TEL TE Connectivity 10-K 2026-09-25 section summaries

TE Connectivity — Section 1 Summary

Business, markets and strategy

TE Connectivity designs and supplies connectivity and sensor products for transportation, industrial, energy and digital-infrastructure markets. Its two reportable segments—Transportation Solutions and Industrial Solutions—served an estimated combined market of approximately $135 billion at FY2026 year-end. FY2026 ended September 25, 2026 and comprised 52 weeks. Following the former Swiss parent’s merger into TE Connectivity plc on September 30, 2024, the company has been organized under Irish law beginning in FY2025.

• Transportation Solutions serves automotive, commercial transportation and sensor markets. Its products include connector systems, terminals, sensors, relays, heat-shrink tubing and tooling. End-market mix was 75% automotive, 16% commercial transportation and 9% sensors. Key applications include vehicle connectivity, electrification, batteries and charging, heavy vehicles, and sensors used across industries.
• Industrial Solutions supplies connector systems, terminals, wire and cable, relays, filters, heat-shrink tubing and medical components. Its end-market mix was 32% digital data networks, 25% automation and connected living, 19% energy, 17% aerospace/defense/marine and 7% medical. TE highlights AI data centers and edge connectivity, thermal solutions, grid modernization, renewables and data-center power as growth areas.

TE emphasizes its broad product portfolio and engineering relationships as advantages in developing next-generation solutions with customers. Its growth opportunities include AI data-center and edge ecosystems, vehicle electrification, power-grid resilience, renewables, automation and connected infrastructure.

Backlog and route to market

Year-end backlog increased 35.6% in FY2026, with most expected to ship in FY2027. The company cautions that orders may be canceled and backlog is not necessarily indicative of future sales.

TE sells in approximately 130 countries. Direct sales accounted for approximately 70% of FY2026 net sales, with the balance through distributors. Its customers span many industries, and no single customer accounted for a significant amount of net sales in FY2024–FY2026. Geographic and customer diversification reduces dependence on any one market, customer or region, but does not eliminate end-market cyclicality.

Competition, operating pressures and risks

Competition is intense, involving large multinational and local suppliers; named competitors include Yazaki, Aptiv, Amphenol, Molex and Sensata. TE faces ongoing general price pressure, although some businesses implemented price increases in recent years in response to higher costs and tariffs. Manufacturing relies on metals, plastics and other materials whose prices and availability are affected by global supply and demand. Certain materials have limited sources, and supply-chain disruptions, trade conflicts and inflation can further affect costs and availability. Demand and orders fluctuate with economic and market conditions.

Seasonality is generally modest: Q3 and Q4 are typically strongest, Q1 is affected by holidays, and Q2 may be affected by winter weather; automotive and energy demand also follow regional and quarterly patterns. Trade and export-licensing requirements, particularly for some defense-related products, may constrain the movement of materials or finished goods. Environmental, product-content, chemical-registration and greenhouse-gas requirements add compliance and reporting costs and may increase energy, materials and product costs.

Workforce and environmental matters

At FY2026 year-end, TE had approximately 104,000 employees, including 14,000 contract employees, with approximately 65,000 in manufacturing. Its FY2026 OSHA total recordable incident rate was 0.16; there were no employee or contractor fatalities.

Estimated contamination investigation and remediation costs at current and former manufacturing sites were reasonably possible in a range of $20M–$53M at fiscal year-end 2026. TE accrued $27M as the probable loss and best estimate within that range. It does not expect material environmental-control or GHG-compliance capital expenditures in FY2027.

From FY2020 to FY2026, energy-use intensity fell more than 25%, total water withdrawals fell approximately 20%, and absolute Scope 1 and 2 GHG emissions fell more than 70%. In FY2026, approximately 95% of waste was diverted from landfill or incineration without energy recovery. TE reports achieving its Scope 1 and 2 reduction goal of at least 70%; its near-term GHG targets were validated by the Science Based Targets initiative.

