Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and the accompanying notes included elsewhere in this Annual Report. The following discussion may contain forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include those factors discussed below and elsewhere in this Annual Report, particularly in “Part I. Item 1A. Risk Factors” and “Forward-Looking Information.”

Our Consolidated Financial Statements have been prepared in U.S. dollars, in accordance with accounting principles generally accepted in the U.S. (“GAAP”).

Discussion of our financial condition and results of operations for fiscal 2026 compared to fiscal 2025 is presented below. Discussion of our financial condition and results of operations for fiscal 2025 compared to fiscal 2024 can be found in “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report for the fiscal year ended September 26, 2025.

The following discussion includes organic net sales growth (decline) which is a non-GAAP financial measure. See “Non-GAAP Financial Measure” for additional information regarding this measure.

Overview

We are 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.

Change in Place of Incorporation

On September 30, 2024, TE Connectivity Ltd., our former parent entity, merged with and into TE Connectivity plc, a public limited company incorporated under Irish law and the surviving entity, in order to effect our change in jurisdiction of incorporation from Switzerland to Ireland. Effective beginning in fiscal 2025, we are organized under the laws of Ireland.

Summary of Fiscal 2026 Performance

	●	Our fiscal 2026 net sales increased 15.2% from fiscal 2025 due to sales growth in both the Industrial Solutions and Transportation Solutions segments. On an organic basis, our net sales increased 11.9% in fiscal 2026 as compared to fiscal 2025.

	●	Our net sales by segment were as follows:

	●	Transportation Solutions—Our net sales increased 7.3% in fiscal 2026 due to sales increases in the automotive and commercial transportation end markets.

	●	Industrial Solutions—Our net sales increased 25.8% in fiscal 2026 primarily as a result of sales growth in the digital data networks; energy; automation and connected living; and aerospace, defense, and marine end markets.

	●	We paid cash dividends to shareholders of $2.98 per ordinary share in fiscal 2026. Also, in September 2026, our Board of Directors approved an interim cash dividend of $0.78 per ordinary share, payable on December 11, 2026, to shareholders of record on November 20, 2026.

	●	Net cash provided by operating activities was $4,525 million in fiscal 2026.

Economic Conditions

Our business and operating results have been and will continue to be affected by worldwide economic conditions. The global economy has been impacted in recent years by supply chain disruptions, inflationary cost pressures, and, most recently, tariff and trade policies. We are monitoring the current environment and its potential effects on our customers and the end markets we serve.

In recent years, we have experienced inflationary cost pressures including increased costs for transportation, energy, and raw materials. However, we have been able to mitigate increased costs and supply chain disruptions through productivity and/or price increases. Also, we have taken, and continue to focus on, actions to manage costs, including restructuring and other cost reduction initiatives such as reducing discretionary spending. Additionally, we are managing our capital resources and monitoring capital availability to ensure that we have sufficient resources to fund our future capital needs. See further discussion in “Liquidity and Capital Resources.”

We are actively monitoring developments in tariff and trade policies and the potential impacts on our business. In addition, we are using pricing actions and sourcing changes to largely mitigate the impacts of new tariffs and changes in existing tariff rates. In February 2026, the U.S. Supreme Court ruled that the tariffs imposed under the International Emergency Economic Powers Act ("IEEPA") were not authorized by the statute. Following a March 2026 order to refund IEEPA tariffs, the U.S. Customs and Border Protection Agency (“CBP”) launched a refund process in April 2026 through which eligible importers could request refunds. During the fourth quarter of fiscal 2026, we filed certain claims and received tariff refunds of $91 million which were recorded as a reduction to cost of sales. These refunds relate to IEEPA tariffs paid since they were originally imposed in 2025 through February 2026. We expect to return $87 million of these refunds to customers and, as such, that amount was recorded as a reduction to net sales during the fourth quarter of fiscal 2026. The

timing and amount of any further tariff refunds remain uncertain, and, accordingly, no benefit was recognized as of fiscal year end 2026 for any additional potential refunds related to IEEPA tariffs previously paid.

We continue to monitor military conflicts in certain parts of the world as well as escalating tensions in surrounding countries, associated sanctions, and any resulting supply chain or other disruptions. These did not have a significant impact on our business, financial condition, or results of operations during fiscal 2026 and 2025.

Outlook

In the first quarter of fiscal 2027, we expect our net sales to be approximately $5.35 billion as compared to $4.67 billion in the first quarter of fiscal 2026. This increase reflects sales growth in both the Industrial Solutions and Transportation Solutions segments. We expect diluted earnings per share from continuing operations to be approximately $3.04 per share in the first quarter of fiscal 2027. This outlook reflects the positive impact of foreign currency exchange rates on net sales and earnings per share of approximately $17 million and $0.06 per share, respectively, in the first quarter of fiscal 2027 as compared to the same period of fiscal 2026. Our outlook for the first quarter of fiscal 2027 does not include results related to our anticipated acquisition of Astrodyne TDI (“Astrodyne”).

For fiscal 2027, we expect double-digit sales growth driven by sales increases in the Industrial Solutions segment, which includes the benefit of our anticipated acquisition of Astrodyne, and, to a lesser degree, the Transportation Solutions segment. Organic net sales growth in fiscal 2027 is expected to be consistent with fiscal 2026 levels.

The above outlook is based on foreign currency exchange rates and commodity prices that are consistent with current levels.

Acquisitions

During fiscal 2026, we acquired two businesses for a combined cash purchase price of $212 million, net of cash acquired. One of the acquisitions includes certain earn-out provisions based on business performance for which we have estimated the acquisition-date fair value to be approximately $150 million. The acquired businesses have been reported as part of our Industrial Solutions and Transportation Solutions segments from the date of acquisition.

During fiscal 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. Also during fiscal 2025, we acquired two additional businesses for a combined cash purchase price of $321 million, net of cash acquired. These acquired businesses have been reported as part of our Industrial Solutions segment from the date of acquisition.

