Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 28, 2019 | Jul. 19, 2019 | |
Entity Registrant Name | TE CONNECTIVITY LTD. | |
Entity Central Index Key | 0001385157 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 28, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-33260 | |
Entity Incorporation, Sate or Country Code | V8 | |
Entity Tax Identification Number | 980518048 | |
Entity Address, Address Line One | Rheinstrasse 20 | |
Entity Address, City or Town | Schaffhausen | |
Entity Address, Country | CH | |
Entity Address, Postal Zip Code | CH-8200 | |
Country Region | +41 | |
City Area Code | (0)52 | |
Local Phone Number | 633 66 61 | |
Title of 12(b) Security | Common Shares, Par Value CHF 0.57 | |
Trading Symbol | TEL | |
Security Exchange Name | NYSE | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-27 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 335,935,258 | |
Document Fiscal Year Focus | 2019 | |
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. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Net sales | $ 3,389 | $ 3,581 | $ 10,148 | $ 10,479 |
Cost of sales | 2,279 | 2,394 | 6,806 | 6,916 |
Gross margin | 1,110 | 1,187 | 3,342 | 3,563 |
Selling, general, and administrative expenses | 356 | 394 | 1,118 | 1,180 |
Research, development, and engineering expenses | 158 | 171 | 485 | 509 |
Acquisition and integration costs | 9 | 4 | 21 | 9 |
Restructuring and other charges, net | 67 | 64 | 184 | 104 |
Operating income | 520 | 554 | 1,534 | 1,761 |
Interest income | 4 | 3 | 13 | 11 |
Interest expense | (13) | (26) | (55) | (80) |
Other income (expense), net | 2 | (1) | 2 | 2 |
Income from continuing operations before income taxes | 513 | 530 | 1,494 | 1,694 |
Income tax (expense) benefit | 245 | (77) | 76 | (784) |
Income from continuing operations | 758 | 453 | 1,570 | 910 |
Income (loss) from discontinued operations, net of income taxes | (1) | 1 | (98) | (6) |
Net income | $ 757 | $ 454 | $ 1,472 | $ 904 |
Basic earnings per share: | ||||
Income from continuing operations (in dollars per share) | $ 2.25 | $ 1.30 | $ 4.63 | $ 2.59 |
Income (loss) from discontinued operations (in dollars per share) | (0.29) | (0.02) | ||
Net income (in dollars per share) | 2.25 | 1.30 | 4.34 | 2.58 |
Diluted earnings per share: | ||||
Income from continuing operations (in dollars per share) | 2.24 | 1.29 | 4.60 | 2.57 |
Income (loss) from discontinued operations (in dollars per share) | (0.29) | (0.02) | ||
Net income (in dollars per share) | $ 2.23 | $ 1.29 | $ 4.32 | $ 2.55 |
Weighted-average number of shares outstanding: | ||||
Basic (in shares) | 337 | 349 | 339 | 351 |
Diluted (in shares) | 339 | 352 | 341 | 354 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Net income | $ 757 | $ 454 | $ 1,472 | $ 904 |
Other comprehensive income (loss): | ||||
Currency translation | (48) | (244) | 35 | (63) |
Adjustments to unrecognized pension and postretirement benefit costs, net of income taxes | 7 | 8 | 19 | 23 |
Gains (losses) on cash flow hedges, net of income taxes | (14) | 51 | (61) | |
Other comprehensive income (loss) | (41) | (250) | 105 | (101) |
Comprehensive income | $ 716 | $ 204 | $ 1,577 | $ 803 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 28, 2019 | Sep. 28, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 546 | $ 848 |
Accounts receivable, net of allowance for doubtful accounts of $25 and $22, respectively | 2,463 | 2,361 |
Inventories | 1,961 | 1,857 |
Prepaid expenses and other current assets | 452 | 661 |
Assets held for sale | 472 | |
Total current assets | 5,422 | 6,199 |
Property, plant, and equipment, net | 3,636 | 3,497 |
Goodwill | 5,800 | 5,684 |
Intangible assets, net | 1,664 | 1,704 |
Deferred income taxes | 2,845 | 2,144 |
Other assets | 381 | 1,158 |
Total assets | 19,748 | 20,386 |
Current liabilities: | ||
Short-term debt | 602 | 963 |
Accounts payable | 1,438 | 1,548 |
Accrued and other current liabilities | 1,654 | 1,711 |
Liabilities held for sale | 188 | |
Total current liabilities | 3,694 | 4,410 |
Long-term debt | 3,434 | 3,037 |
Long-term pension and postretirement liabilities | 1,094 | 1,102 |
Deferred income taxes | 203 | 207 |
Income taxes | 240 | 312 |
Other liabilities | 461 | 487 |
Total liabilities | 9,126 | 9,555 |
Commitments and contingencies (Note 9) | ||
Shareholders' equity: | ||
Common shares, CHF 0.57 par value, 350,951,381 shares authorized and issued, and 357,069,981 shares authorized and issued, respectively | 154 | 157 |
Accumulated earnings | 11,893 | 12,114 |
Treasury shares, at cost, 14,541,059 and 12,279,603 shares, respectively | (1,224) | (1,134) |
Accumulated other comprehensive loss | (201) | (306) |
Total shareholders' equity | 10,622 | 10,831 |
Total liabilities and shareholders' equity | $ 19,748 | $ 20,386 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) $ in Millions | Jun. 28, 2019USD ($)shares | Jun. 28, 2019SFr / shares | Sep. 28, 2018USD ($)shares | Sep. 28, 2018SFr / shares |
Accounts receivable, allowance for doubtful accounts (in dollars) | $ | $ 25 | $ 22 | ||
Common shares, par value (in currency per share) | SFr / shares | SFr 0.57 | SFr 0.57 | ||
Common shares, shares authorized | 350,951,381 | 357,069,981 | ||
Common shares, shares issued | 350,951,381 | 357,069,981 | ||
Treasury shares | 14,541,059 | 12,279,603 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY - USD ($) shares in Millions, $ in Millions | Common Shares | Treasury Shares | Contributed Surplus | Accumulated Earnings (Deficit) | Accumulated Other Comprehensive Income | Total |
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 | (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) | ||||
Balance at Mar. 30, 2018 | $ 157 | $ (585) | 9,957 | (49) | 9,480 | |
Balance (in shares) at Mar. 30, 2018 | 357 | (6) | ||||
Increase (Decrease) in Equity: | ||||||
Net income | 454 | 454 | ||||
Other comprehensive income (loss) | (250) | (250) | ||||
Share-based compensation expense | 22 | 22 | ||||
Dividends | 4 | 4 | ||||
Exercise of share options | $ 2 | 2 | ||||
Restricted share award vestings and other activity | $ 14 | (22) | 17 | 9 | ||
Restricted share award vestings and other activity (in shares) | (1) | |||||
Repurchase of common shares | $ (229) | (229) | ||||
Repurchase of common shares (in shares) | (2) | |||||
Balance at Jun. 29, 2018 | $ 157 | $ (798) | 10,432 | (299) | 9,492 | |
Balance (in shares) at Jun. 29, 2018 | 357 | (9) | ||||
Balance at Sep. 28, 2018 | $ 157 | $ (1,134) | 12,114 | (306) | 10,831 | |
Balance (in shares) at Sep. 28, 2018 | 357 | (12) | ||||
Increase (Decrease) in Equity: | ||||||
Adoption of ASU No. 2016-16 | ASU 2016-16 | (443) | (443) | ||||
Net income | 1,472 | 1,472 | ||||
Other comprehensive income (loss) | 105 | 105 | ||||
Share-based compensation expense | 57 | 57 | ||||
Dividends | (615) | (615) | ||||
Exercise of share options | $ 55 | 55 | ||||
Restricted share award vestings and other activity | $ 118 | (57) | (65) | (4) | ||
Restricted share award vestings and other activity (in shares) | 1 | |||||
Repurchase of common shares | $ (836) | $ (836) | ||||
Repurchase of common shares (in shares) | (10) | (10) | ||||
Cancellation of treasury shares | $ (3) | $ 573 | (570) | |||
Cancellation of treasury shares (in shares) | (6) | 6 | ||||
Balance at Jun. 28, 2019 | $ 154 | $ (1,224) | 11,893 | (201) | $ 10,622 | |
Balance (in shares) at Jun. 28, 2019 | 351 | (15) | ||||
Balance at Mar. 29, 2019 | $ 157 | $ (1,713) | 11,710 | (160) | 9,994 | |
Balance (in shares) at Mar. 29, 2019 | 357 | (20) | ||||
Increase (Decrease) in Equity: | ||||||
Net income | 757 | 757 | ||||
Other comprehensive income (loss) | (41) | (41) | ||||
Share-based compensation expense | 18 | 18 | ||||
Dividends | 1 | 1 | ||||
Exercise of share options | $ 38 | 38 | ||||
Restricted share award vestings and other activity | 30 | $ (18) | (5) | 7 | ||
Repurchase of common shares | $ (152) | (152) | ||||
Repurchase of common shares (in shares) | (1) | |||||
Cancellation of treasury shares | $ (3) | $ 573 | (570) | |||
Cancellation of treasury shares (in shares) | (6) | 6 | ||||
Balance at Jun. 28, 2019 | $ 154 | $ (1,224) | $ 11,893 | $ (201) | $ 10,622 | |
Balance (in shares) at Jun. 28, 2019 | 351 | (15) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Jun. 28, 2019 | Jun. 29, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 1,472 | $ 904 |
Loss from discontinued operations, net of income taxes | 98 | 6 |
Income from continuing operations | 1,570 | 910 |
Adjustments to reconcile income from continuing operations to net cash provided by operating activities: | ||
Depreciation and amortization | 515 | 496 |
Deferred income taxes | (290) | 442 |
Provision for losses on accounts receivable and inventories | 36 | 29 |
Share-based compensation expense | 56 | 71 |
Other | 26 | (12) |
Changes in assets and liabilities, net of the effects of acquisitions and divestitures: | ||
Accounts receivable, net | (105) | (379) |
Inventories | (59) | (217) |
Prepaid expenses and other current assets | 109 | (50) |
Accounts payable | (86) | 177 |
Accrued and other current liabilities | (147) | (143) |
Income taxes | (63) | 24 |
Other | 13 | 31 |
Net cash provided by continuing operating activities | 1,575 | 1,379 |
Net cash provided by (used in) discontinued operating activities | (31) | 148 |
Net cash provided by operating activities | 1,544 | 1,527 |
Cash flows from investing activities: | ||
Capital expenditures | (570) | (673) |
Proceeds from sale of property, plant, and equipment | 16 | 19 |
Acquisition of businesses, net of cash acquired | (283) | |
Proceeds from divestiture of discontinued operation, net of cash retained by sold operation | 297 | |
Other | 3 | (8) |
Net cash used in continuing investing activities | (537) | (662) |
Net cash used in discontinued investing activities | (2) | (13) |
Net cash used in investing activities | (539) | (675) |
Cash flows from financing activities: | ||
Net increase (decrease) in commercial paper | (270) | 271 |
Proceeds from issuance of debt | 746 | 119 |
Repayment of debt | (441) | (708) |
Proceeds from exercise of share options | 55 | 96 |
Repurchase of common shares | (913) | (611) |
Payment of common share dividends to shareholders | (454) | (435) |
Transfers (to) from discontinued operations | (33) | 135 |
Other | (32) | (34) |
Net cash used in continuing financing activities | (1,342) | (1,167) |
Net cash provided by (used in) discontinued financing activities | 33 | (135) |
Net cash used in financing activities | (1,309) | (1,302) |
Effect of currency translation on cash | 2 | 2 |
Net decrease in cash, cash equivalents, and restricted cash | (302) | (448) |
Cash, cash equivalents, and restricted cash at beginning of period | 848 | 1,218 |
Cash, cash equivalents, and restricted cash at end of period | $ 546 | $ 770 |
Basis of Presentation and Accou
Basis of Presentation and Accounting Policies | 9 Months Ended |
Jun. 28, 2019 | |
Basis of Presentation and Accounting Policies | 1. Basis of Presentation and Accounting Policies 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 28, 2018. Unless otherwise indicated, references in the Condensed Consolidated Financial Statements to fiscal 2019 and fiscal 2018 are to our fiscal years ending September 27, 2019 and ended September 28, 2018, respectively. Revenue Recognition We account for revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers We generally warrant that our products will conform to our, or mutually agreed to, specifications and that our products will be free from material defects in materials and workmanship for a limited time. We limit our warranty to the replacement or repair of defective parts, or a refund or credit of the price of the defective product. We do not account for these warranties as separate performance obligations. Although products are generally sold at fixed prices, certain distributors and customers receive incentives or awards, such as sales rebates, return allowances, scrap allowances, and other rights, which are accounted for as variable consideration. We estimate these amounts in the same period revenue is recognized based on the expected value to be provided to customers and reduce revenue accordingly. Our estimates of variable consideration and ultimate determination of the estimated amounts to include in the transaction price are based primarily on our assessment of anticipated performance and historical and forecasted information that is reasonably available to us. Recently Issued Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02 which codified ASC 842, Leases Recently Adopted Accounting Pronouncements In August 2017, the FASB issued ASU No. 2017-12, an update to ASC 815, Derivatives and Hedging. In October 2016, the FASB issued ASU No. 2016-16, an update to ASC 740, Income Taxes. In May 2014, the FASB issued ASU No. 2014-09 which codified ASC 606, Revenue from Contracts with Customers. Revenue Recognition, |
Restructuring and Other Charges
Restructuring and Other Charges, Net | 9 Months Ended |
Jun. 28, 2019 | |
Restructuring and Other Charges, Net | 2. Restructuring and Other Charges, Net Net restructuring and other charges consisted of the following: For the For the Quarters Ended Nine Months Ended June 28, June 29, June 28, June 29, 2019 2018 2019 2018 (in millions) Restructuring charges, net $ 67 $ 74 $ 184 $ 118 Other charges (credits), net — (10) — (14) Restructuring and other charges, net $ 67 $ 64 $ 184 $ 104 Net restructuring charges by segment were as follows: For the For the Quarters Ended Nine Months Ended June 28, June 29, June 28, June 29, 2019 2018 2019 2018 (in millions) Transportation Solutions $ 53 $ 18 $ 98 $ 23 Industrial Solutions 8 49 60 79 Communications Solutions 6 7 26 16 Restructuring charges, net $ 67 $ 74 $ 184 $ 118 Activity in our restructuring reserves was as follows: Balance at Balance at September 28, Changes in Cash Non-Cash Currency June 28, 2018 Charges Estimate Payments Items Translation 2019 (in millions) Fiscal 2019 Actions: Employee severance $ — $ 177 $ — $ (33) $ (2) $ 1 $ 143 Facility and other exit costs — 1 — (1) — — — Property, plant, and equipment — 1 — — (1) — — Total — 179 — (34) (3) 1 143 Fiscal 2018 Actions: Employee severance 114 2 — (45) — (2) 69 Facility and other exit costs 4 3 — (3) — — 4 Property, plant, and equipment — 2 (2) — — — — Total 118 7 (2) (48) — (2) 73 Pre-Fiscal 2018 Actions: Employee severance 49 7 (7) (20) — (2) 27 Facility and other exit costs — 2 — (2) — — — Property, plant, and equipment — 1 (3) — 2 — — Total 49 10 (10) (22) 2 (2) 27 Total Activity $ 167 $ 196 $ (12) $ (104) $ (1) $ (3) $ 243 Fiscal 2019 Actions During fiscal 2019, we initiated a restructuring program associated with footprint consolidation and structural improvements impacting all segments. In connection with this program, during the nine months ended June 28, 2019, we recorded restructuring charges of $179 million. We expect to complete all restructuring actions commenced during the nine months ended June 28, 2019 by the end of fiscal 2021 and to incur additional charges of approximately $25 million related primarily to employee severance in the Transportation Solutions and Industrial Solutions segments. Fiscal 2018 Actions During fiscal 2018, we initiated a restructuring program associated with footprint consolidation and structural improvements primarily impacting the Industrial Solutions and Transportation Solutions segments. In connection with this program, during the nine months ended June 28, 2019 and June 29, 2018, we recorded net restructuring charges of $5 million and $109 million, respectively. We expect to complete all restructuring actions commenced during fiscal 2018 by the end of fiscal 2020 and anticipate that any additional charges will be insignificant. Pre-Fiscal 2018 Actions Prior to fiscal 2018, we initiated a restructuring program associated with footprint consolidation related to recent acquisitions and structural improvements impacting all segments. Also prior to fiscal 2018, we initiated a restructuring program associated with headcount reductions impacting all segments and product line closures in the Communications Solutions segment. During the nine months ended June 29, 2018, we recorded net restructuring charges of $9 million related to pre-fiscal 2018 actions. We expect additional charges related to pre-fiscal 2018 actions to be insignificant. Total Restructuring Reserves Restructuring reserves included on the Condensed Consolidated Balance Sheets were as follows: June 28, September 28, 2019 2018 (in millions) Accrued and other current liabilities $ 214 $ 141 Other liabilities 29 26 Restructuring reserves $ 243 $ 167 |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Jun. 28, 2019 | |
