Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 29, 2018 | Jul. 20, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | TE Connectivity Ltd. | |
Entity Central Index Key | 1,385,157 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 29, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-28 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 348,458,740 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Net sales | $ 3,764 | $ 3,367 | $ 10,989 | $ 9,657 |
Cost of sales | 2,547 | 2,227 | 7,352 | 6,340 |
Gross margin | 1,217 | 1,140 | 3,637 | 3,317 |
Selling, general, and administrative expenses | 409 | 408 | 1,220 | 1,182 |
Research, development, and engineering expenses | 181 | 168 | 539 | 485 |
Acquisition and integration costs | 4 | 1 | 9 | 5 |
Restructuring and other charges, net | 65 | 19 | 106 | 125 |
Operating income | 558 | 544 | 1,763 | 1,520 |
Interest income | 3 | 3 | 11 | 14 |
Interest expense | (25) | (32) | (80) | (95) |
Other income (expense), net | (1) | (12) | 2 | (31) |
Income from continuing operations before income taxes | 535 | 503 | 1,696 | 1,408 |
Income tax expense | (81) | (71) | (789) | (164) |
Income from continuing operations | 454 | 432 | 907 | 1,244 |
Income (loss) from discontinued operations, net of income taxes | 3 | (3) | 5 | |
Net income | $ 454 | $ 435 | $ 904 | $ 1,249 |
Basic earnings per share: | ||||
Income from continuing operations (in dollars per share) | $ 1.30 | $ 1.22 | $ 2.58 | $ 3.50 |
Income (loss) from discontinued operations (in dollars per share) | 0.01 | (0.01) | 0.01 | |
Net income (in dollars per share) | 1.30 | 1.23 | 2.58 | 3.52 |
Diluted earnings per share: | ||||
Income from continuing operations (in dollars per share) | 1.29 | 1.21 | 2.56 | 3.47 |
Income (loss) from discontinued operations (in dollars per share) | 0.01 | (0.01) | 0.01 | |
Net income (in dollars per share) | 1.29 | 1.22 | 2.55 | 3.48 |
Dividends paid per common share | $ 0.44 | $ 0.40 | $ 1.24 | $ 1.14 |
Weighted-average number of shares outstanding: | ||||
Basic (in shares) | 349 | 355 | 351 | 355 |
Diluted (in shares) | 352 | 358 | 354 | 359 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $ 454 | $ 435 | $ 904 | $ 1,249 |
Other comprehensive income (loss): | ||||
Currency translation | (244) | 77 | (63) | (25) |
Adjustments to unrecognized pension and postretirement benefit costs, net of income taxes | 8 | 13 | 23 | 38 |
Gains (losses) on cash flow hedges, net of income taxes | (14) | (12) | (61) | 23 |
Other comprehensive income (loss) | (250) | 78 | (101) | 36 |
Comprehensive income | $ 204 | $ 513 | $ 803 | $ 1,285 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 29, 2018 | Sep. 29, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 770 | $ 1,218 |
Accounts receivable, net of allowance for doubtful accounts of $21 | 2,591 | 2,290 |
Inventories | 1,961 | 1,813 |
Prepaid expenses and other current assets | 619 | 605 |
Total current assets | 5,941 | 5,926 |
Property, plant, and equipment, net | 3,633 | 3,400 |
Goodwill | 5,616 | 5,651 |
Intangible assets, net | 1,698 | 1,841 |
Deferred income taxes | 1,672 | 2,141 |
Other assets | 453 | 444 |
Total Assets | 19,013 | 19,403 |
Current liabilities: | ||
Short-term debt | 714 | 710 |
Accounts payable | 1,583 | 1,436 |
Accrued and other current liabilities | 1,625 | 1,626 |
Deferred revenue | 124 | 75 |
Total current liabilities | 4,046 | 3,847 |
Long-term debt | 3,294 | 3,634 |
Long-term pension and postretirement liabilities | 1,119 | 1,160 |
Deferred income taxes | 227 | 236 |
Income taxes | 311 | 293 |
Other liabilities | 524 | 482 |
Total Liabilities | 9,521 | 9,652 |
Commitments and contingencies (Note 7) | ||
Shareholders' equity: | ||
Common shares, CHF 0.57 par value, 357,069,981 shares authorized and issued | 157 | 157 |
Accumulated earnings | 10,432 | 10,175 |
Treasury shares, at cost, 8,658,869 and 5,356,369 shares, respectively | (798) | (421) |
Accumulated other comprehensive loss | (299) | (160) |
Total Shareholders' Equity | 9,492 | 9,751 |
Total Liabilities and Shareholders' Equity | $ 19,013 | $ 19,403 |
CONDENSED CONSOLIDATED BALANCE5
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) $ in Millions | Jun. 29, 2018SFr / shares | Jun. 29, 2018USD ($)shares | Sep. 29, 2017SFr / shares | Sep. 29, 2017USD ($)shares |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
Accounts receivable, allowance for doubtful accounts (in dollars) | $ | $ 21 | $ 21 | ||
Common shares, par value (in currency per share) | SFr / shares | SFr 0.57 | SFr 0.57 | ||
Common shares, shares authorized | 357,069,981 | 357,069,981 | ||
Common shares, shares issued | 357,069,981 | 357,069,981 | ||
Treasury shares | 8,658,869 | 5,356,369 |
CONDENSED CONSOLIDATED STATEME6
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. 30, 2016 | $ 168 | $ (1,624) | $ 1,801 | $ 8,682 | $ (542) | $ 8,485 |
Balance (in shares) at Sep. 30, 2016 | 383 | (28) | ||||
Increase (Decrease) in Equity: | ||||||
Adoption of ASU No. 2016-09 | ASU 2016-09 | 165 | 165 | ||||
Net income | 1,249 | 1,249 | ||||
Other comprehensive income (loss) | 36 | 36 | ||||
Share-based compensation expense | 73 | 73 | ||||
Dividends approved | (566) | (566) | ||||
Exercise of share options | $ 86 | 86 | ||||
Exercise of share options (in shares) | 3 | |||||
Restricted share award vestings and other activity | $ 155 | (156) | (1) | |||
Restricted share award vestings and other activity (in shares) | 1 | |||||
Repurchase of common shares | $ (386) | $ (386) | ||||
Repurchase of common shares (in shares) | (5) | (5) | ||||
Cancellation of treasury shares | $ (11) | $ 1,512 | (1,152) | (349) | ||
Cancellation of treasury shares (in shares) | (26) | 26 | ||||
Balance at Jun. 30, 2017 | $ 157 | $ (257) | 9,747 | (506) | $ 9,141 | |
Balance (in shares) at Jun. 30, 2017 | 357 | (3) | ||||
Balance at Sep. 29, 2017 | $ 157 | $ (421) | 10,175 | (160) | 9,751 | |
Balance (in shares) at Sep. 29, 2017 | 357 | (5) | ||||
Increase (Decrease) in Equity: | ||||||
Adoption of ASU No. 2018-02 | ASU 2018-02 | 38 | (38) | ||||
Net income | 904 | 904 | ||||
Other comprehensive income (loss) | (101) | (101) | ||||
Share-based compensation expense | 74 | 74 | ||||
Dividends approved | (613) | (613) | ||||
Exercise of share options | $ 96 | 96 | ||||
Exercise of share options (in shares) | 2 | |||||
Restricted share award vestings and other activity | $ 139 | $ (74) | (72) | (7) | ||
Repurchase of common shares | $ (612) | $ (612) | ||||
Repurchase of common shares (in shares) | (6) | (6) | ||||
Balance at Jun. 29, 2018 | $ 157 | $ (798) | $ 10,432 | $ (299) | $ 9,492 | |
Balance (in shares) at Jun. 29, 2018 | 357 | (9) |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Jun. 29, 2018 | Jun. 30, 2017 | |
Cash Flows From Operating Activities: | ||
Net income | $ 904 | $ 1,249 |
(Income) loss from discontinued operations, net of income taxes | 3 | (5) |
Income from continuing operations | 907 | 1,244 |
Adjustments to reconcile income from continuing operations to net cash provided by operating activities: | ||
Depreciation and amortization | 514 | 469 |
Deferred income taxes | 447 | (146) |
Provision for losses on accounts receivable and inventories | 28 | 15 |
Share-based compensation expense | 74 | 73 |
Other | (12) | 23 |
Changes in assets and liabilities, net of the effects of acquisitions and divestitures: | ||
Accounts receivable, net | (317) | (260) |
Inventories | (184) | (195) |
Prepaid expenses and other current assets | (52) | (6) |
Accounts payable | 180 | 217 |
Accrued and other current liabilities | (154) | 56 |
Deferred revenue | 49 | (150) |
Income taxes | 24 | 54 |
Other | 23 | 55 |
Net cash provided by continuing operating activities | 1,527 | 1,449 |
Net cash used in discontinued operating activities | (1) | |
Net cash provided by operating activities | 1,527 | 1,448 |
Cash Flows From Investing Activities: | ||
Capital expenditures | (686) | (452) |
Proceeds from sale of property, plant, and equipment | 19 | 12 |
Acquisition of business, net of cash acquired | (77) | |
Other | (8) | (21) |
Net cash used in investing activities | (675) | (538) |
Cash Flows From Financing Activities: | ||
Net increase (decrease) in commercial paper | 271 | (162) |
Proceeds from issuance of debt | 119 | 89 |
Repayment of debt | (708) | |
Proceeds from exercise of share options | 96 | 86 |
Repurchase of common shares | (611) | (376) |
Payment of common share dividends to shareholders | (435) | (405) |
Other | (34) | (24) |
Net cash used in continuing financing activities | (1,302) | (792) |
Net cash provided by discontinued financing activities | 1 | |
Net cash used in financing activities | (1,302) | (791) |
Effect of currency translation on cash | 2 | (11) |
Net increase (decrease) in cash and cash equivalents | (448) | 108 |
Cash and cash equivalents at beginning of period | 1,218 | 647 |
Cash and cash equivalents at end of period | $ 770 | $ 755 |
Basis of Presentation and Accou
Basis of Presentation and Accounting Pronouncements | 9 Months Ended |
Jun. 29, 2018 | |
Basis of Presentation and Accounting Pronouncements | |
Basis of Presentation and Accounting Pronouncements | 1. Basis of Presentation and Accounting Pronouncements 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 29, 2017. Unless otherwise indicated, references in the Condensed Consolidated Financial Statements to fiscal 2018 and fiscal 2017 are to our fiscal years ending September 28, 2018 and ended September 29, 2017, respectively. Recently Issued Accounting Pronouncement In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09 which codified Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers . This guidance supersedes ASC 605, Revenue Recognition , and introduces a single, comprehensive, five-step revenue recognition model. ASC 606 also enhances disclosures related to revenue recognition. ASC 606, as amended, is effective for us beginning in fiscal 2019. Significantly all our revenues are generated from the sale of products and construction related projects. Our review of these existing contracts, which is substantially complete, affirms that product revenue will continue to be recognized at a point in time in a manner consistent with current practice. In addition, construction related projects, which are accounted for primarily using the percentage-of-completion method, will continue to qualify for revenue recognition over time. In the quarter ended June 29, 2018, we continued the process of updating policies, internal controls, financial statement disclosures, and systems to incorporate the impact of the new standard in our financial reporting processes. We intend to adopt the new standard using the modified retrospective approach and have begun quantifying the impact of the cumulative effect of applying this new standard on existing, uncompleted contracts at the adoption date, which will result in an adjustment to the opening balance of accumulated earnings as of September 29, 2018. We do not expect that the cumulative impact of adoption will be material to our results of operations or financial position. Recently Adopted Accounting Pronouncement In February 2018, the FASB issued ASU No. 2018-02, an update to ASC 220, Income Statement–Reporting Comprehensive Income , to allow a reclassification from accumulated other comprehensive income (loss) for stranded tax effects resulting from the Tax Cuts and Jobs Act (the "Act"). See Note 10 for additional information regarding the Act. We elected to early adopt this update in the quarter ended March 30, 2018 and reclassify the stranded tax effects resulting from the change in the U.S. federal corporate income tax rate. This change in accounting principle resulted in a reclassification of $38 million, primarily associated with our pension plans, during the period of adoption. The reclassification increased both accumulated other comprehensive loss and accumulated earnings with no impact to total shareholders' equity. In March 2017, the FASB issued ASU No. 2017-07, an update to ASC 715, Compensation–Retirement Benefits, which changes the income statement presentation of net periodic pension and postretirement benefit costs. The ASU requires that service costs be presented with other employee compensation costs within operating income and that other cost components be presented outside of operating income. We elected to early adopt this update in the quarter ended December 29, 2017. The update was applied retrospectively and did not have a material impact on our Condensed Consolidated Statements of Operations. |
Restructuring and Other Charges
Restructuring and Other Charges, Net | 9 Months Ended |
Jun. 29, 2018 | |
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 June 29, June 30, June 29, June 30, (in millions) Restructuring charges, net $ $ $ $ Other charges (credits), net ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net restructuring charges by segment were as follows: For the For the June 29, June 30, June 29, June 30, (in millions) Transportation Solutions $ $ $ $ Industrial Solutions Communications Solutions ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Restructuring charges, net $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Activity in our restructuring reserves was as follows: Balance at Charges Changes Cash Non-Cash Currency Balance at (in millions) Fiscal 2018 Actions: Employee severance $ — $ $ — $ ) $ — $ — $ Facility and other exit costs — — ) — — Property, plant, and equipment — — — ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total — — ) ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2017 Actions: Employee severance ) ) — ) Facility and other exit costs — ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ) ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pre-Fiscal 2017 Actions: Employee severance ) ) — ) Facility and other exit costs — ) — — Property, plant, and equipment — ) ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Activity $ $ $ ) $ ) $ ) $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2018 Actions During fiscal 2018, we initiated a restructuring program associated with footprint consolidation and structural improvements primarily impacting the Industrial Solutions segment. In connection with this program, during the nine months ended June 29, 2018, we recorded restructuring charges of $111 million. We expect to complete significantly all restructuring actions commenced during the nine months ended June 29, 2018 by the end of fiscal 2020 and to incur total charges of approximately $130 million. Remaining charges primarily relate to employee severance. Fiscal 2017 Actions During fiscal 2017, we initiated a restructuring program associated with footprint consolidation related to recent acquisitions and structural improvements impacting all segments. In connection with this program, during the nine months ended June 29, 2018 and June 30, 2017, we recorded net restructuring charges of $4 million and $119 million, respectively. We expect to complete all restructuring actions commenced during fiscal 2017 by the end of fiscal 2019 and anticipate that any additional charges will be insignificant. Pre-Fiscal 2017 Actions Prior to fiscal 2017, we initiated a restructuring program associated with headcount reductions impacting all segments and product line closures in the Communications Solutions segment. During each of the nine months ended June 29, 2018 and June 30, 2017, we recorded net restructuring charges of $5 million related to pre-fiscal 2017 actions. We expect to incur additional charges of approximately $15 million related to pre-fiscal 2017 actions with the remaining charges related to employee severance primarily in the Communications Solutions segment. Total Restructuring Reserves Restructuring reserves included on the Condensed Consolidated Balance Sheets were as follows: June 29, September 29, (in millions) Accrued and other current liabilities $ $ Other liabilities ​ ​ ​ ​ ​ ​ ​ ​ Restructuring reserves $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Inventories
Inventories | 9 Months Ended |
Jun. 29, 2018 | |
Inventories | |
Inventories | 3. Inventories Inventories consisted of the following: June 29, September 29, (in millions) Raw materials $ $ Work in progress Finished goods Inventoried costs on long-term contracts ​ ​ ​ ​ ​ ​ ​ ​ Inventories $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Goodwill
Goodwill | 9 Months Ended |
Jun. 29, 2018 | |
Goodwill | |
Goodwill | 4. Goodwill The changes in the carrying amount of goodwill by segment were as follows: Transportation Industrial Communications Total (in millions) September 29, 2017 (1) $ $ $ $ Currency translation and other ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 29, 2018 (1) $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) At June 29, 2018 and September 29, 2017, accumulated impairment losses for the Transportation Solutions, Industrial Solutions, and Communications Solutions segments were $2,191 million, $669 million, and $1,514 million, respectively. |
Intangible Assets, Net
Intangible Assets, Net | 9 Months Ended |
Jun. 29, 2018 | |
Intangible Assets, Net | |
Intangible Assets, Net | 5. Intangible Assets, Net Intangible assets consisted of the following: June 29, 2018 September 29, 2017 Gross Accumulated Net Gross Accumulated Net (in millions) Customer relationships $ $ ) $ $ $ ) $ Intellectual property ) ) Other ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ) $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Intangible asset amortization expense was $45 million and $43 million for the quarters ended June 29, 2018 and June 30, 2017, respectively, and $135 million and $126 million for the nine months ended June 29, 2018 and June 30, 2017, respectively. The aggregate amortization expense on intangible assets is expected to be as follows: (in millions) Remainder of fiscal 2018 $ Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022 Fiscal 2023 Thereafter ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Debt
Debt | 9 Months Ended |
Jun. 29, 2018 | |
Debt | |
Debt | 6. Debt During the nine months ended June 29, 2018, Tyco Electronics Group S.A. ("TEGSA"), our 100%-owned subsidiary, repaid, at maturity, $708 million of 6.55% senior notes due October 2017. We reclassified $325 million of 2.375% senior notes due December 2018 from long-term debt to short-term debt on the Condensed Consolidated Balance Sheet during the nine months ended June 29, 2018. During the nine months ended June 29, 2018, TEGSA entered into an uncommitted revolving credit facility under which it borrowed €100 million at a 0% interest rate with repayment due at maturity in December 2018. As of June 29, 2018, TEGSA had $271 million of commercial paper outstanding at a weighted-average interest rate of 2.33%. TEGSA had no commercial paper outstanding at September 29, 2017. The fair value of our debt, based on indicative valuations, was approximately $4,188 million and $4,622 million at June 29, 2018 and September 29, 2017, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Jun. 29, 2018 | |
Commitments and Contingencies | |
Commitments and Contingencies | 7. 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. 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 June 29, 2018, we concluded that we would incur investigation and remediation costs at these sites in the reasonably possible range of $15 million to $43 million, and we accrued $18 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 June 29, 2018, we had outstanding letters of credit, letters of guarantee, and surety bonds of $283 million. We generally record estimated product warranty costs when contract revenues are recognized under the percentage-of-completion method for construction related contracts; other warranty reserves are not significant. The estimation is based primarily on historical experience and actual warranty claims. Amounts accrued for warranty claims were $46 million and $50 million at June 29, 2018 and September 29, 2017, respectively. Tax Sharing Agreement Under a Tax Sharing Agreement, we, Tyco International plc ("Tyco International"), and Covidien plc ("Covidien") share 31%, 27%, and 42%, respectively, of income tax liabilities that arise from adjustments made by tax authorities to the collective income tax returns for certain of our, Tyco International's, and Covidien's income tax liabilities for periods prior to and including June 29, 2007. Pursuant to the Tax Sharing Agreement, we entered into certain guarantee commitments and indemnifications with Tyco International and Covidien. As a result of subsequent transactions, Tyco International and Covidien now operate as part of Johnson Controls International plc and Medtronic plc, respectively. We have substantially settled all U.S. federal income tax matters with the Internal Revenue Service ("IRS") for periods covered under the Tax Sharing Agreement. Certain shared U.S. state and non-U.S. income tax matters remain open. We do not expect these matters will have a material effect on our results of operations, financial position, or cash flows. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Jun. 29, 2018 | |
Financial Instruments | |
Financial Instruments | 8. Financial Instruments During fiscal 2015, we entered into cross-currency swap contracts with an aggregate notional value of €1,000 million to reduce our exposure to foreign currency exchange risk associated with certain intercompany loans. Under the terms of these contracts, which have been designated as cash flow hedges, we make quarterly interest payments in euros at 3.50% per annum and receive interest in U.S. dollars at a weighted-average rate of 5.33% per annum. Upon the maturities of these contracts in fiscal 2022, 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, we are required to post cash collateral with our counterparties. At June 29, 2018 and September 29, 2017, our cross-currency swap contracts were in a liability position of $107 million and $96 million, respectively, and were recorded in other liabilities on the Condensed Consolidated Balance Sheets. At June 29, 2018 and September 29, 2017, collateral paid to our counterparties approximated the derivative positions and was recorded in prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets. The impacts of our cross-currency swap contracts were as follows: For the For the June 29, June 30, June 29, June 30, (in millions) Gains (losses) recorded in other comprehensive income (loss) $ $ $ ) $ ) Gains (losses) excluded from the hedging relationship (1) ) ) (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. We hedge our net investment in certain foreign operations using intercompany loans denominated in the same currencies. The aggregate notional value of these hedges was $2,986 million and $3,110 million at June 29, 2018 and September 29, 2017, respectively. The impacts of our hedging program were as follows: For the For the June 29, June 30, June 29, June 30, (in millions) Foreign currency exchange gains (losses) (1) $ $ ) $ $ (1) Foreign currency exchange gains and losses are recorded as currency translation, a component of accumulated other comprehensive loss, and are offset by changes attributable to the translation of the net investment. |