See Note 4 to the Consolidated Financial Statements for additional information regarding acquisitions.

Pending Acquisition

During the fourth quarter of fiscal 2026, we entered into a definitive agreement to acquire Astrodyne, a leading manufacturer of power and filter solutions, for approximately $1.4 billion in cash. The transaction, which is expected to close by the end of calendar year 2026, is subject to customary regulatory approvals and other closing conditions. The business will be reported as part of the automation and connected living business within our Industrial Solutions segment.

Results of Operations

Net Sales

The following table presents our net sales and the percentage of total net sales by segment:

​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Fiscal											​
​	​ ​ ​	2026				​ ​ ​	​ ​ ​	2025				​ ​ ​	​ ​ ​
​		($ in millions)											​
Transportation Solutions	​	$	10,069	​ ​ ​ ​	50	%	​	$	9,388	​ ​ ​ ​	54	%	​
Industrial Solutions	​		9,903		50	​	​		7,874		46	​	​
Reconciling item(1)	​	​	(87)	​	—	​	​	​	—	​	—	​	​
Total	​	$	19,885		100	%	​	$	17,262		100	%	​

	(1)	Reconciling item relates to IEEPA tariff refunds received in fiscal 2026 that are expected to be returned to customers.

The following table provides an analysis of the change in our net sales by segment:

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Change in Net Sales for Fiscal 2026 versus Fiscal 2025															​
​	​	Net Sales				​	Organic Net Sales				​	Translation		​	​		​
​	​ ​ ​	Growth (Decline)				​	Growth				​	and Other		​ ​ ​	Acquisitions		​ ​ ​
​	​	($ in millions)															​
Transportation Solutions	​	$	681	​ ​ ​	7.3	%	$	423	​ ​ ​	4.5	%	$	258	​	$	—	​
Industrial Solutions	​		2,029		25.8	​		1,639		20.8	​		118	​		272	​
Reconciling item(1)	​	​	(87)	​	​	​	​	—	​	​	​	​	(87)	​	​	—	​
Total	​	$	2,623	​	15.2	%	$	2,062		11.9	%	$	289	​	$	272	​

(1)	Reconciling item relates to IEEPA tariff refunds received in fiscal 2026 that are expected to be returned to customers.

Net sales increased $2,623 million, or 15.2%, in fiscal 2026 as compared to fiscal 2025. The increase in net sales resulted primarily from organic net sales growth of 11.9%, the positive impact of foreign currency translation of 2.2%, and the positive impact of 1.6% from acquisitions. Additionally, net sales in fiscal 2026 were reduced by $87 million for IEEPA tariff refunds that are expected to be returned to customers. Richards Manufacturing, which was acquired on April 1, 2025, contributed incremental net sales of $227 million in the first six months of fiscal 2026 over the same period of fiscal 2025. In fiscal 2026, net pricing actions positively affected organic net sales by $185 million. See further discussion of net sales below under “Segment Results.”

Net Sales by Geographic Region. Our business operates in three geographic regions—Asia–Pacific, EMEA, and the Americas—and our results of operations are influenced by changes in foreign currency exchange rates. Increases or decreases in the value of the U.S. dollar, compared to other currencies, will directly affect our reported results as we translate those currencies into U.S. dollars at the end of each fiscal period. We sell our products into approximately 130 countries, and approximately 55% of our net sales were invoiced in currencies other than the U.S. dollar in fiscal 2026. The percentage of net sales in fiscal 2026 by major currencies invoiced was as follows:

​	​	​	​	​
Currencies	​ ​ ​	Percentage	​ ​	​ ​ ​
U.S. dollar		45	%	​
Euro		26	​	​
Chinese renminbi		20	​	​
Japanese yen		3	​	​
All others		6	​	​
Total		100	%	​

The following table presents our net sales and the percentage of total net sales by geographic region:

​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Fiscal										​	​
​	​ ​ ​	2026				​ ​ ​	​ ​ ​	2025				​	​ ​ ​
​	​	($ in millions)										​	​
Asia–Pacific	​	$	7,764		39	%	​	$	6,552		38	%	​
EMEA	​	​	6,386	​ ​ ​	32	​	​	​	5,742	​ ​ ​	33	​	​
Americas	​		5,822		29	​	​		4,968		29	​	​
Reconciling item(1)	​	​	(87)	​	—	​	​	​	—	​	—	​	​
Total	​	$	19,885		100	%	​	$	17,262		100	%	​

	(1)	Reconciling item relates to IEEPA tariff refunds received in fiscal 2026 that are expected to be returned to customers.

The following table provides an analysis of the change in our net sales by geographic region:

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Change in Net Sales for Fiscal 2026 versus Fiscal 2025
​	​	Net Sales				​	Organic Net Sales				​	Translation		​	​		​
​	​ ​ ​	Growth (Decline)				​	Growth				​	and Other		​ ​ ​	Acquisitions		​ ​ ​
​	​	($ in millions)
Asia–Pacific	​	$	1,212	​ ​ ​	18.5	%	$	1,087	​ ​ ​	16.6	%	$	125	​	$	—	​
EMEA	​	​	644	​ ​ ​	11.2	​	​	430	​ ​ ​	7.5	​	​	214	​	​	—	​
Americas	​		854		17.2	​		545		11.0	​		37	​		272	​
Reconciling item(1)	​	​	(87)	​	​	​	​	—	​	​	​	​	(87)	​	​	—	​
Total	​	$	2,623	​	15.2	%	$	2,062		11.9	%	$	289	​	$	272	​

(1)	Reconciling item relates to IEEPA tariff refunds received in fiscal 2026 that are expected to be returned to customers.

