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What changed in TE Connectivity's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of TE Connectivity's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+155 added−149 removedSource: 10-K (2024-11-12) vs 10-K (2023-11-13)

Top changes in TE Connectivity's 2024 10-K

155 paragraphs added · 149 removed · 119 edited across 3 sections

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeITEM 1C. CYBERSECURITY Not applicable. ITEM 2. PROPERTIES Our principal executive office is located in Schaffhausen, Switzerland. As of fiscal year end 2023, we owned approximately 17 million square feet and leased approximately 10 million square feet of aggregate floor space, used primarily for manufacturing, warehousing, and office space.
Biggest changeIn connection with our change in place of incorporation, Galway, Ireland became the new location of our principal executive office in fiscal 2025. As of fiscal year end 2024, we owned approximately 17 million square feet and leased approximately 10 million square feet of aggregate floor space, used primarily for manufacturing, warehousing, and office space.
As of fiscal year end 2023, our principal centers of manufacturing output by segment and geographic region were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Transportation Industrial Communications ​ ​ ​ Solutions ​ Solutions ​ Solutions ​ Total ​ (number of manufacturing facilities) ​ EMEA 20 20 2 42 ​ Asia–Pacific 9 6 9 24 ​ Americas 10 26 2 38 ​ Total 39 52 13 104 ​ ​ ​ ITEM 3.
As of fiscal year end 2024, our principal centers of manufacturing output by segment and geographic region were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Transportation Industrial Communications ​ ​ ​ Solutions ​ Solutions ​ Solutions ​ Total ​ (number of manufacturing facilities) ​ EMEA 20 18 1 39 ​ Asia–Pacific 10 9 8 27 ​ Americas 7 25 2 34 ​ Total 37 52 11 100 ​ ​ ​ ITEM 3.
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Environmental Matter The following information is reported in accordance with Item 103 of Regulation S-K: During fiscal 2021, we determined that the Silicon Microstructures, Inc. (“SMI”) manufacturing site in Milpitas, California historically miscalculated and inaccurately reported its sulfur hexafluoride (SF 6 ) emissions prior to our acquisition of SMI.
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ITEM 1C. CYBERSECURITY Cybersecurity Risk Management and Strategy Our cybersecurity risk management strategy and processes are designed to identify, assess, and manage risks to the confidentiality, integrity, and availability of our information technology environment, systems, and information.
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The site voluntarily disclosed the matter to the applicable state and local authorities, and in fiscal 2022, we received 21 Table of Contents approval and installed new air abatement equipment at the site.
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The cybersecurity risk management process is managed centrally and is led by our global chief information security officer 21 Table of Contents (“CISO”) who reports to our global chief information officer. Our cybersecurity program takes a risk-based approach and is integrated with our global enterprise risk management program.
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In connection with an inspection of the air abatement equipment and an unrelated hazardous materials inspection during fiscal 2023, the local environmental authorities identified additional environmental deficiencies at the site. We are in the process of taking corrective actions and are fully cooperating with the authorities to ensure a satisfactory resolution of these matters.
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Our cybersecurity risk strategy is aligned with cyber/information security frameworks and industry standards, including the National Institute of Standards and Technology Cybersecurity Framework.
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We may face monetary sanctions, although we do not anticipate such claims will have a material adverse effect on our results of operations, financial position, or cash flows.
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Our cybersecurity program includes the following risk management practices: ● a formal cybersecurity risk assessment is performed annually in collaboration with our enterprise risk management function, resulting in updates to plans and actions that are incorporated into improvement projects; ● our cybersecurity program maturity is benchmarked annually against industry standards and norms.
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The result serves as a guide to identifying evolving risks, prioritizing improvements, and enhancing the program; ● cybersecurity threats are evaluated throughout the year by our around-the-clock security operations center, utilizing a variety of third-party subscription and threat intelligence data sources and data collected via internal monitoring and scanning processes; ● annual security awareness trainings are required to be completed by employees, and monthly phishing campaigns and additional function-specific cybersecurity trainings are also conducted; ● security and risk metrics are reviewed monthly and reported to leadership quarterly; ● external penetration tests are conducted annually by independent third parties and appropriate actions are taken to strengthen controls; ● a cybersecurity incident response charter and plan, and playbooks are maintained by the cybersecurity incident response team.
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The plan and playbooks are utilized during table-top exercises and trainings. Participants may include information technology, business, corporate function, and external resources depending on the table-top scenario; and ● third-party supplier security reviews are conducted based on risk.
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Reviews may include the assessment of security architecture, connections between our systems and the third party, data security controls, and user access controls. To date, we do not believe that any risks from cybersecurity threats, nor any previous cybersecurity incidents, have materially affected our business strategy, results of operations, or financial condition.
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However, the sophistication of cyber threats continues to increase, and the preventative actions we have taken and continue to take to reduce the risk of cyber incidents and protect our systems and information may not successfully protect against future cyber incidents, which could materially affect our business strategy, results of operations, or financial condition.
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For additional information on certain risks associated with cybersecurity, refer to the risk factors related to cybersecurity and information technology systems in “Part I, Item 1A.
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Risk Factors.” Cybersecurity Program Governance Our cybersecurity program is governed by the information security committee (“ISC”), composed of our leaders from information technology, enterprise risk, legal, compliance, strategy, human resources, finance, internal audit, and various business units.
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On a quarterly basis, the CISO reports to the ISC on topics such as risk mitigation project status, audit results, security metrics, cyber incidents investigated and impact, if any, and significant changes that contribute toward protecting the enterprise from cybersecurity threats.
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Our CISO has over 20 years of experience in information security leadership roles and over 8 years as our CISO. Nearly half of our board of directors have completed cybersecurity program trainings or have cybersecurity and information security industry experience. Cybersecurity incidents are evaluated by a cross-functional management team based on defined quantitative and qualitative criteria and communicated to leadership.
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We have cybersecurity and information technology third-party consultants to assist in performing forensic and technical analyses and advising leadership as needed. 22 Table of Contents The cybersecurity committee of our board of directors has oversight responsibility for cybersecurity risks.
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The CISO provides updates at least twice a year to the cybersecurity committee regarding matters related to information technology and cybersecurity risks including the state of our cybersecurity programs, emerging cybersecurity developments and threats, and our strategy to mitigate cybersecurity risk.
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Additionally, the full board of directors receives updates on our cybersecurity program twice a year as part of the enterprise risk management meetings. ITEM 2. PROPERTIES During fiscal 2024, our principal executive office was located in Schaffhausen, Switzerland.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeIssuer Purchases of Equity Securities The following table presents information about our purchases of our common shares during the quarter ended September 29, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Maximum ​ ​ ​ ​ ​ ​ ​ ​ Total Number of ​ Approximate ​ ​ ​ ​ ​ ​ ​ ​ Shares Purchased ​ Dollar Value ​ ​ ​ ​ ​ ​ ​ ​ as Part of ​ of Shares that May ​ ​ ​ Total Number ​ Average Price ​ Publicly Announced ​ Yet Be Purchased ​ ​ ​ of Shares ​ Paid Per ​ Plans or ​ Under the Plans ​ Period Purchased (1) Share (1) Programs (2) or Programs (2) July 1–July 28, 2023 ​ 428,261 ​ $ 142.15 ​ 428,200 ​ $ 999,101,703 ​ July 29–September 1, 2023 1,067,083 ​ 133.55 1,060,900 ​ 857,423,534 ​ September 2–September 29, 2023 964,156 ​ 126.54 963,800 ​ 735,467,902 ​ Total 2,459,500 ​ ​ 132.30 2,452,900 ​ ​ (1) These columns include the following transactions which occurred during the quarter ended September 29, 2023: (i) the acquisition of 6,600 common shares from individuals in order to satisfy tax withholding requirements in connection with the vesting of restricted share awards issued under equity compensation plans; and (ii) open market purchases totaling 2,452,900 common shares, summarized on a trade-date basis, in conjunction with the share repurchase program announced in September 2007.