Retirement Plans
Retirement Plans | 9 Months Ended |
Jun. 29, 2018 | |
Retirement Plans | |
Retirement Plans | 9. Retirement Plans The net periodic pension benefit cost for all U.S. and non-U.S. defined benefit pension plans was as follows: U.S. Plans Non-U.S. Plans For the For the June 29, June 30, June 29, June 30, (in millions) Service cost $ $ $ $ Interest cost Expected return on plan assets ) ) ) ) Amortization of net actuarial loss Amortization of prior service credit — — ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net periodic pension benefit cost $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. Plans Non-U.S. Plans For the For the June 29, June 30, June 29, June 30, (in millions) Service cost $ $ $ $ Interest cost Expected return on plan assets ) ) ) ) Amortization of net actuarial loss Amortization of prior service credit — — ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net periodic pension benefit cost $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The components of net periodic pension benefit cost other than service cost are included in net other income (expense) on the Condensed Consolidated Statements of Operations. During the nine months ended June 29, 2018, we contributed $36 million to our non-U.S. pension plans. |
Income Taxes
Income Taxes | 9 Months Ended |
Jun. 29, 2018 | |
Income Taxes | |
Income Taxes | 10. Income Taxes We recorded income tax expense of $81 million and $71 million for the quarters ended June 29, 2018 and June 30, 2017, respectively. The income tax expense for the quarter ended June 29, 2018 included a $17 million income tax benefit resulting from lapses of statutes of limitations in the U.S. and certain non-U.S. jurisdictions. The income tax expense for the quarter ended June 30, 2017 included a $14 million income tax benefit associated with pre-separation tax matters. We recorded income tax expense of $789 million and $164 million for the nine months ended June 29, 2018 and June 30, 2017, respectively. The tax expense for the nine months ended June 29, 2018 included $567 million of income tax expense related to the tax impacts of the Tax Cuts and Jobs Act, a $61 million net income tax benefit related to certain legal entity restructurings, and a $34 million income tax benefit resulting from lapses of statutes of limitations in the U.S. and certain non-U.S. jurisdictions. See "Tax Cuts and Jobs Act" below for additional information. The tax expense for the nine months ended June 30, 2017 included a $52 million income tax benefit associated with the tax impacts of certain intercompany transactions and the corresponding reduction in the valuation allowance for U.S. tax loss carryforwards, a $24 million income tax benefit resulting from lapses of statutes of limitations in the U.S. and certain non-U.S. jurisdictions, and a $14 million income tax benefit associated with pre-separation tax matters. We record accrued interest and penalties related to uncertain tax positions as part of income tax expense. As of June 29, 2018 and September 29, 2017, we had $60 million of accrued interest and penalties related to uncertain tax positions on the Condensed Consolidated Balance Sheets, recorded primarily in income taxes. During the nine months ended June 29, 2018, we recognized $2 million of income tax expense related to interest and penalties on the Condensed Consolidated Statement of Operations. Although it is difficult to predict the timing or results of our worldwide examinations, we estimate that approximately $30 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 June 29, 2018. Tax Cuts and Jobs Act On December 22, 2017, the President of the U.S. signed the Tax Cuts and Jobs Act (the "Act") into law. The Act includes numerous significant changes to existing tax law, including a permanent reduction in the U.S. federal corporate income tax rate from 35% to 21%, further limitations on the deductibility of interest expense and certain executive compensation, repeal of the corporate Alternative Minimum Tax, and imposition of a territorial tax system with a one-time repatriation tax on deemed repatriated earnings of foreign subsidiaries. While some of the new provisions of the Act will impact us in fiscal 2019 and beyond, the change in the tax rate was effective January 1, 2018. In the period of enactment, we were required to revalue our U.S. federal deferred tax assets and liabilities at the new tax rate. Accordingly, during the quarter ended December 29, 2017, we recorded income tax expense of $567 million primarily in connection with the write-down of our U.S. federal deferred tax asset for net operating loss and interest carryforwards to the lower tax rate. Included in the expense of $567 million was an income tax benefit of $34 million related to the reduction in the existing valuation allowance recorded against certain U.S. federal tax credit carryforwards. The limitations on interest expense deductions contained in the Act are expected to increase prospective taxable income and thereby allow the utilization of more tax credits in future years. As a Swiss corporation, the one-time repatriation tax imposed by the Act will not be significant to us. The Act makes broad and complex changes to the U.S. Internal Revenue Code, and in certain instances, lacks clarity and is subject to interpretation until additional IRS guidance is issued. The ultimate impact of the Act may differ from our estimates due to changes in the interpretations and assumptions we made as well as any forthcoming regulatory guidance. One area requiring guidance is a transition rule regarding limitations on interest expense deductions. The Act does not address the treatment of the carryforward of disallowed interest expense generated under the prior law. Our interpretation is that the carryforward of interest should survive and will be deductible in future periods subject to the new interest limitations. Accordingly, during the quarter ended December 29, 2017, we revalued our beginning deferred tax asset related to our interest carryforwards to $223 million to reflect the lower tax rate. It is possible additional regulatory guidance could be issued contrary to this interpretation at which point we may be required to record a charge to income tax expense to revalue or eliminate the related deferred tax asset. On April 2, 2018, the Treasury Department and the IRS issued Notice 2018-28 stating their intention to issue regulations consistent with our position related to the carryforward of the disallowed interest expense. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Jun. 29, 2018 | |
Earnings Per Share | |
Earnings Per Share | 11. 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 June 29, June 30, June 29, June 30, (in millions) Basic Dilutive impact of share-based compensation arrangements ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ There were one million share options that were not included in the computation of diluted earnings per share for the nine months ended June 30, 2017 because the instruments' underlying exercise price were greater than the average market prices of our common shares and inclusion would be antidilutive. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Jun. 29, 2018 | |
Shareholders' Equity | |
Shareholders' Equity | 12. Shareholders' Equity Common Shares In March 2018, our shareholders reapproved and extended through March 14, 2020, our board of directors' authorization to issue additional new shares, subject to certain conditions specified in our articles of association, in aggregate not exceeding 50% of the amount of our authorized shares. Dividends We paid a cash dividend of $0.40 per share to shareholders in each of the quarters ended December 29, 2017 and March 30, 2018. In March 2018, our shareholders approved a dividend payment to shareholders of $1.76 per share, payable in four equal quarterly installments beginning in the third quarter of fiscal 2018 and ending in the second quarter of fiscal 2019. We paid the first installment of the dividend at a rate of $0.44 per share in the quarter ended June 29, 2018. Upon shareholders' approval of a dividend payment, we record a liability with a corresponding charge to shareholders' equity. At June 29, 2018 and September 29, 2017, the unpaid portion of the dividends recorded in accrued and other current liabilities on the Condensed Consolidated Balance Sheets totaled $459 million and $281 million, respectively. Share Repurchase Program During the nine months ended June 29, 2018, our board of directors authorized an increase of $1.5 billion in the share repurchase program. Common shares repurchased under the share repurchase program were as follows: For the June 29, June 30, (in millions) Number of common shares repurchased Repurchase value $ $ At June 29, 2018, we had $1.4 billion of availability remaining under our share repurchase authorization. |
Share Plans
Share Plans | 9 Months Ended |
Jun. 29, 2018 | |
Share Plans | |
Share Plans | 13. 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 June 29, June 30, June 29, June 30, (in millions) Share-based compensation expense $ $ $ $ As of June 29, 2018, there was $153 million of unrecognized compensation expense related to share-based awards, which is expected to be recognized over a weighted-average period of 1.8 years. During the quarter ended December 29, 2017, we granted the following share-based awards as part of our annual incentive plan grant: Shares Weighted-Average (in millions) Share options $ Restricted share awards Performance share awards As of June 29, 2018, we had 20 million shares available for issuance under our stock and incentive plans, of which the TE Connectivity Ltd. 2007 Stock and Incentive Plan, amended and restated as of March 8, 2017, was the primary plan. Share-Based Compensation Assumptions The weighted-average 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 % Risk free interest rate % Expected annual dividend per share $ Expected life of options (in years) |
Segment Data
Segment Data | 9 Months Ended |
Jun. 29, 2018 | |
Segment Data | |
Segment Data | 14. Segment Data Net sales by segment were as follows: For the For the June 29, June 30, June 29, June 30, (in millions) Transportation Solutions $ $ $ $ Industrial Solutions Communications Solutions ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total (1) $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Intersegment sales were not material and were recorded at selling prices that approximated market prices. Operating income by segment was as follows: For the For the June 29, June 30, June 29, June 30, (in millions) Transportation Solutions $ $ $ $ Industrial Solutions Communications Solutions ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Tyco Electronics Group S.A.