After achieving its earlier water-reduction initiative in FY2025, TE expanded water stewardship from 30 targeted sites to a company-wide goal of reducing total water withdrawal 3% by FY2029 from a FY2024 baseline. Other goals include zero waste to landfill by FY2029—defined as diverting at least 98% of operational waste through prevention, reuse, recycling or energy recovery—a 30% absolute Scope 3 GHG-emissions reduction, and 80% renewable electricity use in operations. TE is also working with suppliers and logistics providers on supply-chain sustainability and says its products help customers make smaller, lighter and more energy-efficient products.

Item 1A — Risk Factors

TE Connectivity’s results are exposed to global economic and trade volatility, currency movements, customer and end-market concentration, cyclicality, competition, technology shifts, and changing regulatory requirements. Recession, inflation, higher interest rates, tariffs, credit disruption, or weaker customer financing could delay or cancel orders, weaken collections, disrupt suppliers, and pressure cash flows. Deteriorating outlooks could also prompt goodwill or long-lived-asset impairment charges. Natural disasters, climate events, pandemics, conflict, terrorism, or IT failures could interrupt operations and supply chains, raise costs, and delay deliveries.

Markets, customers, and pricing

• Geographic and currency exposure: About 55% of FY2026 net sales were invoiced in currencies other than the U.S. dollar. TE does not hedge this revenue and cost exposure, so a stronger dollar could reduce reported revenue and income. Derivatives are used for certain cash, intercompany, and balance-sheet exposures, but may be ineffective or expose TE to counterparty risk. TE has 19 principal manufacturing sites in China, and approximately 25% of FY2026 net sales were to customers in China; U.S.–China tensions, tariffs, restrictions, regulatory changes, or local-law issues could affect operations and sales.
• End-market concentration and cyclicality: Approximately 38% of FY2026 net sales came from automotive customers, where downturns, customer work stoppages, sourcing changes, consolidation, and buyer price pressure can reduce demand and profitability. Digital data networks contributed 16% of sales and depend on networking, data-center, and wireless infrastructure investment, with connectivity and AI applications supporting demand. Automation and connected living represented 12%, tied to industrial and building-automation investment and home-appliance conditions.
• Pricing and bargaining power: TE continues to face downward pricing pressure. Pricing actions have supported net sales, but historical price erosion averaged 1%–2% annually; preserving margins requires cost reductions of similar magnitude. Customer consolidation can increase negotiating leverage or encourage alternative sourcing, while supplier consolidation can increase suppliers’ pricing power.
• Materials and supply chain: TE relies on resins, chemicals, additives, and metals—including copper, gold, silver, palladium, aluminum, brass, steel, and zinc. Geographically concentrated production, limited suppliers, inflation, trade policy, or force majeure may raise costs or constrain availability. If productivity and customer pricing do not offset input-cost increases, margins and cash flows may suffer. Commodity hedges depend on accurate consumption forecasts; conflict-minerals rules can constrain compliant 3TG sourcing and create cost and reputational risk. Supplier or contract-manufacturer quality, delivery, financial, or pricing problems could also impair fulfillment.

Technology, products, and people

TE’s competitiveness depends on timely innovation and adapting to fast-changing technologies, including AI, machine learning, analytics, IoT, robotics, and advanced manufacturing. Development must deliver products at customer-acceptable prices, and requires attracting and upskilling technology talent. AI may support productivity and innovation, but adoption is early-stage and brings risks involving inaccurate or biased outputs, IP, privacy, cybersecurity, safety, regulation, litigation, and reputation; customers’ in-house AI capabilities could also reduce demand. TE cautions that AI may not improve products, efficiency, safety, or profitability. Short product life cycles can leave development, inventory, and equipment investments unrecovered. Defects may result in warranty, repair, replacement, recall, liability, delivery disruption, inventory write-offs, and reputational harm. Retaining and recruiting experienced management is also important in a competitive labor market.