Biggest changeIssuer Purchases of Equity Securities The following table presents information about our purchases of our common shares during the quarter ended September 27, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Maximum ​ ​ ​ ​ ​ ​ ​ ​ Total Number of ​ Approximate ​ ​ ​ ​ ​ ​ ​ ​ Shares Purchased ​ Dollar Value ​ ​ ​ ​ ​ ​ ​ ​ as Part of ​ of Shares that May ​ ​ ​ Total Number ​ Average Price ​ Publicly Announced ​ Yet Be Purchased ​ ​ ​ of Shares ​ Paid Per ​ Plans or ​ Under the Plans ​ Period Purchased (1) Share (1) Programs (2) or Programs (2) June 29–July 26, 2024 ​ 798,713 ​ $ 153.63 ​ 798,713 ​ $ 876,909,949 ​ July 27–August 30, 2024 2,490,228 ​ 148.83 2,480,852 ​ 507,682,852 ​ August 31–September 27, 2024 1,797,756 ​ 146.33 1,797,756 ​ 244,622,761 ​ Total 5,086,697 ​ ​ 148.70 5,077,321 ​ ​ (1) These columns include the following transactions which occurred during the quarter ended September 27, 2024: (i) the acquisition of 9,376 common shares from individuals in order to satisfy tax withholding requirements in connection with the vesting of restricted share awards issued under equity compensation plans; and (ii) open market purchases totaling 5,077,321 common shares, summarized on a trade-date basis, in conjunction with the share repurchase program announced in September 2007.
Performance Graph The following graph compares the cumulative total shareholder return on our common shares against the cumulative return on the S&P 500 Index and the Dow Jones U.S. Electrical Components and Equipment Index.
Performance Graph The following graph compares the cumulative total shareholder return on our shares against the cumulative return on the S&P 500 Index and the Dow Jones U.S. Electrical Components & Equipment Index.
The graph assumes the investment of $100 in our common shares and in each index at fiscal year end 2018 and assumes the reinvestment of all dividends and distributions. The graph shows the cumulative total return for the last five fiscal years.
The graph assumes the investment of $100 in our shares and in each index at fiscal year end 2019 and assumes the reinvestment of all dividends and distributions. The graph shows the cumulative total return for the last five fiscal years.
In exercising their discretion to recommend to the shareholders that such dividends be approved, our board of directors will consider our results of operations, cash requirements and surplus, financial condition, statutory requirements of applicable law, contractual restrictions, and other factors that they may deem relevant.
In exercising their discretion to approve such dividends, our board of directors will consider our results of operations, financial condition, cash requirements, future business prospects, statutory requirements of applicable law, contractual restrictions, restrictions imposed by Irish law, and other factors that they may deem relevant.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Holders Our common shares are listed and traded on the NYSE under the symbol “TEL.” As of November 8, 2023, there were 16,159 shareholders of record of our common shares.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 23 Table of Contents PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Holders Our shares are listed and traded on the NYSE under the symbol “TEL.” As of November 8, 2024, there were 15,324 shareholders of record.
The comparisons in the graph are based upon historical data and are not indicative of, nor intended to forecast, future performance of our common shares. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year End ​ 2018 (1) 2019 2020 2021 2022 2023 TE Connectivity Ltd. ​ $ 100.00 ​ $ 107.73 ​ $ 113.20 ​ $ 173.60 ​ $ 135.02 ​ $ 153.89 ​ S&P 500 Index ​ 100.00 ​ 103.72 ​ 117.72 ​ 161.39 ​ ​ 131.92 ​ ​ 160.44 ​ Dow Jones U.S.
The comparisons in the graph are based upon historical data and are not indicative of, nor intended to forecast, future returns. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year End ​ 2019 (1) 2020 2021 2022 2023 2024 TE Connectivity ​ $ 100.00 ​ $ 105.07 ​ $ 161.14 ​ $ 125.33 ​ $ 142.85 ​ $ 177.91 ​ S&P 500 Index ​ 100.00 ​ 113.50 ​ 155.59 ​ 127.18 ​ ​ 154.68 ​ ​ 210.00 ​ Dow Jones U.S.
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ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 22 Table of Contents PART II ITEM 5.
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Electrical Components & Equipment Index ​ 100.00 ​ 104.82 ​ 152.18 ​ 126.17 ​ ​ 159.89 ​ ​ 218.36 ​ (1) $100 invested on September 27, 2019 in our common shares and in indexes.
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Electrical Components and Equipment Index ​ 100.00 ​ 96.28 ​ 100.92 ​ 146.51 ​ ​ 121.47 ​ ​ 153.94 ​ (1) $100 invested on September 28, 2018 in TE Connectivity Ltd.’s common shares and in indexes. Indexes calculated on month-end basis. 23 Table of Contents Dividends Future dividends on our common shares, if any, must be approved by our shareholders.
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Indexes calculated on month-end basis. 24 Table of Contents Dividends At the Annual General Meeting on March 13, 2024, shareholders approved a dividend payment of $2.60 per share, payable in four equal quarterly installments of $0.65 per share. The third and fourth installments are expected to occur in our first and second quarters of fiscal 2025.
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As a result of our change in place of incorporation, beginning in our third quarter of fiscal 2025, future dividends on our ordinary shares, if any, will be declared on a quarterly basis by our board of directors as provided by Irish law. Shareholder approval is no longer required.
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On October 30, 2024, our board of directors authorized an increase of $2.5 billion in our share repurchase program. See Note 17 to the Consolidated Financial Statements for additional information regarding our share repurchase program.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

111 edited+17 added−24 removed67 unchanged
Biggest changeThe following table presents the Communications Solutions segment’s net sales and the percentage of total net sales by industry end market (1) : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ ​ 2023 2022 ​ ​ ($ in millions) ​ ​ Data and devices ​ $ 1,162 61 % ​ $ 1,606 62 % ​ Appliances ​ 733 39 ​ ​ 966 38 ​ ​ Total ​ $ 1,895 100 % ​ $ 2,572 100 % ​ (1) Industry end market information is presented consistently with our internal management reporting and may be revised periodically as management deems necessary.
Biggest changeThe following table presents the Communications Solutions segment’s net sales and the percentage of total net sales by industry end market (1) : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ ​ 2024 2023 ​ ​ ($ in millions) ​ ​ Data and devices ​ $ 1,274 65 % ​ $ 1,162 61 % ​ Appliances ​ 692 35 ​ ​ 733 39 ​ ​ Total ​ $ 1,966 100 % ​ $ 1,895 100 % ​ (1) Industry end market information is presented consistently with our internal management reporting and may be revised periodically as management deems necessary. 33 Table of Contents The following table provides an analysis of the change in the Communications Solutions segment’s net sales by industry end market: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in Net Sales for Fiscal 2024 versus Fiscal 2023 ​ ​ Net Sales ​ Organic Net Sales ​ ​ ​ ​ Growth (Declines) ​ Growth (Declines) ​ Translation ​ ​ ($ in millions) Data and devices ​ $ 112 9.6 % $ 118 10.2 % $ (6) ​ Appliances ​ (41) (5.6) ​ (27) (3.7) ​ (14) ​ Total ​ $ 71 3.7 % $ 91 4.8 % $ (20) ​ Net sales in the Communications Solutions segment increased $71 million, or 3.7%, in fiscal 2024 as compared to fiscal 2023 due primarily to organic net sales growth of 4.8%.
A 50-basis-point decrease or increase in the expected long-term returns on plan assets would have increased or decreased, respectively, our fiscal 2023 pension expense by $8 million. At fiscal year end 2023, the long-term target asset allocation in our U.S. plans’ master trust is 25% return-seeking assets and 75% liability-hedging assets.
A 50-basis-point decrease or increase in the expected long-term returns on plan assets would have increased or decreased, respectively, our fiscal 2024 pension expense by $8 million. At fiscal year end 2024, the long-term target asset allocation in our U.S. plans’ master trust is 25% return-seeking assets and 75% liability-hedging assets.
There were no such contracts and no floating debt outstanding at fiscal year end 2023 or 2022. We utilize investment swap contracts to manage earnings exposure on certain nonqualified deferred compensation liabilities. Commodity Exposures Our worldwide operations and product lines may expose us to risks from fluctuations in commodity prices.
There were no such contracts and no floating debt outstanding at fiscal year end 2024 or 2023. We utilize investment swap contracts to manage earnings exposure on certain nonqualified deferred compensation liabilities. Commodity Exposures Our worldwide operations and product lines may expose us to risks from fluctuations in commodity prices.
We may use excess cash to purchase a portion of our common shares pursuant to our authorized share repurchase program, to acquire strategic businesses or product lines, to pay dividends on our common shares, or to reduce our outstanding debt. The cost or availability of future funding may be impacted by financial market conditions.
We may use excess cash to purchase a portion of our ordinary shares pursuant to our authorized share repurchase program, to acquire strategic businesses or product lines, to pay dividends on our ordinary shares, or to reduce our outstanding debt. The cost or availability of future funding may be impacted by financial market conditions.
