Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Mar. 31, 2023 | Apr. 21, 2023 | |
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. 31, 2023 | |
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 | --09-29 | |
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 | 315,115,072 | |
Document Fiscal Year Focus | 2023 | |
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. 31, 2023 | Mar. 25, 2022 | Mar. 31, 2023 | Mar. 25, 2022 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Net sales | $ 4,160 | $ 4,007 | $ 8,001 | $ 7,825 |
Cost of sales | 2,876 | 2,670 | 5,530 | 5,258 |
Gross margin | 1,284 | 1,337 | 2,471 | 2,567 |
Selling, general, and administrative expenses | 435 | 416 | 827 | 779 |
Research, development, and engineering expenses | 185 | 185 | 358 | 360 |
Acquisition and integration costs | 8 | 10 | 17 | 18 |
Restructuring and other charges, net | 119 | 21 | 230 | 33 |
Operating income | 537 | 705 | 1,039 | 1,377 |
Interest income | 12 | 4 | 21 | 6 |
Interest expense | (20) | (18) | (41) | (30) |
Other income (expense), net | (4) | 5 | (9) | 20 |
Income from continuing operations before income taxes | 525 | 696 | 1,010 | 1,373 |
Income tax expense | (100) | (136) | (187) | (246) |
Income from continuing operations | 425 | 560 | 823 | 1,127 |
Income (loss) from discontinued operations, net of income taxes | 8 | 7 | (1) | |
Net income | $ 433 | $ 560 | $ 830 | $ 1,126 |
Basic earnings per share: | ||||
Income from continuing operations (in dollars per share) | $ 1.34 | $ 1.72 | $ 2.60 | $ 3.46 |
Income (loss) from discontinued operations (in dollars per share) | 0.03 | 0.02 | ||
Net income (in dollars per share) | 1.37 | 1.72 | 2.62 | 3.45 |
Diluted earnings per share: | ||||
Income from continuing operations (in dollars per share) | 1.34 | 1.71 | 2.58 | 3.44 |
Income (loss) from discontinued operations (in dollars per share) | 0.03 | 0.02 | ||
Net income (in dollars per share) | $ 1.36 | $ 1.71 | $ 2.60 | $ 3.43 |
Weighted-average number of shares outstanding: | ||||
Basic (in shares) | 316 | 325 | 317 | 326 |
Diluted (in shares) | 318 | 327 | 319 | 328 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 | Mar. 25, 2022 | Mar. 31, 2023 | Mar. 25, 2022 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $ 433 | $ 560 | $ 830 | $ 1,126 |
Other comprehensive income: | ||||
Currency translation | 78 | (9) | 383 | 9 |
Adjustments to unrecognized pension and postretirement benefit costs, net of income taxes | 1 | 4 | 3 | 8 |
Gains on cash flow hedges, net of income taxes | 38 | 46 | 107 | 47 |
Other comprehensive income | 117 | 41 | 493 | 64 |
Comprehensive income | 550 | 601 | 1,323 | 1,190 |
Less: comprehensive (income) loss attributable to noncontrolling interests | (2) | 1 | (11) | 7 |
Comprehensive income attributable to TE Connectivity Ltd. | $ 548 | $ 602 | $ 1,312 | $ 1,197 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2023 | Sep. 30, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 905 | $ 1,088 |
Accounts receivable, net of allowance for doubtful accounts of $46 and $45, respectively | 3,048 | 2,865 |
Inventories | 2,811 | 2,676 |
Prepaid expenses and other current assets | 675 | 639 |
Total current assets | 7,439 | 7,268 |
Property, plant, and equipment, net | 3,818 | 3,567 |
Goodwill | 5,527 | 5,258 |
Intangible assets, net | 1,286 | 1,288 |
Deferred income taxes | 2,634 | 2,498 |
Other assets | 786 | 903 |
Total assets | 21,490 | 20,782 |
Current liabilities: | ||
Short-term debt | 286 | 914 |
Accounts payable | 1,678 | 1,593 |
Accrued and other current liabilities | 2,429 | 2,125 |
Total current liabilities | 4,393 | 4,632 |
Long-term debt | 3,916 | 3,292 |
Long-term pension and postretirement liabilities | 731 | 695 |
Deferred income taxes | 216 | 244 |
Income taxes | 326 | 304 |
Other liabilities | 782 | 718 |
Total liabilities | 10,364 | 9,885 |
Commitments and contingencies (Note 9) | ||
Redeemable noncontrolling interests | 106 | 95 |
Shareholders' equity: | ||
Common shares, CHF 0.57 par value, 322,470,281 shares authorized and issued, and 330,830,781 shares authorized and issued, respectively | 142 | 146 |
Accumulated earnings | 11,824 | 12,832 |
Treasury shares, at cost, 7,053,036 and 12,749,540 shares, respectively | (933) | (1,681) |
Accumulated other comprehensive loss | (13) | (495) |
Total shareholders' equity | 11,020 | 10,802 |
Total liabilities, redeemable noncontrolling interests, and shareholders' equity | $ 21,490 | $ 20,782 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) $ in Millions | Mar. 31, 2023 USD ($) shares | Dec. 30, 2022 SFr / shares | Sep. 30, 2022 USD ($) shares | Sep. 30, 2022 SFr / shares |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
Accounts receivable, allowance for doubtful accounts (in dollars) | $ | $ 46 | $ 45 | ||
Common shares, par value (in currency per share) | SFr / shares | SFr 0.57 | SFr 0.57 | ||
Common shares, shares authorized | 322,470,281 | 330,830,781 | ||
Common shares, shares issued | 322,470,281 | 330,830,781 | ||
Treasury shares | 7,053,036 | 12,749,540 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Millions | Common Shares | Treasury Shares | Contributed Surplus | Accumulated Earnings | Accumulated Other Comprehensive Income (Loss) | Total |
Balance at Sep. 24, 2021 | $ 148 | $ (1,055) | $ 11,709 | $ (168) | $ 10,634 | |
Balance (in shares) at Sep. 24, 2021 | 336,000,000 | |||||
Treasury Stock balance (in shares) at Sep. 24, 2021 | (9,000,000) | |||||
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) | 1,000,000 | |||||
Repurchase of common shares | $ (752) | $ (752) | ||||
Repurchase of common shares (in shares) | (5,000,000) | (5,000,000) | ||||
Balance at Mar. 25, 2022 | $ 148 | $ (1,769) | 12,160 | (97) | $ 10,442 | |
Treasury Stock balance (in shares) at Mar. 25, 2022 | (13,000,000) | |||||
Balance (in shares) at Mar. 25, 2022 | 336,000,000 | |||||
Balance at Dec. 24, 2021 | $ 148 | $ (1,274) | 12,285 | (139) | 11,020 | |
Balance (in shares) at Dec. 24, 2021 | 336,000,000 | |||||
Treasury Stock balance (in shares) at Dec. 24, 2021 | (10,000,000) | |||||
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) | (3,000,000) | |||||
Balance at Mar. 25, 2022 | $ 148 | $ (1,769) | 12,160 | (97) | 10,442 | |
Treasury Stock balance (in shares) at Mar. 25, 2022 | (13,000,000) | |||||
Balance (in shares) at Mar. 25, 2022 | 336,000,000 | |||||
Balance at Sep. 30, 2022 | $ 146 | $ (1,681) | 12,832 | (495) | $ 10,802 | |
Balance (in shares) at Sep. 30, 2022 | 331,000,000 | |||||
Treasury Stock balance (in shares) at Sep. 30, 2022 | (13,000,000) | 12,749,540 | ||||
Increase (Decrease) in Shareholders' Equity: | ||||||
Net income | 830 | $ 830 | ||||
Other comprehensive income | 482 | 482 | ||||
Share-based compensation expense | 63 | 63 | ||||
Dividends | (744) | (744) | ||||
Exercise of share options | $ 20 | 20 | ||||
Restricted share award vestings and other activity | $ 65 | (63) | (3) | (1) | ||
Restricted share award vestings and other activity (in shares) | 1,000,000 | |||||
Repurchase of common shares | $ (432) | $ (432) | ||||
Repurchase of common shares (in shares) | (4,000,000) | (4,000,000) | ||||
Cancellation of treasury shares | $ (4) | $ 1,095 | (1,091) | |||
Cancellation of treasury shares (in shares) | (9,000,000) | 9,000,000 | ||||
Balance at Mar. 31, 2023 | $ 142 | $ (933) | 11,824 | (13) | $ 11,020 | |
Treasury Stock balance (in shares) at Mar. 31, 2023 | (7,000,000) | 7,053,036 | ||||
Balance (in shares) at Mar. 31, 2023 | 322,000,000 | |||||
Balance at Dec. 30, 2022 | $ 146 | $ (1,854) | 13,200 | (128) | $ 11,364 | |
Balance (in shares) at Dec. 30, 2022 | 331,000,000 | |||||
Treasury Stock balance (in shares) at Dec. 30, 2022 | (14,000,000) | |||||
Increase (Decrease) in Shareholders' Equity: | ||||||
Net income | 433 | 433 | ||||
Other comprehensive income | 115 | 115 | ||||
Share-based compensation expense | 31 | 31 | ||||
Dividends | (744) | (744) | ||||
Exercise of share options | $ 9 | 9 | ||||
Restricted share award vestings and other activity | 16 | $ (31) | 26 | 11 | ||
Repurchase of common shares | $ (199) | (199) | ||||
Repurchase of common shares (in shares) | (2,000,000) | |||||
Cancellation of treasury shares | $ (4) | $ 1,095 | (1,091) | |||
Cancellation of treasury shares (in shares) | (9,000,000) | 9,000,000 | ||||
Balance at Mar. 31, 2023 | $ 142 | $ (933) | $ 11,824 | $ (13) | $ 11,020 | |
Treasury Stock balance (in shares) at Mar. 31, 2023 | (7,000,000) | 7,053,036 | ||||
Balance (in shares) at Mar. 31, 2023 | 322,000,000 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Mar. 31, 2023 | Mar. 25, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 830 | $ 1,126 |
Income (loss) from discontinued operations, net of income taxes | (7) | 1 |
