22 million associated with our divestiture of the Subsea Communications business. In addition, as of December 27, 2024, we had $ 23 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 $ 126 million and $ 105 million at December 27, 2024 and September 27, 2024, 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 $ 2,324 million and $ 2,417 million at December 27, 2024 and September 27, 2024, respectively. We also use a cross-currency swap program to hedge our net investment in certain foreign operations. The aggregate notional value of the contracts under this program was $ 6,138 million and $ 5,367 million at December 27, 2024 and September 27, 2024, respectively. Under the terms of these contracts, we receive interest in U.S. dollars at a weighted-average rate of 2.0 % per annum and pay no interest. Upon the maturity of these contracts at various dates through fiscal 12 Table of Contents TE CONNECTIVITY PLC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) 2029, we will pay the notional value of the contracts in the designated foreign currency and receive U.S. dollars from our counterparties. We are not required to provide collateral for these contracts. These cross-currency swap contracts were recorded on the Condensed Consolidated Balance Sheets as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 27, ​ September 27, ​ ​ 2024 2024 ​ ​ (in millions) ​ Prepaid expenses and other current assets ​ $ 125 ​ $ 31 ​ Other assets ​ 87 ​ 11 ​ Accrued and other current liabilities ​ ​ 3 ​ ​ 51 ​ Other liabilities ​ ​ 3 ​ ​ 99 ​ ​ The impacts of our hedge of net investment programs were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ ​ Quarters Ended ​ ​ ​ December 27, ​ December 29, ​ ​ 2024 2023 ​ ​ (in millions) ​ Foreign currency exchange gains (losses) on intercompany loans and external borrowings (1) ​ $ 142 ​ $ ( 107 ) ​ Gains (losses) on cross-currency swap contracts designated as hedges of net investment (1) ​ 342 ​ ( 125 ) ​ (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 $ 481 million and $ 488 million at December 27, 2024 and September 27, 2024, respectively, and were designated as cash flow hedges. These commodity swap contracts were recorded on the Condensed Consolidated Balance Sheets as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 27, ​ September 27, ​ ​ 2024 2024 ​ ​ (in millions) ​ Prepaid expenses and other current assets ​ $ 17 ​ $ 52 ​ Other assets ​ — ​ 4 ​ Accrued and other current liabilities ​ ​ 16 ​ ​ 1 ​ Other liabilities ​ ​ 3 ​ ​ — ​ ​ The impacts of our commodity swap contracts were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ Quarters Ended ​ ​ ​ December 27, ​ December 29, ​ ​ 2024 2023 ​ ​ (in millions) ​ Gains (losses) recorded in other comprehensive income (loss) ​ $ ( 46 ) ​ $ 26 ​ Gains (losses) reclassified from accumulated other comprehensive income (loss) into cost of sales ​ ​ 14 ​ ​ ( 4 ) ​ ​ 13 Table of Contents TE CONNECTIVITY PLC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) 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. 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 27, ​ December 29, ​ December 27, ​ December 29, ​ ​ 2024 2023 2024 2023 ​ ​ (in millions) ​ Operating expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Service cost ​ $ 8 ​ $ 7 ​ $ 2 ​ $ 2 ​ Other (income) expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest cost ​ 16 ​ 15 ​ 8 ​ 10 ​ Expected returns on plan assets ​ ( 15 ) ​ ( 12 ) ​ ( 11 ) ​ ( 10 ) ​ Amortization of net actuarial loss ​ 2 ​ 1 ​ 1 ​ 1 ​ Amortization of prior service credit ​ ( 1 ) ​ ( 1 ) ​ — ​ — ​ Net periodic pension benefit cost ​ $ 10 ​ $ 10 ​ $ — ​ $ 3 ​ ​ During the quarter ended December 27, 2024, we contributed $ 12 million and $ 5 million to our non-U.S. and U.S. pension plans, respectively. 12. Income Taxes We recorded income tax expense of $ 178 million and an income tax benefit of $ 1,105 million for the quarters ended December 27, 2024 and December 29, 2023, respectively. The income tax expense for the quarter ended December 27, 2024 included $ 13 million of income tax expense related to the revaluation of deferred tax assets as a result of a decrease in the corporate tax rate in a non-U.S. jurisdiction. 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. The Organisation for Economic Co-operation and Development (“OECD”) and participating countries continue to work toward the enactment of a 15% global minimum corporate tax. More than 30 countries have thus far enacted global minimum tax legislation. Ireland has implemented elements of the OECD’s global minimum tax rules effective for us beginning in fiscal 2025. The global minimum tax is a significant structural change to the international taxation framework. We anticipate further legislative activity and administrative guidance throughout fiscal 2025. The legislation did not have a material impact on our cash taxes and income tax expense in the quarter ended December 27, 2024. We continue to monitor evolving tax legislation in the jurisdictions in which we operate. See Note 17 for information regarding the impact of guidance issued by the OECD in January 2025 on the ten-year tax credit obtained by a Swiss subsidiary in fiscal 2024. Although it is difficult to predict the timing or results of our worldwide examinations, we estimate that, as of December 27, 2024, approximately $ 20 million of unrecognized income tax benefits, excluding the impact relating to accrued interest and penalties, could be resolved within the next twelve months. 