Item 16. FORM 10-K SUMMARY

Item 16. FORM 10-K SUMMARY

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Fiscal

(in millions)

Antidilutive share options

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	TE CONNECTIVITY PLC

	By:	/s/ Heath A. Mitts
		Heath A. Mitts
		Executive Vice President
		and Chief Financial Officer
		(Principal Financial Officer)

Date: November 10, 2025

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


Signature	Title	Date


/s/ Terrence R. Curtin	Chief Executive Officer and Director	November 10, 2025
Terrence R. Curtin	(Principal Executive Officer)

/s/ Heath A. Mitts	Executive Vice President,
Heath A. Mitts	Chief Financial Officer and Director	November 10, 2025
	(Principal Financial Officer)

/s/ Reuben M. Shaffer	Senior Vice President and
Reuben M. Shaffer	Corporate Controller	November 10, 2025
	(Principal Accounting Officer)

*	Director	November 10, 2025
Jean-Pierre Clamadieu

*	Director	November 10, 2025
Carol A. Davidson

*	Director	November 10, 2025
Lynn A. Dugle

*	Director	November 10, 2025
Sam Eldessouky

*	Director	November 10, 2025
William A. Jeffrey

*	Director	November 10, 2025
Syaru Shirley Lin

*	Director	November 10, 2025
Abhijit Y. Talwalkar


Signature	Title	Date

*	Director	November 10, 2025
Mark C. Trudeau

*	Director	November 10, 2025
Dawn C. Willoughby

*	Director	November 10, 2025
Laura H. Wright

*	John S. Jenkins, Jr., by signing his name hereto, does sign this document on behalf of the above noted individuals, pursuant to powers of attorney duly executed by such individuals, which have been filed as Exhibit 24.1 to this Report.


	By:	/s/ John S. Jenkins, Jr.
		John S. Jenkins, Jr.
		Attorney-in-fact

TE CONNECTIVITY PLC

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

		Page
Reports of Independent Registered Public Accounting Firm (PCAOB ID No. 34)		58
Consolidated Statements of Operations for the Fiscal Years Ended September 26, 2025, September 27, 2024, and September 29, 2023		61
Consolidated Statements of Comprehensive Income for the Fiscal Years Ended September 26, 2025, September 27, 2024, and September 29, 2023		62
Consolidated Balance Sheets as of September 26, 2025 and September 27, 2024		63
Consolidated Statements of Shareholders’ Equity for the Fiscal Years Ended September 26, 2025, September 27, 2024, and September 29, 2023		64
Consolidated Statements of Cash Flows for the Fiscal Years Ended September 26, 2025, September 27, 2024, and September 29, 2023		65
Notes to Consolidated Financial Statements		66
Schedule II—Valuation and Qualifying Accounts		104

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of TE Connectivity plc

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of TE Connectivity plc (formerly TE Connectivity Ltd.) and subsidiaries (the "Company") as of September 26, 2025 and September 27, 2024, the related consolidated statements of operations, comprehensive income, shareholders’ equity, and cash flows, for each of the three years in the period ended September 26, 2025, and the related notes and the schedule listed in the Index at Item 15(a)2 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 26, 2025 and September 27, 2024, and the results of its operations and its cash flows for each of the three years in the period ended September 26, 2025, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of September 26, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated November 10, 2025, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Income Taxes — Realizability of Deferred Tax Assets — Refer to Notes 2 and 15 to the financial statements

Critical Audit Matter Description

The Company recognizes deferred income taxes for temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. A valuation allowance is provided to offset deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Future realization of deferred tax assets depends on the existence of sufficient taxable income of the appropriate character prior to expiration. Sources of taxable income include future reversals of deferred tax assets and liabilities, expected future taxable income, taxable income in prior carryback years if permitted under the tax law, and tax planning strategies. Management has determined that it is more likely than not that sufficient taxable income will be generated in the future to

realize a portion of its deferred tax assets, and therefore, a valuation allowance of $8.8 billion has been recorded to offset the Company’s gross deferred tax assets as of September 26, 2025 of $11.8 billion.

We identified the realizability of certain deferred tax assets as a critical audit matter because of the Company’s tax structure and the significant judgments and estimates made by management to determine that sufficient taxable income will be generated in the future prior to expiration to realize a portion of its deferred tax assets. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our income tax specialists, when performing audit procedures to evaluate the appropriateness of qualifying tax planning strategies and the reasonableness of management’s estimates of taxable income prior to expiration.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the determination that it is more likely than not that sufficient taxable income will be generated in the future to realize certain deferred tax assets included the following, among others:

	•	We tested the effectiveness of controls over management’s estimates of the realization of the deferred tax assets, including those over the estimates of taxable income, the approval of tax planning strategies and the determination of whether it is more likely than not that the deferred tax assets will be realized prior to expiration.

	•	We evaluated the reasonableness of management’s assessment of the significance and weighting of negative evidence and positive evidence that is objectively verifiable.

	•	We evaluated management’s ability to accurately estimate taxable income by comparing actual results to management’s historical estimates and evaluating whether there have been any changes that would impact management’s ability to continue accurately estimating taxable income.

	•	We tested the reasonableness of management’s estimates of taxable income by comparing the estimates to:

	–	Historical taxable income.

	–	Internal communications to management and the board of directors.

	–	Management’s history of carrying out its stated plans and its ability to carry out its plans considering contractual commitments, available financing, or debt covenants.

	•	We evaluated whether the estimates of future taxable income were consistent with evidence obtained in other areas of the audit.

	•	We evaluated whether the taxable income in prior carryback years was of the appropriate character and available under the tax law.

	•	With the assistance of our income tax and other specialists, we evaluated (1) the appropriateness of qualifying tax planning strategies, including that they were prudent, feasible and would more likely than not result in the realization of deferred tax assets and (2) management’s assessment that sufficient taxable income will be generated in the future to realize a portion of the deferred tax assets prior to expiration.

/s/ Deloitte & Touche LLP

Philadelphia, Pennsylvania

November 10, 2025

We have served as the Company’s auditor since 2007.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of TE Connectivity plc

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of TE Connectivity plc and subsidiaries (the “Company”) as of September 26, 2025, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 26, 2025, based on criteria established in Internal Control—Integrated Framework (2013) issued by COSO.

As described in Management’s Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Richards Manufacturing Co., which was acquired on April 1, 2025, and whose financial statements constitute 8% of total assets and 1% of total net sales of the consolidated financial statement amounts as of and for the fiscal year ended September 26, 2025. Accordingly, our audit did not include the internal control over financial reporting at Richards Manufacturing Co.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the fiscal year ended September 26, 2025, of the Company and our report dated November 10, 2025, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP

Philadelphia, Pennsylvania

November 10, 2025

TE CONNECTIVITY PLC

CONSOLIDATED STATEMENTS OF OPERATIONS

Fiscal Years Ended September 26, 2025, September 27, 2024, and September 29, 2023


	Fiscal
	2025		2024		2023

	(in millions, except per share data)
Net sales	$	17,262	$	15,845	$	16,034
Cost of sales		11,183		10,389		10,979
Gross margin		6,079		5,456		5,055
Selling, general, and administrative expenses		1,866		1,732		1,670
Research, development, and engineering expenses		829		741		708
Acquisition and integration costs		47		21		33
Restructuring and other charges, net		126		166		340
Operating income		3,211		2,796		2,304
Interest income		83		87		60
Interest expense		(77)		(70)		(80)
Other expense, net		(13)		(16)		(16)
Income from continuing operations before income taxes		3,204		2,797		2,268
Income tax (expense) benefit		(1,361)		397		(364)
Income from continuing operations		1,843		3,194		1,904
Income (loss) from discontinued operations, net of income taxes		(1)		(1)		6
Net income	$	1,842	$	3,193	$	1,910

Basic earnings per share:
Income from continuing operations	$	6.21	$	10.40	$	6.04
Income (loss) from discontinued operations		—		—		0.02
Net income		6.20		10.40		6.06

Diluted earnings per share:
Income from continuing operations	$	6.16	$	10.34	$	6.01
Income (loss) from discontinued operations		—		—		0.02
Net income		6.16		10.33		6.03

Weighted-average number of shares outstanding:
Basic		297		307		315
Diluted		299		309		317

See accompanying Notes to Consolidated Financial Statements.

TE CONNECTIVITY PLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Fiscal Years Ended September 26, 2025, September 27, 2024, and September 29, 2023


	Fiscal
	2025		2024		2023

	(in millions)
Net income	$	1,842	$	3,193	$	1,910
Other comprehensive income:
Currency translation		(46)		131		261
Adjustments to unrecognized pension and postretirement benefit costs, net of income taxes		33		(37)		20
Gains on cash flow hedges, net of income taxes		21		76		65
Other comprehensive income		8		170		346
Comprehensive income		1,850		3,363		2,256
Less: comprehensive income attributable to noncontrolling interests		(7)		(7)		(9)
Comprehensive income attributable to TE Connectivity plc	$	1,843	$	3,356	$	2,247

See accompanying Notes to Consolidated Financial Statements.

TE CONNECTIVITY PLC

CONSOLIDATED BALANCE SHEETS

As of September 26, 2025 and September 27, 2024


	Fiscal Year End
	2025		2024

	(in millions, except
	share data)
Assets
Current assets:
Cash and cash equivalents	$	1,255	$	1,319
Accounts receivable, net of allowance for doubtful accounts of $44 and $32, respectively		3,403		3,055
Inventories		2,699		2,517
Prepaid expenses and other current assets		609		740
Total current assets		7,966		7,631
Property, plant, and equipment, net		4,312		3,903
Goodwill		7,126		5,801
Intangible assets, net		2,227		1,174
Deferred income taxes		2,507		3,497
Other assets		943		848
Total assets	$	25,081	$	22,854
Liabilities, redeemable noncontrolling interests, and shareholders' equity
Current liabilities:
Short-term debt	$	852	$	871
Accounts payable		2,021		1,728
Accrued and other current liabilities		2,247		2,147
Total current liabilities		5,120		4,746
Long-term debt		4,842		3,332
Long-term pension and postretirement liabilities		767		810
Deferred income taxes		198		199
Income taxes		414		411
Other liabilities		1,010		870
Total liabilities		12,351		10,368
Commitments and contingencies (Note 12)
Redeemable noncontrolling interests		145		131
Shareholders' equity:
Preferred shares, $1.00 par value, 2 shares authorized, none outstanding as of September 26, 2025		—		—
Ordinary class A shares, €1.00 par value, 25,000 shares authorized, none outstanding as of September 26, 2025		—		—
Ordinary shares, $0.01 par value, 1,500,000,000 shares authorized, 302,889,075 shares issued and common shares, CHF 0.57 par value, 316,574,781 shares authorized and issued, respectively		3		139
Accumulated earnings		13,932		14,533
Ordinary shares and common shares held in treasury, at cost, 8,330,931 and 16,656,681 shares, respectively		(1,356)		(2,322)
Accumulated other comprehensive income		6		5
Total shareholders' equity		12,585		12,355
Total liabilities, redeemable noncontrolling interests, and shareholders' equity	$	25,081	$	22,854

See accompanying Notes to Consolidated Financial Statements.

TE CONNECTIVITY PLC

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Fiscal Years Ended September 26, 2025, September 27, 2024, and September 29, 2023


				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 fiscal year end 2022	331	$	146	(13)	$	(1,681)	$	—	$	12,832	$	(495)	$	10,802
Net income	—		—	—		—		—		1,910		—		1,910
Other comprehensive income	—		—	—		—		—		—		337		337
Share-based compensation expense	—		—	—		—		123		—		—		123
Dividends	—		—	—		—		—		(737)		—		(737)
Exercise of share options	—		—	1		43		—		—		—		43
Restricted share award vestings and other activity	—		—	1		109		(123)		33		—		19
Repurchase of common shares	—		—	(8)		(946)		—		—		—		(946)
Cancellation of treasury shares	(9)		(4)	9		1,095		—		(1,091)		—		—
Balance at fiscal year end 2023	322	$	142	(10)	$	(1,380)	$	—	$	12,947	$	(158)	$	11,551
Net income	—		—	—		—		—		3,193		—		3,193
Other comprehensive income	—		—	—		—		—		—		163		163
Share-based compensation expense	—		—	—		—		127		—		—		127
Dividends	—		—	—		—		—		(782)		—		(782)
Exercise of share options	—		—	1		89		—		—		—		89
Restricted share award vestings and other activity	—		—	—		213		(127)		(81)		—		5
Repurchase of common shares	—		—	(14)		(1,991)		—		—		—		(1,991)
Cancellation of treasury shares	(6)		(3)	6		747		—		(744)		—		—
Balance at fiscal year end 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	—		—	—		—		—		1,842		—		1,842
Other comprehensive income	—		—	—		—		—		—		1		1
Share-based compensation expense	—		—	—		—		149		—		—		149
Dividends	—		—	—		—		—		(628)		—		(628)
Exercise of share options	2		—	—		—		182		—		—		182
Restricted share award vestings and other activity	2		—	—		—		(331)		371		—		40
Repurchase of ordinary shares	—		—	(8)		(1,356)		—		—		—		(1,356)
Balance at fiscal year end 2025	303	$	3	(8)	$	(1,356)	$	—	$	13,932	$	6	$	12,585

See accompanying Notes to Consolidated Financial Statements.