Discontinued Operations | 3. Discontinued Operations During the nine months ended June 28, 2019, we sold our Subsea Communications (“SubCom”) business for net cash proceeds of $297 million and incurred a pre-tax loss on sale of $86 million, related primarily to the recognition of cumulative translation adjustment losses of $67 million and the guarantee liabilities discussed below. The SubCom business met the held for sale and discontinued operations criteria and was reported as such in all periods presented on the Condensed Consolidated Financial Statements. Prior to reclassification to discontinued operations, the SubCom business was included in the Communications Solutions segment. In connection with the sale, we contractually agreed to continue to honor performance guarantees and letters of credit related to the SubCom business’ projects that existed as of the date of sale. These guarantees had a combined value of approximately $1.7 billion as of June 28, 2019 and are expected to expire at various dates through fiscal 2025; however, the majority are expected to expire within two years. At the time of sale, we determined that the fair value of these guarantees was $12 million, which we recognized by a charge to pre-tax loss on sale. Also, under the terms of the definitive agreement, we are required to issue up to $300 million of new performance guarantees, subject to certain limitations, for projects entered into by the SubCom business following the sale for a period of up to three years. As of June 28, 2019, there were no such new performance guarantees outstanding. We have contractual recourse against the SubCom business if we are required to perform on any SubCom guarantees; however, based on historical experience, we do not anticipate having to perform. The following table presents the summarized components of income (loss) from discontinued operations, net of income taxes, for the SubCom business and prior divestitures: For the For the Quarters Ended Nine Months Ended June 28, June 29, June 28, June 29, 2019 2018 2019 2018 (in millions) Net sales $ — $ 184 $ 41 $ 510 Cost of sales — (155) (50) (438) Selling, general, and administrative expenses (1) (13) (6) (36) Research, development, and engineering expenses — (10) (3) (30) Restructuring and other charges, net — (1) (3) (5) Pre-tax income (loss) from discontinued operations (1) 5 (21) 1 Pre-tax loss on sale of discontinued operations — (1) (86) (2) Income tax (expense) benefit — (3) 9 (5) Income (loss) from discontinued operations, net of income taxes $ (1) $ 1 $ (98) $ (6) The following table presents balance sheet information for assets and liabilities held for sale at September 28, 2018; there were no such balances at June 28, 2019: September 28, 2018 (in millions) Accounts receivable, net $ 72 Inventories 130 Other current assets 32 Property, plant, and equipment, net 221 Other assets 17 Total assets held for sale $ 472 Accounts payable $ 63 Accrued and other current liabilities 26 Deferred revenue 60 Other liabilities 39 Total liabilities held for sale $ 188 |
Acquisitions
Acquisitions | 9 Months Ended |
Jun. 28, 2019 | |
Acquisitions | 4. Acquisitions During the nine months ended June 28, 2019, we acquired three businesses for a combined cash purchase price of $296 million, net of cash acquired. The acquisitions were reported as part of our Transportation Solutions segment from the date of acquisition. |
Inventories
Inventories | 9 Months Ended |
Jun. 28, 2019 | |
Inventories | 5. Inventories Inventories consisted of the following: June 28, September 28, 2019 2018 (in millions) Raw materials $ 285 $ 276 Work in progress 785 656 Finished goods 891 925 Inventories $ 1,961 $ 1,857 |
Goodwill
Goodwill | 9 Months Ended |
Jun. 28, 2019 | |
Goodwill | 6. Goodwill The changes in the carrying amount of goodwill by segment were as follows: Transportation Industrial Communications Solutions Solutions Solutions Total (in millions) September 28, 2018 (1) $ 1,993 $ 3,104 $ 587 $ 5,684 Acquisitions 162 (13) — 149 Currency translation (12) (18) (3) (33) June 28, 2019 (1) $ 2,143 $ 3,073 $ 584 $ 5,800 (1) At June 28, 2019 and September 28, 2018, accumulated impairment losses for the Transportation Solutions, Industrial Solutions, and Communications Solutions segments were $2,191 million, $669 million, and $489 million, respectively. During the nine months ended June 28, 2019, we recognized goodwill in the Transportation Solutions segment in connection with recent acquisitions. See Note 4 for additional information regarding acquisitions. |
Intangible Assets, Net
Intangible Assets, Net | 9 Months Ended |
Jun. 28, 2019 | |
Intangible Assets, Net | 7. Intangible Assets, Net Intangible assets consisted of the following: June 28, 2019 September 28, 2018 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount (in millions) Customer relationships $ 1,536 $ (441) $ 1,095 $ 1,468 $ (389) $ 1,079 Intellectual property 1,268 (715) 553 1,261 (653) 608 Other 34 (18) 16 33 (16) 17 Total $ 2,838 $ (1,174) $ 1,664 $ 2,762 $ (1,058) $ 1,704 Intangible asset amortization expense was $45 million for the quarters ended June 28, 2019 and June 29, 2018 and $135 million for the nine months ended June 28, 2019 and June 29, 2018. At June 28, 2019, the aggregate amortization expense on intangible assets is expected to be as follows: (in millions) Remainder of fiscal 2019 $ 46 Fiscal 2020 181 Fiscal 2021 179 Fiscal 2022 178 Fiscal 2023 178 Fiscal 2024 147 Thereafter 755 Total $ 1,664 |
Debt
Debt | 9 Months Ended |
Jun. 28, 2019 | |
Debt | 8. Debt During the quarter ended June 28, 2019, Tyco Electronics Group S.A. (“TEGSA”), our 100%-owned subsidiary, issued €350 million aggregate principal amount of fixed-to-floating rate senior notes due June 2021. The fixed-to-floating rate senior notes bear interest at a rate of 0% until June 2020 and then at a rate of three-month Euro Interbank Offered Rate (“EURIBOR”) plus 0.30% per year until maturity. In June 2020, we may, at our option, redeem the fixed-to-floating rate senior notes, as a whole, at 100% of the principal amount. Also, during the nine months ended June 28, 2019, TEGSA issued $350 million aggregate principal amount of floating rate senior notes due June 2020. The floating rate senior notes bear interest at a rate of three-month London Interbank Offered Rate (“LIBOR”) plus 0.45% per year. The fixed-to-floating rate senior notes and floating rate senior notes are TEGSA’s unsecured senior obligations and rank equally in right of payment with all existing and any future senior indebtedness of TEGSA and senior to any subordinated indebtedness that TEGSA may incur. During the nine months ended June 28, 2019, TEGSA repaid, at maturity, $325 million 2.375% senior notes due 2018. TEGSA has a five-year unsecured senior revolving credit facility (“Credit Facility”) with total commitments of $1,500 million. The Credit Facility was amended in November 2018 primarily to extend the maturity date from December 2020 to November 2023. The amended Credit Facility contains provisions that allow for incremental commitments of up to $500 million, an option to temporarily increase the financial ratio covenant following a qualified acquisition, and borrowings in designated currencies. TEGSA had no borrowings under the Credit Facility at June 28, 2019 or September 28, 2018. As of September 28, 2018, TEGSA had $270 million of commercial paper outstanding at a weighted-average interest rate of 2.35%. TEGSA had no commercial paper outstanding at June 28, 2019. The fair value of our debt, based on indicative valuations, was approximately $4,295 million and $4,149 million at June 28, 2019 and September 28, 2018, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Jun. 28, 2019 | |
Commitments and Contingencies | 9. Commitments and Contingencies Legal Proceedings In the normal course of business, we are subject to various legal proceedings and claims, including patent infringement claims, product liability matters, employment disputes, disputes on agreements, other commercial disputes, environmental matters, antitrust claims, and tax matters, including non-income tax matters such as value added tax, sales and use tax, real estate tax, and transfer tax. Although it is not feasible to predict the outcome of these proceedings, based upon our experience, current information, and applicable law, we do not expect that the outcome of these proceedings, either individually or in the aggregate, will have a material effect on our results of operations, financial position, or cash flows. 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 28, 2019, we concluded that we would incur investigation and remediation costs at these sites in the reasonably possible range of $15 million to $44 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 28, 2019, we had outstanding letters of credit, letters of guarantee, and surety bonds of $316 million. We sold our SubCom business during the nine months ended June 28, 2019. In connection with the sale, we contractually agreed to honor certain performance guarantees and letters of credit related to the SubCom business. See Note 3 for additional information regarding these guarantees and the divestiture of the SubCom business. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Jun. 28, 2019 | |
Financial Instruments | 10. Financial Instruments Foreign Currency Exchange Rate Risk 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 rate risk associated with certain intercompany loans. Under the terms of these contracts, which have been designated as cash flow hedges, we make interest payments in euros at 3.50% per annum and receive interest in U.S. dollars at a weighted-average rate of 5.33% per annum. Upon the maturity 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, both counterparties to each contract are required to post cash collateral. At June 28, 2019 and September 28, 2018, these cross-currency swap contracts were in liability positions of $36 million and $100 million, respectively, and were recorded in other liabilities on the Condensed Consolidated Balance Sheets. At June 28, 2019 and September 28, 2018, 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 these cross-currency swap contracts were as follows: For the For the Quarters Ended Nine Months Ended June 28, June 29, June 28, June 29, 2019 2018 2019 2018 (in millions) Gains (losses) recorded in other comprehensive income (loss) $ 10 $ 7 $ 42 $ (25) Gains (losses) excluded from the hedging relationship (1) (16) 64 22 14 (1) Gains and losses excluded from the hedging relationship are recognized prospectively in selling, general, and administrative expenses and are offset by losses and gains generated as a result of re-measuring certain intercompany loans to the U.S. dollar. Hedge of Net Investment We hedge our net investment in certain foreign operations using intercompany loans and external borrowings denominated in the same currencies. The aggregate notional value of these hedges was $3,202 million and $4,064 million at June 28, 2019 and September 28, 2018, respectively. During fiscal 2019, we expanded our cross-currency swap program to hedge our net investment in certain foreign operations. The aggregate notional value of the fiscal 2019 contracts was $1,901 million at June 28, 2019. Under the terms of these contracts, we receive interest in U.S. dollars at a weighted-average rate of 2.96% per annum and pay no interest. Upon the maturity of these contracts at various dates through fiscal 2023, we will pay the notional value of the contracts in the designated foreign currencies and receive U.S. dollars from our counterparties. The impacts of our hedge of net investment programs were as follows: For the For the Quarters Ended Nine Months Ended June 28, June 29, June 28, June 29, 2019 2018 2019 2018 (in millions) Foreign currency exchange gains (losses) on intercompany loans and external borrowings (1) $ (58) $ 153 $ 54 $ 8 Gains (losses) on cross-currency swap contracts designated as hedges of net investment (2) (20) — 17 — (1) Foreign currency exchange gains and losses on intercompany loans and external borrowings are recorded as currency translation, a component of accumulated other comprehensive income (loss), and are offset by changes attributable to the translation of the net investment. (2) Gains and losses on cross-currency swap contracts designated as hedges of net investment are recorded as currency translation . |
Retirement Plans
Retirement Plans | 9 Months Ended |
Jun. 28, 2019 | |
Retirement Plans | 11. Retirement Plans The net periodic pension benefit cost for all non-U.S. and U.S. defined benefit pension plans was as follows: Non-U.S. Plans U.S. Plans For the For the Quarters Ended Quarters Ended June 28, June 29, June 28, June 29, 2019 2018 2019 2018 (in millions) Service cost $ 12 $ 12 $ 4 $ 3 Interest cost 11 10 11 11 Expected return on plan assets (16) (18) (14) (15) Amortization of net actuarial loss 6 7 4 6 Amortization of prior service credit (2) (2) — — Net periodic pension benefit cost $ 11 $ 9 $ 5 $ 5 Non-U.S. Plans U.S. Plans For the For the Nine Months Ended Nine Months Ended June 28, June 29, June 28, June 29, 2019 2018 2019 2018 (in millions) Service cost $ 36 $ 35 $ 10 $ 10 Interest cost 32 31 34 33 Expected return on plan assets (48) (52) (43) (45) Amortization of net actuarial loss 18 18 13 17 Amortization of prior service credit (6) (5) — — Net periodic pension benefit cost $ 32 $ 27 $ 14 $ 15 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 28, 2019, we contributed $29 million to our non-U.S. pension plans. |