As of fiscal year end 2023, our cash and cash equivalents were held in subsidiaries which are located in various countries throughout the world. Under current applicable laws, substantially all of these amounts can be repatriated to Tyco Electronics Group S.A.
As of fiscal year end 2024, our cash and cash equivalents were held in subsidiaries which are located in various countries throughout the world. Under current applicable laws, substantially all of these amounts can be repatriated to Tyco Electronics Group S.A.
The Credit Facility and our other debt agreements contain other customary covenants. None of our covenants are presently considered restrictive to our operations. As of fiscal year end 2023, we were in compliance with all of our debt covenants and believe that we will continue to be in compliance with our existing covenants for the foreseeable future.
The Credit Facility and our other debt agreements contain other customary covenants. None of our covenants are presently considered restrictive to our operations. As of fiscal year end 2024, we were in compliance with all of our debt covenants and believe that we will continue to be in compliance with our existing covenants for the foreseeable future.
Asset re-allocation to meet that target is occurring over a multi-year period based on the funded status. We expect to reach our target allocation when the funded status of the plans exceeds 110%. Based on the funded status of the plans as of fiscal year end 2023, our target asset allocation is 67% return-seeking and 33% liability-hedging.
Asset re-allocation to meet that target is occurring over a multi-year period based on the funded status. We expect to reach our target allocation when the funded status of the plans exceeds 110%. Based on the funded status of the plans as of fiscal year end 2024, our target asset allocation is 67% return-seeking and 33% liability-hedging.
We completed our annual goodwill impairment test in the fourth quarter of fiscal 2023 and determined that no impairment existed. Income Taxes In determining pre-tax income for financial statement purposes, we must make certain estimates and judgments.
We completed our annual goodwill impairment test in the fourth quarter of fiscal 2024 and determined that no impairment existed. Income Taxes In determining pre-tax income for financial statement purposes, we must make certain estimates and judgments.
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. 38 Table of Contents Goodwill and Other Intangible Assets We account for goodwill and other intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other .
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. Goodwill and Other Intangible Assets We account for goodwill and other intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other .
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 37 Table of Contents use tax, real estate tax, and transfer tax.
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.
Organic net sales growth (decline) provides useful information about our results and the trends of our business. Management uses this measure to monitor and evaluate performance. Also, management uses this measure together with GAAP financial measures in its decision-making processes related to the operations of our reportable segments and our overall company.
Organic net sales growth (decline) provides useful information about our results and the trends of our business. Management uses this measure to monitor and evaluate performance. Also, management uses this measure together with GAAP financial measures in its decision-making processes related to the operations of our reportable segments and our 41 Table of Contents overall company.
Divestitures During fiscal 2023, we sold three businesses for net cash proceeds of $48 million. In connection with the divestitures, we recorded pre-tax impairment charges and a net pre-tax loss on sales, which totaled to a net charge of $9 million. The businesses sold were reported in our Industrial Solutions segment.
The business sold was reported in our Transportation Solutions segment. During fiscal 2023, we sold three businesses for net cash proceeds of $48 million. In connection with the divestitures, we recorded pre-tax impairment charges and a net pre-tax loss on sales, which totaled to a net charge of $9 million. The businesses sold were reported in our Industrial Solutions segment.
(2) Interest payments exclude the impact of interest rate swap and cross-currency swap contracts. Interest payments on debt are projected for future periods using rates in effect as of fiscal year end 2023 and are subject to change in future periods. (3) Operating leases represents the undiscounted lease payments.
(2) Interest payments exclude the impact of any interest rate swap and cross-currency swap contracts. Interest payments on debt are projected for future periods using rates in effect as of fiscal year end 2024 and are subject to change in future periods. (3) Operating leases represents the undiscounted lease payments.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The following Consolidated Financial Statements and schedule specified by this Item, together with the reports thereon of Deloitte & Touche LLP, are presented following Item 15 and the signature pages of this report: Financial Statements: Reports of Independent Registered Public Accounting Firm Consolidated Statements of Operations for the Fiscal Years Ended September 29, 2023, September 30, 2022, and September 24, 2021 Consolidated Statements of Comprehensive Income for the Fiscal Years Ended September 29, 2023, September 30, 2022, and September 24, 2021 Consolidated Balance Sheets as of September 29, 2023 and September 30, 2022 Consolidated Statements of Shareholders’ Equity for the Fiscal Years Ended September 29, 2023, September 30, 2022, and September 24, 2021 Consolidated Statements of Cash Flows for the Fiscal Years Ended September 29, 2023, September 30, 2022, and September 24, 2021 Notes to Consolidated Financial Statements Financial Statement Schedule: Schedule II—Valuation and Qualifying Accounts All other financial statements and schedules have been omitted since the information required to be submitted has been included on the Consolidated Financial Statements and related notes or because they are either not applicable or not required under the rules of Regulation S-X.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The following Consolidated Financial Statements and schedule specified by this Item, together with the reports thereon of Deloitte & Touche LLP, are presented following Item 15 and the signature pages of this report: Financial Statements: Reports of Independent Registered Public Accounting Firm Consolidated Statements of Operations for the Fiscal Years Ended September 27, 2024, September 29, 2023, and September 30, 2022 Consolidated Statements of Comprehensive Income for the Fiscal Years Ended September 27, 2024, September 29, 2023, and September 30, 2022 Consolidated Balance Sheets as of September 27, 2024 and September 29, 2023 Consolidated Statements of Shareholders’ Equity for the Fiscal Years Ended September 27, 2024, September 29, 2023, and September 30, 2022 Consolidated Statements of Cash Flows for the Fiscal Years Ended September 27, 2024, September 29, 2023, and September 30, 2022 Notes to Consolidated Financial Statements 44 Table of Contents Financial Statement Schedule: Schedule II—Valuation and Qualifying Accounts All other financial statements and schedules have been omitted since the information required to be submitted has been included on the Consolidated Financial Statements and related notes or because they are either not applicable or not required under the rules of Regulation S-X.
The objective of these contracts is to minimize impacts to cash flows and profitability due to changes in foreign currency exchange rates on intercompany and other cash transactions. In addition, we utilize cross-currency swap contracts to hedge our net investment in certain foreign operations.
The objective of these contracts is to minimize impacts to cash flows and profitability due to changes in foreign currency exchange rates on intercompany and other cash transactions. In addition, we utilize cross-currency swap contracts to hedge our net investment 43 Table of Contents in certain foreign operations.
We expect to contribute $70 million to pension plans in fiscal 2024, before consideration of any voluntary contributions. See Note 14 to the Consolidated Financial Statements for additional information regarding these plans and our estimates of future contributions and benefit payments.
We expect to contribute approximately $70 million to pension plans in fiscal 2025, before consideration of any voluntary contributions. See Note 14 to the Consolidated Financial Statements for additional information regarding these plans and our estimates of future contributions and benefit payments.
Trade Compliance Matters We have been investigating our past compliance with relevant U.S. trade controls and have made voluntary disclosures of apparent trade controls violations to the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) and the U.S. State Department’s Directorate of Defense Trade Controls (“DDTC”).
Trade Compliance Matters We have been investigating our past compliance with relevant U.S. trade controls and have made voluntary disclosures of apparent trade controls violations to the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) and the U.S. State Department’s Directorate of Defense Trade Controls (“DDTC”). We have also been contacted by the U.S.
Although we have reserved for potential fines and penalties relating to these matters based on our current understanding of the facts, the investigations into these matters have yet to be completed and the final outcome of such investigations and related fines and penalties may differ from amounts currently reserved.
Although we have reserved for potential fines and penalties relating to these matters based on our current understanding of the facts, the investigation into these matters has yet to be completed and the final outcome of such investigation and related fines and penalties may differ from amounts currently reserved.
See Note 11 to the Consolidated Financial Statements for additional information regarding leases. (4) Purchase obligations consist primarily of commitments for purchases of goods and services. (5) The above table does not reflect unrecognized income tax benefits of $454 million and related accrued interest and penalties of $65 million, the timing of which is uncertain.
See Note 11 to the Consolidated Financial Statements for additional information regarding leases. (4) Purchase obligations consist primarily of commitments for purchases of goods and services. (5) The above table does not reflect unrecognized income tax benefits of $652 million and related accrued interest and penalties of $80 million, the timing of which is uncertain.
