Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 24, 2022 | Jul. 22, 2022 | |
Document and Entity Information | ||
Entity Registrant Name | TE CONNECTIVITY LTD. | |
Entity Central Index Key | 0001385157 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 24, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-33260 | |
Entity Incorporation, State or Country Code | V8 | |
Entity Tax Identification Number | 98-0518048 | |
Entity Address, Address Line One | Mühlenstrasse 26 | |
Entity Address, City or Town | Schaffhausen | |
Entity Address, Country | CH | |
Entity Address, Postal Zip Code | CH-8200 | |
Country Region | +41 | |
City Area Code | (0)52 | |
Local Phone Number | 633 66 61 | |
Title of 12(b) Security | Common Shares, Par Value CHF 0.57 | |
Trading Symbol | TEL | |
Security Exchange Name | NYSE | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 319,838,968 | |
Document Fiscal Year Focus | 2022 | |
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. 24, 2022 | Jun. 25, 2021 | Jun. 24, 2022 | Jun. 25, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Net sales | $ 4,097 | $ 3,845 | $ 11,922 | $ 11,105 |
Cost of sales | 2,769 | 2,577 | 8,027 | 7,481 |
Gross margin | 1,328 | 1,268 | 3,895 | 3,624 |
Selling, general, and administrative expenses | 393 | 366 | 1,172 | 1,128 |
Research, development, and engineering expenses | 179 | 168 | 539 | 504 |
Acquisition and integration costs | 11 | 9 | 29 | 23 |
Restructuring and other charges, net | 26 | 11 | 59 | 195 |
Operating income | 719 | 714 | 2,096 | 1,774 |
Interest income | 3 | 3 | 9 | 14 |
Interest expense | (18) | (14) | (48) | (42) |
Other income, net | 4 | 2 | 24 | 5 |
Income from continuing operations before income taxes | 708 | 705 | 2,081 | 1,751 |
Income tax expense | (116) | (124) | (362) | (290) |
Income from continuing operations | 592 | 581 | 1,719 | 1,461 |
Income (loss) from discontinued operations, net of income taxes | 2 | (1) | 1 | 6 |
Net income | $ 594 | $ 580 | $ 1,720 | $ 1,467 |
Basic earnings per share: | ||||
Income from continuing operations (in dollars per share) | $ 1.84 | $ 1.76 | $ 5.31 | $ 4.41 |
Income from discontinued operations (in dollars per share) | 0.01 | 0.02 | ||
Net income (in dollars per share) | 1.84 | 1.76 | 5.31 | 4.43 |
Diluted earnings per share: | ||||
Income from continuing operations (in dollars per share) | 1.83 | 1.74 | 5.26 | 4.39 |
Income from discontinued operations (in dollars per share) | 0.01 | 0.02 | ||
Net income (in dollars per share) | $ 1.83 | $ 1.74 | $ 5.26 | $ 4.41 |
Weighted-average number of shares outstanding: | ||||
Basic (in shares) | 322 | 330 | 324 | 331 |
Diluted (in shares) | 324 | 333 | 327 | 333 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 24, 2022 | Jun. 25, 2021 | Jun. 24, 2022 | Jun. 25, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $ 594 | $ 580 | $ 1,720 | $ 1,467 |
Other comprehensive income (loss): | ||||
Currency translation | (225) | 40 | (216) | 172 |
Adjustments to unrecognized pension and postretirement benefit costs, net of income taxes | 4 | 7 | 12 | 19 |
Gains (losses) on cash flow hedges, net of income taxes | (112) | (15) | (65) | 42 |
Other comprehensive income (loss) | (333) | 32 | (269) | 233 |
Comprehensive income | 261 | 612 | 1,451 | 1,700 |
Less: comprehensive (income) loss attributable to noncontrolling interests | 4 | (2) | 11 | (4) |
Comprehensive income attributable to TE Connectivity Ltd. | $ 265 | $ 610 | $ 1,462 | $ 1,696 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 24, 2022 | Sep. 24, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 820 | $ 1,203 |
Accounts receivable, net of allowance for doubtful accounts of $54 and $41, respectively | 3,132 | 2,928 |
Inventories | 3,028 | 2,511 |
Prepaid expenses and other current assets | 603 | 621 |
Total current assets | 7,583 | 7,263 |
Property, plant, and equipment, net | 3,712 | 3,778 |
Goodwill | 5,352 | 5,590 |
Intangible assets, net | 1,355 | 1,549 |
Deferred income taxes | 2,478 | 2,499 |
Other assets | 868 | 783 |
Total assets | 21,348 | 21,462 |
Current liabilities: | ||
Short-term debt | 822 | 503 |
Accounts payable | 1,917 | 1,911 |
Accrued and other current liabilities | 2,319 | 2,242 |
Total current liabilities | 5,058 | 4,656 |
Long-term debt | 3,380 | 3,589 |
Long-term pension and postretirement liabilities | 1,094 | 1,139 |
Deferred income taxes | 186 | 181 |
Income taxes | 322 | 302 |
Other liabilities | 771 | 847 |
Total liabilities | 10,811 | 10,714 |
Commitments and contingencies (Note 9) | ||
Redeemable noncontrolling interests | 103 | 114 |
Shareholders' equity: | ||
Common shares, CHF 0.57 par value, 330,830,781 shares authorized and issued, and 336,099,881 shares authorized and issued, respectively | 146 | 148 |
Accumulated earnings | 12,084 | 11,709 |
Treasury shares, at cost, 10,425,219 and 9,060,919 shares, respectively | (1,370) | (1,055) |
Accumulated other comprehensive loss | (426) | (168) |
Total shareholders' equity | 10,434 | 10,634 |
Total liabilities, redeemable noncontrolling interests, and shareholders' equity | $ 21,348 | $ 21,462 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) $ in Millions | Jun. 24, 2022 USD ($) shares | Jun. 24, 2022 SFr / shares | Sep. 24, 2021 USD ($) shares | Sep. 24, 2021 SFr / shares |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
Accounts receivable, allowance for doubtful accounts (in dollars) | $ | $ 54 | $ 41 | ||
Common shares, par value (in currency per share) | SFr / shares | SFr 0.57 | SFr 0.57 | ||
Common shares, shares authorized | 330,830,781 | 336,099,881 | ||
Common shares, shares issued | 330,830,781 | 336,099,881 | ||
Treasury shares | 10,425,219 | 9,060,919 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Millions, $ in Millions | Common Shares | Treasury Shares | Contributed Surplus | Accumulated Earnings | Accumulated Other Comprehensive Loss | Total |
Balance at Sep. 25, 2020 | $ 149 | $ (669) | $ 10,348 | $ (445) | $ 9,383 | |
Balance (in shares) at Sep. 25, 2020 | 339 | (8) | ||||
Increase (Decrease) in Shareholders' Equity: | ||||||
Net income | 1,467 | 1,467 | ||||
Other comprehensive income (loss) | 229 | 229 | ||||
Share-based compensation expense | $ 73 | 73 | ||||
Dividends | (658) | (658) | ||||
Exercise of share options | $ 130 | 130 | ||||
Exercise of share options (in shares) | 2 | |||||
Restricted share award vestings and other activity | $ 90 | (73) | (4) | 13 | ||
Repurchase of common shares | $ (591) | $ (591) | ||||
Repurchase of common shares (in shares) | (5) | (5) | ||||
Cancellation of treasury shares | $ (1) | $ 262 | (261) | |||
Cancellation of treasury shares (in shares) | (3) | 3 | ||||
Balance at Jun. 25, 2021 | $ 148 | $ (778) | 10,892 | (216) | $ 10,046 | |
Balance (in shares) at Jun. 25, 2021 | 336 | (8) | ||||
Balance at Mar. 26, 2021 | $ 149 | $ (775) | 10,541 | (246) | 9,669 | |
Balance (in shares) at Mar. 26, 2021 | 339 | (9) | ||||
Increase (Decrease) in Shareholders' Equity: | ||||||
Net income | 580 | 580 | ||||
Other comprehensive income (loss) | 30 | 30 | ||||
Share-based compensation expense | 24 | 24 | ||||
Dividends | 3 | 3 | ||||
Exercise of share options | $ 11 | 11 | ||||
Restricted share award vestings and other activity | 6 | (24) | 29 | 11 | ||
Repurchase of common shares | $ (282) | (282) | ||||
Repurchase of common shares (in shares) | (2) | |||||
Cancellation of treasury shares | $ (1) | $ 262 | (261) | |||
Cancellation of treasury shares (in shares) | (3) | 3 | ||||
Balance at Jun. 25, 2021 | $ 148 | $ (778) | 10,892 | (216) | 10,046 | |
Balance (in shares) at Jun. 25, 2021 | 336 | (8) | ||||
Balance at Sep. 24, 2021 | $ 148 | $ (1,055) | 11,709 | (168) | 10,634 | |
Balance (in shares) at Sep. 24, 2021 | 336 | (9) | ||||
Increase (Decrease) in Shareholders' Equity: | ||||||
Net income | 1,720 | 1,720 | ||||
Other comprehensive income (loss) | (258) | (258) | ||||
Share-based compensation expense | 88 | 88 | ||||
Dividends | (717) | (717) | ||||
Exercise of share options | $ 34 | 34 | ||||
Restricted share award vestings and other activity | $ 14 | (88) | 79 | 5 | ||
Restricted share award vestings and other activity (in shares) | 2 | |||||
Repurchase of common shares | $ (1,072) | $ (1,072) | ||||
Repurchase of common shares (in shares) | (8) | (8) | ||||
Cancellation of treasury shares | $ (2) | $ 709 | (707) | |||
Cancellation of treasury shares (in shares) | (5) | 5 | ||||
Balance at Jun. 24, 2022 | $ 146 | $ (1,370) | 12,084 | (426) | $ 10,434 | |
Balance (in shares) at Jun. 24, 2022 | 331 | (10) | ||||
Balance at Mar. 25, 2022 | $ 148 | $ (1,769) | 12,160 | (97) | 10,442 | |
Balance (in shares) at Mar. 25, 2022 | 336 | (13) | ||||
Increase (Decrease) in Shareholders' Equity: | ||||||
Net income | 594 | 594 | ||||
Other comprehensive income (loss) | (329) | (329) | ||||
Share-based compensation expense | 28 | 28 | ||||
Dividends | 5 | 5 | ||||
Exercise of share options | $ 4 | 4 | ||||
Restricted share award vestings and other activity | $ 6 | $ (28) | 32 | 10 | ||
Restricted share award vestings and other activity (in shares) | 1 | |||||
Repurchase of common shares | $ (320) | (320) | ||||
Repurchase of common shares (in shares) | (3) | |||||
Cancellation of treasury shares | $ (2) | $ 709 | (707) | |||
Cancellation of treasury shares (in shares) | (5) | 5 | ||||
Balance at Jun. 24, 2022 | $ 146 | $ (1,370) | $ 12,084 | $ (426) | $ 10,434 | |
Balance (in shares) at Jun. 24, 2022 | 331 | (10) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Jun. 24, 2022 | Jun. 25, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 1,720 | $ 1,467 |
Income from discontinued operations, net of income taxes | (1) | (6) |
Income from continuing operations | 1,719 | 1,461 |
Adjustments to reconcile income from continuing operations to net cash provided by operating activities: | ||
Depreciation and amortization | 597 | 590 |
Deferred income taxes | (18) | (62) |
Non-cash lease cost | 98 | 90 |
Provision for losses on accounts receivable and inventories | 79 | 32 |
Share-based compensation expense | 88 | 73 |
Other | (19) | (45) |
Changes in assets and liabilities, net of the effects of acquisitions and divestitures: | ||
Accounts receivable, net | (108) | (638) |
Inventories | (439) | (482) |