Income Taxes
Income Taxes | 9 Months Ended |
Jun. 28, 2019 | |
Income Taxes | 12. Income Taxes We recorded an income tax benefit of $245 million and income tax expense of $77 million for the quarters ended June 28, 2019 and June 29, 2018, respectively. The income tax benefit for the quarter ended June 28, 2019 included a $214 million income tax benefit related to the tax impacts of certain measures of the Switzerland Federal Act on Tax Reform and AHV Financing (“Swiss Tax Reform”) and a $93 million income tax benefit related to the effective settlement of a tax audit in a non-U.S. jurisdiction. See “Swiss Tax Reform” below for additional information. 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. We recorded an income tax benefit of $76 million and income tax expense of $784 million for the nine months ended June 28, 2019 and June 29, 2018, respectively. The income tax benefit for the nine months ended June 28, 2019 included a $214 million income tax benefit related to the tax impacts of certain measures of Swiss Tax Reform, a $93 million income tax benefit related to the effective settlement of a tax audit in a non-U.S. jurisdiction, and $15 million of income tax expense associated with the tax impacts of certain legal entity restructurings and intercompany transactions. The income 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 (the “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. During the quarter ended December 29, 2017, the period of enactment of the Act, we were required to revalue our U.S. federal deferred tax assets and liabilities at a U.S. federal corporate income tax rate of 21% and 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. 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. We record accrued interest and penalties related to uncertain tax positions as part of income tax expense. As of June 28, 2019 and September 28, 2018, we had $40 million and $60 million, respectively, 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 28, 2019, we recognized $17 million of income tax benefit 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 $100 million of unrecognized income tax benefits, excluding the impact relating to accrued interest and penalties, could be resolved within the next twelve months. We are not aware of any other matters that would result in significant changes to the amount of unrecognized income tax benefits reflected on the Condensed Consolidated Balance Sheet as of June 28, 2019. Swiss Tax Reform Swiss Parliament approved the Federal Act on Tax Reform and AHV Financing in September 2018, and it was approved by public vote on May 19, 2019. Swiss Tax Reform eliminates certain preferential tax items at both the federal and cantonal levels. In addition, the cantons will implement new tax rates. The federal provisions of Swiss Tax Reform are expected to be enacted into law in the quarter ending September 27, 2019 and the cantons will implement thereafter. In reaction to the public approval of Swiss Tax Reform, on May 24, 2019 the federal tax authority issued guidance abolishing certain interest deductions effective January 1, 2020. As a result of this measure, during the quarter ended June 28, 2019, we recorded a $214 million income tax benefit related primarily to the reduction to the valuation allowance for deferred tax assets. Based on our forecast of taxable income, reflecting the abolishment of certain interest deductions, we believe it is more likely than not that additional deferred tax assets for tax loss carryforwards in Switzerland will be realized in the future. We are currently assessing the impacts of the federal provisions and subsequent cantonal implementation, including reductions in tax rates. We will reflect the impacts of the remaining measures on our Condensed Consolidated Financial Statements when enacted. Upon enactment at the cantonal level, which is expected to occur in the quarter ending December 27, 2019, we expect to recognize approximately $300 million of income tax expense related to the write-down of certain deferred tax assets to the expected lower tax rates. 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 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 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. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Jun. 28, 2019 | |
Earnings Per Share | |
Earnings Per Share | 13. Earnings Per Share The weighted-average number of shares outstanding used in the computations of basic and diluted earnings per share were as follows: For the For the Quarters Ended Nine Months Ended June 28, June 29, June 28, June 29, 2019 2018 2019 2018 (in millions) Basic 337 349 339 351 Dilutive impact of share-based compensation arrangements 2 3 2 3 Diluted 339 352 341 354 The following share options were not included in the computation of diluted earnings per share because the instruments’ underlying exercise prices were greater than the average market prices of our common shares and inclusion would be antidilutive: For the For the Quarters Ended Nine Months Ended June 28, June 29, June 28, June 29, 2019 2018 2019 2018 (in millions) Antidilutive share options 1 — 1 — |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Jun. 28, 2019 | |
Shareholders' Equity | 14. Shareholders’ Equity Common Shares Held in Treasury In March 2019, our shareholders approved the cancellation of 6 million shares purchased under our share repurchase program during the period beginning September 30, 2017 and ending September 28, 2018. The capital reduction by cancellation of these shares was subject to a notice period and filing with the commercial register in Switzerland and became effective in May 2019. Dividends We paid cash dividends to shareholders as follows: For the For the Quarters Ended Nine Months Ended June 28, June 29, June 28, June 29, 2019 2018 2019 2018 Dividends paid per common share $ 0.46 $ 0.44 $ 1.34 $ 1.24 In March 2019, our shareholders approved a dividend payment to shareholders of $1.84 per share, payable in four equal quarterly installments of $0.46 per share beginning in the third quarter of fiscal 2019 and ending in the second quarter of fiscal 2020. Upon shareholders’ approval of a dividend payment, we record a liability with a corresponding charge to shareholders’ equity. At June 28, 2019 and September 28, 2018, the unpaid portion of the dividends recorded in accrued and other current liabilities on the Condensed Consolidated Balance Sheets totaled $464 million and $303 million, respectively. Share Repurchase Program During the nine months ended June 28, 2019, our board of directors authorized an increase of $1.5 billion in our share repurchase program. Common shares repurchased under the share repurchase program were as follows: For the Nine Months Ended June 28, June 29, 2019 2018 (in millions) Number of common shares repurchased 10 6 Repurchase value $ 836 $ 612 At June 28, 2019, we had $1.7 billion of availability remaining under our share repurchase authorization. |
Share Plans
Share Plans | 9 Months Ended |
Jun. 28, 2019 | |
Share Plans | 15. Share Plans Share-based compensation expense, which was included primarily in selling, general, and administrative expenses on the Condensed Consolidated Statements of Operations, was as follows: For the For the Quarters Ended Nine Months Ended June 28, June 29, June 28, June 29, 2019 2018 2019 2018 (in millions) Share-based compensation expense $ 18 $ 20 $ 56 $ 71 As of June 28, 2019, there was $128 million of unrecognized compensation expense related to share-based awards, which is expected to be recognized over a weighted-average period of 1.9 years. During the quarter ended December 28, 2018, we granted the following share-based awards as part of our annual incentive plan grant: Grant-Date Shares Fair Value (in millions) Share options 1.6 $ 13.36 Restricted share awards 0.6 76.66 Performance share awards 0.2 76.66 As of June 28, 2019, we had 18 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 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 20 % Risk-free interest rate 3.0 % Expected annual dividend per share $ 1.76 Expected life of options (in years) 5.2 |
Segment and Geographic Data
Segment and Geographic Data | 9 Months Ended |
Jun. 28, 2019 | |
Segment and Geographic Data | 16. Segment and Geographic Data Net sales by segment (1) (2) For the For the Quarters Ended Nine Months Ended June 28, June 29, June 28, June 29, 2019 2018 2019 2018 (in millions) Transportation Solutions: Automotive $ 1,418 $ 1,541 $ 4,312 $ 4,629 Commercial transportation 317 335 938 968 Sensors 233 236 675 681 Total Transportation Solutions 1,968 2,112 5,925 6,278 Industrial Solutions: Industrial equipment 485 506 1,470 1,473 Aerospace, defense, oil, and gas 342 295 958 847 Energy 178 187 512 522 Total Industrial Solutions 1,005 988 2,940 2,842 Communications Solutions: Data and devices 245 278 753 774 Appliances 171 203 530 585 Total Communications Solutions 416 481 1,283 1,359 Total $ 3,389 $ 3,581 $ 10,148 $ 10,479 (1) Intersegment sales were not material and were recorded at selling prices that approximated market prices. (2) Industry end market information is presented consistently with our internal management reporting and may be revised periodically as management deems necessary. Net sales by geographic region (1) For the For the Quarters Ended Nine Months Ended June 28, June 29, June 28, June 29, 2019 2018 2019 2018 (in millions) Europe/Middle East/Africa (“EMEA”): Transportation Solutions $ 785 $ 879 $ 2,365 $ 2,621 Industrial Solutions 369 393 1,101 1,147 Communications Solutions 63 79 198 226 Total EMEA 1,217 1,351 3,664 3,994 Asia–Pacific: Transportation Solutions 705 750 2,143 2,311 Industrial Solutions 155 174 465 501 Communications Solutions 241 276 736 790 Total Asia–Pacific 1,101 1,200 3,344 3,602 Americas: Transportation Solutions 478 483 1,417 1,346 Industrial Solutions 481 421 1,374 1,194 Communications Solutions 112 126 349 343 Total Americas 1,071 1,030 3,140 2,883 Total $ 3,389 $ 3,581 $ 10,148 $ 10,479 (1) Net sales to external customers are attributed to individual countries based on the legal entity that records the sale. Operating income by segment was as follows: For the For the Quarters Ended Nine Months Ended June 28, June 29, June 28, June 29, 2019 2018 2019 2018 (in millions) Transportation Solutions $ 308 $ 393 $ 956 $ 1,237 Industrial Solutions 156 92 393 319 Communications Solutions 56 69 185 205 Total $ 520 $ 554 $ 1,534 $ 1,761 |
Tyco Electronics Group S.A.
Tyco Electronics Group S.A. | 9 Months Ended |
Jun. 28, 2019 | |
Tyco Electronics Group S.A. | 17. 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 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) For the Quarter Ended June 28, 2019 TE Connectivity Other Consolidating Ltd. TEGSA Subsidiaries Adjustments Total (in millions) Net sales $ — $ — $ 3,389 $ — $ 3,389 Cost of sales — — 2,279 — 2,279 Gross margin — — 1,110 — 1,110 Selling, general, and administrative expenses, net (1) 40 (77) 393 — 356 Research, development, and engineering expenses — — 158 — 158 Acquisition and integration costs — — 9 — 9 Restructuring and other charges, net — — 67 — 67 Operating income (loss) (40) 77 483 — 520 Interest income — — 4 — 4 Interest expense — (13) — — (13) Other income, net — — 2 — 2 Equity in net income of subsidiaries 830 831 — (1,661) — Equity in net loss of subsidiaries of discontinued operations (1) (1) — 2 — Intercompany interest income (expense), net (32) (65) 97 — — Income from continuing operations before income taxes 757 829 586 (1,659) 513 Income tax benefit — — 245 — 245 Income from continuing operations 757 829 831 (1,659) 758 Loss from discontinued operations, net of income taxes — — (1) — (1) Net income 757 829 830 (1,659) 757 Other comprehensive loss (41) (41) (20) 61 (41) Comprehensive income $ 716 $ 788 $ 810 $ (1,598) $ 716 (1) TEGSA selling, general, and administrative expenses include gains of $84 million related to intercompany transactions. These gains are offset by corresponding losses recorded by other subsidiaries. Condensed Consolidating Statement of Operations (unaudited) For the Quarter Ended June 29, 2018 TE Connectivity Other Consolidating Ltd. TEGSA Subsidiaries Adjustments Total (in millions) Net sales $ — $ — $ 3,581 $ — $ 3,581 Cost of sales — — 2,394 — 2,394 Gross margin — — 1,187 — 1,187 Selling, general, and administrative expenses, net 19 — 375 — 394 Research, development, and engineering expenses — — 171 — 171 Acquisition and integration costs — — 4 — 4 Restructuring and other charges, net — — 64 — 64 Operating income (loss) (19) — 573 — 554 Interest income — — 3 — 3 Interest expense — (24) (2) — (26) Other expense, net — — (1) — (1) Equity in net income of subsidiaries 490 498 — (988) — Equity in net income of subsidiaries of discontinued operations 1 1 — (2) — Intercompany interest income (expense), net (18) 16 2 — — Income from continuing operations before income taxes 454 491 575 (990) 530 Income tax expense — — (77) — (77) Income from continuing operations 454 491 498 (990) 453 Income from discontinued operations, net of income taxes — — 1 — 1 Net income 454 491 499 (990) 454 Other comprehensive loss (250) (250) (255) 505 (250) Comprehensive income $ 204 $ 241 $ 244 $ (485) $ 204 Condensed Consolidating Statement of Operations (unaudited) For the Nine Months Ended June 28, 2019 TE Connectivity Other Consolidating Ltd. TEGSA Subsidiaries Adjustments Total (in millions) Net sales $ — $ — $ 10,148 $ — $ 10,148 Cost of sales — — 6,806 — 6,806 Gross margin — — 3,342 — 3,342 Selling, general, and administrative expenses, net (1) 103 (175) 1,190 — 1,118 Research, development, and engineering expenses — — 485 — 485 Acquisition and integration costs — — 21 — 21 Restructuring and other charges, net — — 184 — 184 Operating income (loss) (103) 175 1,462 — 1,534 Interest income — 1 12 — 13 Interest expense — (54) (1) — (55) Other income, net — 1 1 — 2 Equity in net income of subsidiaries 1,760 1,780 — (3,540) — Equity in net loss of subsidiaries of discontinued operations (98) (47) — 145 — Intercompany interest income (expense), net (87) (143) 230 — — Income from continuing operations before income taxes 1,472 1,713 1,704 (3,395) 1,494 Income tax benefit — — 76 — 76 Income from continuing operations 1,472 1,713 1,780 (3,395) 1,570 Loss from discontinued operations, net of income taxes — (51) (47) — (98) Net income 1,472 1,662 1,733 (3,395) 1,472 Other comprehensive income 105 105 62 (167) 105 Comprehensive income $ 1,577 $ 1,767 $ 1,795 $ (3,562) $ 1,577 (1) TEGSA selling, general, and administrative expenses include gains of $194 million