Tyco Electronics Group S.A. | 9 Months Ended |
Jun. 29, 2018 | |
Tyco Electronics Group S.A. | |
Tyco Electronics Group S.A. | 15. Tyco Electronics Group S.A. Tyco Electronics Group S.A. ("TEGSA"), a Luxembourg company and our 100%-owned subsidiary, is a holding company that owns, directly or indirectly, all of our operating subsidiaries. TEGSA is the obligor under our senior notes, commercial paper, and five-year unsecured senior revolving credit facility, which are fully and unconditionally guaranteed by its parent, TE Connectivity Ltd. The following tables present condensed consolidating financial information for TE Connectivity Ltd., TEGSA, and all other subsidiaries that are not providing a guarantee of debt but which represent assets of TEGSA, using the equity method of accounting. Condensed Consolidating Statement of Operations (UNAUDITED) TE TEGSA Other Consolidating Total (in millions) Net sales $ — $ — $ $ — $ Cost of sales — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross margin — — — Selling, general, and administrative expenses, net — — Research, development, and engineering expenses — — — Acquisition and integration costs — — — Restructuring and other charges, net — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) ) — — Interest income — — — Interest expense — ) ) — ) Other expense, net — — ) — ) Equity in net income of subsidiaries — ) — Intercompany interest income (expense), net ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations before income taxes ) Income tax expense — — ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ) Other comprehensive loss ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comprehensive income $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Condensed Consolidating Statement of Operations (UNAUDITED) TE TEGSA Other Consolidating Total (in millions) Net sales $ — $ — $ $ — $ Cost of sales — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross margin — — — Selling, general, and administrative expenses, net — Research, development, and engineering expenses — — — Acquisition and integration costs — — — Restructuring and other charges, net — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) ) ) — Interest income — — — Interest expense — ) — — ) Other expense, net — — ) — ) Equity in net income of subsidiaries — ) — Equity in net income of subsidiaries of discontinued operations — ) — Intercompany interest income (expense), net ) ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations before income taxes ) Income tax expense — — ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations ) Income (loss) from discontinued operations, net of income taxes — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ) Other comprehensive income ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comprehensive income $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Condensed Consolidating Statement of Operations (UNAUDITED) TE TEGSA Other Consolidating Total (in millions) Net sales $ — $ — $ $ — $ Cost of sales — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross margin — — — Selling, general, and administrative expenses, net — Research, development, and engineering expenses — — — Acquisition and integration costs — — — Restructuring and other charges, net — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) ) ) — Interest income — — Interest expense — ) ) — ) Other income, net — — — Equity in net income of subsidiaries — ) — Equity in net loss of subsidiaries of discontinued operations ) ) — — Intercompany interest income (expense), net ) ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations before income taxes ) Income tax expense — — ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations ) Loss from discontinued operations, net of income taxes — — ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ) Other comprehensive loss ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comprehensive income $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Condensed Consolidating Statement of Operations (UNAUDITED) TE TEGSA Other Consolidating Total (in millions) Net sales $ — $ — $ $ — $ Cost of sales — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross margin — — — Selling, general, and administrative expenses, net ) — Research, development, and engineering expenses — — — Acquisition and integration costs — — — Restructuring and other charges, net — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) ) — Interest income — — — Interest expense — ) — — ) Other expense, net — — ) — ) Equity in net income of subsidiaries — ) — Equity in net income of subsidiaries of discontinued operations — ) — Intercompany interest income (expense), net ) ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations before income taxes ) Income tax expense — — ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations ) Income (loss) from discontinued operations, net of income taxes (1) — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ) Other comprehensive income ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comprehensive income $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Includes the internal allocation of gains and losses associated with the divestiture of our Broadband Network Solutions business. Condensed Consolidating Balance Sheet (UNAUDITED) TE TEGSA Other Consolidating Total (in millions) Assets Current assets: Cash and cash equivalents $ — $ — $ $ — $ Accounts receivable, net — — — Inventories — — — Intercompany receivables ) — Prepaid expenses and other current assets — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current assets ) Property, plant, and equipment, net — — — Goodwill — — — Intangible assets, net — — — Deferred income taxes — — — Investment in subsidiaries — ) — Intercompany loans receivable ) — Other assets — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Assets $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities and Shareholders' Equity Current liabilities: Short-term debt $ — $ $ $ — $ Accounts payable — — Accrued and other current liabilities — Deferred revenue — — — Intercompany payables — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current liabilities ) Long-term debt — — Intercompany loans payable — ) — Long-term pension and postretirement liabilities — — — Deferred income taxes — — — Income taxes — — — Other liabilities — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Liabilities ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Shareholders' Equity ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Liabilities and Shareholders' Equity $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Condensed Consolidating Balance Sheet (UNAUDITED) TE TEGSA Other Consolidating Total (in millions) Assets Current assets: Cash and cash equivalents $ — $ — $ $ — $ Accounts receivable, net — — — Inventories — — — Intercompany receivables ) — Prepaid expenses and other current assets — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current assets ) Property, plant, and equipment, net — — — Goodwill — — — Intangible assets, net — — — Deferred income taxes — — — Investment in subsidiaries — ) — Intercompany loans receivable — ) — Other assets — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Assets $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities and Shareholders' Equity Current liabilities: Short-term debt $ — $ $ $ — $ Accounts payable — — Accrued and other current liabilities — Deferred revenue — — — Intercompany payables — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current liabilities ) Long-term debt — — Intercompany loans payable — ) — Long-term pension and postretirement liabilities — — — Deferred income taxes — — — Income taxes — — — Other liabilities — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Liabilities ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Shareholders' Equity ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Liabilities and Shareholders' Equity $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Condensed Consolidating Statement of Cash Flows (UNAUDITED) TE TEGSA Other Consolidating Total (in millions) Cash Flows From Operating Activities: Net cash provided by (used in) operating activities (1) $ ) $ ) $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows From Investing Activities: Capital expenditures — — ) — ) Proceeds from sale of property, plant, and equipment — — — Intercompany distribution receipts (1) — — ) — Change in intercompany loans — — ) — Other — — ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) investing activities — ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows From Financing Activities: Changes in parent company equity (2) ) — — Net increase in commercial paper — — — Proceeds from issuance of debt — — — Repayment of debt — ) — — ) Proceeds from exercise of share options — — — Repurchase of common shares ) — ) — ) Payment of common share dividends to shareholders ) — — ) Intercompany distributions (1) — — ) — Loan activity with parent — ) — Other — — ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) financing activities ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of currency translation on cash — — — Net decrease in cash and cash equivalents — — ) — ) Cash and cash equivalents at beginning of period — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents at end of period $ — $ — $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) During fiscal 2018, other subsidiaries made distributions to TEGSA in the amount of $76 million. Cash flows are presented based upon the nature of the distributions. (2) Changes in parent company equity includes cash flows related to certain intercompany equity and funding transactions, and other intercompany activity. Condensed Consolidating Statement of Cash Flows (UNAUDITED) TE TEGSA Other Consolidating Total (in millions) Cash Flows From Operating Activities: Net cash provided by (used in) continuing operating activities $ ) $ ) $ $ — $ Net cash used in discontinued operating activities — — ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) operating activities ) ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows From Investing Activities: Capital expenditures — — ) — ) Proceeds from sale of property, plant, and equipment — — — Acquisition of business, net of cash acquired — — ) — ) Change in intercompany loans — — ) — Other — ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) investing activities — ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows From Financing Activities: Changes in parent company equity (1) ) — — Net decrease in commercial paper — ) — — ) Proceeds from issuance of debt — — — Proceeds from exercise of share options — — — Repurchase of common shares — — ) — ) Payment of common share dividends to shareholders ) — — ) Loan activity with parent — ) — Other — — ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) continuing financing activities ) ) Net cash provided by discontinued financing activities — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) financing activities ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of currency translation on cash — — ) — ) Net increase in cash and cash equivalents — — — Cash and cash equivalents at beginning of period — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents at end of period $ — $ — $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Changes in parent company equity includes cash flows related to certain intercompany equity and funding transactions, and other intercompany activity. |
Restructuring and Other Charg23
Restructuring and Other Charges, Net (Tables) | 9 Months Ended |
Jun. 29, 2018 | |
Restructuring and Other Charges, Net | |