Income from continuing operations | 823 | 1,127 |
Adjustments to reconcile income from continuing operations to net cash provided by operating activities: | ||
Depreciation and amortization | 394 | 392 |
Deferred income taxes | (70) | 42 |
Non-cash lease cost | 70 | 64 |
Provision for losses on accounts receivable and inventories | 69 | 68 |
Share-based compensation expense | 63 | 60 |
Impairment of held for sale businesses | 67 | |
Other | 68 | 4 |
Changes in assets and liabilities, net of the effects of acquisitions and divestitures: | ||
Accounts receivable, net | (224) | (57) |
Inventories | (273) | (411) |
Prepaid expenses and other current assets | (25) | 36 |
Accounts payable | 104 | 15 |
Accrued and other current liabilities | (83) | (305) |
Income taxes | 35 | 27 |
Other | 197 | (117) |
Net cash provided by operating activities | 1,215 | 945 |
Cash flows from investing activities: | ||
Capital expenditures | (372) | (351) |
Proceeds from sale of property, plant, and equipment | 2 | 63 |
Acquisition of businesses, net of cash acquired | (108) | (102) |
Proceeds from divestiture of businesses, net of cash retained by businesses sold | 51 | 16 |
Other | 23 | (9) |
Net cash used in investing activities | (404) | (383) |
Cash flows from financing activities: | ||
Net decrease in commercial paper | (85) | |
Proceeds from issuance of debt | 499 | 588 |
Repayment of debt | (591) | (558) |
Proceeds from exercise of share options | 20 | 30 |
Repurchase of common shares | (466) | (708) |
Payment of common share dividends to shareholders | (355) | (326) |
Other | (28) | (38) |
Net cash used in financing activities | (1,006) | (1,012) |
Effect of currency translation on cash | 12 | (4) |
Net decrease in cash, cash equivalents, and restricted cash | (183) | (454) |
Cash, cash equivalents, and restricted cash at beginning of fiscal period | 1,088 | 1,203 |
Cash, cash equivalents, and restricted cash at end of fiscal period | $ 905 | $ 749 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Mar. 31, 2023 | |
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 30, 2022. Unless otherwise indicated, references in the Condensed Consolidated Financial Statements to fiscal 2023 and fiscal 2022 are to our fiscal years ending September 29, 2023 and ended September 30, 2022, respectively. |
Restructuring and Other Charges
Restructuring and Other Charges, Net | 6 Months Ended |
Mar. 31, 2023 | |
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 31, March 25, March 31, March 25, 2023 2022 2023 2022 (in millions) Restructuring charges, net $ 62 $ 22 $ 166 $ 43 Impairment of held for sale businesses and (gain) loss on divestitures, net 56 (1) 62 (10) Other charges, net 1 — 2 — Restructuring and other charges, net $ 119 $ 21 $ 230 $ 33 Restructuring Charges, Net Net restructuring and related charges by segment were as follows: For the For the Quarters Ended Six Months Ended March 31, March 25, March 31, March 25, 2023 2022 2023 2022 (in millions) Transportation Solutions $ 18 $ 10 $ 92 $ 15 Industrial Solutions 36 10 42 18 Communications Solutions 8 2 32 10 Restructuring charges, net 62 22 166 43 Plus: charges included in cost of sales (1) — — — 12 Restructuring and related charges, net $ 62 $ 22 $ 166 $ 55 (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 30, Changes in Cash Non-Cash Currency March 31, 2022 Charges Estimate Payments Items Translation 2023 (in millions) Fiscal 2023 Actions: Employee severance $ — $ 155 $ — $ (18) $ — $ 2 $ 139 Facility and other exit costs — 1 — — — — 1 Property, plant, and equipment — 5 — — (5) — — Total — 161 — (18) (5) 2 140 Fiscal 2022 Actions: Employee severance 108 6 (7) (28) — 6 85 Facility and other exit costs 1 6 — (3) — — 4 Total 109 12 (7) (31) — 6 89 Pre-Fiscal 2022 Actions: Employee severance 112 4 (2) (27) — 8 95 Facility and other exit costs 7 — (2) (7) — 2 — Total 119 4 (4) (34) — 10 95 Total Activity $ 228 $ 177 $ (11) $ (83) $ (5) $ 18 $ 324 Fiscal 2023 Actions During fiscal 2023, we initiated a restructuring program associated with cost structure improvements across all segments. During the six months ended March 31, 2023, we recorded restructuring charges of $161 million in connection with this program. We expect to complete all restructuring actions commenced during the six months ended March 31, 2023 by the end of fiscal 2025 and to incur additional charges of approximately $19 million related to employee severance, facility exit costs, and accelerated depreciation on property, plant, and equipment. The following table summarizes expected, incurred, and remaining charges for the fiscal 2023 program by segment as of March 31, 2023: Total Cumulative Remaining Expected Charges Expected Charges Incurred Charges (in millions) Transportation Solutions $ 102 $ 94 $ 8 Industrial Solutions 54 44 10 Communications Solutions 24 23 1 Total $ 180 $ 161 $ 19 Fiscal 2022 Actions During fiscal 2022, we initiated a restructuring program associated with footprint consolidation and cost structure improvements across all segments. In connection with this program, during the six months ended March 31, 2023 and March 25, 2022, we recorded net restructuring and related charges of $5 million and $53 million, respectively. We expect to complete all restructuring actions commenced during fiscal 2022 by the end of fiscal 2024 and to incur additional charges of approximately $16 million related primarily to employee severance and facility exit costs. The following table summarizes expected, incurred, and remaining charges for the fiscal 2022 program by segment as of March 31, 2023: Total Cumulative Remaining Expected Charges Expected Charges Incurred Charges (in millions) Transportation Solutions $ 96 $ 88 $ 8 Industrial Solutions 55 52 3 Communications Solutions 31 26 5 Total $ 182 $ 166 $ 16 Pre-Fiscal 2022 Actions During the six months ended March 25, 2022, we recorded net restructuring charges of $2 million related to pre-fiscal 2022 actions. We expect that any additional charges related to restructuring actions commenced prior to fiscal 2022 will be insignificant. Total Restructuring Reserves Restructuring reserves included on the Condensed Consolidated Balance Sheets were as follows: March 31, September 30, 2023 2022 (in millions) Accrued and other current liabilities $ 279 $ 182 Other liabilities 45 46 Restructuring reserves $ 324 $ 228 Divestitures During the six months ended March 31, 2023, we sold two businesses for net cash proceeds of $51 million. In connection with the divestitures, we recorded pre-tax impairment charges and a net pre-tax gain on sales, which totaled to a net charge of $2 million. The businesses sold were both reported in our Industrial Solutions segment. Additionally, during the six months ended March 31, 2023, we recorded a pre-tax impairment charge of $60 million in connection with a held for sale business in the Transportation Solutions segment. During the six months ended March 25, 2022, we sold two businesses for net cash proceeds of $16 million and recognized a net pre-tax gain of $10 million on the transactions. The businesses sold were reported in our Transportation Solutions and Industrial Solutions segments. |
Acquisitions
Acquisitions | 6 Months Ended |
Mar. 31, 2023 | |
Acquisitions | |
Acquisitions | 3. Acquisitions During the six months ended March 31, 2023, we acquired one business for a cash purchase price of $108 million, net of cash acquired. The acquisition was reported as part of our Industrial Solutions segment from the date of acquisition. We acquired one business for a cash purchase price of $127 million, net of cash acquired, during the six months ended March 25, 2022. The acquisition was reported as part of our Communications Solutions segment from the date of acquisition. Also during the six months ended March 25, 2022, we finalized the purchase price allocation of certain fiscal 2021 acquisitions, which included the recognition of $25 million of cash acquired. |
Inventories
Inventories | 6 Months Ended |
Mar. 31, 2023 | |
Inventories | |
Inventories | 4. Inventories Inventories consisted of the following: March 31, September 30, 2023 2022 (in millions) Raw materials $ 434 $ 390 Work in progress 1,288 1,066 Finished goods 1,089 1,220 Inventories $ 2,811 $ 2,676 |
Goodwill
Goodwill | 6 Months Ended |
Mar. 31, 2023 | |
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 30, 2022 (1) $ 1,439 $ 3,118 $ 701 $ 5,258 Acquisition — 73 — 73 Currency translation and other 57 111 28 196 March 31, 2023 (1) $ 1,496 $ 3,302 $ 729 $ 5,527 (1) At March 31, 2023 and September 30, 2022, 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 31, 2023, we recognized goodwill in the Industrial Solutions segment in connection with a recent acquisition. See Note 3 for additional information regarding acquisitions. |