14 Table of Contents TE CONNECTIVITY PLC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) 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 27, 2024. 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 27, ​ December 29, ​ ​ 2024 2023 ​ ​ (in millions) ​ Basic ​ 299 ​ 311 ​ Dilutive impact of share-based compensation arrangements ​ 2 ​ 2 ​ Diluted ​ 301 ​ 313 ​ ​ 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 ordinary/common shares and inclusion would be antidilutive: ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ Quarters Ended ​ ​ ​ December 27, ​ December 29, ​ ​ 2024 2023 ​ ​ (in millions) ​ Antidilutive share options 1 ​ 2 ​ ​ ​ 14. Shareholders’ Equity Ordinary Shares Effective for fiscal 2025, we are organized under the laws of Ireland. The rights of holders of our shares are governed by Irish law and our Irish articles of association. The par value of our ordinary shares is stated in U.S. dollars. As discussed in Note 1, pursuant to the terms of a merger agreement between TE Connectivity Ltd. and TE Connectivity plc, shareholders received one ordinary share in the share capital of TE Connectivity plc for each common share of TE Connectivity Ltd. held immediately prior to the merger and change in place of incorporation. Our articles of association authorize our board of directors to allot and issue shares up to the maximum of our authorized but unissued share capital for a period of five years from September 30, 2024. This authorization will need to be renewed by ordinary resolution upon its expiration and at periodic intervals thereafter. The authorized but unissued share capital may be increased or reduced by way of an ordinary resolution of shareholders. The shares comprising the authorized share capital may be divided into shares of such par value as the resolution shall prescribe. Ordinary Shares Held in Treasury All treasury shares were cancelled at the beginning of fiscal 2025 in connection with our change in place of incorporation. See Note 1 for additional information regarding our change in place of incorporation. Authorized Share Capital In connection with our merger and change in place of incorporation, we converted 25,000 ordinary shares to ordinary class A shares and issued certain preferred shares to facilitate the merger. The ordinary class A shares and preferred 15 Table of Contents TE CONNECTIVITY PLC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) shares were re-acquired and cancelled following the merger. No preferred shares and no ordinary class A shares were outstanding at December 27, 2024. Our authorized share capital consisted of 1,500,000,000 ordinary shares with a par value of $ 0.01 per share, two preferred shares with a par value of $ 1.00 per share, and 25,000 ordinary class A shares with a par value of € 1.00 per share as of December 27, 2024. The authorized share capital includes 25,000 ordinary class A shares with a par value of € 1.00 per share in order to satisfy statutory requirements for the incorporation of all Irish public limited companies. Contributed Surplus As a result of cumulative equity transactions, including dividend activity and treasury share cancellations, our contributed surplus balance was reduced to zero with residual activity recorded against accumulated earnings as reflected on the Condensed 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. Dividends We paid cash dividends to shareholders as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ Quarters Ended ​ December 27, December 29, ​ 2024 2023 Dividends paid per ordinary/common share ​ $ 0.65 ​ $ 0.59 ​ ​ Upon approval of a dividend payment, we record a liability with a corresponding charge to equity. At December 27, 2024 and September 27, 2024, the unpaid portion of the dividends recorded in accrued and other current liabilities on the Condensed Consolidated Balance Sheets totaled $ 194 million and $ 390 million, respectively. We expect future dividends to be made from accumulated earnings as defined under accounting principles generally accepted in Ireland (“Irish GAAP”). Share Repurchase Program During the quarter ended December 27, 2024, our board of directors authorized an increase of $ 2.5 billion in our share repurchase program. Ordinary/common shares repurchased under the share repurchase program were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ Quarters Ended ​ ​ ​ December 27, ​ December 29, ​ ​ 2024 2023 ​ ​ (in millions) ​ Number of ordinary/common shares repurchased ​ 2 ​ 3 ​ Repurchase value $ 310 $ 420 ​ ​ At December 27, 2024, we had $ 2.4 billion of availability remaining under our share repurchase authorization. ​ 16 Table of Contents TE CONNECTIVITY PLC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) 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 27, ​ December 29, ​ ​ 2024 2023 ​ ​ (in millions) ​ Share-based compensation expense $ 35 $ 34 ​ ​ As of December 27, 2024, there was $ 213 million of unrecognized compensation expense related to share-based awards, which is expected to be recognized over a weighted-average period of 2.1 years. During the quarter ended December 27, 2024, we granted the following share-based awards as part of our annual incentive plan grant: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Grant-Date ​ ​ Shares Fair Value ​ ​ (in millions) ​ ​ ​ ​ Share options ​ 0.7 ​ $ 46.45 ​ Restricted share awards ​ 0.4 ​ 153.25 ​ Performance share awards ​ 0.1 ​ ​ 153.25 ​ ​ As of December 27, 2024, we had 18 million shares available for issuance under the TE Connectivity plc 2024 Stock and Incentive Plan, amended and restated as of September 30, 2024. 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 ​ 4.5 % ​ Expected annual dividend per share ​ $ 2.60 ​ ​ Expected life of options (in years) ​ 5.3 ​ ​ ​ ​ 16. Segment and Geographic Data Effective for fiscal 2025, we reorganized our management and segments to align the organization around our fiscal 2025 strategy. See Note 1 for additional information regarding our new segment structure. The following segment information reflects the new segment reporting structure. Prior period segment results have been recast to conform to the new segment structure. ​ 17 Table of Contents TE CONNECTIVITY PLC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Net sales by segment (1) and industry end market (2) were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ Quarters Ended ​ ​ ​ December 27, ​ December 29, ​ ​ 2024 2023 ​ ​ (in millions) ​ Transportation Solutions: ​ ​ ​ ​ ​ ​ ​ Automotive ​ $ 1,722 ​ $ 1,796 ​ Commercial transportation ​ 312 ​ 356 ​ Sensors ​ 209 ​ 241 ​ Total Transportation Solutions ​ ​ 2,243 ​ ​ 2,393 ​ Industrial Solutions: ​ ​ ​ ​ ​ ​ ​ Automation and connected living ​ ​ 479 ​ ​ 464 ​ Aerospace, defense, and marine ​ 334 ​ 290 ​ Digital data networks ​ ​ 413 ​ ​ 279 ​ Energy ​ 216 ​ 205 ​ Medical ​ ​ 151 ​ ​ 200 ​ Total Industrial Solutions ​ ​ 1,593 ​ ​ 1,438 ​ Total ​ $ 3,836 ​ $ 3,831 ​ (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. Net sales by geographic region (1) and segment were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ Quarters Ended ​ ​ ​ December 27, ​ December 29, ​ ​ 2024 2023 ​ ​ (in millions) ​ Europe/Middle East/Africa (“EMEA”): ​ ​ ​ ​ ​ ​ ​ Transportation Solutions ​ $ 720 ​ $ 879 ​ Industrial Solutions ​ 509 ​ 532 ​ Total EMEA ​ 1,229 ​ 1,411 ​ Asia–Pacific: ​ ​ ​ ​ ​ ​ ​ Transportation Solutions ​ ​ 1,097 ​ ​ 1,015 ​ Industrial Solutions ​ 506 ​ 364 ​ Total Asia–Pacific ​ 1,603 ​ 1,379 ​ Americas: ​ ​ ​ ​ ​ ​ ​ Transportation Solutions ​ ​ 426 ​ ​ 499 ​ Industrial Solutions ​ 578 ​ 542 ​ Total Americas ​ 1,004 ​ 1,041 ​ Total ​ $ 3,836 ​ $ 3,831 ​ (1) Net sales to external customers are attributed to individual countries based on the legal entity that records the sale. 18 Table of Contents TE CONNECTIVITY PLC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Operating income by segment was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ ​ Quarters Ended ​ ​ ​ December 27, ​ December 29, ​ ​ 2024 2023 ​ ​ (in millions) ​ Transportation Solutions ​ $ 446 ​ $ 487 ​ Industrial Solutions ​ ​ 244 ​ ​ 211 ​ Total ​ $ 690 ​ $ 698 ​ ​ Segment assets and a reconciliation of segment assets to total assets were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment Assets ​ ​ ​ December 27, ​ September 27, ​ ​ 2024 2024 ​ ​ (in millions) ​ Transportation Solutions ​ $ 5,660 ​ $ 5,758 ​ Industrial Solutions ​ 3,630 ​ 3,717 ​ Total segment assets (1) ​ 9,290 ​ 9,475 ​ Other current assets ​ 1,988 ​ 2,059 ​ Other non-current assets ​ 11,163 ​ 11,320 ​ Total assets ​ $ 22,441 ​ $ 22,854 ​ (1) Segment assets are composed of accounts receivable, inventories, and net property, plant, and equipment. 17. Subsequent Event In January 2025, the OECD released new guidance for the 15% global minimum corporate tax. We expect this guidance to impact the realizability of certain net deferred tax assets associated with a ten-year tax credit obtained by a Swiss subsidiary in fiscal 2024. We are reviewing the new guidance and related interpretations and, while our assessment is not complete, it is probable that we will need to reduce those net deferred tax assets by approximately $ 600 million during the quarter ending March 28, 2025. ​ ​ ​ ​ 19 Table of Contents