TE CONNECTIVITY PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

Fiscal Years Ended September 26, 2025, September 27, 2024, and September 29, 2023


	Fiscal
	2025		2024		2023

	(in millions)
Cash flows from operating activities:
Net income	$	1,842	$	3,193	$	1,910
(Income) loss from discontinued operations, net of income taxes		1		1		(6)
Income from continuing operations		1,843		3,194		1,904
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
Depreciation and amortization		838		826		794
Deferred income taxes		938		(789)		(77)
Non-cash lease cost		145		134		129
Provision for losses on accounts receivable and inventories		58		57		76
Share-based compensation expense		149		127		123
Impairment of held for sale businesses		—		—		74
Other		80		71		101
Changes in assets and liabilities, net of the effects of acquisitions and divestitures:
Accounts receivable, net		(341)		(134)		(146)
Inventories		(160)		(30)		(45)
Prepaid expenses and other current assets		91		25		17
Accounts payable		290		159		(1)
Accrued and other current liabilities		(35)		(165)		21
Income taxes		147		(83)		17
Other		96		85		145
Net cash provided by operating activities		4,139		3,477		3,132
Cash flows from investing activities:
Capital expenditures		(936)		(680)		(732)
Proceeds from sale of property, plant, and equipment		11		16		4
Acquisition of businesses, net of cash acquired		(2,628)		(339)		(110)
Proceeds from divestiture of businesses, net of cash retained by businesses sold		—		59		48
Other		(15)		(6)		22
Net cash used in investing activities		(3,568)		(950)		(768)
Cash flows from financing activities:
Net decrease in commercial paper		(255)		(75)		(40)
Proceeds from issuance of debt		2,231		348		499
Repayment of debt		(580)		(352)		(591)
Proceeds from exercise of share options		182		89		43
Repurchase of ordinary/common shares		(1,347)		(2,062)		(945)
Payment of ordinary/common share dividends to shareholders		(803)		(760)		(725)
Other		(57)		(57)		(34)
Net cash used in financing activities		(629)		(2,869)		(1,793)
Effect of currency translation on cash		(6)		—		2
Net increase (decrease) in cash, cash equivalents, and restricted cash		(64)		(342)		573
Cash, cash equivalents, and restricted cash at beginning of fiscal year		1,319		1,661		1,088
Cash, cash equivalents, and restricted cash at end of fiscal year	$	1,255	$	1,319	$	1,661

Supplemental cash flow information:
Interest paid on debt, net	$	34	$	64	$	75
Income taxes paid, net of refunds		276		475		425

See accompanying Notes to Consolidated Financial Statements.

TE CONNECTIVITY PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

The Consolidated Financial Statements reflect the consolidated operations of TE Connectivity plc and its subsidiaries and have been prepared in United States (“U.S.”) dollars in accordance with accounting principles generally accepted in the U.S. (“GAAP”).

Description of the Business

TE Connectivity plc (“TE Connectivity” or the “Company,” which may be referred to as “we,” “us,” or “our”) is a global industrial technology leader creating a safer, sustainable, productive, and connected future. As a trusted innovation partner, our broad range of connectivity and sensor solutions enable the distribution of power, signal, and data to advance next-generation transportation, energy networks, automated factories, data centers enabling artificial intelligence, and more.

We operate through two reportable segments:

	●	Transportation Solutions—The Transportation Solutions segment is a leader in connectivity and sensor technologies. Our products, which must withstand harsh conditions, are used in the automotive, commercial transportation, and sensors markets.

	●	Industrial Solutions—The Industrial Solutions segment is a leading supplier of products that connect and distribute power, data, and signals. Our products are used in the digital data networks; automation and connected living; aerospace, defense, and marine; energy; and medical markets.

See Note 20 for additional information regarding our segments and new segment structure.

Use of Estimates

The preparation of the Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Actual results could differ from these estimates.

Fiscal Year

We have a 52- or 53-week fiscal year that ends on the last Friday of September. Fiscal 2025, 2024, and 2023 ended on September 26, 2025, September 27, 2024, and September 29, 2023, respectively. Fiscal 2025, 2024, and 2023 were each 52 weeks in length. For fiscal years in which there are 53 weeks, the fourth fiscal quarter includes 14 weeks, with the next occurrence taking place in fiscal 2028.

Change in Place of Incorporation

During fiscal 2024, our board of directors and shareholders approved a change in our jurisdiction of incorporation from Switzerland to Ireland. In connection with the change, TE Connectivity Ltd., our former parent entity, entered into a merger agreement with TE Connectivity plc, its then wholly-owned subsidiary and a public limited company incorporated under Irish law. Under the merger agreement, TE Connectivity Ltd. merged with and into TE Connectivity plc, which was the surviving entity, in order to effect our change in jurisdiction of incorporation from Switzerland to Ireland. The merger was completed on September 30, 2024, thereby changing our jurisdiction of incorporation 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. Effective for fiscal 2025, we are organized under the laws of Ireland. We have not had and do not anticipate any material changes in our operations or financial results as a result of the merger and change in place of incorporation.

TE CONNECTIVITY PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

2. Summary of Significant Accounting Policies

Principles of Consolidation

We consolidate entities in which we own or control more than 50% of the voting shares or otherwise control through similar rights. All intercompany transactions have been eliminated. The results of companies acquired or disposed of are included on the Consolidated Financial Statements from the effective date of acquisition or up to the date of disposal.

Revenue Recognition

We account for revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, which is a single, comprehensive, five-step revenue recognition model. Our revenues are generated principally from the sale of our products. Revenue is recognized as performance obligations under the terms of a contract, such as a purchase order with a customer, are satisfied; generally this occurs with the transfer of control. We transfer control and recognize revenue when we ship product to our customers, the customers accept and have legal title for the product, and we have a right to payment for such product. Revenue is measured as the amount of consideration that we expect to receive in exchange for those products and excludes taxes assessed by governmental authorities and collected from customers concurrent with the sale of products. Shipping and handling costs are treated as fulfillment costs and are included in cost of sales. Since we typically invoice our customers when we satisfy our performance obligations, we do not have material contract assets or contract liabilities. Our credit terms are customary and do not contain significant financing components that extend beyond one year of fulfillment of performance obligations. We apply the practical expedient of ASC 606 with respect to financing components and do not evaluate contracts in which payment is due within one year of satisfaction of the related performance obligation. Since our performance obligations to deliver products are part of contracts that generally have original durations of one year or less, we have elected to use the optional exemption to not disclose the aggregate amount of transaction prices associated with unsatisfied or partially satisfied performance obligations. See Note 20 for net sales disaggregated by industry end market and geographic region which is summarized by segment and that we consider meaningful to depict the nature, amount, timing, and uncertainty of revenue and cash flows affected by economic factors.

Our standard terms of sale generally warrant that our products will conform to our, or mutually agreed to, specifications and that our products will be free from material defects in materials and workmanship for a limited time. In certain instances, we may sell products to customers under terms other than our standard terms. We do not account for warranties as separate performance obligations. Amounts accrued for warranty claims were $28 million and $34 million at fiscal year end 2025 and 2024, respectively.

Although products are generally sold at fixed prices, certain distributors and customers receive incentives or awards, such as sales rebates, return allowances, scrap allowances, and other rights, which are accounted for as variable consideration. We estimate these amounts in the same period revenue is recognized based on the expected value to be provided to customers and reduce revenue accordingly. Our estimates of variable consideration and ultimate determination of the estimated amounts to include in the transaction price are based primarily on our assessment of anticipated performance and historical and forecasted information that is reasonably available to us.

Inventories

Inventories are recorded at the lower of cost or net realizable value using the first-in, first-out cost method.

Property, Plant, and Equipment, Net

Property, plant, and equipment is recorded at cost less accumulated depreciation. Maintenance and repair expenditures are charged to expense when incurred. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, which are 10 to 20 years for land improvements, 5 to 40 years for buildings and improvements, and 1 to 15 years for machinery and equipment.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

We periodically evaluate, when events and circumstances warrant, the net realizable value of property, plant, and equipment and other long-lived assets, relying on several factors including operating results, business plans, economic projections, and anticipated future cash flows. When indicators of potential impairment are present, the carrying values of the asset group are evaluated in relation to the operating performance and estimated future undiscounted cash flows of the underlying asset group. Impairment of the carrying value is recognized whenever anticipated future undiscounted cash flow estimates are less than the carrying value of the asset. Fair value estimates are based on assumptions concerning the amount and timing of estimated future cash flows and discount rates, reflecting varying degrees of perceived risk.

Goodwill and Other Intangible Assets

We account for goodwill and other intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other.

Intangible assets include both indeterminable-lived residual goodwill and determinable-lived identifiable intangible assets. Intangible assets with determinable lives primarily include customer relationships and intellectual property, consisting of patents, trademarks, and unpatented technology. Recoverability estimates range from 1 to 50 years and costs are generally amortized on a straight-line basis. Evaluations of the remaining useful lives of determinable-lived intangible assets are performed on a periodic basis and when events and circumstances warrant.

At fiscal year end 2025, we had four reporting units, all of which contained goodwill. There were two reporting units in both the Transportation Solutions and Industrial Solutions segments. When changes occur in the composition of one or more reporting units, goodwill is reassigned to the reporting units affected based on their relative fair values.

Goodwill impairment is evaluated by comparing the carrying value of each reporting unit to its fair value on the first day of the fourth fiscal quarter of each year or more frequently if events or changes in circumstances indicate that the asset may be impaired. In assessing a potential impairment, management relies on several reporting unit-specific factors including operating results, business plans, economic projections, anticipated future cash flows, transactions, and marketplace data. There are inherent uncertainties related to these factors and management’s judgment in applying these factors to the impairment analysis.

When testing for goodwill impairment, we identify potential impairment by comparing the fair value of a reporting unit with its carrying amount. If the carrying amount of a reporting unit exceeds its fair value, a goodwill impairment charge will be recorded for the amount of the excess, limited to the total amount of goodwill allocated to the reporting unit.

Fair value estimates used in the goodwill impairment tests are calculated using an income approach based on the present value of future cash flows of each reporting unit. The income approach is supported by a guideline analysis (a market approach). These approaches incorporate several assumptions including future growth rates, discount rates, income tax rates, and market activity in assessing fair value and are reporting unit specific. Changes in economic and operating conditions impacting these assumptions could result in goodwill impairments in future periods.

Research and Development

Research and development expenditures are expensed when incurred and are included in research, development, and engineering expenses on the Consolidated Statements of Operations. Research and development expenses include salaries, direct costs incurred, and building and overhead expenses. The amounts expensed in fiscal 2025, 2024, and 2023 were $699 million, $621 million, and $593 million, respectively.

Income Taxes

Income taxes are computed in accordance with the provisions of ASC 740, Income Taxes. Deferred tax liabilities and assets are recognized for the expected future tax consequences of events that have been reflected on the Consolidated Financial Statements. Deferred tax liabilities and assets are determined based on the differences between the book and tax bases of particular assets and liabilities and operating loss carryforwards using tax rates in effect for the years in which the differences are expected to reverse. A valuation allowance is provided to offset deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The calculation of our tax liabilities includes estimates for uncertainties in the application of complex tax regulations across multiple global jurisdictions where we conduct our operations. Under the uncertain tax position provisions of ASC 740, we recognize liabilities for tax and related interest for issues in tax jurisdictions based on our estimate of whether, and the extent to which, additional taxes and related interest will be due. These tax liabilities and related interest are reflected net of the impact of related tax loss carryforwards, as such tax loss carryforwards will be applied against these tax liabilities and will reduce the amount of cash tax payments due upon the eventual settlement with the tax authorities. These estimates may change due to changing facts and circumstances. Due to the complexity of these uncertainties, the ultimate resolution may result in a settlement that differs from our current estimate of the tax liabilities and related interest.

Financial Instruments

Our financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, debt, and derivative financial instruments.