related to intercompany transactions. These gains are offset by corresponding losses recorded by other subsidiaries. Condensed Consolidating Statement of Operations (unaudited) For the Nine Months Ended June 29, 2018 TE Connectivity Other Consolidating Ltd. TEGSA Subsidiaries Adjustments Total (in millions) Net sales $ — $ — $ 10,479 $ — $ 10,479 Cost of sales — — 6,916 — 6,916 Gross margin — — 3,563 — 3,563 Selling, general, and administrative expenses, net 107 6 1,067 — 1,180 Research, development, and engineering expenses — — 509 — 509 Acquisition and integration costs — — 9 — 9 Restructuring and other charges, net — — 104 — 104 Operating income (loss) (107) (6) 1,874 — 1,761 Interest income — 1 10 — 11 Interest expense — (79) (1) — (80) Other income, net — — 2 — 2 Equity in net income of subsidiaries 1,065 1,075 — (2,140) — Equity in net loss of subsidiaries of discontinued operations (6) (6) — 12 — Intercompany interest income (expense), net (48) 74 (26) — — Income from continuing operations before income taxes 904 1,059 1,859 (2,128) 1,694 Income tax expense — — (784) — (784) Income from continuing operations 904 1,059 1,075 (2,128) 910 Loss from discontinued operations, net of income taxes — — (6) — (6) Net income 904 1,059 1,069 (2,128) 904 Other comprehensive loss (101) (101) (74) 175 (101) Comprehensive income $ 803 $ 958 $ 995 $ (1,953) $ 803 Condensed Consolidating Balance Sheet (unaudited) As of June 28, 2019 TE Connectivity Other Consolidating Ltd. TEGSA Subsidiaries Adjustments Total (in millions) Assets Current assets: Cash and cash equivalents $ — $ — $ 546 $ — $ 546 Accounts receivable, net — — 2,463 — 2,463 Inventories — — 1,961 — 1,961 Intercompany receivables 50 3,870 54 (3,974) — Prepaid expenses and other current assets 7 37 408 — 452 Total current assets 57 3,907 5,432 (3,974) 5,422 Property, plant, and equipment, net — — 3,636 — 3,636 Goodwill — — 5,800 — 5,800 Intangible assets, net — — 1,664 — 1,664 Deferred income taxes — — 2,845 — 2,845 Investment in subsidiaries 14,980 29,097 — (44,077) — Intercompany loans receivable 1 2,784 16,683 (19,468) — Other assets — 21 360 — 381 Total assets $ 15,038 $ 35,809 $ 36,420 $ (67,519) $ 19,748 Liabilities and shareholders' equity Current liabilities: Short-term debt $ — $ 600 $ 2 $ — $ 602 Accounts payable 2 — 1,436 — 1,438 Accrued and other current liabilities 491 46 1,117 — 1,654 Intercompany payables 3,923 — 51 (3,974) — Total current liabilities 4,416 646 2,606 (3,974) 3,694 Long-term debt — 3,433 1 — 3,434 Intercompany loans payable — 16,683 2,785 (19,468) — Long-term pension and postretirement liabilities — — 1,094 — 1,094 Deferred income taxes — — 203 — 203 Income taxes — — 240 — 240 Other liabilities — 67 394 — 461 Total liabilities 4,416 20,829 7,323 (23,442) 9,126 Total shareholders' equity 10,622 14,980 29,097 (44,077) 10,622 Total liabilities and shareholders' equity $ 15,038 $ 35,809 $ 36,420 $ (67,519) $ 19,748 Condensed Consolidating Balance Sheet (unaudited) As of September 28, 2018 TE Connectivity Other Consolidating Ltd. TEGSA Subsidiaries Adjustments Total (in millions) Assets Current assets: Cash and cash equivalents $ — $ — $ 848 $ — $ 848 Accounts receivable, net — — 2,361 — 2,361 Inventories — — 1,857 — 1,857 Intercompany receivables 37 2,391 48 (2,476) — Prepaid expenses and other current assets 5 112 544 — 661 Assets held for sale — — 472 — 472 Total current assets 42 2,503 6,130 (2,476) 6,199 Property, plant, and equipment, net — — 3,497 — 3,497 Goodwill — — 5,684 — 5,684 Intangible assets, net — — 1,704 — 1,704 Deferred income taxes — — 2,144 — 2,144 Investment in subsidiaries 13,626 26,613 — (40,239) — Intercompany loans receivable 2 6,535 17,887 (24,424) — Other assets — — 1,158 — 1,158 Total assets $ 13,670 $ 35,651 $ 38,204 $ (67,139) $ 20,386 Liabilities and shareholders' equity Current liabilities: Short-term debt $ — $ 961 $ 2 $ — $ 963 Accounts payable 2 — 1,546 — 1,548 Accrued and other current liabilities 400 36 1,275 — 1,711 Intercompany payables 2,437 — 39 (2,476) — Liabilities held for sale — — 188 — 188 Total current liabilities 2,839 997 3,050 (2,476) 4,410 Long-term debt — 3,033 4 — 3,037 Intercompany loans payable — 17,888 6,536 (24,424) — Long-term pension and postretirement liabilities — — 1,102 — 1,102 Deferred income taxes — — 207 — 207 Income taxes — — 312 — 312 Other liabilities — 107 380 — 487 Total liabilities 2,839 22,025 11,591 (26,900) 9,555 Total shareholders' equity 10,831 13,626 26,613 (40,239) 10,831 Total liabilities and shareholders' equity $ 13,670 $ 35,651 $ 38,204 $ (67,139) $ 20,386 Condensed Consolidating Statement of Cash Flows (unaudited) For the Nine Months Ended June 28, 2019 TE Connectivity Other Consolidating Ltd. TEGSA Subsidiaries Adjustments Total (in millions) Cash flows from operating activities: Net cash provided by (used in) continuing operating (1) $ (198) $ 4,172 $ 1,902 $ (4,301) $ 1,575 Net cash used in discontinued operating activities — — (31) — (31) Net cash provided by (used in) operating activities (198) 4,172 1,871 (4,301) 1,544 Cash flows from investing activities: Capital expenditures — — (570) — (570) Proceeds from sale of property, plant, and equipment — — 16 — 16 Acquisition of businesses, net of cash acquired — — (283) — (283) Proceeds from divestiture of discontinued operation, net of cash retained by sold operation — 312 (15) — 297 Change in intercompany loans — 1,045 — (1,045) — Other — — 3 — 3 Net cash provided by (used in) continuing investing activities — 1,357 (849) (1,045) (537) Net cash used in discontinued investing activities — — (2) — (2) Net cash provided by (used in) investing activities — 1,357 (851) (1,045) (539) Cash flows from financing activities: Changes in parent company equity (2) 57 (5,560) 5,503 — — Net decrease in commercial paper — (270) — — (270) Proceeds from issuance of debt — 746 — — 746 Repayment of debt — (441) — — (441) Proceeds from exercise of share options — — 55 — 55 Repurchase of common shares (892) — (21) — (913) Payment of common share dividends to shareholders (454) — — — (454) Intercompany distributions (1) — — (4,301) 4,301 — Loan activity with parent 1,487 — (2,532) 1,045 — Transfers to discontinued operations — — (33) — (33) Other — (4) (28) — (32) Net cash provided by (used in) continuing financing activities 198 (5,529) (1,357) 5,346 (1,342) Net cash provided by discontinued financing activities — — 33 — 33 Net cash provided by (used in) financing activities 198 (5,529) (1,324) 5,346 (1,309) Effect of currency translation on cash — — 2 — 2 Net decrease in cash, cash equivalents, and restricted cash — — (302) — (302) Cash, cash equivalents, and restricted cash at beginning of period — — 848 — 848 Cash, cash equivalents, and restricted cash at end of period $ — $ — $ 546 $ — $ 546 (1) During fiscal 2019, other subsidiaries made distributions to TEGSA in the amount of $4,301 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) For the Nine Months Ended June 29, 2018 TE Connectivity Other Consolidating Ltd. TEGSA Subsidiaries Adjustments Total (in millions) Cash flows from operating activities: Net cash provided by (used in) continuing operating (1) $ (152) $ (34) $ 1,580 $ (15) $ 1,379 Net cash provided by discontinued operating activities — — 148 — 148 Net cash provided by (used in) operating activities (152) (34) 1,728 (15) 1,527 Cash flows from investing activities: Capital expenditures — — (673) — (673) Proceeds from sale of property, plant, and equipment — — 19 — 19 Intercompany distribution receipts (1) — 61 — (61) — Change in intercompany loans — 261 — (261) — Other — — (8) — (8) Net cash provided by (used in) continuing investing activities — 322 (662) (322) (662) Net cash used in discontinued investing activities — — (13) — (13) Net cash provided by (used in) investing activities — 322 (675) (322) (675) Cash flows from financing activities: Changes in parent company equity (2) 83 30 (113) — — Net increase in commercial paper — 271 — — 271 Proceeds from issuance of debt — 119 — — 119 Repayment of debt — (708) — — (708) Proceeds from exercise of share options — — 96 — 96 Repurchase of common shares (218) — (393) — (611) Payment of common share dividends to shareholders (441) — 6 — (435) Intercompany distributions (1) — — (76) 76 — Loan activity with parent 728 — (989) 261 — Transfers from discontinued operations — — 135 — 135 Other — — (34) — (34) Net cash provided by (used in) continuing financing activities 152 (288) (1,368) 337 (1,167) Net cash used in discontinued financing activities — — (135) — (135) Net cash provided by (used in) financing activities 152 (288) (1,503) 337 (1,302) Effect of currency translation on cash — — 2 — 2 Net decrease in cash, cash equivalents, and restricted cash — — (448) — (448) Cash, cash equivalents, and restricted cash at beginning of period — — 1,218 — 1,218 Cash, cash equivalents, and restricted cash at end of period $ — $ — $ 770 $ — $ 770 (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 . |
Basis of Presentation and Acc_2
Basis of Presentation and Accounting Policies (Policies) | 9 Months Ended |
Jun. 28, 2019 | |
Basis of Presentation and Accounting Policies | |
Revenue Recognition | Revenue Recognition We account for revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers We generally warrant that our products will conform to our, or mutually agreed to, specifications and that our products will be free from material defects in materials and workmanship for a limited time. We limit our warranty to the replacement or repair of defective parts, or a refund or credit of the price of the defective product. We do not account for these warranties as separate performance obligations. Although products are generally sold at fixed prices, certain distributors and customers receive incentives or awards, such as sales rebates, return allowances, scrap allowances, and other rights, which are accounted for as variable consideration. We estimate these amounts in the same period revenue is recognized based on the expected value to be provided to customers and reduce revenue accordingly. Our estimates of variable consideration and ultimate determination of the estimated amounts to include in the transaction price are based primarily on our assessment of anticipated performance and historical and forecasted information that is reasonably available to us. |
Recently Issued and Adopted Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02 which codified ASC 842, Leases Recently Adopted Accounting Pronouncements In August 2017, the FASB issued ASU No. 2017-12, an update to ASC 815, Derivatives and Hedging. In October 2016, the FASB issued ASU No. 2016-16, an update to ASC 740, Income Taxes. In May 2014, the FASB issued ASU No. 2014-09 which codified ASC 606, Revenue from Contracts with Customers. Revenue Recognition, |
Restructuring and Other Charg_2
Restructuring and Other Charges, Net (Tables) | 9 Months Ended |
Jun. 28, 2019 | |
Restructuring and Other Charges, Net | |
Schedule of net restructuring and other charges | For the For the Quarters Ended Nine Months Ended June 28, June 29, June 28, June 29, 2019 2018 2019 2018 (in millions) Restructuring charges, net $ 67 $ 74 $ 184 $ 118 Other charges (credits), net — (10) — (14) Restructuring and other charges, net $ 67 $ 64 $ 184 $ 104 |
Net restructuring charges by segment | For the For the Quarters Ended Nine Months Ended June 28, June 29, June 28, June 29, 2019 2018 2019 2018 (in millions) Transportation Solutions $ 53 $ 18 $ 98 $ 23 Industrial Solutions 8 49 60 79 Communications Solutions 6 7 26 16 Restructuring charges, net $ 67 $ 74 $ 184 $ 118 |
Summary of activity in restructuring reserves | Balance at Balance at September 28, Changes in Cash Non-Cash Currency June 28, 2018 Charges Estimate Payments Items Translation 2019 (in millions) Fiscal 2019 Actions: Employee severance $ — $ 177 $ — $ (33) $ (2) $ 1 $ 143 Facility and other exit costs — 1 — (1) — — — Property, plant, and equipment — 1 — — (1) — — Total — 179 — (34) (3) 1 143 Fiscal 2018 Actions: Employee severance 114 2 — (45) — (2) 69 Facility and other exit costs 4 3 — (3) — — 4 Property, plant, and equipment — 2 (2) — — — — Total 118 7 (2) (48) — (2) 73 Pre-Fiscal 2018 Actions: Employee severance 49 7 (7) (20) — (2) 27 Facility and other exit costs — 2 — (2) — — — Property, plant, and equipment — 1 (3) — 2 — — Total 49 10 (10) (22) 2 (2) 27 Total Activity $ 167 $ 196 $ (12) $ (104) $ (1) $ (3) $ 243 |
Restructuring reserves included on Consolidated Balance Sheets | June 28, September 28, 2019 2018 (in millions) Accrued and other current liabilities $ 214 $ 141 Other liabilities 29 26 Restructuring reserves $ 243 $ 167 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Jun. 28, 2019 | |
Schedule of components of income (loss) from discontinued operations, net of income taxes and balance sheet information for assets and liabilities held for sale | For the For the Quarters Ended Nine Months Ended June 28, June 29, June 28, June 29, 2019 2018 2019 2018 (in millions) Net sales $ — $ 184 $ 41 $ 510 Cost of sales — (155) (50) (438) Selling, general, and administrative expenses (1) (13) (6) (36) Research, development, and engineering expenses — (10) (3) (30) Restructuring and other charges, net — (1) (3) (5) Pre-tax income (loss) from discontinued operations (1) 5 (21) 1 Pre-tax loss on sale of discontinued operations — (1) (86) (2) Income tax (expense) benefit — (3) 9 (5) Income (loss) from discontinued operations, net of income taxes $ (1) $ 1 $ (98) $ (6) The following table presents balance sheet information for assets and liabilities held for sale at September 28, 2018; there were no such balances at June 28, 2019: September 28, 2018 (in millions) Accounts receivable, net $ 72 Inventories 130 Other current assets 32 Property, plant, and equipment, net 221 Other assets 17 Total assets held for sale $ 472 Accounts payable $ 63 Accrued and other current liabilities 26 Deferred revenue 60 Other liabilities 39 Total liabilities held for sale $ 188 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Jun. 28, 2019 | |
Schedule of inventories | June 28, September 28, 2019 2018 (in millions) Raw materials $ 285 $ 276 Work in progress 785 656 Finished goods 891 925 Inventories $ 1,961 $ 1,857 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Jun. 28, 2019 | |
Changes in the carrying amount of goodwill by segment | Transportation Industrial Communications Solutions Solutions Solutions Total (in millions) September 28, 2018 (1) $ 1,993 $ 3,104 $ 587 $ 5,684 Acquisitions 162 (13) — 149 Currency translation (12) (18) (3) (33) June 28, 2019 (1) $ 2,143 $ 3,073 $ 584 $ 5,800 (1) At June 28, 2019 and September 28, 2018, accumulated impairment losses for the Transportation Solutions, Industrial Solutions, and Communications Solutions segments were $2,191 million, $669 million, and $489 million, respectively. |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 9 Months Ended |
Jun. 28, 2019 | |