Cost of Sales and Gross Margin

The following table presents cost of sales and gross margin information:

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Fiscal						​	​	​
​	​ ​ ​	2026		​ ​ ​	​ ​ ​	2025		​ ​ ​	​ ​ ​	Change		​ ​ ​
​	​	($ in millions)
Cost of sales	​	$	12,679	(1)​	​	$	11,183	​	​	$	1,496	​
As a percentage of net sales	​		63.8	%	​		64.8	%	​		​	​
​	​	​	​	​	​	​	​	​	​	​	​	​
Gross margin	​	$	7,206	(2)​	​	$	6,079	​	​	$	1,127	​
As a percentage of net sales	​		36.2	%	​		35.2	%	​		​	​

	(1)	Fiscal 2026 includes $91 million related to IEEPA tariff refunds which were recorded as a reduction to cost of sales.

	(2)	Fiscal 2026 includes the net impact of $4 million related to IEEPA tariff refunds.

In fiscal 2026, gross margin increased $1,127 million as compared to fiscal 2025 primarily as a result of higher volume, improved manufacturing productivity, and the positive impact of net pricing actions.

We use a wide variety of raw materials in the manufacture of our products. Cost of sales and gross margin are subject to variability in raw material prices, which continue to fluctuate for many of the raw materials we use. The following table presents the average prices incurred related to copper, gold, silver, and palladium:

​	​	​	​	​	​	​	​	​	​
​	​	​	​	Fiscal					​
​	​ ​ ​	Measure	​ ​ ​	2026		​ ​ ​	2025		​ ​ ​
Copper		Lb.	​	$	4.81	​	$	4.25	​
Gold		Troy oz.	​		3,550	​		2,560	​
Silver	​	Troy oz.	​	​	46.99	​	​	29.01	​
Palladium		Troy oz.	​		1,275	​		1,065	​

​

In fiscal 2026, we purchased approximately 194 million pounds of copper, 106,000 troy ounces of gold, 1.8 million troy ounces of silver, and 14,000 troy ounces of palladium. We expect to purchase approximately 200 million pounds of copper, 105,000 troy ounces of gold, 1.9 million troy ounces of silver, and 20,000 troy ounces of palladium in fiscal 2027.

Operating Expenses

The following table presents operating expense information:

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Fiscal						​	​	​
​	​ ​ ​	2026		​ ​ ​	​ ​ ​	2025		​ ​ ​	​ ​ ​	Change		​ ​ ​
​	​	($ in millions)
Selling, general, and administrative expenses	​	$	2,124	​	​	$	1,866	​	​	$	258	​
As a percentage of net sales	​		10.7	%	​		10.8	%	​		​	​
​	​	​	​	​	​	​	​	​	​	​	​	​
Restructuring and other charges, net	​	$	117	​	​	$	126	​	​	$	(9)	​

Selling, General, and Administrative Expenses. In fiscal 2026, selling, general, and administrative expenses increased $258 million as compared to fiscal 2025 due primarily to increased selling expenses to support higher sales levels and, to a lesser degree, the negative impact of foreign currency translation, higher incentive compensation costs, and the fiscal 2025 release of reserves associated with trade compliance matters.

Restructuring and Other Charges, Net. We are committed to continuous productivity improvements, and we evaluate opportunities to simplify our global manufacturing footprint, migrate facilities to lower-cost regions, reduce fixed costs, and eliminate excess capacity. These initiatives are designed to help us maintain our competitiveness in the industry, improve our operating leverage, and position us for future growth.

During fiscal 2026 and 2025, we initiated restructuring programs to optimize our manufacturing footprint and improve the cost structure of our organization. We incurred net restructuring charges of $110 million and $113 million in fiscal 2026 and 2025, respectively. Annualized cost savings related to actions initiated in fiscal 2026 are expected to be approximately $65 million and are expected to be fully realized by the end of fiscal 2029. Cost savings will be reflected primarily in cost of sales and selling, general, and administrative expenses. For fiscal 2027, we expect total restructuring charges to be approximately $80 million and total spending, which will be funded with cash from operations, to be approximately $100 million.

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

See Note 3 to the Consolidated Financial Statements for additional information regarding net restructuring and other charges.

Operating Income

The following table presents operating income and operating margin information:

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Fiscal						​	​	​		​
​	​ ​ ​	2026		​ ​ ​	​ ​ ​	2025		​ ​ ​	​ ​ ​	Change		​ ​ ​
​	​	($ in millions)										​
Transportation Solutions	​	$	1,969	​	​	$	1,818	​	​	$	151	​
Industrial Solutions	​	​	2,018	​	​	​	1,393	​	​	​	625	​
Reconciling item(1)	​	​	4	​	​	​	—	​	​	​	4	​
Operating income	​	$	3,991	​	​	$	3,211	​	​	$	780	​
Operating margin	​		20.1	%	​		18.6	%	​		​	​

	(1)	Reconciling item relates to the net impact of IEEPA tariff refunds received in fiscal 2026.

Operating income included the following:

​	​	​	​	​	​	​	​
​	​	Fiscal					​
​	​ ​ ​	2026		​ ​ ​	2025		​ ​ ​
​	​	(in millions)					​
Acquisition-related charges:	​	​	​		​	​
Acquisition and integration costs	​	$	32	​	$	47	​
Charges associated with the amortization of acquisition-related fair value adjustments	​		3	​		10	​
​	​		35	​		57	​
Restructuring and other charges, net	​		117	​		126	​
Amortization expense	​	​	227	​	​	190	​
Total	​	$	379	​	$	373	​

See discussion of operating income below under “Segment Results.”

Non-Operating Items

The following table presents select non-operating information:

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Fiscal						​	​	​	​ ​ ​ ​ ​	​
​	​ ​ ​	2026		​ ​ ​	​ ​ ​	2025		​ ​ ​	​ ​ ​	Change		​ ​ ​
​	​	($ in millions)										​
Interest expense	​	$	124	​	​	$	77	​	​	$	47	​
​	​	​	​	​	​	​	​	​	​	​	​	​
Income tax expense	​	​	695	​	​	​	1,361	​	​	​	(666)	​
Effective tax rate	​		17.6	%	​		42.5	%	​		​	​

Interest Expense. Interest expense increased $47 million in fiscal 2026 as compared to fiscal 2025 due primarily to higher average debt levels and cost of debt.