Schedule of restructuring and other charges | For the For the June 29, June 30, June 29, June 30, (in millions) Restructuring charges, net $ $ $ $ Other charges (credits), net ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Net restructuring charges by segment | For the For the June 29, June 30, June 29, June 30, (in millions) Transportation Solutions $ $ $ $ Industrial Solutions Communications Solutions ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Restructuring charges, net $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of activity in restructuring reserves | Balance at Charges Changes Cash Non-Cash Currency Balance at (in millions) Fiscal 2018 Actions: Employee severance $ — $ $ — $ ) $ — $ — $ Facility and other exit costs — — ) — — Property, plant, and equipment — — — ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total — — ) ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2017 Actions: Employee severance ) ) — ) Facility and other exit costs — ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ) ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pre-Fiscal 2017 Actions: Employee severance ) ) — ) Facility and other exit costs — ) — — Property, plant, and equipment — ) ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Activity $ $ $ ) $ ) $ ) $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Restructuring reserves included on Condensed Consolidated Balance Sheets | June 29, September 29, (in millions) Accrued and other current liabilities $ $ Other liabilities ​ ​ ​ ​ ​ ​ ​ ​ Restructuring reserves $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Jun. 29, 2018 | |
Inventories | |
Schedule of inventories | June 29, September 29, (in millions) Raw materials $ $ Work in progress Finished goods Inventoried costs on long-term contracts ​ ​ ​ ​ ​ ​ ​ ​ Inventories $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Jun. 29, 2018 | |
Goodwill | |
Changes in the carrying amount of goodwill by segment | Transportation Industrial Communications Total (in millions) September 29, 2017 (1) $ $ $ $ Currency translation and other ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 29, 2018 (1) $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) At June 29, 2018 and September 29, 2017, accumulated impairment losses for the Transportation Solutions, Industrial Solutions, and Communications Solutions segments were $2,191 million, $669 million, and $1,514 million, respectively. |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 9 Months Ended |
Jun. 29, 2018 | |
Intangible Assets, Net | |
Schedule of finite-lived intangible assets | June 29, 2018 September 29, 2017 Gross Accumulated Net Gross Accumulated Net (in millions) Customer relationships $ $ ) $ $ $ ) $ Intellectual property ) ) Other ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ) $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of finite-lived intangible assets, future amortization expense | (in millions) Remainder of fiscal 2018 $ Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022 Fiscal 2023 Thereafter ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Jun. 29, 2018 | |
Cross-Currency Swap Contracts | |
Schedule of impacts of hedging program | For the For the June 29, June 30, June 29, June 30, (in millions) Gains (losses) recorded in other comprehensive income (loss) $ $ $ ) $ ) Gains (losses) excluded from the hedging relationship (1) ) ) (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. |
Net investment hedges | |
Schedule of impacts of hedging program | For the For the June 29, June 30, June 29, June 30, (in millions) Foreign currency exchange gains (losses) (1) $ $ ) $ $ (1) Foreign currency exchange gains and losses are recorded as currency translation, a component of accumulated other comprehensive loss, and are offset by changes attributable to the translation of the net investment. |
Retirement Plans (Tables)
Retirement Plans (Tables) | 9 Months Ended |
Jun. 29, 2018 | |
Retirement Plans | |
Net periodic pension benefit cost | U.S. Plans Non-U.S. Plans For the For the June 29, June 30, June 29, June 30, (in millions) Service cost $ $ $ $ Interest cost Expected return on plan assets ) ) ) ) Amortization of net actuarial loss Amortization of prior service credit — — ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net periodic pension benefit cost $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. Plans Non-U.S. Plans For the For the June 29, June 30, June 29, June 30, (in millions) Service cost $ $ $ $ Interest cost Expected return on plan assets ) ) ) ) Amortization of net actuarial loss Amortization of prior service credit — — ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net periodic pension benefit cost $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Jun. 29, 2018 | |
Earnings Per Share | |
Schedule of weighted-average shares outstanding, basic and diluted | For the For the June 29, June 30, June 29, June 30, (in millions) Basic Dilutive impact of share-based compensation arrangements ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Jun. 29, 2018 | |
Shareholders' Equity | |
Schedule of common shares repurchased | For the June 29, June 30, (in millions) Number of common shares repurchased Repurchase value $ $ |
Share Plans (Tables)
Share Plans (Tables) | 9 Months Ended |
Jun. 29, 2018 | |
Share Plans | |
Share-based compensation expense | For the For the June 29, June 30, June 29, June 30, (in millions) Share-based compensation expense $ $ $ $ |
Summary of share-based award activity | During the quarter ended December 29, 2017, we granted the following share-based awards as part of our annual incentive plan grant: Shares Weighted-Average (in millions) Share options $ Restricted share awards Performance share awards |
Weighted-average assumptions | Expected share price volatility % Risk free interest rate % Expected annual dividend per share $ Expected life of options (in years) |
Segment Data (Tables)
Segment Data (Tables) | 9 Months Ended |
Jun. 29, 2018 | |
Segment Data | |
Schedule of net sales by segment | For the For the June 29, June 30, June 29, June 30, (in millions) Transportation Solutions $ $ $ $ Industrial Solutions Communications Solutions ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total (1) $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Intersegment sales were not material and were recorded at selling prices that approximated market prices. |
Schedule of operating income by segment | For the For the June 29, June 30, June 29, June 30, (in millions) Transportation Solutions $ $ $ $ Industrial Solutions Communications Solutions ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Tyco Electronics Group S.A. (Ta
Tyco Electronics Group S.A. (Tables) | 9 Months Ended |
Jun. 29, 2018 | |
Tyco Electronics Group S.A. | |
Condensed Consolidating Statement of Operations | Condensed Consolidating Statement of Operations (UNAUDITED) TE TEGSA Other Consolidating Total (in millions) Net sales $ — $ — $ $ — $ Cost of sales — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross margin — — — Selling, general, and administrative expenses, net — — Research, development, and engineering expenses — — — Acquisition and integration costs — — — Restructuring and other charges, net — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) ) — — Interest income — — — Interest expense — ) ) — ) Other expense, net — — ) — ) Equity in net income of subsidiaries — ) — Intercompany interest income (expense), net ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations before income taxes ) Income tax expense — — ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ) Other comprehensive loss ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comprehensive income $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Condensed Consolidating Statement of Operations (UNAUDITED) TE TEGSA Other Consolidating Total (in millions) Net sales $ — $ — $ $ — $ Cost of sales — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross margin — — — Selling, general, and administrative expenses, net — Research, development, and engineering expenses — — — Acquisition and integration costs — — — Restructuring and other charges, net — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) ) ) — Interest income — — — Interest expense — ) — — ) Other expense, net — — ) — ) Equity in net income of subsidiaries — ) — Equity in net income of subsidiaries of discontinued operations — ) — Intercompany interest income (expense), net ) ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations before income taxes ) Income tax expense — — ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations ) Income (loss) from discontinued operations, net of income taxes — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ) Other comprehensive income ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comprehensive income $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Condensed Consolidating Statement of Operations (UNAUDITED) TE TEGSA Other Consolidating Total (in millions) Net sales $ — $ — $ $ — $ Cost of sales — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross margin — — — Selling, general, and administrative expenses, net — Research, development, and engineering expenses — — — Acquisition and integration costs — — — Restructuring and other charges, net — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) ) ) — Interest income — — Interest expense — ) ) — ) Other income, net — — — Equity in net income of subsidiaries — ) — Equity in net loss of subsidiaries of discontinued operations ) ) — — Intercompany interest income (expense), net ) ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations before income taxes ) Income tax expense — — ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations ) Loss from discontinued operations, net of income taxes — — ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ) Other comprehensive loss ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comprehensive income $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Condensed Consolidating Statement of Operations (UNAUDITED) TE TEGSA Other Consolidating Total (in millions) Net sales $ — $ — $ $ — $ Cost of sales — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross margin — — — Selling, general, and administrative expenses, net ) — Research, development, and engineering expenses — — — Acquisition and integration costs — — — Restructuring and other charges, net — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) ) — Interest income — — — Interest expense — ) — — ) Other expense, net — — ) — ) Equity in net income of subsidiaries — ) — Equity in net income of subsidiaries of discontinued operations — ) — Intercompany interest income (expense), net ) ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations before income taxes ) Income tax expense — — ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations ) Income (loss) from discontinued operations, net of income taxes (1) — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ) Other comprehensive income ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comprehensive income $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Includes the internal allocation of gains and losses associated with the divestiture of our Broadband Network Solutions business. |