We account for derivative financial instrument contracts on the Consolidated Balance Sheets at fair value. For instruments not designated as hedges under ASC 815, Derivatives and Hedging, the changes in the instruments’ fair value are recognized currently in earnings. For instruments designated as cash flow hedges, the effective portion of changes in the fair value of a derivative is recorded in other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the underlying hedged item affects earnings. Amounts excluded from the hedging relationship are recognized currently in earnings. Changes in the fair value of instruments designated as fair value hedges affect the carrying value of the asset or liability hedged, with changes in both the derivative instrument and the hedged asset or liability being recognized currently in earnings. Changes in the fair value of instruments designated as hedges of net investment are recorded in currency translation, a component of accumulated other comprehensive income (loss).

We determine the fair value of our financial instruments using methods and assumptions that are based on market conditions and risks existing at each balance sheet date. Standard market conventions are used to determine the fair value of financial instruments, including derivatives.

The cash flows related to derivative financial instruments are reported in the operating activities section of the Consolidated Statements of Cash Flows.

Our derivative financial instruments present certain market and counterparty risks. Concentration of counterparty risk is mitigated, however, by our use of financial institutions worldwide, substantially all of which have long-term S&P, Moody’s, and/or Fitch credit ratings of A/A2 or higher. In addition, we utilize only conventional derivative financial instruments. We are exposed to potential losses if a counterparty fails to perform according to the terms of its agreement. With respect to counterparty net asset positions recognized at fiscal year end 2025, we have assessed the likelihood of counterparty default as remote. We currently provide guarantees from a wholly-owned subsidiary to the counterparties to our commodity swap derivatives. The likelihood of performance on the guarantees has been assessed as remote. For all other derivative financial instruments, we are not required to provide, nor do we require counterparties to provide, collateral or other security.

Fair Value Measurements

ASC 820, Fair Value Measurements and Disclosures, specifies a fair value hierarchy based upon the observable inputs utilized in valuation of certain assets and liabilities. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. Fair value measurements are classified under the following hierarchy:

	●	_Level 1—_Quoted prices in active markets for identical assets and liabilities.

	●	_Level 2—_Quoted prices in active markets for similar assets and liabilities, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

	●	_Level 3—_Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flows methodologies, and similar techniques that use significant unobservable inputs.

Derivative financial instruments measured at fair value on a recurring basis are generally valued using level 2 inputs.

Financial instruments other than derivative instruments include cash and cash equivalents, accounts receivable, accounts payable, and debt. These instruments are recorded on the Consolidated Balance Sheets at book value. For cash and cash equivalents, accounts receivable, and accounts payable, we believe book value approximates fair value due to the short-term nature of these instruments. See Note 10 for disclosure of the fair value of debt. The following is a description of the valuation methodologies used for the respective financial instruments:

	●	_Cash and cash equivalents—_Cash and cash equivalents are valued at book value, which we consider to be equivalent to unadjusted quoted prices (level 1).

	●	_Accounts receivable—_Accounts receivable are valued based on the net value expected to be realized. The net realizable value generally represents an observable contractual agreement (level 2).

	●	_Accounts payable—_Accounts payable are valued based on the net value expected to be paid, generally supported by an observable contractual agreement (level 2).

	●	_Debt—_The fair value of debt, including both current and non-current maturities, is derived from quoted market prices or other pricing determinations based on the results of market approach valuation models using observable market data such as recently reported trades, bid and offer information, and benchmark securities (level 2).

Pension Plans

The funded status of our defined benefit pension plans is recognized on the Consolidated Balance Sheets and is measured as the difference between the fair value of plan assets and the projected benefit obligation at the measurement date. The projected benefit obligation represents the actuarial present value of benefits projected to be paid upon retirement factoring in estimated future compensation levels. The fair value of plan assets represents the current market value of cumulative company and participant contributions made to irrevocable trust funds, held for the sole benefit of participants, which are invested by the trustees of the funds. The benefits under our defined benefit pension plans are based on various factors, such as years of service and compensation.

Net periodic pension benefit cost is based on the utilization of the projected unit credit method of calculation and is charged to earnings on a systematic basis over the expected average remaining service lives of current participants, or, for inactive plans, over the remaining life expectancy of participants.

The measurement of benefit obligations and net periodic benefit cost is based on estimates and assumptions determined by our management. These valuations reflect the terms of the plans and use participant-specific information such as compensation, age, and years of service, as well as certain assumptions, including estimates of discount rates, expected returns on plan assets, rates of compensation increases, interest crediting rates, and mortality rates.

Share-Based Compensation

We determine the fair value of share awards on the date of grant. Share options are valued using the Black-Scholes-Merton valuation model; restricted share awards and performance awards are valued using our end-of-day share price on the date of grant. The fair value is expensed ratably over the expected service period, with an allowance made for estimated forfeitures based on historical employee activity. Estimates regarding the attainment of performance criteria are reviewed periodically; the cumulative impact of a change in estimate regarding the attainment of performance criteria is recorded in the period in which that change is made.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Earnings Per Share

Basic earnings per share is computed by dividing net income by the basic weighted-average number of ordinary shares outstanding. Diluted earnings per share is computed by dividing net income by the weighted-average number of ordinary shares outstanding adjusted for the potentially dilutive impact of share-based compensation arrangements.

Leases

We account for leases in accordance with ASC 842, Leases. We have facility, land, vehicle, and equipment leases that expire at various dates. We determine if a contract qualifies as a lease at inception. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The right to control the use of an asset includes the right to obtain substantially all of the economic benefits of the identified asset and the right to direct the use of the identified asset.

Lease right-of-use (“ROU”) assets and lease liabilities are recognized at the commencement date of the lease based on the present value of remaining lease payments over the lease term. Lease ROU assets represent our right to use the underlying assets for the lease term and lease liabilities represent the obligation to make lease payments arising from the leases. We do not recognize ROU assets or lease liabilities that arise from short-term leases. Since our lease contracts do not contain a readily determinable implicit rate, we determine a fully-collateralized incremental borrowing rate that reflects a similar term to the lease and the economic environment of the applicable country or region in which the asset is leased.

We have elected to account for fixed lease and non-lease components in our real estate leases as a single lease component; other leases generally do not contain non-lease components. The non-lease components in our real estate leases include logistics services, warehousing, and other operational costs. Many of these costs are variable, fluctuating based on services provided, such as pallets shipped in and out of a location or square footage of space occupied. These costs, and any other variable rental costs, are excluded from our ROU assets and lease liabilities and are expensed as incurred. Some of our leases may include options to either renew or early terminate the lease. The exercise of these options is generally at our sole discretion and would only occur if there is an economic, financial, or business reason to do so. Such options are included in the lease term if we determine it is reasonably certain they will be exercised.

Currency Translation

For our non-U.S. dollar functional currency subsidiaries, assets and liabilities are translated into U.S. dollars using fiscal year end exchange rates. Sales and expenses are translated at average monthly exchange rates. Foreign currency translation gains and losses are included as a component of accumulated other comprehensive income (loss) within equity. Gains and losses resulting from foreign currency transactions are included in earnings.

Restructuring Charges

Restructuring activities involve employee-related termination costs, facility exit costs, and asset impairments resulting from reductions-in-force, migration of facilities or product lines from higher-cost to lower-cost countries, or consolidation of facilities within countries. We recognize termination costs based on requirements established by severance policy, government law, or previous actions. Facility exit costs generally reflect the accelerated rent expense for ROU assets, expected lease termination costs, or costs that will continue to be incurred under the facility lease without future economic benefit to us. Restructuring activities often result in the disposal or abandonment of assets that require an acceleration of depreciation or impairment reflecting the excess of the assets’ carrying values over fair value.

The recognition of restructuring costs require that we make certain judgments and estimates regarding the nature, timing, and amount of costs associated with the planned exit activity. To the extent our actual results differ from our estimates and assumptions, we may be required to revise the estimated liabilities, requiring the recognition of additional restructuring costs or the reduction of liabilities already recognized. At the end of each reporting period, we evaluate the

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

remaining accrued balances to ensure these balances are properly stated and the utilization of the reserves are for their intended purpose in accordance with developed exit plans.

Contingent Liabilities

We record a loss contingency when the available information indicates it is probable that we have incurred a liability and the amount of the loss is reasonably estimable. When a range of possible losses with equal likelihood exists, we record the low end of the range. The likelihood of a loss with respect to a particular contingency is often difficult to predict, and determining a meaningful estimate of the loss or a range of loss may not be practicable based on information available. In addition, it is not uncommon for such matters to be resolved over many years, during which time relevant developments and new information must continuously be evaluated to determine whether a loss is probable and a reasonable estimate of that loss can be made. When a loss is probable but a reasonable estimate cannot be made, or when a loss is at least reasonably possible, disclosure is provided.

Recently Issued Accounting Pronouncements

In September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, to simplify accounting for internal-use software costs. The update will allow for capitalization of costs when management authorizes and commits to funding a project and it is probable that the project will be completed and the software will be used as intended. The amendments are effective for us in fiscal 2029; however, early adoption is permitted. We are currently assessing the impact that adoption will have on our Consolidated Financial Statements.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, to improve disclosures about the nature of expenses in commonly presented financial statement captions. The amendments are effective for our fiscal 2028 Annual Report and subsequent interim periods; however, early adoption is permitted. The amendments can be applied either prospectively or retrospectively to all periods presented in the financial statements. We are currently assessing the impact that adoption will have on our Consolidated Financial Statements.

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. We continue to monitor developments pertaining to the rules and any potential impacts on our Consolidated Financial Statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements 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. We are currently assessing the impact that adoption will have on our Consolidated Financial Statements.

Recently Adopted Accounting Pronouncement

In November 2023, the FASB issued 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. We adopted this update, on a retrospective basis, for our fiscal 2025 Annual Report. Adoption did not have a material impact on our Consolidated Financial Statements. See Note 20 for additional information regarding our reportable segments.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

3. Restructuring and Other Charges, Net

Net restructuring and other charges consisted of the following:


	Fiscal
	2025		2024		2023

	(in millions)
Restructuring charges, net	$	113	$	144	$	260
(Gain) loss on divestitures and impairment of held for sale business, net		(1)		(10)		77
Costs related to change in place of incorporation		11		20		—
Other charges, net		3		12		3
Restructuring and other charges, net	$	126	$	166	$	340

Restructuring Charges, Net

Net restructuring charges by segment were as follows:


	Fiscal
	2025		2024		2023

	(in millions)
Transportation Solutions	$	69	$	62	$	145
Industrial Solutions		44		82		115
Restructuring charges, net	$	113	$	144	$	260

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Activity in our restructuring reserves was as follows:


	Balance at												Balance at
	Beginning										Currency		End
	of Fiscal				Changes in		Cash		Non-Cash		Translation		of Fiscal
	Year		Charges		Estimate		Payments		Items		and Other		Year

	(in millions)
Fiscal 2025 Activity:
Fiscal 2025 Actions:
Employee severance	$	—	$	93	$	—	$	(24)	$	—	$	6	$	75
Property, plant, and equipment		—		3		—		—		(3)		—		—
Total		—		96		—		(24)		(3)		6		75
Fiscal 2024 Actions:
Employee severance		72		2		(4)		(42)		—		—		28
Property, plant, and equipment		—		1		2		—		(3)		—		—
Total		72		3		(2)		(42)		(3)		—		28
Fiscal 2023 Actions:
Employee severance		116		2		(25)		(52)		—		(1)		40
Facility and other exit costs		—		2		—		(4)		—		2		—
Total		116		4		(25)		(56)		—		1		40
Pre-Fiscal 2023 Actions:
Employee severance		70		9		26		(73)		—		(2)		30
Facility and other exit costs		15		6		(4)		(12)		—		(1)		4
Total		85		15		22		(85)		—		(3)		34
Total fiscal 2025 activity	$	273	$	118	$	(5)	$	(207)	$	(6)	$	4	$	177
Fiscal 2024 Activity:
Fiscal 2024 Actions:
Employee severance	$	—	$	79	$	—	$	(9)	$	—	$	2	$	72
Property, plant, and equipment		—		7		—		—		(7)		—		—
Total		—		86		—		(9)		(7)		2		72
Fiscal 2023 Actions:
Employee severance		187		18		(16)		(79)		—		6		116
Facility and other exit costs		2		7		—		(9)		—		—		—
Property, plant, and equipment		—		13		—		—		(13)		—		—
Total		189		38		(16)		(88)		(13)		6		116
Pre-Fiscal 2023 Actions:
Employee severance		127		16		(4)		(74)		—		5		70
Facility and other exit costs		4		18		10		(17)		—		—		15
Property, plant, and equipment		—		(2)		(2)		—		4		—		—
Total		131		32		4		(91)		4		5		85
Total fiscal 2024 activity	$	320	$	156	$	(12)	$	(188)	$	(16)	$	13	$	273
Fiscal 2023 Activity:
Fiscal 2023 Actions:
Employee severance	$	—	$	238	$	—	$	(50)	$	—	$	(1)	$	187
Facility and other exit costs		—		3		—		(1)		—		—		2
Property, plant, and equipment		—		6		—		—		(6)		—		—
Total		—		247		—		(51)		(6)		(1)		189
Pre-Fiscal 2023 Actions:
Employee severance		220		13		(8)		(110)		—		12		127
Facility and other exit costs		8		7		6		(17)		—		—		4
Property, plant, and equipment		—		3		(8)		—		5		—		—
Total		228		23		(10)		(127)		5		12		131
Total fiscal 2023 activity	$	228	$	270	$	(10)	$	(178)	$	(1)	$	11	$	320

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (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. In connection with this program, we recorded restructuring charges of $96 million during fiscal 2025. We expect to complete all restructuring actions commenced during fiscal 2025 by the end of fiscal 2032 and to incur additional charges of approximately $13 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 fiscal 2025 and 2024, we recorded net restructuring charges of $1 million and $86 million, respectively. We expect additional charges related to fiscal 2024 actions will be insignificant.