Income Taxes. See Note 15 to the Consolidated Financial Statements for additional information regarding income taxes.

​

Segment Results

During fiscal 2026, we realigned a product line within the Transportation Solutions segment. Prior period results have been recast to conform to the current reporting structure. See Note 20 to the Consolidated Financial Statements for additional information regarding the realignment.

Transportation Solutions

Net Sales. The following table presents the Transportation Solutions segment’s net sales and the percentage of total net sales by industry end market:

​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Fiscal										​	​
​	​ ​ ​	2026				​ ​ ​	​ ​ ​	2025				​ ​ ​	​ ​ ​
​	​	($ in millions)											​
Automotive	​	$	7,523	​ ​ ​	75	%	​	$	7,106	​ ​ ​	75	%	​
Commercial transportation	​		1,635		16	​	​		1,371		15	​	​
Sensors	​		911		9	​	​		911		10	​	​
Total	​	$	10,069		100	%	​	$	9,388		100	%	​

The following table provides an analysis of the change in the Transportation Solutions segment’s net sales by industry end market:

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Change in Net Sales for Fiscal 2026 versus Fiscal 2025
​	​	Net Sales				​	Organic Net Sales				​	​	​	​
​	​ ​ ​	Growth				​	Growth (Decline)				​	Translation		​ ​ ​
​	​	($ in millions)
Automotive	​	$	417	​ ​ ​	5.9	%	$	212	​ ​ ​	3.0	%	$	205	​
Commercial transportation	​		264		19.3	​		233		17.1	​		31	​
Sensors	​		—		—	​		(22)		(2.4)	​		22	​
Total	​	$	681		7.3	%	$	423		4.5	%	$	258	​

Net sales in the Transportation Solutions segment increased $681 million, or 7.3%, in fiscal 2026 from fiscal 2025 as a result of organic net sales growth of 4.5% and the positive impact of foreign currency translation of 2.8%. Net price erosion negatively affected organic net sales by $34 million in fiscal 2026. Our organic net sales by industry end market were as follows:

	●	Automotive—Our organic net sales increased 3.0% in fiscal 2026 as a result of growth of 5.0% in the Asia–Pacific region and 4.3% in the EMEA region, partially offset by declines of 5.4% in the Americas region. Overall, our organic net sales growth was due primarily to increased content per vehicle.

	●	Commercial transportation—Our organic net sales increased 17.1% in fiscal 2026 as a result of growth across all regions with the benefit of content growth.

	●	Sensors—Our organic net sales decreased 2.4% in fiscal 2026 due to declines in transportation applications, partially offset by growth in industrial applications.

Operating Income. The following table presents the Transportation Solutions segment’s operating income and operating margin information:

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Fiscal						​	​	​
​	​ ​ ​	2026		​ ​ ​	​ ​ ​	2025		​ ​ ​	​ ​ ​	Change		​ ​ ​
​	​	($ in millions)
Operating income	​	$	1,969	​	​	$	1,818	​	​	$	151	​
Operating margin	​		19.6	%	​		19.4	%	​		​	​

Operating income in the Transportation Solutions segment increased $151 million in fiscal 2026 as compared to fiscal 2025. Excluding the items below, operating income increased in fiscal 2026 primarily as a result of improved manufacturing productivity.

​	​	​	​	​	​	​	​
​	​	Fiscal					​
​	​ ​ ​	2026		​ ​ ​	2025		​ ​ ​
​	​	(in millions)
Acquisition and integration costs	​	$	2	​	$	—	​
Restructuring and other charges, net	​		89	​		75	​
Amortization expense	​	​	71	​	​	70	​
Total	​	$	162	​	$	145	​

Industrial Solutions

Net Sales. The following table presents the Industrial Solutions segment’s net sales and the percentage of total net sales by industry end market:

​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Fiscal										​	​
​	​ ​ ​	2026				​ ​ ​	​ ​ ​	2025				​ ​ ​	​ ​ ​
​	​	($ in millions)											​
Digital data networks	​	$	3,183	​	32	%	​	$	2,208	​	28	%	​
Automation and connected living	​	​	2,480		25	​	​	​	2,147		27	​	​
Energy	​	​	1,887	​ ​ ​ ​	19	​	​	​	1,344	​ ​ ​ ​	17	​	​
Aerospace, defense, and marine	​		1,670		17	​	​		1,483		19	​	​
Medical	​	​	683	​	7	​	​	​	692	​	9	​	​
Total	​	$	9,903		100	%	​	$	7,874		100	%	​

The following table provides an analysis of the change in the Industrial Solutions segment’s net sales by industry end market:

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Change in Net Sales for Fiscal 2026 versus Fiscal 2025															​
​	​	Net Sales				​	Organic Net Sales				​	​	​	​	​		​
​	​ ​ ​	Growth (Decline)				​	Growth (Decline)				​	Translation		​ ​ ​	Acquisitions		​ ​ ​
​	​	($ in millions)
Digital data networks	​	$	975		44.2	%	$	961	​	43.5	%	$	14	​	$	—	​
Automation and connected living	​	​	333	​ ​ ​	15.5	​	​	281	​ ​ ​	13.1	​	​	51	​	​	1	​
Energy	​		543		40.4	​		243		18.1	​		29	​		271	​
Aerospace, defense, and marine	​		187		12.6	​		163		11.0	​		24	​		—	​
Medical	​	​	(9)	​	(1.3)	​	​	(9)	​	(1.3)	​	​	—	​	​	—	​
Total	​	$	2,029		25.8	%	$	1,639		20.8	%	$	118	​	$	272	​

In the Industrial Solutions segment, net sales increased $2,029 million, or 25.8%, in fiscal 2026 from fiscal 2025 due to organic net sales growth of 20.8%, the positive impact of 3.5% from acquisitions, and the positive impact of foreign currency translation of 1.5%. Richards Manufacturing, which was acquired on April 1, 2025, contributed incremental net sales of $227 million in the first six months of fiscal 2026 over the same period of fiscal 2025. Net pricing actions positively affected organic net sales by $219 million in fiscal 2026. Our organic net sales by industry end market were as follows:

	●	Digital data networks—Our organic net sales increased 43.5% in fiscal 2026 primarily as a result of growth in AI applications.