Intangible Assets, Net
Intangible Assets, Net | 6 Months Ended |
Mar. 31, 2023 | |
Intangible Assets, Net | |
Intangible Assets, Net | 6. Intangible Assets, Net Intangible assets consisted of the following: March 31, 2023 September 30, 2022 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount (in millions) Customer relationships $ 1,754 $ (770) $ 984 $ 1,642 $ (687) $ 955 Intellectual property 1,210 (919) 291 1,174 (852) 322 Other 17 (6) 11 16 (5) 11 Total $ 2,981 $ (1,695) $ 1,286 $ 2,832 $ (1,544) $ 1,288 Intangible asset amortization expense was $49 million for both the quarters ended March 31, 2023 and March 25, 2022, and $95 million and $97 million for the six months ended March 31, 2023 and March 25, 2022, respectively. At March 31, 2023, the aggregate amortization expense on intangible assets is expected to be as follows: (in millions) Remainder of fiscal 2023 $ 97 Fiscal 2024 164 Fiscal 2025 149 Fiscal 2026 144 Fiscal 2027 126 Fiscal 2028 93 Thereafter 513 Total $ 1,286 |
Debt
Debt | 6 Months Ended |
Mar. 31, 2023 | |
Debt | |
Debt | 7. Debt During the quarter ended March 31, 2023, Tyco Electronics Group S.A. (“TEGSA”), our wholly-owned subsidiary, issued $500 million aggregate principal amount of 4.50% senior notes due in February 2026. 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 31, 2023, TEGSA repaid, at maturity, €550 million of 1.10% senior notes due in March 2023. As of March 31, 2023, TEGSA had $285 million of commercial paper outstanding at a weighted-average interest rate of 5.5%. TEGSA had $370 million of commercial paper outstanding at a weighted-average interest rate of 3.45% at September 30, 2022. The fair value of our debt, based on indicative valuations, was approximately $3,966 million and $3,990 million at March 31, 2023 and September 30, 2022, respectively. |
Leases
Leases | 6 Months Ended |
Mar. 31, 2023 | |
Leases | |
Leases | 8. Leases The components of lease cost were as follows: For the For the Quarters Ended Six Months Ended March 31, March 25, March 31, March 25, 2023 2022 2023 2022 (in millions) Operating lease cost $ 36 $ 33 $ 70 $ 64 Variable lease cost 13 13 25 25 Total lease cost $ 49 $ 46 $ 95 $ 89 Cash flow information, including significant non-cash transactions, related to leases was as follows: For the Six Months Ended March 31, March 25, 2023 2022 (in millions) Cash paid for amounts included in the measurement of lease liabilities: Payments for operating leases (1) $ 64 $ 61 Right-of-use assets, including modifications of existing leases, obtained in exchange for operating lease liabilities 56 77 (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. 31, 2023 | |
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 have been 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 the resulting investigations are ongoing. We have also been contacted by the U.S. Department of Justice concerning aspects of these matters. 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. Although 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 31, 2023, we concluded that we would incur investigation and remediation costs at these sites in the reasonably possible range of $17 million to $45 million, and we accrued $20 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 31, 2023, we had outstanding letters of credit, letters of guarantee, and surety bonds of $171 million, excluding those related to our former 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 $58 million as of March 31, 2023 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. 31, 2023 | |
Financial Instruments | |
Financial Instruments | 10. Financial Instruments Foreign Currency Exchange Rate Risk We may utilize cross-currency swap contracts to reduce our exposure to foreign currency exchange rate risk associated with certain intercompany loans. As of fiscal year end 2022, all such cross-currency swap contracts had been terminated or matured and were settled; additionally, all related collateral positions were settled. The impacts of these cross-currency swap contracts were as follows: For the For the Quarter Ended Six Months Ended March 25, March 25, 2022 2022 (in millions) Losses recorded in other comprehensive income (loss) $ (2) $ (5) Gains excluded from the hedging relationship (1) 10 39 (1) Gains excluded from the hedging relationship are recognized prospectively in selling, general, and administrative expenses and are offset by losses 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 $3,210 million and $1,658 million at March 31, 2023 and September 30, 2022, 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 $3,782 million and $1,873 million at March 31, 2023 and September 30, 2022, respectively. Under the terms of these contracts, we receive interest in U.S. dollars at a weighted-average rate of 1.61% per annum and pay no interest. Upon the maturity of these contracts at various dates through fiscal 2027, 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 31, September 30, 2023 2022 (in millions) Prepaid expenses and other current assets $ 43 $ 55 Other assets 48 172 Accrued and other current liabilities 5 — Other liabilities 25 — The impacts of our hedge of net investment programs were as follows: For the For the Quarters Ended Six Months Ended March 31, March 25, March 31, March 25, 2023 2022 2023 2022 (in millions) Foreign currency exchange gains (losses) on intercompany loans and external borrowings (1) $ (51) $ 80 $ (216) $ 188 Gains (losses) on cross-currency swap contracts designated as hedges of net investment (1) (19) 33 (156) 70 (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 fiscal 2022, we terminated forward starting interest rate swap contracts as a result of the issuance of our 2.50% senior notes due in 2032. The impacts of these forward starting interest rate swap contracts were as follows: For the For the Quarter Ended Six Months Ended March 25, March 25, 2022 2022 (in millions) Gains recorded in other comprehensive income (loss) $ 11 $ 13 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 $492 million and $566 million at March 31, 2023 and September 30, 2022, respectively, and were designated as cash flow hedges. These commodity swap contracts were recorded on the Condensed Consolidated Balance Sheets as follows: March 31, September 30, 2023 2022 (in millions) Prepaid expenses and other current assets $ 28 $ 2 Other assets 2 — Accrued and other current liabilities 10 77 Other liabilities 1 7 The impacts of these commodity swap contracts were as follows: For the For the Quarters Ended Six Months Ended March 31, March 25, March 31, March 25, 2023 2022 2023 2022 (in millions) Gains recorded in other comprehensive income (loss) $ 31 $ 46 $ 78 $ 61 Gains (losses) reclassified from accumulated other comprehensive income (loss) into cost of sales (9) 5 (38) 20 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. 31, 2023 | |
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 31, March 25, March 31, March 25, 2023 2022 2023 2022 (in millions) Operating expense: Service cost $ 6 $ 10 $ 2 $ 2 Other (income) expense: Interest cost 14 8 10 6 Expected returns on plan assets (11) (14) (10) (12) Amortization of net actuarial loss 2 7 1 1 Amortization of prior service credit (1) (2) — — Net periodic pension benefit cost (credit) $ 10 $ 9 $ 3 $ (3) Non-U.S. Plans U.S. Plans For the For the Six Months Ended Six Months Ended March 31, March 25, March 31, March 25, 2023 2022 2023 2022 (in millions) Operating expense: Service cost $ 13 $ 20 $ 4 $ 4 Other (income) expense: Interest cost 28 17 19 13 Expected returns on plan assets (22) (29) (19) (24) Amortization of net actuarial loss 3 13 2 2 Amortization of prior service credit (2) (3) — — Net periodic pension benefit cost (credit) $ 20 $ 18 $ 6 $ (5) During the six months ended March 31, 2023, we contributed $21 million to our non-U.S. pension plans. |
Income Taxes
Income Taxes | 6 Months Ended |
Mar. 31, 2023 | |
Income Taxes | |
Income Taxes | 12. Income Taxes We recorded income tax expense of $100 million and $136 million for the quarters ended March 31, 2023 and March 25, 2022, 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 and a $19 million income tax benefit related to the tax impacts of an intercompany transaction. We recorded income tax expense of $187 million and $246 million for the six months ended March 31, 2023 and March 25, 2022, 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. During the quarter ended March 31, 2023, we completed tax returns for certain non-U.S. entities which resulted in the recognition of additional deferred tax assets for tax loss carryforwards of $313 million. As we do not expect these subsidiaries to generate sufficient future taxable income to realize the deferred tax assets, we recognized a corresponding increase Although it is difficult to predict the timing or results of our worldwide examinations, we estimate that, as of March 31, 2023, approximately $20 million of unrecognized income tax benefits, excluding the impact relating to accrued interest and penalties, could be resolved within the next twelve months. We are not aware of any other matters that would result in significant changes to the amount of unrecognized income tax benefits reflected on the Condensed Consolidated Balance Sheet as of March 31, 2023. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Mar. 31, 2023 | |
