Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Mar. 25, 2022 | Apr. 22, 2022 | |
Document and Entity Information | ||
Entity Registrant Name | TE CONNECTIVITY LTD. | |
Entity Central Index Key | 0001385157 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 25, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-33260 | |
Entity Incorporation, State or Country Code | V8 | |
Entity Tax Identification Number | 98-0518048 | |
Entity Address, Address Line One | Mühlenstrasse 26 | |
Entity Address, City or Town | Schaffhausen | |
Entity Address, Country | CH | |
Entity Address, Postal Zip Code | CH-8200 | |
Country Region | +41 | |
City Area Code | (0)52 | |
Local Phone Number | 633 66 61 | |
Title of 12(b) Security | Common Shares, Par Value CHF 0.57 | |
Trading Symbol | TEL | |
Security Exchange Name | NYSE | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 322,173,819 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 25, 2022 | Mar. 26, 2021 | Mar. 25, 2022 | Mar. 26, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Net sales | $ 4,007 | $ 3,738 | $ 7,825 | $ 7,260 |
Cost of sales | 2,670 | 2,528 | 5,258 | 4,904 |
Gross margin | 1,337 | 1,210 | 2,567 | 2,356 |
Selling, general, and administrative expenses | 416 | 401 | 779 | 762 |
Research, development, and engineering expenses | 185 | 174 | 360 | 336 |
Acquisition and integration costs | 10 | 6 | 18 | 14 |
Restructuring and other charges, net | 21 | 17 | 33 | 184 |
Operating income | 705 | 612 | 1,377 | 1,060 |
Interest income | 4 | 8 | 6 | 11 |
Interest expense | (18) | (13) | (30) | (28) |
Other income, net | 5 | 4 | 20 | 3 |
Income from continuing operations before income taxes | 696 | 611 | 1,373 | 1,046 |
Income tax expense | (136) | (106) | (246) | (166) |
Income from continuing operations | 560 | 505 | 1,127 | 880 |
Income (loss) from discontinued operations, net of income taxes | 1 | (1) | 7 | |
Net income | $ 560 | $ 506 | $ 1,126 | $ 887 |
Basic earnings per share: | ||||
Income from continuing operations (in dollars per share) | $ 1.72 | $ 1.53 | $ 3.46 | $ 2.66 |
Income from discontinued operations (in dollars per share) | 0.02 | |||
Net income (in dollars per share) | 1.72 | 1.53 | 3.45 | 2.68 |
Diluted earnings per share: | ||||
Income from continuing operations (in dollars per share) | 1.71 | 1.51 | 3.44 | 2.64 |
Income from discontinued operations (in dollars per share) | 0.02 | |||
Net income (in dollars per share) | $ 1.71 | $ 1.51 | $ 3.43 | $ 2.66 |
Weighted-average number of shares outstanding: | ||||
Basic (in shares) | 325 | 331 | 326 | 331 |
Diluted (in shares) | 327 | 334 | 328 | 333 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 25, 2022 | Mar. 26, 2021 | Mar. 25, 2022 | Mar. 26, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $ 560 | $ 506 | $ 1,126 | $ 887 |
Other comprehensive income: | ||||
Currency translation | (9) | 21 | 9 | 132 |
Adjustments to unrecognized pension and postretirement benefit costs, net of income taxes | 4 | 6 | 8 | 12 |
Gains on cash flow hedges, net of income taxes | 46 | 28 | 47 | 57 |
Other comprehensive income | 41 | 55 | 64 | 201 |
Comprehensive income | 601 | 561 | 1,190 | 1,088 |
Less: comprehensive (income) loss attributable to noncontrolling interests | 1 | 4 | 7 | (2) |
Comprehensive income attributable to TE Connectivity Ltd. | $ 602 | $ 565 | $ 1,197 | $ 1,086 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 25, 2022 | Sep. 24, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 749 | $ 1,203 |
Accounts receivable, net of allowance for doubtful accounts of $50 and $41, respectively | 3,068 | 2,928 |
Inventories | 2,999 | 2,511 |
Prepaid expenses and other current assets | 601 | 621 |
Total current assets | 7,417 | 7,263 |
Property, plant, and equipment, net | 3,817 | 3,778 |
Goodwill | 5,463 | 5,590 |
Intangible assets, net | 1,441 | 1,549 |
Deferred income taxes | 2,466 | 2,499 |
Other assets | 847 | 783 |
Total assets | 21,451 | 21,462 |
Current liabilities: | ||
Short-term debt | 610 | 503 |
Accounts payable | 1,986 | 1,911 |
Accrued and other current liabilities | 2,450 | 2,242 |
Total current liabilities | 5,046 | 4,656 |
Long-term debt | 3,441 | 3,589 |
Long-term pension and postretirement liabilities | 1,103 | 1,139 |
Deferred income taxes | 185 | 181 |
Income taxes | 318 | 302 |
Other liabilities | 809 | 847 |
Total liabilities | 10,902 | 10,714 |
Commitments and contingencies (Note 9) | ||
Redeemable noncontrolling interests | 107 | 114 |
Shareholders' equity: | ||
Common shares, CHF 0.57 par value, 336,099,881 shares authorized and issued | 148 | 148 |
Accumulated earnings | 12,160 | 11,709 |
Treasury shares, at cost, 13,281,156 and 9,060,919 shares, respectively | (1,769) | (1,055) |
Accumulated other comprehensive loss | (97) | (168) |
Total shareholders' equity | 10,442 | 10,634 |
Total liabilities, redeemable noncontrolling interests, and shareholders' equity | $ 21,451 | $ 21,462 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) $ in Millions | Mar. 25, 2022USD ($)shares | Mar. 25, 2022SFr / shares | Sep. 24, 2021USD ($)shares | Sep. 24, 2021SFr / shares |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
Accounts receivable, allowance for doubtful accounts (in dollars) | $ | $ 50 | $ 41 | ||
Common shares, par value (in currency per share) | SFr / shares | SFr 0.57 | SFr 0.57 | ||
Common shares, shares authorized | 336,099,881 | 336,099,881 | ||
Common shares, shares issued | 336,099,881 | 336,099,881 | ||
Treasury shares | 13,281,156 | 9,060,919 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Millions, $ in Millions | Common Shares | Treasury Shares | Contributed Surplus | Accumulated Earnings | Accumulated Other Comprehensive Loss | Total |
Balance at Sep. 25, 2020 | $ 149 | $ (669) | $ 10,348 | $ (445) | $ 9,383 | |
Balance (in shares) at Sep. 25, 2020 | 339 | (8) | ||||
Increase (Decrease) in Shareholders' Equity: | ||||||
Net income | 887 | 887 | ||||
Other comprehensive income | 199 | 199 | ||||
Share-based compensation expense | $ 49 | 49 | ||||
Dividends | (661) | (661) | ||||
Exercise of share options | $ 119 | 119 | ||||
Exercise of share options (in shares) | 2 | |||||
Restricted share award vestings and other activity | $ 84 | (49) | (33) | 2 | ||
Repurchase of common shares | $ (309) | $ (309) | ||||
Repurchase of common shares (in shares) | (3) | (3) | ||||
Balance at Mar. 26, 2021 | $ 149 | $ (775) | 10,541 | (246) | $ 9,669 | |
Balance (in shares) at Mar. 26, 2021 | 339 | (9) | ||||
Balance at Dec. 25, 2020 | $ 149 | $ (655) | 10,672 | (305) | 9,861 | |
Balance (in shares) at Dec. 25, 2020 | 339 | (8) | ||||
Increase (Decrease) in Shareholders' Equity: | ||||||
Net income | 506 | 506 | ||||
Other comprehensive income | 59 | 59 | ||||
Share-based compensation expense | 30 | 30 | ||||
Dividends | (661) | (661) | ||||
Exercise of share options | $ 44 | 44 | ||||
Exercise of share options (in shares) | 1 | |||||
Restricted share award vestings and other activity | $ 18 | (30) | 24 | 12 | ||
Repurchase of common shares | $ (182) | (182) | ||||
Repurchase of common shares (in shares) | (2) | |||||
Balance at Mar. 26, 2021 | $ 149 | $ (775) | 10,541 | (246) | 9,669 | |
Balance (in shares) at Mar. 26, 2021 | 339 | (9) | ||||
Balance at Sep. 24, 2021 | $ 148 | $ (1,055) | 11,709 | (168) | 10,634 | |
Balance (in shares) at Sep. 24, 2021 | 336 | (9) | ||||
Increase (Decrease) in Shareholders' Equity: | ||||||
Net income | 1,126 | 1,126 | ||||
Other comprehensive income | 71 | 71 | ||||
Share-based compensation expense | 60 | 60 | ||||
Dividends | (722) | (722) | ||||
Exercise of share options | $ 30 | 30 | ||||
Restricted share award vestings and other activity | $ 8 | (60) | 47 | (5) | ||
Restricted share award vestings and other activity (in shares) | 1 | |||||
Repurchase of common shares | $ (752) | $ (752) | ||||
Repurchase of common shares (in shares) | (5) | (5) | ||||
Balance at Mar. 25, 2022 | $ 148 | $ (1,769) | 12,160 | (97) | $ 10,442 | |
Balance (in shares) at Mar. 25, 2022 | 336 | (13) | ||||
Balance at Dec. 24, 2021 | $ 148 | $ (1,274) | 12,285 | (139) | 11,020 | |
Balance (in shares) at Dec. 24, 2021 | 336 | (10) | ||||
Increase (Decrease) in Shareholders' Equity: | ||||||
Net income | 560 | 560 | ||||
Other comprehensive income | 42 | 42 | ||||
Share-based compensation expense | 28 | 28 | ||||
Dividends | (722) | (722) | ||||
Exercise of share options | $ 8 | 8 | ||||
Restricted share award vestings and other activity | 3 | $ (28) | 37 | 12 | ||
Repurchase of common shares | $ (506) | (506) | ||||
Repurchase of common shares (in shares) | (3) | |||||
Balance at Mar. 25, 2022 | $ 148 | $ (1,769) | $ 12,160 | $ (97) | $ 10,442 | |
Balance (in shares) at Mar. 25, 2022 | 336 | (13) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Mar. 25, 2022 | Mar. 26, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 1,126 | $ 887 |
(Income) loss from discontinued operations, net of income taxes | 1 | (7) |
Income from continuing operations | 1,127 | 880 |
Adjustments to reconcile income from continuing operations to net cash provided by operating activities: | ||
Depreciation and amortization | 392 | 380 |
Deferred income taxes | 42 | (48) |
Non-cash lease cost | 64 | 59 |
Provision for losses on accounts receivable and inventories | 68 | 22 |
Share-based compensation expense | 60 | 49 |
Other | 4 | (20) |
Changes in assets and liabilities, net of the effects of acquisitions and divestitures: | ||
Accounts receivable, net | (57) | (567) |
Inventories | (411) | (212) |
Prepaid expenses and other current assets | 36 | (30) |
Accounts payable | 15 | 510 |
Accrued and other current liabilities | (305) | 125 |
Income taxes | 27 | 34 |
Other | (117) | 38 |
Net cash provided by operating activities | 945 | 1,220 |
Cash flows from investing activities: | ||
Capital expenditures | (351) | (284) |
Proceeds from sale of property, plant, and equipment | 63 | 58 |
Acquisition of businesses, net of cash acquired | (102) | (107) |
Other | 7 | 10 |
Net cash used in investing activities | (383) | (323) |