	●	Automation and connected living—Our organic net sales increased 13.1% in fiscal 2026 primarily as a result of growth in factory automation applications and, to a lesser degree, the appliances market.

	●	Energy—Our organic net sales increased 18.1% in fiscal 2026 with growth in all regions and strength in grid hardening and data center applications.

	●	Aerospace, defense, and marine—Our organic net sales increased 11.0% in fiscal 2026 due primarily to growth in the defense and commercial aerospace markets.

	●	Medical—Our organic net sales decreased 1.3% in fiscal 2026 primarily as a result of our strategic exit of a product line.

Operating Income. The following table presents the Industrial Solutions segment’s operating income and operating margin information:

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Fiscal						​	​	​		​
​	​ ​ ​	2026		​ ​ ​	​ ​ ​	2025		​ ​ ​	​ ​ ​	Change		​ ​ ​
​	​	($ in millions)										​
Operating income	​	$	2,018	​	​	$	1,393	​	​	$	625	​
Operating margin	​		20.4	%	​		17.7	%	​		​	​

Operating income in the Industrial Solutions segment increased $625 million in fiscal 2026 from fiscal 2025. Excluding the items below, operating income increased in fiscal 2026 primarily as a result of higher volume and the positive impact of net pricing actions.

​	​	​	​	​	​	​	​
​	​	Fiscal					​
​	​ ​ ​	2026		​ ​ ​	2025		​ ​ ​
​	​	(in millions)
Acquisition-related charges:		​	​		​	​	​
Acquisition and integration costs	​	$	30	​	$	47	​
Charges associated with the amortization of acquisition-related fair value adjustments	​		3	​		10	​
​	​		33	​		57	​
Restructuring and other charges, net	​		28	​		51	​
Amortization expense	​	​	156	​	​	120	​
Total	​	$	217	​	$	228	​

​

​

Liquidity and Capital Resources

Our ability to fund our future capital needs will be affected by our ongoing ability to generate cash from operations and may be affected by our access to capital markets, money markets, or other sources of funding, as well as the capacity and terms of our financing arrangements. We believe that cash generated from operations and, to the extent necessary, these other sources of potential funding will be sufficient to meet our anticipated capital needs for the foreseeable future, including the repayment of $400 million of 3.125% senior notes due in August 2027. We may use excess cash to acquire strategic businesses or product lines, reduce our outstanding debt, or return cash to shareholders through dividends on our ordinary shares or purchases of our ordinary shares pursuant to our authorized share repurchase program. We may also use excess cash and other funding to make strategic acquisitions. We intend to fund the anticipated acquisition of Astrodyne with a combination of available cash and the issuance of commercial paper and, if necessary, borrowing under our existing credit facility and/or new debt financing. The cost or availability of future funding may be impacted by financial market conditions. We will continue to monitor financial markets and respond as necessary to changing conditions. We believe that we have sufficient financial resources and liquidity which will enable us to meet our ongoing working capital and other cash flow needs.

As of fiscal year end 2026, our cash and cash equivalents were held in subsidiaries which are located in various countries throughout the world. Under current applicable laws, substantially all of these amounts can be repatriated to Tyco Electronics Group S.A. (“TEGSA”), our Luxembourg subsidiary, which is the obligor of substantially all of our debt, and to TE Connectivity plc, our Irish parent company; however, the repatriation of these amounts could subject us to additional tax expense. We provide for tax liabilities on the Consolidated Financial Statements with respect to amounts that we expect to repatriate; however, no tax liabilities are recorded for amounts that we consider to be retained indefinitely and reinvested in our global manufacturing operations.

Cash Flows from Operating Activities

Net cash provided by operating activities increased $386 million to $4,525 million in fiscal 2026 as compared to $4,139 million in fiscal 2025. The increase resulted primarily from higher pre-tax income, partially offset by the impact of changes in working capital levels and an increase in income tax payments. The amount of income taxes paid, net of refunds, during fiscal 2026 and 2025 was $454 million and $276 million, respectively.

Pension contributions were $70 million and $69 million in fiscal 2026 and 2025, respectively. We expect pension contributions to be approximately $67 million in fiscal 2027, before consideration of any voluntary contributions. For additional information regarding pensions, see Note 14 to the Consolidated Financial Statements.

Cash Flows from Investing Activities

Capital expenditures were $1,122 million and $936 million in fiscal 2026 and 2025, respectively. We expect fiscal 2027 capital spending levels to be approximately 6% of net sales. We believe our capital funding levels are adequate to support new programs, and we continue to invest in our manufacturing infrastructure to further enhance productivity and manufacturing capabilities.

During fiscal 2026, we acquired two businesses for a combined cash purchase price of $212 million, net of cash acquired. We acquired Richards Manufacturing for cash of approximately $2.3 billion, net of cash acquired, during fiscal 2025. Also during fiscal 2025, we acquired two additional businesses for a combined cash purchase price of $321 million, net of cash acquired. See Note 4 to the Consolidated Financial Statements for additional information regarding acquisitions.

Cash Flows from Financing Activities and Capitalization

Total debt at fiscal year end 2026 and 2025 was $5,639 million and $5,694 million, respectively. See Note 10 to the Consolidated Financial Statements for additional information regarding debt.

During fiscal 2026, TEGSA, our wholly-owned subsidiary, issued $200 million aggregate principal amount of 4.50% senior notes due in February 2031 and $550 million aggregate principal amount of 4.875% senior notes due in February 2036. The February 2031 senior notes represent a further issuance of TEGSA’s outstanding $450 million aggregate principal amount of 4.50% senior notes which were issued in fiscal 2025 and bring the total aggregate principal amount of the 4.50% senior notes due in February 2031 to $650 million. The new notes are TEGSA’s unsecured senior obligations and rank equally in right of payment with all existing and any future senior indebtedness of TEGSA and senior to any subordinated indebtedness that TEGSA may incur.