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 31, March 25, March 31, March 25, 2023 2022 2023 2022 (in millions) Basic 316 325 317 326 Dilutive impact of share-based compensation arrangements 2 2 2 2 Diluted 318 327 319 328 The following share options were not included in the computation of diluted earnings per share because the instruments’ underlying exercise prices were greater than the average market prices of our common shares and inclusion would be antidilutive: For the For the Quarters Ended Six Months Ended March 31, March 25, March 31, March 25, 2023 2022 2023 2022 (in millions) Antidilutive share options 1 1 1 1 |
Shareholders' Equity
Shareholders' Equity | 6 Months Ended |
Mar. 31, 2023 | |
Shareholders' Equity | |
Shareholder' Equity | 14. Shareholders’ Equity Common Shares In March 2023, our shareholders approved, for a period of one year ending March 15, 2024, our board of directors’ authorization to issue additional new shares to a maximum of 120% and/or reduce shares to a minimum of 80% of the existing share capital, subject to certain conditions specified in our articles of association. Common Shares Held in Treasury In March 2023, our shareholders approved the cancellation of approximately eight and a half Dividends We paid cash dividends to shareholders as follows: For the For the Quarters Ended Six Months Ended March 31, March 25, March 31, March 25, 2023 2022 2023 2022 Dividends paid per common share $ 0.56 $ 0.50 $ 1.12 $ 1.00 In March 2023, our shareholders approved a dividend payment to shareholders of $2.36 per share, payable in four equal quarterly installments of $0.59 per share beginning in the third quarter of fiscal 2023 and ending in the second quarter of fiscal 2024. Upon shareholders’ approval of a dividend payment, we record a liability with a corresponding charge to shareholders’ equity. At March 31, 2023 and September 30, 2022, the unpaid portion of the dividends recorded in accrued and other current liabilities on the Condensed Consolidated Balance Sheets totaled $744 million and $356 million, respectively. Share Repurchase Program Common shares repurchased under the share repurchase program were as follows: For the Six Months Ended March 31, March 25, 2023 2022 (in millions) Number of common shares repurchased 4 5 Repurchase value $ 432 $ 752 At March 31, 2023, we had $1.2 billion of availability remaining under our share repurchase authorization. |
Share Plans
Share Plans | 6 Months Ended |
Mar. 31, 2023 | |
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 31, March 25, March 31, March 25, 2023 2022 2023 2022 (in millions) Share-based compensation expense $ 31 $ 28 $ 63 $ 60 As of March 31, 2023, there was $179 million of unrecognized compensation expense related to share-based awards, which is expected to be recognized over a weighted-average period of 1.7 years. During the quarter ended December 30, 2022, we granted the following share-based awards as part of our annual incentive plan grant: Grant-Date Shares Fair Value (in millions) Share options 0.9 $ 35.79 Restricted share awards 0.4 124.52 Performance share awards 0.2 124.52 As of March 31, 2023, we had eight 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 31 % Risk-free interest rate 4.0 % Expected annual dividend per share $ 2.24 Expected life of options (in years) 5.1 |
Segment and Geographic Data
Segment and Geographic Data | 6 Months Ended |
Mar. 31, 2023 | |
Segment and Geographic Data | |
Segment and Geographic Data | 16. Segment and Geographic Data Effective for fiscal 2023, we realigned certain product lines from the Industrial Solutions segment to the Communications Solutions segment. We continue to operate through three reporting segments: Transportation Solutions, Industrial Solutions, and Communications Solutions. The following segment information reflects our current segment reporting structure. Prior period segment results have been restated to conform to the current segment reporting structure. As a result of the realignment, $14 million million Net sales by segment (1) (2) For the For the Quarters Ended Six Months Ended March 31, March 25, March 31, March 25, 2023 2022 2023 2022 (in millions) Transportation Solutions: Automotive $ 1,795 $ 1,653 $ 3,444 $ 3,173 Commercial transportation 405 394 753 759 Sensors 283 267 545 540 Total Transportation Solutions 2,483 2,314 4,742 4,472 Industrial Solutions: Industrial equipment 461 465 895 920 Aerospace, defense, and marine 298 261 562 503 Energy 233 184 422 372 Medical 199 158 372 325 Total Industrial Solutions 1,191 1,068 2,251 2,120 Communications Solutions: Data and devices 288 392 617 748 Appliances 198 233 391 485 Total Communications Solutions 486 625 1,008 1,233 Total $ 4,160 $ 4,007 $ 8,001 $ 7,825 (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 31, March 25, March 31, March 25, 2023 2022 2023 2022 (in millions) Asia–Pacific: Transportation Solutions $ 861 $ 883 $ 1,785 $ 1,811 Industrial Solutions 196 194 385 399 Communications Solutions 242 334 536 671 Total Asia–Pacific 1,299 1,411 2,706 2,881 Europe/Middle East/Africa (“EMEA”): Transportation Solutions 1,046 899 1,858 1,670 Industrial Solutions 527 443 971 893 Communications Solutions 94 91 164 184 Total EMEA 1,667 1,433 2,993 2,747 Americas: Transportation Solutions 576 532 1,099 991 Industrial Solutions 468 431 895 828 Communications Solutions 150 200 308 378 Total Americas 1,194 1,163 2,302 2,197 Total $ 4,160 $ 4,007 $ 8,001 $ 7,825 (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 31, March 25, March 31, March 25, 2023 2022 2023 2022 (in millions) Transportation Solutions $ 333 $ 409 $ 615 $ 804 Industrial Solutions 134 145 290 265 Communications Solutions 70 151 134 308 Total $ 537 $ 705 $ 1,039 $ 1,377 |
Restructuring and Other Charg_2
Restructuring and Other Charges, Net (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Restructuring and Other Charges, Net | |
Schedule of net restructuring and other charges | For the For the Quarters Ended Six Months Ended March 31, March 25, March 31, March 25, 2023 2022 2023 2022 (in millions) Restructuring charges, net $ 62 $ 22 $ 166 $ 43 Impairment of held for sale businesses and (gain) loss on divestitures, net 56 (1) 62 (10) Other charges, net 1 — 2 — Restructuring and other charges, net $ 119 $ 21 $ 230 $ 33 |
Net restructuring and related charges by segment | For the For the Quarters Ended Six Months Ended March 31, March 25, March 31, March 25, 2023 2022 2023 2022 (in millions) Transportation Solutions $ 18 $ 10 $ 92 $ 15 Industrial Solutions 36 10 42 18 Communications Solutions 8 2 32 10 Restructuring charges, net 62 22 166 43 Plus: charges included in cost of sales (1) — — — 12 Restructuring and related charges, net $ 62 $ 22 $ 166 $ 55 (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 30, Changes in Cash Non-Cash Currency March 31, 2022 Charges Estimate Payments Items Translation 2023 (in millions) Fiscal 2023 Actions: Employee severance $ — $ 155 $ — $ (18) $ — $ 2 $ 139 Facility and other exit costs — 1 — — — — 1 Property, plant, and equipment — 5 — — (5) — — Total — 161 — (18) (5) 2 140 Fiscal 2022 Actions: Employee severance 108 6 (7) (28) — 6 85 Facility and other exit costs 1 6 — (3) — — 4 Total 109 12 (7) (31) — 6 89 Pre-Fiscal 2022 Actions: Employee severance 112 4 (2) (27) — 8 95 Facility and other exit costs 7 — (2) (7) — 2 — Total 119 4 (4) (34) — 10 95 Total Activity $ 228 $ 177 $ (11) $ (83) $ (5) $ 18 $ 324 |
Restructuring reserves included on Consolidated Balance Sheets | March 31, September 30, 2023 2022 (in millions) Accrued and other current liabilities $ 279 $ 182 Other liabilities 45 46 Restructuring reserves $ 324 $ 228 |
Fiscal 2023 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 2023 program by segment as of March 31, 2023: Total Cumulative Remaining Expected Charges Expected Charges Incurred Charges (in millions) Transportation Solutions $ 102 $ 94 $ 8 Industrial Solutions 54 44 10 Communications Solutions 24 23 1 Total $ 180 $ 161 $ 19 |