Cash flows from financing activities: | ||
Proceeds from issuance of debt | 588 | 661 |
Repayment of debt | (558) | (280) |
Proceeds from exercise of share options | 30 | 119 |
Repurchase of common shares | (708) | (259) |
Payment of common share dividends to shareholders | (326) | (318) |
Other | (38) | (24) |
Net cash used in financing activities | (1,012) | (101) |
Effect of currency translation on cash | (4) | 7 |
Net increase (decrease) in cash, cash equivalents, and restricted cash | (454) | 803 |
Cash, cash equivalents, and restricted cash at beginning of period | 1,203 | 945 |
Cash, cash equivalents, and restricted cash at end of period | $ 749 | $ 1,748 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Mar. 25, 2022 | |
Basis of Presentation | |
Basis of Presentation | 1. Basis of Presentation The unaudited Condensed Consolidated Financial Statements of TE Connectivity Ltd. (“TE Connectivity” or the “Company,” which may be referred to as “we,” “us,” or “our”) have been prepared in United States (“U.S.”) dollars, in accordance with accounting principles generally accepted in the U.S. (“GAAP”) and the instructions to Form 10-Q under the Securities Exchange Act of 1934. In management’s opinion, the unaudited Condensed Consolidated Financial Statements contain all normal recurring adjustments necessary for a fair presentation of interim results. The results of operations reported for interim periods are not necessarily indicative of the results of operations for the entire fiscal year or any subsequent interim period. The year-end balance sheet data was derived from audited financial statements, but does not include all of the information and disclosures required by GAAP. These financial statements should be read in conjunction with our audited Consolidated Financial Statements contained in our Annual Report on Form 10-K for the fiscal year ended September 24, 2021. Unless otherwise indicated, references in the Condensed Consolidated Financial Statements to fiscal 2022 and fiscal 2021 are to our fiscal years ending September 30, 2022 and ended September 24, 2021, respectively. |
Restructuring and Other Charges
Restructuring and Other Charges, Net | 6 Months Ended |
Mar. 25, 2022 | |
Restructuring and Other Charges, Net | |
Restructuring and Other Charges, Net | 2. Restructuring and Other Charges, Net Net restructuring and other charges consisted of the following: For the For the Quarters Ended Six Months Ended March 25, March 26, March 25, March 26, 2022 2021 2022 2021 (in millions) Restructuring charges, net $ 22 $ 11 $ 43 $ 160 (Gain) loss on divestitures and impairment of held for sale businesses (1) 4 (10) 21 Other charges, net — 2 — 3 Restructuring and other charges, net $ 21 $ 17 $ 33 $ 184 Net restructuring and related charges by segment were as follows: For the For the Quarters Ended Six Months Ended March 25, March 26, March 25, March 26, 2022 2021 2022 2021 (in millions) Transportation Solutions $ 10 $ 10 $ 15 $ 128 Industrial Solutions 10 — 18 20 Communications Solutions 2 1 10 12 Restructuring charges, net 22 11 43 160 Plus: charges included in cost of sales (1) — — 12 — Restructuring and related charges, net $ 22 $ 11 $ 55 $ 160 (1) Charges included in cost of sales were attributable to inventory-related charges within the Industrial Solutions segment. Activity in our restructuring reserves was as follows: Balance at Balance at September 24, Changes in Cash Non-Cash Currency March 25, 2021 Charges Estimate Payments Items Translation 2022 (in millions) Fiscal 2022 Actions: Employee severance $ — $ 35 $ — $ (1) $ — $ — $ 34 Property, plant, and equipment and inventories — 18 — — (18) — — Total — 53 — (1) (18) — 34 Fiscal 2021 Actions: Employee severance 152 2 — (49) — (7) 98 Facility and other exit costs 2 2 — (3) — — 1 Property, plant, and equipment — 2 — — (2) — — Total 154 6 — (52) (2) (7) 99 Pre-Fiscal 2021 Actions: Employee severance 135 — (15) (26) — (5) 89 Facility and other exit costs 15 7 — (7) — (1) 14 Property, plant, and equipment — 4 — — (4) — — Total 150 11 (15) (33) (4) (6) 103 Total Activity $ 304 $ 70 $ (15) $ (86) $ (24) $ (13) $ 236 Fiscal 2022 Actions During fiscal 2022, we initiated a restructuring program associated with footprint consolidation and cost structure improvements across all segments. During the six months ended March 25, 2022, we recorded restructuring and related charges of $53 million in connection with this program. We expect to complete all restructuring actions commenced during the six months ended March 25, 2022 by the end of fiscal 2024 and to incur additional charges of approximately $12 million. Fiscal 2021 Actions During fiscal 2021, we initiated a restructuring program across all segments to optimize our manufacturing footprint and improve the cost structure of the organization. In connection with this program, during the six months ended March 25, 2022 and March 26, 2021, we recorded net restructuring charges of $6 million and $153 million, respectively. We expect to complete all restructuring actions commenced during fiscal 2021 by the end of fiscal 2023 and to incur additional charges of approximately $8 million related to employee severance and facility exit costs. The following table summarizes expected, incurred, and remaining charges for the fiscal 2021 program by segment as of March 25, 2022: Total Cumulative Remaining Expected Charges Expected Charges Incurred Charges (in millions) Transportation Solutions $ 132 $ 129 $ 3 Industrial Solutions 54 51 3 Communications Solutions 27 25 2 Total $ 213 $ 205 $ 8 Pre-Fiscal 2021 Actions During the six months ended March 25, 2022 and March 26, 2021, we recorded net restructuring credits of $4 million and charges of $7 million, respectively, related to pre-fiscal 2021 actions. We expect additional charges related to pre-fiscal 2021 actions to be insignificant. Total Restructuring Reserves Restructuring reserves included on the Condensed Consolidated Balance Sheets were as follows: March 25, September 24, 2022 2021 (in millions) Accrued and other current liabilities $ 181 $ 236 Other liabilities 55 68 Restructuring reserves $ 236 $ 304 |
Acquisitions
Acquisitions | 6 Months Ended |
Mar. 25, 2022 | |
Acquisitions | |
Acquisitions | 3. Acquisitions During the six months ended March 25, 2022, we acquired one business for a cash purchase price of $127 million, net of cash acquired. The acquisition was reported as part of our Communications Solutions segment from the date of acquisition. We acquired one business for a cash purchase price of $106 million, net of cash acquired, during the six months ended March 26, 2021. The acquisition was reported as part of our Industrial Solutions segment from the date of acquisition. |
Inventories
Inventories | 6 Months Ended |
Mar. 25, 2022 | |
Inventories | |
Inventories | 4. Inventories Inventories consisted of the following: March 25, September 24, 2022 2021 (in millions) Raw materials $ 429 $ 320 Work in progress 1,176 991 Finished goods 1,394 1,200 Inventories $ 2,999 $ 2,511 |
Goodwill
Goodwill | 6 Months Ended |
Mar. 25, 2022 | |
Goodwill | |
Goodwill | 5. Goodwill The changes in the carrying amount of goodwill by segment were as follows: Transportation Industrial Communications Solutions Solutions Solutions Total (in millions) September 24, 2021 (1) $ 1,549 $ 3,446 $ 595 $ 5,590 Acquisition — — 74 74 Purchase price adjustments — (101) — (101) Currency translation and other (31) (59) (10) (100) March 25, 2022 (1) $ 1,518 $ 3,286 $ 659 $ 5,463 (1) At March 25, 2022 and September 24, 2021, accumulated impairment losses for the Transportation Solutions, Industrial Solutions, and Communications Solutions segments were $3,091 million, $669 million, and $489 million, respectively. During the six months ended March 25, 2022, we recognized goodwill in the Communications Solutions segment in connection with a recent acquisition. Also during the six months ended March 25, 2022, we recognized purchase price adjustments in the Industrial Solutions segment in connection with prior year acquisitions, including two acquisitions that closed late in the fourth quarter of fiscal 2021. See Note 3 for additional information regarding acquisitions. |
Intangible Assets, Net
Intangible Assets, Net | 6 Months Ended |
Mar. 25, 2022 | |
Intangible Assets, Net | |
Intangible Assets, Net | 6. Intangible Assets, Net Intangible assets consisted of the following: March 25, 2022 September 24, 2021 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount (in millions) Customer relationships $ 1,741 $ (699) $ 1,042 $ 1,766 $ (660) $ 1,106 Intellectual property 1,254 (868) 386 1,262 (832) 430 Other 19 (6) 13 19 (6) 13 Total $ 3,014 $ (1,573) $ 1,441 $ 3,047 $ (1,498) $ 1,549 Intangible asset amortization expense was $49 million and $48 million for the quarters ended March 25, 2022 and March 26, 2021, respectively, and $97 million and $96 million for the six months ended March 25, 2022 and March 26, 2021, respectively. At March 25, 2022, the aggregate amortization expense on intangible assets is expected to be as follows: (in millions) Remainder of fiscal 2022 $ 99 Fiscal 2023 197 Fiscal 2024 165 Fiscal 2025 150 Fiscal 2026 143 Fiscal 2027 123 Thereafter 564 Total $ 1,441 |
Debt
Debt | 6 Months Ended |
Mar. 25, 2022 | |
Debt | |
Debt | 7. Debt During the quarter ended March 25, 2022, Tyco Electronics Group S.A. (“TEGSA”), our wholly-owned subsidiary, issued $600 million aggregate principal amount of 2.50% senior notes due in February 2032. The notes are TEGSA’s unsecured senior obligations and rank equally in right of payment with all existing and any future senior indebtedness of TEGSA and senior to any subordinated indebtedness that TEGSA may incur. The notes are fully and unconditionally guaranteed as to payment on an unsecured basis by TE Connectivity Ltd. During the quarter ended March 25, 2022, we reclassified €550 million of 1.10% senior notes due in March 2023 from long-term debt to short-term During the six months ended March 25, 2022, TEGSA completed an early redemption of $500 million aggregate principal amount of 3.50% senior notes due in February 2022. The fair value of our debt, based on indicative valuations, was approximately $4,137 million and $4,465 million at March 25, 2022 and September 24, 2021, respectively. |