TEGSA entered into a new five-year unsecured senior revolving credit facility (“Credit Facility”) in February 2026 with aggregate commitments of $3.0 billion, which refinanced and replaced in full TEGSA’s existing $1.5 billion five-year unsecured senior revolving credit facility (the “Replaced Credit Facility”). The Credit Facility matures in February 2031 and contains provisions that allow for incremental commitments of up to $1.0 billion, subject to terms and conditions in the Credit Facility. TEGSA had no borrowings under the Credit Facility at fiscal year end 2026 or the Replaced Credit Facility at fiscal year end 2025.

Borrowings under the Credit Facility bear interest at a rate per annum equal to, at the option of TEGSA, (1) with respect to borrowings 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%, (2) with respect to borrowings in euro, the Euro Interbank Offered Rate, (3) with respect to borrowings in sterling, the Sterling Overnight Index Average Reference Rate, and (4) with respect to borrowings in yen, the Tokyo Interbank Offered Rate, 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. None of our covenants are presently considered restrictive to our operations. As of fiscal year end 2026, we were in compliance with all of our debt covenants and believe that we will continue to be in compliance with our existing covenants for the foreseeable future.

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. At fiscal year end 2026, TEGSA had $100 million of commercial paper outstanding at a weighted-average interest rate of 4.10%. TEGSA had no commercial paper outstanding at fiscal year end 2025.

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.

Payments of ordinary share dividends to shareholders were $869 million and $803 million in fiscal 2026 and 2025, respectively. See Note 17 to the Consolidated Financial Statements for additional information regarding dividends.

In September 2026, our Board of Directors approved an interim cash dividend of $0.78 per ordinary share, payable on December 11, 2026, to shareholders of record on November 20, 2026.

As provided by Irish law and our articles of association, our Board of Directors may approve interim dividends. In exercising its discretion to approve such dividends, our Board of Directors will consider our results of operations, financial condition, cash requirements, future business prospects, statutory requirements of applicable law, contractual restrictions, restrictions imposed by Irish law, and other factors that they may deem relevant.

During fiscal 2026, our Board of Directors authorized an increase of $3.0 billion in our share repurchase program. Ordinary shares repurchased under the share repurchase program were as follows:

​	​	​	​	​	​	​	​
​	​	Fiscal					​
​	​ ​ ​	2026		​ ​ ​	2025		​ ​ ​
​	​	(in millions)					​
Number of ordinary shares repurchased		​	9	​	​	8	​
Repurchase value		$	1,892	​	$	1,356	​

At fiscal year end 2026, we had $2.5 billion of availability remaining under our share repurchase authorization.

Summarized Guarantor Financial Information

As discussed above, our senior notes, commercial paper, and Credit Facility are issued by TEGSA and are fully and unconditionally guaranteed on an unsecured basis by TEGSA’s parent, TE Connectivity Switzerland Ltd., and its parent, TE Connectivity plc. In addition to being the issuer of our debt securities, TEGSA owns, directly or indirectly, all of our operating subsidiaries. The following tables present summarized financial information, excluding investments in and equity in earnings of our non-guarantor subsidiaries, for TE Connectivity plc, TE Connectivity Switzerland Ltd., and TEGSA on a combined basis.

​	​	​	​	​	​	​	​
​	​	Fiscal Year End					​
​	​ ​ ​	2026		​ ​ ​	2025		​ ​ ​
​	​	(in millions)					​
Balance Sheet Data:	​	​	​	​	​	​	​
Total current assets	​	$	1,804	​	$	1,236	​
Total noncurrent assets(1)	​		4,132	​		2,465	​
​	​	​	​	​	​	​	​
Total current liabilities	​		1,020	​		1,348	​
Total noncurrent liabilities(2)	​	​	10,359	​	​	10,033	​

	(1)	Includes $4,085 million and $2,444 million as of fiscal year end 2026 and 2025, respectively, of intercompany loans receivable from non-guarantor subsidiaries.

	(2)	Includes $5,131 million and $5,001 million as of fiscal year end 2026 and 2025, respectively, of intercompany loans payable to non-guarantor subsidiaries.

​	​	​	​	​	​	​	​
​	​	Fiscal					​
​	​ ​ ​	2026		​ ​ ​	2025		​ ​ ​
​	​	(in millions)					​
Statement of Operations Data:	​	​	​	​	​	​	​
Income (loss) from continuing operations	​	$	263	​	$	(197)	​
Net income (loss)	​		263	​		(197)	​

​

​

Off-Balance Sheet Arrangements

In certain instances, we have guaranteed the performance of third parties and provided financial guarantees for uncompleted work and financial commitments. The terms of these guarantees vary with end dates ranging from fiscal 2027 through the completion of such transactions. The guarantees would be triggered in the event of nonperformance, and the potential exposure for nonperformance under the guarantees would not have a material effect on our results of operations, financial position, or cash flows.

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 2026, we had outstanding letters of credit, letters of guarantee, and surety bonds of $282 million to support normal business activities.

​

​

Commitments and Contingencies

The following table provides a summary of our contractual obligations and commitments for debt, minimum lease payment obligations under non-cancelable leases, and other material obligations at fiscal year end 2026:

​	​	​	​	​	​	​	​	​	​	​
​	​	Payments Due					​	​	​	​
​	​ ​ ​	In Fiscal 2027		​ ​ ​	Thereafter		​ ​ ​	Total		​ ​ ​
​	​	(in millions)
Long-term debt:	​	​	​	​	​	​	​	​	​	​
Principal payments(1)	​	$	502	​	$	5,194	​	$	5,696	​
Interest payments on debt(2)	​		199	​		1,159	​		1,358	​
Operating leases(3)	​		131	​		494	​		625	​
Purchase obligations(4)	​		1,458	​		168	​		1,626	​
Total contractual cash obligations(5)(6)(7)	​	$	2,290	​	$	7,015	​	$	9,305	​

(1)	See Note 10 to the Consolidated Financial Statements for additional information regarding debt.