Fiscal 2023 Actions

During fiscal 2023, we initiated a restructuring program associated with cost structure improvements across our segments. In connection with this program, during fiscal 2025, 2024, and 2023, we recorded net restructuring credits of $21 million, charges of $22 million, and charges of $247 million, respectively. We expect that any additional charges related to fiscal 2023 actions will be insignificant. Credits in fiscal 2025 are primarily administrative adjustments to multi-wave actions that spanned the fiscal 2023 and pre-fiscal 2023 periods.

The following table summarizes cumulative charges incurred for the fiscal 2023 program by segment as of fiscal year end 2025:


	Cumulative
	Charges
	Incurred
	(in millions)
Transportation Solutions	$	122
Industrial Solutions		126
Total	$	248

Pre-Fiscal 2023 Actions

During fiscal 2025, 2024, and 2023, we recorded net restructuring charges of $37 million, $36 million, and $13 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. Charges in fiscal 2025 are primarily administrative adjustments to multi-wave actions that spanned the fiscal 2023 and pre-fiscal 2023 periods.

Total Restructuring Reserves

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


	Fiscal Year End
	2025		2024

	(in millions)
Accrued and other current liabilities	$	163	$	233
Other liabilities		14		40
Restructuring reserves	$	177	$	273

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Divestitures

During fiscal 2024, we sold one business for net cash proceeds of $59 million. In connection with the divestiture, we recorded a pre-tax gain on sale of $10 million. Additionally, during fiscal 2023, we recorded a pre-tax impairment charge of $68 million when the business was reclassified to held for sale. Prior to divestiture, the business was reported in our Transportation Solutions segment.

We sold three businesses for net cash proceeds of $48 million during fiscal 2023. In connection with the divestitures, we recorded pre-tax impairment charges and a net pre-tax loss on sales, which totaled to a net charge of $9 million. Prior to divestiture, the businesses were reported in our Industrial Solutions segment.

Change in Place of Incorporation

During fiscal 2025 and 2024, we incurred costs of $11 million and $20 million, respectively, related to our change in place of incorporation from Switzerland to Ireland. See Note 1 for additional information regarding the change.

4. Acquisitions

Richards Manufacturing Co.

On April 1, 2025, we acquired 100% of Richards Manufacturing Co. (“Richards Manufacturing”), 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 acquired business has been reported as part of the energy business within our Industrial Solutions segment from the date of acquisition.

The Richards Manufacturing acquisition was accounted for under the provisions of ASC 805, Business Combinations. We have preliminarily allocated the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. We are in the process of completing the valuation of identifiable intangible assets, fixed assets, and pre-acquisition contingencies and, therefore, the fair values set forth below are subject to adjustment upon finalizing the valuations. The amount of these potential adjustments could be significant. We expect to complete the purchase price allocation during the third quarter of fiscal 2026.

The following table summarizes the preliminary allocation of the purchase price to the fair value of identifiable assets acquired and liabilities assumed at the date of acquisition, in accordance with the acquisition method of accounting:


	(in millions)
Cash and cash equivalents	$	41
Accounts receivable		47
Inventories		165
Other current assets		6
Property, plant, and equipment		62
Goodwill		1,028
Intangible assets		1,120
Other noncurrent assets		4
Total assets acquired		2,473
Accounts payable		18
Other current liabilities		14
Deferred income taxes		87
Other noncurrent liabilities		6
Total liabilities assumed		125
Net assets acquired		2,348
Cash and cash equivalents acquired		(41)
Net cash paid	$	2,307

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The fair values assigned to intangible assets were preliminarily determined through the use of the income approach, specifically the relief from royalty and the multi-period excess earnings methods. Both valuation methods rely on management judgment, including expected future cash flows resulting from existing customer relationships, customer attrition rates, contributory effects of other assets utilized in the business, peer group cost of capital and royalty rates, and other factors. The valuation of tangible assets was derived using a combination of the income, market, and cost approaches. Significant judgments used in valuing tangible assets include estimated selling prices, costs to complete, and reasonable profit. Useful lives for intangible assets were determined based upon the remaining useful economic lives of the intangible assets that are expected to contribute directly or indirectly to future cash flows.

Intangible assets acquired consisted of the following:


			Weighted-Average
			Amortization
		Amount	Period
	(in millions)		(in years)
Customer relationships	$	1,000	20
Developed technology		90	16
Trade names and trademarks		30	10
Total	$	1,120	19

The acquired intangible assets are being amortized on a straight-line basis over their expected useful lives.

Goodwill of $1,028 million was recognized in the transaction, representing the excess of the purchase price over the fair value of the tangible and intangible assets acquired and liabilities assumed. This goodwill is attributable primarily to cost savings and other synergies related to operational efficiencies including the consolidation of manufacturing, marketing, and general and administrative functions. The goodwill has been allocated to the Industrial Solutions segment and approximately $600 million is deductible primarily for U.S. tax purposes through fiscal 2040.

During fiscal 2025, Richards Manufacturing contributed net sales of $179 million and operating income of $5 million to our Consolidated Statement of Operations. The operating income included acquisition costs of $25 million, charges of $7 million associated with the amortization of acquisition-related fair value adjustments related to acquired inventories, and integration costs of $3 million.

Pro Forma Financial Information

The following unaudited pro forma financial information reflects our consolidated results of operations had the Richards Manufacturing acquisition occurred at the beginning of fiscal 2024:


	Fiscal
	2025		2024

	(in millions, except
	per share data)
Net sales	$	17,444	$	16,193
Net income		1,844		3,155
Diluted earnings per share	$	6.17	$	10.21

The pro forma financial information is based on our preliminary allocation of the purchase price and therefore subject to adjustment upon finalizing the purchase price allocation. The significant pro forma adjustments, which are described below, are net of income tax expense (benefit) at the statutory rate.

Pro forma results for fiscal 2025 were adjusted to exclude $19 million of acquisition costs. Pro forma results for fiscal 2025 were also adjusted to include $39 million of interest expense based on pro forma changes in our capital structure and $17 million of charges related to the amortization of the fair value of acquired intangible assets.

TE CONNECTIVITY PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Pro forma results for fiscal 2024 were adjusted to include $56 million of interest expense based on pro forma changes in our capital structure, $34 million of charges related to the amortization of the fair value of acquired intangible assets, $19 million of acquisition costs, and $8 million of charges related to the fair value adjustment to acquisition-date inventories.

Pro forma results do not include any anticipated synergies or other anticipated benefits of the acquisition. Accordingly, the unaudited pro forma financial information is not necessarily indicative of either future results of operations or results that might have been achieved had the Richards Manufacturing acquisition occurred at the beginning of fiscal 2024.

Other Acquisitions

We acquired two additional businesses for a combined cash purchase price of $321 million, net of cash acquired, during fiscal 2025. 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 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 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. During the quarter ended June 28, 2024, we completed a squeeze-out of the remaining minority shareholders for $5 million and the Schaffner shares were delisted from the SIX Swiss Exchange.

We acquired one business for a cash purchase price of $110 million, net of cash acquired, during fiscal 2023. The acquired business has been reported as part of our Industrial Solutions segment from the date of acquisition.

5. Inventories

Inventories consisted of the following:


	Fiscal Year End
	2025		2024

	(in millions)
Raw materials	$	420	$	328
Work in progress		1,078		1,063
Finished goods		1,201		1,126
Inventories	$	2,699	$	2,517

6. Property, Plant, and Equipment, Net

Net property, plant, and equipment consisted of the following:


	Fiscal Year End
	2025		2024

	(in millions)
Property, plant, and equipment, gross:
Land and improvements	$	138	$	120
Buildings and improvements		1,692		1,571
Machinery and equipment		9,445		8,931
Construction in process		814		659
		12,089		11,281
Accumulated depreciation		(7,777)		(7,378)
Property, plant, and equipment, net	$	4,312	$	3,903

TE CONNECTIVITY PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Depreciation expense was $648 million, $660 million, and $607 million in fiscal 2025, 2024, and 2023, respectively.

7. Goodwill

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


	Transportation		Industrial
	Solutions		Solutions		Total

	(in millions)
Balance at fiscal year end 2023(2)	$	1,543	$	3,920	$	5,463
Acquisition		—		180		180
Currency translation and other		41		117		158
Balance at fiscal year end 2024(2)		1,584		4,217		5,801
Acquisitions and purchase accounting adjustments		—		1,227		1,227
Currency translation		25		73		98
Balance at fiscal year end 2025(2)	$	1,609	$	5,517	$	7,126

(1)	In connection with the reorganization of our segments, goodwill was reallocated to reporting units using a relative fair value approach. See Notes 1 and 20 for additional information regarding our new segment structure.

(2)	At fiscal year end 2025, 2024, and 2023, accumulated impairment losses for the Transportation Solutions and Industrial Solutions segments were $3,091 million and $1,158 million, respectively.

During fiscal 2025, we completed the acquisition of Richards Manufacturing and recognized $1,028 million of goodwill which benefits the Industrial Solutions segment. During fiscal 2025 and 2024, we recognized goodwill of $199 million and $180 million, respectively, in the Industrial Solutions segment in connection with other acquisitions. See Note 4 for additional information regarding acquisitions.

We completed our annual goodwill impairment test in the fourth quarter of fiscal 2025 and determined that no impairment existed.

8. Intangible Assets, Net

Net intangible assets consisted of the following:


	Fiscal Year End
	2025						2024
	Gross				Net		Gross				Net
	Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
	Amount		Amortization		Amount		Amount		Amortization		Amount

	(in millions)
Customer relationships	$	3,033	$	(1,118)	$	1,915	$	1,901	$	(948)	$	953
Intellectual property		727		(430)		297		686		(481)		205
Other		23		(8)		15		23		(7)		16
Total	$	3,783	$	(1,556)	$	2,227	$	2,610	$	(1,436)	$	1,174

During fiscal 2025, the gross carrying amount of intangible assets increased by $1,120 million as a result of the acquisition of Richards Manufacturing. Intangible asset amortization expense was $190 million, $166 million, and $187 million for fiscal 2025, 2024, and 2023, respectively.

TE CONNECTIVITY PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

At fiscal year end 2025, the aggregate amortization expense on intangible assets is expected to be as follows:


	(in millions)
Fiscal 2026	$	227
Fiscal 2027		209
Fiscal 2028		172
Fiscal 2029		167
Fiscal 2030		157
Thereafter		1,295
Total	$	2,227

9. Accrued and Other Current Liabilities

Accrued and other current liabilities consisted of the following:


	Fiscal Year End
	2025		2024

	(in millions)
Accrued payroll and employee benefits	$	787	$	657
Dividends payable to shareholders		209		390
Restructuring reserves		163		233
Income taxes payable		153		113
Lease liability		126		128
Deferred revenue		115		58
Interest payable		62		27
Other		632		541
Accrued and other current liabilities	$	2,247	$	2,147

10. Debt

Debt was as follows:


	Fiscal Year End
	2025		2024

	(in millions)
Principal debt:
Commercial paper, at a weighted-average interest rate of 4.95% at fiscal year end 2024	$	—	$	255
0.00% euro-denominated senior notes due 2025		—		615
4.50% senior notes due 2026		500		500
3.70% senior notes due 2026		350		350
3.125% senior notes due 2027		400		400
2.50% euro-denominated senior notes due 2028		585		—
0.00% euro-denominated senior notes due 2029		643		615
4.625% senior notes due 2030		350		350
4.50% senior notes due 2031		450		—
2.50% senior notes due 2032		600		600
3.25% euro-denominated senior notes due 2033		877		—
5.00% senior notes due 2035		450		—
7.125% senior notes due 2037		477		477
Other		71		76
		5,753		4,238
Unamortized discounts, premiums, and debt issuance costs, net		(59)		(35)
Total debt	$	5,694	$	4,203

TE CONNECTIVITY PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

During fiscal 2025, Tyco Electronics Group S.A. (“TEGSA”), our wholly-owned subsidiary, issued €500 million aggregate principal amount of 2.50% senior notes due in May 2028, $450 million aggregate principal amount of 4.50% senior notes due in February 2031, €750 million aggregate principal amount of 3.25% senior notes due in January 2033, and $450 million aggregate principal amount of 5.00% senior notes due in May 2035. The notes issued during fiscal 2025 are TEGSA’s unsecured senior obligations and rank equally in right of payment with all existing and any future senior indebtedness of TEGSA and senior to any subordinated indebtedness that TEGSA may incur.