Leases
Leases | 6 Months Ended |
Mar. 25, 2022 | |
Leases | |
Leases | 8. Leases The components of lease cost were as follows: For the For the Quarters Ended Six Months Ended March 25, March 26, March 25, March 26, 2022 2021 2022 2021 (in millions) Operating lease cost $ 33 $ 29 $ 64 $ 59 Variable lease cost 13 13 25 24 Total lease cost $ 46 $ 42 $ 89 $ 83 Cash flow information, including significant non-cash transactions, related to leases was as follows: For the Six Months Ended March 25, March 26, 2022 2021 (in millions) Cash paid for amounts included in the measurement of lease liabilities: Payments for operating leases (1) $ 61 $ 59 Right-of-use assets, including modifications of existing leases, obtained in exchange for operating lease liabilities 77 38 (1) These payments are included in cash flows from operating activities, primarily in changes in accrued and other current liabilities. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Mar. 25, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | 9. Commitments and Contingencies Legal Proceedings In the normal course of business, we are subject to various legal proceedings and claims, including patent infringement claims, product liability matters, employment disputes, disputes on agreements, other commercial disputes, environmental matters, antitrust claims, and tax matters, including non-income tax matters such as value added tax, sales and use tax, real estate tax, and transfer tax. Although it is not feasible to predict the outcome of these proceedings, based upon our experience, current information, and applicable law, we do not expect that the outcome of these proceedings, either individually or in the aggregate, will have a material effect on our results of operations, financial position, or cash flows. Trade Compliance Matters We are investigating our past compliance with relevant U.S. trade controls and have made voluntary disclosures of apparent trade controls violations to the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) and the U.S. State Department’s Directorate of Defense Trade Controls (“DDTC”). We are cooperating with the BIS and DDTC on these matters, and both our internal assessment and the resulting investigations by the agencies remain ongoing. We are unable to predict the timing and final outcome of the agencies’ investigations. An unfavorable outcome may include fines or penalties imposed in response to our disclosures, but we are not yet able to reasonably estimate the extent of any such fines or penalties. While we have reserved for potential fines and penalties relating to these matters based on our current understanding of the facts, the investigations into these matters have yet to be completed and the final outcome of such investigations and related fines and penalties may differ from amounts currently reserved. Environmental Matters We are involved in various stages of investigation and cleanup related to environmental remediation matters at a number of sites. The ultimate cost of site cleanup is difficult to predict given the uncertainties regarding the extent of the required cleanup, the interpretation of applicable laws and regulations, and alternative cleanup methods. As of March 25, 2022, we concluded that we would incur investigation and remediation costs at these sites in the reasonably possible range of $18 million to $45 million, and we accrued $21 million as the probable loss, which was the best estimate within this range. We believe that any potential payment of such estimated amounts will not have a material adverse effect on our results of operations, financial position, or cash flows. Guarantees In disposing of assets or businesses, we often provide representations, warranties, and/or indemnities to cover various risks including unknown damage to assets, environmental risks involved in the sale of real estate, liability for investigation and remediation of environmental contamination at waste disposal sites and manufacturing facilities, and unidentified tax liabilities and legal fees related to periods prior to disposition. We do not expect that these uncertainties will have a material adverse effect on our results of operations, financial position, or cash flows. At March 25, 2022, we had outstanding letters of credit, letters of guarantee, and surety bonds of $120 million, excluding those related to our Subsea Communications (“SubCom”) business which are discussed below. During fiscal 2019, we sold our SubCom business. In connection with the sale, we contractually agreed to continue to honor performance guarantees and letters of credit related to the SubCom business’ projects that existed as of the date of sale. These performance guarantees and letters of credit had a combined value of approximately $117 million as of March 25, 2022 and are expected to expire at various dates through fiscal 2027. We have contractual recourse against the SubCom business if we are required to perform on any SubCom guarantees; however, based on historical experience, we do not anticipate having to perform. |
Financial Instruments
Financial Instruments | 6 Months Ended |
Mar. 25, 2022 | |
Financial Instruments | |
Financial Instruments | 10. Financial Instruments Foreign Currency Exchange Rate Risk We utilize cross-currency swap contracts to reduce our exposure to foreign currency exchange rate risk associated with certain intercompany loans. The aggregate notional value of these contracts was €300 million and €700 million at March 25, 2022 and September 24, 2021, respectively. Certain contracts were terminated in the six months ended March 25, 2022; the remaining contracts mature in the fourth quarter of fiscal 2022. Under the terms of these contracts, which have been designated as cash flow hedges, we make interest payments in euros at 3.50% per annum and receive interest in U.S. dollars at a weighted-average rate of 5.28% per annum. Upon maturity, we will pay the notional value of the contracts in euros and receive U.S. dollars from our counterparties. In connection with the cross-currency swap contracts, both counterparties to each contract are required to provide cash collateral. These cross-currency swap contracts were recorded on the Condensed Consolidated Balance Sheets as follows: March 25, September 24, 2022 2021 (in millions) Prepaid expenses and other current assets $ 11 $ — Other liabilities — 20 At March 25, 2022 and September 24, 2021, collateral received from or paid to our counterparties approximated the net derivative position. Collateral is recorded in accrued and other current liabilities when the contracts are in a net asset position, or prepaid expenses and other current assets when the contracts are in a net liability position on the Condensed Consolidated Balance Sheets. The impacts of these cross-currency swap contracts were as follows: For the For the Quarters Ended Six Months Ended March 25, March 26, March 25, March 26, 2022 2021 2022 2021 (in millions) Losses recorded in other comprehensive income (loss) $ (2) $ — $ (5) $ (4) Gains (losses) excluded from the hedging relationship (1) 10 28 39 (12) (1) Gains and losses excluded from the hedging relationship are recognized prospectively in selling, general, and administrative expenses and are offset by losses and gains generated as a result of re-measuring certain intercompany loans to the U.S. dollar. 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 $3,166 million and $3,798 million at March 25, 2022 and September 24, 2021, 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 $1,691 million and $1,430 million at March 25, 2022 and September 24, 2021, respectively. Under the terms of these contracts, we receive interest in U.S. dollars at a weighted-average rate of 1.55% per annum and pay no interest. Upon the maturity of these contracts at various dates through fiscal 2025, we will pay the notional value of the contracts in the designated foreign currency and receive U.S. dollars from our counterparties. We are not required to provide collateral for these contracts. These cross-currency swap contracts were recorded on the Condensed Consolidated Balance Sheets as follows: March 25, September 24, 2022 2021 (in millions) Prepaid expenses and other current assets $ 16 $ 3 Other assets 46 18 Accrued and other current liabilities 2 13 Other liabilities 2 18 The impacts of our hedge of net investment programs were as follows: For the For the Quarters Ended Six Months Ended March 25, March 26, March 25, March 26, 2022 2021 2022 2021 (in millions) Foreign currency exchange gains (losses) on intercompany loans and external borrowings (1) $ 80 $ 133 $ 188 $ (35) Gains (losses) on cross-currency swap contracts designated as hedges of net investment (1) 33 58 70 (27) (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 Risk Management 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. During the six months ended March 25, 2022, we terminated forward starting interest rate swap contracts with an aggregate notional value of $450 million as a result of the issuance of our 2.50% senior notes due in 2032. At fiscal year end 2021, these forward starting interest rate swap contracts were recorded on the Condensed Consolidated Balance Sheet as follows; there were no such balances at March 25, 2022: September 24, 2021 (in millions) Prepaid expenses and other current assets $ 7 Accrued and other current liabilities 38 The impacts of these forward starting interest rate swap contracts were as follows: For the For the Quarters Ended Six Months Ended March 25, March 26, March 25, March 26, 2022 2021 2022 2021 (in millions) Gains recorded in other comprehensive income (loss) $ 11 $ 34 $ 13 $ 47 Commodity Hedges As part of managing the exposure to certain commodity price fluctuations, we utilize commodity swap contracts. The objective of these contracts is to minimize impacts to cash flows and profitability due to changes in prices of commodities used in production. These contracts had an aggregate notional value of $599 million and $512 million at March 25, 2022 and September 24, 2021, respectively, and were designated as cash flow hedges. These commodity swap contracts were recorded on the Condensed Consolidated Balance Sheets as follows: March 25, September 24, 2022 2021 (in millions) Prepaid expenses and other current assets $ 39 $ 23 Other assets 5 — Accrued and other current liabilities 1 18 Other liabilities — 4 The impacts of these commodity swap contracts were as follows: For the For the Quarters Ended Six Months Ended March 25, March 26, March 25, March 26, 2022 2021 2022 2021 (in millions) Gains recorded in other comprehensive income (loss) $ 46 $ 17 $ 61 $ 54 Gains reclassified from accumulated other comprehensive income (loss) into cost of sales 5 24 20 39 We expect that significantly all of the balance in accumulated other comprehensive income (loss) associated with commodity hedges will be reclassified into the Condensed Consolidated Statement of Operations within the next twelve months. |