Condensed Consolidating Balance Sheet | Condensed Consolidating Balance Sheet (UNAUDITED) TE TEGSA Other Consolidating Total (in millions) Assets Current assets: Cash and cash equivalents $ — $ — $ $ — $ Accounts receivable, net — — — Inventories — — — Intercompany receivables ) — Prepaid expenses and other current assets — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current assets ) Property, plant, and equipment, net — — — Goodwill — — — Intangible assets, net — — — Deferred income taxes — — — Investment in subsidiaries — ) — Intercompany loans receivable ) — Other assets — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Assets $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities and Shareholders' Equity Current liabilities: Short-term debt $ — $ $ $ — $ Accounts payable — — Accrued and other current liabilities — Deferred revenue — — — Intercompany payables — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current liabilities ) Long-term debt — — Intercompany loans payable — ) — Long-term pension and postretirement liabilities — — — Deferred income taxes — — — Income taxes — — — Other liabilities — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Liabilities ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Shareholders' Equity ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Liabilities and Shareholders' Equity $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Condensed Consolidating Balance Sheet (UNAUDITED) TE TEGSA Other Consolidating Total (in millions) Assets Current assets: Cash and cash equivalents $ — $ — $ $ — $ Accounts receivable, net — — — Inventories — — — Intercompany receivables ) — Prepaid expenses and other current assets — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current assets ) Property, plant, and equipment, net — — — Goodwill — — — Intangible assets, net — — — Deferred income taxes — — — Investment in subsidiaries — ) — Intercompany loans receivable — ) — Other assets — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Assets $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities and Shareholders' Equity Current liabilities: Short-term debt $ — $ $ $ — $ Accounts payable — — Accrued and other current liabilities — Deferred revenue — — — Intercompany payables — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current liabilities ) Long-term debt — — Intercompany loans payable — ) — Long-term pension and postretirement liabilities — — — Deferred income taxes — — — Income taxes — — — Other liabilities — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Liabilities ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Shareholders' Equity ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Liabilities and Shareholders' Equity $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Condensed Consolidating Statement of Cash Flows | Condensed Consolidating Statement of Cash Flows (UNAUDITED) TE TEGSA Other Consolidating Total (in millions) Cash Flows From Operating Activities: Net cash provided by (used in) operating activities (1) $ ) $ ) $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows From Investing Activities: Capital expenditures — — ) — ) Proceeds from sale of property, plant, and equipment — — — Intercompany distribution receipts (1) — — ) — Change in intercompany loans — — ) — Other — — ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) investing activities — ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows From Financing Activities: Changes in parent company equity (2) ) — — Net increase in commercial paper — — — Proceeds from issuance of debt — — — Repayment of debt — ) — — ) Proceeds from exercise of share options — — — Repurchase of common shares ) — ) — ) Payment of common share dividends to shareholders ) — — ) Intercompany distributions (1) — — ) — Loan activity with parent — ) — Other — — ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) financing activities ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of currency translation on cash — — — Net decrease in cash and cash equivalents — — ) — ) Cash and cash equivalents at beginning of period — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents at end of period $ — $ — $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) During fiscal 2018, other subsidiaries made distributions to TEGSA in the amount of $76 million. Cash flows are presented based upon the nature of the distributions. (2) Changes in parent company equity includes cash flows related to certain intercompany equity and funding transactions, and other intercompany activity. Condensed Consolidating Statement of Cash Flows (UNAUDITED) TE TEGSA Other Consolidating Total (in millions) Cash Flows From Operating Activities: Net cash provided by (used in) continuing operating activities $ ) $ ) $ $ — $ Net cash used in discontinued operating activities — — ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) operating activities ) ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows From Investing Activities: Capital expenditures — — ) — ) Proceeds from sale of property, plant, and equipment — — — Acquisition of business, net of cash acquired — — ) — ) Change in intercompany loans — — ) — Other — ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) investing activities — ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows From Financing Activities: Changes in parent company equity (1) ) — — Net decrease in commercial paper — ) — — ) Proceeds from issuance of debt — — — Proceeds from exercise of share options — — — Repurchase of common shares — — ) — ) Payment of common share dividends to shareholders ) — — ) Loan activity with parent — ) — Other — — ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) continuing financing activities ) ) Net cash provided by discontinued financing activities — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) financing activities ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of currency translation on cash — — ) — ) Net increase in cash and cash equivalents — — — Cash and cash equivalents at beginning of period — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents at end of period $ — $ — $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Changes in parent company equity includes cash flows related to certain intercompany equity and funding transactions, and other intercompany activity. |
Basis of Presentation and Acc34
Basis of Presentation and Accounting Pronouncements (Details) $ in Millions | 3 Months Ended |
Mar. 30, 2018USD ($) | |
Accumulated Earnings | |
Recently Adopted Accounting Pronouncement | |
Adoption of ASU No. 2018-02 | $ 38 |
Accumulated Other Comprehensive Loss | |
Recently Adopted Accounting Pronouncement | |
Adoption of ASU No. 2018-02 | $ (38) |
Restructuring and Other Charg35
Restructuring and Other Charges, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | |
Restructuring and other charges, net: | ||||
Restructuring charges, net | $ 75 | $ 19 | $ 120 | $ 124 |
Other charges (credits), net | (10) | (14) | 1 | |
Restructuring and other charges, net | 65 | 19 | 106 | 125 |
Transportation Solutions | ||||
Restructuring and other charges, net: | ||||
Restructuring charges, net | 17 | 3 | 22 | 60 |
Industrial Solutions | ||||
Restructuring and other charges, net: | ||||
Restructuring charges, net | 48 | 14 | 78 | 53 |
Communications Solutions | ||||
Restructuring and other charges, net: | ||||
Restructuring charges, net | $ 10 | $ 2 | $ 20 | $ 11 |
Restructuring and Other Charg36
Restructuring and Other Charges, Net - Actions (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | |
Restructuring Charges | ||||
Charges Incurred | $ 75 | $ 19 | $ 120 | $ 124 |
Fiscal 2018 Actions | ||||
Restructuring Charges | ||||
Charges Incurred | 111 | |||
Total Expected Charges | 130 | 130 | ||
Fiscal 2017 Actions | ||||
Restructuring Charges | ||||
Charges Incurred | 4 | 119 | ||
Pre-Fiscal 2017 Actions | ||||
Restructuring Charges | ||||
Charges Incurred | 5 | $ 5 | ||
Remaining Expected Charges | $ 15 | $ 15 |
Restructuring and Other Charg37
Restructuring and Other Charges, Net - Restructuring Reserves (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 29, 2018 | Sep. 29, 2017 | |
Restructuring reserve | ||
Restructuring reserve at the beginning of the period | $ 149 | |
Charges | 129 | |
Changes in Estimates | (9) | |
Cash Payments | (89) | |
Non-Cash Items | (4) | |
Currency Translation | (2) | |
Restructuring reserve at the end of the period | 174 | |
Accrued and other current liabilities | 137 | $ 130 |
Other liabilities | 37 | $ 19 |
Fiscal 2018 Actions | ||
Restructuring reserve | ||
Charges | 111 | |
Cash Payments | (12) | |
Non-Cash Items | (3) | |
Restructuring reserve at the end of the period | 96 | |
Fiscal 2017 Actions | ||
Restructuring reserve | ||
Restructuring reserve at the beginning of the period | 104 | |
Charges | 6 | |
Changes in Estimates | (2) | |
Cash Payments | (56) | |
Currency Translation | (1) | |
Restructuring reserve at the end of the period | 51 | |
Pre-Fiscal 2017 Actions | ||
Restructuring reserve | ||
Restructuring reserve at the beginning of the period | 45 | |
Charges | 12 | |
Changes in Estimates | (7) | |
Cash Payments | (21) | |
Non-Cash Items | (1) | |
Currency Translation | (1) | |
Restructuring reserve at the end of the period | 27 | |
Employee severance | Fiscal 2018 Actions | ||
Restructuring reserve | ||
Charges | 102 | |
Cash Payments | (11) | |
Restructuring reserve at the end of the period | 91 | |
Employee severance | Fiscal 2017 Actions | ||
Restructuring reserve | ||
Restructuring reserve at the beginning of the period | 103 | |
Charges | 4 | |
Changes in Estimates | (2) | |
Cash Payments | (54) | |
Currency Translation | (1) | |
Restructuring reserve at the end of the period | 50 | |
Employee severance | Pre-Fiscal 2017 Actions | ||
Restructuring reserve | ||
Restructuring reserve at the beginning of the period | 36 | |
Charges | 6 | |
Changes in Estimates | (4) | |
Cash Payments | (18) | |
Currency Translation | (1) | |
Restructuring reserve at the end of the period | 19 | |
Facility and other exit costs | Fiscal 2018 Actions | ||
Restructuring reserve | ||
Charges | 6 | |
Cash Payments | (1) | |
Restructuring reserve at the end of the period | 5 | |
Facility and other exit costs | Fiscal 2017 Actions | ||
Restructuring reserve | ||
Restructuring reserve at the beginning of the period | 1 | |
Charges | 2 | |
Cash Payments | (2) | |
Restructuring reserve at the end of the period | 1 | |
Facility and other exit costs | Pre-Fiscal 2017 Actions | ||
Restructuring reserve | ||
Restructuring reserve at the beginning of the period | 9 | |
Charges | 5 | |
Cash Payments | (6) | |
Restructuring reserve at the end of the period | 8 | |
Property, plant, and equipment | Fiscal 2018 Actions | ||
Restructuring reserve | ||
Charges | 3 | |
Non-Cash Items | (3) | |
Property, plant, and equipment | Pre-Fiscal 2017 Actions | ||
Restructuring reserve | ||
Charges | 1 | |
Changes in Estimates | (3) | |
Cash Payments | 3 | |
Non-Cash Items | $ (1) |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Jun. 29, 2018 | Sep. 29, 2017 |
Inventories | ||
Raw materials | $ 337 | $ 306 |
Work in progress | 668 | 580 |
Finished goods | 877 | 810 |
Inventoried costs on long-term contracts | 79 | 117 |
Inventories | $ 1,961 | $ 1,813 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 29, 2018 | Sep. 29, 2017 | |
Goodwill: | ||
Goodwill, beginning balance | $ 5,651 | |
Currency translation and other | (35) | |
Goodwill, ending balance | 5,616 | |
Transportation Solutions | ||
Goodwill: | ||
Goodwill, beginning balance | 2,011 | |
Currency translation and other | (16) | |
Goodwill, ending balance | 1,995 | |
Accumulated impairment losses | 2,191 | $ 2,191 |
Industrial Solutions | ||
Goodwill: | ||
Goodwill, beginning balance | 3,047 | |
Currency translation and other | (15) | |
Goodwill, ending balance | 3,032 | |
Accumulated impairment losses | 669 | 669 |
Communications Solutions | ||
Goodwill: | ||
Goodwill, beginning balance | 593 | |
Currency translation and other | (4) | |
Goodwill, ending balance | 589 | |
Accumulated impairment losses | $ 1,514 | $ 1,514 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | Sep. 29, 2017 | |
Finite-Lived Intangible Assets | |||||
Gross Carrying Amount | $ 2,718 | $ 2,718 | $ 2,732 | ||
Accumulated Amortization | (1,020) | (1,020) | (891) | ||
Net Carrying Amount | 1,698 | 1,698 | 1,841 | ||
Finite-lived intangible assets, amortization expense | 45 | $ 43 | 135 | $ 126 | |
Aggregate amortization expense on intangible assets | |||||