(7) The above table does not reflect redeemable noncontrolling interests of $104 million associated with our First Sensor AG (“First Sensor”) subsidiary.
(7) The above table does not reflect redeemable noncontrolling interests of $131 million associated with our First Sensor AG (“First Sensor”) subsidiary.
Risk Factors,” as well as other risks described in this Annual Report, could cause our results to differ materially from those expressed in forward- looking statements: ● conditions in the global or regional economies and global capital markets, and cyclical industry conditions, including recession, inflation, and higher interest rates; ● conditions affecting demand for products in the industries we serve, particularly the automotive industry; ● risk of future goodwill impairment; ● pricing pressure and competition, including competitive risks associated with the pace of technological change; 41 Table of Contents ● market acceptance of our new product introductions and product innovations and product life cycles; ● raw material availability, quality, and cost; ● product liability, warranty, and product recall claims and our ability to defend such claims; ● fluctuations in foreign currency exchange rates and impacts of offsetting hedges; ● financial condition and consolidation of customers and vendors; ● reliance on third-party suppliers; ● risks associated with current and future acquisitions and divestitures; ● global risks of business interruptions due to natural disasters or other disasters which have impacted and could continue to negatively impact our results of operations as well as customer behaviors, business, and manufacturing operations as well as our facilities and the facilities of our suppliers, and other aspects of our business; ● global risks of political, economic, and military instability, including the continuing military conflict between Russia and Ukraine resulting from Russia’s invasion of Ukraine or escalating tensions in surrounding countries, and volatile and uncertain economic conditions and the evolving regulatory system in China; ● risks associated with cybersecurity incidents and other disruptions to our information technology infrastructure; ● risks related to compliance with current and future environmental and other laws and regulations, including those related to climate change; ● risks related to the increasing scrutiny and expectations regarding ESG matters; ● risks associated with compliance with applicable antitrust or competition laws or applicable trade regulations; ● our ability to protect our intellectual property rights; ● risks of litigation, regulatory actions, and compliance issues; ● our ability to operate within the limitations imposed by our debt instruments; ● the possible effects on us of various non-U.S. and U.S. legislative proposals and other initiatives that, if adopted, could materially increase our worldwide corporate effective tax rate, increase global cash taxes, and negatively impact our U.S. government contracts business; ● requirements related to chemical usage, hazardous material content, recycling, and other circular economy initiatives; ● various risks associated with being a Swiss corporation; ● the impact of fluctuations in the market price of our shares; and ● the impact of certain provisions of our articles of association on unsolicited takeover proposals.
Risk Factors,” as well as other risks described in this Annual Report, could cause our results to differ materially from those expressed in forward- looking statements: ● conditions in the global or regional economies and global capital markets, and cyclical industry conditions, including recession, inflation, and higher interest rates; ● conditions affecting demand for products in the industries we serve, particularly the automotive industry; ● risk of future goodwill impairment; ● pricing pressure and competition, including competitive risks associated with the pace of technological change; ● market acceptance of our new product introductions and product innovations and product life cycles; ● raw material availability, quality, and cost; ● product liability, warranty, and product recall claims and our ability to defend such claims; ● fluctuations in foreign currency exchange rates and impacts of offsetting hedges; ● financial condition and consolidation of customers and vendors; ● reliance on third-party suppliers; ● risks associated with current and future acquisitions and divestitures; 42 Table of Contents ● global risks of business interruptions due to natural disasters or other disasters which have impacted and could continue to negatively impact our results of operations as well as customer behaviors, business, and manufacturing operations as well as our facilities and the facilities of our suppliers, and other aspects of our business; ● global risks of political, economic, and military instability, including the continuing military conflicts in certain parts of the world, and volatile and uncertain economic conditions and the evolving regulatory system in China; ● risks associated with cybersecurity incidents and other disruptions to our information technology infrastructure, including as a result of AI; ● risks related to compliance with current and future environmental and other laws and regulations, including those related to climate change; ● risks related to the increasing scrutiny and expectations regarding ESG matters; ● risks associated with compliance with applicable antitrust or competition laws or applicable trade regulations; ● our ability to protect our intellectual property rights; ● risks of litigation, regulatory actions, and compliance issues; ● our ability to operate within the limitations imposed by our debt instruments; ● the possible effects on us of various non-U.S. and U.S. legislative proposals and other initiatives that, if adopted, could materially increase our worldwide corporate effective tax rate, increase global cash taxes, and negatively impact our U.S. government contracts business; ● requirements related to chemical usage, hazardous material content, recycling, and other circular economy initiatives; ● various risks associated with being an Irish corporation; ● the impact of fluctuations in the market price of our shares; and ● the impact of certain provisions of our articles of association on unsolicited takeover proposals.
For additional information regarding pensions, see Note 14 to the Consolidated Financial Statements. Cash Flows from Investing Activities Capital expenditures were $732 million and $768 million in fiscal 2023 and 2022, respectively. We expect fiscal 2024 capital spending levels to be approximately 5% of net sales.
For additional information regarding pensions, see Note 14 to the Consolidated Financial Statements. Cash Flows from Investing Activities Capital expenditures were $680 million and $732 million in fiscal 2024 and 2023, respectively. We expect fiscal 2025 capital spending levels to be approximately 5% of net sales.
Any reduction in future taxable income including any future restructuring activities may require that we record an additional valuation allowance against our deferred tax assets. An increase in the 39 Table of Contents valuation allowance would result in additional income tax expense in such period and could have a significant impact on our future earnings.
Any reduction in future taxable income including any future restructuring activities may require that we record an additional valuation allowance against our deferred tax assets. An increase in the valuation allowance would result in additional income tax expense in such period and could have a significant impact on our future earnings.
We believe our capital funding levels are adequate to support new programs, and we continue to invest in our manufacturing infrastructure to further enhance productivity and manufacturing capabilities. During fiscal 2023, we acquired one business for a cash purchase price of $110 million, net of cash acquired.
We believe our capital funding levels are adequate to support new programs, and we continue to invest in our manufacturing infrastructure to further enhance productivity and manufacturing capabilities. During fiscal 2024, we acquired one business for a cash purchase price of $339 million, net of cash acquired.
Discussion of our financial condition and results of operations for fiscal 2022 compared to fiscal 2021 can be found in “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2022.
Discussion of our financial condition and results of operations for fiscal 2023 compared to fiscal 2022 can be found in “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended September 29, 2023.
A reporting unit is generally an operating segment or one level below an operating segment (a “component”) if the component constitutes a business for which discrete financial information is available and regularly reviewed by segment management. At fiscal year end 2023, we had five reporting units, all of which contained goodwill.
A reporting unit is generally an operating segment or one level below an operating segment (a “component”) if the component constitutes a business for which discrete financial information is available and regularly reviewed by segment management. At fiscal year end 2024, we had five reporting 39 Table of Contents units, all of which contained goodwill.
Risk Factors” and “Forward-Looking Information.” Our Consolidated Financial Statements have been prepared in U.S. dollars, in accordance with accounting principles generally accepted in the U.S. (“GAAP”). Discussion of our financial condition and results of operations for fiscal 2023 compared to fiscal 2022 is presented below.
Risk Factors” and “Forward-Looking Information.” Our Consolidated Financial Statements have been prepared in U.S. dollars, in accordance with accounting principles generally accepted in the U.S. (“GAAP”). 25 Table of Contents Discussion of our financial condition and results of operations for fiscal 2024 compared to fiscal 2023 is presented below.
We will continue to monitor financial markets and respond as necessary to changing conditions. We believe that we have sufficient financial resources and liquidity which will enable us to meet our ongoing working capital and other cash flow needs.
We will continue to monitor financial markets and respond as 34 Table of Contents necessary to changing conditions. We believe that we have sufficient financial resources and liquidity which will enable us to meet our ongoing working capital and other cash flow needs.
There may be other risks and uncertainties that we are unable to predict at this time or that we currently do not expect to have a material adverse effect on our business. 42 Table of Contents ITEM 7A.
There may be other risks and uncertainties that we are unable to predict at this time or that we currently do not expect to have a material adverse effect on our business. ITEM 7A.
A 10% appreciation or depreciation of the underlying currency in our cross-currency swap contracts or foreign currency forward contracts from the fiscal year end 2022 market rates would have changed the unrealized value of our contracts by $151 million.
A 10% appreciation or depreciation of the underlying currency in our cross-currency swap contracts or foreign currency forward contracts from the fiscal year end 2024 market rates would have changed the unrealized value of our contracts by $538 million.
