TE Connectivity(TEL) - 2024 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS This section presents the company's unaudited condensed consolidated financial statements and accompanying notes for the period Condensed Consolidated Statements of Operations Condensed Consolidated Statements of Operations (Q1 FY24 vs Q1 FY23) | Metric | Q1 FY24 (in millions) | Q1 FY23 (in millions) | | :--- | :--- | :--- | | Net sales | $3,831 | $3,841 | | Gross margin | $1,324 | $1,187 | | Operating income | $698 | $502 | | Income tax (expense) benefit | $1,105 | $(87) | | Net income | $1,803 | $397 | | Basic earnings per share | $5.80 | $1.26 | | Diluted earnings per share | $5.76 | $1.24 | Condensed Consolidated Statements of Comprehensive Income Condensed Consolidated Statements of Comprehensive Income (Q1 FY24 vs Q1 FY23) | Metric | Q1 FY24 (in millions) | Q1 FY23 (in millions) | | :--- | :--- | :--- | | Net income | $1,803 | $397 | | Other comprehensive income | $173 | $376 | | Comprehensive income attributable to TE Connectivity Ltd. | $1,972 | $764 | Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheets (Dec 29, 2023 vs Sep 29, 2023) | Metric | Dec 29, 2023 (in millions) | Sep 29, 2023 (in millions) | | :--- | :--- | :--- | | Total current assets | $7,441 | $7,892 | | Property, plant, and equipment, net | $3,854 | $3,754 | | Goodwill | $5,836 | $5,463 | | Intangible assets, net | $1,278 | $1,175 | | Deferred income taxes (assets) | $3,852 | $2,600 | | Total assets | $23,071 | $21,712 | | Total current liabilities | $4,011 | $4,463 | | Total liabilities | $9,822 | $10,057 | | Total equity | $13,141 | $11,551 | Condensed Consolidated Statements of Equity Condensed Consolidated Statements of Equity (Q1 FY24) | Metric | Balance at Sep 29, 2023 (in millions) | Net Income (in millions) | Other Comprehensive Income (in millions) | Repurchase of Common Shares (in millions) | Balance at Dec 29, 2023 (in millions) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total TE Connectivity Ltd. shareholders' equity | $11,551 | $1,803 | $174 | $(420) | $13,136 | | Total equity | $11,551 | $1,803 | $174 | $(420) | $13,141 | Condensed Consolidated Statements of Cash Flows Condensed Consolidated Statements of Cash Flows (Q1 FY24 vs Q1 FY23) | Metric | Q1 FY24 (in millions) | Q1 FY23 (in millions) | | :--- | :--- | :--- | | Net cash provided by operating activities | $719 | $581 | | Net cash used in investing activities | $(468) | $(265) | | Net cash used in financing activities | $(745) | $(621) | | Net decrease in cash, cash equivalents, and restricted cash | $(491) | $(295) | | Cash, cash equivalents, and restricted cash at end of period | $1,170 | $793 | - Acquisition of businesses, net of cash acquired, increased to $349 million in Q1 FY24 from $109 million in Q1 FY23[20] - Repurchase of common shares increased to $476 million in Q1 FY24 from $287 million in Q1 FY23[20] Notes to Condensed Consolidated Financial Statements (unaudited) 1. Basis of Presentation and Accounting Policies - The unaudited Condensed Consolidated Financial Statements are prepared in U.S. dollars, in accordance with GAAP[22] - The company adopted ASU No 2022-04 (Supplier Finance Programs) in the first quarter of fiscal 2024, which did not have a material impact on the financial statements[27] - The company is currently assessing the impact of ASU No 2023-07 (Segment Reporting) and ASU No 2023-09 (Income Tax Disclosures), effective for fiscal 2025 and 2026, respectively[25][26] 2. Restructuring and Other Charges, Net Net Restructuring and Other Charges (Q1 FY24 vs Q1 FY23) | Charge Type | Q1 FY24 (in millions) | Q1 FY23 (in millions) | | :--- | :--- | :--- | | Restructuring charges, net | $9 | $104 | | Loss on divestiture and impairment of held for sale business | $11 | $6 | | Other charges, net | $1 | $1 | | Total Restructuring and other charges, net | $21 | $111 | - Initiated a fiscal 2024 restructuring program to optimize manufacturing footprint and improve cost structure, primarily in Industrial Solutions and Transportation Solutions segments, with $5 million recorded in Q1 FY24[33] - Sold one business for net cash proceeds of $38 million, recording a pre-tax loss on sale of $11 million, reported in the Transportation Solutions segment[38] 3. Acquisitions - Acquired approximately 98.7% of Schaffner Holding AG for $349 million (net of cash acquired) in Q1 FY24, reported as part of the Industrial Solutions segment[40] - Acquired one business for $109 million (net of cash acquired) in