Prepaid expenses and other current assets | 57 | (14) |
Accounts payable | (48) | 646 |
Accrued and other current liabilities | (316) | 110 |
Income taxes | 53 | 61 |
Other | (219) | 80 |
Net cash provided by operating activities | 1,524 | 1,902 |
Cash flows from investing activities: | ||
Capital expenditures | (556) | (454) |
Proceeds from sale of property, plant, and equipment | 98 | 85 |
Acquisition of businesses, net of cash acquired | (116) | (126) |
Other | 6 | (2) |
Net cash used in investing activities | (568) | (497) |
Cash flows from financing activities: | ||
Net increase in commercial paper | 237 | |
Proceeds from issuance of debt | 588 | 661 |
Repayment of debt | (558) | (706) |
Proceeds from exercise of share options | 34 | 130 |
Repurchase of common shares | (1,086) | (518) |
Payment of common share dividends to shareholders | (506) | (483) |
Other | (39) | (27) |
Net cash used in financing activities | (1,330) | (943) |
Effect of currency translation on cash | (9) | 9 |
Net increase (decrease) in cash, cash equivalents, and restricted cash | (383) | 471 |
Cash, cash equivalents, and restricted cash at beginning of period | 1,203 | 945 |
Cash, cash equivalents, and restricted cash at end of period | $ 820 | $ 1,416 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Jun. 24, 2022 | |
Basis of Presentation | |
Basis of Presentation | 1. Basis of Presentation The unaudited Condensed Consolidated Financial Statements of TE Connectivity Ltd. (“TE Connectivity” or the “Company,” which may be referred to as “we,” “us,” or “our”) have been prepared in United States (“U.S.”) dollars, in accordance with accounting principles generally accepted in the U.S. (“GAAP”) and the instructions to Form 10-Q under the Securities Exchange Act of 1934. In management’s opinion, the unaudited Condensed Consolidated Financial Statements contain all normal recurring adjustments necessary for a fair presentation of interim results. The results of operations reported for interim periods are not necessarily indicative of the results of operations for the entire fiscal year or any subsequent interim period. The year-end balance sheet data was derived from audited financial statements, but does not include all of the information and disclosures required by GAAP. These financial statements should be read in conjunction with our audited Consolidated Financial Statements contained in our Annual Report on Form 10-K for the fiscal year ended September 24, 2021. Unless otherwise indicated, references in the Condensed Consolidated Financial Statements to fiscal 2022 and fiscal 2021 are to our fiscal years ending September 30, 2022 and ended September 24, 2021, respectively. |
Restructuring and Other Charges
Restructuring and Other Charges, Net | 9 Months Ended |
Jun. 24, 2022 | |
Restructuring and Other Charges, Net | |
Restructuring and Other Charges, Net | 2. Restructuring and Other Charges, Net Net restructuring and other charges consisted of the following: For the For the Quarters Ended Nine Months Ended June 24, June 25, June 24, June 25, 2022 2021 2022 2021 (in millions) Restructuring charges, net $ 26 $ 10 $ 69 $ 170 (Gain) loss on divestitures and impairment of held for sale businesses — — (10) 21 Other charges, net — 1 — 4 Restructuring and other charges, net $ 26 $ 11 $ 59 $ 195 Net restructuring and related charges by segment were as follows: For the For the Quarters Ended Nine Months Ended June 24, June 25, June 24, June 25, 2022 2021 2022 2021 (in millions) Transportation Solutions $ 9 $ 2 $ 24 $ 130 Industrial Solutions 11 6 29 26 Communications Solutions 6 2 16 14 Restructuring charges, net 26 10 69 170 Plus: charges included in cost of sales (1) 4 — 16 — Restructuring and related charges, net $ 30 $ 10 $ 85 $ 170 (1) Charges included in cost of sales were attributable to inventory-related charges within the Industrial Solutions segment. Activity in our restructuring reserves was as follows: Balance at Balance at September 24, Changes in Cash Non-Cash Currency June 24, 2021 Charges Estimate Payments Items Translation 2022 (in millions) Fiscal 2022 Actions: Employee severance $ — $ 57 $ — $ (4) $ — $ — $ 53 Property, plant, and equipment and other non-cash charges — 27 — — (27) — — Total — 84 — (4) (27) — 53 Fiscal 2021 Actions: Employee severance 152 2 (4) (73) — (10) 67 Facility and other exit costs 2 3 — (4) — — 1 Property, plant, and equipment — 2 — — (2) — — Total 154 7 (4) (77) (2) (10) 68 Pre-Fiscal 2021 Actions: Employee severance 135 — (7) (34) — (10) 84 Facility and other exit costs 15 8 (4) (11) — — 8 Property, plant, and equipment — 4 (3) — (1) — — Total 150 12 (14) (45) (1) (10) 92 Total Activity $ 304 $ 103 $ (18) $ (126) $ (30) $ (20) $ 213 Fiscal 2022 Actions During fiscal 2022, we initiated a restructuring program associated with footprint consolidation and cost structure improvements across all segments. During the nine months ended June 24, 2022, we recorded restructuring and related charges of $84 million in connection with this program. We expect to complete all restructuring actions commenced during the nine months ended June 24, 2022 by the end of fiscal 2024 and to incur additional charges of approximately $16 million. The following table summarizes expected, incurred, and remaining charges for the fiscal 2022 program by segment as of June 24, 2022: Total Cumulative Remaining Expected Charges Expected Charges Incurred Charges (in millions) Transportation Solutions $ 28 $ 24 $ 4 Industrial Solutions 47 45 2 Communications Solutions 25 15 10 Total $ 100 $ 84 $ 16 Fiscal 2021 Actions During fiscal 2021, we initiated a restructuring program across all segments to optimize our manufacturing footprint and improve the cost structure of the organization. In connection with this program, during the nine months ended June 24, 2022 and June 25, 2021, we recorded net restructuring charges of $3 million and $162 million, respectively. We expect additional charges related to fiscal 2021 actions to be insignificant. The following table summarizes charges incurred for the fiscal 2021 program by segment as of June 24, 2022: Cumulative Charges Incurred (in millions) Transportation Solutions $ 125 Industrial Solutions 49 Communications Solutions 24 Total $ 198 Pre-Fiscal 2021 Actions During the nine months ended June 24, 2022 and June 25, 2021, we recorded net restructuring credits of $2 million and charges of $8 million, respectively, related to pre-fiscal 2021 actions. We expect additional charges related to pre-fiscal 2021 actions to be insignificant. Total Restructuring Reserves Restructuring reserves included on the Condensed Consolidated Balance Sheets were as follows: June 24, September 24, 2022 2021 (in millions) Accrued and other current liabilities $ 160 $ 236 Other liabilities 53 68 Restructuring reserves $ 213 $ 304 |
Acquisitions
Acquisitions | 9 Months Ended |
Jun. 24, 2022 | |
Acquisitions | |
Acquisitions | 3. Acquisitions During the nine months ended June 24, 2022, we acquired two businesses for a combined cash purchase price of $141 million, net of cash acquired. The acquisitions were reported as part of our Communications Solutions segment from the date of acquisition. We acquired two businesses for a combined cash purchase price of $125 million, net of cash acquired, during the nine months ended June 25, 2021. The acquisitions were reported as part of our Industrial Solutions segment from the date of acquisition. |
Inventories
Inventories | 9 Months Ended |
Jun. 24, 2022 | |
Inventories | |
Inventories | 4. Inventories Inventories consisted of the following: June 24, September 24, 2022 2021 (in millions) Raw materials $ 419 $ 320 Work in progress 1,190 991 Finished goods 1,419 1,200 Inventories $ 3,028 $ 2,511 |
Goodwill
Goodwill | 9 Months Ended |
Jun. 24, 2022 | |
Goodwill | |
Goodwill | 5. Goodwill The changes in the carrying amount of goodwill by segment were as follows: Transportation Industrial Communications Solutions Solutions Solutions Total (in millions) September 24, 2021 (1) $ 1,549 $ 3,446 $ 595 $ 5,590 Acquisitions — — 82 82 Purchase price adjustments — (101) — (101) Currency translation and other (64) (130) (25) (219) June 24, 2022 (1) $ 1,485 $ 3,215 $ 652 $ 5,352 (1) At June 24, 2022 and September 24, 2021, accumulated impairment losses for the Transportation Solutions, Industrial Solutions, and Communications Solutions segments were $3,091 million, $669 million, and $489 million, respectively. During the nine months ended June 24, 2022, we recognized goodwill in the Communications Solutions segment in connection with recent acquisitions. Also during the nine months ended June 24, 2022, we recognized purchase price adjustments in the Industrial Solutions segment in connection with prior year acquisitions, including two acquisitions that closed late in the fourth quarter of fiscal 2021. See Note 3 for additional information regarding acquisitions. |
Intangible Assets, Net
Intangible Assets, Net | 9 Months Ended |
Jun. 24, 2022 | |
Intangible Assets, Net | |
Intangible Assets, Net | 6. Intangible Assets, Net Intangible assets consisted of the following: June 24, 2022 September 24, 2021 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount (in millions) Customer relationships $ 1,687 $ (700) $ 987 $ 1,766 $ (660) $ 1,106 Intellectual property 1,216 (860) 356 1,262 (832) 430 Other 18 (6) 12 19 (6) 13 Total $ 2,921 $ (1,566) $ 1,355 $ 3,047 $ (1,498) $ 1,549 Intangible asset amortization expense was $48 million for both the quarters ended June 24, 2022 and June 25, 2021, and $145 million and $144 million for the nine months ended June 24, 2022 and June 25, 2021, respectively. At June 24, 2022, the aggregate amortization expense on intangible assets is expected to be as follows: (in millions) Remainder of fiscal 2022 $ 48 Fiscal 2023 191 Fiscal 2024 161 Fiscal 2025 146 Fiscal 2026 139 Fiscal 2027 120 Thereafter 550 Total $ 1,355 |
Debt
Debt | 9 Months Ended |
Jun. 24, 2022 | |
Debt | |
