TE Connectivity plc

**1.**Basis of Presentation and Accounting Pronouncement

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.

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 receivedone 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:

Recently Issued Accounting Pronouncement

In March 2024, the U.S. Securities and Exchange Commission (“SEC”) issued its final climate disclosure rules,The Enhancement and Standardization of Climate-Related Disclosures for Investors, which require all registrants to provide certain climate-related information in their registration statements and annual reports. The rules require disclosure of, among other things, material climate-related risks, activities to mitigate or adapt to such risks, governance and oversight of such risks, material climate targets and goals, and Scope 1 and/or Scope 2 greenhouse gas emissions, on a phased-in basis, when those emissions are material. In addition, the final rules require certain disclosures in the notes to the financial statements, including the effects of severe weather events and other natural conditions. The rules are effective for us on a phased-in timeline starting in fiscal 2026; however, in April 2024, the SEC issued an order to voluntarily stay its final climate rules pending the completion of judicial review thereof by the U.S. Court of Appeals for the Eighth Circuit. Also, in March 2025, the SEC informed the Court that it has ended its defense of the climate disclosure rules.

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 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 six months ended March 28, 2025, we recorded restructuring charges of $77 million in connection with this program. We expect to complete all restructuring actions commenced during the six months ended March 28, 2025 by the end of fiscal 2032 and to incur additional charges of approximately $15 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 six months ended March 28, 2025 and March 29, 2024, we recorded restructuring charges of $3 million and $11 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 six months ended March 28, 2025 and March 29, 2024, we recorded net restructuring charges of $7 million and $30 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:

Divestiture

During the six months ended March 29, 2024, we soldone 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 six months ended March 29, 2024. The business sold was reported in our Transportation Solutions segment.

During the six months ended March 28, 2025 and March 29, 2024, we incurred costs of $11 million and $8 million, respectively, 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 six months ended March 28, 2025, we acquiredtwo businesses for a combined cash purchase price of $321 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 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 six months ended March 29, 2024, 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 294 million (equivalent to $339 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:

5. Goodwill

The changes in the carrying amount of goodwill by segment were as follows(1):

During the six months ended March 28, 2025, we recognized goodwill in the Industrial Solutions segment in connection with recent acquisitions. See Note 3 for additional information regarding acquisitions.

6. Intangible Assets, Net

Intangible assets consisted of the following:

Intangible asset amortization expense was $41 million and $43 million for the quarters ended March 28, 2025 and March 29, 2024, respectively, and $80 million and $85 million for the six months ended March 28, 2025 and March 29, 2024, respectively.

At March 28, 2025, the aggregate amortization expense on intangible assets is expected to be as follows:

7. Debt

During the quarter ended March 28, 2025, Tyco Electronics Group S.A. (“TEGSA”), our wholly-owned subsidiary, issued €750 million aggregate principal amount of 3.25% senior notes due in January 2033. The notes are TEGSA’s unsecured senior obligations and rank equally in right of payment with all existing and any future senior indebtedness of TEGSA and senior to any subordinated indebtedness that TEGSA may incur.

During the quarter ended March 28, 2025, TEGSA repaid, at maturity, €550 million of 0.00% senior notes due in February 2025.

During the quarter ended March 28, 2025, we reclassified $500 million of 4.50% senior notes and $350 million of 3.70% senior notes, both due in February 2026, from long-term debt toshort-term debt on the Condensed Consolidated Balance Sheet.

As of March 28, 2025, TEGSA had $1.5 billion of commercial paper outstanding at a weighted-average interest rate of 4.64%. TEGSA had $255 million of commercial paper outstanding at a weighted-average interest rate of 4.95% at September 27, 2024.

In March 2025, TEGSA entered into a 364-day senior credit agreement ("364-Day Credit Facility") with total commitments of $1.5 billion. This increases the size of our commercial paper program as the 364-Day Credit Facility, in addition to the five-year unsecured senior revolving credit facility (“Five-Year Credit Facility”), backs borrowings made under our commercial paper program. TEGSA hadno borrowings under the 364-Day Credit Facility or Five-Year Credit Facility at March 28, 2025.

Borrowings under the 364-Day Credit Facility bear interest at a rate per annum equal to, at the option of TEGSA, (a)the term secured overnight financing rate (“Term SOFR”) (as defined in the 364-Day Credit Facility) or (b) an alternate base rate equal to the highest of (i)Bank of America, N.A.’s base rate, (ii) thefederal funds effective rate plus 1/2 of 1%, (iii)the Term SOFR for a one-month interest period plus 1%, and (iv)1%, plus, in each case, an applicable margin based upon the senior, unsecured, long-term debt rating of TEGSA. TEGSA is required to pay an annual facility fee. Based on the applicable credit ratings of TEGSA, this fee ranges from 3.0 to 9.0 basis points of the lenders' commitments under the 364-Day Credit Facility.

The 364-Day Credit Facility contains a financial ratio covenant providing that if, as of the last day of each fiscal quarter, our ratio of Consolidated Total Debt to Consolidated EBITDA (as defined in the 364-Day Credit Facility) for the then most recently concluded period offour consecutive fiscal quarters exceeds 3.75 to 1.0, an Event of Default (as defined in the 364-Day Credit Facility) is triggered.