Q1 FY23, reported as part of the Industrial Solutions segment[41] 4. Inventories Inventories (Dec 29, 2023 vs Sep 29, 2023) | Inventory Type | Dec 29, 2023 (in millions) | Sep 29, 2023 (in millions) | | :--- | :--- | :--- | | Raw materials | $394 | $367 | | Work in progress | $1,284 | $1,185 | | Finished goods | $1,105 | $1,000 | | Total Inventories | $2,783 | $2,552 | 5. Goodwill Goodwill by Segment (Dec 29, 2023 vs Sep 29, 2023) | Segment | Sep 29, 2023 (in millions) | Acquisition (in millions) | Currency translation and other (in millions) | Dec 29, 2023 (in millions) | | :--- | :--- | :--- | :--- | :--- | | Transportation Solutions | $1,478 | — | $29 | $1,507 | | Industrial Solutions | $3,263 | $257 | $71 | $3,591 | | Communications Solutions | $722 | — | $16 | $738 | | Total | $5,463 | $257 | $116 | $5,836 | - Goodwill in the Industrial Solutions segment increased by $257 million due to an acquisition in Q1 FY24[43][44] 6. Intangible Assets, Net Intangible Assets, Net (Dec 29, 2023 vs Sep 29, 2023) | Asset Type | Dec 29, 2023 (Net, in millions) | Sep 29, 2023 (Net, in millions) | | :--- | :--- | :--- | | Customer relationships | $1,020 | $914 | | Intellectual property | $245 | $248 | | Other | $13 | $13 | | Total | $1,278 | $1,175 | - Intangible asset amortization expense was $42 million for Q1 FY24, down from $46 million in Q1 FY23[46] - Aggregate amortization expense on intangible assets is expected to be $128 million for the remainder of fiscal 2024[47] 7. Debt - Commercial paper outstanding decreased to $261 million at December 29, 2023, from $330 million at September 29, 2023, with a weighted-average interest rate of 5.50%[48] - The fair value of debt was approximately $4,103 million at December 29, 2023, up from $3,974 million at September 29, 2023[48] 8. Leases Lease Cost (Q1 FY24 vs Q1 FY23) | Lease Cost Component | Q1 FY24 (in millions) | Q1 FY23 (in millions) | | :--- | :--- | :--- | | Operating lease cost | $34 | $34 | | Variable lease cost | $12 | $12 | | Total lease cost | $46 | $46 | - Cash paid for operating leases was $34 million in Q1 FY24, compared to $32 million in Q1 FY23[51] 9. Commitments and Contingencies - The company is subject to various legal proceedings, trade compliance matters, and environmental remediation, but does not expect a material effect on financial results[52][53][54] - Environmental remediation costs are estimated in the range of $17 million to $44 million, with a probable loss of $20 million accrued as of December 29, 2023[54] - Outstanding letters of credit, letters of guarantee, and surety bonds totaled $196 million at December 29, 2023[57] - Obligations under the supply chain finance program were $122 million at December 29, 2023, up from $109 million at September 29, 2023[58] 10. Financial Instruments - The company uses cross-currency swap contracts and foreign currency forward contracts to manage foreign currency exchange rate risk[59] - Net investment in foreign operations is hedged using intercompany loans, external borrowings (aggregate notional value $2,792 million at Dec 29, 2023), and cross-currency swap contracts (aggregate notional value $3,599 million at Dec 29, 2023)[60][61] - Commodity swap contracts, designated as cash flow hedges, had an aggregate notional value of $431 million at December 29, 2023, to manage commodity price fluctuations[64] 11. Retirement Plans Net Periodic Pension Benefit Cost (Q1 FY24 vs Q1 FY23) | Plan Type | Q1 FY24 (in millions) | Q1 FY23 (in millions) | | :--- | :--- | :--- | | Non-U.S. Plans | $10 | $10 | | U.S. Plans | $3 | $3 | | Total | $13 | $13 | - The company contributed $12 million to its non-U.S. pension plans during Q1 FY24[66] 12. Income Taxes - The company recorded an income tax benefit of $1,105 million for Q1 FY24, compared to an expense of $87 million for Q1 FY23[67] - The Q1 FY24 benefit includes an $874 million net income tax benefit from a Swiss tax credit and a $262 million benefit from the revaluation of deferred tax assets due to a Swiss corporate tax rate increase[67] - Approximately $30 million of unrecognized income tax benefits could be resolved within the next twelve months[68] 13. Earnings Per Share Weighted-Average Number of Shares Outstanding (Q1 FY24 vs Q1 FY23) | Share Type | Q1 FY24 (in millions) | Q1 FY23 (in millions) | | :--- | :--- | :--- | | Basic | 311 | 317 | | Dilutive impact of share-based compensation arrangements | 2 | 2 | | Diluted | 313 | 319 | - Antidilutive share options not included in diluted EPS