Schedule of finite-lived intangible assets | June 28, 2019 September 28, 2018 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount (in millions) Customer relationships $ 1,536 $ (441) $ 1,095 $ 1,468 $ (389) $ 1,079 Intellectual property 1,268 (715) 553 1,261 (653) 608 Other 34 (18) 16 33 (16) 17 Total $ 2,838 $ (1,174) $ 1,664 $ 2,762 $ (1,058) $ 1,704 |
Schedule of finite-lived intangible assets, future amortization expense | At June 28, 2019, the aggregate amortization expense on intangible assets is expected to be as follows: (in millions) Remainder of fiscal 2019 $ 46 Fiscal 2020 181 Fiscal 2021 179 Fiscal 2022 178 Fiscal 2023 178 Fiscal 2024 147 Thereafter 755 Total $ 1,664 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Jun. 28, 2019 | |
Cash flow hedges | |
Schedule of impacts of hedging program | For the For the Quarters Ended Nine Months Ended June 28, June 29, June 28, June 29, 2019 2018 2019 2018 (in millions) Gains (losses) recorded in other comprehensive income (loss) $ 10 $ 7 $ 42 $ (25) Gains (losses) excluded from the hedging relationship (1) (16) 64 22 14 (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 Quarters Ended Nine Months Ended June 28, June 29, June 28, June 29, 2019 2018 2019 2018 (in millions) Foreign currency exchange gains (losses) on intercompany loans and external borrowings (1) $ (58) $ 153 $ 54 $ 8 Gains (losses) on cross-currency swap contracts designated as hedges of net investment (2) (20) — 17 — (1) Foreign currency exchange gains and losses on intercompany loans and external borrowings are recorded as currency translation, a component of accumulated other comprehensive income (loss), and are offset by changes attributable to the translation of the net investment. (2) Gains and losses on cross-currency swap contracts designated as hedges of net investment are recorded as currency translation . |
Retirement Plans (Tables)
Retirement Plans (Tables) | 9 Months Ended |
Jun. 28, 2019 | |
Defined benefit plans and other postretirement benefit plans | |
Net periodic pension benefit cost | Non-U.S. Plans U.S. Plans For the For the Quarters Ended Quarters Ended June 28, June 29, June 28, June 29, 2019 2018 2019 2018 (in millions) Service cost $ 12 $ 12 $ 4 $ 3 Interest cost 11 10 11 11 Expected return on plan assets (16) (18) (14) (15) Amortization of net actuarial loss 6 7 4 6 Amortization of prior service credit (2) (2) — — Net periodic pension benefit cost $ 11 $ 9 $ 5 $ 5 Non-U.S. Plans U.S. Plans For the For the Nine Months Ended Nine Months Ended June 28, June 29, June 28, June 29, 2019 2018 2019 2018 (in millions) Service cost $ 36 $ 35 $ 10 $ 10 Interest cost 32 31 34 33 Expected return on plan assets (48) (52) (43) (45) Amortization of net actuarial loss 18 18 13 17 Amortization of prior service credit (6) (5) — — Net periodic pension benefit cost $ 32 $ 27 $ 14 $ 15 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Jun. 28, 2019 | |
Earnings Per Share | |
Schedule of weighted-average shares outstanding, basic and diluted | For the For the Quarters Ended Nine Months Ended June 28, June 29, June 28, June 29, 2019 2018 2019 2018 (in millions) Basic 337 349 339 351 Dilutive impact of share-based compensation arrangements 2 3 2 3 Diluted 339 352 341 354 |
Schedule of antidilutive securities excluded from computation of earnings per share | For the For the Quarters Ended Nine Months Ended June 28, June 29, June 28, June 29, 2019 2018 2019 2018 (in millions) Antidilutive share options 1 — 1 — |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Jun. 28, 2019 | |
Schedule of cash dividends to shareholders | For the For the Quarters Ended Nine Months Ended June 28, June 29, June 28, June 29, 2019 2018 2019 2018 Dividends paid per common share $ 0.46 $ 0.44 $ 1.34 $ 1.24 |
Schedule of common shares repurchased | For the Nine Months Ended June 28, June 29, 2019 2018 (in millions) Number of common shares repurchased 10 6 Repurchase value $ 836 $ 612 |
Share Plans (Tables)
Share Plans (Tables) | 9 Months Ended |
Jun. 28, 2019 | |
Share-based compensation expense | For the For the Quarters Ended Nine Months Ended June 28, June 29, June 28, June 29, 2019 2018 2019 2018 (in millions) Share-based compensation expense $ 18 $ 20 $ 56 $ 71 |
Summary of share-based award activity | Grant-Date Shares Fair Value (in millions) Share options 1.6 $ 13.36 Restricted share awards 0.6 76.66 Performance share awards 0.2 76.66 |
Weighted-average assumptions | Expected share price volatility 20 % Risk-free interest rate 3.0 % Expected annual dividend per share $ 1.76 Expected life of options (in years) 5.2 |
Segment and Geographic Data (Ta
Segment and Geographic Data (Tables) | 9 Months Ended |
Jun. 28, 2019 | |
Schedule of net sales by segment | For the For the Quarters Ended Nine Months Ended June 28, June 29, June 28, June 29, 2019 2018 2019 2018 (in millions) Transportation Solutions: Automotive $ 1,418 $ 1,541 $ 4,312 $ 4,629 Commercial transportation 317 335 938 968 Sensors 233 236 675 681 Total Transportation Solutions 1,968 2,112 5,925 6,278 Industrial Solutions: Industrial equipment 485 506 1,470 1,473 Aerospace, defense, oil, and gas 342 295 958 847 Energy 178 187 512 522 Total Industrial Solutions 1,005 988 2,940 2,842 Communications Solutions: Data and devices 245 278 753 774 Appliances 171 203 530 585 Total Communications Solutions 416 481 1,283 1,359 Total $ 3,389 $ 3,581 $ 10,148 $ 10,479 (1) Intersegment sales were not material and were recorded at selling prices that approximated market prices. (2) Industry end market information is presented consistently with our internal management reporting and may be revised periodically as management deems necessary. |
Schedule of net sales by geographic region and segment | For the For the Quarters Ended Nine Months Ended June 28, June 29, June 28, June 29, 2019 2018 2019 2018 (in millions) Europe/Middle East/Africa (“EMEA”): Transportation Solutions $ 785 $ 879 $ 2,365 $ 2,621 Industrial Solutions 369 393 1,101 1,147 Communications Solutions 63 79 198 226 Total EMEA 1,217 1,351 3,664 3,994 Asia–Pacific: Transportation Solutions 705 750 2,143 2,311 Industrial Solutions 155 174 465 501 Communications Solutions 241 276 736 790 Total Asia–Pacific 1,101 1,200 3,344 3,602 Americas: Transportation Solutions 478 483 1,417 1,346 Industrial Solutions 481 421 1,374 1,194 Communications Solutions 112 126 349 343 Total Americas 1,071 1,030 3,140 2,883 Total $ 3,389 $ 3,581 $ 10,148 $ 10,479 (1) Net sales to external customers are attributed to individual countries based on the legal entity that records the sale. |
Schedule of operating income by segment | For the For the Quarters Ended Nine Months Ended June 28, June 29, June 28, June 29, 2019 2018 2019 2018 (in millions) Transportation Solutions $ 308 $ 393 $ 956 $ 1,237 Industrial Solutions 156 92 393 319 Communications Solutions 56 69 185 205 Total $ 520 $ 554 $ 1,534 $ 1,761 |
Tyco Electronics Group S.A. (Ta
Tyco Electronics Group S.A. (Tables) | 9 Months Ended |
Jun. 28, 2019 | |
Condensed Consolidating Statement of Operations | Condensed Consolidating Statement of Operations (unaudited) For the Quarter Ended June 28, 2019 TE Connectivity Other Consolidating Ltd. TEGSA Subsidiaries Adjustments Total (in millions) Net sales $ — $ — $ 3,389 $ — $ 3,389 Cost of sales — — 2,279 — 2,279 Gross margin — — 1,110 — 1,110 Selling, general, and administrative expenses, net (1) 40 (77) 393 — 356 Research, development, and engineering expenses — — 158 — 158 Acquisition and integration costs — — 9 — 9 Restructuring and other charges, net — — 67 — 67 Operating income (loss) (40) 77 483 — 520 Interest income — — 4 — 4 Interest expense — (13) — — (13) Other income, net — — 2 — 2 Equity in net income of subsidiaries 830 831 — (1,661) — Equity in net loss of subsidiaries of discontinued operations (1) (1) — 2 — Intercompany interest income (expense), net (32) (65) 97 — — Income from continuing operations before income taxes 757 829 586 (1,659) 513 Income tax benefit — — 245 — 245 Income from continuing operations 757 829 831 (1,659) 758 Loss from discontinued operations, net of income taxes — — (1) — (1) Net income 757 829 830 (1,659) 757 Other comprehensive loss (41) (41) (20) 61 (41) Comprehensive income $ 716 $ 788 $ 810 $ (1,598) $ 716 (1) TEGSA selling, general, and administrative expenses include gains of $84 million related to intercompany transactions. These gains are offset by corresponding losses recorded by other subsidiaries. Condensed Consolidating Statement of Operations (unaudited) For the Quarter Ended June 29, 2018 TE Connectivity Other Consolidating Ltd. TEGSA Subsidiaries Adjustments Total (in millions) Net sales $ — $ — $ 3,581 $ — $ 3,581 Cost of sales — — 2,394 — 2,394 Gross margin — — 1,187 — 1,187 Selling, general, and administrative expenses, net 19 — 375 — 394 Research, development, and engineering expenses — — 171 — 171 Acquisition and integration costs — — 4 — 4 Restructuring and other charges, net — — 64 — 64 Operating income (loss) (19) — 573 — 554 Interest income — — 3 — 3 Interest expense — (24) (2) — (26) Other expense, net — — (1) — (1) Equity in net income of subsidiaries 490 498 — (988) — Equity in net income of subsidiaries of discontinued operations 1 1 — (2) — Intercompany interest income (expense), net (18) 16 2 — — Income from continuing operations before income taxes 454 491 575 (990) 530 Income tax expense — — (77) — (77) Income from continuing operations 454 491 498 (990) 453 Income from discontinued operations, net of income taxes — — 1 — 1 Net income 454 491 499 (990) 454 Other comprehensive loss (250) (250) (255) 505 (250) Comprehensive income $ 204 $ 241 $ 244 $ (485) $ 204 Condensed Consolidating Statement of Operations (unaudited) For the Nine Months Ended June 28, 2019 TE Connectivity Other Consolidating Ltd. TEGSA Subsidiaries Adjustments Total (in millions) Net sales $ — $ — $ 10,148 $ — $ 10,148 Cost of sales — — 6,806 — 6,806 Gross margin — — 3,342 — 3,342 Selling, general, and administrative expenses, net (1) 103 (175) 1,190 — 1,118 Research, development, and engineering expenses — — 485 — 485 Acquisition and integration costs — — 21 — 21 Restructuring and other charges, net — — 184 — 184 Operating income (loss) (103) 175 1,462 — 1,534 Interest income — 1 12 — 13 Interest expense — (54) (1) — (55) Other income, net — 1 1 — 2 Equity in net income of subsidiaries 1,760 1,780 — (3,540) — Equity in net loss of subsidiaries of discontinued operations (98) (47) — 145 — Intercompany interest income (expense), net (87) (143) 230 — — Income from continuing operations before income taxes 1,472 1,713 1,704 (3,395) 1,494 Income tax benefit — — 76 — 76 Income from continuing operations 1,472 1,713 1,780 (3,395) 1,570 Loss from discontinued operations, net of income taxes — (51) (47) — (98) Net income 1,472 1,662 1,733 (3,395) 1,472 Other comprehensive income 105 105 62 (167) 105 Comprehensive income $ 1,577 $ 1,767 $ 1,795 $ (3,562) $ 1,577 (1) TEGSA selling, general, and administrative expenses include gains of $194 million related to intercompany transactions. These gains are offset by corresponding losses recorded by other subsidiaries. Condensed Consolidating Statement of Operations (unaudited) For the Nine Months Ended June 29, 2018 TE Connectivity Other Consolidating Ltd. TEGSA Subsidiaries Adjustments Total (in millions) Net sales $ — $ — $ 10,479 $ — $ 10,479 Cost of sales — — 6,916 — 6,916 Gross margin — — 3,563 — 3,563 Selling, general, and administrative expenses, net 107 6 1,067 — 1,180 Research, development, and engineering expenses — — 509 — 509 Acquisition and integration costs — — 9 — 9 Restructuring and other charges, net — — 104 — 104 Operating income (loss) (107) (6) 1,874 — 1,761 Interest income — 1 10 — 11 Interest expense — (79) (1) — (80) Other income, net — — 2 — 2 Equity in net income of subsidiaries 1,065 1,075 — (2,140) — Equity in net loss of subsidiaries of discontinued operations (6) (6) — 12 — Intercompany interest income (expense), net (48) 74 (26) — — Income from continuing operations before income taxes 904 1,059 1,859 (2,128) 1,694 Income tax expense — — (784) — (784) Income from continuing operations 904 1,059 1,075 (2,128) 910 Loss from discontinued operations, net of income taxes — — (6) — (6) Net income 904 1,059 1,069 (2,128) 904 Other comprehensive loss (101) (101) (74) 175 (101) Comprehensive income $ 803 $ 958 $ 995 $ (1,953) $ 803 |
Condensed Consolidating Balance Sheet | Condensed Consolidating Balance Sheet (unaudited) As of June 28, 2019 TE Connectivity Other Consolidating Ltd. TEGSA Subsidiaries Adjustments Total (in millions) Assets Current assets: Cash and cash equivalents $ — $ — $ 546 $ — $ 546 Accounts receivable, net — — 2,463 — 2,463 Inventories — — 1,961 — 1,961 Intercompany receivables 50 3,870 54 (3,974) — Prepaid expenses and other current assets 7 37 408 — 452 Total current assets 57 3,907 5,432 (3,974) 5,422 Property, plant, and equipment, net — — 3,636 — 3,636 Goodwill — — 5,800 — 5,800 Intangible assets, net — — 1,664 — 1,664 Deferred income taxes — — 2,845 — 2,845 Investment in subsidiaries 14,980 29,097 — (44,077) — Intercompany loans receivable 1 2,784 16,683 (19,468) — Other assets — 21 360 — 381 Total assets $ 15,038 $ 35,809 $ 36,420 $ (67,519) $ 19,748 Liabilities and shareholders' equity Current liabilities: Short-term debt $ — $ 600 $ 2 $ — $ 602 Accounts payable 2 — 1,436 — 1,438 Accrued and other current liabilities 491 46 1,117 — 1,654 Intercompany payables 3,923 — 51 (3,974) — Total current liabilities 4,416 646 2,606 (3,974) 3,694 Long-term debt — 3,433 1 — 3,434 Intercompany loans payable — 16,683 2,785 (19,468) — Long-term pension and postretirement liabilities — — 1,094 — 1,094 Deferred income taxes — — 203 — 203 Income taxes — — 240 — 240 Other liabilities — 67 394 — 461 Total liabilities 4,416 20,829 7,323 (23,442) 9,126 Total shareholders' equity 10,622 14,980 29,097 (44,077) 10,622 Total liabilities and shareholders' equity $ 15,038 $ 35,809 $ 36,420 $ (67,519) $ 19,748 Condensed Consolidating Balance Sheet (unaudited) As of September 28, 2018 TE Connectivity Other Consolidating Ltd. TEGSA Subsidiaries Adjustments Total (in millions) Assets Current assets: Cash and cash equivalents $ — $ — $ 848 $ — $ 848 Accounts receivable, net — — 2,361 — 2,361 Inventories — — 1,857 — 1,857 Intercompany receivables 37 2,391 48 (2,476) — Prepaid expenses and other current assets 5 112 544 — 661 Assets held for sale — — 472 — 472 Total current assets 42 2,503 6,130 (2,476) 6,199 Property, plant, and equipment, net — — 3,497 — 3,497 Goodwill — — 5,684 — 5,684 Intangible assets, net — — 1,704 — 1,704 Deferred income taxes — — 2,144 — 2,144 Investment in subsidiaries 13,626 26,613 — (40,239) — Intercompany loans receivable 2 6,535 17,887 (24,424) — Other assets — — 1,158 — 1,158 Total assets $ 13,670 $ 35,651 $ 38,204 $ (67,139) $ 20,386 Liabilities and shareholders' equity Current liabilities: Short-term debt $ — $ 961 $ 2 $ — $ 963 Accounts payable 2 — 1,546 — 1,548 Accrued and other current liabilities 400 36 1,275 — 1,711 Intercompany payables 2,437 — 39 (2,476) — Liabilities held for sale — — 188 — 188 Total current liabilities 2,839 997 3,050 (2,476) 4,410 Long-term debt — 3,033 4 — 3,037 Intercompany loans payable — 17,888 6,536 (24,424) — Long-term pension and postretirement liabilities — — 1,102 — 1,102 Deferred income taxes — — 207 — 207 Income taxes — — 312 — 312 Other liabilities — 107 380 — 487 Total liabilities 2,839 22,025 11,591 (26,900) 9,555 Total shareholders' equity 10,831 13,626 26,613 (40,239) 10,831 Total liabilities and shareholders' equity $ 13,670 $ 35,651 $ 38,204 $ (67,139) $ 20,386 |