Debt | 7. Debt During the nine months ended June 24, 2022, Tyco Electronics Group S.A. (“TEGSA”), our wholly-owned subsidiary, issued $600 million aggregate principal amount of 2.50% senior notes due in February 2032. The notes are TEGSA’s unsecured senior obligations and rank equally in right of payment with all existing and any future senior indebtedness of TEGSA and senior to any subordinated indebtedness that TEGSA may incur. The notes are fully and unconditionally guaranteed as to payment on an unsecured basis by TE Connectivity Ltd. During the nine months ended June 24, 2022, we reclassified €550 million of 1.10% senior notes due in March 2023 from long-term debt to short-term During the nine months ended June 24, 2022, TEGSA completed an early redemption of $500 million aggregate principal amount of 3.50% senior notes due in February 2022. As of June 24, 2022, TEGSA had $237 million of commercial paper outstanding at a weighted-average interest rate of 1.92%. TEGSA had no commercial paper outstanding at September 24, 2021. The fair value of our debt, based on indicative valuations, was approximately $4,134 million and $4,465 million at June 24, 2022 and September 24, 2021, respectively. |
Leases
Leases | 9 Months Ended |
Jun. 24, 2022 | |
Leases | |
Leases | 8. Leases The components of lease cost were as follows: For the For the Quarters Ended Nine Months Ended June 24, June 25, June 24, June 25, 2022 2021 2022 2021 (in millions) Operating lease cost $ 34 $ 31 $ 98 $ 90 Variable lease cost 15 13 40 37 Total lease cost $ 49 $ 44 $ 138 $ 127 Cash flow information, including significant non-cash transactions, related to leases was as follows: For the Nine Months Ended June 24, June 25, 2022 2021 (in millions) Cash paid for amounts included in the measurement of lease liabilities: Payments for operating leases (1) $ 92 $ 90 Right-of-use assets, including modifications of existing leases, obtained in exchange for operating lease liabilities 102 65 (1) These payments are included in cash flows from operating activities, primarily in changes in accrued and other current liabilities. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Jun. 24, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | 9. Commitments and Contingencies Legal Proceedings In the normal course of business, we are subject to various legal proceedings and claims, including patent infringement claims, product liability matters, employment disputes, disputes on agreements, other commercial disputes, environmental matters, antitrust claims, and tax matters, including non-income tax matters such as value added tax, sales and use tax, real estate tax, and transfer tax. Although it is not feasible to predict the outcome of these proceedings, based upon our experience, current information, and applicable law, we do not expect that the outcome of these proceedings, either individually or in the aggregate, will have a material effect on our results of operations, financial position, or cash flows. Trade Compliance Matters We are investigating our past compliance with relevant U.S. trade controls and have made voluntary disclosures of apparent trade controls violations to the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) and the U.S. State Department’s Directorate of Defense Trade Controls (“DDTC”). We are cooperating with the BIS and DDTC on these matters, and both our internal assessment and the resulting investigations by the agencies remain ongoing. We are unable to predict the timing and final outcome of the agencies’ investigations. An unfavorable outcome may include fines or penalties imposed in response to our disclosures, but we are not yet able to reasonably estimate the extent of any such fines or penalties. While we have reserved for potential fines and penalties relating to these matters based on our current understanding of the facts, the investigations into these matters have yet to be completed and the final outcome of such investigations and related fines and penalties may differ from amounts currently reserved. Environmental Matters We are involved in various stages of investigation and cleanup related to environmental remediation matters at a number of sites. The ultimate cost of site cleanup is difficult to predict given the uncertainties regarding the extent of the required cleanup, the interpretation of applicable laws and regulations, and alternative cleanup methods. As of June 24, 2022, we concluded that we would incur investigation and remediation costs at these sites in the reasonably possible range of $17 million to $45 million, and we accrued $20 million as the probable loss, which was the best estimate within this range. We believe that any potential payment of such estimated amounts will not have a material adverse effect on our results of operations, financial position, or cash flows. Guarantees In disposing of assets or businesses, we often provide representations, warranties, and/or indemnities to cover various risks including unknown damage to assets, environmental risks involved in the sale of real estate, liability for investigation and remediation of environmental contamination at waste disposal sites and manufacturing facilities, and unidentified tax liabilities and legal fees related to periods prior to disposition. We do not expect that these uncertainties will have a material adverse effect on our results of operations, financial position, or cash flows. At June 24, 2022, we had outstanding letters of credit, letters of guarantee, and surety bonds of $134 million, excluding those related to our Subsea Communications (“SubCom”) business which are discussed below. During fiscal 2019, we sold our SubCom business. In connection with the sale, we contractually agreed to continue to honor performance guarantees and letters of credit related to the SubCom business’ projects that existed as of the date of sale. These performance guarantees and letters of credit had a combined value of approximately $116 million as of June 24, 2022 and are expected to expire at various dates through fiscal 2027. We have contractual recourse against the SubCom business if we are required to perform on any SubCom guarantees; however, based on historical experience, we do not anticipate having to perform. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Jun. 24, 2022 | |
Financial Instruments | |
Financial Instruments | 10. Financial Instruments Foreign Currency Exchange Rate Risk We utilize cross-currency swap contracts to reduce our exposure to foreign currency exchange rate risk associated with certain intercompany loans. The aggregate notional value of these contracts was €200 million and €700 million at June 24, 2022 and September 24, 2021, respectively. Certain contracts were terminated during the nine months ended June 24, 2022; the remaining contracts mature in the fourth quarter of fiscal 2022. Under the terms of these contracts, which have been designated as cash flow hedges, we make interest payments in euros at 3.50% per annum and receive interest in U.S. dollars at a weighted-average rate of 5.26% per annum. Upon maturity, we will pay the notional value of the contracts in euros and receive U.S. dollars from our counterparties. In connection with the cross-currency swap contracts, both counterparties to each contract are required to provide cash collateral. These cross-currency swap contracts were recorded on the Condensed Consolidated Balance Sheets as follows: June 24, September 24, 2022 2021 (in millions) Prepaid expenses and other current assets $ 18 $ — Other liabilities — 20 At June 24, 2022 and September 24, 2021, collateral received from or paid to our counterparties approximated the net derivative position. Collateral is recorded in accrued and other current liabilities when the contracts are in a net asset position, or prepaid expenses and other current assets when the contracts are in a net liability position on the Condensed Consolidated Balance Sheets. The impacts of these cross-currency swap contracts were as follows: For the For the Quarters Ended Nine Months Ended June 24, June 25, June 24, June 25, 2022 2021 2022 2021 (in millions) Losses recorded in other comprehensive income (loss) $ (1) $ (1) $ (6) $ (5) Gains (losses) excluded from the hedging relationship (1) 13 (11) 52 (23) (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 $2,203 million and $3,798 million at June 24, 2022 and September 24, 2021, respectively. We also use a cross-currency swap program to hedge our net investment in certain foreign operations. The aggregate notional value of the contracts under this program was $1,767 million and $1,430 million at June 24, 2022 and September 24, 2021, respectively. Under the terms of these contracts, we receive interest in U.S. dollars at a weighted-average rate of 1.51% per annum and pay no interest. Upon the maturity of these contracts at various dates through fiscal 2026, we will pay the notional value of the contracts in the designated foreign currency and receive U.S. dollars from our counterparties. We are not required to provide collateral for these contracts. These cross-currency swap contracts were recorded on the Condensed Consolidated Balance Sheets as follows: June 24, September 24, 2022 2021 (in millions) Prepaid expenses and other current assets $ 28 $ 3 Other assets 97 18 Accrued and other current liabilities — 13 Other liabilities — 18 The impacts of our hedge of net investment programs were as follows: For the For the Quarters Ended Nine Months Ended June 24, June 25, June 24, June 25, 2022 2021 2022 2021 (in millions) Foreign currency exchange gains (losses) on intercompany loans and external borrowings (1) $ 156 $ (46) $ 344 $ (81) Gains (losses) on cross-currency swap contracts designated as hedges of net investment (1) 78 (14) 148 (41) (1) Recorded as currency translation, a component of accumulated other comprehensive income (loss), and offset by changes attributable to the translation of the net investment. Interest Rate Risk Management We may utilize forward starting interest rate swap contracts to manage interest rate exposure in periods prior to the anticipated issuance of fixed rate debt. During the nine months ended June 24, 2022, we terminated forward starting interest rate swap contracts with an aggregate notional value of $450 million as a result of the issuance of our 2.50% senior notes due in 2032. At fiscal year end 2021, these forward starting interest rate