computation totaled 2 million for both Q1 FY24 and Q1 FY23[72] 14. Equity - Dividends paid per common share increased to $0.59 in Q1 FY24 from $0.56 in Q1 FY23[73] - The board of directors authorized a $1.5 billion increase in the share repurchase program during Q1 FY24[74] - Repurchased 3 million common shares for $420 million in Q1 FY24, compared to 2 million shares for $233 million in Q1 FY23[74] - As of December 29, 2023, $1.8 billion remained available under the share repurchase authorization[74] 15. Share Plans - Share-based compensation expense was $34 million in Q1 FY24, up from $32 million in Q1 FY23[75] - Unrecognized compensation expense related to share-based awards totaled $211 million, expected to be recognized over a weighted-average period of 1.9 years[77] Share-Based Awards Granted (Q1 FY24) | Award Type | Shares Granted (in millions) | Grant-Date Fair Value | | :--- | :--- | :--- | | Share options | 0.9 | $39.77 | | Restricted share awards | 0.4 | $131.77 | | Performance share awards | 0.2 | $131.77 | 16. Segment and Geographic Data Net Sales by Segment (Q1 FY24 vs Q1 FY23) | Segment | Q1 FY24 (in millions) | % of Total Q1 FY24 | Q1 FY23 (in millions) | % of Total Q1 FY23 | | :--- | :--- | :--- | :--- | :--- | | Transportation Solutions | $2,373 | 62 % | $2,259 | 58 % | | Industrial Solutions | $1,025 | 27 % | $1,060 | 28 % | | Communications Solutions | $433 | 11 % | $522 | 14 % | | Total | $3,831 | 100 % | $3,841 | 100 % | Net Sales by Geographic Region (Q1 FY24 vs Q1 FY23) | Region | Q1 FY24 (in millions) | % of Total Q1 FY24 | Q1 FY23 (in millions) | % of Total Q1 FY23 | | :--- | :--- | :--- | :--- | :--- | | EMEA | $1,411 | 37 % | $1,326 | 34 % | | Asia–Pacific | $1,379 | 36 % | $1,407 | 37 % | | Americas | $1,041 | 27 % | $1,108 | 29 % | | Total | $3,831 | 100 % | $3,841 | 100 % | Operating Income by Segment (Q1 FY24 vs Q1 FY23) | Segment | Q1 FY24 (in millions) | Q1 FY23 (in millions) | | :--- | :--- | :--- | | Transportation Solutions | $478 | $282 | | Industrial Solutions | $141 | $156 | | Communications Solutions | $79 | $64 | | Total | $698 | $502 | ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management discusses the company's financial condition, operational results, segment performance, and liquidity for the first quarter of fiscal 2024 Overview - TE Connectivity Ltd is a global industrial technology leader providing connectivity and sensor solutions[89] - Solutions enable distribution of power, signal, and data for next-generation transportation, renewable energy, automated factories, data centers, and medical technology[89] Summary of Performance - Net sales were essentially flat in Q1 FY24 compared to Q1 FY23, with an organic net sales decrease of 0.7%[91] - Transportation Solutions net sales increased 5.0% due to automotive market growth, while Industrial Solutions decreased 3.3% and Communications Solutions decreased 17.0%[91] - Net cash provided by operating activities was $719 million in Q1 FY24[91] - The company mitigated inflationary cost pressures through productivity and prior pricing actions and is managing costs through restructuring and other initiatives[92] Outlook - Expected net sales for Q2 FY24 are approximately $3.95 billion, a decline from $4.16 billion in Q2 FY23, with sales declines across all segments[94] - Expected diluted earnings per share from continuing operations for Q2 FY24 is approximately $1.75 per share[94] - The outlook reflects a negative impact of foreign currency exchange rates on net sales of approximately $13 million and on EPS of $0.05 per share in Q2 FY24[94] Acquisition - In Q1 FY24, TE Connectivity acquired approximately 98.7% of Schaffner Holding AG for CHF 302 million ($349 million, net of cash acquired), integrating it into the Industrial Solutions segment[95] Divestiture - In Q1 FY24, the company sold one business for net cash proceeds of $38 million, resulting in a pre-tax loss on sale of $11 million, reported in the Transportation Solutions segment[96] Results of Operations Net Sales - Net sales slightly decreased by $10 million, or 0.3%, in Q1 FY24 compared to Q1 FY23, driven by a 0.7% organic net sales decline and a 0.7% negative impact from acquisitions/divestitures, partially offset by a 1.1% positive impact from foreign currency translation[99] - Pricing actions initiated in fiscal 2023 positively affected organic net sales by $68 million in Q1 FY24[99] Change in Net Sales by Segment (Q1 FY24 vs Q1 FY23) | Segment | Net Sales Growth (Decline) ($M) | Net Sales Growth (Decline) (%) | Organic Net Sales Growth (Decline) (%) | | :--- | :--- | :--- | :--- | | Transportation Solutions | $114 | 5.0 % | 5.0 % | | Industrial Solutions | $(35) | (3.3)% | (4.9)% | | Communications Solutions | $(89) | (17.0)% | (17.0)% | | Total | $(10) | (0.3)% | (0.7)% | Change in Net Sales by Geographic Region (Q1 FY24 vs Q1 FY23) | Region | Net Sales Growth (Decline) ($M) | Net Sales Growth (Decline) (%) | Organic Net Sales Growth (Decline) (%) | | :--- | :--- | :--- | :--- | | EMEA | $85 | 6.4 % | 2.5 % | | Asia–Pacific | $(28) | (2.0)% | (0.4)% | | Americas | $(67) | (6.0)% | (5.0)% | | Total | $(10) | (0.3)% | (0.7)% | Cost of Sales and Gross Margin - Gross margin increased by $137 million in Q1 FY24 compared to Q1 FY23, primarily due to improved manufacturing productivity and positive impact of prior year pricing actions, partially offset by lower volume[105] Cost of Sales and Gross Margin (Q1 FY24 vs Q1 FY23) | Metric | Q1 FY24 (in millions) | Q1 FY23 (in millions) | Change (in millions) | | :--- | :--- | :--- | :--- | | Cost of sales | $2,507 | $2,654 | $(147) | | As a percentage of net sales | 65.4 % | 69.1 % | | | Gross margin | $1,324 | $1,187 | $137 | | As a percentage of net sales | 34.6 % | 30.9 % | | Average Raw Material Prices (Q1 FY24 vs Q1 FY23) | Material | Q1 FY24 Price | Q1 FY23 Price | | :--- | :--- | :--- | | Copper | $3.87/Lb. | $4.18/Lb. | | Gold | $1,943/Troy oz. | $1,821/Troy oz. | | Silver | $23.15/Troy oz. | $24.26/Troy oz. | | Palladium | $1,500/Troy oz. | $2,083/Troy oz. | Operating Expenses - Selling, general, and administrative expenses increased by $32 million in Q1 FY24, primarily due to inflation, partially offset by savings from prior restructuring actions[108] - Net restructuring and other charges decreased by $90 million to $21 million in Q1 FY24 from $111 million in Q1 FY23[108] - A new restructuring program was initiated in fiscal 2024 to optimize manufacturing footprint and cost structure, primarily in Industrial Solutions and Transportation Solutions segments, with expected annualized cost savings of approximately $3 million from Q1 FY24 actions[110] Operating Income Operating Income and Margin (Q1 FY24 vs Q1 FY23) | Metric | Q1 FY24 (in millions) | Q1 FY23 (in millions) | Change (in millions) | | :--- | :--- | :--- | :--- | | Operating income | $698 | $502 | $196 | | Operating margin | 18.2 % | 13.1 % | | - Operating income increased by $196 million, primarily due to improved gross margin and lower restructuring and other charges[112][113] Non-Operating Items - The company recorded an income tax benefit of $1,105 million in Q1 FY24, a significant change from an $87 million expense in Q1 FY23, resulting in an effective tax rate of (158.1)%[114] - The income tax benefit was primarily driven by an $874 million net income tax benefit from a Swiss tax credit and a $262 million benefit from the revaluation of deferred tax assets due to a Swiss corporate tax rate increase[67] - The OECD's 15% global minimum corporate tax rules are expected to affect the company starting in fiscal 2025[115] Segment Results Transportation Solutions - Net sales increased by $114 million, or 5.0%, in Q1 FY24, driven by 5.0% organic net sales growth[118] - Automotive organic net sales increased 8.1%, with strong growth in Asia-Pacific (13.4%) and EMEA (7.4%), partially offset by declines in the Americas (4.0%)[120] - Sensors organic net sales decreased 9.2% due to market weakness and strategic exits of lower margin product lines[120] - Operating income increased by $196 million in Q1 FY24, with operating margin improving to 20.1% from 12.5%, primarily due to improved manufacturing productivity and prior year pricing actions[119] Industrial Solutions - Net sales decreased by $35 million, or 3.3%, in Q1 FY24, primarily due to a 4.9% organic net sales decline[122] - Industrial equipment organic net sales decreased 26.3% due to reduced demand and inventory corrections, while Aerospace, defense, and marine (12.5% growth) and Medical (15.6% growth) showed strength[123] - Operating income decreased by $15 million in Q1 FY24, with operating margin at 13.8% (vs 14.7%), primarily due to lower volume, partially offset by prior year pricing actions[124] Communications Solutions - Net sales decreased by $89 million, or 17.0%, in Q1 FY24, entirely due to a 17.0% organic net sales decline[128] - Data and devices organic net sales decreased 15.2%, and Appliances organic net sales decreased 20.2%, both