TEGSA has a five-year unsecured senior revolving credit facility (“Credit Facility”) with a maturity date of April 2029 and aggregate commitments of $1.5 billion. The Credit Facility contains provisions that allow for incremental commitments of up to $500 million and borrowings in designated currencies. TEGSA had no borrowings under the Credit Facility at fiscal year end 2025 or 2024.

Borrowings under the Credit Facility bear interest at a rate per annum equal to, at the option of TEGSA, (1) with respect to revolving loans denominated in U.S. dollars, (a) the term secured overnight financing rate (“Term SOFR”) (as defined in the Credit Facility) or (b) an alternate base rate equal to the highest of (i) Bank of America, N.A.’s base rate, (ii) the federal funds effective rate plus 1/2 of 1%, (iii) the Term SOFR for a one-month interest period plus 1%, and (iv) 1%, and (2) with respect to revolving loans determined in an alternative currency, (a) an alternative currency daily rate or (b) an alternative currency term rate, as applicable, plus, in each case, an applicable margin based upon the senior, unsecured, long-term debt rating of TEGSA. TEGSA is required to pay an annual facility fee. Based on the applicable credit ratings of TEGSA, this fee ranges from 5.0 to 12.5 basis points of the lenders’ commitments under the Credit Facility.

The Credit Facility contains a financial ratio covenant providing that if, as of the last day of each fiscal quarter, our ratio of Consolidated Total Debt to Consolidated EBITDA (as defined in the Credit Facility) for the then most recently concluded period of four consecutive fiscal quarters exceeds 3.75 (or temporarily 4.25 following a qualified acquisition) to 1.0, an Event of Default (as defined in the Credit Facility) is triggered. The Credit Facility and our other debt agreements contain other customary covenants.

Periodically, TEGSA issues commercial paper to U.S. institutional accredited investors and qualified institutional buyers in accordance with available exemptions from the registration requirements of the Securities Act of 1933 as part of our ongoing effort to maintain financial flexibility and to potentially decrease the cost of borrowings. Borrowings under the commercial paper program are backed by the Credit Facility.

Payment obligations under TEGSA’s senior notes, commercial paper, and 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.

At fiscal year end 2025, principal payments required for debt were as follows:


	(in millions)
Fiscal 2026	$	852
Fiscal 2027		402
Fiscal 2028		585
Fiscal 2029		643
Fiscal 2030		350
Thereafter		2,921
Total	$	5,753

The fair value of our debt, based on indicative valuations, was approximately $5,725 million and $4,190 million at fiscal year end 2025 and 2024, respectively.

TE CONNECTIVITY PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

11. Leases

The components of lease cost were as follows:


	Fiscal
	2025		2024		2023

	(in millions)
Operating lease cost	$	145	$	134	$	129
Variable lease cost		57		53		55
Total lease cost	$	202	$	187	$	184

Amounts recognized on the Consolidated Balance Sheets were as follows:


	Fiscal Year End
	2025			2024

	($ in millions)
Operating lease ROU assets:
Other assets	$	479		$	433
Operating lease liabilities:
Accrued and other current liabilities	$	126		$	128
Other liabilities		365			313
Total operating lease liabilities	$	491		$	441

Weighted-average remaining lease term (in years)		5.7			5.5
Weighted-average discount rate		3.4	%		3.4	%

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


	Fiscal
	2025		2024		2023

	(in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Payments for operating leases(1)	$	148	$	141	$	127

ROU assets, including modifications of existing leases, obtained in exchange for operating lease liabilities		183		180		106

(1)	These payments are included in cash flows from operating activities, primarily in changes in accrued and other current liabilities.

At fiscal year end 2025, the maturities of operating lease liabilities were as follows:


	(in millions)
Fiscal 2026	$	126
Fiscal 2027		107
Fiscal 2028		86
Fiscal 2029		62
Fiscal 2030		50
Thereafter		117
Total lease payments		548
Less: interest		(57)
Present value of lease liabilities	$	491

TE CONNECTIVITY PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

12. Commitments and Contingencies

Legal Proceedings

In the normal course of business, we are subject to various legal proceedings and claims, including patent infringement claims, product liability matters, employment disputes, disputes on agreements, other commercial disputes, environmental matters, antitrust claims, 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.

Environmental Matters

We are involved in various stages of investigation and cleanup related to environmental remediation matters at a number of sites. The ultimate cost of site cleanup is difficult to predict given the uncertainties regarding the extent of the required cleanup, the interpretation of applicable laws and regulations, and alternative cleanup methods. As of fiscal year end 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 fiscal year end 2025, we had outstanding letters of credit, letters of guarantee, and surety bonds of $219 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. Outstanding payment obligations under our supply chain finance program are included in accounts payable on our Consolidated Balance Sheets. The changes in our payment obligations were as follows:


	Fiscal
	2025
	(in millions)
Balance at beginning of fiscal year	$	105
Invoices confirmed during the fiscal year		514
Invoices paid during the fiscal year		(458)
Balance at end of fiscal year	$	161

13. Financial Instruments and Fair Value Measurements

We use derivative and non-derivative financial instruments to manage certain exposures to foreign currency, interest rate, investment, and commodity risks.

TE CONNECTIVITY PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Foreign Currency Exchange Rate Risk

As part of managing the exposure to changes in foreign currency exchange rates, we utilize cross-currency swap contracts and foreign currency forward contracts, a portion of which are designated as cash flow hedges. The objective of these contracts is to minimize impacts to cash flows and profitability due to changes in foreign currency exchange rates on intercompany and other cash transactions. We expect that significantly all of the balance in accumulated other comprehensive income (loss) associated with the cash flow hedge-designated instruments addressing foreign exchange risks will be reclassified into the Consolidated Statement of Operations within the next twelve months.

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 $4,212 million and $2,417 million at fiscal year end 2025 and 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 $5,671 million and $5,367 million at fiscal year end 2025 and 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 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 Consolidated Balance Sheets as follows:


	Fiscal Year End
	2025		2024

	(in millions)
Prepaid expenses and other current assets	$	11	$	31
Other assets		23		11
Accrued and other current liabilities		97		51
Other liabilities		193		99

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


	Fiscal
	2025		2024		2023

	(in millions)
Foreign currency exchange losses on intercompany loans and external borrowings(1)	$	(163)	$	(112)	$	(162)
Losses on cross-currency swap contracts designated as hedges of net investment(1)		(89)		(194)		(29)

(1)	Recorded as currency translation, a component of accumulated other comprehensive income (loss), and offset by changes attributable to the translation of the net investment.

Interest Rate and Investment Risk Management

We issue debt, as needed, to fund our operations and capital requirements. Such borrowings can result in interest rate exposure. To manage the interest rate exposure, we may use interest rate swap contracts to convert a portion of fixed rate debt into variable rate debt. Also, we may utilize forward starting interest rate swap contracts to manage interest rate exposure in periods prior to the anticipated issuance of fixed rate debt. We also utilize investment swap contracts to manage earnings exposure on certain nonqualified deferred compensation liabilities.

Commodity Hedges

As part of managing the exposure to certain commodity price fluctuations, we utilize commodity swap contracts. The objective of these contracts is to minimize impacts to cash flows and profitability due to changes in prices of

TE CONNECTIVITY PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

commodities used in production. These contracts had an aggregate notional value of $569 million and $488 million at fiscal year end 2025 and 2024, respectively, and were designated as cash flow hedges. These commodity swap contracts were recorded on the Consolidated Balance Sheets as follows:


	Fiscal Year End
	2025		2024

	(in millions)
Prepaid expenses and other current assets	$	73	$	52
Other assets		7		4
Accrued and other current liabilities		—		1

The impacts of our commodity swap contracts were as follows:


	Fiscal
	2025		2024		2023

	(in millions)
Gains recorded in other comprehensive income (loss)	$	78	$	102	$	31
Gains (losses) reclassified from accumulated other comprehensive income (loss) into cost of sales		54		19		(39)

We expect that significantly all of the balance in accumulated other comprehensive income (loss) associated with commodity hedges will be reclassified into the Consolidated Statement of Operations within the next twelve months.

Fair Value Measurements

Financial instruments recorded at fair value on a recurring basis, which consist of marketable securities and derivative instruments not discussed above, were immaterial at fiscal year end 2025 and 2024.

14. Retirement Plans

Defined Benefit Pension Plans

We have several contributory and noncontributory defined benefit retirement plans covering certain of our non-U.S. and U.S. employees, designed in accordance with local customs and practice.

The net periodic pension benefit cost (credit) for all non-U.S. and U.S. defined benefit pension plans was as follows:


	Non-U.S. Plans									U.S. Plans
	Fiscal									Fiscal
	2025			2024			2023			2025			2024			2023

	($ in millions)
Operating expense:
Service cost	$	31		$	28		$	29		$	7		$	7		$	9
Other (income) expense:
Interest cost		61			63			60			33			39			38
Expected returns on plan assets		(58)			(53)			(48)			(45)			(38)			(38)
Amortization of net actuarial loss		6			5			6			4			4			4
Amortization of prior service credit		(4)			(4)			(4)			—			—			—
Settlement and curtailment losses (gains) and other		5			(1)			(2)			—			—			—
Net periodic pension benefit cost (credit)	$	41		$	38		$	41		$	(1)		$	12		$	13
Weighted-average assumptions used to determine net pension benefit cost (credit) during the fiscal year:
Discount rate		3.59	%		4.13	%		3.80	%		4.94	%		6.04	%		5.53	%
Expected returns on plan assets		4.96	%		5.08	%		4.61	%		7.69	%		7.10	%		6.60	%
Rates of compensation increases		2.59	%		2.68	%		2.62	%		—	%		—	%		—	%

TE CONNECTIVITY PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table represents the changes in benefit obligation and plan assets and the net amount recognized on the Consolidated Balance Sheets for all non-U.S. and U.S. defined benefit pension plans:


	Non-U.S. Plans						U.S. Plans
	Fiscal						Fiscal
	2025			2024			2025			2024

	($ in millions)
Change in benefit obligation:
Benefit obligation at beginning of fiscal year	$	1,778		$	1,509		$	700		$	674
Service cost		31			28			7			7
Interest cost		61			63			33			39
Actuarial (gains) losses		(91)			112			(5)			57
Benefits and administrative expenses paid		(79)			(75)			(64)			(77)
Settlements and curtailments		(30)			(15)			—			—
Currency translation		36			106			—			—
Other		6			50			—			—
Benefit obligation at end of fiscal year		1,712			1,778			671			700

Change in plan assets:
Fair value of plan assets at beginning of fiscal year		1,217			1,007			607			566
Actual returns on plan assets		7			124			41			94
Employer contributions		51			45			18			24
Benefits and administrative expenses paid		(79)			(75)			(64)			(77)
Settlements		(28)			(15)			—			—
Currency translation		3			82			—			—
Other		1			49			—			—
Fair value of plan assets at end of fiscal year		1,172			1,217			602			607
Funded status	$	(540)		$	(561)		$	(69)		$	(93)

Amounts recognized on the Consolidated Balance Sheets:
Other assets	$	191		$	182		$	—		$	—
Accrued and other current liabilities		(40)			(34)			(1)			(2)
Long-term pension and postretirement liabilities		(691)			(709)			(68)			(91)
Net amount recognized	$	(540)		$	(561)		$	(69)		$	(93)

Pre-tax amounts included in accumulated other comprehensive income (loss) which have not yet been recognized in net periodic pension benefit cost:
Net actuarial loss	$	(154)		$	(204)		$	(132)		$	(137)
Prior service (cost) credit		(2)			5			—			—
Total	$	(156)		$	(199)		$	(132)		$	(137)

Weighted-average assumptions used to determine pension benefit obligation at fiscal year end:
Discount rate		4.06	%		3.59	%		5.29	%		4.94	%
Rates of compensation increases		2.61	%		2.59	%		—	%		—	%

TE CONNECTIVITY PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The pre-tax amounts recognized in accumulated other comprehensive income (loss) for all non-U.S. and U.S. defined benefit pension plans were as follows:


	Non-U.S. Plans				U.S. Plans
	Fiscal				Fiscal
	2025		2024		2025		2024

	(in millions)
Current year net actuarial gain (loss) recorded in accumulated other comprehensive income (loss)	$	41	$	(55)	$	1	$	(1)
Amortization of net actuarial loss		9		5		4		4
Current year prior service cost recorded in accumulated other comprehensive income (loss)		(2)		—		—		—
Amortization of prior service credit		(5)		(4)		—		—
	$	43	$	(54)	$	5	$	3

In fiscal 2025, unrecognized actuarial gains recorded in accumulated other comprehensive income (loss) were primarily the result of higher discount rates and favorable asset performance for our U.S. defined benefit pension plans, partially offset by unfavorable asset performance for our non-U.S. defined benefit pension plans as compared to fiscal 2024. In fiscal 2024, unrecognized actuarial losses recorded in accumulated other comprehensive income (loss) were primarily the result of lower discount rates, partially offset by favorable asset performance for our non-U.S. defined benefit pension plans as compared to fiscal 2023.