Cybersecurity, legal, and regulatory exposure

Cyberattacks or IT disruptions affecting TE or third parties could interrupt operations, expose confidential or personal data, and create liability, penalties, and reputational damage. TE has experienced attacks and attempted intrusions but reports no material business or operational impact to date. Privacy and data-transfer laws, including GDPR, CCPA, and China’s PIPL, as well as data-localization requirements and remote or hybrid work, may increase compliance costs and cyber exposure.

TE faces patent and other litigation risks, including antitrust, securities, product-liability, contract, employment, and government-investigation matters. Patent or antitrust cases may involve substantial defense costs, damages, settlements, injunctions, or treble damages. Competition-law violations could bring penalties, third-party claims, or invalidated commercial agreements. Import/export licensing, including for defense-related products, may be affected by geopolitics; noncompliance could restrict cross-border movement. Despite policies and controls, operations in higher-corruption-risk countries create potential exposure under the FCPA, UK Bribery Act, and similar laws.

Environmental and product rules cover hazardous materials, emissions and GHGs, remediation, worker safety, and chemical content. TE has received notices from the EPA, other agencies, and third parties regarding investigation, cleanup, remediation, and natural-resource damages at current and former sites, and has identified sites requiring further work. Some regimes impose retroactive, strict, joint-and-several liability; costs, penalties, claims, or facility closures could exceed estimates. Requirements such as EU RoHS, End-of-Life Vehicle and WEEE Directives, REACH, and China RoHS may require product or manufacturing changes, raise costs, restrict sales, or lead to recalls or claims. Climate rules and customer expectations may add compliance, energy, raw-material, and capital costs.

Financial, strategic, and corporate risks

Pension-asset declines or weaker returns could require materially higher plan funding. Tight credit or volatile equity markets could raise financing costs, constrain funding, or force project and capital-spending changes. TE’s five-year unsecured revolving credit facility includes a Consolidated Total Debt-to-Consolidated EBITDA covenant and restrictions on subsidiary debt and liens; senior-note indentures also contain customary covenants. TE says the covenants are not currently restrictive, but breach could trigger default, acceleration, or loss of credit access. A change-of-control triggering event may require repurchasing notes at 101% of principal plus accrued and unpaid interest, and funding is not assured. Share-price volatility may reflect operating results, markets, regulation, analyst estimates, and transaction announcements.

Acquisitions support TE’s growth strategy but may bring integration problems, unexpected costs, underperformance, or loss of customers, employees, suppliers, or distributors; significant deals may require debt or equity financing, increasing leverage or diluting shareholders. Further divestitures under consideration could cause goodwill or intangible-asset write-offs, separation costs, disruption, management distraction, and loss of key employees. Intellectual-property disputes may also require substantial costs to defend or protect TE’s rights.

Tax rules may raise cash taxes, effective tax rates, double-taxation exposure, or audit risk. OECD minimum-tax rules impose a 15% minimum tax in participating jurisdictions; Ireland’s rules applied to TE beginning in FY2025. Under recently enacted U.S. legislation, current ownership-attribution rules cease for foreign-corporation tax years beginning after December 31, 2025; based on current ownership, TE expects its non-U.S. subsidiaries not to be CFCs from its tax year beginning September 26, 2026.

TE’s Irish incorporation creates additional shareholder and tax considerations: U.S. securities-law judgments may not be automatically enforceable in Ireland, and Irish law differs on director duties, shareholder actions, and interested-party transactions. Share allotments require periodic authorization; the current authorization runs five years from September 30, 2024. Dividends and generally share repurchases are limited to distributable profits. Irish dividend withholding tax is 25% absent an exemption or required documentation; certain transfers outside DTC may incur 1% stamp duty, and gifts or inheritances may be subject to capital acquisitions tax. Irish law and TE’s articles may also delay or deter takeovers and proxy contests. Proposed U.S. federal and state restrictions on government contracting with foreign companies that have U.S. operations could adversely affect direct or indirect government sales and commercial customers.

Cybersecurity

TEL says cybersecurity threats and prior incidents have not, to date, materially affected its business strategy, results of operations, or financial condition. It cautions that threats are becoming more sophisticated and that its safeguards may not prevent future incidents, which could materially affect the company’s business, operating results, or financial condition.