impacted by market declines and inventory corrections[132] - Operating income increased by $15 million in Q1 FY24, with operating margin improving to 18.2% from 12.3%, largely due to improved manufacturing productivity and lower restructuring charges, offsetting lower volume[128][129] Liquidity and Capital Resources - The company believes cash generated from operations and other funding sources will be sufficient to meet anticipated capital needs, including the payment of $350 million of senior notes due in August 2024[131] Cash Flows from Operating Activities - Net cash provided by operating activities increased by $138 million to $719 million in Q1 FY24 from $581 million in Q1 FY23, primarily due to higher pre-tax income[132] - Income taxes paid, net of refunds, were $100 million in Q1 FY24, compared to $98 million in Q1 FY23[132] Cash Flows from Investing Activities - Capital expenditures were $151 million in Q1 FY24, down from $183 million in Q1 FY23, with fiscal 2024 capital spending expected to be approximately 5% of net sales[133] - Acquisition of businesses, net of cash acquired, increased to $349 million in Q1 FY24 from $109 million in Q1 FY23[135] - Received net cash proceeds of $38 million from the sale of one business in Q1 FY24[134] Cash Flows from Financing Activities and Capitalization - Total debt was $4,198 million at December 29, 2023, slightly down from $4,211 million at September 29, 2023[136] - Commercial paper outstanding decreased to $261 million at December 29, 2023, from $330 million at September 29, 2023, at a 5.50% weighted-average interest rate[137] - The company has a $1.5 billion unsecured senior revolving credit facility with no borrowings outstanding and is in compliance with all debt covenants[138][139] - Repurchased approximately 3 million common shares for $420 million in Q1 FY24, compared to 2 million shares for $233 million in Q1 FY23, with $1.8 billion remaining under authorization[141] Summarized Guarantor Financial Information - TEGSA's payment obligations under its senior notes, commercial paper, and Credit Facility are fully and unconditionally guaranteed by its parent, TE Connectivity Ltd[142] Summarized Guarantor Balance Sheet Data (Dec 29, 2023 vs Sep 29, 2023) | Metric | Dec 29, 2023 (in millions) | Sep 29, 2023 (in millions) | | :--- | :--- | :--- | | Total current assets | $1,117 | $1,632 | | Total noncurrent assets | $3,485 | $2,857 | | Total current liabilities | $940 | $1,303 | | Total noncurrent liabilities | $8,710 | $7,592 | - Total noncurrent assets include $3,454 million of intercompany loans receivable from non-guarantor subsidiaries, and total noncurrent liabilities include $5,070 million of intercompany loans payable to non-guarantor subsidiaries as of December 29, 2023[144][149] Guarantees - The company provides various guarantees for third-party performance, asset dispositions, and financial commitments, which are not expected to have a material adverse effect on financial results[145][146] - Outstanding letters of credit, letters of guarantee, and surety bonds totaled $196 million at December 29, 2023[147] Commitments and Contingencies - This section refers to Note 9 of the Condensed Consolidated Financial Statements for detailed information on legal proceedings, trade compliance matters, and environmental matters[148] Legal Proceedings - The company is subject to various legal proceedings and claims, including patent infringement, product liability, and environmental matters, but does not expect a material effect on its financial position or results[149][150] Trade Compliance Matters - The company has made voluntary disclosures of apparent U.S. trade controls violations to BIS and DDTC and is cooperating with ongoing investigations, including contact from the U.S. Department of Justice[151] - The timing and final outcome of these investigations are unpredictable, and while potential fines and penalties are reserved for, the final amounts may differ[151] Critical Accounting Policies and Estimates - The preparation of financial statements requires management to make estimates and assumptions, particularly for revenue recognition, goodwill and other intangible assets, income taxes, and pension plans[153][154] - There were no significant changes to critical accounting policies and estimates during Q1 FY24[154] Accounting Pronouncements - Refer to Note 1 to the Condensed Consolidated Financial Statements for additional information regarding recently issued and adopted accounting pronouncements[156] Non-GAAP Financial Measure - The company presents 'organic net sales growth (decline)' as a non-GAAP financial measure, excluding the impact of foreign currency exchange rates and acquisitions/divestitures, to provide useful information about underlying business trends[158] - Management uses this measure to monitor and evaluate performance and in decision-making processes, and it is a significant component in incentive compensation plans[159] Forward-Looking Information - The report contains forward-looking statements based on management's beliefs and assumptions, which involve risks, uncertainties, and assumptions that could cause actual results to differ materially[162][163] - Key risks include global economic conditions, demand in the automotive industry, goodwill impairment, competition, raw material costs, foreign currency fluctuations, and geopolitical instability[164][167] - The company does not have any intention or obligation to update forward-looking statements after filing this report, except as required by law[163] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There have been no significant changes in TE Connectivity's exposures to market risk during the first quarter of fiscal 2024 - No significant changes in exposures to market risk during Q1 FY24[166] ITEM 4. CONTROLS AND PROCEDURES This section confirms the effectiveness of the company's disclosure controls and procedures and reports no material changes in internal control over financial reporting Evaluation of Disclosure Controls and Procedures - Management, with the participation of the CEO and CFO, concluded that disclosure controls and procedures were effective as of December 29, 2023[167] Changes in Internal Control Over Financial Reporting - There were no changes in internal control over financial reporting that materially affected, or are reasonably likely to materially affect, internal control over financial reporting during Q1 FY24[168] PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS There have been no material developments in the company's legal proceedings since the filing of its Annual Report on Form 10-K for fiscal year 2023 - No material developments in legal proceedings since the Annual Report on Form 10-K for FY23[171] ITEM 1A. RISK FACTORS There have been no material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for fiscal year 2023 - No material changes in risk factors from those disclosed in the Annual Report on Form 10-K for FY23[172] - Additional risks and uncertainties not currently known or believed to be immaterial may also impair business operations, financial condition, and liquidity[172] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS The company repurchased approximately 3.4 million common shares for $446 million during the first quarter of fiscal 2024 Issuer Purchases of Equity Securities (Q1 FY24) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | September 30–October 27, 2023 | 813,638 | $121.46 | | October 28–December 1, 2023 | 1,490,417 | $128.43 | | December 2–December 29, 2023 | 1,135,361 | $137.42 | | Total | 3,439,416 | $129.75 | - Total purchases include 3,239,941 common shares through open market purchases under the share repurchase program and 199,475 shares to satisfy tax withholding requirements[174] - At December 29, 2023, $1.8 billion of availability remained under the share repurchase authorization[174] ITEM 5. OTHER INFORMATION This section details the adoption of a Rule 10b5-1 trading arrangement by an executive officer during the first quarter of fiscal 2024 Rule 10b5-1 Trading Arrangements - Shad Kroeger, President, Industrial Solutions, adopted a Rule 10b5-1 trading plan on November 17, 2023, for the potential exercise and related sale of up to 18,750 common shares via stock options across three dates in 2024[175] ITEM 6. EXHIBITS This section lists all exhibits filed with the Form 10-Q, including certifications and Inline XBRL documents - Exhibits include the TE Connectivity Ltd 2007 Stock and Incentive Plan (amended and restated as of December 12, 2023)[176] - Certifications by the Chief Executive Officer and Chief Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are included[176] - Inline XBRL documents (Instance, Schema, Calculation, Definition, Label, Presentation Linkbase Documents) are furnished[176] SIGNATURES - The report was signed on behalf of TE Connectivity Ltd by Heath A Mitts, Executive Vice President and Chief Financial Officer, on January 26, 2024[180]