Condensed Consolidating Statement of Cash Flows | Condensed Consolidating Statement of Cash Flows (unaudited) For the Nine Months Ended June 28, 2019 TE Connectivity Other Consolidating Ltd. TEGSA Subsidiaries Adjustments Total (in millions) Cash flows from operating activities: Net cash provided by (used in) continuing operating (1) $ (198) $ 4,172 $ 1,902 $ (4,301) $ 1,575 Net cash used in discontinued operating activities — — (31) — (31) Net cash provided by (used in) operating activities (198) 4,172 1,871 (4,301) 1,544 Cash flows from investing activities: Capital expenditures — — (570) — (570) Proceeds from sale of property, plant, and equipment — — 16 — 16 Acquisition of businesses, net of cash acquired — — (283) — (283) Proceeds from divestiture of discontinued operation, net of cash retained by sold operation — 312 (15) — 297 Change in intercompany loans — 1,045 — (1,045) — Other — — 3 — 3 Net cash provided by (used in) continuing investing activities — 1,357 (849) (1,045) (537) Net cash used in discontinued investing activities — — (2) — (2) Net cash provided by (used in) investing activities — 1,357 (851) (1,045) (539) Cash flows from financing activities: Changes in parent company equity (2) 57 (5,560) 5,503 — — Net decrease in commercial paper — (270) — — (270) Proceeds from issuance of debt — 746 — — 746 Repayment of debt — (441) — — (441) Proceeds from exercise of share options — — 55 — 55 Repurchase of common shares (892) — (21) — (913) Payment of common share dividends to shareholders (454) — — — (454) Intercompany distributions (1) — — (4,301) 4,301 — Loan activity with parent 1,487 — (2,532) 1,045 — Transfers to discontinued operations — — (33) — (33) Other — (4) (28) — (32) Net cash provided by (used in) continuing financing activities 198 (5,529) (1,357) 5,346 (1,342) Net cash provided by discontinued financing activities — — 33 — 33 Net cash provided by (used in) financing activities 198 (5,529) (1,324) 5,346 (1,309) Effect of currency translation on cash — — 2 — 2 Net decrease in cash, cash equivalents, and restricted cash — — (302) — (302) Cash, cash equivalents, and restricted cash at beginning of period — — 848 — 848 Cash, cash equivalents, and restricted cash at end of period $ — $ — $ 546 $ — $ 546 (1) During fiscal 2019, other subsidiaries made distributions to TEGSA in the amount of $4,301 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) For the Nine Months Ended June 29, 2018 TE Connectivity Other Consolidating Ltd. TEGSA Subsidiaries Adjustments Total (in millions) Cash flows from operating activities: Net cash provided by (used in) continuing operating (1) $ (152) $ (34) $ 1,580 $ (15) $ 1,379 Net cash provided by discontinued operating activities — — 148 — 148 Net cash provided by (used in) operating activities (152) (34) 1,728 (15) 1,527 Cash flows from investing activities: Capital expenditures — — (673) — (673) Proceeds from sale of property, plant, and equipment — — 19 — 19 Intercompany distribution receipts (1) — 61 — (61) — Change in intercompany loans — 261 — (261) — Other — — (8) — (8) Net cash provided by (used in) continuing investing activities — 322 (662) (322) (662) Net cash used in discontinued investing activities — — (13) — (13) Net cash provided by (used in) investing activities — 322 (675) (322) (675) Cash flows from financing activities: Changes in parent company equity (2) 83 30 (113) — — Net increase in commercial paper — 271 — — 271 Proceeds from issuance of debt — 119 — — 119 Repayment of debt — (708) — — (708) Proceeds from exercise of share options — — 96 — 96 Repurchase of common shares (218) — (393) — (611) Payment of common share dividends to shareholders (441) — 6 — (435) Intercompany distributions (1) — — (76) 76 — Loan activity with parent 728 — (989) 261 — Transfers from discontinued operations — — 135 — 135 Other — — (34) — (34) Net cash provided by (used in) continuing financing activities 152 (288) (1,368) 337 (1,167) Net cash used in discontinued financing activities — — (135) — (135) Net cash provided by (used in) financing activities 152 (288) (1,503) 337 (1,302) Effect of currency translation on cash — — 2 — 2 Net decrease in cash, cash equivalents, and restricted cash — — (448) — (448) Cash, cash equivalents, and restricted cash at beginning of period — — 1,218 — 1,218 Cash, cash equivalents, and restricted cash at end of period $ — $ — $ 770 $ — $ 770 (1) During fiscal 2018, other subsidiaries made distributions to TEGSA in the amount of $76 million. Cash flows are presented based upon the nature of the distributions. (2) Changes in parent company equity includes cash flows related to certain intercompany equity and funding transactions, and other intercompany activity . |
Basis of Presentation and Acc_3
Basis of Presentation and Accounting Policies (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Dec. 28, 2018 | Jun. 28, 2019 | Sep. 28, 2018 | |
Revenue Recognition | |||
Practical expedient with respect to financing components | true | ||
Optional exemption not to disclose aggregate amount of transaction prices associated with unsatisfied or partially satisfied performance obligations | true | ||
Recently Adopted Accounting Pronouncements | |||
Other assets | $ 381 | $ 1,158 | |
Prepaid expenses and other current assets | 452 | 661 | |
Deferred tax assets | 2,845 | $ 2,144 | |
ASU 2016-16 | |||
Recently Adopted Accounting Pronouncements | |||
Cumulative-effect adjustment | $ 443 | $ 443 | |
Other assets | (798) | ||
Prepaid expenses and other current assets | (63) | ||
Deferred tax assets | $ 418 |
Restructuring and Other Charg_3
Restructuring and Other Charges, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Restructuring and other charges, net | ||||
Restructuring charges, net | $ 67 | $ 74 | $ 184 | $ 118 |
Other charges (credits), net | (10) | (14) | ||
Restructuring and other charges, net | 67 | 64 | 184 | 104 |
Transportation Solutions | ||||
Restructuring and other charges, net | ||||
Restructuring charges, net | 53 | 18 | 98 | 23 |
Industrial Solutions | ||||
Restructuring and other charges, net | ||||
Restructuring charges, net | 8 | 49 | 60 | 79 |
Communications Solutions | ||||
Restructuring and other charges, net | ||||
Restructuring charges, net | $ 6 | $ 7 | $ 26 | $ 16 |
Restructuring and Other Charg_4
Restructuring and Other Charges, Net - Restructuring Reserve Activity (Details) $ in Millions | 9 Months Ended |
Jun. 28, 2019USD ($) | |
Restructuring reserve | |
Restructuring reserve at the beginning of the period | $ 167 |
Charges | 196 |
Changes in Estimate | (12) |
Cash Payments | (104) |
Non-Cash Items | (1) |
Currency Translation | (3) |
Restructuring reserve at the end of the period | 243 |
Fiscal 2019 Actions | |
Restructuring reserve | |
Charges | 179 |
Cash Payments | (34) |
Non-Cash Items | (3) |
Currency Translation | 1 |
Restructuring reserve at the end of the period | 143 |
Fiscal 2019 Actions | Employee severance | |
Restructuring reserve | |
Charges | 177 |
Cash Payments | (33) |
Non-Cash Items | (2) |
Currency Translation | 1 |
Restructuring reserve at the end of the period | 143 |
Fiscal 2019 Actions | Facility and other exit costs | |
Restructuring reserve | |
Charges | 1 |
Cash Payments | (1) |
Fiscal 2019 Actions | Property, plant, and equipment | |
Restructuring reserve | |
Charges | 1 |
Non-Cash Items | (1) |
Fiscal 2018 Actions | |
Restructuring reserve | |
Restructuring reserve at the beginning of the period | 118 |
Charges | 7 |
Changes in Estimate | (2) |
Cash Payments | (48) |
Currency Translation | (2) |
Restructuring reserve at the end of the period | 73 |
Fiscal 2018 Actions | Employee severance | |
Restructuring reserve | |
Restructuring reserve at the beginning of the period | 114 |
Charges | 2 |
Cash Payments | (45) |
Currency Translation | (2) |
Restructuring reserve at the end of the period | 69 |
Fiscal 2018 Actions | Facility and other exit costs | |
Restructuring reserve | |
Restructuring reserve at the beginning of the period | 4 |
Charges | 3 |
Cash Payments | (3) |
Restructuring reserve at the end of the period | 4 |
Fiscal 2018 Actions | Property, plant, and equipment | |
Restructuring reserve | |
Charges | 2 |
Changes in Estimate | (2) |
Pre-Fiscal 2018 Actions | |
Restructuring reserve | |
Restructuring reserve at the beginning of the period | 49 |
Charges | 10 |
Changes in Estimate | (10) |
Cash Payments | (22) |
Non-Cash Items | 2 |
Currency Translation | (2) |
Restructuring reserve at the end of the period | 27 |
Pre-Fiscal 2018 Actions | Employee severance | |
Restructuring reserve | |
Restructuring reserve at the beginning of the period | 49 |
Charges | 7 |
Changes in Estimate | (7) |
Cash Payments | (20) |
Currency Translation | (2) |
Restructuring reserve at the end of the period | 27 |
Pre-Fiscal 2018 Actions | Facility and other exit costs | |
Restructuring reserve | |
Charges | 2 |
Cash Payments | (2) |
Pre-Fiscal 2018 Actions | Property, plant, and equipment | |
Restructuring reserve | |
Charges | 1 |
Changes in Estimate | (3) |
Non-Cash Items | $ 2 |
Restructuring and Other Charg_5
Restructuring and Other Charges, Net - Actions (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Restructuring Charges | ||||
Charges Incurred | $ 67 | $ 74 | $ 184 | $ 118 |
Transportation Solutions | ||||
Restructuring Charges | ||||
Charges Incurred | 53 | 18 | 98 | 23 |
Industrial Solutions | ||||
Restructuring Charges | ||||
Charges Incurred | 8 | 49 | 60 | 79 |
Communications Solutions | ||||
Restructuring Charges | ||||
Charges Incurred | 6 | $ 7 | 26 | 16 |
Fiscal 2019 Actions | ||||
Restructuring Charges | ||||
Charges Incurred | 179 | |||
Remaining Expected Charges | $ 25 | 25 | ||
Fiscal 2018 Actions | ||||
Restructuring Charges | ||||
Charges Incurred | $ 5 | 109 | ||
Pre-Fiscal 2018 Actions | ||||
Restructuring Charges | ||||
Charges Incurred | $ 9 |
Restructuring and Other Charg_6
Restructuring and Other Charges, Net - Restructuring Reserve Balances (Details) - USD ($) $ in Millions | Jun. 28, 2019 | Sep. 28, 2018 |
Restructuring reserves included on the Condensed Consolidated Balance Sheets | ||
Accrued and other current liabilities | $ 214 | $ 141 |
Other liabilities | 29 | 26 |
Restructuring reserves | $ 243 | $ 167 |
Discontinued Operations - Subse
Discontinued Operations - Subsea (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Discontinued Operations | |||
Net cash proceeds | $ 297 | ||
Pre-tax loss on sale | $ (1) | (86) | $ (2) |
Discontinued Operations, Disposed of by Sale | Subsea Communications | |||
Discontinued Operations | |||
Net cash proceeds | 297 | ||
Pre-tax loss on sale | (86) | ||
Cumulative translation adjustment losses | 67 | ||
Existing guarantees value | $ 1,700 | ||
Maximum remaining term for majority of existing guarantees | 2 years | ||
Fair value of existing guarantees | $ 12 | ||
New performance guarantees outstanding | 0 | ||
Discontinued Operations, Disposed of by Sale | Subsea Communications | Maximum | |||
Discontinued Operations | |||
New performance guarantees issuable amount | $ 300 | ||
Period for issuance of new performance guarantees | 3 years |
Discontinued Operations - Summa
Discontinued Operations - Summary Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | Sep. 28, 2018 | |
Income (loss) from discontinued operations, net of income taxes | |||||
Net sales | $ 184 | $ 41 | $ 510 | ||
Cost of sales | (155) | (50) | (438) | ||
Selling, general, and administrative expenses | $ (1) | (13) | (6) | (36) | |
Research, development, and engineering expenses | (10) | (3) | (30) | ||
Restructuring and other charges, net | (1) | (3) | (5) | ||
Pre-tax income (loss) from discontinued operations | (1) | 5 | (21) | 1 | |
Pre-tax loss on sale of discontinued operations | (1) | (86) | (2) | ||
Income tax (expense) benefit | (3) | 9 | (5) | ||
Income (loss) from discontinued operations, net of income taxes | $ (1) | $ 1 | $ (98) | $ (6) | |
Balance sheet information for assets and liabilities held for sale | |||||
Accounts receivable, net | $ 72 | ||||
Inventories | 130 | ||||
Other current assets | 32 | ||||
Property, plant, and equipment, net | 221 | ||||
Other assets | 17 | ||||
Total assets held for sale | 472 | ||||
Accounts payable | 63 | ||||
Accrued and other current liabilities | 26 | ||||
Deferred revenue | 60 | ||||
Other liabilities | 39 | ||||
Total liabilities held for sale | $ 188 |
Acquisitions (Details)
Acquisitions (Details) $ in Millions | 9 Months Ended |
Jun. 28, 2019USD ($)item | |
Acquisitions | |
Net cash paid | $ 283 |
Number of businesses acquired | item | 3 |
2019 Acquisitions | |
Acquisitions | |
Net cash paid | $ 296 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Jun. 28, 2019 | Sep. 28, 2018 |
Inventories | ||
Raw materials | $ 285 | $ 276 |
Work in progress | 785 | 656 |
Finished goods | 891 | 925 |
Inventories | $ 1,961 | $ 1,857 |
Goodwill (Details)
Goodwill (Details) $ in Millions | 9 Months Ended | |
Jun. 28, 2019USD ($)item | Sep. 28, 2018USD ($) | |
Goodwill: | ||
Goodwill, beginning balance | $ 5,684 | |
Acquisitions | 149 | |
Currency translation | (33) | |
Goodwill, ending balance | $ 5,800 | |
Number of Businesses Acquired | item | 3 | |
Transportation Solutions | ||
Goodwill: | ||
Goodwill, beginning balance | $ 1,993 | |
Acquisitions | 162 | |
Currency translation | (12) | |
Goodwill, ending balance | 2,143 | |
Accumulated impairment losses | 2,191 | $ 2,191 |
Industrial Solutions | ||
Goodwill: | ||
Goodwill, beginning balance | 3,104 | |
Acquisitions | (13) | |
Currency translation | (18) | |
Goodwill, ending balance | 3,073 | |
Accumulated impairment losses | 669 | 669 |
Communications Solutions | ||
Goodwill: | ||
Goodwill, beginning balance | 587 | |
Currency translation | (3) | |
Goodwill, ending balance | 584 | |
Accumulated impairment losses | $ 489 | $ 489 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | Sep. 28, 2018 | |
Finite-Lived Intangible Assets | |||||
Gross Carrying Amount | $ 2,838 | $ 2,838 | $ 2,762 | ||
Accumulated Amortization | (1,174) | (1,174) | (1,058) | ||
Net Carrying Amount | 1,664 | 1,664 | 1,704 | ||
Finite-lived intangible assets, amortization expense | 45 | $ 45 | 135 | $ 135 | |
Aggregate amortization expense on intangible assets | |||||
Remainder of fiscal 2019 | 46 | 46 | |||
Fiscal 2020 | 181 | 181 | |||
Fiscal 2021 | 179 | 179 | |||
Fiscal 2022 | 178 | 178 | |||