Fiscal 2022 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 2022 program by segment as of March 31, 2023: Total Cumulative Remaining Expected Charges Expected Charges Incurred Charges (in millions) Transportation Solutions $ 96 $ 88 $ 8 Industrial Solutions 55 52 3 Communications Solutions 31 26 5 Total $ 182 $ 166 $ 16 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Inventories | |
Schedule of inventories | March 31, September 30, 2023 2022 (in millions) Raw materials $ 434 $ 390 Work in progress 1,288 1,066 Finished goods 1,089 1,220 Inventories $ 2,811 $ 2,676 |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Goodwill | |
Changes in the carrying amount of goodwill by segment | Transportation Industrial Communications Solutions Solutions Solutions Total (in millions) September 30, 2022 (1) $ 1,439 $ 3,118 $ 701 $ 5,258 Acquisition — 73 — 73 Currency translation and other 57 111 28 196 March 31, 2023 (1) $ 1,496 $ 3,302 $ 729 $ 5,527 (1) At March 31, 2023 and September 30, 2022, 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. 31, 2023 | |
Intangible Assets, Net | |
Schedule of finite-lived intangible assets | March 31, 2023 September 30, 2022 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount (in millions) Customer relationships $ 1,754 $ (770) $ 984 $ 1,642 $ (687) $ 955 Intellectual property 1,210 (919) 291 1,174 (852) 322 Other 17 (6) 11 16 (5) 11 Total $ 2,981 $ (1,695) $ 1,286 $ 2,832 $ (1,544) $ 1,288 |
Schedule of finite-lived intangible assets, future amortization expense | At March 31, 2023, the aggregate amortization expense on intangible assets is expected to be as follows: (in millions) Remainder of fiscal 2023 $ 97 Fiscal 2024 164 Fiscal 2025 149 Fiscal 2026 144 Fiscal 2027 126 Fiscal 2028 93 Thereafter 513 Total $ 1,286 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Leases | |
Schedule of components of lease cost | For the For the Quarters Ended Six Months Ended March 31, March 25, March 31, March 25, 2023 2022 2023 2022 (in millions) Operating lease cost $ 36 $ 33 $ 70 $ 64 Variable lease cost 13 13 25 25 Total lease cost $ 49 $ 46 $ 95 $ 89 |
Schedule of Cash Flow information, including significant non-cash transactions, related to leases | For the Six Months Ended March 31, March 25, 2023 2022 (in millions) Cash paid for amounts included in the measurement of lease liabilities: Payments for operating leases (1) $ 64 $ 61 Right-of-use assets, including modifications of existing leases, obtained in exchange for operating lease liabilities 56 77 (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. 31, 2023 | |
Net investment hedges | |
Schedule of impacts of hedging program | For the For the Quarters Ended Six Months Ended March 31, March 25, March 31, March 25, 2023 2022 2023 2022 (in millions) Foreign currency exchange gains (losses) on intercompany loans and external borrowings (1) $ (51) $ 80 $ (216) $ 188 Gains (losses) on cross-currency swap contracts designated as hedges of net investment (1) (19) 33 (156) 70 (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 | |
Schedule of impacts of hedging program | For the For the Quarter Ended Six Months Ended March 25, March 25, 2022 2022 (in millions) Losses recorded in other comprehensive income (loss) $ (2) $ (5) Gains excluded from the hedging relationship (1) 10 39 (1) Gains excluded from the hedging relationship are recognized prospectively in selling, general, and administrative expenses and are offset by losses 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 31, September 30, 2023 2022 (in millions) Prepaid expenses and other current assets $ 43 $ 55 Other assets 48 172 Accrued and other current liabilities 5 — Other liabilities 25 — |
Forward starting interest rate swaps | Cash flow hedges | |
Schedule of impacts of hedging program | For the For the Quarter Ended Six Months Ended March 25, March 25, 2022 2022 (in millions) Gains recorded in other comprehensive income (loss) $ 11 $ 13 |
Commodity swap contracts | Cash flow hedges | |
Summary of fair value of derivative instruments | March 31, September 30, 2023 2022 (in millions) Prepaid expenses and other current assets $ 28 $ 2 Other assets 2 — Accrued and other current liabilities 10 77 Other liabilities 1 7 |
Schedule of impacts of hedging program | For the For the Quarters Ended Six Months Ended March 31, March 25, March 31, March 25, 2023 2022 2023 2022 (in millions) Gains recorded in other comprehensive income (loss) $ 31 $ 46 $ 78 $ 61 Gains (losses) reclassified from accumulated other comprehensive income (loss) into cost of sales (9) 5 (38) 20 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Retirement Plans | |
Net periodic pension benefit cost | Non-U.S. Plans U.S. Plans For the For the Quarters Ended Quarters Ended March 31, March 25, March 31, March 25, 2023 2022 2023 2022 (in millions) Operating expense: Service cost $ 6 $ 10 $ 2 $ 2 Other (income) expense: Interest cost 14 8 10 6 Expected returns on plan assets (11) (14) (10) (12) Amortization of net actuarial loss 2 7 1 1 Amortization of prior service credit (1) (2) — — Net periodic pension benefit cost (credit) $ 10 $ 9 $ 3 $ (3) Non-U.S. Plans U.S. Plans For the For the Six Months Ended Six Months Ended March 31, March 25, March 31, March 25, 2023 2022 2023 2022 (in millions) Operating expense: Service cost $ 13 $ 20 $ 4 $ 4 Other (income) expense: Interest cost 28 17 19 13 Expected returns on plan assets (22) (29) (19) (24) Amortization of net actuarial loss 3 13 2 2 Amortization of prior service credit (2) (3) — — Net periodic pension benefit cost (credit) $ 20 $ 18 $ 6 $ (5) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Weighted-average number of shares outstanding: | |
Schedule of weighted-average shares outstanding, basic and diluted | For the For the Quarters Ended Six Months Ended March 31, March 25, March 31, March 25, 2023 2022 2023 2022 (in millions) Basic 316 325 317 326 Dilutive impact of share-based compensation arrangements 2 2 2 2 Diluted 318 327 319 328 |
Schedule of antidilutive securities excluded from computation of earnings per share | For the For the Quarters Ended Six Months Ended March 31, March 25, March 31, March 25, 2023 2022 2023 2022 (in millions) Antidilutive share options 1 1 1 1 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Shareholders' Equity | |
Schedule of cash dividends to shareholders | For the For the Quarters Ended Six Months Ended March 31, March 25, March 31, March 25, 2023 2022 2023 2022 Dividends paid per common share $ 0.56 $ 0.50 $ 1.12 $ 1.00 |
Schedule of common shares repurchased | For the Six Months Ended March 31, March 25, 2023 2022 (in millions) Number of common shares repurchased 4 5 Repurchase value $ 432 $ 752 |
Share Plans (Tables)
Share Plans (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Share Plans | |
Share-based compensation expense | For the For the Quarters Ended Six Months Ended March 31, March 25, March 31, March 25, 2023 2022 2023 2022 (in millions) Share-based compensation expense $ 31 $ 28 $ 63 $ 60 |
Summary of share-based award activity | During the quarter ended December 30, 2022, we granted the following share-based awards as part of our annual incentive plan grant: Grant-Date Shares Fair Value (in millions) Share options 0.9 $ 35.79 Restricted share awards 0.4 124.52 Performance share awards 0.2 124.52 |
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 31 % Risk-free interest rate 4.0 % Expected annual dividend per share $ 2.24 Expected life of options (in years) 5.1 |
Segment and Geographic Data (Ta
Segment and Geographic Data (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Segment and Geographic Data | |
Schedule of net sales by segment | For the For the Quarters Ended Six Months Ended March 31, March 25, March 31, March 25, 2023 2022 2023 2022 (in millions) Transportation Solutions: Automotive $ 1,795 $ 1,653 $ 3,444 $ 3,173 Commercial transportation 405 394 753 759 Sensors 283 267 545 540 Total Transportation Solutions 2,483 2,314 4,742 4,472 Industrial Solutions: Industrial equipment 461 465 895 920 Aerospace, defense, and marine 298 261 562 503 Energy 233 184 422 372 Medical 199 158 372 325 Total Industrial Solutions 1,191 1,068 2,251 2,120 Communications Solutions: Data and devices 288 392 617 748 Appliances 198 233 391 485 Total Communications Solutions 486 625 1,008 1,233 Total $ 4,160 $ 4,007 $ 8,001 $ 7,825 (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 31, March 25, March 31, March 25, 2023 2022 2023 2022 (in millions) Asia–Pacific: Transportation Solutions $ 861 $ 883 $ 1,785 $ 1,811 Industrial Solutions 196 194 385 399 Communications Solutions 242 334 536 671 Total Asia–Pacific 1,299 1,411 2,706 2,881 Europe/Middle East/Africa (“EMEA”): Transportation Solutions 1,046 899 1,858 1,670 Industrial Solutions 527 443 971 893 Communications Solutions 94 91 164 184 Total EMEA 1,667 1,433 2,993 2,747 Americas: Transportation Solutions 576 532 1,099 991 Industrial Solutions 468 431 895 828 Communications Solutions 150 200 308 378 Total Americas 1,194 1,163 2,302 2,197 Total $ 4,160 $ 4,007 $ 8,001 $ 7,825 (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 31, March 25, March 31, March 25, 2023 2022 2023 2022 (in millions) Transportation Solutions $ 333 $ 409 $ 615 $ 804 Industrial Solutions 134 145 290 265 Communications Solutions 70 151 134 308 Total $ 537 $ 705 $ 1,039 $ 1,377 |