Retirement Plans
Retirement Plans | 6 Months Ended |
Mar. 25, 2022 | |
Retirement Plans | |
Retirement Plans | 11. Retirement Plans 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 For the For the Quarters Ended Quarters Ended March 25, March 26, March 25, March 26, 2022 2021 2022 2021 (in millions) Operating expense: Service cost $ 10 $ 12 $ 2 $ 3 Other (income) expense: Interest cost 8 7 6 8 Expected return on plan assets (14) (13) (12) (13) Amortization of net actuarial loss 7 7 1 2 Amortization of prior service credit (2) (2) — — Net periodic pension benefit cost (credit) $ 9 $ 11 $ (3) $ — Non-U.S. Plans U.S. Plans For the For the Six Months Ended Six Months Ended March 25, March 26, March 25, March 26, 2022 2021 2022 2021 (in millions) Operating expense: Service cost $ 20 $ 24 $ 4 $ 6 Other (income) expense: Interest cost 17 14 13 16 Expected return on plan assets (29) (27) (24) (26) Amortization of net actuarial loss 13 15 2 4 Amortization of prior service credit (3) (3) — — Net periodic pension benefit cost (credit) $ 18 $ 23 $ (5) $ — During the six months ended March 25, 2022, we contributed $18 million to our non-U.S. pension plans. |
Income Taxes
Income Taxes | 6 Months Ended |
Mar. 25, 2022 | |
Income Taxes | |
Income Taxes | 12. Income Taxes We recorded income tax expense of $136 million and $106 million for the quarters ended March 25, 2022 and March 26, 2021, respectively. The income tax expense for the quarter ended March 25, 2022 included $27 million of income tax expense related to the write-down of certain deferred tax assets to the lower tax rate enacted in the canton of Schaffhausen on December 27, 2021. In addition, the income tax expense for the quarter ended March 25, 2022 included a $19 million income tax benefit related to the tax impacts of an intercompany transaction. Our estimated annual effective tax rate for fiscal 2022 includes a total income tax benefit of approximately $75 million related to this transaction, with a portion recognized in the first six months of fiscal 2022 and the remainder to be recognized in the remaining quarters of fiscal 2022. We recorded income tax expense of $246 million and $166 million for the six months ended March 25, 2022 and March 26, 2021, respectively. The income tax expense for the six months ended March 25, 2022 included a $36 million income tax benefit related to the tax impacts of the intercompany transaction discussed above and $27 million of income tax expense related to the write-down of certain deferred tax assets to the lower tax rate enacted in the canton of Schaffhausen. In addition, the income tax expense for the six months ended March 25, 2022 included $12 million of income tax expense related to an income tax audit of an acquired entity. As we are entitled to indemnification of pre-acquisition period tax obligations under the terms of the purchase agreement, we recorded an associated indemnification receivable and other income of $11 million during the six months ended March 25, 2022. The income tax expense for the six months ended March 26, 2021 included a $29 million income tax benefit related to an Internal Revenue Service approved change in the tax method of depreciating or amortizing certain assets During the quarter ended March 25, 2022, we completed additional intercompany transactions that resulted in a non-U.S. subsidiary recording an increase in deferred tax assets for tax loss and credit carryforwards of approximately $4.0 billion. We do not expect this subsidiary to generate sufficient future taxable income to realize these deferred tax assets; therefore, we recognized a corresponding increase to the valuation Although it is difficult to predict the timing or results of our worldwide examinations, we estimate that approximately $100 million of unrecognized income tax benefits, excluding the impact relating to accrued interest and penalties, could be resolved within the next twelve months. We are not aware of any other matters that would result in significant changes to the amount of unrecognized income tax benefits reflected on the Condensed Consolidated Balance Sheet as of March 25, 2022. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Mar. 25, 2022 | |
Earnings Per Share | |
Earnings Per Share | 13. Earnings Per Share The weighted-average number of shares outstanding used in the computations of basic and diluted earnings per share were as follows: For the For the Quarters Ended Six Months Ended March 25, March 26, March 25, March 26, 2022 2021 2022 2021 (in millions) Basic 325 331 326 331 Dilutive impact of share-based compensation arrangements 2 3 2 2 Diluted 327 334 328 333 For the quarter and six months ended March 25, 2022, one million 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 common shares and inclusion would be antidilutive. |
Shareholders' Equity
Shareholders' Equity | 6 Months Ended |
Mar. 25, 2022 | |
Shareholders' Equity | |
Shareholder' Equity | 14. Shareholders’ Equity Common Shares Held in Treasury In March 2022, our shareholders approved the cancellation of approximately five million shares purchased under our share repurchase program during the period beginning September 26, 2020 and ending September 24, 2021. The capital reduction by cancellation of these shares is subject to a notice period and filing with the commercial register in Switzerland and is not yet reflected on the Condensed Consolidated Balance Sheet. Dividends We paid cash dividends to shareholders as follows: For the For the Quarters Ended Six Months Ended March 25, March 26, March 25, March 26, 2022 2021 2022 2021 Dividends paid per common share $ 0.50 $ 0.48 $ 1.00 $ 0.96 In March 2022, our shareholders approved a dividend payment to shareholders of $2.24 per share, payable in four equal quarterly installments of $0.56 per share beginning in the third quarter of fiscal 2022 and ending in the second quarter of fiscal 2023. Upon shareholders’ approval of a dividend payment, we record a liability with a corresponding charge to shareholders’ equity. At March 25, 2022 and September 24, 2021, the unpaid portion of the dividends recorded in accrued and other current liabilities on the Condensed Consolidated Balance Sheets totaled $723 million and $327 million, respectively. Share Repurchase Program Common shares repurchased under the share repurchase program were as follows: For the Six Months Ended March 25, March 26, 2022 2021 (in millions) Number of common shares repurchased 5 3 Repurchase value $ 752 $ 309 At March 25, 2022, we had $839 million of availability remaining under our share repurchase authorization. |
Share Plans
Share Plans | 6 Months Ended |
Mar. 25, 2022 | |
Share Plans | |
Share Plans | 15. Share Plans Share-based compensation expense, which was included in selling, general, and administrative expenses on the Condensed Consolidated Statements of Operations, was as follows: For the For the Quarters Ended Six Months Ended March 25, March 26, March 25, March 26, 2022 2021 2022 2021 (in millions) Share-based compensation expense $ 28 $ 30 $ 60 $ 49 As of March 25, 2022, there was $180 million of unrecognized compensation expense related to share-based awards, which is expected to be recognized over a weighted-average period of 2.0 years. During the quarter ended December 24, 2021, we granted the following share-based awards as part of our annual incentive plan grant: Grant-Date Shares Fair Value (in millions) Share options 0.8 $ 37.67 Restricted share awards 0.3 158.00 Performance share awards 0.1 158.00 As of March 25, 2022, we had 11 million shares available for issuance under the TE Connectivity Ltd. 2007 Stock and Incentive Plan, amended and restated as of September 17, 2020. Share-Based Compensation Assumptions The assumptions we used in the Black-Scholes-Merton option pricing model for the options granted as part of our annual incentive plan grant were as follows: Expected share price volatility 29 % Risk-free interest rate 1.1 % Expected annual dividend per share $ 2.00 Expected life of options (in years) 5.1 |
Segment and Geographic Data
Segment and Geographic Data | 6 Months Ended |
Mar. 25, 2022 | |
Segment and Geographic Data | |
