TE Connectivity plc

**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 26, 2025.

Unless otherwise indicated, references in the Condensed Consolidated Financial Statements to fiscal 2026 and fiscal 2025 are to our fiscal years ending September 25, 2026 and ended September 26, 2025, respectively.

2. Restructuring and Other Charges, Net

Net restructuring and other charges consisted of the following:

Restructuring Charges, Net

Net restructuring charges by segment were as follows:

Activity in our restructuring reserves was as follows:

Fiscal 2026 Actions

During fiscal 2026, we initiated a restructuring program to optimize our manufacturing footprint and improve the cost structure of our organization. During the quarter ended December 26, 2025, we recorded restructuring charges of $4 million in connection with this program. We expect to complete all restructuring actions commenced during the quarter ended December 26, 2025 by the end of fiscal 2028 and to incur additional charges of approximately $6 million related primarily to facility exit costs in the Industrial Solutions segment.

Fiscal 2025 Actions

During fiscal 2025, we initiated a restructuring program associated with footprint consolidation and cost structure improvements in both of our segments. In connection with this program, during the quarters ended December 26, 2025 and December 27, 2024, we recorded restructuring credits of $3 million and charges of $30 million, respectively. We expect to complete all restructuring actions commenced during fiscal 2025 by the end of fiscal 2032 and to incur additional charges of approximately $12 million related primarily to facility exit costs in the Industrial Solutions segment.

Pre-Fiscal 2025 Actions

During the quarters ended December 26, 2025 and December 27, 2024, we recorded net restructuring charges of $9 million and $13 million, respectively, related to pre-fiscal 2025 actions. We expect that any additional charges related to restructuring actions commenced prior to fiscal 2025 will be insignificant.

Total Restructuring Reserves

Restructuring reserves included on the Condensed Consolidated Balance Sheets were as follows:

3. Acquisitions

During the quarter ended December 27, 2024, we acquiredtwo 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.

4. Inventories

Inventories consisted of the following:

5. Goodwill

The changes in the carrying amount of goodwill by segment were as follows:

6. Intangible Assets, Net

Net intangible assets consisted of the following:

Intangible asset amortization expense was $57 million and $39 million for the quarters ended December 26, 2025 and December 27, 2024, respectively.

At December 26, 2025, the aggregate amortization expense on intangible assets is expected to be as follows:

7. Debt

Tyco Electronics Group S.A. (“TEGSA”), our wholly-owned subsidiary, hadno commercial paper outstanding at December 26, 2025 or September 26, 2025.

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 $5,738 million and $5,725 million at December 26, 2025 and September 26, 2025, respectively.

8. Leases

The components of lease cost were as follows:

Cash flow information, including significant non-cash transactions, related to leases was as follows:

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, trade compliance matters, and tax matters, including non-income tax matters such as value added tax, sales and use tax, real estate tax, and transfer tax. Although it is not feasible to predict the outcome of these proceedings, based upon our experience, current information, and applicable law, we do not expect that the outcome of these proceedings, either individually or in the aggregate, will have a material effect on our results of operations, financial position, or cash flows.

Trade Compliance Matters

As part of our ongoing internal compliance activities, we have been investigating compliance with relevant country of origin for import matters and recently made a voluntary disclosure to the U.S. Customs and Border Protection Agency regarding potential Section 301 unpaid duties, fees, and interest for certain imported products into the U.S. We are unable to predict the timing and final outcome of investigation into this matter. An unfavorable outcome may include unpaid duties, fees, interest, and penalties imposed in response to our disclosures. Based on currently available information, we have reserved an aggregate of $27 million related to this exposure. The investigation into this matter has yet to be completed and the final outcome of such investigation and related duties, fees, interest, and potential penalties may differ from amounts currently reserved.

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 26, 2025, we concluded that we would incur investigation and remediation costs at these sites in the reasonably possible range of $18 million to $44 million, and we accrued $23 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 26, 2025, we had outstanding letters of credit, letters of guarantee, and surety bonds of $245 million.

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 $135 million and $161 million at December 26, 2025 and September 26, 2025, 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 $4,620 million and $4,212 million at December 26, 2025 and September 26, 2025, 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 $5,686 million and $5,671 million at December 26, 2025 and September 26, 2025, respectively. Under the terms of these contracts, we receive interest in U.S. dollars at a weighted-average rate of 1.9% per annum and payno interest. Upon the maturity of these contracts at various dates through fiscal 2030, 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:

The impacts of our hedge of net investment programs were as follows:

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 $611 million and $569 million at December 26, 2025 and September 26, 2025, respectively, and were designated as cash flow hedges. These commodity swap contracts were recorded on the Condensed Consolidated Balance Sheets as follows:

The impacts of our commodity swap contracts were as follows:

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:

During the quarter ended December 26, 2025, we contributed $11 million and $4 million to our non-U.S. and U.S. pension plans, respectively.

12. Income Taxes

We recorded income tax expense of $210 million and $178 million for the quarters ended December 26, 2025 and December 27, 2024, respectively. The income tax expense for 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.

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:

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 shares and inclusion would be antidilutive:

14. Shareholders’ Equity

Dividends

We paid cash dividends to shareholders as follows:

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

Share Repurchase Program

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

At December 26, 2025, we had $983 million 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:

As of December 26, 2025, there was $225 million of unrecognized compensation expense related to share-based awards, which is expected to be recognized over a weighted-average period of 1.8 years.

During the quarter ended December 26, 2025, we granted the following share-based awards as part of our annual incentive plan grant:

As of December 26, 2025, we had 17 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:

16. Segment and Geographic Data

Net sales bysegment(1) and industry end market were as follows:

Net sales by geographic region(1) and segment were as follows:

The following table presents operating results and other data by reportable segment:

Segment assets and a reconciliation of segment assets to total assets were as follows: