TE CONNECTIVITY LTD., 10-Q filed on 7/26/2018
Quarterly Report
v3.10.0.1
Document and Entity Information - shares
9 Months Ended
Jun. 29, 2018
Jul. 20, 2018
Document and Entity Information    
Entity Registrant Name TE Connectivity Ltd.  
Entity Central Index Key 0001385157  
Document Type 10-Q  
Document Period End Date Jun. 29, 2018  
Amendment Flag false  
Current Fiscal Year End Date --09-28  
Entity Current Reporting Status Yes  
Entity Filer Category Large Accelerated Filer  
Entity Common Stock, Shares Outstanding   348,458,740
Document Fiscal Year Focus 2018  
Document Fiscal Period Focus Q3  
v3.10.0.1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
shares in Millions, $ in Millions
3 Months Ended 9 Months Ended
Jun. 29, 2018
Jun. 30, 2017
Jun. 29, 2018
Jun. 30, 2017
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS        
Net sales $ 3,764 $ 3,367 $ 10,989 $ 9,657
Cost of sales 2,547 2,227 7,352 6,340
Gross margin 1,217 1,140 3,637 3,317
Selling, general, and administrative expenses 409 408 1,220 1,182
Research, development, and engineering expenses 181 168 539 485
Acquisition and integration costs 4 1 9 5
Restructuring and other charges, net 65 19 106 125
Operating income 558 544 1,763 1,520
Interest income 3 3 11 14
Interest expense (25) (32) (80) (95)
Other income (expense), net (1) (12) 2 (31)
Income from continuing operations before income taxes 535 503 1,696 1,408
Income tax expense (81) (71) (789) (164)
Income from continuing operations 454 432 907 1,244
Income (loss) from discontinued operations, net of income taxes   3 (3) 5
Net income $ 454 $ 435 $ 904 $ 1,249
Basic earnings per share:        
Income from continuing operations (in dollars per share) $ 1.30 $ 1.22 $ 2.58 $ 3.50
Income (loss) from discontinued operations (in dollars per share)   0.01 (0.01) 0.01
Net income (in dollars per share) 1.30 1.23 2.58 3.52
Diluted earnings per share:        
Income from continuing operations (in dollars per share) 1.29 1.21 2.56 3.47
Income (loss) from discontinued operations (in dollars per share)   0.01 (0.01) 0.01
Net income (in dollars per share) 1.29 1.22 2.55 3.48
Dividends paid per common share $ 0.44 $ 0.40 $ 1.24 $ 1.14
Weighted-average number of shares outstanding:        
Basic (in shares) 349 355 351 355
Diluted (in shares) 352 358 354 359
v3.10.0.1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Jun. 29, 2018
Jun. 30, 2017
Jun. 29, 2018
Jun. 30, 2017
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME        
Net income $ 454 $ 435 $ 904 $ 1,249
Other comprehensive income (loss):        
Currency translation (244) 77 (63) (25)
Adjustments to unrecognized pension and postretirement benefit costs, net of income taxes 8 13 23 38
Gains (losses) on cash flow hedges, net of income taxes (14) (12) (61) 23
Other comprehensive income (loss) (250) 78 (101) 36
Comprehensive income $ 204 $ 513 $ 803 $ 1,285
v3.10.0.1
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Millions
Jun. 29, 2018
Sep. 29, 2017
Current assets:    
Cash and cash equivalents $ 770 $ 1,218
Accounts receivable, net of allowance for doubtful accounts of $21 2,591 2,290
Inventories 1,961 1,813
Prepaid expenses and other current assets 619 605
Total current assets 5,941 5,926
Property, plant, and equipment, net 3,633 3,400
Goodwill 5,616 5,651
Intangible assets, net 1,698 1,841
Deferred income taxes 1,672 2,141
Other assets 453 444
Total Assets 19,013 19,403
Current liabilities:    
Short-term debt 714 710
Accounts payable 1,583 1,436
Accrued and other current liabilities 1,625 1,626
Deferred revenue 124 75
Total current liabilities 4,046 3,847
Long-term debt 3,294 3,634
Long-term pension and postretirement liabilities 1,119 1,160
Deferred income taxes 227 236
Income taxes 311 293
Other liabilities 524 482
Total Liabilities 9,521 9,652
Commitments and contingencies (Note 7)
Shareholders' equity:    
Common shares, CHF 0.57 par value, 357,069,981 shares authorized and issued 157 157
Accumulated earnings 10,432 10,175
Treasury shares, at cost, 8,658,869 and 5,356,369 shares, respectively (798) (421)
Accumulated other comprehensive loss (299) (160)
Total Shareholders' Equity 9,492 9,751
Total Liabilities and Shareholders' Equity $ 19,013 $ 19,403
v3.10.0.1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical)
$ in Millions
Jun. 29, 2018
SFr / shares
Jun. 29, 2018
USD ($)
shares
Sep. 29, 2017
SFr / shares
Sep. 29, 2017
USD ($)
shares
CONDENSED CONSOLIDATED BALANCE SHEETS        
Accounts receivable, allowance for doubtful accounts (in dollars) | $   $ 21   $ 21
Common shares, par value (in currency per share) | SFr / shares SFr 0.57   SFr 0.57  
Common shares, shares authorized   357,069,981   357,069,981
Common shares, shares issued   357,069,981   357,069,981
Treasury shares   8,658,869   5,356,369
v3.10.0.1
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($)
shares in Millions, $ in Millions
Common Shares
Treasury Shares
Contributed Surplus
Accumulated Earnings
Accumulated Other Comprehensive Loss
Total
Balance at Sep. 30, 2016 $ 168 $ (1,624) $ 1,801 $ 8,682 $ (542) $ 8,485
Balance (in shares) at Sep. 30, 2016 383 (28)        
Increase (Decrease) in Equity:            
Adoption of ASU No. 2016-09 | ASU 2016-09       165   165
Net income       1,249   1,249
Other comprehensive income (loss)         36 36
Share-based compensation expense     73     73
Dividends approved     (566)     (566)
Exercise of share options   $ 86       86
Exercise of share options (in shares)   3        
Restricted share award vestings and other activity   $ 155 (156)     (1)
Restricted share award vestings and other activity (in shares)   1        
Repurchase of common shares   $ (386)       $ (386)
Repurchase of common shares (in shares)   (5)       (5)
Cancellation of treasury shares $ (11) $ 1,512 (1,152) (349)    
Cancellation of treasury shares (in shares) (26) 26        
Balance at Jun. 30, 2017 $ 157 $ (257)   9,747 (506) $ 9,141
Balance (in shares) at Jun. 30, 2017 357 (3)        
Balance at Sep. 29, 2017 $ 157 $ (421)   10,175 (160) 9,751
Balance (in shares) at Sep. 29, 2017 357 (5)        
Increase (Decrease) in Equity:            
Adoption of ASU No. 2018-02 | ASU 2018-02       38 (38)  
Net income       904   904
Other comprehensive income (loss)         (101) (101)
Share-based compensation expense     74     74
Dividends approved       (613)   (613)
Exercise of share options   $ 96       96
Exercise of share options (in shares)   2        
Restricted share award vestings and other activity   $ 139 $ (74) (72)   (7)
Repurchase of common shares   $ (612)       $ (612)
Repurchase of common shares (in shares)   (6)       (6)
Balance at Jun. 29, 2018 $ 157 $ (798)   $ 10,432 $ (299) $ 9,492
Balance (in shares) at Jun. 29, 2018 357 (9)        
v3.10.0.1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Millions
9 Months Ended
Jun. 29, 2018
Jun. 30, 2017
Cash Flows From Operating Activities:    
Net income $ 904 $ 1,249
(Income) loss from discontinued operations, net of income taxes 3 (5)
Income from continuing operations 907 1,244
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:    
Depreciation and amortization 514 469
Deferred income taxes 447 (146)
Provision for losses on accounts receivable and inventories 28 15
Share-based compensation expense 74 73
Other (12) 23
Changes in assets and liabilities, net of the effects of acquisitions and divestitures:    
Accounts receivable, net (317) (260)
Inventories (184) (195)
Prepaid expenses and other current assets (52) (6)
Accounts payable 180 217
Accrued and other current liabilities (154) 56
Deferred revenue 49 (150)
Income taxes 24 54
Other 23 55
Net cash provided by continuing operating activities 1,527 1,449
Net cash used in discontinued operating activities   (1)
Net cash provided by operating activities 1,527 1,448
Cash Flows From Investing Activities:    
Capital expenditures (686) (452)
Proceeds from sale of property, plant, and equipment 19 12
Acquisition of business, net of cash acquired   (77)
Other (8) (21)
Net cash used in investing activities (675) (538)
Cash Flows From Financing Activities:    
Net increase (decrease) in commercial paper 271 (162)
Proceeds from issuance of debt 119 89
Repayment of debt (708)  
Proceeds from exercise of share options 96 86
Repurchase of common shares (611) (376)
Payment of common share dividends to shareholders (435) (405)
Other (34) (24)
Net cash used in continuing financing activities (1,302) (792)
Net cash provided by discontinued financing activities   1
Net cash used in financing activities (1,302) (791)
Effect of currency translation on cash 2 (11)
Net increase (decrease) in cash and cash equivalents (448) 108
Cash and cash equivalents at beginning of period 1,218 647
Cash and cash equivalents at end of period $ 770 $ 755
v3.10.0.1
Basis of Presentation and Accounting Pronouncements
9 Months Ended
Jun. 29, 2018
Basis of Presentation and Accounting Pronouncements  
Basis of Presentation and Accounting Pronouncements

1. Basis of Presentation and Accounting Pronouncements

Basis of Presentation

        The unaudited Condensed Consolidated Financial Statements of TE Connectivity Ltd. ("TE Connectivity" or the "Company," which may be referred to as "we," "us," or "our") have been prepared in United States ("U.S.") dollars, in accordance with accounting principles generally accepted in the U.S. ("GAAP") and the instructions to Form 10-Q under the Securities Exchange Act of 1934. In management's opinion, the unaudited Condensed Consolidated Financial Statements contain all normal recurring adjustments necessary for a fair presentation of interim results. The results of operations reported for interim periods are not necessarily indicative of the results of operations for the entire fiscal year or any subsequent interim period.

        The year-end balance sheet data was derived from audited financial statements, but does not include all of the information and disclosures required by GAAP. These financial statements should be read in conjunction with our audited Consolidated Financial Statements contained in our Annual Report on Form 10-K for the fiscal year ended September 29, 2017.

        Unless otherwise indicated, references in the Condensed Consolidated Financial Statements to fiscal 2018 and fiscal 2017 are to our fiscal years ending September 28, 2018 and ended September 29, 2017, respectively.

Recently Issued Accounting Pronouncement

        In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09 which codified Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers. This guidance supersedes ASC 605, Revenue Recognition, and introduces a single, comprehensive, five-step revenue recognition model. ASC 606 also enhances disclosures related to revenue recognition. ASC 606, as amended, is effective for us beginning in fiscal 2019. Significantly all our revenues are generated from the sale of products and construction related projects. Our review of these existing contracts, which is substantially complete, affirms that product revenue will continue to be recognized at a point in time in a manner consistent with current practice. In addition, construction related projects, which are accounted for primarily using the percentage-of-completion method, will continue to qualify for revenue recognition over time. In the quarter ended June 29, 2018, we continued the process of updating policies, internal controls, financial statement disclosures, and systems to incorporate the impact of the new standard in our financial reporting processes. We intend to adopt the new standard using the modified retrospective approach and have begun quantifying the impact of the cumulative effect of applying this new standard on existing, uncompleted contracts at the adoption date, which will result in an adjustment to the opening balance of accumulated earnings as of September 29, 2018. We do not expect that the cumulative impact of adoption will be material to our results of operations or financial position.

Recently Adopted Accounting Pronouncement

        In February 2018, the FASB issued ASU No. 2018-02, an update to ASC 220, Income Statement–Reporting Comprehensive Income, to allow a reclassification from accumulated other comprehensive income (loss) for stranded tax effects resulting from the Tax Cuts and Jobs Act (the "Act"). See Note 10 for additional information regarding the Act. We elected to early adopt this update in the quarter ended March 30, 2018 and reclassify the stranded tax effects resulting from the change in the U.S. federal corporate income tax rate. This change in accounting principle resulted in a reclassification of $38 million, primarily associated with our pension plans, during the period of adoption. The reclassification increased both accumulated other comprehensive loss and accumulated earnings with no impact to total shareholders' equity.

        In March 2017, the FASB issued ASU No. 2017-07, an update to ASC 715, Compensation–Retirement Benefits, which changes the income statement presentation of net periodic pension and postretirement benefit costs. The ASU requires that service costs be presented with other employee compensation costs within operating income and that other cost components be presented outside of operating income. We elected to early adopt this update in the quarter ended December 29, 2017. The update was applied retrospectively and did not have a material impact on our Condensed Consolidated Statements of Operations.

 

v3.10.0.1
Restructuring and Other Charges, Net
9 Months Ended
Jun. 29, 2018
Restructuring and Other Charges, Net  
Restructuring and Other Charges, Net

2. Restructuring and Other Charges, Net

        Net restructuring and other charges consisted of the following:

                                                                                                                                                                                    

 

 

For the
Quarters Ended

 

For the
Nine Months Ended

 

 

 

June 29,
2018

 

June 30,
2017

 

June 29,
2018

 

June 30,
2017

 

 

 

(in millions)

 

Restructuring charges, net

 

$

75

 

$

19

 

$

120

 

$

124

 

Other charges (credits), net

 

 

(10

)

 

 

 

(14

)

 

1

 

​  

​  

​  

​  

​  

​  

​  

​  

 

 

$

65

 

$

19

 

$

106

 

$

125

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

        Net restructuring charges by segment were as follows:

                                                                                                                                                                                    

 

 

For the
Quarters Ended

 

For the
Nine Months Ended

 

 

 

June 29,
2018

 

June 30,
2017

 

June 29,
2018

 

June 30,
2017

 

 

 

(in millions)

 

Transportation Solutions

 

$

17

 

$

3

 

$

22

 

$

60

 

Industrial Solutions

 

 

48

 

 

14

 

 

78

 

 

53

 

Communications Solutions

 

 

10

 

 

2

 

 

20

 

 

11

 

​  

​  

​  

​  

​  

​  

​  

​  

Restructuring charges, net

 

$

75

 

$

19

 

$

120

 

$

124

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

        Activity in our restructuring reserves was as follows:

                                                                                                                                                                                    

 

 

Balance at
September 29,
2017

 

Charges

 

Changes
in
Estimates

 

Cash
Payments

 

Non-Cash
Items

 

Currency
Translation

 

Balance at
June 29,
2018

 

 

 

(in millions)

 

Fiscal 2018 Actions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Employee severance

 

$

 

$

102

 

$

 

$

(11

)

$

 

$

 

$

91

 

   Facility and other exit costs

 

 

 

 

6

 

 

 

 

(1

)

 

 

 

 

 

5

 

   Property, plant, and equipment

 

 

 

 

3

 

 

 

 

 

 

(3

)

 

 

 

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

     Total

 

 

 

 

111

 

 

 

 

(12

)

 

(3

)

 

 

 

96

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Fiscal 2017 Actions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Employee severance

 

 

103

 

 

4

 

 

(2

)

 

(54

)

 

 

 

(1

)

 

50

 

   Facility and other exit costs

 

 

1

 

 

2

 

 

 

 

(2

)

 

 

 

 

 

1

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

     Total

 

 

104

 

 

6

 

 

(2

)

 

(56

)

 

 

 

(1

)

 

51

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Pre-Fiscal 2017 Actions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Employee severance

 

 

36

 

 

6

 

 

(4

)

 

(18

)

 

 

 

(1

)

 

19

 

   Facility and other exit costs

 

 

9

 

 

5

 

 

 

 

(6

)

 

 

 

 

 

8

 

   Property, plant, and equipment

 

 

 

 

1

 

 

(3

)

 

3

 

 

(1

)

 

 

 

 

   ​

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

     Total

 

 

45

 

 

12

 

 

(7

)

 

(21

)

 

(1

)

 

(1

)

 

27

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total Activity

 

$

149

 

$

129

 

$

(9

)

$

(89

)

$

(4

)

$

(2

)

$

174

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

        Fiscal 2018 Actions

        During fiscal 2018, we initiated a restructuring program associated with footprint consolidation and structural improvements primarily impacting the Industrial Solutions segment. In connection with this program, during the nine months ended June 29, 2018, we recorded restructuring charges of $111 million. We expect to complete significantly all restructuring actions commenced during the nine months ended June 29, 2018 by the end of fiscal 2020 and to incur total charges of approximately $130 million. Remaining charges primarily relate to employee severance.

        Fiscal 2017 Actions

        During fiscal 2017, we initiated a restructuring program associated with footprint consolidation related to recent acquisitions and structural improvements impacting all segments. In connection with this program, during the nine months ended June 29, 2018 and June 30, 2017, we recorded net restructuring charges of $4 million and $119 million, respectively. We expect to complete all restructuring actions commenced during fiscal 2017 by the end of fiscal 2019 and anticipate that any additional charges will be insignificant.

        Pre-Fiscal 2017 Actions

        Prior to fiscal 2017, we initiated a restructuring program associated with headcount reductions impacting all segments and product line closures in the Communications Solutions segment. During each of the nine months ended June 29, 2018 and June 30, 2017, we recorded net restructuring charges of $5 million related to pre-fiscal 2017 actions. We expect to incur additional charges of approximately $15 million related to pre-fiscal 2017 actions with the remaining charges related to employee severance primarily in the Communications Solutions segment.

        Total Restructuring Reserves

        Restructuring reserves included on the Condensed Consolidated Balance Sheets were as follows:

                                                                                                                                                                                    

 

 

June 29,
2018

 

September 29,
2017

 

 

 

(in millions)

 

Accrued and other current liabilities

 

$

137

 

$

130

 

Other liabilities

 

 

37

 

 

19

 

​  

​  

​  

​  

Restructuring reserves

 

$

174

 

$

149

 

​  

​  

​  

​  

​  

​  

​  

​  

 

v3.10.0.1
Inventories
9 Months Ended
Jun. 29, 2018
Inventories  
Inventories

3. Inventories

        Inventories consisted of the following:

                                                                                                                                                                                    

 

 

June 29,
2018

 

September 29,
2017

 

 

 

(in millions)

 

Raw materials

 

$

337

 

$

306

 

Work in progress

 

 

668

 

 

580

 

Finished goods

 

 

877

 

 

810

 

Inventoried costs on long-term contracts

 

 

79

 

 

117

 

​  

​  

​  

​  

Inventories

 

$

1,961

 

$

1,813

 

​  

​  

​  

​  

​  

​  

​  

​  

 

v3.10.0.1
Goodwill
9 Months Ended
Jun. 29, 2018
Goodwill  
Goodwill

4. Goodwill

        The changes in the carrying amount of goodwill by segment were as follows:

                                                                                                                                                                                    

 

 

Transportation
Solutions

 

Industrial
Solutions

 

Communications
Solutions

 

Total

 

 

 

(in millions)

 

September 29, 2017(1)

 

$

2,011

 

$

3,047

 

$

593

 

$

5,651

 

Currency translation and other

 

 

(16

)

 

(15

)

 

(4

)

 

(35

)

​  

​  

​  

​  

​  

​  

​  

​  

June 29, 2018(1)

 

$

1,995

 

$

3,032

 

$

589

 

$

5,616

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  


 

 

(1)          

At June 29, 2018 and September 29, 2017, accumulated impairment losses for the Transportation Solutions, Industrial Solutions, and Communications Solutions segments were $2,191 million, $669 million, and $1,514 million, respectively.

 

v3.10.0.1
Intangible Assets, Net
9 Months Ended
Jun. 29, 2018
Intangible Assets, Net  
Intangible Assets, Net

5. Intangible Assets, Net

        Intangible assets consisted of the following:

                                                                                                                                                                                    

 

 

June 29, 2018

 

September 29, 2017

 

 

 

Gross
Carrying
Amount

 

Accumulated
Amortization

 

Net
Carrying
Amount

 

Gross
Carrying
Amount

 

Accumulated
Amortization

 

Net
Carrying
Amount

 

 

 

(in millions)

 

Customer relationships

 

$

1,424

 

$

(367

)

$

1,057

 

$

1,433

 

$

(300

)

$

1,133

 

Intellectual property

 

 

1,259

 

 

(637

)

 

622

 

 

1,263

 

 

(575

)

 

688

 

Other

 

 

35

 

 

(16

)

 

19

 

 

36

 

 

(16

)

 

20

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total

 

$

2,718

 

$

(1,020

)

$

1,698

 

$

2,732

 

$

(891

)

$

1,841

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

        Intangible asset amortization expense was $45 million and $43 million for the quarters ended June 29, 2018 and June 30, 2017, respectively, and $135 million and $126 million for the nine months ended June 29, 2018 and June 30, 2017, respectively.

        The aggregate amortization expense on intangible assets is expected to be as follows:

                                                                                                                                                                                    

 

 

(in millions)

 

Remainder of fiscal 2018

 

$

46

 

Fiscal 2019

 

 

181

 

Fiscal 2020

 

 

173

 

Fiscal 2021

 

 

170

 

Fiscal 2022

 

 

169

 

Fiscal 2023

 

 

169

 

Thereafter

 

 

790

 

​  

​  

Total

 

$

1,698

 

​  

​  

​  

​  

 

v3.10.0.1
Debt
9 Months Ended
Jun. 29, 2018
Debt  
Debt

6. Debt

        During the nine months ended June 29, 2018, Tyco Electronics Group S.A. ("TEGSA"), our 100%-owned subsidiary, repaid, at maturity, $708 million of 6.55% senior notes due October 2017.

        We reclassified $325 million of 2.375% senior notes due December 2018 from long-term debt to short-term debt on the Condensed Consolidated Balance Sheet during the nine months ended June 29, 2018.

        During the nine months ended June 29, 2018, TEGSA entered into an uncommitted revolving credit facility under which it borrowed €100 million at a 0% interest rate with repayment due at maturity in December 2018.

        As of June 29, 2018, TEGSA had $271 million of commercial paper outstanding at a weighted-average interest rate of 2.33%. TEGSA had no commercial paper outstanding at September 29, 2017.

        The fair value of our debt, based on indicative valuations, was approximately $4,188 million and $4,622 million at June 29, 2018 and September 29, 2017, respectively.

 

v3.10.0.1
Commitments and Contingencies
9 Months Ended
Jun. 29, 2018
Commitments and Contingencies  
Commitments and Contingencies

7. Commitments and Contingencies

        Legal Proceedings

        In the normal course of business, we are subject to various legal proceedings and claims, including patent infringement claims, product liability matters, employment disputes, disputes on agreements, other commercial disputes, environmental matters, antitrust claims, and tax matters, including non-income tax matters such as value added tax, sales and use tax, real estate tax, and transfer tax. Although it is not feasible to predict the outcome of these proceedings, based upon our experience, current information, and applicable law, we do not expect that the outcome of these proceedings, either individually or in the aggregate, will have a material effect on our results of operations, financial position, or cash flows.

        Environmental Matters

        We are involved in various stages of investigation and cleanup related to environmental remediation matters at a number of sites. The ultimate cost of site cleanup is difficult to predict given the uncertainties regarding the extent of the required cleanup, the interpretation of applicable laws and regulations, and alternative cleanup methods. As of June 29, 2018, we concluded that we would incur investigation and remediation costs at these sites in the reasonably possible range of $15 million to $43 million, and we accrued $18 million as the probable loss, which was the best estimate within this range. We believe that any potential payment of such estimated amounts will not have a material adverse effect on our results of operations, financial position, or cash flows.

        Guarantees

        In disposing of assets or businesses, we often provide representations, warranties, and/or indemnities to cover various risks including unknown damage to assets, environmental risks involved in the sale of real estate, liability for investigation and remediation of environmental contamination at waste disposal sites and manufacturing facilities, and unidentified tax liabilities and legal fees related to periods prior to disposition. We do not expect that these uncertainties will have a material adverse effect on our results of operations, financial position, or cash flows.

        At June 29, 2018, we had outstanding letters of credit, letters of guarantee, and surety bonds of $283 million.

        We generally record estimated product warranty costs when contract revenues are recognized under the percentage-of-completion method for construction related contracts; other warranty reserves are not significant. The estimation is based primarily on historical experience and actual warranty claims. Amounts accrued for warranty claims were $46 million and $50 million at June 29, 2018 and September 29, 2017, respectively.

        Tax Sharing Agreement

        Under a Tax Sharing Agreement, we, Tyco International plc ("Tyco International"), and Covidien plc ("Covidien") share 31%, 27%, and 42%, respectively, of income tax liabilities that arise from adjustments made by tax authorities to the collective income tax returns for certain of our, Tyco International's, and Covidien's income tax liabilities for periods prior to and including June 29, 2007. Pursuant to the Tax Sharing Agreement, we entered into certain guarantee commitments and indemnifications with Tyco International and Covidien. As a result of subsequent transactions, Tyco International and Covidien now operate as part of Johnson Controls International plc and Medtronic plc, respectively. We have substantially settled all U.S. federal income tax matters with the Internal Revenue Service ("IRS") for periods covered under the Tax Sharing Agreement. Certain shared U.S. state and non-U.S. income tax matters remain open. We do not expect these matters will have a material effect on our results of operations, financial position, or cash flows.

 

v3.10.0.1
Financial Instruments
9 Months Ended
Jun. 29, 2018
Financial Instruments  
Financial Instruments

8. Financial Instruments

        During fiscal 2015, we entered into cross-currency swap contracts with an aggregate notional value of €1,000 million to reduce our exposure to foreign currency exchange risk associated with certain intercompany loans. Under the terms of these contracts, which have been designated as cash flow hedges, we make quarterly interest payments in euros at 3.50% per annum and receive interest in U.S. dollars at a weighted-average rate of 5.33% per annum. Upon the maturities of these contracts in fiscal 2022, we will pay the notional value of the contracts in euros and receive U.S. dollars from our counterparties. In connection with the cross-currency swap contracts, we are required to post cash collateral with our counterparties.

        At June 29, 2018 and September 29, 2017, our cross-currency swap contracts were in a liability position of $107 million and $96 million, respectively, and were recorded in other liabilities on the Condensed Consolidated Balance Sheets. At June 29, 2018 and September 29, 2017, collateral paid to our counterparties approximated the derivative positions and was recorded in prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets. The impacts of our cross-currency swap contracts were as follows:

                                                                                                                                                                                    

 

 

For the
Quarters Ended

 

For the
Nine Months Ended

 

 

 

June 29,
2018

 

June 30,
2017

 

June 29,
2018

 

June 30,
2017

 

 

 

(in millions)

 

Gains (losses) recorded in other comprehensive income (loss)

 

$

7

 

$

2

 

$

(25

)

$

(6

)

Gains (losses) excluded from the hedging relationship(1)

 

 

64

 

 

(71

)

 

14

 

 

(17

)


 

 

(1)          

Gains and losses excluded from the hedging relationship are recognized prospectively in selling, general, and administrative expenses and are offset by losses and gains generated as a result of re-measuring certain intercompany loans to the U.S. dollar.

        We hedge our net investment in certain foreign operations using intercompany loans denominated in the same currencies. The aggregate notional value of these hedges was $2,986 million and $3,110 million at June 29, 2018 and September 29, 2017, respectively. The impacts of our hedging program were as follows:

                                                                                                                                                                                    

 

 

For the
Quarters Ended

 

For the
Nine Months Ended

 

 

 

June 29,
2018

 

June 30,
2017

 

June 29,
2018

 

June 30,
2017

 

 

 

(in millions)

 

Foreign currency exchange gains (losses)(1)

 

$

153

 

$

(129

)

$

8

 

$

15

 


 

 

(1)          

Foreign currency exchange gains and losses are recorded as currency translation, a component of accumulated other comprehensive loss, and are offset by changes attributable to the translation of the net investment.

 

v3.10.0.1
Retirement Plans
9 Months Ended
Jun. 29, 2018
Retirement Plans  
Retirement Plans

9. Retirement Plans

        The net periodic pension benefit cost for all U.S. and non-U.S. defined benefit pension plans was as follows:

                                                                                                                                                                                    

 

 

U.S. Plans

 

Non-U.S. Plans

 

 

 

For the
Quarters Ended

 

For the
Quarters Ended

 

 

 

June 29,
2018

 

June 30,
2017

 

June 29,
2018

 

June 30,
2017

 

 

 

(in millions)

 

Service cost

 

$

3

 

$

3

 

$

12

 

$

13

 

Interest cost

 

 

11

 

 

11

 

 

10

 

 

9

 

Expected return on plan assets

 

 

(15

)

 

(13

)

 

(18

)

 

(18

)

Amortization of net actuarial loss

 

 

6

 

 

10

 

 

7

 

 

11

 

Amortization of prior service credit

 

 

 

 

 

 

(2

)

 

(2

)

​  

​  

​  

​  

​  

​  

​  

​  

Net periodic pension benefit cost

 

$

5

 

$

11

 

$

9

 

$

13

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

 

                                                                                                                                                                                    

 

 

U.S. Plans

 

Non-U.S. Plans

 

 

 

For the
Nine Months Ended

 

For the
Nine Months Ended

 

 

 

June 29,
2018

 

June 30,
2017

 

June 29,
2018

 

June 30,
2017

 

 

 

(in millions)

 

Service cost

 

$

10

 

$

9

 

$

35

 

$

39

 

Interest cost

 

 

33

 

 

33

 

 

31

 

 

27

 

Expected return on plan assets

 

 

(45

)

 

(40

)

 

(52

)

 

(53

)

Amortization of net actuarial loss

 

 

17

 

 

30

 

 

18

 

 

32

 

Amortization of prior service credit

 

 

 

 

 

 

(5

)

 

(5

)

​  

​  

​  

​  

​  

​  

​  

​  

Net periodic pension benefit cost

 

$

15

 

$

32

 

$

27

 

$

40

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

        The components of net periodic pension benefit cost other than service cost are included in net other income (expense) on the Condensed Consolidated Statements of Operations.

        During the nine months ended June 29, 2018, we contributed $36 million to our non-U.S. pension plans.

 

v3.10.0.1
Income Taxes
9 Months Ended
Jun. 29, 2018
Income Taxes  
Income Taxes

10. Income Taxes

        We recorded income tax expense of $81 million and $71 million for the quarters ended June 29, 2018 and June 30, 2017, respectively. The income tax expense for the quarter ended June 29, 2018 included a $17 million income tax benefit resulting from lapses of statutes of limitations in the U.S. and certain non-U.S. jurisdictions. The income tax expense for the quarter ended June 30, 2017 included a $14 million income tax benefit associated with pre-separation tax matters.

        We recorded income tax expense of $789 million and $164 million for the nine months ended June 29, 2018 and June 30, 2017, respectively. The tax expense for the nine months ended June 29, 2018 included $567 million of income tax expense related to the tax impacts of the Tax Cuts and Jobs Act, a $61 million net income tax benefit related to certain legal entity restructurings, and a $34 million income tax benefit resulting from lapses of statutes of limitations in the U.S. and certain non-U.S. jurisdictions. See "Tax Cuts and Jobs Act" below for additional information. The tax expense for the nine months ended June 30, 2017 included a $52 million income tax benefit associated with the tax impacts of certain intercompany transactions and the corresponding reduction in the valuation allowance for U.S. tax loss carryforwards, a $24 million income tax benefit resulting from lapses of statutes of limitations in the U.S. and certain non-U.S. jurisdictions, and a $14 million income tax benefit associated with pre-separation tax matters.

        We record accrued interest and penalties related to uncertain tax positions as part of income tax expense. As of June 29, 2018 and September 29, 2017, we had $60 million of accrued interest and penalties related to uncertain tax positions on the Condensed Consolidated Balance Sheets, recorded primarily in income taxes. During the nine months ended June 29, 2018, we recognized $2 million of income tax expense related to interest and penalties on the Condensed Consolidated Statement of Operations.

        Although it is difficult to predict the timing or results of our worldwide examinations, we estimate that approximately $30 million of unrecognized income tax benefits, excluding the impact relating to accrued interest and penalties, could be resolved within the next twelve months.

        We are not aware of any other matters that would result in significant changes to the amount of unrecognized income tax benefits reflected on the Condensed Consolidated Balance Sheet as of June 29, 2018.

        Tax Cuts and Jobs Act

        On December 22, 2017, the President of the U.S. signed the Tax Cuts and Jobs Act (the "Act") into law. The Act includes numerous significant changes to existing tax law, including a permanent reduction in the U.S. federal corporate income tax rate from 35% to 21%, further limitations on the deductibility of interest expense and certain executive compensation, repeal of the corporate Alternative Minimum Tax, and imposition of a territorial tax system with a one-time repatriation tax on deemed repatriated earnings of foreign subsidiaries. While some of the new provisions of the Act will impact us in fiscal 2019 and beyond, the change in the tax rate was effective January 1, 2018. In the period of enactment, we were required to revalue our U.S. federal deferred tax assets and liabilities at the new tax rate. Accordingly, during the quarter ended December 29, 2017, we recorded income tax expense of $567 million primarily in connection with the write-down of our U.S. federal deferred tax asset for net operating loss and interest carryforwards to the lower tax rate. Included in the expense of $567 million was an income tax benefit of $34 million related to the reduction in the existing valuation allowance recorded against certain U.S. federal tax credit carryforwards. The limitations on interest expense deductions contained in the Act are expected to increase prospective taxable income and thereby allow the utilization of more tax credits in future years. As a Swiss corporation, the one-time repatriation tax imposed by the Act will not be significant to us.

        The Act makes broad and complex changes to the U.S. Internal Revenue Code, and in certain instances, lacks clarity and is subject to interpretation until additional IRS guidance is issued. The ultimate impact of the Act may differ from our estimates due to changes in the interpretations and assumptions we made as well as any forthcoming regulatory guidance. One area requiring guidance is a transition rule regarding limitations on interest expense deductions. The Act does not address the treatment of the carryforward of disallowed interest expense generated under the prior law. Our interpretation is that the carryforward of interest should survive and will be deductible in future periods subject to the new interest limitations. Accordingly, during the quarter ended December 29, 2017, we revalued our beginning deferred tax asset related to our interest carryforwards to $223 million to reflect the lower tax rate. It is possible additional regulatory guidance could be issued contrary to this interpretation at which point we may be required to record a charge to income tax expense to revalue or eliminate the related deferred tax asset. On April 2, 2018, the Treasury Department and the IRS issued Notice 2018-28 stating their intention to issue regulations consistent with our position related to the carryforward of the disallowed interest expense.

 

v3.10.0.1
Earnings Per Share
9 Months Ended
Jun. 29, 2018
Earnings Per Share  
Earnings Per Share

11. Earnings Per Share

        The weighted-average number of shares outstanding used in the computations of basic and diluted earnings per share were as follows:

                                                                                                                                                                                    

 

 

For the
Quarters Ended

 

For the
Nine Months Ended

 

 

 

June 29,
2018

 

June 30,
2017

 

June 29,
2018

 

June 30,
2017

 

 

 

(in millions)

 

Basic

 

 

349

 

 

355

 

 

351

 

 

355

 

Dilutive impact of share-based compensation arrangements

 

 

3

 

 

3

 

 

3

 

 

4

 

​  

​  

​  

​  

​  

​  

​  

​  

Diluted

 

 

352

 

 

358

 

 

354

 

 

359

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

        There were one million share options that were not included in the computation of diluted earnings per share for the nine months ended June 30, 2017 because the instruments' underlying exercise price were greater than the average market prices of our common shares and inclusion would be antidilutive.

 

v3.10.0.1
Shareholders' Equity
9 Months Ended
Jun. 29, 2018
Shareholders' Equity  
Shareholders' Equity

12. Shareholders' Equity

        Common Shares

        In March 2018, our shareholders reapproved and extended through March 14, 2020, our board of directors' authorization to issue additional new shares, subject to certain conditions specified in our articles of association, in aggregate not exceeding 50% of the amount of our authorized shares.

        Dividends

        We paid a cash dividend of $0.40 per share to shareholders in each of the quarters ended December 29, 2017 and March 30, 2018.

        In March 2018, our shareholders approved a dividend payment to shareholders of $1.76 per share, payable in four equal quarterly installments beginning in the third quarter of fiscal 2018 and ending in the second quarter of fiscal 2019. We paid the first installment of the dividend at a rate of $0.44 per share in the quarter ended June 29, 2018.

        Upon shareholders' approval of a dividend payment, we record a liability with a corresponding charge to shareholders' equity. At June 29, 2018 and September 29, 2017, the unpaid portion of the dividends recorded in accrued and other current liabilities on the Condensed Consolidated Balance Sheets totaled $459 million and $281 million, respectively.

        Share Repurchase Program

        During the nine months ended June 29, 2018, our board of directors authorized an increase of $1.5 billion in the share repurchase program. Common shares repurchased under the share repurchase program were as follows:

                                                                                                                                                                                    

 

 

For the
Nine Months Ended

 

 

 

June 29,
2018

 

June 30,
2017

 

 

 

(in millions)

 

Number of common shares repurchased

 

 

6

 

 

5

 

Repurchase value

 

$

612

 

$

386

 

        At June 29, 2018, we had $1.4 billion of availability remaining under our share repurchase authorization.

 

v3.10.0.1
Share Plans
9 Months Ended
Jun. 29, 2018
Share Plans  
Share Plans

13. Share Plans

        Share-based compensation expense, which was included in selling, general, and administrative expenses on the Condensed Consolidated Statements of Operations, was as follows:

                                                                                                                                                                                    

 

 

For the
Quarters Ended

 

For the
Nine Months Ended

 

 

 

June 29,
2018

 

June 30,
2017

 

June 29,
2018

 

June 30,
2017

 

 

 

(in millions)

 

Share-based compensation expense

 

$

22

 

$

26

 

$

74

 

$

73

 

        As of June 29, 2018, there was $153 million of unrecognized compensation expense related to share-based awards, which is expected to be recognized over a weighted-average period of 1.8 years.

        During the quarter ended December 29, 2017, we granted the following share-based awards as part of our annual incentive plan grant:

                                                                                                                                                                                    

 

 

Shares

 

Weighted-Average
Grant-Date
Fair Value

 

 

 

(in millions)

 

 

 

Share options

 

 

1.4

 

$

16.47

 

Restricted share awards

 

 

0.5

 

 

93.36

 

Performance share awards

 

 

0.2

 

 

93.36

 

        As of June 29, 2018, we had 20 million shares available for issuance under our stock and incentive plans, of which the TE Connectivity Ltd. 2007 Stock and Incentive Plan, amended and restated as of March 8, 2017, was the primary plan.

        Share-Based Compensation Assumptions

        The weighted-average assumptions we used in the Black-Scholes-Merton option pricing model for the options granted as part of our annual incentive plan grant were as follows:

                                                                                                                                                                                    

Expected share price volatility

 

 

20

%

Risk free interest rate

 

 

2.2

%

Expected annual dividend per share

 

$

1.60

 

Expected life of options (in years)

 

 

5.3

 

 

v3.10.0.1
Segment Data
9 Months Ended
Jun. 29, 2018
Segment Data  
Segment Data

14. Segment Data

        Net sales by segment were as follows:

                                                                                                                                                                                    

 

 

For the
Quarters Ended

 

For the
Nine Months Ended

 

 

 

June 29,
2018

 

June 30,
2017

 

June 29,
2018

 

June 30,
2017

 

 

 

(in millions)

 

Transportation Solutions

 

$

2,112

 

$

1,765

 

$

6,278

 

$

5,195

 

Industrial Solutions

 

 

988

 

 

905

 

 

2,842

 

 

2,553

 

Communications Solutions

 

 

664

 

 

697

 

 

1,869

 

 

1,909

 

​  

​  

​  

​  

​  

​  

​  

​  

Total(1)

 

$

3,764

 

$

3,367

 

$

10,989

 

$

9,657

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  


 

 

(1)          

Intersegment sales were not material and were recorded at selling prices that approximated market prices.

        Operating income by segment was as follows:

                                                                                                                                                                                    

 

 

For the
Quarters Ended

 

For the
Nine Months Ended

 

 

 

June 29,
2018

 

June 30,
2017

 

June 29,
2018

 

June 30,
2017

 

 

 

(in millions)

 

Transportation Solutions

 

$

394

 

$

333

 

$

1,242

 

$

986

 

Industrial Solutions

 

 

93

 

 

100

 

 

321

 

 

258

 

Communications Solutions

 

 

71

 

 

111

 

 

200

 

 

276

 

​  

​  

​  

​  

​  

​  

​  

​  

Total

 

$

558

 

$

544

 

$

1,763

 

$

1,520

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

 

v3.10.0.1
Tyco Electronics Group S.A.
9 Months Ended
Jun. 29, 2018
Tyco Electronics Group S.A.  
Tyco Electronics Group S.A.

15. Tyco Electronics Group S.A.

        Tyco Electronics Group S.A. ("TEGSA"), a Luxembourg company and our 100%-owned subsidiary, is a holding company that owns, directly or indirectly, all of our operating subsidiaries. TEGSA is the obligor under our senior notes, commercial paper, and five-year unsecured senior revolving credit facility, which are fully and unconditionally guaranteed by its parent, TE Connectivity Ltd. The following tables present condensed consolidating financial information for TE Connectivity Ltd., TEGSA, and all other subsidiaries that are not providing a guarantee of debt but which represent assets of TEGSA, using the equity method of accounting.

Condensed Consolidating Statement of Operations (UNAUDITED)
For the Quarter Ended June 29, 2018

                                                                                                                                                                                    

 

 

TE
Connectivity
Ltd.

 

TEGSA

 

Other
Subsidiaries

 

Consolidating
Adjustments

 

Total

 

 

 

(in millions)

 

Net sales

 

$

 

$

 

$

3,764

 

$

 

$

3,764

 

Cost of sales

 

 

 

 

 

 

2,547

 

 

 

 

2,547

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Gross margin

 

 

 

 

 

 

1,217

 

 

 

 

1,217

 

Selling, general, and administrative expenses, net

 

 

19

 

 

 

 

390

 

 

 

 

409

 

Research, development, and engineering expenses

 

 

 

 

 

 

181

 

 

 

 

181

 

Acquisition and integration costs

 

 

 

 

 

 

4

 

 

 

 

4

 

Restructuring and other charges, net

 

 

 

 

 

 

65

 

 

 

 

65

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Operating income (loss)

 

 

(19

)

 

 

 

577

 

 

 

 

558

 

Interest income

 

 

 

 

 

 

3

 

 

 

 

3

 

Interest expense

 

 

 

 

(24

)

 

(1

)

 

 

 

(25

)

Other expense, net

 

 

 

 

 

 

(1

)

 

 

 

(1

)

Equity in net income of subsidiaries

 

 

491

 

 

499

 

 

 

 

(990

)

 

 

Intercompany interest income (expense), net

 

 

(18

)

 

16

 

 

2

 

 

 

 

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Income from continuing operations before income taxes

 

 

454

 

 

491

 

 

580

 

 

(990

)

 

535

 

Income tax expense

 

 

 

 

 

 

(81

)

 

 

 

(81

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Net income

 

 

454

 

 

491

 

 

499

 

 

(990

)

 

454

 

Other comprehensive loss

 

 

(250

)

 

(250

)

 

(255

)

 

505

 

 

(250

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Comprehensive income

 

$

204

 

$

241

 

$

244

 

$

(485

)

$

204

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Condensed Consolidating Statement of Operations (UNAUDITED)
For the Quarter Ended June 30, 2017

                                                                                                                                                                                    

 

 

TE
Connectivity
Ltd.

 

TEGSA

 

Other
Subsidiaries

 

Consolidating
Adjustments

 

Total

 

 

 

(in millions)

 

Net sales

 

$

 

$

 

$

3,367

 

$

 

$

3,367

 

Cost of sales

 

 

 

 

 

 

2,227

 

 

 

 

2,227

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Gross margin

 

 

 

 

 

 

1,140

 

 

 

 

1,140

 

Selling, general, and administrative expenses, net

 

 

68

 

 

18

 

 

322

 

 

 

 

408

 

Research, development, and engineering expenses

 

 

 

 

 

 

168

 

 

 

 

168

 

Acquisition and integration costs

 

 

 

 

 

 

1

 

 

 

 

1

 

Restructuring and other charges, net

 

 

 

 

 

 

19

 

 

 

 

19

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Operating income (loss)

 

 

(68

)

 

(18

)

 

630

 

 

 

 

544

 

Interest income

 

 

 

 

 

 

3

 

 

 

 

3

 

Interest expense

 

 

 

 

(32

)

 

 

 

 

 

(32

)

Other expense, net

 

 

 

 

 

 

(12

)

 

 

 

(12

)

Equity in net income of subsidiaries

 

 

507

 

 

530

 

 

 

 

(1,037

)

 

 

Equity in net income of subsidiaries of discontinued operations

 

 

3

 

 

4

 

 

 

 

(7

)

 

 

Intercompany interest income (expense), net

 

 

(7

)

 

27

 

 

(20

)

 

 

 

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Income from continuing operations before income taxes

 

 

435

 

 

511

 

 

601

 

 

(1,044

)

 

503

 

Income tax expense

 

 

 

 

 

 

(71

)

 

 

 

(71

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Income from continuing operations

 

 

435

 

 

511

 

 

530

 

 

(1,044

)

 

432

 

Income (loss) from discontinued operations, net of income taxes

 

 

 

 

(1

)

 

4

 

 

 

 

3

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Net income

 

 

435

 

 

510

 

 

534

 

 

(1,044

)

 

435

 

Other comprehensive income

 

 

78

 

 

78

 

 

83

 

 

(161

)

 

78

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Comprehensive income

 

$

513

 

$

588

 

$

617

 

$

(1,205

)

$

513

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Condensed Consolidating Statement of Operations (UNAUDITED)
For the Nine Months Ended June 29, 2018

                                                                                                                                                                                    

 

 

TE
Connectivity
Ltd.

 

TEGSA

 

Other
Subsidiaries

 

Consolidating
Adjustments

 

Total

 

 

 

(in millions)

 

Net sales

 

$

 

$

 

$

10,989

 

$

 

$

10,989

 

Cost of sales

 

 

 

 

 

 

7,352

 

 

 

 

7,352

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Gross margin

 

 

 

 

 

 

3,637

 

 

 

 

3,637

 

Selling, general, and administrative expenses, net

 

 

107

 

 

6

 

 

1,107

 

 

 

 

1,220

 

Research, development, and engineering expenses

 

 

 

 

 

 

539

 

 

 

 

539

 

Acquisition and integration costs

 

 

 

 

 

 

9

 

 

 

 

9

 

Restructuring and other charges, net

 

 

 

 

 

 

106

 

 

 

 

106

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Operating income (loss)

 

 

(107

)

 

(6

)

 

1,876

 

 

 

 

1,763

 

Interest income

 

 

 

 

1

 

 

10

 

 

 

 

11

 

Interest expense

 

 

 

 

(79

)

 

(1

)

 

 

 

(80

)

Other income, net

 

 

 

 

 

 

2

 

 

 

 

2

 

Equity in net income of subsidiaries

 

 

1,062

 

 

1,072

 

 

 

 

(2,134

)

 

 

Equity in net loss of subsidiaries of discontinued operations

 

 

(3

)

 

(3

)

 

 

 

6

 

 

 

Intercompany interest income (expense), net

 

 

(48

)

 

74

 

 

(26

)

 

 

 

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Income from continuing operations before income taxes

 

 

904

 

 

1,059

 

 

1,861

 

 

(2,128

)

 

1,696

 

Income tax expense

 

 

 

 

 

 

(789

)

 

 

 

(789

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Income from continuing operations

 

 

904

 

 

1,059

 

 

1,072

 

 

(2,128

)

 

907

 

Loss from discontinued operations, net of income taxes

 

 

 

 

 

 

(3

)

 

 

 

(3

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Net income

 

 

904

 

 

1,059

 

 

1,069

 

 

(2,128

)

 

904

 

Other comprehensive loss

 

 

(101

)

 

(101

)

 

(74

)

 

175

 

 

(101

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Comprehensive income

 

$

803

 

$

958

 

$

995

 

$

(1,953

)

$

803

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Condensed Consolidating Statement of Operations (UNAUDITED)
For the Nine Months Ended June 30, 2017

                                                                                                                                                                                    

 

 

TE
Connectivity
Ltd.

 

TEGSA

 

Other
Subsidiaries

 

Consolidating
Adjustments

 

Total

 

 

 

(in millions)

 

Net sales

 

$

 

$

 

$

9,657

 

$

 

$

9,657

 

Cost of sales

 

 

 

 

 

 

6,340

 

 

 

 

6,340

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Gross margin

 

 

 

 

 

 

3,317

 

 

 

 

3,317

 

Selling, general, and administrative expenses, net

 

 

144

 

 

(52

)

 

1,090

 

 

 

 

1,182

 

Research, development, and engineering expenses

 

 

 

 

 

 

485

 

 

 

 

485

 

Acquisition and integration costs

 

 

 

 

 

 

5

 

 

 

 

5

 

Restructuring and other charges, net

 

 

 

 

 

 

125

 

 

 

 

125

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Operating income (loss)

 

 

(144

)

 

52

 

 

1,612

 

 

 

 

1,520

 

Interest income

 

 

 

 

 

 

14

 

 

 

 

14

 

Interest expense

 

 

 

 

(95

)

 

 

 

 

 

(95

)

Other expense, net

 

 

 

 

 

 

(31

)

 

 

 

(31

)

Equity in net income of subsidiaries

 

 

1,409

 

 

1,369

 

 

 

 

(2,778

)

 

 

Equity in net income of subsidiaries of discontinued operations

 

 

5

 

 

18

 

 

 

 

(23

)

 

 

Intercompany interest income (expense), net

 

 

(21

)

 

83

 

 

(62

)

 

 

 

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Income from continuing operations before income taxes

 

 

1,249

 

 

1,427

 

 

1,533

 

 

(2,801

)

 

1,408

 

Income tax expense

 

 

 

 

 

 

(164

)

 

 

 

(164

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Income from continuing operations

 

 

1,249

 

 

1,427

 

 

1,369

 

 

(2,801

)

 

1,244

 

Income (loss) from discontinued operations, net of income taxes(1)

 

 

 

 

(13

)

 

18

 

 

 

 

5

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Net income

 

 

1,249

 

 

1,414

 

 

1,387

 

 

(2,801

)

 

1,249

 

Other comprehensive income

 

 

36

 

 

36

 

 

14

 

 

(50

)

 

36

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Comprehensive income

 

$

1,285

 

$

1,450

 

$

1,401

 

$

(2,851

)

$

1,285

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  


 

 

(1)          

Includes the internal allocation of gains and losses associated with the divestiture of our Broadband Network Solutions business.

Condensed Consolidating Balance Sheet (UNAUDITED)
As of June 29, 2018

                                                                                                                                                                                    

 

 

TE
Connectivity
Ltd.

 

TEGSA

 

Other
Subsidiaries

 

Consolidating
Adjustments

 

Total

 

 

 

(in millions)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

 

$

 

$

770

 

$

 

$

770

 

Accounts receivable, net

 

 

 

 

 

 

2,591

 

 

 

 

2,591

 

Inventories

 

 

 

 

 

 

1,961

 

 

 

 

1,961

 

Intercompany receivables

 

 

39

 

 

2,644

 

 

49

 

 

(2,732

)

 

 

Prepaid expenses and other current assets

 

 

6

 

 

108

 

 

505

 

 

 

 

619

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total current assets

 

 

45

 

 

2,752

 

 

5,876

 

 

(2,732

)

 

5,941

 

Property, plant, and equipment, net

 

 

 

 

 

 

3,633

 

 

 

 

3,633

 

Goodwill

 

 

 

 

 

 

5,616

 

 

 

 

5,616

 

Intangible assets, net

 

 

 

 

 

 

1,698

 

 

 

 

1,698

 

Deferred income taxes

 

 

 

 

 

 

1,672

 

 

 

 

1,672

 

Investment in subsidiaries

 

 

12,615

 

 

25,097

 

 

 

 

(37,712

)

 

 

Intercompany loans receivable

 

 

2

 

 

6,562

 

 

17,639

 

 

(24,203

)

 

 

Other assets

 

 

 

 

 

 

453

 

 

 

 

453

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total Assets

 

$

12,662

 

$

34,411

 

$

36,587

 

$

(64,647

)

$

19,013

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Liabilities and Shareholders' Equity

 

 


 

 

 


 

 

 


 

 

 


 

 

 


 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term debt

 

$

 

$

712

 

$

2

 

$

 

$

714

 

Accounts payable

 

 

2

 

 

 

 

1,581

 

 

 

 

1,583

 

Accrued and other current liabilities

 

 

475

 

 

43

 

 

1,107

 

 

 

 

1,625

 

Deferred revenue

 

 

 

 

 

 

124

 

 

 

 

124

 

Intercompany payables

 

 

2,693

 

 

 

 

39

 

 

(2,732

)

 

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total current liabilities

 

 

3,170

 

 

755

 

 

2,853

 

 

(2,732

)

 

4,046

 

Long-term debt

 

 

 

 

3,289

 

 

5

 

 

 

 

3,294

 

Intercompany loans payable

 

 

 

 

17,640

 

 

6,563

 

 

(24,203

)

 

 

Long-term pension and postretirement liabilities

 

 

 

 

 

 

1,119

 

 

 

 

1,119

 

Deferred income taxes

 

 

 

 

 

 

227

 

 

 

 

227

 

Income taxes

 

 

 

 

 

 

311

 

 

 

 

311

 

Other liabilities

 

 

 

 

112

 

 

412

 

 

 

 

524

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total Liabilities

 

 

3,170

 

 

21,796

 

 

11,490

 

 

(26,935

)

 

9,521

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total Shareholders' Equity

 

 

9,492

 

 

12,615

 

 

25,097

 

 

(37,712

)

 

9,492

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total Liabilities and Shareholders' Equity

 

$

12,662

 

$

34,411

 

$

36,587

 

$

(64,647

)

$

19,013

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Condensed Consolidating Balance Sheet (UNAUDITED)
As of September 29, 2017

                                                                                                                                                                                    

 

 

TE
Connectivity
Ltd.

 

TEGSA

 

Other
Subsidiaries

 

Consolidating
Adjustments

 

Total

 

 

 

(in millions)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

 

$

 

$

1,218

 

$

 

$

1,218

 

Accounts receivable, net

 

 

 

 

 

 

2,290

 

 

 

 

2,290

 

Inventories

 

 

 

 

 

 

1,813

 

 

 

 

1,813

 

Intercompany receivables

 

 

49

 

 

1,914

 

 

60

 

 

(2,023

)

 

 

Prepaid expenses and other current assets

 

 

4

 

 

96

 

 

505

 

 

 

 

605

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total current assets

 

 

53

 

 

2,010

 

 

5,886

 

 

(2,023

)

 

5,926

 

Property, plant, and equipment, net

 

 

 

 

 

 

3,400

 

 

 

 

3,400

 

Goodwill

 

 

 

 

 

 

5,651

 

 

 

 

5,651

 

Intangible assets, net

 

 

 

 

 

 

1,841

 

 

 

 

1,841

 

Deferred income taxes

 

 

 

 

 

 

2,141

 

 

 

 

2,141

 

Investment in subsidiaries

 

 

11,960

 

 

20,109

 

 

 

 

(32,069

)

 

 

Intercompany loans receivable

 

 

 

 

4,027

 

 

9,700

 

 

(13,727

)

 

 

Other assets

 

 

 

 

6

 

 

438

 

 

 

 

444

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total Assets

 

$

12,013

 

$

26,152

 

$

29,057

 

$

(47,819

)

$

19,403

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term debt

 

$

 

$

708

 

$

2

 

$

 

$

710

 

Accounts payable

 

 

2

 

 

 

 

1,434

 

 

 

 

1,436

 

Accrued and other current liabilities

 

 

286

 

 

59

 

 

1,281

 

 

 

 

1,626

 

Deferred revenue

 

 

 

 

 

 

75

 

 

 

 

75

 

Intercompany payables

 

 

1,974

 

 

 

 

49

 

 

(2,023

)

 

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total current liabilities

 

 

2,262

 

 

767

 

 

2,841

 

 

(2,023

)

 

3,847

 

Long-term debt

 

 

 

 

3,629

 

 

5

 

 

 

 

3,634

 

Intercompany loans payable

 

 

 

 

9,700

 

 

4,027

 

 

(13,727

)

 

 

Long-term pension and postretirement liabilities

 

 

 

 

 

 

1,160

 

 

 

 

1,160

 

Deferred income taxes

 

 

 

 

 

 

236

 

 

 

 

236

 

Income taxes

 

 

 

 

 

 

293

 

 

 

 

293

 

Other liabilities

 

 

 

 

96

 

 

386

 

 

 

 

482

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total Liabilities

 

 

2,262

 

 

14,192

 

 

8,948

 

 

(15,750

)

 

9,652

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total Shareholders' Equity

 

 

9,751

 

 

11,960

 

 

20,109

 

 

(32,069

)

 

9,751

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total Liabilities and Shareholders' Equity

 

$

12,013

 

$

26,152

 

$

29,057

 

$

(47,819

)

$

19,403

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Condensed Consolidating Statement of Cash Flows (UNAUDITED)
For the Nine Months Ended June 29, 2018

                                                                                                                                                                                    

 

 

TE
Connectivity
Ltd.

 

TEGSA

 

Other
Subsidiaries

 

Consolidating
Adjustments

 

Total

 

 

 

(in millions)

 

Cash Flows From Operating Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities(1)

 

$

(152

)

$

(34

)

$

1,728

 

$

(15

)

$

1,527

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Cash Flows From Investing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

 

 

 

 

(686

)

 

 

 

(686

)

Proceeds from sale of property, plant, and equipment

 

 

 

 

 

 

19

 

 

 

 

19

 

Intercompany distribution receipts(1)

 

 

 

 

61

 

 

 

 

(61

)

 

 

Change in intercompany loans

 

 

 

 

261

 

 

 

 

(261

)

 

 

Other

 

 

 

 

 

 

(8

)

 

 

 

(8

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Net cash provided by (used in) investing activities

 

 

 

 

322

 

 

(675

)

 

(322

)

 

(675

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Cash Flows From Financing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Changes in parent company equity(2)

 

 

83

 

 

30

 

 

(113

)

 

 

 

 

Net increase in commercial paper

 

 

 

 

271

 

 

 

 

 

 

271

 

Proceeds from issuance of debt

 

 

 

 

119

 

 

 

 

 

 

119

 

Repayment of debt

 

 

 

 

(708

)

 

 

 

 

 

(708

)

Proceeds from exercise of share options

 

 

 

 

 

 

96

 

 

 

 

96

 

Repurchase of common shares

 

 

(218

)

 

 

 

(393

)

 

 

 

(611

)

Payment of common share dividends to shareholders

 

 

(441

)

 

 

 

6

 

 

 

 

(435

)

Intercompany distributions(1)

 

 

 

 

 

 

(76

)

 

76

 

 

 

Loan activity with parent

 

 

728

 

 

 

 

(989

)

 

261

 

 

 

Other

 

 

 

 

 

 

(34

)

 

 

 

(34

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Net cash provided by (used in) financing activities

 

 

152

 

 

(288

)

 

(1,503

)

 

337

 

 

(1,302

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Effect of currency translation on cash

 

 

 

 

 

 

2

 

 

 

 

2

 

Net decrease in cash and cash equivalents

 

 

 

 

 

 

(448

)

 

 

 

(448

)

Cash and cash equivalents at beginning of period

 

 

 

 

 

 

1,218

 

 

 

 

1,218

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Cash and cash equivalents at end of period

 

$

 

$

 

$

770

 

$

 

$

770

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  


 

 

(1)          

During fiscal 2018, other subsidiaries made distributions to TEGSA in the amount of $76 million. Cash flows are presented based upon the nature of the distributions.

(2)          

Changes in parent company equity includes cash flows related to certain intercompany equity and funding transactions, and other intercompany activity.

Condensed Consolidating Statement of Cash Flows (UNAUDITED)
For the Nine Months Ended June 30, 2017

                                                                                                                                                                                    

 

 

TE
Connectivity
Ltd.

 

TEGSA

 

Other
Subsidiaries

 

Consolidating
Adjustments

 

Total

 

 

 

(in millions)

 

Cash Flows From Operating Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) continuing operating activities

 

$

(159

)

$

(58

)

$

1,666

 

$

 

$

1,449

 

Net cash used in discontinued operating activities

 

 

 

 

 

 

(1

)

 

 

 

(1

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Net cash provided by (used in) operating activities

 

 

(159

)

 

(58

)

 

1,665

 

 

 

 

1,448

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Cash Flows From Investing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

 

 

 

 

(452

)

 

 

 

(452

)

Proceeds from sale of property, plant, and equipment

 

 

 

 

 

 

12

 

 

 

 

12

 

Acquisition of business, net of cash acquired

 

 

 

 

 

 

(77

)

 

 

 

(77

)

Change in intercompany loans

 

 

 

 

16

 

 

 

 

(16

)

 

 

Other

 

 

 

 

(8

)

 

(9

)

 

(4

)

 

(21

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Net cash provided by (used in) investing activities

 

 

 

 

8

 

 

(526

)

 

(20

)

 

(538

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Cash Flows From Financing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Changes in parent company equity(1)

 

 

67

 

 

123

 

 

(190

)

 

 

 

 

Net decrease in commercial paper

 

 

 

 

(162

)

 

 

 

 

 

(162

)

Proceeds from issuance of debt

 

 

 

 

89

 

 

 

 

 

 

89

 

Proceeds from exercise of share options

 

 

 

 

 

 

86

 

 

 

 

86

 

Repurchase of common shares

 

 

 

 

 

 

(376

)

 

 

 

(376

)

Payment of common share dividends to shareholders

 

 

(407

)

 

 

 

2

 

 

 

 

(405

)

Loan activity with parent

 

 

499

 

 

 

 

(515

)

 

16

 

 

 

Other

 

 

 

 

 

 

(28

)

 

4

 

 

(24

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Net cash provided by (used in) continuing financing activities

 

 

159

 

 

50

 

 

(1,021

)

 

20

 

 

(792

)

Net cash provided by discontinued financing activities

 

 

 

 

 

 

1

 

 

 

 

1

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Net cash provided by (used in) financing activities

 

 

159

 

 

50

 

 

(1,020

)

 

20

 

 

(791

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Effect of currency translation on cash

 

 

 

 

 

 

(11

)

 

 

 

(11

)

Net increase in cash and cash equivalents

 

 

 

 

 

 

108

 

 

 

 

108

 

Cash and cash equivalents at beginning of period

 

 

 

 

 

 

647

 

 

 

 

647

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Cash and cash equivalents at end of period

 

$

 

$

 

$

755

 

$

 

$

755

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  


 

 

(1)          

Changes in parent company equity includes cash flows related to certain intercompany equity and funding transactions, and other intercompany activity.

 

v3.10.0.1
Restructuring and Other Charges, Net (Tables)
9 Months Ended
Jun. 29, 2018
Restructuring and Other Charges, Net  
Schedule of restructuring and other charges

                                                                                                                                                                                                                   

 

 

For the
Quarters Ended

 

For the
Nine Months Ended

 

 

 

June 29,
2018

 

June 30,
2017

 

June 29,
2018

 

June 30,
2017

 

 

 

(in millions)

 

Restructuring charges, net

 

$

75

 

$

19

 

$

120

 

$

124

 

Other charges (credits), net

 

 

(10

)

 

 

 

(14

)

 

1

 

​  

​  

​  

​  

​  

​  

​  

​  

 

 

$

65

 

$

19

 

$

106

 

$

125

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

 

Net restructuring charges by segment

 

                                                                                                                                                                                                                   

 

 

For the
Quarters Ended

 

For the
Nine Months Ended

 

 

 

June 29,
2018

 

June 30,
2017

 

June 29,
2018

 

June 30,
2017

 

 

 

(in millions)

 

Transportation Solutions

 

$

17

 

$

3

 

$

22

 

$

60

 

Industrial Solutions

 

 

48

 

 

14

 

 

78

 

 

53

 

Communications Solutions

 

 

10

 

 

2

 

 

20

 

 

11

 

​  

​  

​  

​  

​  

​  

​  

​  

Restructuring charges, net

 

$

75

 

$

19

 

$

120

 

$

124

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

 

Summary of activity in restructuring reserves

 

                                                                                                                                                                                                                     

 

 

Balance at
September 29,
2017

 

Charges

 

Changes
in
Estimates

 

Cash
Payments

 

Non-Cash
Items

 

Currency
Translation

 

Balance at
June 29,
2018

 

 

 

(in millions)

 

Fiscal 2018 Actions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee severance

 

$

 

$

102

 

$

 

$

(11

)

$

 

$

 

$

91

 

Facility and other exit costs

 

 

 

 

6

 

 

 

 

(1

)

 

 

 

 

 

5

 

Property, plant, and equipment

 

 

 

 

3

 

 

 

 

 

 

(3

)

 

 

 

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total

 

 

 

 

111

 

 

 

 

(12

)

 

(3

)

 

 

 

96

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Fiscal 2017 Actions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee severance

 

 

103

 

 

4

 

 

(2

)

 

(54

)

 

 

 

(1

)

 

50

 

Facility and other exit costs

 

 

1

 

 

2

 

 

 

 

(2

)

 

 

 

 

 

1

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total

 

 

104

 

 

6

 

 

(2

)

 

(56

)

 

 

 

(1

)

 

51

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Pre-Fiscal 2017 Actions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee severance

 

 

36

 

 

6

 

 

(4

)

 

(18

)

 

 

 

(1

)

 

19

 

Facility and other exit costs

 

 

9

 

 

5

 

 

 

 

(6

)

 

 

 

 

 

8

 

Property, plant, and equipment

 

 

 

 

1

 

 

(3

)

 

3

 

 

(1

)

 

 

 

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total

 

 

45

 

 

12

 

 

(7

)

 

(21

)

 

(1

)

 

(1

)

 

27

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total Activity

 

$

149

 

$

129

 

$

(9

)

$

(89

)

$

(4

)

$

(2

)

$

174

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

 

Restructuring reserves included on Condensed Consolidated Balance Sheets

 

                                                                                                                                                                                                                  

 

 

June 29,
2018

 

September 29,
2017

 

 

 

(in millions)

 

Accrued and other current liabilities

 

$

137

 

$

130

 

Other liabilities

 

 

37

 

 

19

 

​  

​  

​  

​  

Restructuring reserves

 

$

174

 

$

149

 

​  

​  

​  

​  

​  

​  

​  

​  

 

v3.10.0.1
Inventories (Tables)
9 Months Ended
Jun. 29, 2018
Inventories  
Schedule of inventories

 

                                                                                                                                                                                                                 

 

 

June 29,
2018

 

September 29,
2017

 

 

 

(in millions)

 

Raw materials

 

$

337

 

$

306

 

Work in progress

 

 

668

 

 

580

 

Finished goods

 

 

877

 

 

810

 

Inventoried costs on long-term contracts

 

 

79

 

 

117

 

​  

​  

​  

​  

Inventories

 

$

1,961

 

$

1,813

 

​  

​  

​  

​  

​  

​  

​  

​  

 

v3.10.0.1
Goodwill (Tables)
9 Months Ended
Jun. 29, 2018
Goodwill  
Changes in the carrying amount of goodwill by segment

                                                                                                                                                                                                                    

 

 

Transportation
Solutions

 

Industrial
Solutions

 

Communications
Solutions

 

Total

 

 

 

(in millions)

 

September 29, 2017(1)

 

$

2,011

 

$

3,047

 

$

593

 

$

5,651

 

Currency translation and other

 

 

(16

)

 

(15

)

 

(4

)

 

(35

)

​  

​  

​  

​  

​  

​  

​  

​  

June 29, 2018(1)

 

$

1,995

 

$

3,032

 

$

589

 

$

5,616

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  


 

 

(1)          

At June 29, 2018 and September 29, 2017, accumulated impairment losses for the Transportation Solutions, Industrial Solutions, and Communications Solutions segments were $2,191 million, $669 million, and $1,514 million, respectively.

 

v3.10.0.1
Intangible Assets, Net (Tables)
9 Months Ended
Jun. 29, 2018
Intangible Assets, Net  
Schedule of finite-lived intangible assets

                                                                                                                                                                                                           

 

 

June 29, 2018

 

September 29, 2017

 

 

 

Gross
Carrying
Amount

 

Accumulated
Amortization

 

Net
Carrying
Amount

 

Gross
Carrying
Amount

 

Accumulated
Amortization

 

Net
Carrying
Amount

 

 

 

(in millions)

 

Customer relationships

 

$

1,424

 

$

(367

)

$

1,057

 

$

1,433

 

$

(300

)

$

1,133

 

Intellectual property

 

 

1,259

 

 

(637

)

 

622

 

 

1,263

 

 

(575

)

 

688

 

Other

 

 

35

 

 

(16

)

 

19

 

 

36

 

 

(16

)

 

20

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total

 

$

2,718

 

$

(1,020

)

$

1,698

 

$

2,732

 

$

(891

)

$

1,841

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

 

Schedule of finite-lived intangible assets, future amortization expense

 

                                                                                                                                                                                                          

 

 

(in millions)

 

Remainder of fiscal 2018

 

$

46

 

Fiscal 2019

 

 

181

 

Fiscal 2020

 

 

173

 

Fiscal 2021

 

 

170

 

Fiscal 2022

 

 

169

 

Fiscal 2023

 

 

169

 

Thereafter

 

 

790

 

​  

​  

Total

 

$

1,698

 

​  

​  

 

v3.10.0.1
Financial Instruments (Tables)
9 Months Ended
Jun. 29, 2018
Cross-Currency Swap Contracts  
Schedule of impacts of hedging program

                                                                                                                                                                                                         

 

 

For the
Quarters Ended

 

For the
Nine Months Ended

 

 

 

June 29,
2018

 

June 30,
2017

 

June 29,
2018

 

June 30,
2017

 

 

 

(in millions)

 

Gains (losses) recorded in other comprehensive income (loss)

 

$

7

 

$

2

 

$

(25

)

$

(6

)

Gains (losses) excluded from the hedging relationship(1)

 

 

64

 

 

(71

)

 

14

 

 

(17

)


 

 

(1)          

Gains and losses excluded from the hedging relationship are recognized prospectively in selling, general, and administrative expenses and are offset by losses and gains generated as a result of re-measuring certain intercompany loans to the U.S. dollar.

 

Net investment hedges  
Schedule of impacts of hedging program

                                                                                                                                                                                                    

 

 

For the
Quarters Ended

 

For the
Nine Months Ended

 

 

 

June 29,
2018

 

June 30,
2017

 

June 29,
2018

 

June 30,
2017

 

 

 

(in millions)

 

Foreign currency exchange gains (losses)(1)

 

$

153

 

$

(129

)

$

8

 

$

15

 


 

 

(1)          

Foreign currency exchange gains and losses are recorded as currency translation, a component of accumulated other comprehensive loss, and are offset by changes attributable to the translation of the net investment.

 

v3.10.0.1
Retirement Plans (Tables)
9 Months Ended
Jun. 29, 2018
Retirement Plans  
Net periodic pension benefit cost

                                                                                                                                                                                                      

 

 

U.S. Plans

 

Non-U.S. Plans

 

 

 

For the
Quarters Ended

 

For the
Quarters Ended

 

 

 

June 29,
2018

 

June 30,
2017

 

June 29,
2018

 

June 30,
2017

 

 

 

(in millions)

 

Service cost

 

$

3

 

$

3

 

$

12

 

$

13

 

Interest cost

 

 

11

 

 

11

 

 

10

 

 

9

 

Expected return on plan assets

 

 

(15

)

 

(13

)

 

(18

)

 

(18

)

Amortization of net actuarial loss

 

 

6

 

 

10

 

 

7

 

 

11

 

Amortization of prior service credit

 

 

 

 

 

 

(2

)

 

(2

)

​  

​  

​  

​  

​  

​  

​  

​  

Net periodic pension benefit cost

 

$

5

 

$

11

 

$

9

 

$

13

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

 

                                                                                                                                                                                    

 

 

U.S. Plans

 

Non-U.S. Plans

 

 

 

For the
Nine Months Ended

 

For the
Nine Months Ended

 

 

 

June 29,
2018

 

June 30,
2017

 

June 29,
2018

 

June 30,
2017

 

 

 

(in millions)

 

Service cost

 

$

10

 

$

9

 

$

35

 

$

39

 

Interest cost

 

 

33

 

 

33

 

 

31

 

 

27

 

Expected return on plan assets

 

 

(45

)

 

(40

)

 

(52

)

 

(53

)

Amortization of net actuarial loss

 

 

17

 

 

30

 

 

18

 

 

32

 

Amortization of prior service credit

 

 

 

 

 

 

(5

)

 

(5

)

​  

​  

​  

​  

​  

​  

​  

​  

Net periodic pension benefit cost

 

$

15

 

$

32

 

$

27

 

$

40

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

 

v3.10.0.1
Earnings Per Share (Tables)
9 Months Ended
Jun. 29, 2018
Earnings Per Share  
Schedule of weighted-average shares outstanding, basic and diluted

                                                                                                                                                                                                           

 

 

For the
Quarters Ended

 

For the
Nine Months Ended

 

 

 

June 29,
2018

 

June 30,
2017

 

June 29,
2018

 

June 30,
2017

 

 

 

(in millions)

 

Basic

 

 

349

 

 

355

 

 

351

 

 

355

 

Dilutive impact of share-based compensation arrangements

 

 

3

 

 

3

 

 

3

 

 

4

 

​  

​  

​  

​  

​  

​  

​  

​  

Diluted

 

 

352

 

 

358

 

 

354

 

 

359

 

​  

​  

​  

​  

​  

​  

​  

​  

 

v3.10.0.1
Shareholders' Equity (Tables)
9 Months Ended
Jun. 29, 2018
Shareholders' Equity  
Schedule of common shares repurchased

                                                                                                                                                                                                  

 

 

For the
Nine Months Ended

 

 

 

June 29,
2018

 

June 30,
2017

 

 

 

(in millions)

 

Number of common shares repurchased

 

 

6

 

 

5

 

Repurchase value

 

$

612

 

$

386

 

 

v3.10.0.1
Share Plans (Tables)
9 Months Ended
Jun. 29, 2018
Share Plans  
Share-based compensation expense

                                                                                                                                                                                    

 

 

For the
Quarters Ended

 

For the
Nine Months Ended

 

 

 

June 29,
2018

 

June 30,
2017

 

June 29,
2018

 

June 30,
2017

 

 

 

(in millions)

 

Share-based compensation expense

 

$

22

 

$

26

 

$

74

 

$

73

 

 

Summary of share-based award activity

        During the quarter ended December 29, 2017, we granted the following share-based awards as part of our annual incentive plan grant:

                                                                                                                                                                                    

 

 

Shares

 

Weighted-Average
Grant-Date
Fair Value

 

 

 

(in millions)

 

 

 

Share options

 

 

1.4

 

$

16.47

 

Restricted share awards

 

 

0.5

 

 

93.36

 

Performance share awards

 

 

0.2

 

 

93.36

 

 

Weighted-average assumptions

                                                                                                                                                                                                 

Expected share price volatility

 

 

20

%

Risk free interest rate

 

 

2.2

%

Expected annual dividend per share

 

$

1.60

 

Expected life of options (in years)

 

 

5.3

 

 

v3.10.0.1
Segment Data (Tables)
9 Months Ended
Jun. 29, 2018
Segment Data  
Schedule of net sales by segment

                                                                                                                                                                                    

 

 

For the
Quarters Ended

 

For the
Nine Months Ended

 

 

 

June 29,
2018

 

June 30,
2017

 

June 29,
2018

 

June 30,
2017

 

 

 

(in millions)

 

Transportation Solutions

 

$

2,112

 

$

1,765

 

$

6,278

 

$

5,195

 

Industrial Solutions

 

 

988

 

 

905

 

 

2,842

 

 

2,553

 

Communications Solutions

 

 

664

 

 

697

 

 

1,869

 

 

1,909

 

​  

​  

​  

​  

​  

​  

​  

​  

Total(1)

 

$

3,764

 

$

3,367

 

$

10,989

 

$

9,657

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  


 

 

(1)          

Intersegment sales were not material and were recorded at selling prices that approximated market prices.

 

Schedule of operating income by segment

                                                                                                                                                                                    

 

 

For the
Quarters Ended

 

For the
Nine Months Ended

 

 

 

June 29,
2018

 

June 30,
2017

 

June 29,
2018

 

June 30,
2017

 

 

 

(in millions)

 

Transportation Solutions

 

$

394

 

$

333

 

$

1,242

 

$

986

 

Industrial Solutions

 

 

93

 

 

100

 

 

321

 

 

258

 

Communications Solutions

 

 

71

 

 

111

 

 

200

 

 

276

 

​  

​  

​  

​  

​  

​  

​  

​  

Total

 

$

558

 

$

544

 

$

1,763

 

$

1,520

 

​  

​  

​  

​  

​  

​  

​  

​  

 

v3.10.0.1
Tyco Electronics Group S.A. (Tables)
9 Months Ended
Jun. 29, 2018
Tyco Electronics Group S.A.  
Condensed Consolidating Statement of Operations

 

Condensed Consolidating Statement of Operations (UNAUDITED)
For the Quarter Ended June 29, 2018

                                                                                                                                                                                    

 

 

TE
Connectivity
Ltd.

 

TEGSA

 

Other
Subsidiaries

 

Consolidating
Adjustments

 

Total

 

 

 

(in millions)

 

Net sales

 

$

 

$

 

$

3,764

 

$

 

$

3,764

 

Cost of sales

 

 

 

 

 

 

2,547

 

 

 

 

2,547

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Gross margin

 

 

 

 

 

 

1,217

 

 

 

 

1,217

 

Selling, general, and administrative expenses, net

 

 

19

 

 

 

 

390

 

 

 

 

409

 

Research, development, and engineering expenses

 

 

 

 

 

 

181

 

 

 

 

181

 

Acquisition and integration costs

 

 

 

 

 

 

4

 

 

 

 

4

 

Restructuring and other charges, net

 

 

 

 

 

 

65

 

 

 

 

65

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Operating income (loss)

 

 

(19

)

 

 

 

577

 

 

 

 

558

 

Interest income

 

 

 

 

 

 

3

 

 

 

 

3

 

Interest expense

 

 

 

 

(24

)

 

(1

)

 

 

 

(25

)

Other expense, net

 

 

 

 

 

 

(1

)

 

 

 

(1

)

Equity in net income of subsidiaries

 

 

491

 

 

499

 

 

 

 

(990

)

 

 

Intercompany interest income (expense), net

 

 

(18

)

 

16

 

 

2

 

 

 

 

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Income from continuing operations before income taxes

 

 

454

 

 

491

 

 

580

 

 

(990

)

 

535

 

Income tax expense

 

 

 

 

 

 

(81

)

 

 

 

(81

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Net income

 

 

454

 

 

491

 

 

499

 

 

(990

)

 

454

 

Other comprehensive loss

 

 

(250

)

 

(250

)

 

(255

)

 

505

 

 

(250

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Comprehensive income

 

$

204

 

$

241

 

$

244

 

$

(485

)

$

204

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Condensed Consolidating Statement of Operations (UNAUDITED)
For the Quarter Ended June 30, 2017

                                                                                                                                                                                    

 

 

TE
Connectivity
Ltd.

 

TEGSA

 

Other
Subsidiaries

 

Consolidating
Adjustments

 

Total

 

 

 

(in millions)

 

Net sales

 

$

 

$

 

$

3,367

 

$

 

$

3,367

 

Cost of sales

 

 

 

 

 

 

2,227

 

 

 

 

2,227

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Gross margin

 

 

 

 

 

 

1,140

 

 

 

 

1,140

 

Selling, general, and administrative expenses, net

 

 

68

 

 

18

 

 

322

 

 

 

 

408

 

Research, development, and engineering expenses

 

 

 

 

 

 

168

 

 

 

 

168

 

Acquisition and integration costs

 

 

 

 

 

 

1

 

 

 

 

1

 

Restructuring and other charges, net

 

 

 

 

 

 

19

 

 

 

 

19

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Operating income (loss)

 

 

(68

)

 

(18

)

 

630

 

 

 

 

544

 

Interest income

 

 

 

 

 

 

3

 

 

 

 

3

 

Interest expense

 

 

 

 

(32

)

 

 

 

 

 

(32

)

Other expense, net

 

 

 

 

 

 

(12

)

 

 

 

(12

)

Equity in net income of subsidiaries

 

 

507

 

 

530

 

 

 

 

(1,037

)

 

 

Equity in net income of subsidiaries of discontinued operations

 

 

3

 

 

4

 

 

 

 

(7

)

 

 

Intercompany interest income (expense), net

 

 

(7

)

 

27

 

 

(20

)

 

 

 

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Income from continuing operations before income taxes

 

 

435

 

 

511

 

 

601

 

 

(1,044

)

 

503

 

Income tax expense

 

 

 

 

 

 

(71

)

 

 

 

(71

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Income from continuing operations

 

 

435

 

 

511

 

 

530

 

 

(1,044

)

 

432

 

Income (loss) from discontinued operations, net of income taxes

 

 

 

 

(1

)

 

4

 

 

 

 

3

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Net income

 

 

435

 

 

510

 

 

534

 

 

(1,044

)

 

435

 

Other comprehensive income

 

 

78

 

 

78

 

 

83

 

 

(161

)

 

78

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Comprehensive income

 

$

513

 

$

588

 

$

617

 

$

(1,205

)

$

513

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Condensed Consolidating Statement of Operations (UNAUDITED)
For the Nine Months Ended June 29, 2018

                                                                                                                                                                                    

 

 

TE
Connectivity
Ltd.

 

TEGSA

 

Other
Subsidiaries

 

Consolidating
Adjustments

 

Total

 

 

 

(in millions)

 

Net sales

 

$

 

$

 

$

10,989

 

$

 

$

10,989

 

Cost of sales

 

 

 

 

 

 

7,352

 

 

 

 

7,352

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Gross margin

 

 

 

 

 

 

3,637

 

 

 

 

3,637

 

Selling, general, and administrative expenses, net

 

 

107

 

 

6

 

 

1,107

 

 

 

 

1,220

 

Research, development, and engineering expenses

 

 

 

 

 

 

539

 

 

 

 

539

 

Acquisition and integration costs

 

 

 

 

 

 

9

 

 

 

 

9

 

Restructuring and other charges, net

 

 

 

 

 

 

106

 

 

 

 

106

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Operating income (loss)

 

 

(107

)

 

(6

)

 

1,876

 

 

 

 

1,763

 

Interest income

 

 

 

 

1

 

 

10

 

 

 

 

11

 

Interest expense

 

 

 

 

(79

)

 

(1

)

 

 

 

(80

)

Other income, net

 

 

 

 

 

 

2

 

 

 

 

2

 

Equity in net income of subsidiaries

 

 

1,062

 

 

1,072

 

 

 

 

(2,134

)

 

 

Equity in net loss of subsidiaries of discontinued operations

 

 

(3

)

 

(3

)

 

 

 

6

 

 

 

Intercompany interest income (expense), net

 

 

(48

)

 

74

 

 

(26

)

 

 

 

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Income from continuing operations before income taxes

 

 

904

 

 

1,059

 

 

1,861

 

 

(2,128

)

 

1,696

 

Income tax expense

 

 

 

 

 

 

(789

)

 

 

 

(789

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Income from continuing operations

 

 

904

 

 

1,059

 

 

1,072

 

 

(2,128

)

 

907

 

Loss from discontinued operations, net of income taxes

 

 

 

 

 

 

(3

)

 

 

 

(3

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Net income

 

 

904

 

 

1,059

 

 

1,069

 

 

(2,128

)

 

904

 

Other comprehensive loss

 

 

(101

)

 

(101

)

 

(74

)

 

175

 

 

(101

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Comprehensive income

 

$

803

 

$

958

 

$

995

 

$

(1,953

)

$

803

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Condensed Consolidating Statement of Operations (UNAUDITED)
For the Nine Months Ended June 30, 2017

                                                                                                                                                                                    

 

 

TE
Connectivity
Ltd.

 

TEGSA

 

Other
Subsidiaries

 

Consolidating
Adjustments

 

Total

 

 

 

(in millions)

 

Net sales

 

$

 

$

 

$

9,657

 

$

 

$

9,657

 

Cost of sales

 

 

 

 

 

 

6,340

 

 

 

 

6,340

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Gross margin

 

 

 

 

 

 

3,317

 

 

 

 

3,317

 

Selling, general, and administrative expenses, net

 

 

144

 

 

(52

)

 

1,090

 

 

 

 

1,182

 

Research, development, and engineering expenses

 

 

 

 

 

 

485

 

 

 

 

485

 

Acquisition and integration costs

 

 

 

 

 

 

5

 

 

 

 

5

 

Restructuring and other charges, net

 

 

 

 

 

 

125

 

 

 

 

125

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Operating income (loss)

 

 

(144

)

 

52

 

 

1,612

 

 

 

 

1,520

 

Interest income

 

 

 

 

 

 

14

 

 

 

 

14

 

Interest expense

 

 

 

 

(95

)

 

 

 

 

 

(95

)

Other expense, net

 

 

 

 

 

 

(31

)

 

 

 

(31

)

Equity in net income of subsidiaries

 

 

1,409

 

 

1,369

 

 

 

 

(2,778

)

 

 

Equity in net income of subsidiaries of discontinued operations

 

 

5

 

 

18

 

 

 

 

(23

)

 

 

Intercompany interest income (expense), net

 

 

(21

)

 

83

 

 

(62

)

 

 

 

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Income from continuing operations before income taxes

 

 

1,249

 

 

1,427

 

 

1,533

 

 

(2,801

)

 

1,408

 

Income tax expense

 

 

 

 

 

 

(164

)

 

 

 

(164

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Income from continuing operations

 

 

1,249

 

 

1,427

 

 

1,369

 

 

(2,801

)

 

1,244

 

Income (loss) from discontinued operations, net of income taxes(1)

 

 

 

 

(13

)

 

18

 

 

 

 

5

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Net income

 

 

1,249

 

 

1,414

 

 

1,387

 

 

(2,801

)

 

1,249

 

Other comprehensive income

 

 

36

 

 

36

 

 

14

 

 

(50

)

 

36

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Comprehensive income

 

$

1,285

 

$

1,450

 

$

1,401

 

$

(2,851

)

$

1,285

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  


 

 

(1)          

Includes the internal allocation of gains and losses associated with the divestiture of our Broadband Network Solutions business.

 

Condensed Consolidating Balance Sheet

 

Condensed Consolidating Balance Sheet (UNAUDITED)
As of June 29, 2018

                                                                                                                                                                                    

 

 

TE
Connectivity
Ltd.

 

TEGSA

 

Other
Subsidiaries

 

Consolidating
Adjustments

 

Total

 

 

 

(in millions)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

 

$

 

$

770

 

$

 

$

770

 

Accounts receivable, net

 

 

 

 

 

 

2,591

 

 

 

 

2,591

 

Inventories

 

 

 

 

 

 

1,961

 

 

 

 

1,961

 

Intercompany receivables

 

 

39

 

 

2,644

 

 

49

 

 

(2,732

)

 

 

Prepaid expenses and other current assets

 

 

6

 

 

108

 

 

505

 

 

 

 

619

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total current assets

 

 

45

 

 

2,752

 

 

5,876

 

 

(2,732

)

 

5,941

 

Property, plant, and equipment, net

 

 

 

 

 

 

3,633

 

 

 

 

3,633

 

Goodwill

 

 

 

 

 

 

5,616

 

 

 

 

5,616

 

Intangible assets, net

 

 

 

 

 

 

1,698

 

 

 

 

1,698

 

Deferred income taxes

 

 

 

 

 

 

1,672

 

 

 

 

1,672

 

Investment in subsidiaries

 

 

12,615

 

 

25,097

 

 

 

 

(37,712

)

 

 

Intercompany loans receivable

 

 

2

 

 

6,562

 

 

17,639

 

 

(24,203

)

 

 

Other assets

 

 

 

 

 

 

453

 

 

 

 

453

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total Assets

 

$

12,662

 

$

34,411

 

$

36,587

 

$

(64,647

)

$

19,013

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Liabilities and Shareholders' Equity

 

 


 

 

 


 

 

 


 

 

 


 

 

 


 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term debt

 

$

 

$

712

 

$

2

 

$

 

$

714

 

Accounts payable

 

 

2

 

 

 

 

1,581

 

 

 

 

1,583

 

Accrued and other current liabilities

 

 

475

 

 

43

 

 

1,107

 

 

 

 

1,625

 

Deferred revenue

 

 

 

 

 

 

124

 

 

 

 

124

 

Intercompany payables

 

 

2,693

 

 

 

 

39

 

 

(2,732

)

 

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total current liabilities

 

 

3,170

 

 

755

 

 

2,853

 

 

(2,732

)

 

4,046

 

Long-term debt

 

 

 

 

3,289

 

 

5

 

 

 

 

3,294

 

Intercompany loans payable

 

 

 

 

17,640

 

 

6,563

 

 

(24,203

)

 

 

Long-term pension and postretirement liabilities

 

 

 

 

 

 

1,119

 

 

 

 

1,119

 

Deferred income taxes

 

 

 

 

 

 

227

 

 

 

 

227

 

Income taxes

 

 

 

 

 

 

311

 

 

 

 

311

 

Other liabilities

 

 

 

 

112

 

 

412

 

 

 

 

524

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total Liabilities

 

 

3,170

 

 

21,796

 

 

11,490

 

 

(26,935

)

 

9,521

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total Shareholders' Equity

 

 

9,492

 

 

12,615

 

 

25,097

 

 

(37,712

)

 

9,492

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total Liabilities and Shareholders' Equity

 

$

12,662

 

$

34,411

 

$

36,587

 

$

(64,647

)

$

19,013

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Condensed Consolidating Balance Sheet (UNAUDITED)
As of September 29, 2017

                                                                                                                                                                                    

 

 

TE
Connectivity
Ltd.

 

TEGSA

 

Other
Subsidiaries

 

Consolidating
Adjustments

 

Total

 

 

 

(in millions)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

 

$

 

$

1,218

 

$

 

$

1,218

 

Accounts receivable, net

 

 

 

 

 

 

2,290

 

 

 

 

2,290

 

Inventories

 

 

 

 

 

 

1,813

 

 

 

 

1,813

 

Intercompany receivables

 

 

49

 

 

1,914

 

 

60

 

 

(2,023

)

 

 

Prepaid expenses and other current assets

 

 

4

 

 

96

 

 

505

 

 

 

 

605

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total current assets

 

 

53

 

 

2,010

 

 

5,886

 

 

(2,023

)

 

5,926

 

Property, plant, and equipment, net

 

 

 

 

 

 

3,400

 

 

 

 

3,400

 

Goodwill

 

 

 

 

 

 

5,651

 

 

 

 

5,651

 

Intangible assets, net

 

 

 

 

 

 

1,841

 

 

 

 

1,841

 

Deferred income taxes

 

 

 

 

 

 

2,141

 

 

 

 

2,141

 

Investment in subsidiaries

 

 

11,960

 

 

20,109

 

 

 

 

(32,069

)

 

 

Intercompany loans receivable

 

 

 

 

4,027

 

 

9,700

 

 

(13,727

)

 

 

Other assets

 

 

 

 

6

 

 

438

 

 

 

 

444

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total Assets

 

$

12,013

 

$

26,152

 

$

29,057

 

$

(47,819

)

$

19,403

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term debt

 

$

 

$

708

 

$

2

 

$

 

$

710

 

Accounts payable

 

 

2

 

 

 

 

1,434

 

 

 

 

1,436

 

Accrued and other current liabilities

 

 

286

 

 

59

 

 

1,281

 

 

 

 

1,626

 

Deferred revenue

 

 

 

 

 

 

75

 

 

 

 

75

 

Intercompany payables

 

 

1,974

 

 

 

 

49

 

 

(2,023

)

 

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total current liabilities

 

 

2,262

 

 

767

 

 

2,841

 

 

(2,023

)

 

3,847

 

Long-term debt

 

 

 

 

3,629

 

 

5

 

 

 

 

3,634

 

Intercompany loans payable

 

 

 

 

9,700

 

 

4,027

 

 

(13,727

)

 

 

Long-term pension and postretirement liabilities

 

 

 

 

 

 

1,160

 

 

 

 

1,160

 

Deferred income taxes

 

 

 

 

 

 

236

 

 

 

 

236

 

Income taxes

 

 

 

 

 

 

293

 

 

 

 

293

 

Other liabilities

 

 

 

 

96

 

 

386

 

 

 

 

482

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total Liabilities

 

 

2,262

 

 

14,192

 

 

8,948

 

 

(15,750

)

 

9,652

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total Shareholders' Equity

 

 

9,751

 

 

11,960

 

 

20,109

 

 

(32,069

)

 

9,751

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Total Liabilities and Shareholders' Equity

 

$

12,013

 

$

26,152

 

$

29,057

 

$

(47,819

)

$

19,403

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

 

Condensed Consolidating Statement of Cash Flows

 

Condensed Consolidating Statement of Cash Flows (UNAUDITED)
For the Nine Months Ended June 29, 2018

                                                                                                                                                                                    

 

 

TE
Connectivity
Ltd.

 

TEGSA

 

Other
Subsidiaries

 

Consolidating
Adjustments

 

Total

 

 

 

(in millions)

 

Cash Flows From Operating Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities(1)

 

$

(152

)

$

(34

)

$

1,728

 

$

(15

)

$

1,527

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Cash Flows From Investing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

 

 

 

 

(686

)

 

 

 

(686

)

Proceeds from sale of property, plant, and equipment

 

 

 

 

 

 

19

 

 

 

 

19

 

Intercompany distribution receipts(1)

 

 

 

 

61

 

 

 

 

(61

)

 

 

Change in intercompany loans

 

 

 

 

261

 

 

 

 

(261

)

 

 

Other

 

 

 

 

 

 

(8

)

 

 

 

(8

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Net cash provided by (used in) investing activities

 

 

 

 

322

 

 

(675

)

 

(322

)

 

(675

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Cash Flows From Financing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Changes in parent company equity(2)

 

 

83

 

 

30

 

 

(113

)

 

 

 

 

Net increase in commercial paper

 

 

 

 

271

 

 

 

 

 

 

271

 

Proceeds from issuance of debt

 

 

 

 

119

 

 

 

 

 

 

119

 

Repayment of debt

 

 

 

 

(708

)

 

 

 

 

 

(708

)

Proceeds from exercise of share options

 

 

 

 

 

 

96

 

 

 

 

96

 

Repurchase of common shares

 

 

(218

)

 

 

 

(393

)

 

 

 

(611

)

Payment of common share dividends to shareholders

 

 

(441

)

 

 

 

6

 

 

 

 

(435

)

Intercompany distributions(1)

 

 

 

 

 

 

(76

)

 

76

 

 

 

Loan activity with parent

 

 

728

 

 

 

 

(989

)

 

261

 

 

 

Other

 

 

 

 

 

 

(34

)

 

 

 

(34

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Net cash provided by (used in) financing activities

 

 

152

 

 

(288

)

 

(1,503

)

 

337

 

 

(1,302

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Effect of currency translation on cash

 

 

 

 

 

 

2

 

 

 

 

2

 

Net decrease in cash and cash equivalents

 

 

 

 

 

 

(448

)

 

 

 

(448

)

Cash and cash equivalents at beginning of period

 

 

 

 

 

 

1,218

 

 

 

 

1,218

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Cash and cash equivalents at end of period

 

$

 

$

 

$

770

 

$

 

$

770

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  


 

 

(1)          

During fiscal 2018, other subsidiaries made distributions to TEGSA in the amount of $76 million. Cash flows are presented based upon the nature of the distributions.

(2)          

Changes in parent company equity includes cash flows related to certain intercompany equity and funding transactions, and other intercompany activity.

Condensed Consolidating Statement of Cash Flows (UNAUDITED)
For the Nine Months Ended June 30, 2017

                                                                                                                                                                                    

 

 

TE
Connectivity
Ltd.

 

TEGSA

 

Other
Subsidiaries

 

Consolidating
Adjustments

 

Total

 

 

 

(in millions)

 

Cash Flows From Operating Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) continuing operating activities

 

$

(159

)

$

(58

)

$

1,666

 

$

 

$

1,449

 

Net cash used in discontinued operating activities

 

 

 

 

 

 

(1

)

 

 

 

(1

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Net cash provided by (used in) operating activities

 

 

(159

)

 

(58

)

 

1,665

 

 

 

 

1,448

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Cash Flows From Investing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

 

 

 

 

(452

)

 

 

 

(452

)

Proceeds from sale of property, plant, and equipment

 

 

 

 

 

 

12

 

 

 

 

12

 

Acquisition of business, net of cash acquired

 

 

 

 

 

 

(77

)

 

 

 

(77

)

Change in intercompany loans

 

 

 

 

16

 

 

 

 

(16

)

 

 

Other

 

 

 

 

(8

)

 

(9

)

 

(4

)

 

(21

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Net cash provided by (used in) investing activities

 

 

 

 

8

 

 

(526

)

 

(20

)

 

(538

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Cash Flows From Financing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Changes in parent company equity(1)

 

 

67

 

 

123

 

 

(190

)

 

 

 

 

Net decrease in commercial paper

 

 

 

 

(162

)

 

 

 

 

 

(162

)

Proceeds from issuance of debt

 

 

 

 

89

 

 

 

 

 

 

89

 

Proceeds from exercise of share options

 

 

 

 

 

 

86

 

 

 

 

86

 

Repurchase of common shares

 

 

 

 

 

 

(376

)

 

 

 

(376

)

Payment of common share dividends to shareholders

 

 

(407

)

 

 

 

2

 

 

 

 

(405

)

Loan activity with parent

 

 

499

 

 

 

 

(515

)

 

16

 

 

 

Other

 

 

 

 

 

 

(28

)

 

4

 

 

(24

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Net cash provided by (used in) continuing financing activities

 

 

159

 

 

50

 

 

(1,021

)

 

20

 

 

(792

)

Net cash provided by discontinued financing activities

 

 

 

 

 

 

1

 

 

 

 

1

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Net cash provided by (used in) financing activities

 

 

159

 

 

50

 

 

(1,020

)

 

20

 

 

(791

)

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Effect of currency translation on cash

 

 

 

 

 

 

(11

)

 

 

 

(11

)

Net increase in cash and cash equivalents

 

 

 

 

 

 

108

 

 

 

 

108

 

Cash and cash equivalents at beginning of period

 

 

 

 

 

 

647

 

 

 

 

647

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Cash and cash equivalents at end of period

 

$

 

$

 

$

755

 

$

 

$

755

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  


 

 

(1)          

Changes in parent company equity includes cash flows related to certain intercompany equity and funding transactions, and other intercompany activity.

 

v3.10.0.1
Basis of Presentation and Accounting Pronouncements (Details)
$ in Millions
3 Months Ended
Mar. 30, 2018
USD ($)
Accumulated Earnings  
Recently Adopted Accounting Pronouncement  
Adoption of ASU No. 2018-02 $ 38
Accumulated Other Comprehensive Loss  
Recently Adopted Accounting Pronouncement  
Adoption of ASU No. 2018-02 $ (38)
v3.10.0.1
Restructuring and Other Charges, Net (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Jun. 29, 2018
Jun. 30, 2017
Jun. 29, 2018
Jun. 30, 2017
Restructuring and other charges, net:        
Restructuring charges, net $ 75 $ 19 $ 120 $ 124
Other charges (credits), net (10)   (14) 1
Restructuring and other charges, net 65 19 106 125
Transportation Solutions        
Restructuring and other charges, net:        
Restructuring charges, net 17 3 22 60
Industrial Solutions        
Restructuring and other charges, net:        
Restructuring charges, net 48 14 78 53
Communications Solutions        
Restructuring and other charges, net:        
Restructuring charges, net $ 10 $ 2 $ 20 $ 11
v3.10.0.1
Restructuring and Other Charges, Net - Actions (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Jun. 29, 2018
Jun. 30, 2017
Jun. 29, 2018
Jun. 30, 2017
Restructuring Charges        
Charges Incurred $ 75 $ 19 $ 120 $ 124
Fiscal 2018 Actions        
Restructuring Charges        
Charges Incurred     111  
Total Expected Charges 130   130  
Fiscal 2017 Actions        
Restructuring Charges        
Charges Incurred     4 119
Pre-Fiscal 2017 Actions        
Restructuring Charges        
Charges Incurred     5 $ 5
Remaining Expected Charges $ 15   $ 15  
v3.10.0.1
Restructuring and Other Charges, Net - Restructuring Reserves (Details) - USD ($)
$ in Millions
9 Months Ended
Jun. 29, 2018
Sep. 29, 2017
Restructuring reserve    
Restructuring reserve at the beginning of the period $ 149  
Charges 129  
Changes in Estimates (9)  
Cash Payments (89)  
Non-Cash Items (4)  
Currency Translation (2)  
Restructuring reserve at the end of the period 174  
Accrued and other current liabilities 137 $ 130
Other liabilities 37 $ 19
Fiscal 2018 Actions    
Restructuring reserve    
Charges 111  
Cash Payments (12)  
Non-Cash Items (3)  
Restructuring reserve at the end of the period 96  
Fiscal 2017 Actions    
Restructuring reserve    
Restructuring reserve at the beginning of the period 104  
Charges 6  
Changes in Estimates (2)  
Cash Payments (56)  
Currency Translation (1)  
Restructuring reserve at the end of the period 51  
Pre-Fiscal 2017 Actions    
Restructuring reserve    
Restructuring reserve at the beginning of the period 45  
Charges 12  
Changes in Estimates (7)  
Cash Payments (21)  
Non-Cash Items (1)  
Currency Translation (1)  
Restructuring reserve at the end of the period 27  
Employee severance | Fiscal 2018 Actions    
Restructuring reserve    
Charges 102  
Cash Payments (11)  
Restructuring reserve at the end of the period 91  
Employee severance | Fiscal 2017 Actions    
Restructuring reserve    
Restructuring reserve at the beginning of the period 103  
Charges 4  
Changes in Estimates (2)  
Cash Payments (54)  
Currency Translation (1)  
Restructuring reserve at the end of the period 50  
Employee severance | Pre-Fiscal 2017 Actions    
Restructuring reserve    
Restructuring reserve at the beginning of the period 36  
Charges 6  
Changes in Estimates (4)  
Cash Payments (18)  
Currency Translation (1)  
Restructuring reserve at the end of the period 19  
Facility and other exit costs | Fiscal 2018 Actions    
Restructuring reserve    
Charges 6  
Cash Payments (1)  
Restructuring reserve at the end of the period 5  
Facility and other exit costs | Fiscal 2017 Actions    
Restructuring reserve    
Restructuring reserve at the beginning of the period 1  
Charges 2  
Cash Payments (2)  
Restructuring reserve at the end of the period 1  
Facility and other exit costs | Pre-Fiscal 2017 Actions    
Restructuring reserve    
Restructuring reserve at the beginning of the period 9  
Charges 5  
Cash Payments (6)  
Restructuring reserve at the end of the period 8  
Property, plant, and equipment | Fiscal 2018 Actions    
Restructuring reserve    
Charges 3  
Non-Cash Items (3)  
Property, plant, and equipment | Pre-Fiscal 2017 Actions    
Restructuring reserve    
Charges 1  
Changes in Estimates (3)  
Cash Payments 3  
Non-Cash Items $ (1)  
v3.10.0.1
Inventories (Details) - USD ($)
$ in Millions
Jun. 29, 2018
Sep. 29, 2017
Inventories    
Raw materials $ 337 $ 306
Work in progress 668 580
Finished goods 877 810
Inventoried costs on long-term contracts 79 117
Inventories $ 1,961 $ 1,813
v3.10.0.1
Goodwill (Details) - USD ($)
$ in Millions
9 Months Ended
Jun. 29, 2018
Sep. 29, 2017
Goodwill:    
Goodwill, beginning balance $ 5,651  
Currency translation and other (35)  
Goodwill, ending balance 5,616  
Transportation Solutions    
Goodwill:    
Goodwill, beginning balance 2,011  
Currency translation and other (16)  
Goodwill, ending balance 1,995  
Accumulated impairment losses 2,191 $ 2,191
Industrial Solutions    
Goodwill:    
Goodwill, beginning balance 3,047  
Currency translation and other (15)  
Goodwill, ending balance 3,032  
Accumulated impairment losses 669 669
Communications Solutions    
Goodwill:    
Goodwill, beginning balance 593  
Currency translation and other (4)  
Goodwill, ending balance 589  
Accumulated impairment losses $ 1,514 $ 1,514
v3.10.0.1
Intangible Assets, Net (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Jun. 29, 2018
Jun. 30, 2017
Jun. 29, 2018
Jun. 30, 2017
Sep. 29, 2017
Finite-Lived Intangible Assets          
Gross Carrying Amount $ 2,718   $ 2,718   $ 2,732
Accumulated Amortization (1,020)   (1,020)   (891)
Net Carrying Amount 1,698   1,698   1,841
Finite-lived intangible assets, amortization expense 45 $ 43 135 $ 126  
Aggregate amortization expense on intangible assets          
Remainder of fiscal 2018 46   46    
Fiscal 2019 181   181    
Fiscal 2020 173   173    
Fiscal 2021 170   170    
Fiscal 2022 169   169    
Fiscal 2023 169   169    
Thereafter 790   790    
Customer relationships          
Finite-Lived Intangible Assets          
Gross Carrying Amount 1,424   1,424   1,433
Accumulated Amortization (367)   (367)   (300)
Net Carrying Amount 1,057   1,057   1,133
Intellectual property          
Finite-Lived Intangible Assets          
Gross Carrying Amount 1,259   1,259   1,263
Accumulated Amortization (637)   (637)   (575)
Net Carrying Amount 622   622   688
Other          
Finite-Lived Intangible Assets          
Gross Carrying Amount 35   35   36
Accumulated Amortization (16)   (16)   (16)
Net Carrying Amount $ 19   $ 19   $ 20
v3.10.0.1
Debt (Details)
€ in Millions, $ in Millions
9 Months Ended
Jun. 29, 2018
USD ($)
Jun. 29, 2018
EUR (€)
Sep. 29, 2017
USD ($)
Debt      
Ownership percentage in TEGSA 100.00% 100.00%  
Repayments of debt $ 708    
Long-term debt 3,294   $ 3,634
Short-term debt 714   710
Fair value of debt 4,188   4,622
6.55% senior notes due 2017      
Debt      
Repayments of debt $ 708    
Debt instrument, interest rate (as a percent) 6.55% 6.55%  
2.375% senior notes due 2018 | Reclassified      
Debt      
Long-term debt $ (325)    
Short-term debt $ 325    
Debt instrument, interest rate (as a percent) 2.375% 2.375%  
Commercial paper      
Debt      
Total principal debt $ 271   $ 0
Weighted-average interest rate 2.33% 2.33%  
Revolving credit facility      
Debt      
Uncommitted revolving credit facility borrowed amount | €   € 100  
Debt instrument, interest rate (as a percent) 0.00% 0.00%  
v3.10.0.1
Commitments and Contingencies (Details) - USD ($)
$ in Millions
9 Months Ended
Jun. 29, 2018
Sep. 29, 2017
Loss Contingencies    
Accrual environmental loss contingency, estimate of probable loss $ 18  
Guarantees and Product Warranties    
Accrued warranty claims $ 46 $ 50
Liabilities sharing percent, entity 31.00%  
Liabilities sharing percent, Tyco International 27.00%  
Liabilities sharing percent, Covidien 42.00%  
Minimum    
Loss Contingencies    
Accrual environmental loss contingency, estimate of probable loss $ 15  
Maximum    
Loss Contingencies    
Accrual environmental loss contingency, estimate of probable loss 43  
Outstanding Letters of Credit, Letters of Guarantee, and Surety Bonds    
Guarantees and Product Warranties    
Guarantor obligations, maximum exposure $ 283  
v3.10.0.1
Financial Instruments (Details)
€ in Millions, $ in Millions
3 Months Ended 9 Months Ended 12 Months Ended
Jun. 29, 2018
USD ($)
Jun. 30, 2017
USD ($)
Jun. 29, 2018
USD ($)
Jun. 30, 2017
USD ($)
Sep. 29, 2017
USD ($)
Sep. 25, 2015
EUR (€)
Net investment hedges            
Financial Instruments            
Notional amount of non derivative instruments     $ 2,986   $ 3,110  
Foreign currency exchange gains (losses) $ 153 $ (129) 8 $ 15    
Cash flow hedges | Cross-Currency Swap Contracts            
Financial Instruments            
Notional amount | €           € 1,000
Quarterly interest payments in euro, fixed interest rate           3.50%
Interest received in U.S. dollars, average fixed interest rate           5.33%
Fair Value of Liability Positions 107   107   $ 96  
Gains (losses) recorded in other comprehensive income (loss) 7 2 (25) (6)    
Gains (losses) excluded from the hedging relationship $ 64 $ (71) $ 14 $ (17)    
v3.10.0.1
Retirement Plans (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Jun. 29, 2018
Jun. 30, 2017
Jun. 29, 2018
Jun. 30, 2017
U.S. Plans        
Defined Benefit Plan, Net Periodic Pension Benefit Cost        
Service cost $ 3 $ 3 $ 10 $ 9
Interest cost 11 11 33 33
Expected return on plan assets (15) (13) (45) (40)
Amortization of net actuarial loss 6 10 17 30
Net periodic pension benefit cost 5 11 15 32
Non-U.S. Plans        
Defined Benefit Plan, Net Periodic Pension Benefit Cost        
Service cost 12 13 35 39
Interest cost 10 9 31 27
Expected return on plan assets (18) (18) (52) (53)
Amortization of net actuarial loss 7 11 18 32
Amortization of prior service credit (2) (2) (5) (5)
Net periodic pension benefit cost $ 9 $ 13 27 $ 40
Defined Benefit Plan Contributions        
Defined benefit plan, contributions by employer     $ 36  
v3.10.0.1
Income Taxes (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended 9 Months Ended
Jun. 29, 2018
Dec. 31, 2017
Dec. 29, 2017
Jun. 30, 2017
Jun. 29, 2018
Jun. 29, 2018
Jun. 30, 2017
Sep. 29, 2017
Income Taxes                
Income tax expense $ 81     $ 71   $ 789 $ 164  
Income tax benefit resulting from lapses of applicable statutes of limitations 17         34 24  
Income tax benefit associated with pre-separation tax matters       $ 14     14  
Income tax expense related to tax impacts of Tax Cuts and Jobs Act     $ 567     567    
Net income tax benefit related to certain legal entity restructurings           61    
Income tax benefit associated with intercompany transactions and the corresponding reduction in the valuation allowance for U.S. tax loss carryforwards             $ 52  
Accrued interest and penalties related to uncertain tax positions 60       $ 60 60   $ 60
Income tax expense related to interest and penalties           2    
Unrecognized income tax benefits, approximate amount that could be resolved in next twelve months $ 30       $ 30 $ 30    
U.S. federal corporate income tax rate   35.00%     21.00%      
Income tax benefit related to the reduction in the valuation allowance recorded against certain U.S. federal tax credit carryforwards     34          
Revalued beginning deferred tax asset related to interest carryforwards     $ 223          
v3.10.0.1
Earnings Per Share (Details) - shares
shares in Millions
3 Months Ended 9 Months Ended
Jun. 29, 2018
Jun. 30, 2017
Jun. 29, 2018
Jun. 30, 2017
Earnings Per Share        
Basic (in shares) 349 355 351 355
Dilutive impact of share-based compensation arrangements (in shares) 3 3 3 4
Diluted (in shares) 352 358 354 359
Share options        
Antidilutive shares excluded from computation of earnings per share        
Antidilutive share options       1
v3.10.0.1
Shareholders' Equity (Details)
$ / shares in Units, shares in Millions, $ in Millions
1 Months Ended 3 Months Ended 9 Months Ended
Mar. 30, 2018
installment
$ / shares
Jun. 29, 2018
USD ($)
$ / shares
Mar. 30, 2018
installment
$ / shares
Dec. 29, 2017
$ / shares
Jun. 30, 2017
$ / shares
Jun. 29, 2018
USD ($)
$ / shares
shares
Jun. 30, 2017
USD ($)
$ / shares
shares
Sep. 29, 2017
USD ($)
Shareholders' Equity                
Maximum percentage of shares that the board may authorize for issuance           50.00%    
Cash dividend paid (in dollars per share) | $ / shares   $ 0.44 $ 0.40 $ 0.40 $ 0.40 $ 1.24 $ 1.14  
Dividend or cash distribution approved (in currency per share) | $ / shares $ 1.76              
Number of quarterly dividend installments | installment 4   4          
Unpaid portion of the dividend payment recorded in accrued and other current liabilities   $ 459       $ 459   $ 281
Share repurchase program, increase in authorized amount           $ 1,500    
Number of common shares repurchased | shares           6 5  
Repurchase value           $ 612 $ 386  
Amount available for repurchase, at end of period   $ 1,400       $ 1,400    
v3.10.0.1
Share Plans (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions
3 Months Ended 9 Months Ended
Jun. 29, 2018
Dec. 29, 2017
Jun. 30, 2017
Jun. 29, 2018
Jun. 30, 2017
Share Based Compensation Arrangements:          
Share-based compensation expense $ 22   $ 26 $ 74 $ 73
Shares available for issuance 20.0     20.0  
Share Based Compensation Expenses Not Recognized          
Share-based compensation, share-based awards, total compensation expense not yet recognized $ 153     $ 153  
Share-based compensation, share-based awards, total compensation expense not yet recognized, expected period for recognition 1 year 9 months 18 days        
Share options          
Share Based Compensation Arrangements:          
Share options granted   1.4      
Options granted, weighted-average grant-date fair value (in dollars per share)   $ 16.47      
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology          
Expected share price volatility (as a percent)   20.00%      
Risk free interest rate (as a percent)   2.20%      
Expected annual dividend per share   $ 1.60      
Expected life of options (in years)   5 years 3 months 18 days      
Restricted share awards          
Share Based Compensation Arrangements:          
Shares granted   0.5      
Shares granted, weighted-average grant-date fair value (in dollars per share)   $ 93.36      
Performance share awards          
Share Based Compensation Arrangements:          
Shares granted   0.2      
Shares granted, weighted-average grant-date fair value (in dollars per share)   $ 93.36      
v3.10.0.1
Segment Data (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Jun. 29, 2018
Jun. 30, 2017
Jun. 29, 2018
Jun. 30, 2017
Segment Data        
Net sales $ 3,764 $ 3,367 $ 10,989 $ 9,657
Operating income 558 544 1,763 1,520
Transportation Solutions        
Segment Data        
Net sales 2,112 1,765 6,278 5,195
Operating income 394 333 1,242 986
Industrial Solutions        
Segment Data        
Net sales 988 905 2,842 2,553
Operating income 93 100 321 258
Communications Solutions        
Segment Data        
Net sales 664 697 1,869 1,909
Operating income $ 71 $ 111 $ 200 $ 276
v3.10.0.1
Tyco Electronics Group S.A. - Operations (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Jun. 29, 2018
Jun. 30, 2017
Jun. 29, 2018
Jun. 30, 2017
Tyco Electronics Group S.A.        
Ownership percentage in TEGSA 100.00%   100.00%  
Statement of Operations Detail:        
Net sales $ 3,764 $ 3,367 $ 10,989 $ 9,657
Cost of sales 2,547 2,227 7,352 6,340
Gross margin 1,217 1,140 3,637 3,317
Selling, general, and administrative expenses, net 409 408 1,220 1,182
Research, development, and engineering expenses 181 168 539 485
Acquisition and integration costs 4 1 9 5
Restructuring and other charges, net 65 19 106 125
Operating income 558 544 1,763 1,520
Interest income 3 3 11 14
Interest expense (25) (32) (80) (95)
Other income (expense), net (1) (12) 2 (31)
Income from continuing operations before income taxes 535 503 1,696 1,408
Income tax expense (81) (71) (789) (164)
Income from continuing operations 454 432 907 1,244
Income (loss) from discontinued operations, net of income taxes   3 (3) 5
Net income 454 435 904 1,249
Other comprehensive income (loss) (250) 78 (101) 36
Comprehensive income 204 513 803 1,285
Consolidating Adjustments        
Statement of Operations Detail:        
Equity in net income of subsidiaries (990) (1,037) (2,134) (2,778)
Equity in net income (loss) of subsidiaries of discontinued operations   (7) 6 (23)
Income from continuing operations before income taxes (990) (1,044) (2,128) (2,801)
Income from continuing operations   (1,044) (2,128) (2,801)
Net income (990) (1,044) (2,128) (2,801)
Other comprehensive income (loss) 505 (161) 175 (50)
Comprehensive income (485) (1,205) (1,953) (2,851)
TE Connectivity Ltd. | Consolidating Reportable entities        
Statement of Operations Detail:        
Selling, general, and administrative expenses, net 19 68 107 144
Operating income (19) (68) (107) (144)
Equity in net income of subsidiaries 491 507 1,062 1,409
Equity in net income (loss) of subsidiaries of discontinued operations   3 (3) 5
Intercompany interest income (expense), net (18) (7) (48) (21)
Income from continuing operations before income taxes 454 435 904 1,249
Income from continuing operations   435 904 1,249
Net income 454 435 904 1,249
Other comprehensive income (loss) (250) 78 (101) 36
Comprehensive income 204 513 803 1,285
TEGSA | Consolidating Reportable entities        
Statement of Operations Detail:        
Selling, general, and administrative expenses, net   18 6 (52)
Operating income   (18) (6) 52
Interest income     1  
Interest expense (24) (32) (79) (95)
Equity in net income of subsidiaries 499 530 1,072 1,369
Equity in net income (loss) of subsidiaries of discontinued operations   4 (3) 18
Intercompany interest income (expense), net 16 27 74 83
Income from continuing operations before income taxes 491 511 1,059 1,427
Income from continuing operations   511 1,059 1,427
Income (loss) from discontinued operations, net of income taxes   (1)   (13)
Net income 491 510 1,059 1,414
Other comprehensive income (loss) (250) 78 (101) 36
Comprehensive income 241 588 958 1,450
Other Subsidiaries | Consolidating Reportable entities        
Statement of Operations Detail:        
Net sales 3,764 3,367 10,989 9,657
Cost of sales 2,547 2,227 7,352 6,340
Gross margin 1,217 1,140 3,637 3,317
Selling, general, and administrative expenses, net 390 322 1,107 1,090
Research, development, and engineering expenses 181 168 539 485
Acquisition and integration costs 4 1 9 5
Restructuring and other charges, net 65 19 106 125
Operating income 577 630 1,876 1,612
Interest income 3 3 10 14
Interest expense (1)   (1)  
Other income (expense), net (1) (12) 2 (31)
Intercompany interest income (expense), net 2 (20) (26) (62)
Income from continuing operations before income taxes 580 601 1,861 1,533
Income tax expense (81) (71) (789) (164)
Income from continuing operations   530 1,072 1,369
Income (loss) from discontinued operations, net of income taxes   4 (3) 18
Net income 499 534 1,069 1,387
Other comprehensive income (loss) (255) 83 (74) 14
Comprehensive income $ 244 $ 617 $ 995 $ 1,401
v3.10.0.1
Tyco Electronics Group S.A. - Balance Sheet (Details) - USD ($)
$ in Millions
Jun. 29, 2018
Sep. 29, 2017
Jun. 30, 2017
Sep. 30, 2016
Current assets:        
Cash and cash equivalents $ 770 $ 1,218 $ 755 $ 647
Accounts receivable, net 2,591 2,290    
Inventories 1,961 1,813    
Prepaid expenses and other current assets 619 605    
Total current assets 5,941 5,926    
Property, plant, and equipment, net 3,633 3,400    
Goodwill 5,616 5,651    
Intangible assets, net 1,698 1,841    
Deferred income taxes 1,672 2,141    
Other assets 453 444    
Total Assets 19,013 19,403    
Current liabilities:        
Short-term debt 714 710    
Accounts payable 1,583 1,436    
Accrued and other current liabilities 1,625 1,626    
Deferred revenue 124 75    
Total current liabilities 4,046 3,847    
Long-term debt 3,294 3,634    
Long-term pension and postretirement liabilities 1,119 1,160    
Deferred income taxes 227 236    
Income taxes 311 293    
Other liabilities 524 482    
Total Liabilities 9,521 9,652    
Total Shareholders' Equity 9,492 9,751 9,141 8,485
Total Liabilities and Shareholders' Equity 19,013 19,403    
Consolidating Adjustments        
Current assets:        
Intercompany receivables (2,732) (2,023)    
Total current assets (2,732) (2,023)    
Investment in subsidiaries (37,712) (32,069)    
Intercompany loans receivable (24,203) (13,727)    
Total Assets (64,647) (47,819)    
Current liabilities:        
Intercompany payables (2,732) (2,023)    
Total current liabilities (2,732) (2,023)    
Intercompany loans payable (24,203) (13,727)    
Total Liabilities (26,935) (15,750)    
Total Shareholders' Equity (37,712) (32,069)    
Total Liabilities and Shareholders' Equity (64,647) (47,819)    
TE Connectivity Ltd. | Consolidating Reportable entities        
Current assets:        
Intercompany receivables 39 49    
Prepaid expenses and other current assets 6 4    
Total current assets 45 53    
Investment in subsidiaries 12,615 11,960    
Intercompany loans receivable 2      
Total Assets 12,662 12,013    
Current liabilities:        
Accounts payable 2 2    
Accrued and other current liabilities 475 286    
Intercompany payables 2,693 1,974    
Total current liabilities 3,170 2,262    
Total Liabilities 3,170 2,262    
Total Shareholders' Equity 9,492 9,751    
Total Liabilities and Shareholders' Equity 12,662 12,013    
TEGSA | Consolidating Reportable entities        
Current assets:        
Intercompany receivables 2,644 1,914    
Prepaid expenses and other current assets 108 96    
Total current assets 2,752 2,010    
Investment in subsidiaries 25,097 20,109    
Intercompany loans receivable 6,562 4,027    
Other assets   6    
Total Assets 34,411 26,152    
Current liabilities:        
Short-term debt 712 708    
Accrued and other current liabilities 43 59    
Total current liabilities 755 767    
Long-term debt 3,289 3,629    
Intercompany loans payable 17,640 9,700    
Other liabilities 112 96    
Total Liabilities 21,796 14,192    
Total Shareholders' Equity 12,615 11,960    
Total Liabilities and Shareholders' Equity 34,411 26,152    
Other Subsidiaries | Consolidating Reportable entities        
Current assets:        
Cash and cash equivalents 770 1,218 $ 755 $ 647
Accounts receivable, net 2,591 2,290    
Inventories 1,961 1,813    
Intercompany receivables 49 60    
Prepaid expenses and other current assets 505 505    
Total current assets 5,876 5,886    
Property, plant, and equipment, net 3,633 3,400    
Goodwill 5,616 5,651    
Intangible assets, net 1,698 1,841    
Deferred income taxes 1,672 2,141    
Intercompany loans receivable 17,639 9,700    
Other assets 453 438    
Total Assets 36,587 29,057    
Current liabilities:        
Short-term debt 2 2    
Accounts payable 1,581 1,434    
Accrued and other current liabilities 1,107 1,281    
Deferred revenue 124 75    
Intercompany payables 39 49    
Total current liabilities 2,853 2,841    
Long-term debt 5 5    
Intercompany loans payable 6,563 4,027    
Long-term pension and postretirement liabilities 1,119 1,160    
Deferred income taxes 227 236    
Income taxes 311 293    
Other liabilities 412 386    
Total Liabilities 11,490 8,948    
Total Shareholders' Equity 25,097 20,109    
Total Liabilities and Shareholders' Equity $ 36,587 $ 29,057    
v3.10.0.1
Tyco Electronics Group S.A. - Cash Flows (Details) - USD ($)
$ in Millions
9 Months Ended
Jun. 29, 2018
Jun. 30, 2017
Cash Flows From Operating Activities:    
Net cash provided by (used in) continuing operating activities $ 1,527 $ 1,449
Net cash provided by (used in) discontinued operating activities   (1)
Net cash provided by operating activities 1,527 1,448
Cash Flows From Investing Activities:    
Capital expenditures (686) (452)
Proceeds from sale of property, plant, and equipment 19 12
Acquisition of business, net of cash acquired   (77)
Other (8) (21)
Net cash used in investing activities (675) (538)
Cash Flows From Financing Activities:    
Net increase (decrease) in commercial paper 271 (162)
Proceeds from issuance of debt 119 89
Repayment of debt (708)  
Proceeds from exercise of share options 96 86
Repurchase of common shares (611) (376)
Payment of common share dividends to shareholders (435) (405)
Other (34) (24)
Net cash used in continuing financing activities (1,302) (792)
Net cash provided by discontinued financing activities   1
Net cash used in financing activities (1,302) (791)
Effect of currency translation on cash 2 (11)
Net increase (decrease) in cash and cash equivalents (448) 108
Cash and cash equivalents at beginning of period 1,218 647
Cash and cash equivalents at end of period 770 755
Consolidating Adjustments    
Cash Flows From Operating Activities:    
Net cash provided by operating activities (15)  
Cash Flows From Investing Activities:    
Intercompany distribution receipts (61)  
Change in intercompany loans (261) (16)
Other   (4)
Net cash used in investing activities (322) (20)
Cash Flows From Financing Activities:    
Intercompany distributions 76  
Loan activity with parent 261 16
Other   4
Net cash used in continuing financing activities   20
Net cash used in financing activities 337 20
TE Connectivity Ltd. | Consolidating Reportable entities    
Cash Flows From Operating Activities:    
Net cash provided by (used in) continuing operating activities   (159)
Net cash provided by operating activities (152) (159)
Cash Flows From Financing Activities:    
Changes in parent company equity 83 67
Repurchase of common shares (218)  
Payment of common share dividends to shareholders (441) (407)
Loan activity with parent 728 499
Net cash used in continuing financing activities   159
Net cash used in financing activities 152 159
TEGSA | Consolidating Reportable entities    
Cash Flows From Operating Activities:    
Net cash provided by (used in) continuing operating activities   (58)
Net cash provided by operating activities (34) (58)
Cash Flows From Investing Activities:    
Intercompany distribution receipts 61  
Change in intercompany loans 261 16
Other   (8)
Net cash used in investing activities 322 8
Cash Flows From Financing Activities:    
Changes in parent company equity 30 123
Net increase (decrease) in commercial paper 271 (162)
Proceeds from issuance of debt 119 89
Repayment of debt (708)  
Net cash used in continuing financing activities   50
Net cash used in financing activities (288) 50
Other Subsidiaries | Consolidating Reportable entities    
Cash Flows From Operating Activities:    
Net cash provided by (used in) continuing operating activities   1,666
Net cash provided by (used in) discontinued operating activities   (1)
Net cash provided by operating activities 1,728 1,665
Cash Flows From Investing Activities:    
Capital expenditures (686) (452)
Proceeds from sale of property, plant, and equipment 19 12
Acquisition of business, net of cash acquired   (77)
Other (8) (9)
Net cash used in investing activities (675) (526)
Cash Flows From Financing Activities:    
Changes in parent company equity (113) (190)
Proceeds from exercise of share options 96 86
Repurchase of common shares (393) (376)
Payment of common share dividends to shareholders 6 2
Intercompany distributions (76)  
Loan activity with parent (989) (515)
Other (34) (28)
Net cash used in continuing financing activities   (1,021)
Net cash provided by discontinued financing activities   1
Net cash used in financing activities (1,503) (1,020)
Effect of currency translation on cash 2 (11)
Net increase (decrease) in cash and cash equivalents (448) 108
Cash and cash equivalents at beginning of period 1,218 647
Cash and cash equivalents at end of period $ 770 $ 755