(2)	Interest payments exclude the impact of any interest rate swap and cross-currency swap contracts. Interest payments on debt are projected for future periods using rates in effect as of fiscal year end 2026 and are subject to change in future periods.

(3)	Operating leases represents the undiscounted lease payments. See Note 11 to the Consolidated Financial Statements for additional information regarding leases.

(4)	Purchase obligations consist primarily of commitments for purchases of goods and services.

(5)	The above table does not reflect unrecognized income tax benefits of $659 million and related accrued interest and penalties of $42 million, the timing of which is uncertain. See Note 15 to the Consolidated Financial Statements for additional information regarding unrecognized income tax benefits, interest, and penalties.

(6)

The above table does not reflect pension obligations to certain employees and former employees. We are obligated to make contributions to our pension plans; however, we are unable to determine the amount of plan contributions due to the inherent uncertainties of obligations of this type, including timing, interest rate charges, investment performance, and amounts of benefit payments. We expect to contribute approximately $67 million to pension plans in fiscal 2027, before consideration of any voluntary contributions. See Note 14 to the Consolidated Financial Statements for additional information regarding these plans and our estimates of future contributions and benefit payments.

(7)

The above table does not reflect redeemable noncontrolling interests of $150 million associated with our First Sensor AG (“First Sensor”) subsidiary. 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. The ultimate amount (plus any statutory interest, if applicable) and timing of any future cash payments is uncertain. See Note 17 to the Consolidated Financial Statements for additional information regarding redeemable noncontrolling interests.

Legal Proceedings

In the normal course of business, we are subject to various legal proceedings and claims, including patent infringement claims, product liability matters, employment disputes, disputes on agreements, other commercial disputes, environmental matters, antitrust claims, trade compliance matters, and tax matters, including non-income tax matters such as value added tax, sales and use tax, real estate tax, and transfer tax. Although it is not feasible to predict the outcome of these proceedings, based upon our experience, current information, and applicable law, we do not expect that the outcome of these

proceedings, either individually or in the aggregate, will have a material effect on our results of operations, financial position, or cash flows.

Trade Compliance Matters

As previously reported, as part of our ongoing internal compliance activities, we conducted an investigation related to country of origin for import matters and made a voluntary disclosure to CBP regarding potential Section 301 unpaid duties, fees, and interest for certain imported products into the U.S. During fiscal 2026, we filed a perfected prior disclosure to CBP and paid $14 million to CBP to resolve this matter. Although CBP has not yet completed its review of the disclosure, we do not expect that the outcome of the review will have a material effect on our results of operations, financial position, or cash flows.

Critical Accounting Policies and 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 revenue and expenses. Our significant accounting policies are summarized in Note 2 to the Consolidated Financial Statements. We believe the following accounting policies are the most critical as they require significant judgments and assumptions that involve inherent risks and uncertainties. Management’s estimates are based on the relevant information available at the end of each period.

Revenue Recognition

We account for revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. 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.

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.

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.

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.

We test for goodwill impairment at the reporting unit level. A reporting unit is generally an operating segment or one level below an operating segment (a “component”) if the component constitutes a business for which discrete financial information is available and regularly reviewed by segment management. At fiscal year end 2026, 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. We review our reporting unit structure each year as part of our annual goodwill impairment test, or more frequently based on changes in our structure.

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.

We completed our annual goodwill impairment test in the fourth quarter of fiscal 2026 and determined that no impairment existed.

Income Taxes

In determining pre-tax income for financial statement purposes, we must make certain estimates and judgments. These estimates and judgments affect the calculation of certain tax liabilities and the determination of the recoverability of certain deferred tax assets, which arise from temporary differences between the income tax return and financial statement recognition of revenue and expense.

In evaluating our ability to recover our deferred tax assets, we consider all available positive and negative evidence including our past operating results, the existence of cumulative losses in the most recent years, and our forecast of taxable income. In estimating future taxable income, we develop assumptions including the amount of pre-tax operating income in various tax jurisdictions, the reversal of temporary differences, and the implementation of feasible and prudent tax planning strategies. These assumptions require significant judgment about the forecasts of taxable income and are consistent with the plans and estimates we are using to manage the underlying businesses.

We currently have recorded significant valuation allowances that we intend to maintain until it is more likely than not the deferred tax assets will be realized. Our income tax expense recorded in the future will be reduced to the extent of decreases in our valuation allowances. The realization of our remaining deferred tax assets is dependent primarily on future taxable income in the appropriate jurisdictions. Any reduction in future taxable income including any future restructuring activities may require that we record an additional valuation allowance against our deferred tax assets. An increase in the valuation allowance would result in additional income tax expense in such period and could have a significant impact on our future earnings.

Changes in tax laws and rates also could affect recorded deferred tax assets and liabilities in the future. Impacts of enacted law changes that have a material effect on our results of operations, financial position, or cash flows have been recorded in the Consolidated Financial Statements.

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, Income Taxes, we recognize liabilities for tax and related interest for issues in tax jurisdictions based on our estimate of whether, and to what extent, 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. These tax liabilities and related interest are recorded in income taxes and accrued and other current liabilities on the Consolidated Balance Sheets.

Pension Plans

Our defined benefit pension plan expense and obligations are developed from actuarial assumptions. The funded status of our 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.