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. 31, 2023 | Mar. 25, 2022 | Mar. 31, 2023 | Mar. 25, 2022 | |
Restructuring and other charges, net | ||||
Restructuring charges, net | $ 62 | $ 22 | $ 166 | $ 43 |
Impairment of held for sale businesses and (gain) loss on divestitures, net | 56 | (1) | 62 | (10) |
Other charges, net | 1 | 2 | ||
Restructuring and other charges, net | 119 | 21 | 230 | 33 |
Operating expenses | ||||
Restructuring and other charges, net | ||||
Restructuring charges, net | 62 | 22 | 166 | 55 |
Restructuring charges, net | ||||
Restructuring and other charges, net | ||||
Restructuring charges, net | 62 | 22 | 166 | 43 |
Restructuring charges, net | Transportation Solutions | ||||
Restructuring and other charges, net | ||||
Restructuring charges, net | 18 | 10 | 92 | 15 |
Restructuring charges, net | Industrial Solutions | ||||
Restructuring and other charges, net | ||||
Restructuring charges, net | 36 | 10 | 42 | 18 |
Restructuring charges, net | Communications Solutions | ||||
Restructuring and other charges, net | ||||
Restructuring charges, net | $ 8 | $ 2 | $ 32 | 10 |
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. 31, 2023 USD ($) | |
Restructuring reserve | |
Restructuring reserve at the beginning of the period | $ 228 |
Charges | 177 |
Changes in Estimate | (11) |
Cash Payments | (83) |
Non-Cash Items | (5) |
Currency Translation | 18 |
Restructuring reserve at the end of the period | 324 |
Fiscal 2023 Actions | |
Restructuring reserve | |
Charges | 161 |
Cash Payments | (18) |
Non-Cash Items | (5) |
Currency Translation | 2 |
Restructuring reserve at the end of the period | 140 |
Fiscal 2023 Actions | Employee severance | |
Restructuring reserve | |
Charges | 155 |
Cash Payments | (18) |
Currency Translation | 2 |
Restructuring reserve at the end of the period | 139 |
Fiscal 2023 Actions | Facility and other exit costs | |
Restructuring reserve | |
Charges | 1 |
Restructuring reserve at the end of the period | 1 |
Fiscal 2023 Actions | Property, plant, and equipment | |
Restructuring reserve | |
Charges | 5 |
Non-Cash Items | (5) |
Restructuring reserve at the end of the period | 0 |
Fiscal 2022 Actions | |
Restructuring reserve | |
Restructuring reserve at the beginning of the period | 109 |
Charges | 12 |
Changes in Estimate | (7) |
Cash Payments | (31) |
Currency Translation | 6 |
Restructuring reserve at the end of the period | 89 |
Fiscal 2022 Actions | Employee severance | |
Restructuring reserve | |
Restructuring reserve at the beginning of the period | 108 |
Charges | 6 |
Changes in Estimate | (7) |
Cash Payments | (28) |
Currency Translation | 6 |
Restructuring reserve at the end of the period | 85 |
Fiscal 2022 Actions | Facility and other exit costs | |
Restructuring reserve | |
Restructuring reserve at the beginning of the period | 1 |
Charges | 6 |
Cash Payments | (3) |
Restructuring reserve at the end of the period | 4 |
Pre-Fiscal 2022 Actions | |
Restructuring reserve | |
Restructuring reserve at the beginning of the period | 119 |
Charges | 4 |
Changes in Estimate | (4) |
Cash Payments | (34) |
Currency Translation | 10 |
Restructuring reserve at the end of the period | 95 |
Pre-Fiscal 2022 Actions | Employee severance | |
Restructuring reserve | |
Restructuring reserve at the beginning of the period | 112 |
Charges | 4 |
Changes in Estimate | (2) |
Cash Payments | (27) |
Currency Translation | 8 |
Restructuring reserve at the end of the period | 95 |
Pre-Fiscal 2022 Actions | Facility and other exit costs | |
Restructuring reserve | |
Restructuring reserve at the beginning of the period | 7 |
Changes in Estimate | (2) |
Cash Payments | (7) |
Currency Translation | 2 |
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. 31, 2023 | Mar. 25, 2022 | Mar. 31, 2023 | Mar. 25, 2022 | |
Restructuring Charges | ||||
Charges Incurred | $ 62 | $ 22 | $ 166 | $ 43 |
Fiscal 2022 Actions | ||||
Restructuring Charges | ||||
Total Expected Charges | 182 | 182 | ||
Cumulative Charges Incurred | 166 | 166 | ||
Remaining Expected Charges | 16 | 16 | ||
Charges Incurred | 5 | 53 | ||
Fiscal 2022 Actions | Transportation Solutions | ||||
Restructuring Charges | ||||
Total Expected Charges | 96 | 96 | ||
Cumulative Charges Incurred | 88 | 88 | ||
Remaining Expected Charges | 8 | 8 | ||
Fiscal 2022 Actions | Industrial Solutions | ||||
Restructuring Charges | ||||
Total Expected Charges | 55 | 55 | ||
Cumulative Charges Incurred | 52 | 52 | ||
Remaining Expected Charges | 3 | 3 | ||
Fiscal 2022 Actions | Communications Solutions | ||||
Restructuring Charges | ||||
Total Expected Charges | 31 | 31 | ||
Cumulative Charges Incurred | 26 | 26 | ||
Remaining Expected Charges | 5 | 5 | ||
Fiscal 2023 Actions | ||||
Restructuring Charges | ||||
Total Expected Charges | 180 | 180 | ||
Cumulative Charges Incurred | 161 | 161 | ||
Remaining Expected Charges | 19 | 19 | ||
Charges Incurred | 161 | |||
Fiscal 2023 Actions | Transportation Solutions | ||||
Restructuring Charges | ||||
Total Expected Charges | 102 | 102 | ||
Cumulative Charges Incurred | 94 | 94 | ||
Remaining Expected Charges | 8 | 8 | ||
Fiscal 2023 Actions | Industrial Solutions | ||||
Restructuring Charges | ||||
Total Expected Charges | 54 | 54 | ||
Cumulative Charges Incurred | 44 | 44 | ||
Remaining Expected Charges | 10 | 10 | ||
Fiscal 2023 Actions | Communications Solutions | ||||
Restructuring Charges | ||||
Total Expected Charges | 24 | 24 | ||
Cumulative Charges Incurred | 23 | 23 | ||
Remaining Expected Charges | $ 1 | $ 1 | ||
Pre-Fiscal 2022 Actions | ||||
Restructuring Charges | ||||
Charges Incurred | $ 2 |
Restructuring and Other Charg_6
Restructuring and Other Charges, Net - Restructuring Reserve Balances (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Sep. 30, 2022 |
Restructuring reserves included on the Consolidated Balance Sheets | ||
Accrued and other current liabilities | $ 279 | $ 182 |
Other liabilities | 45 | 46 |
Restructuring reserves | $ 324 | $ 228 |
Restructuring and Other Charg_7
Restructuring and Other Charges, Net - Divestitures (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 USD ($) | Mar. 25, 2022 USD ($) | Mar. 31, 2023 USD ($) item | Mar. 25, 2022 USD ($) item | |
Divestitures, Not Discontinued Operation | ||||
Proceeds from divestiture of businesses, net of cash retained by businesses sold | $ 51 | $ 16 | ||
Impairment of held for sale businesses and (gain) loss on divestitures, net | $ 56 | $ (1) | 62 | $ (10) |
Pre-tax impairment charge | 67 | |||
Fiscal 2023 Divestitures | Transportation Solutions | ||||
Divestitures, Not Discontinued Operation | ||||
Pre-tax impairment charge | $ 60 | |||
Fiscal 2023 Divestitures | Industrial Solutions | ||||
Divestitures, Not Discontinued Operation | ||||
Number of Businesses Sold | item | 2 | |||
Proceeds from divestiture of businesses, net of cash retained by businesses sold | $ 51 | |||
Impairment of held for sale businesses and (gain) loss on divestitures, net | $ 2 | |||
Fiscal 2022 Divestitures | ||||
Divestitures, Not Discontinued Operation | ||||
Number of Businesses Sold | item | 2 | |||
Proceeds from divestiture of businesses, net of cash retained by businesses sold | $ 16 | |||
Net pre-tax gain on divestiture | $ 10 |
Acquisitions (Details)
Acquisitions (Details) $ in Millions | 6 Months Ended | |
Mar. 31, 2023 USD ($) item | Mar. 25, 2022 USD ($) item | |
Acquisitions | ||
Net cash paid | $ 108 | $ 102 |
2023 Acquisitions | ||
Acquisitions | ||
Number of businesses acquired | item | 1 | |
Net cash paid | $ 108 | |
2022 Acquisitions | ||
Acquisitions | ||
Number of businesses acquired | item | 1 | |
Net cash paid | $ 127 | |
2021 Acquisitions | ||
Acquisitions | ||
Customary net working capital settlement amount | $ 25 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Sep. 30, 2022 |
Inventories | ||
Raw materials | $ 434 | $ 390 |
Work in progress | 1,288 | 1,066 |
Finished goods | 1,089 | 1,220 |
Inventories | $ 2,811 | $ 2,676 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Millions | 6 Months Ended | |
Mar. 31, 2023 | Sep. 30, 2022 | |
Goodwill: | ||
Goodwill, beginning balance | $ 5,258 | |
Acquisition | 73 | |
Currency translation and other | 196 | |