Segment and Geographic Data | 16. Segment and Geographic Data Net sales by segment (1) (2) For the For the Quarters Ended Six Months Ended March 25, March 26, March 25, March 26, 2022 2021 2022 2021 (in millions) Transportation Solutions: Automotive $ 1,653 $ 1,630 $ 3,173 $ 3,259 Commercial transportation 394 382 759 713 Sensors 267 275 540 539 Total Transportation Solutions 2,314 2,287 4,472 4,511 Industrial Solutions: Industrial equipment 472 339 934 634 Aerospace, defense, oil, and gas 261 267 503 517 Energy 184 185 372 357 Medical 158 161 325 317 Total Industrial Solutions 1,075 952 2,134 1,825 Communications Solutions: Data and devices 385 278 734 512 Appliances 233 221 485 412 Total Communications Solutions 618 499 1,219 924 Total $ 4,007 $ 3,738 $ 7,825 $ 7,260 (1) Intersegment sales were not material. (2) Industry end market information is presented consistently with our internal management reporting and may be revised periodically as management deems necessary. Net sales by geographic region (1) For the For the Quarters Ended Six Months Ended March 25, March 26, March 25, March 26, 2022 2021 2022 2021 (in millions) Europe/Middle East/Africa (“EMEA”): Transportation Solutions $ 899 $ 922 $ 1,670 $ 1,816 Industrial Solutions 446 393 898 751 Communications Solutions 88 75 179 139 Total EMEA 1,433 1,390 2,747 2,706 Asia–Pacific: Transportation Solutions 883 875 1,811 1,751 Industrial Solutions 197 171 406 334 Communications Solutions 331 290 664 544 Total Asia–Pacific 1,411 1,336 2,881 2,629 Americas: Transportation Solutions 532 490 991 944 Industrial Solutions 432 388 830 740 Communications Solutions 199 134 376 241 Total Americas 1,163 1,012 2,197 1,925 Total $ 4,007 $ 3,738 $ 7,825 $ 7,260 (1) Net sales to external customers are attributed to individual countries based on the legal entity that records the sale. Operating income by segment was as follows: For the For the Quarters Ended Six Months Ended March 25, March 26, March 25, March 26, 2022 2021 2022 2021 (in millions) Transportation Solutions $ 409 $ 398 $ 804 $ 706 Industrial Solutions 148 111 271 187 Communications Solutions 148 103 302 167 Total $ 705 $ 612 $ 1,377 $ 1,060 |
Restructuring and Other Charg_2
Restructuring and Other Charges, Net (Tables) | 6 Months Ended |
Mar. 25, 2022 | |
Restructuring and Other Charges, Net | |
Schedule of net restructuring and other charges | For the For the Quarters Ended Six Months Ended March 25, March 26, March 25, March 26, 2022 2021 2022 2021 (in millions) Restructuring charges, net $ 22 $ 11 $ 43 $ 160 (Gain) loss on divestitures and impairment of held for sale businesses (1) 4 (10) 21 Other charges, net — 2 — 3 Restructuring and other charges, net $ 21 $ 17 $ 33 $ 184 |
Net restructuring and related charges by segment | For the For the Quarters Ended Six Months Ended March 25, March 26, March 25, March 26, 2022 2021 2022 2021 (in millions) Transportation Solutions $ 10 $ 10 $ 15 $ 128 Industrial Solutions 10 — 18 20 Communications Solutions 2 1 10 12 Restructuring charges, net 22 11 43 160 Plus: charges included in cost of sales (1) — — 12 — Restructuring and related charges, net $ 22 $ 11 $ 55 $ 160 (1) Charges included in cost of sales were attributable to inventory-related charges within the Industrial Solutions segment. |
Summary of activity in restructuring reserves | Balance at Balance at September 24, Changes in Cash Non-Cash Currency March 25, 2021 Charges Estimate Payments Items Translation 2022 (in millions) Fiscal 2022 Actions: Employee severance $ — $ 35 $ — $ (1) $ — $ — $ 34 Property, plant, and equipment and inventories — 18 — — (18) — — Total — 53 — (1) (18) — 34 Fiscal 2021 Actions: Employee severance 152 2 — (49) — (7) 98 Facility and other exit costs 2 2 — (3) — — 1 Property, plant, and equipment — 2 — — (2) — — Total 154 6 — (52) (2) (7) 99 Pre-Fiscal 2021 Actions: Employee severance 135 — (15) (26) — (5) 89 Facility and other exit costs 15 7 — (7) — (1) 14 Property, plant, and equipment — 4 — — (4) — — Total 150 11 (15) (33) (4) (6) 103 Total Activity $ 304 $ 70 $ (15) $ (86) $ (24) $ (13) $ 236 |
Restructuring reserves included on Consolidated Balance Sheets | March 25, September 24, 2022 2021 (in millions) Accrued and other current liabilities $ 181 $ 236 Other liabilities 55 68 Restructuring reserves $ 236 $ 304 |
Fiscal 2021 Actions | |
Restructuring and Other Charges, Net | |
Schedule of expected, incurred and remaining charges by segment | The following table summarizes expected, incurred, and remaining charges for the fiscal 2021 program by segment as of March 25, 2022: Total Cumulative Remaining Expected Charges Expected Charges Incurred Charges (in millions) Transportation Solutions $ 132 $ 129 $ 3 Industrial Solutions 54 51 3 Communications Solutions 27 25 2 Total $ 213 $ 205 $ 8 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Mar. 25, 2022 | |
Inventories | |
Schedule of inventories | March 25, September 24, 2022 2021 (in millions) Raw materials $ 429 $ 320 Work in progress 1,176 991 Finished goods 1,394 1,200 Inventories $ 2,999 $ 2,511 |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Mar. 25, 2022 | |
Goodwill | |
Changes in the carrying amount of goodwill by segment | Transportation Industrial Communications Solutions Solutions Solutions Total (in millions) September 24, 2021 (1) $ 1,549 $ 3,446 $ 595 $ 5,590 Acquisition — — 74 74 Purchase price adjustments — (101) — (101) Currency translation and other (31) (59) (10) (100) March 25, 2022 (1) $ 1,518 $ 3,286 $ 659 $ 5,463 (1) At March 25, 2022 and September 24, 2021, accumulated impairment losses for the Transportation Solutions, Industrial Solutions, and Communications Solutions segments were $3,091 million, $669 million, and $489 million, respectively. |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 6 Months Ended |
Mar. 25, 2022 | |
Intangible Assets, Net | |
Schedule of finite-lived intangible assets | March 25, 2022 September 24, 2021 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount (in millions) Customer relationships $ 1,741 $ (699) $ 1,042 $ 1,766 $ (660) $ 1,106 Intellectual property 1,254 (868) 386 1,262 (832) 430 Other 19 (6) 13 19 (6) 13 Total $ 3,014 $ (1,573) $ 1,441 $ 3,047 $ (1,498) $ 1,549 |
Schedule of finite-lived intangible assets, future amortization expense | At March 25, 2022, the aggregate amortization expense on intangible assets is expected to be as follows: (in millions) Remainder of fiscal 2022 $ 99 Fiscal 2023 197 Fiscal 2024 165 Fiscal 2025 150 Fiscal 2026 143 Fiscal 2027 123 Thereafter 564 Total $ 1,441 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Mar. 25, 2022 | |
Leases | |
Schedule of components of lease cost | For the For the Quarters Ended Six Months Ended March 25, March 26, March 25, March 26, 2022 2021 2022 2021 (in millions) Operating lease cost $ 33 $ 29 $ 64 $ 59 Variable lease cost 13 13 25 24 Total lease cost $ 46 $ 42 $ 89 $ 83 |
Schedule of Cash Flow information, including significant non-cash transactions, related to leases | For the Six Months Ended March 25, March 26, 2022 2021 (in millions) Cash paid for amounts included in the measurement of lease liabilities: Payments for operating leases (1) $ 61 $ 59 Right-of-use assets, including modifications of existing leases, obtained in exchange for operating lease liabilities 77 38 (1) These payments are included in cash flows from operating activities, primarily in changes in accrued and other current liabilities. |
Financial Instruments (Tables)
Financial Instruments (Tables) | 6 Months Ended |
Mar. 25, 2022 | |
Net investment hedges | |
Schedule of impacts of hedging program | For the For the Quarters Ended Six Months Ended March 25, March 26, March 25, March 26, 2022 2021 2022 2021 (in millions) Foreign currency exchange gains (losses) on intercompany loans and external borrowings (1) $ 80 $ 133 $ 188 $ (35) Gains (losses) on cross-currency swap contracts designated as hedges of net investment (1) 33 58 70 (27) (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. |
Cross-currency swap contracts | Cash flow hedges | |
Summary of fair value of derivative instruments | March 25, September 24, 2022 2021 (in millions) Prepaid expenses and other current assets $ 11 $ — Other liabilities — 20 |
Schedule of impacts of hedging program | For the For the Quarters Ended Six Months Ended March 25, March 26, March 25, March 26, 2022 2021 2022 2021 (in millions) Losses recorded in other comprehensive income (loss) $ (2) $ — $ (5) $ (4) Gains (losses) excluded from the hedging relationship (1) 10 28 39 (12) (1) Gains and losses excluded from the hedging relationship are recognized prospectively in selling, general, and administrative expenses and are offset by losses and gains generated as a result of re-measuring certain intercompany loans to the U.S. dollar. |
Cross-currency swap contracts | Net investment hedges | |
Summary of fair value of derivative instruments | March 25, September 24, 2022 2021 (in millions) Prepaid expenses and other current assets $ 16 $ 3 Other assets 46 18 Accrued and other current liabilities 2 13 Other liabilities 2 18 |
Forward starting interest rate swaps | Cash flow hedges | |
Summary of fair value of derivative instruments | September 24, 2021 (in millions) Prepaid expenses and other current assets $ 7 Accrued and other current liabilities 38 |
Schedule of impacts of hedging program | For the For the Quarters Ended Six Months Ended March 25, March 26, March 25, March 26, 2022 2021 2022 2021 (in millions) Gains recorded in other comprehensive income (loss) $ 11 $ 34 $ 13 $ 47 |
Commodity swap contracts | Cash flow hedges | |
Summary of fair value of derivative instruments | March 25, September 24, 2022 2021 (in millions) Prepaid expenses and other current assets $ 39 $ 23 Other assets 5 — Accrued and other current liabilities 1 18 Other liabilities — 4 |
Schedule of impacts of hedging program | For the For the Quarters Ended Six Months Ended March 25, March 26, March 25, March 26, 2022 2021 2022 2021 (in millions) Gains recorded in other comprehensive income (loss) $ 46 $ 17 $ 61 $ 54 Gains reclassified from accumulated other comprehensive income (loss) into cost of sales 5 24 20 39 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 6 Months Ended |
Mar. 25, 2022 | |
Retirement Plans | |