swap contracts were recorded on the Condensed Consolidated Balance Sheet as follows; there were no such balances at June 24, 2022: September 24, 2021 (in millions) Prepaid expenses and other current assets $ 7 Accrued and other current liabilities 38 The impacts of these forward starting interest rate swap contracts were as follows: For the For the Quarters Ended Nine Months Ended June 24, June 25, June 24, June 25, 2022 2021 2022 2021 (in millions) Gains (losses) recorded in other comprehensive income (loss) $ — $ (11) $ 13 $ 36 Commodity Hedges As part of managing the exposure to certain commodity price fluctuations, we utilize commodity swap contracts. The objective of these contracts is to minimize impacts to cash flows and profitability due to changes in prices of commodities used in production. These contracts had an aggregate notional value of $605 million and $512 million at June 24, 2022 and September 24, 2021, respectively, and were designated as cash flow hedges. These commodity swap contracts were recorded on the Condensed Consolidated Balance Sheets as follows: June 24, September 24, 2022 2021 (in millions) Prepaid expenses and other current assets $ 2 $ 23 Accrued and other current liabilities 57 18 Other liabilities 10 4 The impacts of these commodity swap contracts were as follows: For the For the Quarters Ended Nine Months Ended June 24, June 25, June 24, June 25, 2022 2021 2022 2021 (in millions) Gains (losses) recorded in other comprehensive income (loss) $ (106) $ 24 $ (45) $ 78 Gains reclassified from accumulated other comprehensive income (loss) into cost of sales 15 27 35 66 We expect that significantly all of the balance in accumulated other comprehensive income (loss) associated with commodity hedges will be reclassified into the Condensed Consolidated Statement of Operations within the next twelve months. |
Retirement Plans
Retirement Plans | 9 Months Ended |
Jun. 24, 2022 | |
Retirement Plans | |
Retirement Plans | 11. Retirement Plans The net periodic pension benefit cost (credit) for all non-U.S. and U.S. defined benefit pension plans was as follows: Non-U.S. Plans U.S. Plans For the For the Quarters Ended Quarters Ended June 24, June 25, June 24, June 25, 2022 2021 2022 2021 (in millions) Operating expense: Service cost $ 11 $ 10 $ 2 $ 3 Other (income) expense: Interest cost 8 7 7 7 Expected return on plan assets (15) (13) (11) (13) Amortization of net actuarial loss 6 8 — 3 Amortization of prior service credit (1) (3) — — Net periodic pension benefit cost (credit) $ 9 $ 9 $ (2) $ — Non-U.S. Plans U.S. Plans For the For the Nine Months Ended Nine Months Ended June 24, June 25, June 24, June 25, 2022 2021 2022 2021 (in millions) Operating expense: Service cost $ 31 $ 34 $ 6 $ 9 Other (income) expense: Interest cost 25 21 20 23 Expected return on plan assets (44) (40) (35) (39) Amortization of net actuarial loss 19 23 2 7 Amortization of prior service credit (4) (6) — — Net periodic pension benefit cost (credit) $ 27 $ 32 $ (7) $ — During the nine months ended June 24, 2022, we contributed $29 million to our non-U.S. pension plans. |
Income Taxes
Income Taxes | 9 Months Ended |
Jun. 24, 2022 | |
Income Taxes | |
Income Taxes | 12. Income Taxes We recorded income tax expense of $116 million and $124 million for the quarters ended June 24, 2022 and June 25, 2021, respectively. The income tax expense for the quarter ended June 24, 2022 included a $21 million income tax benefit related to the tax impacts of an intercompany transaction. Our estimated annual effective tax rate for fiscal 2022 includes a total income tax benefit of approximately $75 million related to this transaction, with a portion recognized in the nine months ended June 24, 2022 and the remainder to be recognized in the fourth quarter of fiscal 2022. We recorded income tax expense of $362 million and $290 million for the nine months ended June 24, 2022 and June 25, 2021, respectively. The income tax expense for the nine months ended June 24, 2022 included a $57 million income tax benefit related to the tax impacts of the intercompany transaction discussed above and $27 million of income tax expense related to the write-down of certain deferred tax assets to the lower corporate tax rate enacted in the canton of Schaffhausen. In addition, the income tax expense for the nine months ended June 24, 2022 included $12 million of income tax expense related to an income tax audit of an acquired entity. As we are entitled to indemnification of pre-acquisition period tax obligations under the terms of the purchase agreement, we recorded an associated indemnification receivable and other income of $11 million during the nine months ended June 24, 2022. The income tax expense for the nine months ended June 25, 2021 included a $29 million income tax benefit related to an Internal Revenue Service approved change in the tax method of depreciating or amortizing certain assets During the nine months ended June 24, 2022, we completed additional intercompany transactions that resulted in a non-U.S. subsidiary recording an increase in deferred tax assets for tax loss and credit carryforwards of approximately $4.0 billion. We do not expect this subsidiary to generate sufficient future taxable income to realize these deferred tax assets; therefore, we recognized a corresponding increase to the valuation Although it is difficult to predict the timing or results of our worldwide examinations, we estimate that, as of June 24, 2022, 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 24, 2022. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Jun. 24, 2022 | |
Earnings Per Share | |
Earnings Per Share | 13. Earnings Per Share The weighted-average number of shares outstanding used in the computations of basic and diluted earnings per share were as follows: For the For the Quarters Ended Nine Months Ended June 24, June 25, June 24, June 25, 2022 2021 2022 2021 (in millions) Basic 322 330 324 331 Dilutive impact of share-based compensation arrangements 2 3 3 2 Diluted 324 333 327 333 For both the quarter and nine months ended June 24, 2022, one million share options were not included in the computation of diluted earnings per share because the instruments’ underlying exercise prices were greater than the average market prices of our common shares and inclusion would be antidilutive. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Jun. 24, 2022 | |
Shareholders' Equity | |
Shareholder' Equity | 14. Shareholders’ Equity Common Shares Held in Treasury In March 2022, our shareholders approved the cancellation of approximately five million shares purchased under our share repurchase program during the period beginning September 26, 2020 and ending September 24, 2021. The capital reduction by cancellation of these shares was subject to a notice period and filing with the commercial register in Switzerland and became effective in May 2022. Dividends We paid cash dividends to shareholders as follows: For the For the Quarters Ended Nine Months Ended June 24, June 25, June 24, June 25, 2022 2021 2022 2021 Dividends paid per common share $ 0.56 $ 0.50 $ 1.56 $ 1.46 In March 2022, our shareholders approved a dividend payment to shareholders of $2.24 per share, payable in four equal quarterly installments of $0.56 per share beginning in the third quarter of fiscal 2022 and ending in the second quarter of fiscal 2023. Upon shareholders’ approval of a dividend payment, we record a liability with a corresponding charge to shareholders’ equity. At June 24, 2022 and September 24, 2021, the unpaid portion of the dividends recorded in accrued and other current liabilities on the Condensed Consolidated Balance Sheets totaled $538 million and $327 million, respectively. Share Repurchase Program During the quarter ended June 24, 2022, 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 24, June 25, 2022 2021 (in millions) Number of common shares repurchased 8 5 Repurchase value $ 1,072 $ 591 At June 24, 2022, we had $2.0 billion of availability remaining under our share repurchase authorization. |
Share Plans
Share Plans | 9 Months Ended |
Jun. 24, 2022 | |
Share Plans | |
Share Plans | 15. Share Plans Share-based compensation expense, which was included in selling, general, and administrative expenses on the Condensed Consolidated Statements of Operations, was as follows: For the For the Quarters Ended Nine Months Ended June 24, June 25, June 24, June 25, 2022 2021 2022 2021 (in millions) Share-based compensation expense $ 28 $ 24 $ 88 $ 73 As of June 24, 2022, there was $160 million of unrecognized compensation expense related to share-based awards, which is expected to be recognized over a weighted-average period of 1.8 years. During the quarter ended December 24, 2021, we granted the following share-based awards as part of our annual incentive plan grant: Grant-Date Shares Fair Value (in millions) Share options 0.8 $ 37.67 Restricted share awards 0.3 158.00 Performance share awards 0.1 158.00 As of June 24, 2022, we had 11 million shares available for issuance under the TE Connectivity Ltd. 2007 Stock and Incentive Plan, amended and restated as of September 17, 2020. Share-Based Compensation Assumptions The assumptions we used in the Black-Scholes-Merton option pricing model for the options granted as part of our annual incentive plan grant were as follows: Expected share price volatility 29 % Risk-free interest rate 1.1 % Expected annual dividend per share $ 2.00 Expected life of options (in years) 5.1 |
Segment and Geographic Data
Segment and Geographic Data | 9 Months Ended |
Jun. 24, 2022 | |
Segment and Geographic Data | |