Fiscal 2023 | 178 | 178 | |||
Fiscal 2024 | 147 | 147 | |||
Thereafter | 755 | 755 | |||
Customer relationships | |||||
Finite-Lived Intangible Assets | |||||
Gross Carrying Amount | 1,536 | 1,536 | 1,468 | ||
Accumulated Amortization | (441) | (441) | (389) | ||
Net Carrying Amount | 1,095 | 1,095 | 1,079 | ||
Intellectual property | |||||
Finite-Lived Intangible Assets | |||||
Gross Carrying Amount | 1,268 | 1,268 | 1,261 | ||
Accumulated Amortization | (715) | (715) | (653) | ||
Net Carrying Amount | 553 | 553 | 608 | ||
Other | |||||
Finite-Lived Intangible Assets | |||||
Gross Carrying Amount | 34 | 34 | 33 | ||
Accumulated Amortization | (18) | (18) | (16) | ||
Net Carrying Amount | $ 16 | $ 16 | $ 17 |
Debt (Details)
Debt (Details) € in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 28, 2019USD ($) | Jun. 28, 2019USD ($) | Jun. 29, 2018USD ($) | Jun. 28, 2019EUR (€) | Sep. 28, 2018USD ($) | |
Debt | |||||
Ownership percentage in TEGSA | 100.00% | 100.00% | 100.00% | ||
Repayments of debt | $ 441 | $ 708 | |||
Fair value of debt | $ 4,295 | $ 4,295 | $ 4,149 | ||
Fixed-to-floating rate senior notes due 2021 | |||||
Debt | |||||
Debt instrument principal amount | € | € 350 | ||||
Debt instrument redemption price (as a percent) | 100.00% | ||||
Fixed-to-floating rate senior notes due 2021 | Fixed-to-Floating Debt Instrument, Fixed Period | |||||
Debt | |||||
Debt instrument, interest rate (as a percent) | 0.00% | 0.00% | 0.00% | ||
Fixed-to-floating rate senior notes due 2021 | Fixed-to-Floating Debt Instrument, Floating Period | Three-month Euro Interbank Offered Rate ("EURIBOR") | |||||
Debt | |||||
Debt instrument description of variable rate basis | three-month Euro Interbank Offered Rate | ||||
Debt instrument basis spread on variable rate (as a percent) | 0.30% | ||||
Senior floating rate notes due June 2020 | |||||
Debt | |||||
Debt instrument principal amount | $ 350 | $ 350 | |||
Senior floating rate notes due June 2020 | LIBOR | |||||
Debt | |||||
Debt instrument description of variable rate basis | three-month London Interbank Offered Rate | ||||
Debt instrument basis spread on variable rate (as a percent) | 0.45% | ||||
2.375% senior notes due 2018 | |||||
Debt | |||||
Repayments of debt | $ 325 | ||||
Debt instrument, interest rate (as a percent) | 2.375% | 2.375% | 2.375% | ||
Five-Year Credit Facility | |||||
Debt | |||||
Revolving credit facility term | 5 years | ||||
Maximum borrowing capacity | $ 1,500 | $ 1,500 | |||
Incremental borrowing capacity | 500 | 500 | |||
Borrowings under the Credit Facility | 0 | 0 | 0 | ||
Commercial paper | |||||
Debt | |||||
Total principal debt | $ 0 | $ 0 | $ 270 | ||
Weighted-average interest rate (as a percent) | 2.35% |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Jun. 28, 2019USD ($) |
Loss Contingencies | |
Accrual environmental loss contingency, estimate of probable loss | $ 18 |
Minimum | |
Loss Contingencies | |
Accrual environmental loss contingency, estimate of probable loss | 15 |
Maximum | |
Loss Contingencies | |
Accrual environmental loss contingency, estimate of probable loss | 44 |
Outstanding Letters of Credit, Letters of Guarantee, and Surety Bonds | |
Guarantees and Product Warranties | |
Guarantor obligations, maximum exposure | $ 316 |
Financial Instruments (Details)
Financial Instruments (Details) € in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 28, 2019USD ($) | Jun. 29, 2018USD ($) | Jun. 28, 2019USD ($) | Jun. 29, 2018USD ($) | Sep. 28, 2018USD ($) | Sep. 25, 2015EUR (€) | |
Cash flow hedges | Cross-currency swap contracts | ||||||
Financial Instruments | ||||||
Notional amount | € | € 1,000 | |||||
Interest paid in foreign currency, fixed interest rate | 3.50% | |||||
Interest received in U.S. dollars, weighted-average fixed interest rate | 5.33% | |||||
Fair Value of Liability Positions | $ 36 | $ 36 | $ 100 | |||
Gains (losses) recorded in other comprehensive income (loss) | 10 | $ 7 | 42 | $ (25) | ||
Gains (losses) excluded from the hedging relationship | (16) | 64 | 22 | 14 | ||
Net investment hedges | Intercompany loans and external borrowings | ||||||
Financial Instruments | ||||||
Notional amount of non-derivative instruments | 3,202 | $ 4,064 | ||||
Foreign currency exchange gains (losses) | (58) | $ 153 | 54 | $ 8 | ||
Net investment hedges | Cross-currency swap contracts | ||||||
Financial Instruments | ||||||
Notional amount | $ 1,901 | $ 1,901 | ||||
Interest paid in foreign currency, fixed interest rate | 0.00% | 0.00% | ||||
Interest received in U.S. dollars, weighted-average fixed interest rate | 2.96% | 2.96% | ||||
Foreign currency exchange gains (losses) | $ (20) | $ 17 |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Non-U.S. Plans | ||||
Defined Benefit Plan, Net Periodic Pension Benefit Cost | ||||
Service cost | $ 12 | $ 12 | $ 36 | $ 35 |
Interest cost | 11 | 10 | 32 | 31 |
Expected return on plan assets | (16) | (18) | (48) | (52) |
Amortization of net actuarial loss | 6 | 7 | 18 | 18 |
Amortization of prior service credit | (2) | (2) | (6) | (5) |
Net periodic pension benefit cost | 11 | 9 | 32 | 27 |
Defined Benefit Plan Contributions | ||||
Defined benefit plan, contributions by employer | 29 | |||
U.S. Plans | ||||
Defined Benefit Plan, Net Periodic Pension Benefit Cost | ||||
Service cost | 4 | 3 | 10 | 10 |
Interest cost | 11 | 11 | 34 | 33 |
Expected return on plan assets | (14) | (15) | (43) | (45) |
Amortization of net actuarial loss | 4 | 6 | 13 | 17 |
Net periodic pension benefit cost | $ 5 | $ 5 | $ 14 | $ 15 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Jun. 28, 2019 | Jun. 29, 2018 | Dec. 29, 2017 | Jun. 28, 2019 | Jun. 29, 2018 | Sep. 28, 2018 | |
Income tax expense (benefit) | $ (245) | $ 77 | $ (76) | $ 784 | ||
Income tax benefit related to tax impacts of Swiss Tax Reform | (214) | (214) | ||||
Income tax benefit related to a tax settlement in a non-U.S. jurisdictions | (93) | (93) | ||||
Income tax expense associated with certain legal entity restructurings and intercompany transactions | 15 | |||||
Income tax expense related to tax impacts of the Tax Cuts and Jobs Act | $ 567 | 567 | ||||
Net income tax benefit related to certain legal entity restructurings | 61 | |||||
Income tax benefit resulting from lapses of statutes of limitations | $ 17 | $ 34 | ||||
U.S. federal corporate income tax rate | 21.00% | |||||
Income tax benefit related to the reduction in the valuation allowance recorded against certain U.S. federal tax credit carryforwards | $ 34 | |||||
Accrued interest and penalties related to uncertain tax positions | 40 | 40 | $ 60 | |||
Income tax benefit related to interest and penalties | 17 | |||||
Unrecognized income tax benefits, approximate amount that could be resolved in next twelve months | $ 100 | 100 | ||||
Expected income tax expense related to cantonal enactment of Swiss Tax Reform | $ 300 | |||||
Liabilities sharing percent, entity | 31.00% | |||||
Liabilities sharing percent, Tyco International | 27.00% | |||||
Liabilities sharing percent, Covidien | 42.00% |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Earnings Per Share | ||||
Basic (in shares) | 337 | 349 | 339 | 351 |
Dilutive impact of share-based compensation arrangements (in shares) | 2 | 3 | 2 | 3 |
Diluted (in shares) | 339 | 352 | 341 | 354 |
Share options | ||||
Antidilutive shares excluded from computation of earnings per share | ||||
Antidilutive share options | 1 | 1 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) $ / shares in Units, shares in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
May 31, 2019shares | Mar. 29, 2019installment$ / shares | Jun. 28, 2019USD ($)$ / shares | Jun. 29, 2018USD ($)$ / shares | Jun. 28, 2019USD ($)$ / sharesshares | Jun. 29, 2018USD ($)$ / sharesshares | Mar. 27, 2020$ / shares | Dec. 27, 2019$ / shares | Sep. 27, 2019$ / shares | Sep. 28, 2018USD ($) | |
Cash dividend paid (in dollars per share) | $ / shares | $ 0.46 | $ 0.44 | $ 1.34 | $ 1.24 | ||||||
Cancellation of treasury shares (in shares) | shares | 6 | |||||||||
Dividend or cash distribution approved (in currency per share) | $ / shares | $ 1.84 | |||||||||
Number of quarterly dividend installments | installment | 4 | |||||||||
Cash distribution quarterly installment payable (in dollars per share) | $ / shares | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | |||||
Unpaid portion of the dividend payment recorded in accrued and other current liabilities | $ 464 | $ 464 | $ 303 | |||||||
Share repurchase program, increase in authorized amount | $ 1,500 | |||||||||
Number of common shares repurchased | shares | 10 | 6 | ||||||||
Repurchase value | 152 | $ 229 | $ 836 | $ 612 | ||||||
Amount available for repurchase, at end of period | $ 1,700 | $ 1,700 |
Share Plans (Details)
Share Plans (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 28, 2019 | Dec. 28, 2018 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Share Based Compensation Arrangements: | |||||
Share-based compensation expense | $ 18 | $ 20 | $ 56 | $ 71 | |
Shares available for issuance | 18 | 18 | |||
Share Based Compensation Expenses Not Recognized | |||||
Share-based compensation, share-based awards, total compensation expense not yet recognized | $ 128 | $ 128 | |||
Share-based compensation, share-based awards, total compensation expense not yet recognized, expected period for recognition | 1 year 10 months 24 days | ||||
Share options | |||||
Share Based Compensation Arrangements: | |||||
Share options granted | 1.6 | ||||
Options granted, grant-date fair value (in dollars per share) | $ 13.36 | ||||
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) | 3.00% | ||||
Expected annual dividend per share | $ 1.76 | ||||
Expected life of options (in years) | 5 years 2 months 12 days | ||||
Restricted share awards | |||||
Share Based Compensation Arrangements: | |||||
Shares granted | 0.6 | ||||
Shares granted, grant-date fair value (in dollars per share) | $ 76.66 | ||||
Performance share awards | |||||
Share Based Compensation Arrangements: | |||||
Shares granted | 0.2 | ||||
Shares granted, grant-date fair value (in dollars per share) | $ 76.66 |
Segment and Geographic Data - N
Segment and Geographic Data - Net Sales by Segment and Industry End Market (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Segment and Geographic Data | ||||
Net sales | $ 3,389 | $ 3,581 | $ 10,148 | $ 10,479 |
Transportation Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 1,968 | 2,112 | 5,925 | 6,278 |
Transportation Solutions | Automotive | ||||
Segment and Geographic Data | ||||
Net sales | 1,418 | 1,541 | 4,312 | 4,629 |
Transportation Solutions | Commercial transportation | ||||
Segment and Geographic Data | ||||
Net sales | 317 | 335 | 938 | 968 |
Transportation Solutions | Sensors | ||||
Segment and Geographic Data | ||||
Net sales | 233 | 236 | 675 | 681 |
Industrial Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 1,005 | 988 | 2,940 | 2,842 |
Industrial Solutions | Industrial equipment | ||||
Segment and Geographic Data | ||||
Net sales | 485 | 506 | 1,470 | 1,473 |
Industrial Solutions | Aerospace, defense, oil, and gas | ||||
Segment and Geographic Data | ||||
Net sales | 342 | 295 | 958 | 847 |
Industrial Solutions | Energy | ||||
Segment and Geographic Data | ||||
Net sales | 178 | 187 | 512 | 522 |
Communications Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 416 | 481 | 1,283 | 1,359 |
Communications Solutions | Data and devices | ||||
Segment and Geographic Data | ||||
Net sales | 245 | 278 | 753 | 774 |
Communications Solutions | Appliances | ||||
Segment and Geographic Data | ||||
Net sales | $ 171 | $ 203 | $ 530 | $ 585 |
Segment and Geographic Data -_2
Segment and Geographic Data - Net Sales by Geographic Region and Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Segment and Geographic Data | ||||
Net sales | $ 3,389 | $ 3,581 | $ 10,148 | $ 10,479 |
Transportation Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 1,968 | 2,112 | 5,925 | 6,278 |
Industrial Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 1,005 | 988 | 2,940 | 2,842 |
Communications Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 416 | 481 | 1,283 | 1,359 |
Total Europe/Middle East/Africa | ||||
Segment and Geographic Data | ||||
Net sales | 1,217 | 1,351 | 3,664 | 3,994 |
Total Europe/Middle East/Africa | Transportation Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 785 | 879 | 2,365 | 2,621 |
Total Europe/Middle East/Africa | Industrial Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 369 | 393 | 1,101 | 1,147 |
Total Europe/Middle East/Africa | Communications Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 63 | 79 | 198 | 226 |
Total Asia-Pacific | ||||
Segment and Geographic Data | ||||
Net sales | 1,101 | 1,200 | 3,344 | 3,602 |
Total Asia-Pacific | Transportation Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 705 | 750 | 2,143 | 2,311 |
Total Asia-Pacific | Industrial Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 155 | 174 | 465 | 501 |
Total Asia-Pacific | Communications Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 241 | 276 | 736 | 790 |
Total Americas | ||||
Segment and Geographic Data | ||||
Net sales | 1,071 | 1,030 | 3,140 | 2,883 |
Total Americas | Transportation Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 478 | 483 | 1,417 | 1,346 |
Total Americas | Industrial Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 481 | 421 | 1,374 | 1,194 |
Total Americas | Communications Solutions | ||||
Segment and Geographic Data | ||||
Net sales | $ 112 | $ 126 | $ 349 | $ 343 |
Segment and Geographic Data - O
Segment and Geographic Data - Operating Income by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Segment and Geographic Data | ||||
Operating income | $ 520 | $ 554 | $ 1,534 | $ 1,761 |
Transportation Solutions | ||||
Segment and Geographic Data | ||||
Operating income | 308 | 393 | 956 | 1,237 |
Industrial Solutions | ||||
Segment and Geographic Data | ||||
Operating income | 156 | 92 | 393 | 319 |
Communications Solutions | ||||
Segment and Geographic Data | ||||
Operating income | $ 56 | $ 69 | $ 185 | $ 205 |
Tyco Electronics Group S.A. - N
Tyco Electronics Group S.A. - Narrative (Details) | Jun. 28, 2019 |
Tyco Electronics Group S.A. | |
Ownership percentage in TEGSA | 100.00% |
Tyco Electronics Group S.A. - O
Tyco Electronics Group S.A. - Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Statement of Operations Detail: | ||||
Net sales | $ 3,389 | $ 3,581 | $ 10,148 | $ 10,479 |
Cost of sales | 2,279 | 2,394 | 6,806 | 6,916 |
Gross margin | 1,110 | 1,187 | 3,342 | 3,563 |
Selling, general, and administrative expenses, net | 356 | 394 | 1,118 | 1,180 |
Research, development, and engineering expenses | 158 | 171 | 485 | 509 |
Acquisition and integration costs | 9 | 4 | 21 | 9 |
Restructuring and other charges, net | 67 | 64 | 184 | 104 |
Operating income | 520 | 554 | 1,534 | 1,761 |
Interest income | 4 | 3 | 13 | 11 |
Interest expense | (13) | (26) | (55) | (80) |