Net periodic pension benefit cost | Non-U.S. Plans U.S. Plans For the For the Quarters Ended Quarters Ended March 25, March 26, March 25, March 26, 2022 2021 2022 2021 (in millions) Operating expense: Service cost $ 10 $ 12 $ 2 $ 3 Other (income) expense: Interest cost 8 7 6 8 Expected return on plan assets (14) (13) (12) (13) Amortization of net actuarial loss 7 7 1 2 Amortization of prior service credit (2) (2) — — Net periodic pension benefit cost (credit) $ 9 $ 11 $ (3) $ — Non-U.S. Plans U.S. Plans For the For the Six Months Ended Six Months Ended March 25, March 26, March 25, March 26, 2022 2021 2022 2021 (in millions) Operating expense: Service cost $ 20 $ 24 $ 4 $ 6 Other (income) expense: Interest cost 17 14 13 16 Expected return on plan assets (29) (27) (24) (26) Amortization of net actuarial loss 13 15 2 4 Amortization of prior service credit (3) (3) — — Net periodic pension benefit cost (credit) $ 18 $ 23 $ (5) $ — |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Mar. 25, 2022 | |
Earnings Per Share | |
Schedule of weighted-average shares outstanding, basic and diluted | For the For the Quarters Ended Six Months Ended March 25, March 26, March 25, March 26, 2022 2021 2022 2021 (in millions) Basic 325 331 326 331 Dilutive impact of share-based compensation arrangements 2 3 2 2 Diluted 327 334 328 333 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 6 Months Ended |
Mar. 25, 2022 | |
Shareholders' Equity | |
Schedule of cash dividends to shareholders | For the For the Quarters Ended Six Months Ended March 25, March 26, March 25, March 26, 2022 2021 2022 2021 Dividends paid per common share $ 0.50 $ 0.48 $ 1.00 $ 0.96 |
Schedule of common shares repurchased | For the Six Months Ended March 25, March 26, 2022 2021 (in millions) Number of common shares repurchased 5 3 Repurchase value $ 752 $ 309 |
Share Plans (Tables)
Share Plans (Tables) | 6 Months Ended |
Mar. 25, 2022 | |
Share Plans | |
Share-based compensation expense | For the For the Quarters Ended Six Months Ended March 25, March 26, March 25, March 26, 2022 2021 2022 2021 (in millions) Share-based compensation expense $ 28 $ 30 $ 60 $ 49 |
Summary of share-based award activity | During the quarter ended December 24, 2021, we granted the following share-based awards as part of our annual incentive plan grant: Grant-Date Shares Fair Value (in millions) Share options 0.8 $ 37.67 Restricted share awards 0.3 158.00 Performance share awards 0.1 158.00 |
Weighted-average assumptions | The assumptions we used in the Black-Scholes-Merton option pricing model for the options granted as part of our annual incentive plan grant were as follows: Expected share price volatility 29 % Risk-free interest rate 1.1 % Expected annual dividend per share $ 2.00 Expected life of options (in years) 5.1 |
Segment and Geographic Data (Ta
Segment and Geographic Data (Tables) | 6 Months Ended |
Mar. 25, 2022 | |
Segment and Geographic Data | |
Schedule of net sales by segment and industry end market | For the For the Quarters Ended Six Months Ended March 25, March 26, March 25, March 26, 2022 2021 2022 2021 (in millions) Transportation Solutions: Automotive $ 1,653 $ 1,630 $ 3,173 $ 3,259 Commercial transportation 394 382 759 713 Sensors 267 275 540 539 Total Transportation Solutions 2,314 2,287 4,472 4,511 Industrial Solutions: Industrial equipment 472 339 934 634 Aerospace, defense, oil, and gas 261 267 503 517 Energy 184 185 372 357 Medical 158 161 325 317 Total Industrial Solutions 1,075 952 2,134 1,825 Communications Solutions: Data and devices 385 278 734 512 Appliances 233 221 485 412 Total Communications Solutions 618 499 1,219 924 Total $ 4,007 $ 3,738 $ 7,825 $ 7,260 (1) Intersegment sales were not material. (2) Industry end market information is presented consistently with our internal management reporting and may be revised periodically as management deems necessary. |
Net sales by segment and geographic region | For the For the Quarters Ended Six Months Ended March 25, March 26, March 25, March 26, 2022 2021 2022 2021 (in millions) Europe/Middle East/Africa (“EMEA”): Transportation Solutions $ 899 $ 922 $ 1,670 $ 1,816 Industrial Solutions 446 393 898 751 Communications Solutions 88 75 179 139 Total EMEA 1,433 1,390 2,747 2,706 Asia–Pacific: Transportation Solutions 883 875 1,811 1,751 Industrial Solutions 197 171 406 334 Communications Solutions 331 290 664 544 Total Asia–Pacific 1,411 1,336 2,881 2,629 Americas: Transportation Solutions 532 490 991 944 Industrial Solutions 432 388 830 740 Communications Solutions 199 134 376 241 Total Americas 1,163 1,012 2,197 1,925 Total $ 4,007 $ 3,738 $ 7,825 $ 7,260 (1) Net sales to external customers are attributed to individual countries based on the legal entity that records the sale. |
Schedule of operating income by segment | For the For the Quarters Ended Six Months Ended March 25, March 26, March 25, March 26, 2022 2021 2022 2021 (in millions) Transportation Solutions $ 409 $ 398 $ 804 $ 706 Industrial Solutions 148 111 271 187 Communications Solutions 148 103 302 167 Total $ 705 $ 612 $ 1,377 $ 1,060 |
Restructuring and Other Charg_3
Restructuring and Other Charges, Net - Restructuring and Other Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 25, 2022 | Mar. 26, 2021 | Mar. 25, 2022 | Mar. 26, 2021 | |
Restructuring and other charges, net | ||||
Restructuring charges, net | $ 22 | $ 11 | $ 43 | $ 160 |
(Gain) loss on divestitures and impairment of held for sale businesses | (1) | 4 | (10) | 21 |
Other charges, net | 2 | 3 | ||
Restructuring and other charges, net | 21 | 17 | 33 | 184 |
Operating expenses | ||||
Restructuring and other charges, net | ||||
Restructuring charges, net | 22 | 11 | 55 | 160 |
Restructuring charges, net | ||||
Restructuring and other charges, net | ||||
Restructuring charges, net | 22 | 11 | 43 | 160 |
Restructuring charges, net | Transportation Solutions | ||||
Restructuring and other charges, net | ||||
Restructuring charges, net | 10 | 10 | 15 | 128 |
Restructuring charges, net | Industrial Solutions | ||||
Restructuring and other charges, net | ||||
Restructuring charges, net | 10 | 18 | 20 | |
Restructuring charges, net | Communications Solutions | ||||
Restructuring and other charges, net | ||||
Restructuring charges, net | $ 2 | $ 1 | 10 | $ 12 |
Cost of sales | ||||
Restructuring and other charges, net | ||||
Restructuring charges, net | $ 12 |
Restructuring and Other Charg_4
Restructuring and Other Charges, Net - Restructuring Reserve Activity (Details) $ in Millions | 6 Months Ended |
Mar. 25, 2022USD ($) | |
Restructuring reserve | |
Restructuring reserve at the beginning of the period | $ 304 |
Charges | 70 |
Changes in Estimate | (15) |
Cash Payments | (86) |
Non-Cash Items | (24) |
Currency Translation | (13) |
Restructuring reserve at the end of the period | 236 |
Fiscal 2022 Actions | |
Restructuring reserve | |
Charges | 53 |
Cash Payments | (1) |
Non-Cash Items | (18) |
Restructuring reserve at the end of the period | 34 |
Fiscal 2022 Actions | Employee severance | |
Restructuring reserve | |
Charges | 35 |
Cash Payments | (1) |
Restructuring reserve at the end of the period | 34 |
Fiscal 2022 Actions | Property, plant, and equipment and inventories | |
Restructuring reserve | |
Charges | 18 |
Non-Cash Items | (18) |
Restructuring reserve at the end of the period | 0 |
Fiscal 2021 Actions | |
Restructuring reserve | |
Restructuring reserve at the beginning of the period | 154 |
Charges | 6 |
Cash Payments | (52) |
Non-Cash Items | (2) |
Currency Translation | (7) |
Restructuring reserve at the end of the period | 99 |
Fiscal 2021 Actions | Employee severance | |
Restructuring reserve | |
Restructuring reserve at the beginning of the period | 152 |
Charges | 2 |
Cash Payments | (49) |
Currency Translation | (7) |
Restructuring reserve at the end of the period | 98 |
Fiscal 2021 Actions | Facility and other exit costs | |
Restructuring reserve | |
Restructuring reserve at the beginning of the period | 2 |
Charges | 2 |
Cash Payments | (3) |
Restructuring reserve at the end of the period | 1 |
Fiscal 2021 Actions | Property, plant, and equipment | |
Restructuring reserve | |
Charges | 2 |
Non-Cash Items | (2) |
Restructuring reserve at the end of the period | 0 |
Pre-Fiscal 2021 Actions | |
Restructuring reserve | |
Restructuring reserve at the beginning of the period | 150 |
Charges | 11 |
Changes in Estimate | (15) |
Cash Payments | (33) |
Non-Cash Items | (4) |
Currency Translation | (6) |
Restructuring reserve at the end of the period | 103 |
Pre-Fiscal 2021 Actions | Employee severance | |
Restructuring reserve | |
Restructuring reserve at the beginning of the period | 135 |
Changes in Estimate | (15) |
Cash Payments | (26) |
Currency Translation | (5) |
Restructuring reserve at the end of the period | 89 |
Pre-Fiscal 2021 Actions | Facility and other exit costs | |
Restructuring reserve | |
Restructuring reserve at the beginning of the period | 15 |
Charges | 7 |
Cash Payments | (7) |
Currency Translation | (1) |
Restructuring reserve at the end of the period | 14 |
Pre-Fiscal 2021 Actions | Property, plant, and equipment | |
Restructuring reserve | |
Charges | 4 |
Non-Cash Items | (4) |
Restructuring reserve at the end of the period | $ 0 |
Restructuring and Other Charg_5
Restructuring and Other Charges, Net - Actions (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 25, 2022 | Mar. 26, 2021 | Mar. 25, 2022 | Mar. 26, 2021 | |
Restructuring Charges | ||||
Charges Incurred | $ 22 | $ 11 | $ 43 | $ 160 |
Fiscal 2022 Actions | ||||
Restructuring Charges | ||||
Remaining Expected Charges | 12 | 12 | ||
Charges Incurred | 53 | |||
Fiscal 2021 Actions | ||||
Restructuring Charges | ||||
Total Expected Charges | 213 | 213 | ||
Cumulative Charges Incurred | 205 | 205 | ||
Remaining Expected Charges | 8 | 8 | ||
Charges Incurred | 6 | 153 | ||
Fiscal 2021 Actions | Transportation Solutions | ||||
Restructuring Charges | ||||
Total Expected Charges | 132 | 132 | ||
Cumulative Charges Incurred | 129 | 129 | ||
Remaining Expected Charges | 3 | 3 | ||
Fiscal 2021 Actions | Industrial Solutions | ||||
Restructuring Charges | ||||
Total Expected Charges | 54 | 54 | ||
Cumulative Charges Incurred | 51 | 51 | ||
Remaining Expected Charges | 3 | 3 | ||
Fiscal 2021 Actions | Communications Solutions | ||||
Restructuring Charges | ||||
Total Expected Charges | 27 | 27 | ||
Cumulative Charges Incurred | 25 | 25 | ||
Remaining Expected Charges | $ 2 | 2 | ||