Segment and Geographic Data | 16. Segment and Geographic Data Net sales by segment (1) (2) For the For the Quarters Ended Nine Months Ended June 24, June 25, June 24, June 25, 2022 2021 2022 2021 (in millions) Transportation Solutions: Automotive $ 1,629 $ 1,600 $ 4,802 $ 4,859 Commercial transportation 400 382 1,159 1,095 Sensors 271 283 811 822 Total Transportation Solutions 2,300 2,265 6,772 6,776 Industrial Solutions: Industrial equipment 479 377 1,413 1,011 Aerospace, defense, oil, and gas 271 260 774 777 Energy 207 187 579 544 Medical 177 178 502 495 Total Industrial Solutions 1,134 1,002 3,268 2,827 Communications Solutions: Data and devices 417 329 1,151 841 Appliances 246 249 731 661 Total Communications Solutions 663 578 1,882 1,502 Total $ 4,097 $ 3,845 $ 11,922 $ 11,105 (1) Intersegment sales were not material. (2) Industry end market information is presented consistently with our internal management reporting and may be revised periodically as management deems necessary. Net sales by geographic region (1) For the For the Quarters Ended Nine Months Ended June 24, June 25, June 24, June 25, 2022 2021 2022 2021 (in millions) Europe/Middle East/Africa (“EMEA”): Transportation Solutions $ 894 $ 913 $ 2,564 $ 2,729 Industrial Solutions 470 417 1,368 1,168 Communications Solutions 84 83 263 222 Total EMEA 1,448 1,413 4,195 4,119 Asia–Pacific: Transportation Solutions 825 868 2,636 2,619 Industrial Solutions 205 183 611 517 Communications Solutions 372 333 1,036 877 Total Asia–Pacific 1,402 1,384 4,283 4,013 Americas: Transportation Solutions 581 484 1,572 1,428 Industrial Solutions 459 402 1,289 1,142 Communications Solutions 207 162 583 403 Total Americas 1,247 1,048 3,444 2,973 Total $ 4,097 $ 3,845 $ 11,922 $ 11,105 (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 24, June 25, June 24, June 25, 2022 2021 2022 2021 (in millions) Transportation Solutions $ 383 $ 433 $ 1,187 $ 1,139 Industrial Solutions 169 148 440 335 Communications Solutions 167 133 469 300 Total $ 719 $ 714 $ 2,096 $ 1,774 |
Restructuring and Other Charg_2
Restructuring and Other Charges, Net (Tables) | 9 Months Ended |
Jun. 24, 2022 | |
Restructuring and Other Charges, Net | |
Schedule of net restructuring and other charges | For the For the Quarters Ended Nine Months Ended June 24, June 25, June 24, June 25, 2022 2021 2022 2021 (in millions) Restructuring charges, net $ 26 $ 10 $ 69 $ 170 (Gain) loss on divestitures and impairment of held for sale businesses — — (10) 21 Other charges, net — 1 — 4 Restructuring and other charges, net $ 26 $ 11 $ 59 $ 195 |
Net restructuring and related charges by segment | For the For the Quarters Ended Nine Months Ended June 24, June 25, June 24, June 25, 2022 2021 2022 2021 (in millions) Transportation Solutions $ 9 $ 2 $ 24 $ 130 Industrial Solutions 11 6 29 26 Communications Solutions 6 2 16 14 Restructuring charges, net 26 10 69 170 Plus: charges included in cost of sales (1) 4 — 16 — Restructuring and related charges, net $ 30 $ 10 $ 85 $ 170 (1) Charges included in cost of sales were attributable to inventory-related charges within the Industrial Solutions segment. |
Summary of activity in restructuring reserves | Balance at Balance at September 24, Changes in Cash Non-Cash Currency June 24, 2021 Charges Estimate Payments Items Translation 2022 (in millions) Fiscal 2022 Actions: Employee severance $ — $ 57 $ — $ (4) $ — $ — $ 53 Property, plant, and equipment and other non-cash charges — 27 — — (27) — — Total — 84 — (4) (27) — 53 Fiscal 2021 Actions: Employee severance 152 2 (4) (73) — (10) 67 Facility and other exit costs 2 3 — (4) — — 1 Property, plant, and equipment — 2 — — (2) — — Total 154 7 (4) (77) (2) (10) 68 Pre-Fiscal 2021 Actions: Employee severance 135 — (7) (34) — (10) 84 Facility and other exit costs 15 8 (4) (11) — — 8 Property, plant, and equipment — 4 (3) — (1) — — Total 150 12 (14) (45) (1) (10) 92 Total Activity $ 304 $ 103 $ (18) $ (126) $ (30) $ (20) $ 213 |
Restructuring reserves included on Consolidated Balance Sheets | June 24, September 24, 2022 2021 (in millions) Accrued and other current liabilities $ 160 $ 236 Other liabilities 53 68 Restructuring reserves $ 213 $ 304 |
Fiscal 2022 Actions | |
Restructuring and Other Charges, Net | |
Schedule of expected, incurred and remaining charges by segment | The following table summarizes expected, incurred, and remaining charges for the fiscal 2022 program by segment as of June 24, 2022: Total Cumulative Remaining Expected Charges Expected Charges Incurred Charges (in millions) Transportation Solutions $ 28 $ 24 $ 4 Industrial Solutions 47 45 2 Communications Solutions 25 15 10 Total $ 100 $ 84 $ 16 |
Fiscal 2021 Actions | |
Restructuring and Other Charges, Net | |
Schedule of expected, incurred and remaining charges by segment | The following table summarizes charges incurred for the fiscal 2021 program by segment as of June 24, 2022: Cumulative Charges Incurred (in millions) Transportation Solutions $ 125 Industrial Solutions 49 Communications Solutions 24 Total $ 198 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Jun. 24, 2022 | |
Inventories | |
Schedule of inventories | June 24, September 24, 2022 2021 (in millions) Raw materials $ 419 $ 320 Work in progress 1,190 991 Finished goods 1,419 1,200 Inventories $ 3,028 $ 2,511 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Jun. 24, 2022 | |
Goodwill | |
Changes in the carrying amount of goodwill by segment | Transportation Industrial Communications Solutions Solutions Solutions Total (in millions) September 24, 2021 (1) $ 1,549 $ 3,446 $ 595 $ 5,590 Acquisitions — — 82 82 Purchase price adjustments — (101) — (101) Currency translation and other (64) (130) (25) (219) June 24, 2022 (1) $ 1,485 $ 3,215 $ 652 $ 5,352 (1) At June 24, 2022 and September 24, 2021, accumulated impairment losses for the Transportation Solutions, Industrial Solutions, and Communications Solutions segments were $3,091 million, $669 million, and $489 million, respectively. |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 9 Months Ended |
Jun. 24, 2022 | |
Intangible Assets, Net | |
Schedule of finite-lived intangible assets | June 24, 2022 September 24, 2021 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount (in millions) Customer relationships $ 1,687 $ (700) $ 987 $ 1,766 $ (660) $ 1,106 Intellectual property 1,216 (860) 356 1,262 (832) 430 Other 18 (6) 12 19 (6) 13 Total $ 2,921 $ (1,566) $ 1,355 $ 3,047 $ (1,498) $ 1,549 |
Schedule of finite-lived intangible assets, future amortization expense | At June 24, 2022, the aggregate amortization expense on intangible assets is expected to be as follows: (in millions) Remainder of fiscal 2022 $ 48 Fiscal 2023 191 Fiscal 2024 161 Fiscal 2025 146 Fiscal 2026 139 Fiscal 2027 120 Thereafter 550 Total $ 1,355 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Jun. 24, 2022 | |
Leases | |
Schedule of components of lease cost | For the For the Quarters Ended Nine Months Ended June 24, June 25, June 24, June 25, 2022 2021 2022 2021 (in millions) Operating lease cost $ 34 $ 31 $ 98 $ 90 Variable lease cost 15 13 40 37 Total lease cost $ 49 $ 44 $ 138 $ 127 |
Schedule of Cash Flow information, including significant non-cash transactions, related to leases | For the Nine Months Ended June 24, June 25, 2022 2021 (in millions) Cash paid for amounts included in the measurement of lease liabilities: Payments for operating leases (1) $ 92 $ 90 Right-of-use assets, including modifications of existing leases, obtained in exchange for operating lease liabilities 102 65 (1) These payments are included in cash flows from operating activities, primarily in changes in accrued and other current liabilities. |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Jun. 24, 2022 | |
Net investment hedges | |
Schedule of impacts of hedging program | For the For the Quarters Ended Nine Months Ended June 24, June 25, June 24, June 25, 2022 2021 2022 2021 (in millions) Foreign currency exchange gains (losses) on intercompany loans and external borrowings (1) $ 156 $ (46) $ 344 $ (81) Gains (losses) on cross-currency swap contracts designated as hedges of net investment (1) 78 (14) 148 (41) (1) Recorded as currency translation, a component of accumulated other comprehensive income (loss), and offset by changes attributable to the translation of the net investment. |
Cross-currency swap contracts | Cash flow hedges | |
Summary of fair value of derivative instruments | June 24, September 24, 2022 2021 (in millions) Prepaid expenses and other current assets $ 18 $ — Other liabilities — 20 |
Schedule of impacts of hedging program | For the For the Quarters Ended Nine Months Ended June 24, June 25, June 24, June 25, 2022 2021 2022 2021 (in millions) Losses recorded in other comprehensive income (loss) $ (1) $ (1) $ (6) $ (5) Gains (losses) excluded from the hedging relationship (1) 13 (11) 52 (23) (1) Gains and losses excluded from the hedging relationship are recognized prospectively in selling, general, and administrative expenses and are offset by losses and gains generated as a result of re-measuring certain intercompany loans to the U.S. dollar. |
Cross-currency swap contracts | Net investment hedges | |
Summary of fair value of derivative instruments | June 24, September 24, 2022 2021 (in millions) Prepaid expenses and other current assets $ 28 $ 3 Other assets 97 18 Accrued and other current liabilities — 13 Other liabilities — 18 |
Forward starting interest rate swaps | Cash flow hedges | |
Summary of fair value of derivative instruments | September 24, 2021 (in millions) Prepaid expenses and other current assets $ 7 Accrued and other current liabilities 38 |
Schedule of impacts of hedging program | For the For the Quarters Ended Nine Months Ended June 24, June 25, June 24, June 25, 2022 2021 2022 2021 (in millions) Gains (losses) recorded in other comprehensive income (loss) $ — $ (11) $ 13 $ 36 |
Commodity swap contracts | Cash flow hedges | |
Summary of fair value of derivative instruments | June 24, September 24, 2022 2021 (in millions) Prepaid expenses and other current assets $ 2 $ 23 Accrued and other current liabilities 57 18 Other liabilities 10 4 |
Schedule of impacts of hedging program | For the For the Quarters Ended Nine Months Ended June 24, June 25, June 24, June 25, 2022 2021 2022 2021 (in millions) Gains (losses) recorded in other comprehensive income (loss) $ (106) $ 24 $ (45) $ 78 Gains reclassified from accumulated other comprehensive income (loss) into cost of sales 15 27 35 66 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 9 Months Ended |
Jun. 24, 2022 | |
Retirement Plans | |