Other income (expense), net | 2 | (1) | 2 | 2 |
Income from continuing operations before income taxes | 513 | 530 | 1,494 | 1,694 |
Income tax (expense) benefit | 245 | (77) | 76 | (784) |
Income from continuing operations | 758 | 453 | 1,570 | 910 |
Income (loss) from discontinued operations, net of income taxes | (1) | 1 | (98) | (6) |
Net income | 757 | 454 | 1,472 | 904 |
Other comprehensive income (loss) | (41) | (250) | 105 | (101) |
Comprehensive income | 716 | 204 | 1,577 | 803 |
Consolidating Adjustments | ||||
Statement of Operations Detail: | ||||
Equity in net income of subsidiaries | (1,661) | (988) | (3,540) | (2,140) |
Equity in net income (loss) of subsidiaries of discontinued operations | 2 | (2) | 145 | 12 |
Income from continuing operations before income taxes | (1,659) | (990) | (3,395) | (2,128) |
Income from continuing operations | (1,659) | (990) | (3,395) | (2,128) |
Net income | (1,659) | (990) | (3,395) | (2,128) |
Other comprehensive income (loss) | 61 | 505 | (167) | 175 |
Comprehensive income | (1,598) | (485) | (3,562) | (1,953) |
TE Connectivity Ltd. | Reportable entities | ||||
Statement of Operations Detail: | ||||
Selling, general, and administrative expenses, net | 40 | 19 | 103 | 107 |
Operating income | (40) | (19) | (103) | (107) |
Equity in net income of subsidiaries | 830 | 490 | 1,760 | 1,065 |
Equity in net income (loss) of subsidiaries of discontinued operations | (1) | 1 | (98) | (6) |
Intercompany interest income (expense), net | (32) | (18) | (87) | (48) |
Income from continuing operations before income taxes | 757 | 454 | 1,472 | 904 |
Income from continuing operations | 757 | 454 | 1,472 | 904 |
Net income | 757 | 454 | 1,472 | 904 |
Other comprehensive income (loss) | (41) | (250) | 105 | (101) |
Comprehensive income | 716 | 204 | 1,577 | 803 |
TEGSA | Reportable entities | ||||
Statement of Operations Detail: | ||||
Selling, general, and administrative expenses, net | (77) | (175) | 6 | |
Operating income | 77 | 175 | (6) | |
Interest income | 1 | 1 | ||
Interest expense | (13) | (24) | (54) | (79) |
Other income (expense), net | 1 | |||
Equity in net income of subsidiaries | 831 | 498 | 1,780 | 1,075 |
Equity in net income (loss) of subsidiaries of discontinued operations | (1) | 1 | (47) | (6) |
Intercompany interest income (expense), net | (65) | 16 | (143) | 74 |
Income from continuing operations before income taxes | 829 | 491 | 1,713 | 1,059 |
Income from continuing operations | 829 | 491 | 1,713 | 1,059 |
Income (loss) from discontinued operations, net of income taxes | (51) | |||
Net income | 829 | 491 | 1,662 | 1,059 |
Other comprehensive income (loss) | (41) | (250) | 105 | (101) |
Comprehensive income | 788 | 241 | 1,767 | 958 |
Intercompany transaction gains | 84 | 194 | ||
Non-Guarantor Subsidiaries | Reportable entities | ||||
Statement of Operations Detail: | ||||
Net sales | 3,389 | 3,581 | 10,148 | 10,479 |
Cost of sales | 2,279 | 2,394 | 6,806 | 6,916 |
Gross margin | 1,110 | 1,187 | 3,342 | 3,563 |
Selling, general, and administrative expenses, net | 393 | 375 | 1,190 | 1,067 |
Research, development, and engineering expenses | 158 | 171 | 485 | 509 |
Acquisition and integration costs | 9 | 4 | 21 | 9 |
Restructuring and other charges, net | 67 | 64 | 184 | 104 |
Operating income | 483 | 573 | 1,462 | 1,874 |
Interest income | 4 | 3 | 12 | 10 |
Interest expense | (2) | (1) | (1) | |
Other income (expense), net | 2 | (1) | 1 | 2 |
Intercompany interest income (expense), net | 97 | 2 | 230 | (26) |
Income from continuing operations before income taxes | 586 | 575 | 1,704 | 1,859 |
Income tax (expense) benefit | 245 | (77) | 76 | (784) |
Income from continuing operations | 831 | 498 | 1,780 | 1,075 |
Income (loss) from discontinued operations, net of income taxes | (1) | 1 | (47) | (6) |
Net income | 830 | 499 | 1,733 | 1,069 |
Other comprehensive income (loss) | (20) | (255) | 62 | (74) |
Comprehensive income | $ 810 | $ 244 | $ 1,795 | $ 995 |
Tyco Electronics Group S.A. - B
Tyco Electronics Group S.A. - Balance Sheet (Details) - USD ($) $ in Millions | Jun. 28, 2019 | Mar. 29, 2019 | Sep. 28, 2018 | Jun. 29, 2018 | Mar. 30, 2018 | Sep. 29, 2017 |
Current assets: | ||||||
Cash and cash equivalents | $ 546 | $ 848 | ||||
Accounts receivable, net | 2,463 | 2,361 | ||||
Inventories | 1,961 | 1,857 | ||||
Prepaid expenses and other current assets | 452 | 661 | ||||
Assets held for sale | 472 | |||||
Total current assets | 5,422 | 6,199 | ||||
Property, plant, and equipment, net | 3,636 | 3,497 | ||||
Goodwill | 5,800 | 5,684 | ||||
Intangible assets, net | 1,664 | 1,704 | ||||
Deferred income taxes | 2,845 | 2,144 | ||||
Other assets | 381 | 1,158 | ||||
Total assets | 19,748 | 20,386 | ||||
Current liabilities: | ||||||
Short-term debt | 602 | 963 | ||||
Accounts payable | 1,438 | 1,548 | ||||
Accrued and other current liabilities | 1,654 | 1,711 | ||||
Liabilities held for sale | 188 | |||||
Total current liabilities | 3,694 | 4,410 | ||||
Long-term debt | 3,434 | 3,037 | ||||
Long-term pension and postretirement liabilities | 1,094 | 1,102 | ||||
Deferred income taxes | 203 | 207 | ||||
Income taxes | 240 | 312 | ||||
Other liabilities | 461 | 487 | ||||
Total liabilities | 9,126 | 9,555 | ||||
Total Shareholders' Equity | 10,622 | $ 9,994 | 10,831 | $ 9,492 | $ 9,480 | $ 9,751 |
Total liabilities and shareholders' equity | 19,748 | 20,386 | ||||
Consolidating Adjustments | ||||||
Current assets: | ||||||
Intercompany receivables | (3,974) | (2,476) | ||||
Total current assets | (3,974) | (2,476) | ||||
Investment in subsidiaries | (44,077) | (40,239) | ||||
Intercompany loans receivable | (19,468) | (24,424) | ||||
Total assets | (67,519) | (67,139) | ||||
Current liabilities: | ||||||
Intercompany payables | (3,974) | (2,476) | ||||
Total current liabilities | (3,974) | (2,476) | ||||
Intercompany loans payable | (19,468) | (24,424) | ||||
Total liabilities | (23,442) | (26,900) | ||||
Total Shareholders' Equity | (44,077) | (40,239) | ||||
Total liabilities and shareholders' equity | (67,519) | (67,139) | ||||
TE Connectivity Ltd. | Reportable entities | ||||||
Current assets: | ||||||
Intercompany receivables | 50 | 37 | ||||
Prepaid expenses and other current assets | 7 | 5 | ||||
Total current assets | 57 | 42 | ||||
Investment in subsidiaries | 14,980 | 13,626 | ||||
Intercompany loans receivable | 1 | 2 | ||||
Total assets | 15,038 | 13,670 | ||||
Current liabilities: | ||||||
Accounts payable | 2 | 2 | ||||
Accrued and other current liabilities | 491 | 400 | ||||
Intercompany payables | 3,923 | 2,437 | ||||
Total current liabilities | 4,416 | 2,839 | ||||
Total liabilities | 4,416 | 2,839 | ||||
Total Shareholders' Equity | 10,622 | 10,831 | ||||
Total liabilities and shareholders' equity | 15,038 | 13,670 | ||||
TEGSA | Reportable entities | ||||||
Current assets: | ||||||
Intercompany receivables | 3,870 | 2,391 | ||||
Prepaid expenses and other current assets | 37 | 112 | ||||
Total current assets | 3,907 | 2,503 | ||||
Investment in subsidiaries | 29,097 | 26,613 | ||||
Intercompany loans receivable | 2,784 | 6,535 | ||||
Other assets | 21 | |||||
Total assets | 35,809 | 35,651 | ||||
Current liabilities: | ||||||
Short-term debt | 600 | 961 | ||||
Accrued and other current liabilities | 46 | 36 | ||||
Total current liabilities | 646 | 997 | ||||
Long-term debt | 3,433 | 3,033 | ||||
Intercompany loans payable | 16,683 | 17,888 | ||||
Other liabilities | 67 | 107 | ||||
Total liabilities | 20,829 | 22,025 | ||||
Total Shareholders' Equity | 14,980 | 13,626 | ||||
Total liabilities and shareholders' equity | 35,809 | 35,651 | ||||
Non-Guarantor Subsidiaries | Reportable entities | ||||||
Current assets: | ||||||
Cash and cash equivalents | 546 | 848 | ||||
Accounts receivable, net | 2,463 | 2,361 | ||||
Inventories | 1,961 | 1,857 | ||||
Intercompany receivables | 54 | 48 | ||||
Prepaid expenses and other current assets | 408 | 544 | ||||
Assets held for sale | 472 | |||||
Total current assets | 5,432 | 6,130 | ||||
Property, plant, and equipment, net | 3,636 | 3,497 | ||||
Goodwill | 5,800 | 5,684 | ||||
Intangible assets, net | 1,664 | 1,704 | ||||
Deferred income taxes | 2,845 | 2,144 | ||||
Intercompany loans receivable | 16,683 | 17,887 | ||||
Other assets | 360 | 1,158 | ||||
Total assets | 36,420 | 38,204 | ||||
Current liabilities: | ||||||
Short-term debt | 2 | 2 | ||||
Accounts payable | 1,436 | 1,546 | ||||
Accrued and other current liabilities | 1,117 | 1,275 | ||||
Intercompany payables | 51 | 39 | ||||
Liabilities held for sale | 188 | |||||
Total current liabilities | 2,606 | 3,050 | ||||
Long-term debt | 1 | 4 | ||||
Intercompany loans payable | 2,785 | 6,536 | ||||
Long-term pension and postretirement liabilities | 1,094 | 1,102 | ||||
Deferred income taxes | 203 | 207 | ||||
Income taxes | 240 | 312 | ||||
Other liabilities | 394 | 380 | ||||
Total liabilities | 7,323 | 11,591 | ||||
Total Shareholders' Equity | 29,097 | 26,613 | ||||
Total liabilities and shareholders' equity | $ 36,420 | $ 38,204 |
Tyco Electronics Group S.A. - C
Tyco Electronics Group S.A. - Cash Flows (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 28, 2019 | Jun. 29, 2018 | |
Cash flows from operating activities: | ||
Net cash provided by (used in) continuing operating activities | $ 1,575 | $ 1,379 |
Net cash provided by (used in) discontinued operating activities | (31) | 148 |
Net cash provided by operating activities | 1,544 | 1,527 |
Cash flows from investing activities: | ||
Capital expenditures | (570) | (673) |
Proceeds from sale of property, plant, and equipment | 16 | 19 |
Acquisition of businesses, net of cash acquired | (283) | |
Proceeds from divestiture of discontinued operation, net of cash retained by sold operation | 297 | |
Other | 3 | (8) |
Net cash used in continuing investing activities | (537) | (662) |
Net cash used in discontinued investing activities | (2) | (13) |
Net cash used in investing activities | (539) | (675) |
Cash flows from financing activities: | ||
Net increase (decrease) in commercial paper | (270) | 271 |
Proceeds from issuance of debt | 746 | 119 |
Repayment of debt | (441) | (708) |
Proceeds from exercise of share options | 55 | 96 |
Repurchase of common shares | (913) | (611) |
Payment of common share dividends to shareholders | (454) | (435) |
Transfers (to) from discontinued operations | (33) | 135 |
Other | (32) | (34) |
Net cash used in continuing financing activities | (1,342) | (1,167) |
Net cash provided by (used in) discontinued financing activities | 33 | (135) |
Net cash used in financing activities | (1,309) | (1,302) |
Effect of currency translation on cash | 2 | 2 |
Net decrease in cash, cash equivalents, and restricted cash | (302) | (448) |
Cash, cash equivalents, and restricted cash at beginning of period | 848 | 1,218 |
Cash, cash equivalents, and restricted cash at end of period | 546 | 770 |
Consolidating Adjustments | ||
Cash flows from operating activities: | ||
Net cash provided by (used in) continuing operating activities | (4,301) | (15) |
Net cash provided by operating activities | (4,301) | (15) |
Cash flows from investing activities: | ||
Intercompany distribution receipts | (61) | |
Change in intercompany loans | (1,045) | (261) |
Net cash used in continuing investing activities | (1,045) | (322) |
Net cash used in investing activities | (1,045) | (322) |
Cash flows from financing activities: | ||
Intercompany distributions | 4,301 | 76 |
Loan activity with parent | 1,045 | 261 |
Net cash used in continuing financing activities | 5,346 | 337 |
Net cash used in financing activities | 5,346 | 337 |
TE Connectivity Ltd. | Reportable entities | ||
Cash flows from operating activities: | ||
Net cash provided by (used in) continuing operating activities | (198) | (152) |
Net cash provided by operating activities | (198) | (152) |
Cash flows from financing activities: | ||
Changes in parent company equity | 57 | 83 |
Repurchase of common shares | (892) | (218) |
Payment of common share dividends to shareholders | (454) | (441) |
Loan activity with parent | 1,487 | 728 |
Net cash used in continuing financing activities | 198 | 152 |
Net cash used in financing activities | 198 | 152 |
TEGSA | Reportable entities | ||
Cash flows from operating activities: | ||
Net cash provided by (used in) continuing operating activities | 4,172 | (34) |
Net cash provided by operating activities | 4,172 | (34) |
Cash flows from investing activities: | ||
Proceeds from divestiture of discontinued operation, net of cash retained by sold operation | 312 | |
Intercompany distribution receipts | 61 | |
Change in intercompany loans | 1,045 | 261 |
Net cash used in continuing investing activities | 1,357 | 322 |
Net cash used in investing activities | 1,357 | 322 |
Cash flows from financing activities: | ||
Changes in parent company equity | (5,560) | 30 |
Net increase (decrease) in commercial paper | (270) | 271 |
Proceeds from issuance of debt | 746 | 119 |
Repayment of debt | (441) | (708) |
Other | (4) | |
Net cash used in continuing financing activities | (5,529) | (288) |
Net cash used in financing activities | (5,529) | (288) |
Non-Guarantor Subsidiaries | ||
Cash flows from financing activities: | ||
Intercompany distributions | (4,301) | (76) |
Non-Guarantor Subsidiaries | Reportable entities | ||
Cash flows from operating activities: | ||
Net cash provided by (used in) continuing operating activities | 1,902 | 1,580 |
Net cash provided by (used in) discontinued operating activities | (31) | 148 |
Net cash provided by operating activities | 1,871 | 1,728 |
Cash flows from investing activities: | ||
Capital expenditures | (570) | (673) |
Proceeds from sale of property, plant, and equipment | 16 | 19 |
Acquisition of businesses, net of cash acquired | (283) | |
Proceeds from divestiture of discontinued operation, net of cash retained by sold operation | (15) | |
Other | 3 | (8) |
Net cash used in continuing investing activities | (849) | (662) |
Net cash used in discontinued investing activities | (2) | (13) |
Net cash used in investing activities | (851) | (675) |
Cash flows from financing activities: | ||
Changes in parent company equity | 5,503 | (113) |
Proceeds from exercise of share options | 55 | 96 |
Repurchase of common shares | (21) | (393) |
Payment of common share dividends to shareholders | 6 | |
Intercompany distributions | (4,301) | (76) |
Loan activity with parent | (2,532) | (989) |
Transfers (to) from discontinued operations | (33) | 135 |
Other | (28) | (34) |
Net cash used in continuing financing activities | (1,357) | (1,368) |
Net cash provided by (used in) discontinued financing activities | 33 | (135) |
Net cash used in financing activities | (1,324) | (1,503) |
Effect of currency translation on cash | 2 | 2 |
Net decrease in cash, cash equivalents, and restricted cash | (302) | (448) |
Cash, cash equivalents, and restricted cash at beginning of period | 848 | 1,218 |
Cash, cash equivalents, and restricted cash at end of period | $ 546 | $ 770 |