Remainder of fiscal 2018 | 46 | 46 | |||
Fiscal 2,019 | 181 | 181 | |||
Fiscal 2,020 | 173 | 173 | |||
Fiscal 2,021 | 170 | 170 | |||
Fiscal 2,022 | 169 | 169 | |||
Fiscal 2,023 | 169 | 169 | |||
Thereafter | 790 | 790 | |||
Customer relationships | |||||
Finite-Lived Intangible Assets | |||||
Gross Carrying Amount | 1,424 | 1,424 | 1,433 | ||
Accumulated Amortization | (367) | (367) | (300) | ||
Net Carrying Amount | 1,057 | 1,057 | 1,133 | ||
Intellectual property | |||||
Finite-Lived Intangible Assets | |||||
Gross Carrying Amount | 1,259 | 1,259 | 1,263 | ||
Accumulated Amortization | (637) | (637) | (575) | ||
Net Carrying Amount | 622 | 622 | 688 | ||
Other | |||||
Finite-Lived Intangible Assets | |||||
Gross Carrying Amount | 35 | 35 | 36 | ||
Accumulated Amortization | (16) | (16) | (16) | ||
Net Carrying Amount | $ 19 | $ 19 | $ 20 |
Debt (Details)
Debt (Details) € in Millions, $ in Millions | 9 Months Ended | ||
Jun. 29, 2018USD ($) | Jun. 29, 2018EUR (€) | Sep. 29, 2017USD ($) | |
Debt | |||
Ownership percentage in TEGSA | 100.00% | 100.00% | |
Repayments of debt | $ 708 | ||
Long-term debt | 3,294 | $ 3,634 | |
Short-term debt | 714 | 710 | |
Fair value of debt | 4,188 | 4,622 | |
6.55% senior notes due 2017 | |||
Debt | |||
Repayments of debt | $ 708 | ||
Debt instrument, interest rate (as a percent) | 6.55% | 6.55% | |
2.375% senior notes due 2018 | Reclassified | |||
Debt | |||
Long-term debt | $ (325) | ||
Short-term debt | $ 325 | ||
Debt instrument, interest rate (as a percent) | 2.375% | 2.375% | |
Commercial paper | |||
Debt | |||
Total principal debt | $ 271 | $ 0 | |
Weighted-average interest rate | 2.33% | 2.33% | |
Revolving credit facility | |||
Debt | |||
Uncommitted revolving credit facility borrowed amount | € | € 100 | ||
Debt instrument, interest rate (as a percent) | 0.00% | 0.00% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 29, 2018 | Sep. 29, 2017 | |
Loss Contingencies | ||
Accrual environmental loss contingency, estimate of probable loss | $ 18 | |
Guarantees and Product Warranties | ||
Accrued warranty claims | $ 46 | $ 50 |
Liabilities sharing percent, entity | 31.00% | |
Liabilities sharing percent, Tyco International | 27.00% | |
Liabilities sharing percent, Covidien | 42.00% | |
Minimum | ||
Loss Contingencies | ||
Accrual environmental loss contingency, estimate of probable loss | $ 15 | |
Maximum | ||
Loss Contingencies | ||
Accrual environmental loss contingency, estimate of probable loss | 43 | |
Outstanding Letters of Credit, Letters of Guarantee, and Surety Bonds | ||
Guarantees and Product Warranties | ||
Guarantor obligations, maximum exposure | $ 283 |
Financial Instruments (Details)
Financial Instruments (Details) € in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 29, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 29, 2018USD ($) | Jun. 30, 2017USD ($) | Sep. 29, 2017USD ($) | Sep. 25, 2015EUR (€) | |
Net investment hedges | ||||||
Financial Instruments | ||||||
Notional amount of non derivative instruments | $ 2,986 | $ 3,110 | ||||
Foreign currency exchange gains (losses) | $ 153 | $ (129) | 8 | $ 15 | ||
Cash flow hedges | Cross-Currency Swap Contracts | ||||||
Financial Instruments | ||||||
Notional amount | € | € 1,000 | |||||
Quarterly interest payments in euro, fixed interest rate | 3.50% | |||||
Interest received in U.S. dollars, average fixed interest rate | 5.33% | |||||
Fair Value of Liability Positions | 107 | 107 | $ 96 | |||
Gains (losses) recorded in other comprehensive income (loss) | 7 | 2 | (25) | (6) | ||
Gains (losses) excluded from the hedging relationship | $ 64 | $ (71) | $ 14 | $ (17) |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | |
U.S. Plans | ||||
Defined Benefit Plan, Net Periodic Pension Benefit Cost | ||||
Service cost | $ 3 | $ 3 | $ 10 | $ 9 |
Interest cost | 11 | 11 | 33 | 33 |
Expected return on plan assets | (15) | (13) | (45) | (40) |
Amortization of net actuarial loss | 6 | 10 | 17 | 30 |
Net periodic pension benefit cost | 5 | 11 | 15 | 32 |
Non-U.S. Plans | ||||
Defined Benefit Plan, Net Periodic Pension Benefit Cost | ||||
Service cost | 12 | 13 | 35 | 39 |
Interest cost | 10 | 9 | 31 | 27 |
Expected return on plan assets | (18) | (18) | (52) | (53) |
Amortization of net actuarial loss | 7 | 11 | 18 | 32 |
Amortization of prior service credit | (2) | (2) | (5) | (5) |
Net periodic pension benefit cost | $ 9 | $ 13 | 27 | $ 40 |
Defined Benefit Plan Contributions | ||||
Defined benefit plan, contributions by employer | $ 36 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||
Jun. 29, 2018 | Dec. 31, 2017 | Dec. 29, 2017 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 29, 2018 | Jun. 30, 2017 | Sep. 29, 2017 | |
Income Taxes | ||||||||
Income tax expense | $ 81 | $ 71 | $ 789 | $ 164 | ||||
Income tax benefit resulting from lapses of applicable statutes of limitations | 17 | 34 | 24 | |||||
Income tax benefit associated with pre-separation tax matters | $ 14 | 14 | ||||||
Income tax expense related to tax impacts of Tax Cuts and Jobs Act | $ 567 | 567 | ||||||
Net income tax benefit related to certain legal entity restructurings | 61 | |||||||
Income tax benefit associated with intercompany transactions and the corresponding reduction in the valuation allowance for U.S. tax loss carryforwards | $ 52 | |||||||
Accrued interest and penalties related to uncertain tax positions | 60 | $ 60 | 60 | $ 60 | ||||
Income tax expense related to interest and penalties | 2 | |||||||
Unrecognized income tax benefits, approximate amount that could be resolved in next twelve months | $ 30 | $ 30 | $ 30 | |||||
U.S. federal corporate income tax rate | 35.00% | 21.00% | ||||||
Income tax benefit related to the reduction in the valuation allowance recorded against certain U.S. federal tax credit carryforwards | 34 | |||||||
Revalued beginning deferred tax asset related to interest carryforwards | $ 223 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | |
Earnings Per Share | ||||
Basic (in shares) | 349 | 355 | 351 | 355 |
Dilutive impact of share-based compensation arrangements (in shares) | 3 | 3 | 3 | 4 |
Diluted (in shares) | 352 | 358 | 354 | 359 |
Share options | ||||
Antidilutive shares excluded from computation of earnings per share | ||||
Antidilutive share options | 1 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) $ / shares in Units, shares in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Mar. 30, 2018installment$ / shares | Jun. 29, 2018USD ($)$ / shares | Mar. 30, 2018installment$ / shares | Dec. 29, 2017$ / shares | Jun. 30, 2017$ / shares | Jun. 29, 2018USD ($)$ / sharesshares | Jun. 30, 2017USD ($)$ / sharesshares | Sep. 29, 2017USD ($) | |
Shareholders' Equity | ||||||||
Maximum percentage of shares that the board may authorize for issuance | 50.00% | |||||||
Cash dividend paid (in dollars per share) | $ / shares | $ 0.44 | $ 0.40 | $ 0.40 | $ 0.40 | $ 1.24 | $ 1.14 | ||
Dividend or cash distribution approved (in currency per share) | $ / shares | $ 1.76 | |||||||
Number of quarterly dividend installments | installment | 4 | 4 | ||||||
Unpaid portion of the dividend payment recorded in accrued and other current liabilities | $ 459 | $ 459 | $ 281 | |||||
Share repurchase program, increase in authorized amount | $ 1,500 | |||||||
Number of common shares repurchased | shares | 6 | 5 | ||||||
Repurchase value | $ 612 | $ 386 | ||||||
Amount available for repurchase, at end of period | $ 1,400 | $ 1,400 |
Share Plans (Details)
Share Plans (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 29, 2018 | Dec. 29, 2017 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | |
Share Based Compensation Arrangements: | |||||
Share-based compensation expense | $ 22 | $ 26 | $ 74 | $ 73 | |
Shares available for issuance | 20 | 20 | |||
Share Based Compensation Expenses Not Recognized | |||||
Share-based compensation, share-based awards, total compensation expense not yet recognized | $ 153 | $ 153 | |||
Share-based compensation, share-based awards, total compensation expense not yet recognized, expected period for recognition | 1 year 9 months 18 days | ||||
Share options | |||||
Share Based Compensation Arrangements: | |||||
Share options granted | 1.4 | ||||
Options granted, weighted-average grant-date fair value (in dollars per share) | $ 16.47 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology | |||||
Expected share price volatility (as a percent) | 20.00% | ||||
Risk free interest rate (as a percent) | 2.20% | ||||
Expected annual dividend per share | $ 1.60 | ||||
Expected life of options (in years) | 5 years 3 months 18 days | ||||
Restricted share awards | |||||
Share Based Compensation Arrangements: | |||||
Shares granted | 0.5 | ||||
Shares granted, weighted-average grant-date fair value (in dollars per share) | $ 93.36 | ||||
Performance share awards | |||||
Share Based Compensation Arrangements: | |||||
Shares granted | 0.2 | ||||
Shares granted, weighted-average grant-date fair value (in dollars per share) | $ 93.36 |
Segment Data (Details)
Segment Data (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | |
Segment Data | ||||
Net sales | $ 3,764 | $ 3,367 | $ 10,989 | $ 9,657 |
Operating income | 558 | 544 | 1,763 | 1,520 |
Transportation Solutions | ||||
Segment Data | ||||
Net sales | 2,112 | 1,765 | 6,278 | 5,195 |
Operating income | 394 | 333 | 1,242 | 986 |
Industrial Solutions | ||||
Segment Data | ||||
Net sales | 988 | 905 | 2,842 | 2,553 |
Operating income | 93 | 100 | 321 | 258 |
Communications Solutions | ||||
Segment Data | ||||
Net sales | 664 | 697 | 1,869 | 1,909 |
Operating income | $ 71 | $ 111 | $ 200 | $ 276 |
Tyco Electronics Group S.A. - O
Tyco Electronics Group S.A. - Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | |
Tyco Electronics Group S.A. | ||||
Ownership percentage in TEGSA | 100.00% | 100.00% | ||
Statement of Operations Detail: | ||||
Net sales | $ 3,764 | $ 3,367 | $ 10,989 | $ 9,657 |
Cost of sales | 2,547 | 2,227 | 7,352 | 6,340 |
Gross margin | 1,217 | 1,140 | 3,637 | 3,317 |
Selling, general, and administrative expenses, net | 409 | 408 | 1,220 | 1,182 |
Research, development, and engineering expenses | 181 | 168 | 539 | 485 |
Acquisition and integration costs | 4 | 1 | 9 | 5 |
Restructuring and other charges, net | 65 | 19 | 106 | 125 |
Operating income | 558 | 544 | 1,763 | 1,520 |
Interest income | 3 | 3 | 11 | 14 |
Interest expense | (25) | (32) | (80) | (95) |
Other income (expense), net | (1) | (12) | 2 | (31) |
Income from continuing operations before income taxes | 535 | 503 | 1,696 | 1,408 |
Income tax expense | (81) | (71) | (789) | (164) |
Income from continuing operations | 454 | 432 | 907 | 1,244 |
Income (loss) from discontinued operations, net of income taxes | 3 | (3) | 5 | |
Net income | 454 | 435 | 904 | 1,249 |
Other comprehensive income (loss) | (250) | 78 | (101) | 36 |
Comprehensive income | 204 | 513 | 803 | 1,285 |
Consolidating Adjustments | ||||
Statement of Operations Detail: | ||||
Equity in net income of subsidiaries | (990) | (1,037) | (2,134) | (2,778) |
Equity in net income (loss) of subsidiaries of discontinued operations | (7) | 6 | (23) | |
Income from continuing operations before income taxes | (990) | (1,044) | (2,128) | (2,801) |
Income from continuing operations | (1,044) | (2,128) | (2,801) | |
Net income | (990) | (1,044) | (2,128) | (2,801) |
Other comprehensive income (loss) | 505 | (161) | 175 | (50) |
Comprehensive income | (485) | (1,205) | (1,953) | (2,851) |
TE Connectivity Ltd. | Consolidating Reportable entities | ||||
Statement of Operations Detail: | ||||
Selling, general, and administrative expenses, net | 19 | 68 | 107 | 144 |
Operating income | (19) | (68) | (107) | (144) |
Equity in net income of subsidiaries | 491 | 507 | 1,062 | 1,409 |
Equity in net income (loss) of subsidiaries of discontinued operations | 3 | (3) | 5 | |
Intercompany interest income (expense), net | (18) | (7) | (48) | (21) |