In determining the expected returns on plan assets, we consider the relative weighting of plan assets by class and individual asset class performance expectations.

The investment strategies for non-U.S. and U.S. pension plans are governed locally. Our investment strategy for our pension plans is to manage the plans on a going concern basis. Current investment policy is to achieve a reasonable return on assets, subject to a prudent level of portfolio risk, for the purpose of enhancing the security of benefits for participants. Projected returns are based primarily on pro forma asset allocation, expected long-term returns, and forward-looking estimates of active portfolio and investment management.

At fiscal year end 2025, the long-term target asset allocation in our U.S. plans’ master trust is 25% return-seeking assets and 75% liability-hedging assets. Return-seeking assets, including non-U.S. and U.S. equity securities, are assets intended to generate returns in excess of pension liability growth. Liability-hedging assets, including government and corporate bonds, are assets intended to have characteristics similar to pension liabilities and are used to better match asset cash flows with expected obligation cash flows. Asset re-allocation to meet that target is occurring over a multi-year period based on the funded status. We expect to reach our target allocation when the funded status of the plans exceeds 110%. Based on the funded status of the plans as of fiscal year end 2025, our target asset allocation is 67% return-seeking and 33% liability-hedging.

Target weighted-average asset allocation and weighted-average asset allocation for non-U.S. and U.S. pension plans were as follows:


	Non-U.S. Plans						U.S. Plans
			Fiscal		Fiscal				Fiscal		Fiscal
			Year End		Year End				Year End		Year End
	Target		2025		2024		Target		2025		2024
Asset category:
Equity securities	28	%	36	%	40	%	67	%	52	%	54	%
Fixed income	44		37		36		33		48		46
Other	28		27		24		—		—		—
Total	100	%	100	%	100	%	100	%	100	%	100	%

TE CONNECTIVITY PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Our ordinary shares are not a direct investment of our pension funds; however, the pension funds may indirectly include our shares. The aggregate amount of our ordinary shares would not be considered material relative to the total pension fund assets.

Our funding policy is to make contributions in accordance with the laws and customs of the various countries in which we operate as well as to make discretionary voluntary contributions from time to time. We expect to make the minimum required contributions of approximately $55 million and $15 million to our non-U.S. and U.S. pension plans, respectively, in fiscal 2026. We may also make voluntary contributions at our discretion.

At fiscal year end 2025, benefit payments, which reflect future expected service, as appropriate, are expected to be paid as follows:


	Non-U.S. Plans		U.S. Plans

	(in millions)
Fiscal 2026	$	103	$	61
Fiscal 2027		101		60
Fiscal 2028		104		60
Fiscal 2029		110		58
Fiscal 2030		115		57
Fiscal 2031-2035		589		261

Presented below is the accumulated benefit obligation for all non-U.S. and U.S. pension plans as well as additional information related to plans with an accumulated benefit obligation in excess of plan assets and plans with a projected benefit obligation in excess of plan assets.


	Non-U.S. Plans				U.S. Plans
	Fiscal Year End				Fiscal Year End
	2025		2024		2025		2024

	(in millions)
Accumulated benefit obligation	$	1,643	$	1,700	$	671	$	700
Pension plans with accumulated benefit obligations in excess of plan assets:
Accumulated benefit obligation		742		743		671		700
Fair value of plan assets		50		50		602		607
Pension plans with projected benefit obligations in excess of plan assets:
Projected benefit obligation		856		856		671		700
Fair value of plan assets		123		113		602		607

We value our pension assets based on the fair value hierarchy of ASC 820, Fair Value Measurements and Disclosures. Details of the fair value hierarchy are described in Note 2. The following table presents our defined benefit pension plans’ asset categories and their associated fair value within the fair value hierarchy:


	Fiscal Year End 2025
	Non-U.S. Plans								U.S. Plans
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total

	(in millions)
Equity:
Commingled equity funds(1)	$	—	$	257	$	—	$	257	$	—	$	182	$	—	$	182
Fixed income:
Commingled fixed income funds(2)		—		648		—		648		—		257		—		257
Other(3)		—		180		—		180		—		31		—		31
Subtotal	$	—	$	1,085	$	—		1,085	$	—	$	470	$	—		470
Items to reconcile to fair value of plan assets(4)								87								132
Fair value of plan assets							$	1,172							$	602

TE CONNECTIVITY PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


	Fiscal Year End 2024
	Non-U.S. Plans								U.S. Plans
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total

	(in millions)
Equity:
Commingled equity funds(1)	$	—	$	205	$	—	$	205	$	—	$	184	$	—	$	184
Fixed income:
Commingled fixed income funds(2)		—		711		—		711		—		275		—		275
Other(3)		—		181		—		181		—		2		—		2
Subtotal	$	—	$	1,097	$	—		1,097	$	—	$	461	$	—		461
Items to reconcile to fair value of plan assets(4)								120								146
Fair value of plan assets							$	1,217							$	607

(1)	Commingled equity funds are pooled investments in multiple equity-type securities. Fair value is calculated as the closing price of the underlying investments, an observable market condition, divided by the number of shares of the fund outstanding.

(2)	Commingled fixed income funds are pooled investments in multiple fixed income-type securities. Fair value is calculated as the closing price of the underlying investments, an observable market condition, divided by the number of shares of the fund outstanding.

(3)

Other investments are composed of insurance contracts, derivatives, short-term investments, and structured products such as collateralized obligations and mortgage- and asset-backed securities. Insurance contracts are valued using cash surrender value, or face value of the contract if a cash surrender value is unavailable (level 2), as these values represent the amount that the plan would receive on termination of the underlying contract. Derivatives, short-term investments, and structured products are marked to fair value using models that are supported by observable market-based data (level 2).

(4)	Items to reconcile to fair value of plan assets include certain investments containing no significant redemption restrictions that were measured at net asset value (“NAV”) using the NAV practical expedient available in ASC 820 and amounts receivable or payable for unsettled transactions and cash balances, both of which are considered to be carried at book value.

Defined Contribution Retirement Plans

We maintain several defined contribution retirement plans, the most significant of which is located in the U.S. These plans include 401(k) matching programs, as well as qualified and nonqualified profit sharing and share bonus retirement plans. Expense for the defined contribution plans is computed as a percentage of participants’ compensation and was $53 million, $57 million, and $56 million for fiscal 2025, 2024, and 2023, respectively.

Deferred Compensation Plans

We maintain nonqualified deferred compensation plans, which permit eligible employees to defer a portion of their compensation. A record-keeping account is set up for each participant and the participant chooses from a variety of measurement funds for the deemed investment of their accounts. The measurement funds correspond to several funds in our 401(k) plans and the account balance fluctuates with the investment returns on those funds. At fiscal year end 2025 and 2024, total deferred compensation liabilities were $310 million and $285 million, respectively, and were recorded in other liabilities on the Consolidated Balance Sheets. See Note 13 for additional information regarding our risk management strategy related to deferred compensation liabilities.

Postretirement Benefit Plans

In addition to providing pension and 401(k) benefits, we also provide certain health care coverage continuation for qualifying retirees from the date of retirement to age 65 or lifetime, as applicable. The accumulated postretirement benefit obligation was $10 million and $11 million at fiscal year end 2025 and 2024, respectively, and the underfunded status of the postretirement benefit plans was included primarily in long-term pension and postretirement liabilities on the Consolidated Balance Sheets. Activity during fiscal 2025, 2024, and 2023 was not significant.

TE CONNECTIVITY PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

15. Income Taxes

Income Tax Expense (Benefit)

Significant components of the income tax expense (benefit) were as follows:


	Fiscal
	2025		2024		2023

	(in millions)
Current income tax expense:
U.S. Federal	$	22	$	23	$	23
U.S. State		6		4		—
Non-U.S.		395		365		418
		423		392		441
Deferred income tax expense (benefit):
U.S. Federal		47		(49)		(90)
U.S. State		5		3		(6)
Non-U.S.		886		(743)		19
		938		(789)		(77)
Income tax expense (benefit)	$	1,361	$	(397)	$	364

The U.S. and non-U.S. components of income from continuing operations before income taxes were as follows:


	Fiscal
	2025		2024		2023

	(in millions)
U.S.	$	(70)	$	(96)	$	(137)
Non-U.S.		3,274		2,893		2,405
Income from continuing operations before income taxes	$	3,204	$	2,797	$	2,268

The reconciliation between U.S. federal income taxes at the statutory rate and income tax expense (benefit) was as follows:


	Fiscal
	2025		2024		2023

	(in millions)
Notional U.S. federal income tax expense at the statutory rate(1)	$	673	$	587	$	476
Adjustments to reconcile to the income tax expense (benefit):
U.S. state income tax expense (benefit), net		9		6		(5)
Tax law changes		—		(260)		(1)
Tax credits		(24)		(982)		(13)
Non-U.S. net (earnings) loss(2)		40		(15)		(58)
Change in accrued income tax liabilities		38		160		47
Valuation allowance		617		328		(47)
Legal entity restructurings and intercompany transactions		2		(234)		(1)
Divestitures		(1)		—		(17)
Excess tax benefits from share-based payments		(22)		(8)		(6)
Other		29		21		(11)
Income tax expense (benefit)	$	1,361	$	(397)	$	364

(1)	The U.S. federal statutory rate was 21% for fiscal 2025, 2024, and 2023.

(2)	Excludes items which are separately presented.

TE CONNECTIVITY PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The income tax expense for fiscal 2025 included $574 million of income tax expense related to a net increase in the valuation allowance for certain deferred tax assets associated with a ten-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 the ten-year tax credit obtained by a Swiss subsidiary. In addition, the income tax expense for fiscal 2025 included $44 million of income tax expense related to an increase in the valuation allowance for certain U.S. tax loss and credit carryforwards.

The income tax benefit for fiscal 2024 included a $636 million net income tax benefit associated with the $972 million ten-year tax credit obtained by a Swiss subsidiary discussed above, reduced by a $336 million valuation allowance related to the amount of the tax credit that was not expected to be realized. In addition, the income tax benefit for fiscal 2024 included 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, as well as 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 income tax expense for fiscal 2023 included a $49 million income tax benefit related to a decrease in the valuation allowance for certain U.S. tax loss and credit carryforwards.

Deferred Tax Assets and Liabilities

Deferred income taxes result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. The components of the net deferred income tax asset were as follows:


	Fiscal Year End
	2025		2024

	(in millions)
Deferred tax assets:
Accrued liabilities and reserves	$	461	$	417
Tax loss, credit, and other tax attribute carryforwards		9,638		10,075
Inventories		61		81
Intangible assets		883		884
Pension and postretirement benefits		57		84
Deferred revenue		5		10
Interest		562		524
Lease liabilities		92		85
Other		4		3
Gross deferred tax assets		11,763		12,163
Valuation allowance		(8,821)		(8,285)
Deferred tax assets, net of valuation allowance		2,942		3,878

Deferred tax liabilities:
Property, plant, and equipment		(108)		(93)
Write-down of investments in subsidiaries		(231)		(244)
Lease ROU assets		(90)		(84)
Other		(204)		(159)
Total deferred tax liabilities		(633)		(580)

Net deferred tax assets	$	2,309	$	3,298

TE CONNECTIVITY PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Our tax loss, credit, and other tax attribute carryforwards (tax effected) at fiscal year end 2025 were as follows:


	Expiration Period
			Fiscal 2031
	Through		Through		No
	Fiscal 2030		Fiscal 2045		Expiration		Total

	(in millions)
U.S. Federal:
Net operating loss	$	138	$	203	$	58	$	399
Tax credit		46		109		—		155
U.S. State:
Net operating loss		14		13		6		33
Tax credit		2		1		6		9
Non-U.S.:
Net operating loss		47		6,428		1,281		7,756
Tax credit		1		1,033		1		1,035
Notional interest deduction		—		—		159		159
Capital loss		—		2		90		92
Total tax loss, credit, and other tax attribute carryforwards	$	248	$	7,789	$	1,601	$	9,638

The valuation allowance for deferred tax assets of $8,821 million and $8,285 million at fiscal year end 2025 and 2024, respectively, related principally to the uncertainty of the utilization of certain deferred tax assets, primarily tax loss, credit, and other tax attribute carryforwards in various jurisdictions. During fiscal 2025, the valuation allowance increased primarily, as discussed above, by $574 million related to the portion of a tax credit obtained by a Swiss subsidiary in fiscal 2024 not expected to be realized as a result of new guidance issued by the OECD in January 2025. We believe that we will generate sufficient future taxable income to realize the income tax benefits related to the remaining net deferred tax assets on the Consolidated Balance Sheet.