Net periodic pension benefit cost | Non-U.S. Plans U.S. Plans For the For the Quarters Ended Quarters Ended June 24, June 25, June 24, June 25, 2022 2021 2022 2021 (in millions) Operating expense: Service cost $ 11 $ 10 $ 2 $ 3 Other (income) expense: Interest cost 8 7 7 7 Expected return on plan assets (15) (13) (11) (13) Amortization of net actuarial loss 6 8 — 3 Amortization of prior service credit (1) (3) — — Net periodic pension benefit cost (credit) $ 9 $ 9 $ (2) $ — Non-U.S. Plans U.S. Plans For the For the Nine Months Ended Nine Months Ended June 24, June 25, June 24, June 25, 2022 2021 2022 2021 (in millions) Operating expense: Service cost $ 31 $ 34 $ 6 $ 9 Other (income) expense: Interest cost 25 21 20 23 Expected return on plan assets (44) (40) (35) (39) Amortization of net actuarial loss 19 23 2 7 Amortization of prior service credit (4) (6) — — Net periodic pension benefit cost (credit) $ 27 $ 32 $ (7) $ — |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Jun. 24, 2022 | |
Earnings Per Share | |
Schedule of weighted-average shares outstanding, basic and diluted | For the For the Quarters Ended Nine Months Ended June 24, June 25, June 24, June 25, 2022 2021 2022 2021 (in millions) Basic 322 330 324 331 Dilutive impact of share-based compensation arrangements 2 3 3 2 Diluted 324 333 327 333 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Jun. 24, 2022 | |
Shareholders' Equity | |
Schedule of cash dividends to shareholders | For the For the Quarters Ended Nine Months Ended June 24, June 25, June 24, June 25, 2022 2021 2022 2021 Dividends paid per common share $ 0.56 $ 0.50 $ 1.56 $ 1.46 |
Schedule of common shares repurchased | For the Nine Months Ended June 24, June 25, 2022 2021 (in millions) Number of common shares repurchased 8 5 Repurchase value $ 1,072 $ 591 |
Share Plans (Tables)
Share Plans (Tables) | 9 Months Ended |
Jun. 24, 2022 | |
Share Plans | |
Share-based compensation expense | For the For the Quarters Ended Nine Months Ended June 24, June 25, June 24, June 25, 2022 2021 2022 2021 (in millions) Share-based compensation expense $ 28 $ 24 $ 88 $ 73 |
Summary of share-based award activity | During the quarter ended December 24, 2021, we granted the following share-based awards as part of our annual incentive plan grant: Grant-Date Shares Fair Value (in millions) Share options 0.8 $ 37.67 Restricted share awards 0.3 158.00 Performance share awards 0.1 158.00 |
Weighted-average assumptions | The assumptions we used in the Black-Scholes-Merton option pricing model for the options granted as part of our annual incentive plan grant were as follows: Expected share price volatility 29 % Risk-free interest rate 1.1 % Expected annual dividend per share $ 2.00 Expected life of options (in years) 5.1 |
Segment and Geographic Data (Ta
Segment and Geographic Data (Tables) | 9 Months Ended |
Jun. 24, 2022 | |
Segment and Geographic Data | |
Schedule of net sales by segment and industry end market | For the For the Quarters Ended Nine Months Ended June 24, June 25, June 24, June 25, 2022 2021 2022 2021 (in millions) Transportation Solutions: Automotive $ 1,629 $ 1,600 $ 4,802 $ 4,859 Commercial transportation 400 382 1,159 1,095 Sensors 271 283 811 822 Total Transportation Solutions 2,300 2,265 6,772 6,776 Industrial Solutions: Industrial equipment 479 377 1,413 1,011 Aerospace, defense, oil, and gas 271 260 774 777 Energy 207 187 579 544 Medical 177 178 502 495 Total Industrial Solutions 1,134 1,002 3,268 2,827 Communications Solutions: Data and devices 417 329 1,151 841 Appliances 246 249 731 661 Total Communications Solutions 663 578 1,882 1,502 Total $ 4,097 $ 3,845 $ 11,922 $ 11,105 (1) Intersegment sales were not material. (2) Industry end market information is presented consistently with our internal management reporting and may be revised periodically as management deems necessary. |
Net sales by segment and geographic region | For the For the Quarters Ended Nine Months Ended June 24, June 25, June 24, June 25, 2022 2021 2022 2021 (in millions) Europe/Middle East/Africa (“EMEA”): Transportation Solutions $ 894 $ 913 $ 2,564 $ 2,729 Industrial Solutions 470 417 1,368 1,168 Communications Solutions 84 83 263 222 Total EMEA 1,448 1,413 4,195 4,119 Asia–Pacific: Transportation Solutions 825 868 2,636 2,619 Industrial Solutions 205 183 611 517 Communications Solutions 372 333 1,036 877 Total Asia–Pacific 1,402 1,384 4,283 4,013 Americas: Transportation Solutions 581 484 1,572 1,428 Industrial Solutions 459 402 1,289 1,142 Communications Solutions 207 162 583 403 Total Americas 1,247 1,048 3,444 2,973 Total $ 4,097 $ 3,845 $ 11,922 $ 11,105 (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 24, June 25, June 24, June 25, 2022 2021 2022 2021 (in millions) Transportation Solutions $ 383 $ 433 $ 1,187 $ 1,139 Industrial Solutions 169 148 440 335 Communications Solutions 167 133 469 300 Total $ 719 $ 714 $ 2,096 $ 1,774 |
Restructuring and Other Charg_3
Restructuring and Other Charges, Net - Restructuring and Other Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 24, 2022 | Jun. 25, 2021 | Jun. 24, 2022 | Jun. 25, 2021 | |
Restructuring and other charges, net | ||||
Restructuring charges, net | $ 26 | $ 10 | $ 69 | $ 170 |
(Gain) loss on divestitures and impairment of held for sale businesses | (10) | 21 | ||
Other charges, net | 1 | 4 | ||
Restructuring and other charges, net | 26 | 11 | 59 | 195 |
Operating expenses | ||||
Restructuring and other charges, net | ||||
Restructuring charges, net | 30 | 10 | 85 | 170 |
Restructuring charges, net | ||||
Restructuring and other charges, net | ||||
Restructuring charges, net | 26 | 10 | 69 | 170 |
Restructuring charges, net | Transportation Solutions | ||||
Restructuring and other charges, net | ||||
Restructuring charges, net | 9 | 2 | 24 | 130 |
Restructuring charges, net | Industrial Solutions | ||||
Restructuring and other charges, net | ||||
Restructuring charges, net | 11 | 6 | 29 | 26 |
Restructuring charges, net | Communications Solutions | ||||
Restructuring and other charges, net | ||||
Restructuring charges, net | 6 | $ 2 | 16 | $ 14 |
Cost of sales | ||||
Restructuring and other charges, net | ||||
Restructuring charges, net | $ 4 | $ 16 |
Restructuring and Other Charg_4
Restructuring and Other Charges, Net - Restructuring Reserve Activity (Details) $ in Millions | 9 Months Ended |
Jun. 24, 2022 USD ($) | |
Restructuring reserve | |
Restructuring reserve at the beginning of the period | $ 304 |
Charges | 103 |
Changes in Estimate | (18) |
Cash Payments | (126) |
Non-Cash Items | (30) |
Currency Translation | (20) |
Restructuring reserve at the end of the period | 213 |
Fiscal 2022 Actions | |
Restructuring reserve | |
Charges | 84 |
Cash Payments | (4) |
Non-Cash Items | (27) |
Restructuring reserve at the end of the period | 53 |
Fiscal 2022 Actions | Employee severance | |
Restructuring reserve | |
Charges | 57 |
Cash Payments | (4) |
Restructuring reserve at the end of the period | 53 |
Fiscal 2022 Actions | Property, plant, and equipment and other non-cash charges | |
Restructuring reserve | |
Charges | 27 |
Non-Cash Items | (27) |
Restructuring reserve at the end of the period | 0 |
Fiscal 2021 Actions | |
Restructuring reserve | |
Restructuring reserve at the beginning of the period | 154 |
Charges | 7 |
Changes in Estimate | (4) |
Cash Payments | (77) |
Non-Cash Items | (2) |
Currency Translation | (10) |
Restructuring reserve at the end of the period | 68 |
Fiscal 2021 Actions | Employee severance | |
Restructuring reserve | |
Restructuring reserve at the beginning of the period | 152 |
Charges | 2 |
Changes in Estimate | (4) |
Cash Payments | (73) |
Currency Translation | (10) |
Restructuring reserve at the end of the period | 67 |
Fiscal 2021 Actions | Facility and other exit costs | |
Restructuring reserve | |
Restructuring reserve at the beginning of the period | 2 |
Charges | 3 |
Cash Payments | (4) |
Restructuring reserve at the end of the period | 1 |
Fiscal 2021 Actions | Property, plant, and equipment | |
Restructuring reserve | |
Charges | 2 |
Non-Cash Items | (2) |
Restructuring reserve at the end of the period | 0 |
Pre-Fiscal 2021 Actions | |
Restructuring reserve | |
Restructuring reserve at the beginning of the period | 150 |
Charges | 12 |
Changes in Estimate | (14) |
Cash Payments | (45) |
Non-Cash Items | (1) |
Currency Translation | (10) |
Restructuring reserve at the end of the period | 92 |
Pre-Fiscal 2021 Actions | Employee severance | |
Restructuring reserve | |
Restructuring reserve at the beginning of the period | 135 |
Changes in Estimate | (7) |
Cash Payments | (34) |
Currency Translation | (10) |
Restructuring reserve at the end of the period | 84 |
Pre-Fiscal 2021 Actions | Facility and other exit costs | |
Restructuring reserve | |
Restructuring reserve at the beginning of the period | 15 |
Charges | 8 |
Changes in Estimate | (4) |
Cash Payments | (11) |
Restructuring reserve at the end of the period | 8 |
Pre-Fiscal 2021 Actions | Property, plant, and equipment | |
Restructuring reserve | |
Charges | 4 |
Changes in Estimate | (3) |
Non-Cash Items | (1) |
Restructuring reserve at the end of the period | $ 0 |
Restructuring and Other Charg_5
Restructuring and Other Charges, Net - Actions (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 24, 2022 | Jun. 25, 2021 | Jun. 24, 2022 | Jun. 25, 2021 | |
Restructuring Charges | ||||
Charges Incurred | $ 26 | $ 10 | $ 69 | $ 170 |
Fiscal 2022 Actions | ||||
Restructuring Charges | ||||
Total Expected Charges | 100 | 100 | ||
Cumulative Charges Incurred | 84 | 84 | ||
Remaining Expected Charges | 16 | 16 | ||
Charges Incurred | 84 | |||
Fiscal 2022 Actions | Transportation Solutions | ||||
Restructuring Charges | ||||
Total Expected Charges | 28 | 28 | ||
Cumulative Charges Incurred | 24 | 24 | ||
Remaining Expected Charges | 4 | 4 | ||
Fiscal 2022 Actions | Industrial Solutions | ||||
Restructuring Charges | ||||
Total Expected Charges | 47 | 47 | ||
Cumulative Charges Incurred | 45 | 45 | ||
Remaining Expected Charges | 2 | 2 | ||
Fiscal 2022 Actions | Communications Solutions | ||||
Restructuring Charges | ||||
Total Expected Charges | 25 | 25 | ||
Cumulative Charges Incurred | 15 | 15 | ||
Remaining Expected Charges | 10 | 10 | ||
Fiscal 2021 Actions | ||||
Restructuring Charges | ||||
Cumulative Charges Incurred | 198 | 198 | ||
Charges Incurred | 3 | 162 | ||
Fiscal 2021 Actions | Transportation Solutions | ||||