(“TEGSA”), our Luxembourg subsidiary, which is the obligor of substantially all of our debt, and to TE Connectivity Ltd., our Swiss parent company; however, the repatriation of these amounts could subject us to additional tax expense.
(“TEGSA”), our Luxembourg subsidiary, which is the obligor of substantially all of our debt, and to TE Connectivity plc, our now parent company; however, the repatriation of these amounts could subject us to additional tax expense.
(2) Includes $4,056 million and $12,582 million as of fiscal year end 2023 and 2022, respectively, of intercompany loans payable to non-guarantor subsidiaries. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ 2023 2022 ​ ​ (in millions) ​ Statement of Operations Data: ​ ​ ​ ​ ​ ​ ​ Loss from continuing operations ​ $ (606) ​ $ (35) ​ Net loss ​ (606) ​ (35) ​ ​ ​ Off-Balance Sheet Arrangements In certain instances, we have guaranteed the performance of third parties and provided financial guarantees for uncompleted work and financial commitments.
(2) Includes $7,309 million and $4,056 million as of fiscal year end 2024 and 2023, respectively, of intercompany loans payable to non-guarantor subsidiaries. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ 2024 2023 ​ ​ (in millions) ​ Statement of Operations Data: ​ ​ ​ ​ ​ ​ ​ Loss from continuing operations ​ $ (271) ​ $ (606) ​ Net loss ​ (271) ​ (606) ​ ​ ​ Off-Balance Sheet Arrangements In certain instances, we have guaranteed the performance of third parties and provided financial guarantees for uncompleted work and financial commitments.
A 10% appreciation or depreciation of commodity prices from the fiscal year end 2023 prices would have changed the unrealized value of our forward contracts by $44 million. A 10% appreciation or depreciation of commodity prices from the fiscal year end 2022 prices would have changed the unrealized value of our forward contracts by $48 million.
A 10% appreciation or depreciation of commodity prices from the fiscal year end 2024 prices would have changed the unrealized value of our forward contracts by $54 million. A 10% appreciation or depreciation of commodity prices from the fiscal year end 2023 prices would have changed the unrealized value of our forward contracts by $44 million.
We are monitoring the current environment and its potential effects on our customers and the end markets we serve. We have experienced inflationary cost pressures including increased costs for transportation, energy, and raw materials. However, we have been able to mitigate increased costs and supply chain disruptions through price increases or productivity.
We are monitoring the current environment and its potential effects on our customers and the end markets we serve. 26 Table of Contents In recent years, we have experienced inflationary cost pressures including increased costs for transportation, energy, and raw materials. However, we have been able to mitigate increased costs and supply chain disruptions through productivity and/or price increases.
We sell our products into approximately 140 countries, and approximately 60% of our net sales were invoiced in currencies other than the U.S. dollar in fiscal 2023.
We sell our products into approximately 130 countries, and approximately 60% of our net sales were invoiced in currencies other than the U.S. dollar in fiscal 2024.
The valuation allowance for deferred tax assets was $7,416 million and $7,112 million at fiscal year end 2023 and 2022, respectively. See Note 15 to the Consolidated Financial Statements for further information regarding the valuation allowance for deferred tax assets.
The valuation allowance for deferred tax assets was $8,285 million and $7,416 million at fiscal year end 2024 and 2023, respectively. See Note 15 to the Consolidated Financial Statements for further information regarding the valuation allowance for deferred tax assets.
We have implemented select price increases for certain products. Also, we have taken and continue to focus on actions to manage costs, including restructuring and other cost reduction initiatives such as reducing discretionary spending and travel. Additionally, we are managing our capital resources and monitoring capital availability to ensure that we have sufficient resources to fund our future capital needs.
Also, we have taken and continue to focus on actions to manage costs, including restructuring and other cost reduction initiatives such as reducing discretionary spending and travel. Additionally, we are managing our capital resources and monitoring capital availability to ensure that we have sufficient resources to fund our future capital needs.
We do not expect that these uncertainties will have a material adverse effect on our results of operations, financial position, or cash flows. At fiscal year end 2023, we had outstanding letters of credit, letters of guarantee, and surety bonds of $198 million, including letters of credit of $29 million associated with our divesture of the Subsea Communications business.
We do not expect that these uncertainties will have a material adverse effect on our results of operations, financial position, or cash flows. At fiscal year end 2024, we had outstanding letters of credit, letters of guarantee, and surety bonds of $186 million, including letters of credit of $22 million associated with our divestiture of the Subsea Communications business.
We received net cash proceeds of $16 million related to the sale of two businesses during fiscal 2022. See Note 3 to the Consolidated Financial Statements for additional information regarding divestitures. Cash Flows from Financing Activities and Capitalization Total debt at fiscal year end 2023 and 2022 was $4,211 million and $4,206 million, respectively.
We received net cash proceeds of $48 million related to the sale of three businesses during fiscal 2023. See Note 3 to the Consolidated Financial Statements for additional information regarding divestitures. Cash Flows from Financing Activities and Capitalization Total debt at fiscal year end 2024 and 2023 was $4,203 million and $4,211 million, respectively.
At fiscal year end 2023, TEGSA had $330 million of commercial paper outstanding at a weighted-average interest rate of 5.50%.
At fiscal year end 2024, TEGSA had $255 million of commercial paper outstanding at a weighted-average interest rate of 4.95%. TEGSA had $330 million of commercial paper outstanding at a weighted-average interest rate of 5.50% at fiscal year end 2023.
Accounting Pronouncement See Note 2 to the Consolidated Financial Statements for information regarding a recently issued accounting pronouncement. 40 Table of Contents Non-GAAP Financial Measure Organic Net Sales Growth (Decline) We present organic net sales growth (decline) as we believe it is appropriate for investors to consider this adjusted financial measure in addition to results in accordance with GAAP.
Accounting Pronouncement See Note 2 to the Consolidated Financial Statements for information regarding recently issued and adopted accounting pronouncements. Non-GAAP Financial Measure Organic Net Sales Growth (Decline) We present organic net sales growth (decline) as we believe it is appropriate for investors to consider this adjusted financial measure in addition to results in accordance with GAAP.
At fiscal year end 2023, a 25-basis-point decrease in discount rates would have increased the present value of our pension obligations by $60 million; a 25-basis-point increase would have decreased the present value of our pension obligations by $57 million.
At fiscal year end 2024, a 25-basis-point decrease in discount rates would have increased the present value of our pension obligations by $68 million; a 25-basis-point increase would have decreased the present value of our pension obligations by $67 million.
These tax liabilities and related interest are reflected net of the impact of related tax loss carryforwards, as such tax loss carryforwards will be applied against these tax liabilities and will reduce the amount of cash tax payments due upon the eventual settlement with the tax authorities. These estimates may change due to changing facts and circumstances.
These tax liabilities and related interest are reflected net of the impact of related tax loss carryforwards, as such tax loss carryforwards will be applied against these tax liabilities and will reduce the amount of cash tax payments due upon the eventual settlement with the tax authorities.
See Note 3 to the Consolidated Financial Statements for additional information regarding net restructuring and other charges.
See Notes 1 and 21 to the Consolidated Financial Statements for additional information regarding the change. See Note 3 to the Consolidated Financial Statements for additional information regarding net restructuring and other charges.
See Note 10 to the Consolidated Financial Statements for additional information regarding debt. During fiscal 2023, TEGSA, our wholly-owned subsidiary, issued $500 million aggregate principal amount of 4.50% senior notes due in February 2026.
See Note 10 to the Consolidated Financial Statements for additional information regarding debt. During fiscal 2024, TEGSA, our wholly-owned subsidiary, issued $350 million aggregate principal amount of 4.625% senior notes due in February 2030.
See Note 13 to the Consolidated Financial Statements for additional information regarding financial instruments. ​ 43 Table of Contents ITEM 8.
See Note 13 to the Consolidated Financial Statements for additional information regarding financial instruments. ​ ITEM 8.
Cash Flows from Operating Activities Net cash provided by operating activities increased $664 million to $3,132 million in fiscal 2023 as compared to $2,468 million in fiscal 2022. The increase resulted primarily from the impact of changes in working capital levels, partially offset by lower pre-tax income.
Cash Flows from Operating Activities Net cash provided by operating activities increased $345 million to $3,477 million in fiscal 2024 as compared to $3,132 million in fiscal 2023. The increase resulted primarily from higher pre-tax income, partially offset by the impact of changes in working capital levels.