We have provided income taxes for earnings that are currently distributed as well as the taxes associated with several subsidiaries’ earnings that are expected to be distributed in the future. No additional provision has been made for Irish or non-Irish income taxes on the undistributed earnings of subsidiaries or for unrecognized deferred tax liabilities for temporary differences related to basis differences in investments in subsidiaries, as such earnings are expected to be permanently reinvested, the investments are essentially permanent in duration, or we have concluded that no additional tax liability will arise as a result of the distribution of such earnings. As of fiscal year end 2025, certain subsidiaries had approximately $37.7 billion of cumulative undistributed earnings that have been retained indefinitely and reinvested in our global manufacturing operations, including working capital; property, plant, and equipment; intangible assets; and research and development activities. A liability could arise if our intention to permanently reinvest such earnings were to change and amounts are distributed by such subsidiaries or if such subsidiaries are ultimately disposed. It is not practicable to estimate the additional income taxes related to permanently reinvested earnings or the basis differences related to investments in subsidiaries. As of fiscal year end 2025, we had approximately $3.5 billion of cash, cash equivalents, and intercompany deposits, principally in our subsidiaries, that we have the ability to distribute to TEGSA, our Luxembourg subsidiary, which is the obligor of substantially all of our debt, and to TE Connectivity plc, our Irish parent company, but we consider to be permanently reinvested. We estimate that an immaterial amount of tax expense would be recognized on the Consolidated Financial Statements if our intention to permanently reinvest these amounts were to change. Our current plans do not demonstrate a need to repatriate cash, cash equivalents, and intercompany deposits that are designated as permanently reinvested in order to fund our operations, including investing and financing activities.

TE CONNECTIVITY PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Uncertain Tax Positions

The following table summarizes the activity related to unrecognized income tax benefits:


	Fiscal
	2025		2024		2023

	(in millions)
Balance at beginning of fiscal year	$	652	$	454	$	287
Additions for tax positions related to prior years		6		8		78
Reductions for tax positions related to prior years		(18)		(4)		(1)
Additions for tax positions related to the current year		97		214		107
Settlements		(2)		(5)		(2)
Reductions due to lapse of applicable statutes of limitations		(16)		(15)		(15)
Balance at end of fiscal year	$	719	$	652	$	454

The total amount of unrecognized tax benefits that, if recognized, would reduce income tax expense and the effective tax rate were $533 million, $485 million, and $327 million at fiscal year end 2025, 2024, and 2023, respectively.

We record accrued interest and penalties related to uncertain tax positions as part of income tax expense (benefit). As of fiscal year end 2025 and 2024, we had $89 million and $80 million, respectively, of accrued interest and penalties related to uncertain tax positions on the Consolidated Balance Sheets, recorded primarily in income taxes. During fiscal 2025, 2024, and 2023, we recognized income tax expense of $9 million, $15 million, and $11 million, respectively, related to interest and penalties on the Consolidated Statements of Operations.

We file income tax returns on a unitary, consolidated, or stand-alone basis in multiple state and local jurisdictions, which generally have statutes of limitations ranging from 3 to 4 years. Various state and local income tax returns are currently in the process of examination or administrative appeal.

Our non-U.S. subsidiaries file income tax returns in the countries in which they have operations. Generally, these countries have statutes of limitations ranging from 3 to 10 years. Various non-U.S. subsidiary income tax returns are currently in the process of examination by taxing authorities.

TE CONNECTIVITY PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of fiscal year end 2025, under applicable statutes, the following tax years remained subject to examination in the major tax jurisdictions indicated:


Jurisdiction		Open Years
Brazil		2020 through 2025
China		2015 through 2025
Czech Republic		2017 through 2025
France		2018 through 2025
Germany		2015 through 2025
Hong Kong		2019 through 2025
India		2012 through 2025
Ireland		2020 through 2025
Italy		2020 through 2025
Japan		2019 through 2025
Luxembourg		2020 through 2025
Mexico		2020 through 2025
Morocco		2022 through 2025
Singapore		2020 through 2025
South Korea		2019 through 2025
Spain		2021 through 2025
Switzerland		2021 through 2025
Thailand		2023 through 2025
United Kingdom		2023 through 2025
U.S.—federal		2022 through 2025

In most jurisdictions, taxing authorities retain the ability to review prior tax years and to adjust any net operating loss and tax credit carryforwards from these years that are utilized in a subsequent period.

Although it is difficult to predict the timing or results of our worldwide examinations, we estimate that approximately $130 million of unrecognized income tax benefits, excluding the impact relating to accrued interest and penalties, could be resolved within the next twelve months.

We are not aware of any other matters that would result in significant changes to the amount of unrecognized income tax benefits reflected on the Consolidated Balance Sheet as of fiscal year end 2025.

Other Income Tax Matters

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 elements of the 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 a ten-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 fiscal 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. We continue to closely monitor the evolving global minimum tax framework and assess the implications in the jurisdictions in which we operate.

TE CONNECTIVITY PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

One Big Beautiful Bill Act (“OBBBA”)

On July 4, 2025, the OBBBA was enacted. The OBBBA includes significant changes to U.S. tax law, including modifications to international tax provisions, making bonus depreciation permanent, enabling domestic research cost expensing, and adjusting the business interest expense limitation. We do not believe the implications of the OBBBA will have a material impact on our Consolidated Financial Statements.

16. Earnings Per Share

The weighted-average number of shares outstanding used in the computations of basic and diluted earnings per share were as follows:


	Fiscal
	2025	2024	2023

	(in millions)
Basic	297	307	315
Dilutive impact of share-based compensation arrangements	2	2	2
Diluted	299	309	317

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 shares and inclusion would be antidilutive:

17. Shareholders’ Equity and Redeemable Noncontrolling Interest

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 shareholder 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

At fiscal year end 2025, approximately 8 million ordinary shares were held in treasury. At fiscal year end 2024, approximately 17 million common shares were held in treasury, all of which were owned by one of our subsidiaries. Shares held both directly by us and by our subsidiary are presented as treasury shares on the Consolidated Balance Sheets.

TE CONNECTIVITY PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

All treasury shares held as of September 27, 2024 were cancelled at the beginning of fiscal 2025 following our change in place of incorporation. See Note 1 for additional information regarding our change in place of incorporation.

In fiscal 2024 and 2023, our shareholders approved the cancellation of six million and eight and a half million shares, respectively, purchased under our share repurchase program. These capital reductions by cancellation of shares were subject to a notice period, filing with the commercial register in Switzerland, and other requirements.

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 shares were re-acquired and cancelled following the merger. No preferred shares and no ordinary class A shares were outstanding at September 26, 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 September 26, 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 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.

As an Irish company, dividends are made from accumulated realized profits as defined under Irish company law. As of fiscal year end 2025, Irish accumulated realized profits were approximately $47 billion.

Dividends

We paid cash dividends to shareholders of $2.72, $2.48, and $2.30 per ordinary/common share in fiscal 2025, 2024, and 2023, respectively.

Following our change in place of incorporation, dividends on our ordinary shares, if any, may be declared on a quarterly basis by our board of directors, as provided by Irish law. Shareholder approval is no longer required for interim dividends.

In September 2025, our board of directors declared a regular quarterly cash dividend of $0.71 per ordinary share, payable on December 12, 2025, to shareholders of record on November 21, 2025. At fiscal year end 2025 and 2024, dividends payable to shareholders of $209 million and $390 million, respectively, were recorded in accrued and other current liabilities on the Consolidated Balance Sheets.

Share Repurchase Program

In fiscal 2025, our board of directors authorized an increase of $2.5 billion in our share repurchase program. Shares repurchased under the share repurchase program were as follows:


	Fiscal
	2025		2024		2023

	(in millions)
Number of ordinary/common shares repurchased		8		14		8
Repurchase value	$	1,356	$	1,991	$	946

TE CONNECTIVITY PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

At fiscal year end 2025, we had $1.4 billion of availability remaining under our share repurchase authorization.

Redeemable Noncontrolling Interest

We owned approximately 71% of our First Sensor AG (“First Sensor”) subsidiary as of fiscal year end 2025. The noncontrolling interest holders can elect either (1) to remain First Sensor shareholders and receive recurring annual compensation of €0.56 per First Sensor share or (2) to put their First Sensor shares in exchange for compensation of €33.27 per First Sensor share. As the exercise of the put right by First Sensor noncontrolling interest shareholders is not within our control, our First Sensor noncontrolling interest balance is recorded as redeemable noncontrolling interest outside of equity on the Consolidated Balance Sheets as of fiscal year end 2025 and 2024.

18. Accumulated Other Comprehensive Income (Loss)

The changes in each component of accumulated other comprehensive income (loss) were as follows:


	Foreign		Unrecognized		Gains (Losses)		Accumulated
	Currency		Pension and		on Cash		Other
	Translation		Postretirement		Flow		Comprehensive
	Adjustments(1)		Benefit Costs		Hedges		Income (Loss)

	(in millions)
Balance at fiscal year end 2022	$	(177)	$	(216)	$	(102)	$	(495)
Other comprehensive income, net of tax:
Other comprehensive income before reclassifications		251		21		31		303
Amounts reclassified from accumulated other comprehensive income (loss)		10		4		38		52
Income tax expense		—		(5)		(4)		(9)
Other comprehensive income, net of tax		261		20		65		346
Less: other comprehensive income attributable to noncontrolling interests		(9)		—		—		(9)
Balance at fiscal year end 2023	$	75	$	(196)	$	(37)	$	(158)
Other comprehensive income (loss), net of tax:
Other comprehensive income (loss) before reclassifications		130		(56)		102		176
Amounts reclassified from accumulated other comprehensive income (loss)		1		4		(18)		(13)
Income tax (expense) benefit		—		15		(8)		7
Other comprehensive income (loss), net of tax		131		(37)		76		170
Less: other comprehensive income attributable to noncontrolling interests		(7)		—		—		(7)
Balance at fiscal year end 2024	$	199	$	(233)	$	39	$	5
Other comprehensive income (loss), net of tax:
Other comprehensive income (loss) before reclassifications		(46)		40		77		71
Amounts reclassified from accumulated other comprehensive income (loss)		—		8		(53)		(45)
Income tax expense		—		(15)		(3)		(18)
Other comprehensive income (loss), net of tax		(46)		33		21		8
Less: other comprehensive income attributable to noncontrolling interests		(7)		—		—		(7)
Balance at fiscal year end 2025	$	146	$	(200)	$	60	$	6

(1)	Includes hedges of net investment foreign currency exchange gains or losses which offset foreign currency exchange losses or gains attributable to the translation of the net investments.

TE CONNECTIVITY PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

19. Share Plans

Our equity compensation plans, of which the 2024 Stock and Incentive Plan, amended and restated as of September 30, 2024 (the “2024 Plan”), is the primary plan, provide for the award of annual performance bonuses and long-term performance awards, including share options; restricted, performance, and deferred share units; and other share-based awards (collectively, “Awards”) and allow for the use of unissued shares or treasury shares to be used to satisfy such Awards. As of fiscal year end 2025, the 2024 Plan provided for a maximum of 20 million ordinary shares to be issued as Awards, subject to adjustment as provided under the terms of the plan. A total of 18 million of the shares remained available for issuance under the 2024 Plan as of fiscal year end 2025.

Share-Based Compensation Expense

Share-based compensation expense, which was included in selling, general, and administrative expenses on the Consolidated Statements of Operations, was as follows:


	Fiscal
	2025		2024		2023

	(in millions)
Share-based compensation expense	$	149	$	127	$	123

We recognized a related tax benefit associated with our share-based compensation arrangements of $29 million, $25 million, and $25 million in fiscal 2025, 2024, and 2023, respectively.