Goodwill, ending balance | 5,527 | |
Transportation Solutions | ||
Goodwill: | ||
Goodwill, beginning balance | 1,439 | |
Currency translation and other | 57 | |
Goodwill, ending balance | 1,496 | |
Accumulated impairment losses | 3,091 | $ 3,091 |
Industrial Solutions | ||
Goodwill: | ||
Goodwill, beginning balance | 3,118 | |
Acquisition | 73 | |
Currency translation and other | 111 | |
Goodwill, ending balance | 3,302 | |
Accumulated impairment losses | 669 | 669 |
Communications Solutions | ||
Goodwill: | ||
Goodwill, beginning balance | 701 | |
Currency translation and other | 28 | |
Goodwill, ending balance | 729 | |
Accumulated impairment losses | $ 489 | $ 489 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2023 | Mar. 25, 2022 | Mar. 31, 2023 | Mar. 25, 2022 | Sep. 30, 2022 | |
Finite-Lived Intangible Assets | |||||
Gross Carrying Amount | $ 2,981 | $ 2,981 | $ 2,832 | ||
Accumulated Amortization | (1,695) | (1,695) | (1,544) | ||
Net Carrying Amount | 1,286 | 1,286 | 1,288 | ||
Finite-lived intangible assets, amortization expense | 49 | $ 49 | 95 | $ 97 | |
Aggregate amortization expense on intangible assets | |||||
Remainder of fiscal 2023 | 97 | 97 | |||
Fiscal 2024 | 164 | 164 | |||
Fiscal 2025 | 149 | 149 | |||
Fiscal 2026 | 144 | 144 | |||
Fiscal 2027 | 126 | 126 | |||
Fiscal 2028 | 93 | 93 | |||
Thereafter | 513 | 513 | |||
Net Carrying Amount | 1,286 | 1,286 | 1,288 | ||
Customer relationships | |||||
Finite-Lived Intangible Assets | |||||
Gross Carrying Amount | 1,754 | 1,754 | 1,642 | ||
Accumulated Amortization | (770) | (770) | (687) | ||
Net Carrying Amount | 984 | 984 | 955 | ||
Aggregate amortization expense on intangible assets | |||||
Net Carrying Amount | 984 | 984 | 955 | ||
Intellectual property | |||||
Finite-Lived Intangible Assets | |||||
Gross Carrying Amount | 1,210 | 1,210 | 1,174 | ||
Accumulated Amortization | (919) | (919) | (852) | ||
Net Carrying Amount | 291 | 291 | 322 | ||
Aggregate amortization expense on intangible assets | |||||
Net Carrying Amount | 291 | 291 | 322 | ||
Other | |||||
Finite-Lived Intangible Assets | |||||
Gross Carrying Amount | 17 | 17 | 16 | ||
Accumulated Amortization | (6) | (6) | (5) | ||
Net Carrying Amount | 11 | 11 | 11 | ||
Aggregate amortization expense on intangible assets | |||||
Net Carrying Amount | $ 11 | $ 11 | $ 11 |
Debt - Summary (Details)
Debt - Summary (Details) € in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 EUR (€) | Mar. 31, 2023 USD ($) | Mar. 25, 2022 USD ($) | Sep. 30, 2022 USD ($) | |
Debt | ||||
Fair value of debt | $ 3,966 | $ 3,990 | ||
Repayment of debt | 591 | $ 558 | ||
Commercial paper | ||||
Debt | ||||
Commercial paper | $ 285 | $ 370 | ||
Weighted-average interest rate (as a percent) | 5.50% | 3.45% | ||
1.10% euro-denominated senior notes due 2023 | ||||
Debt | ||||
Debt instrument, interest rate (as a percent) | 1.10% | |||
Repayment of debt | € | € 550 | |||
4.50% senior notes due 2026 | ||||
Debt | ||||
Debt instrument, interest rate (as a percent) | 4.50% | |||
Debt instrument principal amount | $ 500 |
Leases - Components of Lease Co
Leases - Components of Lease Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 | Mar. 25, 2022 | Mar. 31, 2023 | Mar. 25, 2022 | |
Leases | ||||
Operating lease cost | $ 36 | $ 33 | $ 70 | $ 64 |
Variable lease cost | 13 | 13 | 25 | 25 |
Total lease cost | $ 49 | $ 46 | $ 95 | $ 89 |
Leases - Cash Flow Information
Leases - Cash Flow Information (Details) - USD ($) $ in Millions | 6 Months Ended | |
Mar. 31, 2023 | Mar. 25, 2022 | |
Leases | ||
Payments for operating leases | $ 64 | $ 61 |
Right-of-use assets, including modifications of existing leases, obtained in exchange for operating lease liabilities | $ 56 | $ 77 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Mar. 31, 2023 USD ($) |
Loss Contingencies | |
Accrual environmental loss contingency, estimate of probable loss | $ 20 |
Minimum | |
Loss Contingencies | |
Accrual environmental loss contingency, estimate of probable loss | 17 |
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 | 171 |
Discontinued Operations, Disposed of by Sale | Subsea Communications | |
Guarantees | |
Guarantor obligations, maximum exposure | $ 58 |
Financial Instruments (Details)
Financial Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 25, 2022 | Mar. 31, 2023 | Mar. 25, 2022 | Sep. 30, 2022 | |
Cash flow hedges | Cross-currency swap contracts | |||||
Financial Instruments | |||||
Gains (losses) recorded in other comprehensive income (loss) | $ (2) | $ (5) | |||
Gains (losses) excluded from the hedging relationship | $ 10 | $ 39 | |||
Derivative, Excluded Component, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Selling, General and Administrative Expense | Selling, General and Administrative Expense | |||
Cash flow hedges | Forward starting interest rate swaps | |||||
Financial Instruments | |||||
Gains (losses) recorded in other comprehensive income (loss) | $ 11 | $ 13 | |||
Debt instrument, interest rate (as a percent) | 2.50% | ||||
Cash flow hedges | Commodity swap contracts | |||||
Financial Instruments | |||||
Notional amount | $ 492 | $ 492 | $ 566 | ||
Gains (losses) recorded in other comprehensive income (loss) | 31 | 46 | 78 | 61 | |
Gains (losses) reclassified from accumulated other comprehensive income (loss) into cost of sales | (9) | 5 | (38) | 20 | |
Net investment hedges | Intercompany loans and external borrowings | |||||
Financial Instruments | |||||
Notional amount of non-derivative instruments | 3,210 | 1,658 | |||
Foreign currency exchange gains (losses) on intercompany loans and external borrowings | (51) | 80 | (216) | 188 | |
Net investment hedges | Cross-currency swap contracts | |||||
Financial Instruments | |||||
Notional amount | $ 3,782 | $ 3,782 | 1,873 | ||
Interest paid in foreign currency, fixed interest rate | 0% | 0% | |||
Interest received in U.S. dollars, weighted-average fixed interest rate | 1.61% | 1.61% | |||
Gains (losses) on cross-currency swap contracts designated as hedges of net investment | $ (19) | $ 33 | $ (156) | $ 70 | |
Prepaid expenses and other current assets | Cash flow hedges | Commodity swap contracts | |||||
Financial Instruments | |||||
Fair Value of Asset Positions | 28 | 28 | 2 | ||
Prepaid expenses and other current assets | Net investment hedges | Cross-currency swap contracts | |||||
Financial Instruments | |||||
Fair Value of Asset Positions | 43 | 43 | 55 | ||
Other assets | Cash flow hedges | Commodity swap contracts | |||||
Financial Instruments | |||||
Fair Value of Asset Positions | 2 | 2 | |||
Other assets | Net investment hedges | Cross-currency swap contracts | |||||
Financial Instruments | |||||
Fair Value of Asset Positions | 48 | 48 | 172 | ||
Accrued and other current liabilities | Cash flow hedges | Commodity swap contracts | |||||
Financial Instruments | |||||
Fair Value of Liability Positions | 10 | 10 | 77 | ||
Accrued and other current liabilities | Net investment hedges | Cross-currency swap contracts | |||||
Financial Instruments | |||||
Fair Value of Liability Positions | 5 | 5 | |||
Other liabilities | Cash flow hedges | Commodity swap contracts | |||||
Financial Instruments | |||||
Fair Value of Liability Positions | 1 | 1 | $ 7 | ||
Other liabilities | Net investment hedges | Cross-currency swap contracts | |||||
Financial Instruments | |||||
Fair Value of Liability Positions | $ 25 | $ 25 |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 | Mar. 25, 2022 | Mar. 31, 2023 | Mar. 25, 2022 | |
Net Periodic Postretirement Benefit Cost (Credit) | ||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Interest Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Expected Return (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Amortization of Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Amortization of Prior Service Cost (Credit), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Non-U.S. Plans | ||||
Net Periodic Postretirement Benefit Cost (Credit) | ||||
Service cost | $ 6 | $ 10 | $ 13 | $ 20 |
Interest cost | 14 | 8 | 28 | 17 |
Expected returns on plan assets | (11) | (14) | (22) | (29) |
Amortization of net actuarial loss | 2 | 7 | 3 | 13 |
Amortization of prior service credit | (1) | (2) | (2) | (3) |
Net periodic pension benefit cost (credit) | 10 | 9 | 20 | 18 |
Defined benefit plan, contributions by employer | 21 | |||
U.S. Plans | ||||
Net Periodic Postretirement Benefit Cost (Credit) | ||||
Service cost | 2 | 2 | 4 | 4 |
Interest cost | 10 | 6 | 19 | 13 |
Expected returns on plan assets | (10) | (12) | (19) | (24) |
Amortization of net actuarial loss | 1 | 1 | 2 | 2 |
Net periodic pension benefit cost (credit) | $ 3 | $ (3) | $ 6 | $ (5) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 | Mar. 25, 2022 | Mar. 31, 2023 | Mar. 25, 2022 | |