As of fiscal year end 2023, we had approximately $2.6 billion of cash, cash equivalents, and intercompany deposits, principally in our subsidiaries, that we have the ability to distribute to TEGSA and TE Connectivity Ltd. but we consider to be permanently reinvested.
As of fiscal year end 2024, we had approximately $4.7 billion of cash, cash equivalents, and intercompany deposits, principally in our subsidiaries, that we have the ability to distribute to TEGSA and now to TE Connectivity plc but we consider to be permanently reinvested.
The following table presents the Transportation Solutions segment’s net sales and the percentage of total net sales by industry end market (1) : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ ​ 2023 2022 ​ ​ ($ in millions) ​ ​ Automotive ​ $ 6,951 72 % ​ $ 6,527 71 % ​ Commercial transportation ​ 1,525 16 ​ ​ 1,582 17 ​ ​ Sensors ​ 1,112 12 ​ ​ 1,110 12 ​ ​ Total ​ $ 9,588 100 % ​ $ 9,219 100 % ​ (1) Industry end market information is presented consistently with our internal management reporting and may be revised periodically as management deems necessary.
The following table presents the Transportation Solutions segment’s net sales and the percentage of total net sales by industry end market (1) : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ ​ 2024 2023 ​ ​ ($ in millions) ​ ​ Automotive ​ $ 6,956 75 % ​ $ 6,951 72 % ​ Commercial transportation ​ 1,456 15 ​ ​ 1,525 16 ​ ​ Sensors ​ 986 10 ​ ​ 1,112 12 ​ ​ Total ​ $ 9,398 100 % ​ $ 9,588 100 % ​ (1) Industry end market information is presented consistently with our internal management reporting and may be revised periodically as management deems necessary.
At fiscal year end 2022, our commodity hedges, which related to expected purchases of gold, silver, copper, and palladium, were in a net loss position of $82 million and had a notional value of $566 million.
At fiscal year end 2024, our commodity hedges, which related to expected purchases of gold, silver, copper, and palladium, were in a net gain position of $55 million and had a notional value of $488 million.
The following tables present summarized financial information, excluding investments in and equity in earnings of our non-guarantor subsidiaries, for TE Connectivity Ltd. and TEGSA on a combined basis. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year End ​ ​ 2023 2022 ​ ​ (in millions) ​ Balance Sheet Data: ​ ​ ​ ​ ​ ​ ​ Total current assets ​ $ 1,632 ​ $ 1,400 ​ Total noncurrent assets (1) ​ 2,857 ​ 2,769 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current liabilities ​ 1,303 ​ 1,937 ​ Total noncurrent liabilities (2) ​ ​ 7,592 ​ ​ 15,871 ​ (1) Includes $2,783 million and $2,601 million as of fiscal year end 2023 and 2022, respectively, of intercompany loans receivable from non-guarantor subsidiaries.
The 36 Table of Contents following tables present summarized financial information, excluding investments in and equity in earnings of our non-guarantor subsidiaries, for TE Connectivity Ltd., TE Connectivity Switzerland Ltd., and TEGSA on a combined basis. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year End ​ ​ 2024 2023 ​ ​ (in millions) ​ Balance Sheet Data: ​ ​ ​ ​ ​ ​ ​ Total current assets ​ $ 1,164 ​ $ 1,632 ​ Total noncurrent assets (1) ​ 2,377 ​ 2,857 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current liabilities ​ 1,362 ​ 1,303 ​ Total noncurrent liabilities (2) ​ ​ 10,738 ​ ​ 7,592 ​ (1) Includes $2,368 million and $2,783 million as of fiscal year end 2024 and 2023, respectively, of intercompany loans receivable from non-guarantor subsidiaries.
The amount of income taxes paid, net of refunds, during fiscal 2023 and 2022 was $425 million and $421 million, respectively. 34 Table of Contents Pension contributions were $71 million and $42 million in fiscal 2023 and 2022, respectively. We expect pension contributions to be $70 million in fiscal 2024, before consideration of any voluntary contributions.
The amount of income taxes paid, net of refunds, during fiscal 2024 and 2023 was $475 million and $425 million, respectively. Pension contributions were $69 million and $71 million in fiscal 2024 and 2023, respectively. We expect pension contributions to be approximately $70 million in fiscal 2025, before consideration of any voluntary contributions.
The following table presents the Industrial Solutions segment’s net sales and the percentage of total net sales by industry end market (1) : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ ​ 2023 2022 ​ ​ ($ in millions) ​ ​ Industrial equipment ​ $ 1,706 38 % ​ $ 1,904 43 % ​ Aerospace, defense, and marine ​ ​ 1,178 26 ​ ​ ​ 1,087 24 ​ ​ Energy ​ 883 19 ​ ​ 804 18 ​ ​ Medical ​ ​ 784 ​ 17 ​ ​ ​ 695 ​ 15 ​ ​ Total ​ $ 4,551 100 % ​ $ 4,490 100 % ​ (1) Industry end market information is presented consistently with our internal management reporting and may be revised periodically as management deems necessary.
The following table presents the Industrial Solutions segment’s net sales and the percentage of total net sales by industry end market (1) : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ ​ 2024 2023 ​ ​ ($ in millions) ​ ​ Industrial equipment ​ $ 1,385 30 % ​ $ 1,706 38 % ​ Aerospace, defense, and marine ​ ​ 1,344 30 ​ ​ ​ 1,178 26 ​ ​ Energy ​ 919 21 ​ ​ 883 19 ​ ​ Medical ​ ​ 833 ​ 19 ​ ​ ​ 784 ​ 17 ​ ​ Total ​ $ 4,481 100 % ​ $ 4,551 100 % ​ (1) Industry end market information is presented consistently with our internal management reporting and may be revised periodically as management deems necessary.
Economic Conditions Our business and operating results have been and will continue to be affected by worldwide economic conditions. The global economy has been impacted in recent years by supply chain disruptions and inflationary cost pressures as well as the military conflict between Russia and Ukraine and the COVID-19 pandemic.
Economic Conditions Our business and operating results have been and will continue to be affected by worldwide economic conditions. The global economy has been impacted in recent years by supply chain disruptions and inflationary cost pressures.
This outlook reflects the impact of foreign currency exchange rates which is a positive impact of approximately $17 million on net sales and a negative impact of approximately $0.02 per share on earnings per share in the first quarter of fiscal 2024 as compared to the same period of fiscal 2023.
This outlook reflects the positive impact of foreign currency exchange rates on net sales and earnings per share of approximately $32 million and $0.04 per share, respectively, in the first quarter of fiscal 2025 as compared to the same period of fiscal 2024.
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.
We are unable to predict the timing and final outcome of the 38 Table of Contents agency’s investigation. 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.
Borrowings under the Credit Facility bear interest at a rate per annum equal to, at the option of TEGSA, (1) the term secured overnight financing rate (“Term SOFR”) (as defined in the Credit Facility), (2) an alternate base rate equal to the highest of (i) Bank of America, N.A.’s base rate, (ii) the federal funds effective rate plus 1 / 2 of 1%, and (iii) the Term SOFR for a one-month interest period plus 1%, (3) an alternative currency daily rate, or (4) an alternative currency term rate, plus, in each case, an applicable margin based upon the senior, unsecured, long-term debt rating of TEGSA.
TEGSA had no borrowings under the Credit Facility at fiscal year end 2024 or the Replaced Credit Facility at fiscal year end 2023. 35 Table of Contents Borrowings under the Credit Facility bear interest at a rate per annum equal to, at the option of TEGSA, (1) with respect to revolving loans denominated in U.S. dollars, (a) the term secured overnight financing rate (“Term SOFR”) (as defined in the Credit Facility) or (b) an alternate base rate equal to the highest of (i) Bank of America, N.A.’s base rate, (ii) the federal funds effective rate plus 1 / 2 of 1%, (iii) the Term SOFR for a one-month interest period plus 1%, and (iv) 1%, and (2) with respect to revolving loans determined in an alternative currency, (a) an alternative currency daily rate or (b) an alternative currency term rate, as applicable, plus, in each case, an applicable margin based upon the senior, unsecured, long-term debt rating of TEGSA.
We acquired three businesses for a combined cash purchase price of $245 million, net of cash acquired, during fiscal 2022. See Note 4 to the Consolidated Financial Statements for additional information regarding acquisitions. During fiscal 2023, we received net cash proceeds of $48 million related to the sale of three businesses.