Restricted Share Awards

Restricted share awards, which are generally in the form of restricted share units, are granted subject to certain restrictions. Conditions of vesting are determined at the time of grant. All restrictions on an award will lapse upon death or disability of the employee. If the employee satisfies retirement requirements, all or a portion of the award may vest, depending on the terms and conditions of the particular grant. Recipients of restricted share units have no voting rights, but do receive dividend equivalents. For grants that vest through passage of time, the fair value of the award at the time of the grant is amortized to expense over the period of vesting. The fair value of restricted share awards is determined based on the closing value of our shares on the grant date. Restricted share awards generally vest in increments over a period of four years as determined by the management development and compensation committee of our board of directors.

Restricted share award activity was as follows:


		Weighted-Average
		Grant-Date
	Shares	Fair Value
Nonvested at fiscal year end 2024	1,429,201	$	133.29
Granted	623,197		153.48
Vested	(598,705)		133.56
Forfeited	(127,510)		137.10
Nonvested at fiscal year end 2025	1,326,183	$	142.44

The weighted-average grant-date fair value of restricted share awards granted during fiscal 2025, 2024, and 2023 was $153.48, $135.32, and $124.92, respectively.

The total fair value of restricted share awards that vested during fiscal 2025, 2024, and 2023 was $80 million, $73 million, and $54 million, respectively.

As of fiscal year end 2025, there was $91 million of unrecognized compensation expense related to nonvested restricted share awards, which is expected to be recognized over a weighted-average period of 1.7 years.

TE CONNECTIVITY PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Performance Share Awards

Performance share awards, which are generally in the form of performance share units, are granted with pay-out subject to vesting requirements and certain performance conditions that are determined at the time of grant. Based on our performance, the pay-out of performance share units can range from 0% to 200% of the number of units originally granted. The grant-date fair value of performance share awards is expensed over the period of performance once achievement of the performance criteria is deemed probable. Recipients of performance share units have no voting rights but do receive dividend equivalents. Performance share awards generally vest after a period of three years as determined by the management development and compensation committee of our board of directors.

Performance share award activity was as follows:


		Weighted-Average
		Grant-Date
	Shares	Fair Value
Outstanding at fiscal year end 2024	467,998	$	136.11
Granted	160,802		153.44
Vested	(140,229)		157.49
Forfeited	(2,343)		131.77
Outstanding at fiscal year end 2025	486,228	$	135.69

The weighted-average grant-date fair value of performance share awards granted during fiscal 2025, 2024, and 2023 was $153.44, $129.05, and $120.06, respectively.

The total fair value of performance share awards that vested during fiscal 2025, 2024, and 2023 was $22 million, $20 million, and $17 million, respectively.

As of fiscal year end 2025, there was $30 million of unrecognized compensation expense related to nonvested performance share awards, which is expected to be recognized over a weighted-average period of 1.1 years.

Share Options

Share options are granted to purchase our shares at prices which are equal to or greater than the market price of the shares on the date the option is granted. Conditions of vesting are determined at the time of grant. All restrictions on the award will lapse upon death or disability of the employee. If the employee satisfies retirement requirements, all or a portion of the award may vest, depending on the terms and conditions of the particular grant. Options generally vest and become exercisable in equal annual installments over a period of four years and expire ten years after the date of grant.

Share option award activity was as follows:


				Weighted-Average
		Weighted-Average		Remaining	Aggregate
		Exercise		Contractual	Intrinsic
	Shares	Price		Term	Value
				(in years)	(in millions)
Outstanding at fiscal year end 2024	5,383,285	$	112.33
Granted	733,000		153.11
Exercised	(1,903,343)		94.21
Forfeited	(96,346)		137.72
Outstanding at fiscal year end 2025	4,116,596	$	127.38	6.5	$	369
Vested and expected to vest at fiscal year end 2025	4,051,465	$	127.12	6.5	$	364
Exercisable at fiscal year end 2025	2,213,966	$	116.03	5.2	$	224

The weighted-average exercise price of share option awards granted during fiscal 2025, 2024, and 2023 was $153.11, $131.86, and $124.56, respectively.

TE CONNECTIVITY PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The total intrinsic value of options exercised during fiscal 2025, 2024, and 2023 was $157 million, $59 million, and $30 million, respectively. We received cash related to the exercise of options of $182 million, $89 million, and $43 million in fiscal 2025, 2024, and 2023, respectively.

As of fiscal year end 2025, there was $26 million of unrecognized compensation expense related to nonvested share options granted under our share option plans, which is expected to be recognized over a weighted-average period of 1.5 years.

Share-Based Compensation Assumptions

The grant-date fair value of each share option grant was estimated using the Black-Scholes-Merton option pricing model. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs. We employ our historical share volatility when calculating the grant-date fair value of our share option grants using the Black-Scholes-Merton option pricing model. Currently, we do not have exchange-traded options of sufficient duration to employ an implied volatility assumption in the calculation and therefore rely solely on the historical volatility calculation. The average expected life was based on the contractual term of the option and expected employee exercise and post-vesting employment termination behavior. The risk-free interest rate was based on U.S. Treasury zero-coupon issues with a remaining term that approximated the expected life assumed at the date of grant. The expected annual dividend per share was based on our expected dividend rate. The recognized share-based compensation expense was net of estimated forfeitures, which are based on voluntary termination behavior as well as an analysis of actual option forfeitures.

The weighted-average grant-date fair value of options granted and the weighted-average assumptions we used in the Black-Scholes-Merton option pricing model were as follows:


	Fiscal
	2025			2024			2023
Weighted-average grant-date fair value	$	46.38		$	39.79		$	35.90

Assumptions:
Expected share price volatility		31	%		31	%		31	%
Risk-free interest rate		4.4	%		4.6	%		4.0	%
Expected annual dividend per share	$	2.60		$	2.36		$	2.24
Expected life of options (in years)		5.3			5.3			5.1

20. Segment and Geographic Data

Effective for fiscal 2025, we reorganized our management and segments to align the organization around our current 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. We now operate through two reportable segments: Transportation Solutions and Industrial Solutions. Our segments are organized based on several factors, including differences in markets, products, and customers. See Note 1 for a description of our segments. The following segment information reflects the new segment reporting structure. Prior period segment results have been recast to conform to the new segment structure.

Segment performance is evaluated by our chief operating decision maker (“CODM”), the Chief Executive Officer, based primarily on net sales and operating income. On a regular basis, the CODM considers segment results in combination with budget-to-actual variances, segment performance reviews, trends and forecasts, and the overall economic environment to assess segment performance, make decisions, and determine how to allocate capital and other resources to the segments.

Costs specific to a segment are charged to the segment, and corporate expenses, such as headquarters administrative costs, are allocated to the segments based on each segment’s share of total operating income. Intersegment sales are not material. Corporate assets are allocated to the segments based on each segment’s share of total segment assets.

TE CONNECTIVITY PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

No single customer accounted for a significant amount of our net sales in fiscal 2025, 2024, or 2023.

As we are not organized by product or service, it is not practicable to disclose net sales by product or service.

Net sales by segment and industry end market were as follows:


	Fiscal
	2025		2024		2023

	(in millions)
Transportation Solutions:
Automotive	$	7,052	$	7,039	$	7,038
Commercial transportation		1,425		1,456		1,525
Sensors		911		986		1,112
Total Transportation Solutions		9,388		9,481		9,675
Industrial Solutions:
Digital data networks		2,208		1,274		1,162
Automation and connected living		2,147		1,994		2,352
Aerospace, defense, and marine		1,483		1,344		1,178
Energy		1,344		919		883
Medical		692		833		784
Total Industrial Solutions		7,874		6,364		6,359
Total	$	17,262	$	15,845	$	16,034

Net sales by geographic region and segment were as follows:


	Fiscal
	2025		2024		2023

	(in millions)
Asia–Pacific:
Transportation Solutions	$	4,118	$	3,709	$	3,447
Industrial Solutions		2,434		1,658		1,709
Total Asia–Pacific		6,552		5,367		5,156
Europe/Middle East/Africa (“EMEA”):
Transportation Solutions		3,282		3,600		3,897
Industrial Solutions		2,460		2,299		2,311
Total EMEA		5,742		5,899		6,208
Americas:
Transportation Solutions		1,988		2,172		2,331
Industrial Solutions		2,980		2,407		2,339
Total Americas		4,968		4,579		4,670
Total	$	17,262	$	15,845	$	16,034

TE CONNECTIVITY PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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


	Transportation		Industrial
	Solutions		Solutions		Total

	(in millions)
As of or for the fiscal year ended September 26, 2025
Net sales	$	9,388	$	7,874	$	17,262
Less:
Cost of sales		6,151		5,032		11,183
Selling, general, and administrative expenses		892		974		1,866
Research, development, and engineering expenses		452		377		829
Other segment items(1)		75		98		173
Operating income	$	1,818	$	1,393	$	3,211

Depreciation	$	405	$	243	$	648
Amortization		70		120		190
Capital expenditures		495		441		936
Segment assets(2)		5,975		4,439		10,414
As of or for the fiscal year ended September 27, 2024
Net sales	$	9,481	$	6,364	$	15,845
Less:
Cost of sales		6,220		4,169		10,389
Selling, general, and administrative expenses		874		858		1,732
Research, development, and engineering expenses		440		301		741
Other segment items(1)		67		120		187
Operating income	$	1,880	$	916	$	2,796

Depreciation	$	451	$	209	$	660
Amortization		71		95		166
Capital expenditures		431		249		680
Segment assets(2)		5,758		3,717		9,475
As of or for the fiscal year ended September 29, 2023
Net sales	$	9,675	$	6,359	$	16,034
Less:
Cost of sales		6,702		4,277		10,979
Selling, general, and administrative expenses		840		830		1,670
Research, development, and engineering expenses		432		276		708
Other segment items(1)		214		159		373
Operating income	$	1,487	$	817	$	2,304

Depreciation	$	398	$	209	$	607
Amortization		92		95		187
Capital expenditures		471		261		732
Segment assets(2)		5,762		3,511		9,273

(1)	Other segment items consist of acquisition and integration costs and net restructuring and other charges.

(2)	Segment assets are composed of accounts receivable, inventories, and net property, plant, and equipment.

TE CONNECTIVITY PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table presents a reconciliation of segment assets to total assets:


	Fiscal Year End
	2025		2024		2023

	(in millions)
Total segment assets	$	10,414	$	9,475	$	9,273
Other current assets		1,864		2,059		2,373
Other noncurrent assets		12,803		11,320		10,066
Total assets	$	25,081	$	22,854	$	21,712

Net sales and net property, plant, and equipment by geographic region were as follows:


							Property, Plant, and
	Net Sales(1)						Equipment, Net
	Fiscal						Fiscal Year End
	2025		2024		2023		2025		2024		2023

	(in millions)
Asia–Pacific:
China	$	4,610	$	3,571	$	3,182	$	970	$	844	$	794
Other Asia–Pacific		1,942		1,796		1,974		373		332		294
Total Asia–Pacific		6,552		5,367		5,156		1,343		1,176		1,088
EMEA:
Switzerland		3,860		3,906		4,111		15		7		6
Germany		193		236		405		592		586		637
Other EMEA		1,689		1,757		1,692		1,134		1,060		965
Total EMEA		5,742		5,899		6,208		1,741		1,653		1,608
Americas:
U.S.		4,408		4,020		4,107		1,085		953		933
Other Americas		560		559		563		143		121		125
Total Americas		4,968		4,579		4,670		1,228		1,074		1,058
Total	$	17,262	$	15,845	$	16,034	$	4,312	$	3,903	$	3,754

(1)	Net sales to external customers are attributed to individual countries based on the legal entity that records the sale.

TE CONNECTIVITY PLC

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

Fiscal Years Ended September 26, 2025, September 27, 2024, and September 29, 2023


			Additions
	Balance at		Charged to		Acquisitions,		Write-offs		Balance at
	Beginning of		Costs and		Divestitures,		and		End of
Description	Fiscal Year		Expenses		and Other		Deductions		Fiscal Year

	(in millions)
Fiscal 2025:
Allowance for doubtful accounts receivable	$	32	$	22	$	1	$	(11)	$	44
Valuation allowance on deferred tax assets		8,285		954		—		(418)		8,821

Fiscal 2024:
Allowance for doubtful accounts receivable	$	30	$	15	$	2	$	(15)	$	32
Valuation allowance on deferred tax assets		7,416		916		—		(47)		8,285

Fiscal 2023:
Allowance for doubtful accounts receivable	$	45	$	(1)	$	—	$	(14)	$	30
Valuation allowance on deferred tax assets		7,112		406		—		(102)		7,416

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