Two critical assumptions in determining pension expense and obligations are discount rates and expected long-term returns on plan assets. We evaluate these assumptions at least annually. Other assumptions reflect demographic factors such as retirement, mortality, and employee turnover. These assumptions are evaluated periodically and updated to reflect our actual experience. Actual results may differ from actuarial assumptions. Discount rates represent the market rate for high-quality fixed income investments and are used to calculate the present value of the expected future cash flows for benefit obligations to be paid under our pension plans. A decrease in discount rates increases the present value of pension benefit obligations. At fiscal year end 2026, a 25-basis-point decrease in discount rates would have increased the present value of our pension obligations by $53 million; a 25-basis-point increase would have decreased the present value of our pension obligations by $51 million. We consider the current and expected asset allocations of our pension plans, as well as historical and expected long-term rates of return on those types of plan assets, in determining the expected long-term rates of return on plan assets. A 50-basis-point decrease or increase in the expected long-term returns on plan assets would have increased or decreased, respectively, our fiscal 2026 pension expense by $9 million.

At fiscal year end 2026, the long-term target asset allocation in our U.S. plans’ master trust is 25% return-seeking assets and 75% liability-hedging assets. 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 2026, our target asset allocation is 60% return-seeking and 40% liability-hedging.

Accounting Pronouncements

See Note 2 to the Consolidated Financial Statements for information regarding recently issued and adopted accounting pronouncements.

Non-GAAP Financial Measure

Organic Net Sales Growth (Decline)

We present organic net sales growth (decline) as we believe it is appropriate for investors to consider this adjusted financial measure in addition to results in accordance with GAAP. Organic net sales growth (decline) represents net sales growth (decline) (the most comparable GAAP financial measure) excluding the impact of foreign currency exchange rates and acquisitions and divestitures that occurred in the preceding twelve months, if any. Organic net sales growth (decline) is a useful measure of our performance because it excludes items that are not completely under management’s control, such as the

impact of changes in foreign currency exchange rates, and items that do not reflect the underlying growth of the company, such as acquisition and divestiture activity.

Organic net sales growth (decline) provides useful information about our results and the trends of our business. Management uses this measure to monitor and evaluate performance. Also, management uses this measure together with GAAP financial measures in its decision-making processes related to the operations of our reportable segments and our overall company. It is also a significant component in our incentive compensation plans. We believe that investors benefit from having access to the same financial measures that management uses in evaluating operations. The tables presented in “Results of Operations” and “Segment Results” provide reconciliations of organic net sales growth (decline) to net sales growth (decline) calculated in accordance with GAAP.

Organic net sales growth (decline) is a non-GAAP financial measure and should not be considered a replacement for results in accordance with GAAP. This non-GAAP financial measure may not be comparable to similarly-titled measures reported by other companies. The primary limitation of this measure is that it excludes the financial impact of items that would otherwise either increase or decrease our reported results. This limitation is best addressed by using organic net sales growth (decline) in combination with net sales growth (decline) to better understand the amounts, character, and impact of any increase or decrease in reported amounts.

Forward-Looking Information

Certain statements in this Annual Report are “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. These statements are based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include, among others, the information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, potential growth opportunities, potential operating performance improvements, acquisitions, divestitures, the effects of competition, and the effects of future legislation or regulations. Forward-looking statements also include statements addressing our ESG and sustainability plans and goals. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believe,” “expect,” “plan,” “intend,” “anticipate,” “aspire,” “estimate,” “predict,” “potential,” “goal,” “target,” “continue,” “may,” and “should,” or the negative of these terms or similar expressions.

Forward-looking statements involve risks, uncertainties, and assumptions. Actual results may differ materially from those expressed in these forward-looking statements. Investors should not place undue reliance on any forward-looking statements. We do not have any intention or obligation to update forward-looking statements after we file this report except as required by law.

The following and other risks, which are described in greater detail in “Part I. Item 1A. Risk Factors,” as well as other risks described in this Annual Report, could cause our results to differ materially from those expressed in forward- looking statements:

	●	conditions in the global or regional economies and global capital markets, and cyclical industry conditions, including recession, inflation, tariffs, supply chain disruptions, and higher interest rates;

	●	conditions affecting demand for products in the industries we serve, particularly the automotive industry;

	●	risk of future goodwill impairment;

	●	pricing pressure and competition, including competitive risks associated with the pace of technological change;

	●	market acceptance of our new product introductions and product innovations and product life cycles;

	●	raw material availability, quality, and cost;

	●	product liability, warranty, and product recall claims and our ability to defend such claims;

	●	fluctuations in foreign currency exchange rates and impacts of offsetting hedges;

	●	financial condition and consolidation of customers and vendors;

	●	reliance on third-party suppliers;

	●	risks associated with current and future acquisitions and divestitures;

	●	global risks of business interruptions due to natural disasters or other disasters which have impacted and could continue to negatively impact our results of operations as well as customer behaviors, business, and manufacturing operations as well as our facilities and the facilities of our suppliers, and other aspects of our business;

	●	global risks of political, economic, and military instability, including the continuing military conflicts in certain parts of the world and any resulting supply chain or other disruptions, and volatile and uncertain economic conditions and the evolving regulatory system in China;

	●	risks associated with cybersecurity incidents and other disruptions to our information technology infrastructure, including as a result of AI;

	●	risks related to compliance with current and future environmental and other laws and regulations, including those related to climate change;

	●	risks related to scrutiny and expectations regarding ESG matters;

	●	risks associated with compliance with applicable antitrust or competition laws or applicable trade regulations;

	●	our ability to protect our intellectual property rights;

	●	risks of litigation, regulatory actions, and compliance issues;

	●	our ability to operate within the limitations imposed by our debt instruments;

	●	the possible effects on us of various global legislative proposals and other initiatives that could materially increase our worldwide corporate effective tax rate, increase global cash taxes, and negatively impact our U.S. government contracts business;

	●	requirements related to chemical usage, hazardous material content, recycling, and other circular economy initiatives;

	●	various risks associated with being an Irish corporation;

	●	the impact of fluctuations in the market price of our shares; and

	●	the impact of certain provisions of our articles of association on unsolicited takeover proposals.

There may be other risks and uncertainties that we are unable to predict at this time or that we currently do not expect to have a material adverse effect on our business.