We acquired one business for a cash purchase price of $110 million, net of cash acquired, during fiscal 2023. See Note 4 to the Consolidated Financial Statements for additional information regarding acquisitions. During fiscal 2024, we received net cash proceeds of $59 million related to the sale of one business.
Summary of Fiscal 2023 Performance ● Our fiscal 2023 net sales decreased 1.5% from fiscal 2022 levels due to sales declines in the Communications Solutions segment, partially offset by sales increases in the Transportation Solutions segment and, to a lesser degree, the Industrial Solutions segment.
Summary of Fiscal 2024 Performance ● Our fiscal 2024 net sales decreased 1.2% from fiscal 2023 levels due to sales declines in the Transportation Solutions and Industrial Solutions segments, partially offset by sales growth in the Communications Solutions segment.
Net sales increases in the Transportation Solutions and Industrial Solutions segments are expected to be largely offset by sales declines in the Communications Solutions segment. We expect diluted earnings per share from continuing operations to be approximately $1.59 per share in the first quarter of fiscal 2024.
Under the new structure, net sales increases in the Industrial Solutions segment are expected to be partially offset by sales declines in the Transportation Solutions segment. We expect diluted earnings per share from continuing operations to be approximately $1.64 per share in the first quarter of fiscal 2025.
We contractually agreed to continue to honor letters of credit and performance guarantees related to the business’ projects that existed as of the date of sale; however, based on historical experience, we do not anticipate having to perform on these guarantees. ​ ​ Commitments and Contingencies The following table provides a summary of our contractual obligations and commitments for debt, minimum lease payment obligations under non-cancelable leases, and other material obligations at fiscal year end 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments Due ​ ​ ​ ​ ​ In Fiscal 2024 Thereafter Total ​ ​ (in millions) Long-term debt: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Principal payments (1) ​ $ 682 ​ $ 3,564 ​ $ 4,246 ​ Interest payments on debt (2) ​ 110 ​ 666 ​ 776 ​ Operating leases (3) ​ 118 ​ 314 ​ 432 ​ Purchase obligations (4) ​ 859 ​ 60 ​ 919 ​ Total contractual cash obligations (5)(6)(7) ​ $ 1,769 ​ $ 4,604 ​ $ 6,373 ​ (1) See Note 10 to the Consolidated Financial Statements for additional information regarding debt.
We contractually agreed to continue to honor letters of credit and performance guarantees related to the business’ projects that existed as of the date of sale; however, based on historical experience, we do not anticipate having to perform on these guarantees. ​ ​ 37 Table of Contents Commitments and Contingencies The following table provides a summary of our contractual obligations and commitments for debt, minimum lease payment obligations under non-cancelable leases, and other material obligations at fiscal year end 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments Due ​ ​ ​ ​ ​ In Fiscal 2025 Thereafter Total ​ ​ (in millions) Long-term debt: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Principal payments (1) ​ $ 872 ​ $ 3,366 ​ $ 4,238 ​ Interest payments on debt (2) ​ 114 ​ 642 ​ 756 ​ Operating leases (3) ​ 128 ​ 358 ​ 486 ​ Purchase obligations (4) ​ 961 ​ 48 ​ 1,009 ​ Total contractual cash obligations (5)(6)(7) ​ $ 2,075 ​ $ 4,414 ​ $ 6,489 ​ (1) See Note 10 to the Consolidated Financial Statements for additional information regarding debt.
Annualized cost savings related to actions initiated in fiscal 2023 are expected to be approximately $200 million and are expected to be fully realized by the end of fiscal 2026. Cost savings will be reflected primarily in cost of sales and selling, general, and administrative expenses.
Annualized cost savings related to actions initiated in fiscal 2024 are expected to be approximately $85 million and we expect the majority of these savings will be realized by the end of fiscal 2027. Cost savings will be reflected primarily in cost of sales and selling, general, and administrative expenses.
We expect to purchase approximately 180 million pounds of copper, 110,000 troy ounces of gold, 2.0 million troy ounces of silver, and 12,000 troy ounces of palladium in fiscal 2024.
We expect to purchase approximately 190 million pounds of copper, 95,000 troy ounces of gold, 2.0 million troy ounces of silver, and 11,000 troy ounces of palladium in fiscal 2025.
In addition, at fiscal year end 2023, we had $27 million of performance guarantees associated with that divestiture.
In addition, at fiscal year end 2024, we had $23 million of performance guarantees associated with the divestiture.
In exercising their discretion to recommend to the shareholders that such dividends be approved, our board of directors will consider our results of operations, cash requirements and surplus, financial condition, statutory requirements of applicable law, contractual restrictions, and other factors that they may deem relevant.
In exercising their discretion to approve such dividends, our board of directors will consider our results of operations, financial condition, cash requirements, future business prospects, statutory requirements of applicable law, contractual restrictions, restrictions imposed by Irish law, and other factors that they may deem relevant.
The impact of the additional week was estimated using an average sales figure for the fourth quarter of the fiscal year. See further discussion of net sales below under “Segment Results.” Net Sales by Geographic Region. Our business operates in three geographic regions—EMEA, Asia–Pacific, and the Americas—and our results of operations are influenced by changes in foreign currency exchange rates.
See further discussion of net sales below under “Segment Results.” Net Sales by Geographic Region. Our business operates in three geographic regions—EMEA, Asia–Pacific, and the Americas—and our results of operations are influenced by changes in foreign currency exchange rates.
We believe that cash generated from operations and, to the extent necessary, these other sources of potential funding will be sufficient to meet our anticipated capital needs for the foreseeable future, including the pending acquisition of Schaffner and payment of $350 million of 3.45% senior notes due in August 2024.
We believe that cash generated from operations and, to the extent necessary, these other sources of potential funding will be sufficient to meet our anticipated capital needs for the foreseeable future, including the payment of €550 million of 0.00% euro-denominated senior notes due in February 2025.
We acquired three businesses for a combined cash purchase price of $245 million, net of cash acquired, during fiscal 2022. The acquisitions were reported as part of our Communications Solutions segment from the date of acquisition. See Note 4 to the Consolidated Financial Statements for additional information regarding acquisitions.
We acquired one business for a cash purchase price of $110 million, net of cash acquired, during fiscal 2023. The acquired business has been reported as part of our Industrial Solutions segment from the date of acquisition. See Note 4 to the Consolidated Financial Statements for additional information regarding acquisitions.
As of fiscal year end 2023, certain subsidiaries had approximately $38.0 billion of cumulative undistributed earnings that have been retained indefinitely and reinvested in our global manufacturing operations, including working capital; property, plant, and equipment; intangible assets; and research and development activities.
As of fiscal year end 2024, certain subsidiaries had approximately $39.0 billion of cumulative undistributed earnings that have been retained indefinitely and reinvested in our global manufacturing operations, including working capital; property, plant, and equipment; intangible assets; and research and development activities. See Note 15 to the Consolidated Financial Statements for additional information regarding undistributed earnings.
The following table presents the average prices incurred related to copper, gold, silver, and palladium: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ Measure 2023 2022 Copper Lb. ​ $ 4.09 ​ $ 4.08 ​ Gold Troy oz. ​ 1,860 ​ 1,828 ​ Silver ​ Troy oz. ​ ​ 23.33 ​ ​ 24.23 ​ Palladium Troy oz. ​ 2,162 ​ 2,337 ​ ​ In fiscal 2023, we purchased approximately 181 million pounds of copper, 112,000 troy ounces of gold, 2.4 million troy ounces of silver, and 7,000 troy ounces of palladium.
The following table presents the average prices incurred related to copper, gold, silver, and palladium: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ Measure 2024 2023 Copper Lb. ​ $ 3.91 ​ $ 4.09 ​ Gold Troy oz. ​ 2,027 ​ 1,860 ​ Silver ​ Troy oz. ​ ​ 24.59 ​ ​ 23.33 ​ Palladium Troy oz. ​ 1,409 ​ 2,162 ​ ​ In fiscal 2024, we purchased approximately 182 million pounds of copper, 98,000 troy ounces of gold, 2.0 million troy ounces of silver, and 10,000 troy ounces of palladium.
Operating Expenses The following table presents operating expense information: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ ​ ​ 2023 2022 Change ​ ​ ($ in millions) Selling, general, and administrative expenses ​ $ 1,670 ​ ​ $ 1,584 (1) ​ ​ $ 86 ​ As a percentage of net sales ​ 10.4 % ​ 9.7 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Restructuring and other charges, net ​ $ 340 ​ ​ $ 141 ​ ​ $ 199 ​ (1) Fiscal 2022 included an additional week.