Income from continuing operations before income taxes | 454 | 435 | 904 | 1,249 |
Income from continuing operations | 435 | 904 | 1,249 | |
Net income | 454 | 435 | 904 | 1,249 |
Other comprehensive income (loss) | (250) | 78 | (101) | 36 |
Comprehensive income | 204 | 513 | 803 | 1,285 |
TEGSA | Consolidating Reportable entities | ||||
Statement of Operations Detail: | ||||
Selling, general, and administrative expenses, net | 18 | 6 | (52) | |
Operating income | (18) | (6) | 52 | |
Interest income | 1 | |||
Interest expense | (24) | (32) | (79) | (95) |
Equity in net income of subsidiaries | 499 | 530 | 1,072 | 1,369 |
Equity in net income (loss) of subsidiaries of discontinued operations | 4 | (3) | 18 | |
Intercompany interest income (expense), net | 16 | 27 | 74 | 83 |
Income from continuing operations before income taxes | 491 | 511 | 1,059 | 1,427 |
Income from continuing operations | 511 | 1,059 | 1,427 | |
Income (loss) from discontinued operations, net of income taxes | (1) | (13) | ||
Net income | 491 | 510 | 1,059 | 1,414 |
Other comprehensive income (loss) | (250) | 78 | (101) | 36 |
Comprehensive income | 241 | 588 | 958 | 1,450 |
Other Subsidiaries | Consolidating Reportable entities | ||||
Statement of Operations Detail: | ||||
Net sales | 3,764 | 3,367 | 10,989 | 9,657 |
Cost of sales | 2,547 | 2,227 | 7,352 | 6,340 |
Gross margin | 1,217 | 1,140 | 3,637 | 3,317 |
Selling, general, and administrative expenses, net | 390 | 322 | 1,107 | 1,090 |
Research, development, and engineering expenses | 181 | 168 | 539 | 485 |
Acquisition and integration costs | 4 | 1 | 9 | 5 |
Restructuring and other charges, net | 65 | 19 | 106 | 125 |
Operating income | 577 | 630 | 1,876 | 1,612 |
Interest income | 3 | 3 | 10 | 14 |
Interest expense | (1) | (1) | ||
Other income (expense), net | (1) | (12) | 2 | (31) |
Intercompany interest income (expense), net | 2 | (20) | (26) | (62) |
Income from continuing operations before income taxes | 580 | 601 | 1,861 | 1,533 |
Income tax expense | (81) | (71) | (789) | (164) |
Income from continuing operations | 530 | 1,072 | 1,369 | |
Income (loss) from discontinued operations, net of income taxes | 4 | (3) | 18 | |
Net income | 499 | 534 | 1,069 | 1,387 |
Other comprehensive income (loss) | (255) | 83 | (74) | 14 |
Comprehensive income | $ 244 | $ 617 | $ 995 | $ 1,401 |
Tyco Electronics Group S.A. - B
Tyco Electronics Group S.A. - Balance Sheet (Details) - USD ($) $ in Millions | Jun. 29, 2018 | Sep. 29, 2017 | Jun. 30, 2017 | Sep. 30, 2016 |
Current assets: | ||||
Cash and cash equivalents | $ 770 | $ 1,218 | $ 755 | $ 647 |
Accounts receivable, net | 2,591 | 2,290 | ||
Inventories | 1,961 | 1,813 | ||
Prepaid expenses and other current assets | 619 | 605 | ||
Total current assets | 5,941 | 5,926 | ||
Property, plant, and equipment, net | 3,633 | 3,400 | ||
Goodwill | 5,616 | 5,651 | ||
Intangible assets, net | 1,698 | 1,841 | ||
Deferred income taxes | 1,672 | 2,141 | ||
Other assets | 453 | 444 | ||
Total Assets | 19,013 | 19,403 | ||
Current liabilities: | ||||
Short-term debt | 714 | 710 | ||
Accounts payable | 1,583 | 1,436 | ||
Accrued and other current liabilities | 1,625 | 1,626 | ||
Deferred revenue | 124 | 75 | ||
Total current liabilities | 4,046 | 3,847 | ||
Long-term debt | 3,294 | 3,634 | ||
Long-term pension and postretirement liabilities | 1,119 | 1,160 | ||
Deferred income taxes | 227 | 236 | ||
Income taxes | 311 | 293 | ||
Other liabilities | 524 | 482 | ||
Total Liabilities | 9,521 | 9,652 | ||
Total Shareholders' Equity | 9,492 | 9,751 | 9,141 | 8,485 |
Total Liabilities and Shareholders' Equity | 19,013 | 19,403 | ||
Consolidating Adjustments | ||||
Current assets: | ||||
Intercompany receivables | (2,732) | (2,023) | ||
Total current assets | (2,732) | (2,023) | ||
Investment in subsidiaries | (37,712) | (32,069) | ||
Intercompany loans receivable | (24,203) | (13,727) | ||
Total Assets | (64,647) | (47,819) | ||
Current liabilities: | ||||
Intercompany payables | (2,732) | (2,023) | ||
Total current liabilities | (2,732) | (2,023) | ||
Intercompany loans payable | (24,203) | (13,727) | ||
Total Liabilities | (26,935) | (15,750) | ||
Total Shareholders' Equity | (37,712) | (32,069) | ||
Total Liabilities and Shareholders' Equity | (64,647) | (47,819) | ||
TE Connectivity Ltd. | Consolidating Reportable entities | ||||
Current assets: | ||||
Intercompany receivables | 39 | 49 | ||
Prepaid expenses and other current assets | 6 | 4 | ||
Total current assets | 45 | 53 | ||
Investment in subsidiaries | 12,615 | 11,960 | ||
Intercompany loans receivable | 2 | |||
Total Assets | 12,662 | 12,013 | ||
Current liabilities: | ||||
Accounts payable | 2 | 2 | ||
Accrued and other current liabilities | 475 | 286 | ||
Intercompany payables | 2,693 | 1,974 | ||
Total current liabilities | 3,170 | 2,262 | ||
Total Liabilities | 3,170 | 2,262 | ||
Total Shareholders' Equity | 9,492 | 9,751 | ||
Total Liabilities and Shareholders' Equity | 12,662 | 12,013 | ||
TEGSA | Consolidating Reportable entities | ||||
Current assets: | ||||
Intercompany receivables | 2,644 | 1,914 | ||
Prepaid expenses and other current assets | 108 | 96 | ||
Total current assets | 2,752 | 2,010 | ||
Investment in subsidiaries | 25,097 | 20,109 | ||
Intercompany loans receivable | 6,562 | 4,027 | ||
Other assets | 6 | |||
Total Assets | 34,411 | 26,152 | ||
Current liabilities: | ||||
Short-term debt | 712 | 708 | ||
Accrued and other current liabilities | 43 | 59 | ||
Total current liabilities | 755 | 767 | ||
Long-term debt | 3,289 | 3,629 | ||
Intercompany loans payable | 17,640 | 9,700 | ||
Other liabilities | 112 | 96 | ||
Total Liabilities | 21,796 | 14,192 | ||
Total Shareholders' Equity | 12,615 | 11,960 | ||
Total Liabilities and Shareholders' Equity | 34,411 | 26,152 | ||
Other Subsidiaries | Consolidating Reportable entities | ||||
Current assets: | ||||
Cash and cash equivalents | 770 | 1,218 | $ 755 | $ 647 |
Accounts receivable, net | 2,591 | 2,290 | ||
Inventories | 1,961 | 1,813 | ||
Intercompany receivables | 49 | 60 | ||
Prepaid expenses and other current assets | 505 | 505 | ||
Total current assets | 5,876 | 5,886 | ||
Property, plant, and equipment, net | 3,633 | 3,400 | ||
Goodwill | 5,616 | 5,651 | ||
Intangible assets, net | 1,698 | 1,841 | ||
Deferred income taxes | 1,672 | 2,141 | ||
Intercompany loans receivable | 17,639 | 9,700 | ||
Other assets | 453 | 438 | ||
Total Assets | 36,587 | 29,057 | ||
Current liabilities: | ||||
Short-term debt | 2 | 2 | ||
Accounts payable | 1,581 | 1,434 | ||
Accrued and other current liabilities | 1,107 | 1,281 | ||
Deferred revenue | 124 | 75 | ||
Intercompany payables | 39 | 49 | ||
Total current liabilities | 2,853 | 2,841 | ||
Long-term debt | 5 | 5 | ||
Intercompany loans payable | 6,563 | 4,027 | ||
Long-term pension and postretirement liabilities | 1,119 | 1,160 | ||
Deferred income taxes | 227 | 236 | ||
Income taxes | 311 | 293 | ||
Other liabilities | 412 | 386 | ||
Total Liabilities | 11,490 | 8,948 | ||
Total Shareholders' Equity | 25,097 | 20,109 | ||
Total Liabilities and Shareholders' Equity | $ 36,587 | $ 29,057 |
Tyco Electronics Group S.A. - C
Tyco Electronics Group S.A. - Cash Flows (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 29, 2018 | Jun. 30, 2017 | |
Cash Flows From Operating Activities: | ||
Net cash provided by (used in) continuing operating activities | $ 1,527 | $ 1,449 |
Net cash provided by (used in) discontinued operating activities | (1) | |
Net cash provided by operating activities | 1,527 | 1,448 |
Cash Flows From Investing Activities: | ||
Capital expenditures | (686) | (452) |
Proceeds from sale of property, plant, and equipment | 19 | 12 |
Acquisition of business, net of cash acquired | (77) | |
Other | (8) | (21) |
Net cash used in investing activities | (675) | (538) |
Cash Flows From Financing Activities: | ||
Net increase (decrease) in commercial paper | 271 | (162) |
Proceeds from issuance of debt | 119 | 89 |
Repayment of debt | (708) | |
Proceeds from exercise of share options | 96 | 86 |
Repurchase of common shares | (611) | (376) |
Payment of common share dividends to shareholders | (435) | (405) |
Other | (34) | (24) |
Net cash used in continuing financing activities | (1,302) | (792) |
Net cash provided by discontinued financing activities | 1 | |
Net cash used in financing activities | (1,302) | (791) |
Effect of currency translation on cash | 2 | (11) |
Net increase (decrease) in cash and cash equivalents | (448) | 108 |
Cash and cash equivalents at beginning of period | 1,218 | 647 |
Cash and cash equivalents at end of period | 770 | 755 |
Consolidating Adjustments | ||
Cash Flows From Operating Activities: | ||
Net cash provided by operating activities | (15) | |
Cash Flows From Investing Activities: | ||
Intercompany distribution receipts | (61) | |
Change in intercompany loans | (261) | (16) |
Other | (4) | |
Net cash used in investing activities | (322) | (20) |
Cash Flows From Financing Activities: | ||
Intercompany distributions | 76 | |
Loan activity with parent | 261 | 16 |
Other | 4 | |
Net cash used in continuing financing activities | 20 | |
Net cash used in financing activities | 337 | 20 |
TE Connectivity Ltd. | Consolidating Reportable entities | ||
Cash Flows From Operating Activities: | ||
Net cash provided by (used in) continuing operating activities | (159) | |
Net cash provided by operating activities | (152) | (159) |
Cash Flows From Financing Activities: | ||
Changes in parent company equity | 83 | 67 |
Repurchase of common shares | (218) | |
Payment of common share dividends to shareholders | (441) | (407) |
Loan activity with parent | 728 | 499 |
Net cash used in continuing financing activities | 159 | |
Net cash used in financing activities | 152 | 159 |
TEGSA | Consolidating Reportable entities | ||
Cash Flows From Operating Activities: | ||
Net cash provided by (used in) continuing operating activities | (58) | |
Net cash provided by operating activities | (34) | (58) |
Cash Flows From Investing Activities: | ||
Intercompany distribution receipts | 61 | |
Change in intercompany loans | 261 | 16 |
Other | (8) | |
Net cash used in investing activities | 322 | 8 |
Cash Flows From Financing Activities: | ||
Changes in parent company equity | 30 | 123 |
Net increase (decrease) in commercial paper | 271 | (162) |
Proceeds from issuance of debt | 119 | 89 |
Repayment of debt | (708) | |
Net cash used in continuing financing activities | 50 | |
Net cash used in financing activities | (288) | 50 |
Other Subsidiaries | Consolidating Reportable entities | ||
Cash Flows From Operating Activities: | ||
Net cash provided by (used in) continuing operating activities | 1,666 | |
Net cash provided by (used in) discontinued operating activities | (1) | |
Net cash provided by operating activities | 1,728 | 1,665 |
Cash Flows From Investing Activities: | ||
Capital expenditures | (686) | (452) |
Proceeds from sale of property, plant, and equipment | 19 | 12 |
Acquisition of business, net of cash acquired | (77) | |
Other | (8) | (9) |
Net cash used in investing activities | (675) | (526) |
Cash Flows From Financing Activities: | ||
Changes in parent company equity | (113) | (190) |
Proceeds from exercise of share options | 96 | 86 |
Repurchase of common shares | (393) | (376) |
Payment of common share dividends to shareholders | 6 | 2 |
Intercompany distributions | (76) | |
Loan activity with parent | (989) | (515) |
Other | (34) | (28) |
Net cash used in continuing financing activities | (1,021) | |
Net cash provided by discontinued financing activities | 1 | |
Net cash used in financing activities | (1,503) | (1,020) |
Effect of currency translation on cash | 2 | (11) |
Net increase (decrease) in cash and cash equivalents | (448) | 108 |
Cash and cash equivalents at beginning of period | 1,218 | 647 |
Cash and cash equivalents at end of period | $ 770 | $ 755 |