Payment obligations under TEGSA’s senior notes, commercial paper, 364-Day Credit Facility, and Five-Year 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 $5,565 million and $4,190 million at March 28, 2025 and September 27, 2024, 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, 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 previously disclosed, we had been investigating our past compliance with relevant U.S. trade controls and had made voluntary disclosures of apparent trade controls violations to the U.S. State Department’s Directorate of Defense Trade Controls (“DDTC”). During the quarter ended March 28, 2025, DDTC closed its investigations regarding these matters without fine, penalty, or further action, and we released amounts previously reserved for potential fines and penalties relating to these matters.

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 March 28, 2025, 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 March 28, 2025, we had outstanding letters of credit, letters of guarantee, and surety bonds of $191 million, including letters of credit of $22 million associated with the divestiture of our former Subsea Communications business. We contractually agreed to continue to honor letters of credit 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 $112 million and $105 million at March 28, 2025 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 $2,613 million and $2,417 million at March 28, 2025 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 $5,886 million and $5,367 million at March 28, 2025 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 payno interest. Upon the maturity of these contracts at various dates through fiscal 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:

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 $505 million and $488 million at March 28, 2025 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:

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 six months ended March 28, 2025, we contributed $24 million and $9 million to our non-U.S. and U.S. pension plans, respectively.

12. Income Taxes

We recorded income tax expense of $742 million and $146 million for the quarters ended March 28, 2025 and March 29, 2024, respectively. The income tax expense for the quarter ended March 28, 2025 included $574 million of income tax expense related to a net increase in the valuation allowance for certain deferred tax assets associated with aten-year tax credit obtained by a Swiss subsidiary in fiscal 2024. See “Global Minimum Tax” below for additional information regarding the impact of guidance issued by the Organisation for Economic Co-operation and Development (“OECD”) in January 2025 on theten-year tax credit obtained by a Swiss subsidiary.

We recorded income tax expense of $920 million and an income tax benefit of $959 million for the six months ended March 28, 2025 and March 29, 2024, respectively. The income tax expense for the six months ended March 28, 2025 included $574 million of income tax expense related to a net increase in the valuation allowance for certain deferred tax assets associated with aten-year tax credit obtained by a Swiss subsidiary in fiscal 2024. In addition, the income tax expense for six months ended March 28, 2025 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 six months ended March 29, 2024 included an $874 million net income tax benefit associated with the sameten-year tax credit obtained

by a Swiss subsidiary mentioned above 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 six months ended March 29, 2024 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 March 28, 2025, 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.

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 March 28, 2025.

Global Minimum Tax

The OECD and participating countries continue to enact the 15% global minimum tax. The global minimum tax is a significant structural change to the international taxation framework and more than 50 countries have thus far enacted some or all of the elements of the global minimum tax. Ireland has implemented elements of the OECD’s global minimum tax rules which were effective for us beginning in fiscal 2025.

In January 2025, the OECD released new guidance for the global minimum tax rules which impacted the realizability of certain deferred tax assets associated with aten-year tax credit obtained by a Swiss subsidiary in fiscal 2024. The January 2025 OECD guidance was enacted into law in Switzerland and as a result, as discussed above, during the quarter ended March 28, 2025, we recorded income tax expense of $574 million related to a net increase in the valuation allowance for deferred tax assets representing the amount of the Swiss subsidiary’s tax credits not expected to be realized.

We anticipate further legislative activity and administrative guidance throughout fiscal 2025. We continue to monitor evolving tax legislation in the jurisdictions within which we operate.

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/common shares and inclusion would be antidilutive:

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 receivedone 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 offive 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 Ashares and issued certain preferred shares to facilitate the merger. The ordinary class A shares and preferred shares were re-acquired and cancelled following the merger. No preferred shares andno ordinary class A shares were outstanding at March 28, 2025.

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 March 28, 2025. 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:

In March 2025, our board of directors declared a regular quarterly dividend of $0.71 per ordinary share, payable on June 10, 2025, to shareholders of record on May 21, 2025. As a result of our change in place of incorporation, dividends on our ordinary shares, if any, are now declared on a quarterly basis by our board of directors, as provided by Irish law. Shareholder approval is no longer required. As an Irish company, dividends will be made from accumulated earnings as defined under accounting principles generally accepted in Ireland (“Irish GAAP”).

Share Repurchase Program

During the six months ended March 28, 2025, 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:

At March 28, 2025, we had $2.1 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:

As of March 28, 2025, there was $183 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 27, 2024, we granted the following share-based awards as part of our annual incentive plan grant:

As of March 28, 2025, 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:

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.

Net sales by segment(1) and industry end market(2) were as follows:

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

Operating income by segment was as follows:

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

17. Subsequent Event

On April 1, 2025, we acquired Richards Manufacturing Co., a U.S.-based producer of overhead and underground electrical and gas distribution products, for cash of approximately $2.3 billion, net of cash acquired. The transaction is subject to post-closing adjustments. The acquired business will be reported as part of our Energy business within our Industrial Solutions segment from the date of acquisition.

We have not yet completed the initial accounting for this business combination, including obtaining all of the information required for the valuation of contingencies, intangible assets, and goodwill. Also, because the initial accounting for the transaction is incomplete, we are unable to provide the supplemental pro forma revenue and earnings of the combined entity. The amounts recognized for the major classes of assets acquired and liabilities assumed as of the acquisition date and the pro forma revenue and earnings of the combined entity will be included in our Form 10-Q for the quarter ending June 27, 2025.