Operating Expenses The following table presents operating expense information: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ ​ ​ 2024 2023 Change ​ ​ ($ in millions) Selling, general, and administrative expenses ​ $ 1,732 ​ ​ $ 1,670 ​ ​ $ 62 ​ As a percentage of net sales ​ 10.9 % ​ 10.4 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Restructuring and other charges, net ​ $ 166 ​ ​ $ 340 ​ ​ $ (174) ​ Selling, General, and Administrative Expenses.
The guarantees would be triggered in the event of nonperformance, and the potential exposure for nonperformance under the guarantees would not have a material effect on our results of operations, financial position, or cash flows. 36 Table of Contents 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.
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.
In fiscal 2023, selling, general, and administrative expenses increased $86 million as compared to fiscal 2022 due primarily to gains on the sale of real estate in fiscal 2022 and the impact of cost inflation, partially offset by savings attributable to restructuring actions and the positive impact of foreign currency translation. ​ 28 Table of Contents Restructuring and Other Charges, Net.
In fiscal 2024, selling, general, and administrative expenses increased $62 million as compared to fiscal 2023 due primarily to the impact of inflation, partially offset by savings attributable to prior restructuring actions. 29 Table of Contents Restructuring and Other Charges, Net.
Fiscal 2022 included an additional week which contributed $306 million in net sales. ● Our net sales by segment were as follows: ● Transportation Solutions —Our net sales increased 4.0% due primarily to sales increases in the automotive end market. ● Industrial Solutions —Our net sales increased 1.4% as a result of sales increases in the aerospace, defense, and marine, the energy, and the medical end markets, partially offset by declines in the industrial equipment end market. ● Communications Solutions —Our net sales decreased 26.3% due to sales declines in both the data and devices and the appliances end markets. ● During fiscal 2023, our shareholders approved a dividend payment to shareholders of $2.36 per share, payable in four equal quarterly installments of $0.59 beginning in the third quarter of fiscal 2023 and ending in the second quarter of fiscal 2024. ● Net cash provided by operating activities was $3,132 million in fiscal 2023.
On an organic basis, our net sales were flat in fiscal 2024 as compared to fiscal 2023. ● Our net sales by segment were as follows: ● Transportation Solutions —Our net sales decreased 2.0% due primarily to sales declines in the sensors end market and, to a lesser degree, the commercial transportation end market. ● Industrial Solutions —Our net sales decreased 1.5% as a result of sales declines in the industrial equipment end market, partially offset by sales growth in all other end markets. ● Communications Solutions —Our net sales increased 3.7% due to sales growth in the data and devices end market, partially offset by sales declines in the appliances end market. ● During fiscal 2024, our shareholders approved a dividend payment of $2.60 per share, payable in four equal quarterly installments of $0.65 per share beginning in the third quarter of fiscal 2024 and ending in the second quarter of fiscal 2025. ● Net cash provided by operating activities was $3,477 million in fiscal 2024.
The following table provides an analysis of the change in the Transportation Solutions segment’s net sales by industry end market: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in Net Sales for Fiscal 2023 versus Fiscal 2022 ​ ​ Net Sales ​ Organic Net Sales ​ ​ ​ ​ Growth (Decline) ​ Growth (Decline) ​ Translation ​ ​ ($ in millions) Automotive ​ $ 424 6.5 % $ 662 10.2 % $ (238) ​ Commercial transportation ​ (57) (3.6) ​ (17) (1.1) ​ (40) ​ Sensors ​ 2 0.2 ​ 20 1.8 ​ (18) ​ Total ​ $ 369 4.0 % $ 665 7.2 % $ (296) ​ Net sales in the Transportation Solutions segment increased $369 million, or 4.0%, in fiscal 2023 from fiscal 2022 as a result of organic net sales growth of 7.2%, partially offset by the negative impact of foreign currency translation of 3.2%.
The following table provides an analysis of the change in the Transportation Solutions segment’s net sales by industry end market: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in Net Sales for Fiscal 2024 versus Fiscal 2023 ​ ​ Net Sales ​ Organic Net Sales ​ ​ ​ ​ ​ ​ ​ Growth (Decline) ​ Growth (Decline) ​ Translation Divestiture ​ ​ ($ in millions) Automotive ​ $ 5 0.1 % $ 210 3.0 % $ (46) $ (159) ​ Commercial transportation ​ (69) (4.5) ​ (62) (4.1) ​ (7) ​ — ​ Sensors ​ (126) (11.3) ​ (119) (10.8) ​ (7) ​ — ​ Total ​ $ (190) (2.0) % $ 29 0.3 % $ (60) ​ $ (159) ​ Net sales in the Transportation Solutions segment decreased $190 million, or 2.0%, in fiscal 2024 from fiscal 2023 primarily as a result of the negative impact of a divestiture of 1.7% and the negative impact of foreign currency translation of 0.6%.
Our organic net sales by industry end market were as follows: ● Industrial equipment —Our organic net sales decreased 8.1% in fiscal 2023 as a result of declines across all regions with reduced demand resulting from inventory corrections in the supply chain . ● Aerospace, defense, and marine —Our organic net sales increased 12.8% in fiscal 2023 due primarily to growth in the defense market and, to a lesser degree, the commercial aerospace market . ● Energy —Our organic net sales increased 9.6% in fiscal 2023 due to growth across all regions and strength in renewable energy applications . ● Medical —Our organic net sales increased 13.1% in fiscal 2023 primarily as a result of growth in interventional medical applications . 32 Table of Contents Operating Income.
Our organic net sales by industry end market were as follows: ● Industrial equipment —Our organic net sales decreased 24.9% in fiscal 2024 as a result of declines across all regions and reduced demand resulting from inventory corrections in the supply chain . ● Aerospace, defense, and marine —Our organic net sales increased 15.4% in fiscal 2024 due to growth in all markets . ● Energy —Our organic net sales increased 4.9% in fiscal 2024 due to growth in the Americas and EMEA regions, partially offset by declines in the Asia–Pacific region . ● Medical —Our organic net sales increased 6.5% in fiscal 2024 primarily as a result of growth in interventional medical applications .
The following table presents the Industrial Solutions segment’s operating income and operating margin information: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ ​ ​ ​ 2023 2022 Change ​ ​ ($ in millions) ​ Operating income ​ $ 602 ​ ​ $ 607 (1) ​ ​ $ (5) ​ Operating margin ​ 13.2 % ​ 13.5 % ​ ​ ​ (1) Fiscal 2022 included an additional week.
The following table presents the Industrial Solutions segment’s operating income and operating margin information: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ ​ ​ ​ ​ 2024 2023 Change ​ ​ ($ in millions) ​ Operating income ​ $ 588 ​ ​ $ 602 ​ ​ $ (14) ​ Operating margin ​ 13.1 % ​ 13.2 % ​ ​ ​ Operating income in the Industrial Solutions segment decreased $14 million in fiscal 2024 from fiscal 2023.
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. TEGSA has a five-year unsecured senior revolving credit facility (“Credit Facility”) with a maturity date of June 2026 and total commitments of $1.5 billion.
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.
Due to the complexity of these uncertainties, the ultimate resolution may result in a settlement that differs from our current estimate of the tax liabilities and related interest. These tax liabilities and related interest are recorded in income taxes and accrued and other current liabilities on the Consolidated Balance Sheets.
These 40 Table of Contents estimates may change due to changing facts and circumstances. Due to the complexity of these uncertainties, the ultimate resolution may result in a settlement that differs from our current estimate of the tax liabilities and related interest.
Our organic net sales by industry end market were as follows: ● Data and devices —Our organic net sales decreased 27.2% in fiscal 2023 due to reduced demand resulting from inventory corrections in the supply chain and market declines . 33 Table of Contents ● Appliances —Our organic net sales decreased 21.8% in fiscal 2023 as a result of reduced demand resulting from inventory corrections in the supply chain and market declines across all regions, partially offset by share gains .
Our organic net sales by industry end market were as follows: ● Data and devices —Our organic net sales increased 10.2% in fiscal 2024 due to growth in AI applications, partially offset by reduced demand resulting from inventory corrections in the supply chain in the first half of the year . ● Appliances —Our organic net sales decreased 3.7% in fiscal 2024 primarily as a result of reduced demand resulting from inventory corrections in the supply chain in the first half of the year and our strategic exit of certain product lines, partially offset by share gains .

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