Income Taxes | ||||
Income tax expense | $ 100 | $ 136 | $ 187 | $ 246 |
Income tax benefit associated with intercompany transactions | 19 | 36 | ||
Income tax expense related to the write-down of certain deferred tax assets to the lower corporate tax rate | $ 27 | 27 | ||
Income tax expense associated with income tax audit of pre-acquisition period of acquired entity | 12 | |||
Other income associated with indemnification receivable | $ 11 | |||
Increase in Deferred Tax Assets For Tax Loss And Credit Carryforward | 313 | |||
Increase In Valuation Allowance For Tax Loss And Credit Carryforwards | 313 | |||
Unrecognized income tax benefits, approximate amount that could be resolved in next twelve months | $ 20 | $ 20 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 | Mar. 25, 2022 | Mar. 31, 2023 | Mar. 25, 2022 | |
Weighted-average number of shares outstanding: | ||||
Basic (in shares) | 316 | 325 | 317 | 326 |
Dilutive impact of share-based compensation arrangements (in shares) | 2 | 2 | 2 | 2 |
Diluted (in shares) | 318 | 327 | 319 | 328 |
Share options | ||||
Antidilutive shares excluded from computation of earnings per share | ||||
Antidilutive share options | 1 | 1 | 1 | 1 |
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, 2023 USD ($) installment $ / shares shares | Mar. 31, 2023 USD ($) installment $ / shares | Mar. 25, 2022 USD ($) $ / shares | Mar. 31, 2023 USD ($) installment $ / shares shares | Mar. 25, 2022 USD ($) $ / shares shares | Sep. 30, 2022 USD ($) | |
Shareholders' Equity | ||||||
Swiss Law Capital Band, Maximum Duration of Authorization | 1 year | |||||
Swiss Law Capital Band, Maximum Percentage of Increase of Share Capital | 120% | |||||
Swiss Law Capital Band, Maximum Percentage of Reduction of Share Capital | 80% | |||||
Dividends paid per common share | $ / shares | $ 0.56 | $ 0.50 | $ 1.12 | $ 1 | ||
Cancellation of treasury shares (in shares) | shares | 8.5 | |||||
Dividend or cash distribution approved (in currency per share) | $ / shares | $ 2.36 | |||||
Number of quarterly dividend installments | installment | 4 | 4 | 4 | |||
Cash distribution quarterly installment payable (in dollars per share) | $ / shares | $ 0.59 | $ 0.59 | $ 0.59 | |||
Unpaid portion of the dividend payment recorded in accrued and other current liabilities | $ | $ 744 | $ 744 | $ 744 | $ 356 | ||
Number of common shares repurchased | shares | 4 | 5 | ||||
Repurchase value | $ | 199 | $ 506 | $ 432 | $ 752 | ||
Amount available for repurchase, at end of period | $ | $ 1,200 | $ 1,200 | $ 1,200 |
Share Plans (Details)
Share Plans (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2023 | Dec. 30, 2022 | Mar. 25, 2022 | Mar. 31, 2023 | Mar. 25, 2022 | |
Share Based Compensation Arrangements: | |||||
Share-based compensation expense | $ 31 | $ 28 | $ 63 | $ 60 | |
Shares available for issuance | 8 | 8 | |||
Share Based Compensation Expenses Not Recognized | |||||
Share-based compensation, share-based awards, total compensation expense not yet recognized | $ 179 | $ 179 | |||
Share-based compensation, share-based awards, total compensation expense not yet recognized, expected period for recognition | 1 year 8 months 12 days | ||||
Share options | |||||
Share Based Compensation Arrangements: | |||||
Share options granted | 0.9 | ||||
Options granted, grant-date fair value (in dollars per share) | $ 35.79 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology | |||||
Expected share price volatility (as a percent) | 31% | ||||
Risk-free interest rate (as a percent) | 4% | ||||
Expected annual dividend per share | $ 2.24 | ||||
Expected life of options (in years) | 5 years 1 month 6 days | ||||
Restricted share awards | |||||
Share Based Compensation Arrangements: | |||||
Shares granted | 0.4 | ||||
Shares granted, grant-date fair value (in dollars per share) | $ 124.52 | ||||
Performance share awards | |||||
Share Based Compensation Arrangements: | |||||
Shares granted | 0.2 | ||||
Shares granted, grant-date fair value (in dollars per share) | $ 124.52 |
Segment and Geographic Data - N
Segment and Geographic Data - Net Sales by Segment and Industry End Market (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 USD ($) segment | Mar. 25, 2022 USD ($) | Mar. 31, 2023 USD ($) | Mar. 25, 2022 USD ($) | |
Segment and Geographic Data | ||||
Number of reportable segments | segment | 3 | |||
Net sales | $ 4,160 | $ 4,007 | $ 8,001 | $ 7,825 |
Transportation Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 2,483 | 2,314 | 4,742 | 4,472 |
Transportation Solutions | Automotive | ||||
Segment and Geographic Data | ||||
Net sales | 1,795 | 1,653 | 3,444 | 3,173 |
Transportation Solutions | Commercial transportation | ||||
Segment and Geographic Data | ||||
Net sales | 405 | 394 | 753 | 759 |
Transportation Solutions | Sensors | ||||
Segment and Geographic Data | ||||
Net sales | 283 | 267 | 545 | 540 |
Industrial Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 1,191 | 1,068 | 2,251 | 2,120 |
Industrial Solutions | Adjustments | ||||
Segment and Geographic Data | ||||
Net sales | (14) | |||
Industrial Solutions | Industrial equipment | ||||
Segment and Geographic Data | ||||
Net sales | 461 | 465 | 895 | 920 |
Industrial Solutions | Aerospace, defense, and marine | ||||
Segment and Geographic Data | ||||
Net sales | 298 | 261 | 562 | 503 |
Industrial Solutions | Energy | ||||
Segment and Geographic Data | ||||
Net sales | 233 | 184 | 422 | 372 |
Industrial Solutions | Medical | ||||
Segment and Geographic Data | ||||
Net sales | 199 | 158 | 372 | 325 |
Communications Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 486 | 625 | 1,008 | 1,233 |
Communications Solutions | Adjustments | ||||
Segment and Geographic Data | ||||
Net sales | 14 | |||
Communications Solutions | Data and devices | ||||
Segment and Geographic Data | ||||
Net sales | 288 | 392 | 617 | 748 |
Communications Solutions | Appliances | ||||
Segment and Geographic Data | ||||
Net sales | $ 198 | $ 233 | $ 391 | $ 485 |
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. 31, 2023 | Mar. 25, 2022 | Mar. 31, 2023 | Mar. 25, 2022 | |
Segment and Geographic Data | ||||
Net sales | $ 4,160 | $ 4,007 | $ 8,001 | $ 7,825 |
Transportation Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 2,483 | 2,314 | 4,742 | 4,472 |
Industrial Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 1,191 | 1,068 | 2,251 | 2,120 |
Communications Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 486 | 625 | 1,008 | 1,233 |
Total Asia-Pacific | ||||
Segment and Geographic Data | ||||
Net sales | 1,299 | 1,411 | 2,706 | 2,881 |
Total Asia-Pacific | Transportation Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 861 | 883 | 1,785 | 1,811 |
Total Asia-Pacific | Industrial Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 196 | 194 | 385 | 399 |
Total Asia-Pacific | Communications Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 242 | 334 | 536 | 671 |
Total Europe/Middle East/Africa | ||||
Segment and Geographic Data | ||||
Net sales | 1,667 | 1,433 | 2,993 | 2,747 |
Total Europe/Middle East/Africa | Transportation Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 1,046 | 899 | 1,858 | 1,670 |
Total Europe/Middle East/Africa | Industrial Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 527 | 443 | 971 | 893 |
Total Europe/Middle East/Africa | Communications Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 94 | 91 | 164 | 184 |
Total Americas | ||||
Segment and Geographic Data | ||||
Net sales | 1,194 | 1,163 | 2,302 | 2,197 |
Total Americas | Transportation Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 576 | 532 | 1,099 | 991 |
Total Americas | Industrial Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 468 | 431 | 895 | 828 |
Total Americas | Communications Solutions | ||||
Segment and Geographic Data | ||||
Net sales | $ 150 | $ 200 | $ 308 | $ 378 |
Segment and Geographic Data - O
Segment and Geographic Data - Operating Income (Loss) by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 | Mar. 25, 2022 | Mar. 31, 2023 | Mar. 25, 2022 | |
Segment and Geographic Data | ||||
Operating income (loss) | $ 537 | $ 705 | $ 1,039 | $ 1,377 |
Transportation Solutions | ||||
Segment and Geographic Data | ||||
Operating income (loss) | 333 | 409 | 615 | 804 |
Industrial Solutions | ||||
Segment and Geographic Data | ||||
Operating income (loss) | 134 | 145 | 290 | 265 |
Industrial Solutions | Adjustments | ||||
Segment and Geographic Data | ||||
Operating income (loss) | (6) | |||
Communications Solutions | ||||
Segment and Geographic Data | ||||
Operating income (loss) | $ 70 | $ 151 | $ 134 | 308 |
Communications Solutions | Adjustments | ||||
Segment and Geographic Data | ||||
Operating income (loss) | $ 6 |