Pre-Fiscal 2021 Actions | ||||
Restructuring Charges | ||||
Charges Incurred | $ (4) | $ 7 |
Restructuring and Other Charg_6
Restructuring and Other Charges, Net - Restructuring Reserve Balances (Details) - USD ($) $ in Millions | Mar. 25, 2022 | Sep. 24, 2021 |
Restructuring reserves included on the Consolidated Balance Sheets | ||
Accrued and other current liabilities | $ 181 | $ 236 |
Other liabilities | 55 | 68 |
Restructuring reserves | $ 236 | $ 304 |
Acquisitions (Details)
Acquisitions (Details) $ in Millions | 6 Months Ended | |
Mar. 25, 2022USD ($)item | Mar. 26, 2021USD ($)item | |
Acquisitions | ||
Net cash paid | $ 102 | $ 107 |
2022 Acquisitions | ||
Acquisitions | ||
Number of businesses acquired | item | 1 | |
Net cash paid | $ 127 | |
2021 Acquisitions | ||
Acquisitions | ||
Number of businesses acquired | item | 1 | |
Net cash paid | $ 106 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Mar. 25, 2022 | Sep. 24, 2021 |
Inventories | ||
Raw materials | $ 429 | $ 320 |
Work in progress | 1,176 | 991 |
Finished goods | 1,394 | 1,200 |
Inventories | $ 2,999 | $ 2,511 |
Goodwill (Details)
Goodwill (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Sep. 24, 2021USD ($)item | Mar. 25, 2022USD ($) | |
Goodwill: | ||
Goodwill, beginning balance | $ 5,590 | |
Acquisition | 74 | |
Purchase price adjustments | (101) | |
Currency translation and other | (100) | |
Goodwill, ending balance | $ 5,590 | 5,463 |
Transportation Solutions | ||
Goodwill: | ||
Goodwill, beginning balance | 1,549 | |
Currency translation and other | (31) | |
Goodwill, ending balance | 1,549 | 1,518 |
Accumulated impairment losses | 3,091 | 3,091 |
Industrial Solutions | ||
Goodwill: | ||
Goodwill, beginning balance | 3,446 | |
Purchase price adjustments | (101) | |
Currency translation and other | (59) | |
Goodwill, ending balance | 3,446 | 3,286 |
Accumulated impairment losses | $ 669 | 669 |
Number of businesses acquired | item | 2 | |
Communications Solutions | ||
Goodwill: | ||
Goodwill, beginning balance | 595 | |
Acquisition | 74 | |
Currency translation and other | (10) | |
Goodwill, ending balance | $ 595 | 659 |
Accumulated impairment losses | $ 489 | $ 489 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 25, 2022 | Mar. 26, 2021 | Mar. 25, 2022 | Mar. 26, 2021 | Sep. 24, 2021 | |
Finite-Lived Intangible Assets | |||||
Gross Carrying Amount | $ 3,014 | $ 3,014 | $ 3,047 | ||
Accumulated Amortization | (1,573) | (1,573) | (1,498) | ||
Net Carrying Amount | 1,441 | 1,441 | 1,549 | ||
Finite-lived intangible assets, amortization expense | 49 | $ 48 | 97 | $ 96 | |
Aggregate amortization expense on intangible assets | |||||
Remainder of fiscal 2022 | 99 | 99 | |||
Fiscal 2023 | 197 | 197 | |||
Fiscal 2024 | 165 | 165 | |||
Fiscal 2025 | 150 | 150 | |||
Fiscal 2026 | 143 | 143 | |||
Fiscal 2027 | 123 | 123 | |||
Thereafter | 564 | 564 | |||
Net Carrying Amount | 1,441 | 1,441 | 1,549 | ||
Customer relationships | |||||
Finite-Lived Intangible Assets | |||||
Gross Carrying Amount | 1,741 | 1,741 | 1,766 | ||
Accumulated Amortization | (699) | (699) | (660) | ||
Net Carrying Amount | 1,042 | 1,042 | 1,106 | ||
Aggregate amortization expense on intangible assets | |||||
Net Carrying Amount | 1,042 | 1,042 | 1,106 | ||
Intellectual property | |||||
Finite-Lived Intangible Assets | |||||
Gross Carrying Amount | 1,254 | 1,254 | 1,262 | ||
Accumulated Amortization | (868) | (868) | (832) | ||
Net Carrying Amount | 386 | 386 | 430 | ||
Aggregate amortization expense on intangible assets | |||||
Net Carrying Amount | 386 | 386 | 430 | ||
Other | |||||
Finite-Lived Intangible Assets | |||||
Gross Carrying Amount | 19 | 19 | 19 | ||
Accumulated Amortization | (6) | (6) | (6) | ||
Net Carrying Amount | 13 | 13 | 13 | ||
Aggregate amortization expense on intangible assets | |||||
Net Carrying Amount | $ 13 | $ 13 | $ 13 |
Debt - Summary (Details)
Debt - Summary (Details) € in Millions, $ in Millions | 6 Months Ended | ||||
Mar. 25, 2022USD ($) | Mar. 26, 2021USD ($) | Mar. 25, 2022EUR (€) | Mar. 25, 2022USD ($) | Sep. 24, 2021USD ($) | |
Debt | |||||
Fair value of debt | $ 4,137 | $ 4,465 | |||
Repayment of debt | $ 558 | $ 280 | |||
Short-term debt | 610 | 503 | |||
Long-term debt | $ 3,441 | $ 3,589 | |||
2.50% senior notes due 2032 | |||||
Debt | |||||
Debt instrument, interest rate (as a percent) | 2.50% | 2.50% | |||
Debt instrument principal amount | $ 600 | ||||
3.50% senior notes due 2022 | |||||
Debt | |||||
Debt instrument, interest rate (as a percent) | 3.50% | 3.50% | |||
Repayment of debt | $ 500 | ||||
Reclassification | |||||
Debt | |||||
Debt instrument, interest rate (as a percent) | 1.10% | 1.10% | |||
Short-term debt | € | € 550 | ||||
Long-term debt | € | € (550) |
Leases - Components of Lease Co
Leases - Components of Lease Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 25, 2022 | Mar. 26, 2021 | Mar. 25, 2022 | Mar. 26, 2021 | |
Leases | ||||
Operating lease cost | $ 33 | $ 29 | $ 64 | $ 59 |
Variable lease cost | 13 | 13 | 25 | 24 |
Total lease cost | $ 46 | $ 42 | $ 89 | $ 83 |
Leases - Cash Flow Information
Leases - Cash Flow Information (Details) - USD ($) $ in Millions | 6 Months Ended | |
Mar. 25, 2022 | Mar. 26, 2021 | |
Leases | ||
Payments for operating leases | $ 61 | $ 59 |
Right-of-use assets, including modifications of existing leases, obtained in exchange for operating lease liabilities | $ 77 | $ 38 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Mar. 25, 2022USD ($) |
Loss Contingencies | |
Accrual environmental loss contingency, estimate of probable loss | $ 21 |
Minimum | |
Loss Contingencies | |
Accrual environmental loss contingency, estimate of probable loss | 18 |
Maximum | |
Loss Contingencies | |
Accrual environmental loss contingency, estimate of probable loss | 45 |
Outstanding letters of credit, letters of guarantee and surety bonds | |
Guarantees | |
Guarantor obligations, maximum exposure | 120 |
Discontinued Operations, Disposed of by Sale | Subsea Communications | |
Guarantees | |
Guarantor obligations, maximum exposure | $ 117 |
Financial Instruments (Details)
Financial Instruments (Details) € in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Mar. 25, 2022USD ($) | Mar. 26, 2021USD ($) | Mar. 25, 2022USD ($) | Mar. 26, 2021USD ($) | Sep. 24, 2021USD ($) | Mar. 25, 2022EUR (€) | Mar. 25, 2022USD ($) | Sep. 24, 2021EUR (€) | Sep. 24, 2021USD ($) | |
Cash flow hedges | Cross-currency swap contracts | |||||||||
Financial Instruments | |||||||||
Notional amount | € | € 300 | € 700 | |||||||
Interest paid in foreign currency, fixed interest rate | 3.50% | 3.50% | |||||||
Interest received in U.S. dollars, weighted-average fixed interest rate | 5.28% | 5.28% | |||||||
Gains (losses) recorded in other comprehensive income (loss) | $ (2,000,000) | $ (5,000,000) | $ (4,000,000) | ||||||
Gains (losses) excluded from the hedging relationship | 10,000,000 | $ 28,000,000 | 39,000,000 | (12,000,000) | |||||
Cash flow hedges | Forward starting interest rate swaps | |||||||||
Financial Instruments | |||||||||
Notional amount | $ 0 | $ 450,000,000 | |||||||
Gains (losses) recorded in other comprehensive income (loss) | 11,000,000 | 34,000,000 | 13,000,000 | 47,000,000 | |||||
Debt instrument, interest rate (as a percent) | 2.50% | 2.50% | |||||||
Cash flow hedges | Commodity swap contracts | |||||||||
Financial Instruments | |||||||||
Notional amount | $ 599,000,000 | 512,000,000 | |||||||
Gains (losses) recorded in other comprehensive income (loss) | 46,000,000 | 17,000,000 | 61,000,000 | 54,000,000 | |||||
Gains (losses) reclassified from accumulated other comprehensive income (loss) into cost of sales | 5,000,000 | 24,000,000 | 20,000,000 | 39,000,000 | |||||
Net investment hedges | Intercompany loans and external borrowings | |||||||||
Financial Instruments | |||||||||
Notional amount of non-derivative instruments | 3,166,000,000 | $ 3,798,000,000 | |||||||
Foreign currency exchange gains (losses) on intercompany loans and external borrowings | 80,000,000 | 133,000,000 | 188,000,000 | (35,000,000) | |||||
Net investment hedges | Cross-currency swap contracts | |||||||||
Financial Instruments | |||||||||
Notional amount | $ 1,691,000,000 | 1,430,000,000 | |||||||
Interest paid in foreign currency, fixed interest rate | 0.00% | 0.00% | |||||||
Interest received in U.S. dollars, weighted-average fixed interest rate | 1.55% | 1.55% | |||||||
Gains (losses) on cross-currency swap contracts designated as hedges of net investment | $ 33,000,000 | $ 58,000,000 | $ 70,000,000 | $ (27,000,000) | |||||
Prepaid expenses and other current assets | Cash flow hedges | Cross-currency swap contracts | |||||||||
Financial Instruments | |||||||||
Fair Value of Asset Positions | $ 11,000,000 | ||||||||
Prepaid expenses and other current assets | Cash flow hedges | Forward starting interest rate swaps | |||||||||
Financial Instruments | |||||||||
Fair Value of Asset Positions | 7,000,000 | ||||||||
Prepaid expenses and other current assets | Cash flow hedges | Commodity swap contracts | |||||||||
Financial Instruments | |||||||||
Fair Value of Asset Positions | 39,000,000 | 23,000,000 | |||||||
Prepaid expenses and other current assets | Net investment hedges | Cross-currency swap contracts | |||||||||
Financial Instruments | |||||||||
Fair Value of Asset Positions | 16,000,000 | 3,000,000 | |||||||
Other assets | Cash flow hedges | Commodity swap contracts | |||||||||
Financial Instruments | |||||||||
Fair Value of Asset Positions | 5,000,000 | ||||||||
Other assets | Net investment hedges | Cross-currency swap contracts | |||||||||
Financial Instruments | |||||||||
Fair Value of Asset Positions | 46,000,000 | 18,000,000 | |||||||
Accrued and other current liabilities | Cash flow hedges | Forward starting interest rate swaps | |||||||||
Financial Instruments | |||||||||
Fair Value of Liability Positions | 38,000,000 | ||||||||
Accrued and other current liabilities | Cash flow hedges | Commodity swap contracts | |||||||||
Financial Instruments | |||||||||