Restructuring Charges | ||||
Cumulative Charges Incurred | 125 | 125 | ||
Fiscal 2021 Actions | Industrial Solutions | ||||
Restructuring Charges | ||||
Cumulative Charges Incurred | 49 | 49 | ||
Fiscal 2021 Actions | Communications Solutions | ||||
Restructuring Charges | ||||
Cumulative Charges Incurred | $ 24 | 24 | ||
Pre-Fiscal 2021 Actions | ||||
Restructuring Charges | ||||
Charges Incurred | $ (2) | $ 8 |
Restructuring and Other Charg_6
Restructuring and Other Charges, Net - Restructuring Reserve Balances (Details) - USD ($) $ in Millions | Jun. 24, 2022 | Sep. 24, 2021 |
Restructuring reserves included on the Consolidated Balance Sheets | ||
Accrued and other current liabilities | $ 160 | $ 236 |
Other liabilities | 53 | 68 |
Restructuring reserves | $ 213 | $ 304 |
Acquisitions (Details)
Acquisitions (Details) $ in Millions | 9 Months Ended | |
Jun. 24, 2022 USD ($) item | Jun. 25, 2021 USD ($) item | |
Acquisitions | ||
Net cash paid | $ 116 | $ 126 |
2022 Acquisitions | ||
Acquisitions | ||
Number of businesses acquired | item | 2 | |
Net cash paid | $ 141 | |
2021 Acquisitions | ||
Acquisitions | ||
Number of businesses acquired | item | 2 | |
Net cash paid | $ 125 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Jun. 24, 2022 | Sep. 24, 2021 |
Inventories | ||
Raw materials | $ 419 | $ 320 |
Work in progress | 1,190 | 991 |
Finished goods | 1,419 | 1,200 |
Inventories | $ 3,028 | $ 2,511 |
Goodwill (Details)
Goodwill (Details) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 24, 2021 USD ($) item | Jun. 24, 2022 USD ($) | |
Goodwill: | ||
Goodwill, beginning balance | $ 5,590 | |
Acquisitions | 82 | |
Purchase price adjustments | (101) | |
Currency translation and other | (219) | |
Goodwill, ending balance | $ 5,590 | 5,352 |
Transportation Solutions | ||
Goodwill: | ||
Goodwill, beginning balance | 1,549 | |
Currency translation and other | (64) | |
Goodwill, ending balance | 1,549 | 1,485 |
Accumulated impairment losses | 3,091 | 3,091 |
Industrial Solutions | ||
Goodwill: | ||
Goodwill, beginning balance | 3,446 | |
Purchase price adjustments | (101) | |
Currency translation and other | (130) | |
Goodwill, ending balance | 3,446 | 3,215 |
Accumulated impairment losses | $ 669 | 669 |
Number of businesses acquired | item | 2 | |
Communications Solutions | ||
Goodwill: | ||
Goodwill, beginning balance | 595 | |
Acquisitions | 82 | |
Currency translation and other | (25) | |
Goodwill, ending balance | $ 595 | 652 |
Accumulated impairment losses | $ 489 | $ 489 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 24, 2022 | Jun. 25, 2021 | Jun. 24, 2022 | Jun. 25, 2021 | Sep. 24, 2021 | |
Finite-Lived Intangible Assets | |||||
Gross Carrying Amount | $ 2,921 | $ 2,921 | $ 3,047 | ||
Accumulated Amortization | (1,566) | (1,566) | (1,498) | ||
Net Carrying Amount | 1,355 | 1,355 | 1,549 | ||
Finite-lived intangible assets, amortization expense | 48 | $ 48 | 145 | $ 144 | |
Aggregate amortization expense on intangible assets | |||||
Remainder of fiscal 2022 | 48 | 48 | |||
Fiscal 2023 | 191 | 191 | |||
Fiscal 2024 | 161 | 161 | |||
Fiscal 2025 | 146 | 146 | |||
Fiscal 2026 | 139 | 139 | |||
Fiscal 2027 | 120 | 120 | |||
Thereafter | 550 | 550 | |||
Net Carrying Amount | 1,355 | 1,355 | 1,549 | ||
Customer relationships | |||||
Finite-Lived Intangible Assets | |||||
Gross Carrying Amount | 1,687 | 1,687 | 1,766 | ||
Accumulated Amortization | (700) | (700) | (660) | ||
Net Carrying Amount | 987 | 987 | 1,106 | ||
Aggregate amortization expense on intangible assets | |||||
Net Carrying Amount | 987 | 987 | 1,106 | ||
Intellectual property | |||||
Finite-Lived Intangible Assets | |||||
Gross Carrying Amount | 1,216 | 1,216 | 1,262 | ||
Accumulated Amortization | (860) | (860) | (832) | ||
Net Carrying Amount | 356 | 356 | 430 | ||
Aggregate amortization expense on intangible assets | |||||
Net Carrying Amount | 356 | 356 | 430 | ||
Other | |||||
Finite-Lived Intangible Assets | |||||
Gross Carrying Amount | 18 | 18 | 19 | ||
Accumulated Amortization | (6) | (6) | (6) | ||
Net Carrying Amount | 12 | 12 | 13 | ||
Aggregate amortization expense on intangible assets | |||||
Net Carrying Amount | $ 12 | $ 12 | $ 13 |
Debt - Summary (Details)
Debt - Summary (Details) € in Millions, $ in Millions | 9 Months Ended | ||||
Jun. 24, 2022 USD ($) | Jun. 25, 2021 USD ($) | Jun. 24, 2022 EUR (€) | Jun. 24, 2022 USD ($) | Sep. 24, 2021 USD ($) | |
Debt | |||||
Fair value of debt | $ 4,134 | $ 4,465 | |||
Repayment of debt | $ 558 | $ 706 | |||
Short-term debt | 822 | 503 | |||
Long-term debt | 3,380 | 3,589 | |||
Commercial paper | |||||
Debt | |||||
Commercial paper | $ 237 | $ 0 | |||
Weighted-average interest rate (as a percent) | 1.92% | 1.92% | |||
2.50% senior notes due 2032 | |||||
Debt | |||||
Debt instrument, interest rate (as a percent) | 2.50% | 2.50% | |||
Debt instrument principal amount | $ 600 | ||||
3.50% senior notes due 2022 | |||||
Debt | |||||
Debt instrument, interest rate (as a percent) | 3.50% | 3.50% | |||
Repayment of debt | $ 500 | ||||
Reclassification | |||||
Debt | |||||
Debt instrument, interest rate (as a percent) | 1.10% | 1.10% | |||
Short-term debt | € | € 550 | ||||
Long-term debt | € | € (550) |
Leases - Components of Lease Co
Leases - Components of Lease Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 24, 2022 | Jun. 25, 2021 | Jun. 24, 2022 | Jun. 25, 2021 | |
Leases | ||||
Operating lease cost | $ 34 | $ 31 | $ 98 | $ 90 |
Variable lease cost | 15 | 13 | 40 | 37 |
Total lease cost | $ 49 | $ 44 | $ 138 | $ 127 |
Leases - Cash Flow Information
Leases - Cash Flow Information (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 24, 2022 | Jun. 25, 2021 | |
Leases | ||
Payments for operating leases | $ 92 | $ 90 |
Right-of-use assets, including modifications of existing leases, obtained in exchange for operating lease liabilities | $ 102 | $ 65 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Jun. 24, 2022 USD ($) |
Loss Contingencies | |
Accrual environmental loss contingency, estimate of probable loss | $ 20 |
Minimum | |
Loss Contingencies | |
Accrual environmental loss contingency, estimate of probable loss | 17 |
Maximum | |
Loss Contingencies | |
Accrual environmental loss contingency, estimate of probable loss | 45 |
Outstanding letters of credit, letters of guarantee and surety bonds | |
Guarantees | |
Guarantor obligations, maximum exposure | 134 |
Discontinued Operations, Disposed of by Sale | Subsea Communications | |
Guarantees | |
Guarantor obligations, maximum exposure | $ 116 |
Financial Instruments (Details)
Financial Instruments (Details) € in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Jun. 24, 2022 USD ($) | Jun. 25, 2021 USD ($) | Jun. 24, 2022 USD ($) | Jun. 25, 2021 USD ($) | Sep. 24, 2021 USD ($) | Jun. 24, 2022 EUR (€) | Jun. 24, 2022 USD ($) | Sep. 24, 2021 EUR (€) | Sep. 24, 2021 USD ($) | |
Cash flow hedges | Cross-currency swap contracts | |||||||||
Financial Instruments | |||||||||
Notional amount | € | € 200 | € 700 | |||||||
Interest paid in foreign currency, fixed interest rate | 3.50% | 3.50% | |||||||
Interest received in U.S. dollars, weighted-average fixed interest rate | 5.26% | 5.26% | |||||||
Gains (losses) recorded in other comprehensive income (loss) | $ (1,000,000) | $ (1,000,000) | $ (6,000,000) | $ (5,000,000) | |||||
Gains (losses) excluded from the hedging relationship | 13,000,000 | (11,000,000) | 52,000,000 | (23,000,000) | |||||
Cash flow hedges | Forward starting interest rate swaps | |||||||||
Financial Instruments | |||||||||
Notional amount | $ 0 | $ 450,000,000 | |||||||
Gains (losses) recorded in other comprehensive income (loss) | (11,000,000) | 13,000,000 | 36,000,000 | ||||||
Debt instrument, interest rate (as a percent) | 2.50% | 2.50% | |||||||
Cash flow hedges | Commodity swap contracts | |||||||||
Financial Instruments | |||||||||
Notional amount | $ 605,000,000 | 512,000,000 | |||||||
Gains (losses) recorded in other comprehensive income (loss) | (106,000,000) | 24,000,000 | (45,000,000) | 78,000,000 | |||||
Gains (losses) reclassified from accumulated other comprehensive income (loss) into cost of sales | 15,000,000 | 27,000,000 | 35,000,000 | 66,000,000 | |||||
Net investment hedges | Intercompany loans and external borrowings | |||||||||
Financial Instruments | |||||||||
Notional amount of non-derivative instruments | 2,203,000,000 | $ 3,798,000,000 | |||||||
Foreign currency exchange gains (losses) on intercompany loans and external borrowings | 156,000,000 | (46,000,000) | 344,000,000 | (81,000,000) | |||||
Net investment hedges | Cross-currency swap contracts | |||||||||
Financial Instruments | |||||||||
Notional amount | $ 1,767,000,000 | 1,430,000,000 | |||||||
Interest paid in foreign currency, fixed interest rate | 0% | 0% | |||||||
Interest received in U.S. dollars, weighted-average fixed interest rate | 1.51% | 1.51% | |||||||
Gains (losses) on cross-currency swap contracts designated as hedges of net investment | $ 78,000,000 | $ (14,000,000) | $ 148,000,000 | $ (41,000,000) | |||||
Prepaid expenses and other current assets | Cash flow hedges | Cross-currency swap contracts | |||||||||
Financial Instruments | |||||||||
Fair Value of Asset Positions | $ 18,000,000 | ||||||||
Prepaid expenses and other current assets | Cash flow hedges | Forward starting interest rate swaps | |||||||||
Financial Instruments | |||||||||
Fair Value of Asset Positions | 7,000,000 | ||||||||
Prepaid expenses and other current assets | Cash flow hedges | Commodity swap contracts | |||||||||
Financial Instruments | |||||||||
Fair Value of Asset Positions | 2,000,000 | 23,000,000 | |||||||
Prepaid expenses and other current assets | Net investment hedges | Cross-currency swap contracts | |||||||||
Financial Instruments | |||||||||
Fair Value of Asset Positions | 28,000,000 | 3,000,000 | |||||||
Other assets | Net investment hedges | Cross-currency swap contracts | |||||||||
Financial Instruments | |||||||||
Fair Value of Asset Positions | 97,000,000 | 18,000,000 | |||||||
Accrued and other current liabilities | Cash flow hedges | Forward starting interest rate swaps | |||||||||
Financial Instruments | |||||||||
Fair Value of Liability Positions | 38,000,000 | ||||||||
Accrued and other current liabilities | Cash flow hedges | Commodity swap contracts | |||||||||
Financial Instruments | |||||||||
Fair Value of Liability Positions | 57,000,000 | 18,000,000 | |||||||
Accrued and other current liabilities | Net investment hedges | Cross-currency swap contracts | |||||||||
Financial Instruments | |||||||||
Fair Value of Liability Positions | 13,000,000 | ||||||||
Other liabilities | Cash flow hedges | Cross-currency swap contracts | |||||||||
Financial Instruments | |||||||||
Fair Value of Liability Positions | 20,000,000 | ||||||||
Other liabilities | Cash flow hedges | Commodity swap contracts | |||||||||
Financial Instruments | |||||||||
Fair Value of Liability Positions | $ 10,000,000 | 4,000,000 | |||||||
Other liabilities | Net investment hedges | Cross-currency swap contracts | |||||||||
Financial Instruments | |||||||||
Fair Value of Liability Positions | $ 18,000,000 |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 24, 2022 | Jun. 25, 2021 | Jun. 24, 2022 | Jun. 25, 2021 | |
Non-U.S. Plans | ||||
Net Periodic Postretirement Benefit Cost (Credit) | ||||
Service cost | $ 11 | $ 10 | $ 31 | $ 34 |
Interest cost | 8 | 7 | 25 | 21 |
Expected return on plan assets | (15) | (13) | (44) | (40) |
Amortization of net actuarial loss | 6 | 8 | 19 | 23 |
Amortization of prior service credit | (1) | (3) | (4) | (6) |
Net periodic pension benefit cost (credit) | 9 | 9 | 27 | 32 |
Defined benefit plan, contributions by employer | 29 | |||
U.S. Plans | ||||
Net Periodic Postretirement Benefit Cost (Credit) | ||||
Service cost | 2 | 3 | 6 | 9 |
Interest cost | 7 | 7 | 20 | 23 |
Expected return on plan assets | (11) | (13) | (35) | (39) |
Amortization of net actuarial loss | $ 3 | 2 | $ 7 | |
Net periodic pension benefit cost (credit) | $ (2) | $ (7) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 24, 2022 | Jun. 25, 2021 | Jun. 24, 2022 | Jun. 25, 2021 | Sep. 30, 2022 | |
Income tax expense | $ 116 | $ 124 | $ 362 | $ 290 | |
Income tax benefit associated with intercompany transactions | 21 | 57 | |||
Income Tax Charges Associated With Write Down Of Certain Deferred Tax Assets To Lower Tax Rate | 27 | ||||
Income tax expense associated with income tax audit of pre-acquisition period of acquired entity | 12 | ||||
Other income associated with indemnification receivable | 11 | ||||
Income tax benefit from change in the tax method of depreciating or amortizing certain assets | $ 29 | ||||
Increase in deferred tax assets for tax loss and credit carryforwards from intercompany transaction with non-U.S. subsidiary | 4,000 | ||||
Increase in deferred tax assets valuation allowance for tax loss and credit carryforwards from intercompany transaction with non-U.S. subsidiary | 4,000 | ||||
Unrecognized income tax benefits, approximate amount that could be resolved in next twelve months | $ 100 | $ 100 | |||
Expected | |||||
Income tax benefit associated with intercompany transactions | $ 75 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 24, 2022 | Jun. 25, 2021 | Jun. 24, 2022 | Jun. 25, 2021 | |
Earnings Per Share | ||||
Antidilutive share options | 1 | 1 | ||
Earnings Per Share | ||||
Basic (in shares) | 322 | 330 | 324 | 331 |
Dilutive impact of share-based compensation arrangements (in shares) | 2 | 3 | 3 | 2 |
Diluted (in shares) | 324 | 333 | 327 | 333 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) $ / shares in Units, shares in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2022 installment $ / shares shares | Jun. 24, 2022 USD ($) $ / shares | Jun. 25, 2021 USD ($) $ / shares | Jun. 24, 2022 USD ($) $ / shares shares | Jun. 25, 2021 USD ($) $ / shares shares | Sep. 24, 2021 USD ($) | |
Shareholders' Equity | ||||||
Dividends paid per common share | $ / shares | $ 0.56 | $ 0.50 | $ 1.56 | $ 1.46 | ||
Cancellation of treasury shares (in shares) | shares | 5 | |||||
Dividend or cash distribution approved (in currency per share) | $ / shares | $ 2.24 | |||||
Number of quarterly dividend installments | installment | 4 | |||||
Cash distribution quarterly installment payable (in dollars per share) | $ / shares | $ 0.56 | |||||
Unpaid portion of the dividend payment recorded in accrued and other current liabilities | $ 538 | $ 538 | $ 327 | |||
Share repurchase program, increase in authorized amount | 1,500 | |||||
Number of common shares repurchased | shares | 8 | 5 | ||||
Repurchase value | 320 | $ 282 | $ 1,072 | $ 591 | ||
Amount available for repurchase, at end of period | $ 2,000 | $ 2,000 |
Share Plans (Details)
Share Plans (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 24, 2022 | Dec. 24, 2021 | Jun. 25, 2021 | Jun. 24, 2022 | Jun. 25, 2021 | |
Share Based Compensation Arrangements: | |||||
Share-based compensation expense | $ 28 | $ 24 | $ 88 | $ 73 | |
Shares available for issuance | 11 | 11 | |||
Share Based Compensation Expenses Not Recognized | |||||
Share-based compensation, share-based awards, total compensation expense not yet recognized | $ 160 | $ 160 | |||
Share-based compensation, share-based awards, total compensation expense not yet recognized, expected period for recognition | 1 year 9 months 18 days | ||||
Share options | |||||
Share Based Compensation Arrangements: | |||||
Share options granted | 0.8 | ||||
Options granted, grant-date fair value (in dollars per share) | $ 37.67 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology | |||||
Expected share price volatility (as a percent) | 29% | ||||
Risk-free interest rate (as a percent) | 1.10% | ||||
Expected annual dividend per share | $ 2 | ||||
Expected life of options (in years) | 5 years 1 month 6 days | ||||
Restricted share awards | |||||
Share Based Compensation Arrangements: | |||||
Shares granted | 0.3 | ||||
Shares granted, grant-date fair value (in dollars per share) | $ 158 | ||||
Performance share awards | |||||
Share Based Compensation Arrangements: | |||||
Shares granted | 0.1 | ||||
Shares granted, grant-date fair value (in dollars per share) | $ 158 |
Segment and Geographic Data - N
Segment and Geographic Data - Net Sales by Segment and Industry End Market (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 24, 2022 | Jun. 25, 2021 | Jun. 24, 2022 | Jun. 25, 2021 | |
Segment and Geographic Data | ||||
Net sales | $ 4,097 | $ 3,845 | $ 11,922 | $ 11,105 |
Transportation Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 2,300 | 2,265 | 6,772 | 6,776 |
Transportation Solutions | Automotive | ||||
Segment and Geographic Data | ||||
Net sales | 1,629 | 1,600 | 4,802 | 4,859 |
Transportation Solutions | Commercial transportation | ||||
Segment and Geographic Data | ||||
Net sales | 400 | 382 | 1,159 | 1,095 |
Transportation Solutions | Sensors | ||||
Segment and Geographic Data | ||||
Net sales | 271 | 283 | 811 | 822 |
Industrial Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 1,134 | 1,002 | 3,268 | 2,827 |
Industrial Solutions | Industrial equipment | ||||
Segment and Geographic Data | ||||
Net sales | 479 | 377 | 1,413 | 1,011 |
Industrial Solutions | Aerospace, defense, oil, and gas | ||||
Segment and Geographic Data | ||||
Net sales | 271 | 260 | 774 | 777 |
Industrial Solutions | Energy | ||||
Segment and Geographic Data | ||||
Net sales | 207 | 187 | 579 | 544 |
Industrial Solutions | Medical | ||||
Segment and Geographic Data | ||||
Net sales | 177 | 178 | 502 | 495 |
Communications Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 663 | 578 | 1,882 | 1,502 |
Communications Solutions | Data and devices | ||||
Segment and Geographic Data | ||||
Net sales | 417 | 329 | 1,151 | 841 |
Communications Solutions | Appliances | ||||
Segment and Geographic Data | ||||
Net sales | $ 246 | $ 249 | $ 731 | $ 661 |
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. 24, 2022 | Jun. 25, 2021 | Jun. 24, 2022 | Jun. 25, 2021 | |
Segment and Geographic Data | ||||
Net sales | $ 4,097 | $ 3,845 | $ 11,922 | $ 11,105 |
Transportation Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 2,300 | 2,265 | 6,772 | 6,776 |
Industrial Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 1,134 | 1,002 | 3,268 | 2,827 |
Communications Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 663 | 578 | 1,882 | 1,502 |
Total Europe/Middle East/Africa | ||||
Segment and Geographic Data | ||||
Net sales | 1,448 | 1,413 | 4,195 | 4,119 |
Total Europe/Middle East/Africa | Transportation Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 894 | 913 | 2,564 | 2,729 |
Total Europe/Middle East/Africa | Industrial Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 470 | 417 | 1,368 | 1,168 |
Total Europe/Middle East/Africa | Communications Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 84 | 83 | 263 | 222 |
Total Asia-Pacific | ||||
Segment and Geographic Data | ||||
Net sales | 1,402 | 1,384 | 4,283 | 4,013 |
Total Asia-Pacific | Transportation Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 825 | 868 | 2,636 | 2,619 |
Total Asia-Pacific | Industrial Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 205 | 183 | 611 | 517 |
Total Asia-Pacific | Communications Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 372 | 333 | 1,036 | 877 |
Total Americas | ||||
Segment and Geographic Data | ||||
Net sales | 1,247 | 1,048 | 3,444 | 2,973 |
Total Americas | Transportation Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 581 | 484 | 1,572 | 1,428 |
Total Americas | Industrial Solutions | ||||
Segment and Geographic Data | ||||
Net sales | 459 | 402 | 1,289 | 1,142 |
Total Americas | Communications Solutions | ||||
Segment and Geographic Data | ||||
Net sales | $ 207 | $ 162 | $ 583 | $ 403 |
Segment and Geographic Data - O
Segment and Geographic Data - Operating Income by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 24, 2022 | Jun. 25, 2021 | Jun. 24, 2022 | Jun. 25, 2021 | |
Segment and Geographic Data | ||||
Operating income | $ 719 | $ 714 | $ 2,096 | $ 1,774 |
Transportation Solutions | ||||
Segment and Geographic Data | ||||
Operating income | 383 | 433 | 1,187 | 1,139 |
Industrial Solutions | ||||
Segment and Geographic Data | ||||
Operating income | 169 | 148 | 440 | 335 |
Communications Solutions | ||||
Segment and Geographic Data | ||||
Operating income | $ 167 | $ 133 | $ 469 | $ 300 |