Fair Value of Liability Positions | 1,000,000 | 18,000,000 | |||||||
Accrued and other current liabilities | Net investment hedges | Cross-currency swap contracts | |||||||||
Financial Instruments | |||||||||
Fair Value of Liability Positions | 2,000,000 | 13,000,000 | |||||||
Other liabilities | Cash flow hedges | Cross-currency swap contracts | |||||||||
Financial Instruments | |||||||||
Fair Value of Liability Positions | 20,000,000 | ||||||||
Other liabilities | Cash flow hedges | Commodity swap contracts | |||||||||
Financial Instruments | |||||||||
Fair Value of Liability Positions | 4,000,000 | ||||||||
Other liabilities | Net investment hedges | Cross-currency swap contracts | |||||||||
Financial Instruments | |||||||||
Fair Value of Liability Positions | $ 2,000,000 | $ 18,000,000 |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 25, 2022 | Mar. 26, 2021 | Mar. 25, 2022 | Mar. 26, 2021 | |
Non-U.S. Plans | ||||
Net Periodic Postretirement Benefit Cost (Credit) | ||||
Service cost | $ 10 | $ 12 | $ 20 | $ 24 |
Interest cost | 8 | 7 | 17 | 14 |
Expected return on plan assets | (14) | (13) | (29) | (27) |
Amortization of net actuarial loss | 7 | 7 | 13 | 15 |
Amortization of prior service credit | (2) | (2) | (3) | (3) |
Net periodic pension benefit cost (credit) | 9 | 11 | 18 | 23 |
Defined benefit plan, contributions by employer | 18 | |||
U.S. Plans | ||||
Net Periodic Postretirement Benefit Cost (Credit) | ||||
Service cost | 2 | 3 | 4 | 6 |
Interest cost | 6 | 8 | 13 | 16 |
Expected return on plan assets | (12) | (13) | (24) | (26) |
Amortization of net actuarial loss | 1 | $ 2 | 2 | $ 4 |
Net periodic pension benefit cost (credit) | $ (3) | $ (5) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Mar. 25, 2022 | Mar. 26, 2021 | Mar. 25, 2022 | Mar. 26, 2021 | Sep. 30, 2022 | |
Income tax expense | $ 136 | $ 106 | $ 246 | $ 166 | |
Income tax benefit associated with intercompany transactions | 19 | 36 | |||
Income Tax Charges Associated With Write Down Of Certain Deferred Tax Assets To Lower Tax Rate | 27 | 27 | |||
Income tax expense associated with income tax audit of pre-acquisition period of acquired entity | 12 | ||||
Income tax benefit associated with indemnification receivable and other income | 11 | ||||
Income tax benefit from change in the tax method of depreciating or amortizing certain assets | $ 29 | ||||
Increase in deferred tax assets for tax loss and credit carryforwards from intercompany transaction with non-U.S. subsidiary | 4,000 | ||||
Increase in deferred tax assets valuation allowance for tax loss and credit carryforwards from intercompany transaction with non-U.S. subsidiary | 4,000 | ||||
Unrecognized income tax benefits, approximate amount that could be resolved in next twelve months | $ 100 | $ 100 | |||
Expected | |||||
Income tax benefit associated with intercompany transactions | $ 75 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 25, 2022 | Mar. 26, 2021 | Mar. 25, 2022 | Mar. 26, 2021 | |
Earnings Per Share | ||||
Antidilutive share options | 1 | 1 | ||
Earnings Per Share | ||||
Basic (in shares) | 325 | 331 | 326 | 331 |
Dilutive impact of share-based compensation arrangements (in shares) | 2 | 3 | 2 | 2 |
Diluted (in shares) | 327 | 334 | 328 | 333 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) $ / shares in Units, shares in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2022installment$ / sharesshares | Mar. 25, 2022USD ($)$ / shares | Mar. 26, 2021USD ($)$ / shares | Mar. 25, 2022USD ($)$ / sharesshares | Mar. 26, 2021USD ($)$ / sharesshares | Sep. 24, 2021USD ($) | |
Shareholders' Equity | ||||||
Cancellation of treasury shares (in shares) | shares | 5 | |||||
Dividends paid per common share | $ / shares | $ 0.50 | $ 0.48 | $ 1 | $ 0.96 | ||
Dividend or cash distribution approved (in currency per share) | $ / shares | $ 2.24 | |||||
Number of quarterly dividend installments | installment | 4 | |||||
Cash distribution quarterly installment payable (in dollars per share) | $ / shares | $ 0.56 | |||||
Unpaid portion of the dividend payment recorded in accrued and other current liabilities | $ | $ 723 | $ 723 | $ 327 | |||
Number of common shares repurchased | shares | 5 | 3 | ||||
Repurchase value | $ | 506 | $ 182 | $ 752 | $ 309 | ||
Amount available for repurchase, at end of period | $ | $ 839 | $ 839 |
Share Plans (Details)
Share Plans (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 25, 2022 | Dec. 24, 2021 | Mar. 26, 2021 | Mar. 25, 2022 | Mar. 26, 2021 | |
Share Based Compensation Arrangements: | |||||
Share-based compensation expense | $ 28 | $ 30 | $ 60 | $ 49 | |
Shares available for issuance | 11 | 11 | |||
Share Based Compensation Expenses Not Recognized | |||||
Share-based compensation, share-based awards, total compensation expense not yet recognized | $ 180 | $ 180 | |||
Share-based compensation, share-based awards, total compensation expense not yet recognized, expected period for recognition | 2 years | ||||
Share options | |||||
Share Based Compensation Arrangements: | |||||
Share options granted | 0.8 | ||||
Options granted, grant-date fair value (in dollars per share) | $ 37.67 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology | |||||
Expected share price volatility (as a percent) | 29.00% | ||||
Risk-free interest rate (as a percent) | 1.10% | ||||
Expected annual dividend per share | $ 2 | ||||
Expected life of options (in years) | 5 years 1 month 6 days | ||||
Restricted share awards | |||||
Share Based Compensation Arrangements: | |||||
Shares granted | 0.3 | ||||
Shares granted, grant-date fair value (in dollars per share) | $ 158 | ||||
Performance share awards | |||||
Share Based Compensation Arrangements: | |||||
Shares granted | 0.1 | ||||
Shares granted, grant-date fair value (in dollars per share) | $ 158 |
Segment and Geographic Data - N
Segment and Geographic Data - Net Sales by Segment and Industry End Market (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 25, 2022 | Mar. 26, 2021 | Mar. 25, 2022 | Mar. 26, 2021 | |
Segment and Geographic Data | ||||
Net sales | $ 4,007 | $ 3,738 | $ 7,825 | $ 7,260 |
Transportation Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 2,314 | 2,287 | 4,472 | 4,511 |
Transportation Solutions | Automotive | ||||
Segment and Geographic Data | ||||
Net sales | 1,653 | 1,630 | 3,173 | 3,259 |
Transportation Solutions | Commercial transportation | ||||
Segment and Geographic Data | ||||
Net sales | 394 | 382 | 759 | 713 |
Transportation Solutions | Sensors | ||||
Segment and Geographic Data | ||||
Net sales | 267 | 275 | 540 | 539 |
Industrial Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 1,075 | 952 | 2,134 | 1,825 |
Industrial Solutions | Industrial equipment | ||||
Segment and Geographic Data | ||||
Net sales | 472 | 339 | 934 | 634 |
Industrial Solutions | Aerospace, defense, oil, and gas | ||||
Segment and Geographic Data | ||||
Net sales | 261 | 267 | 503 | 517 |
Industrial Solutions | Energy | ||||
Segment and Geographic Data | ||||
Net sales | 184 | 185 | 372 | 357 |
Industrial Solutions | Medical | ||||
Segment and Geographic Data | ||||
Net sales | 158 | 161 | 325 | 317 |
Communications Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 618 | 499 | 1,219 | 924 |
Communications Solutions | Data and devices | ||||
Segment and Geographic Data | ||||
Net sales | 385 | 278 | 734 | 512 |
Communications Solutions | Appliances | ||||
Segment and Geographic Data | ||||
Net sales | $ 233 | $ 221 | $ 485 | $ 412 |
Segment and Geographic Data -_2
Segment and Geographic Data - Net Sales by Geographic Region and Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 25, 2022 | Mar. 26, 2021 | Mar. 25, 2022 | Mar. 26, 2021 | |
Segment and Geographic Data | ||||
Net sales | $ 4,007 | $ 3,738 | $ 7,825 | $ 7,260 |
Transportation Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 2,314 | 2,287 | 4,472 | 4,511 |
Industrial Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 1,075 | 952 | 2,134 | 1,825 |
Communications Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 618 | 499 | 1,219 | 924 |
Total Europe/Middle East/Africa | ||||
Segment and Geographic Data | ||||
Net sales | 1,433 | 1,390 | 2,747 | 2,706 |
Total Europe/Middle East/Africa | Transportation Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 899 | 922 | 1,670 | 1,816 |
Total Europe/Middle East/Africa | Industrial Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 446 | 393 | 898 | 751 |
Total Europe/Middle East/Africa | Communications Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 88 | 75 | 179 | 139 |
Total Asia-Pacific | ||||
Segment and Geographic Data | ||||
Net sales | 1,411 | 1,336 | 2,881 | 2,629 |
Total Asia-Pacific | Transportation Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 883 | 875 | 1,811 | 1,751 |
Total Asia-Pacific | Industrial Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 197 | 171 | 406 | 334 |
Total Asia-Pacific | Communications Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 331 | 290 | 664 | 544 |
Total Americas | ||||
Segment and Geographic Data | ||||
Net sales | 1,163 | 1,012 | 2,197 | 1,925 |
Total Americas | Transportation Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 532 | 490 | 991 | 944 |
Total Americas | Industrial Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 432 | 388 | 830 | 740 |
Total Americas | Communications Solutions | ||||
Segment and Geographic Data | ||||
Net sales | $ 199 | $ 134 | $ 376 | $ 241 |
Segment and Geographic Data - O
Segment and Geographic Data - Operating Income by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 25, 2022 | Mar. 26, 2021 | Mar. 25, 2022 | Mar. 26, 2021 | |
Segment and Geographic Data | ||||
Operating income | $ 705 | $ 612 | $ 1,377 | $ 1,060 |
Transportation Solutions | ||||
Segment and Geographic Data | ||||
Operating income | 409 | 398 | 804 | 706 |
Industrial Solutions | ||||
Segment and Geographic Data | ||||
Operating income | 148 | 111 | 271 | 187 |
Communications Solutions | ||||
Segment and Geographic Data | ||||
Operating income | $ 148 | $ 103 | $ 302 | $ 167 |