Risk management and response

Cybersecurity risk management is led centrally by the Chief Information Security Officer (CISO), who reports to the Chief Information Officer. The program is integrated with enterprise risk management and aligned with NIST and other industry standards. Its practices include annual risk assessments and maturity benchmarking; continuous monitoring through a 24/7 security operations center; employee awareness training and phishing exercises; monthly reviews of security metrics; annual independent penetration testing; incident-response plans and tabletop exercises; and risk-based security reviews of third-party suppliers.

A cross-functional team assesses cyber incidents. Third-party consultants are available to support response, forensics, and technical analysis.

Oversight

A cross-functional Information Security Committee receives quarterly CISO updates covering mitigation projects, audit findings, security metrics, investigated incidents and their impacts, and significant security developments. The CISO has more than 20 years of information-security leadership experience, including more than 10 years as TEL’s CISO.

The Board’s Cybersecurity Committee receives CISO updates at least twice annually. The full Board also receives cybersecurity updates twice a year through enterprise-risk-management meetings.

Fiscal 2026 performance

TE Connectivity’s fiscal 2026 net sales grew 15.2%, with organic growth of 11.9%; currency translation added 2.2% and acquisitions 1.6%. Net pricing actions contributed $185 million to organic sales. Sales included an $87 million reduction for tariff refunds expected to be returned to customers.

Higher volume, manufacturing productivity and net pricing supported gross-margin improvement. SG&A increased to $2.124B from $1.866B, largely reflecting support for higher sales, currency translation and incentive compensation, as well as the prior-year release of trade-compliance reserves.

Segment performance

Transportation Solutions sales grew 7.3% (4.5% organically); operating margin increased to 19.6% from 19.4%, primarily reflecting improved manufacturing productivity excluding specified items. Automotive sales were $7.523B versus $7.106B, with 3.0% organic growth driven mainly by increased content per vehicle. Asia–Pacific and EMEA automotive growth was partly offset by an Americas decline. Commercial transportation sales were $1.635B versus $1.371B, with 17.1% organic growth across regions. Sensors organic sales declined 2.4%, as weakness in transportation applications was partly offset by industrial growth. Net price erosion reduced Transportation Solutions organic sales by $34M.

Industrial Solutions sales grew 25.8%, comprising 20.8% organic growth, 3.5% acquisition growth and 1.5% currency translation. Pricing contributed $219M to organic sales. Operating margin expanded to 20.4% from 17.7%; excluding specified items, higher volume and favorable net pricing drove the income increase.

Digital data networks’ 43.5% organic growth was primarily driven by AI applications. Automation and connected living grew 13.1%, mainly from factory automation; energy grew 18.1%, including grid-hardening and data-center demand; and aerospace, defense and marine grew 11.0%. Medical declined 1.3%, primarily due to a strategic product-line exit. Richards Manufacturing, acquired April 1, 2025, contributed $227M of incremental sales in fiscal 2026’s first six months versus the comparable prior-year period.

Geography and cash generation

Approximately 55% of sales were invoiced in currencies other than the U.S. dollar, exposing reported results to exchange-rate movements.

Higher pretax income supported operating cash flow, partly offset by working-capital changes and higher income-tax payments. Fiscal 2027 capital spending is expected to be about 6% of sales, supporting manufacturing capacity and productivity. Pension contributions were $70M versus $69M; fiscal 2027 contributions are expected to be about $67M before voluntary contributions.

Capital allocation, financing and commitments

Year-end total debt was $5.639B, down from $5.694B. During fiscal 2026, TEGSA issued $200M of 4.50% senior notes due February 2031 and $550M of 4.875% senior notes due February 2036. The company replaced its $1.5B revolving credit facility with a $3.0B five-year facility, with up to $1.0B of additional commitments subject to conditions; there were no year-end revolver borrowings. Commercial paper outstanding was $100M at a weighted-average rate of 4.10%, versus none at the prior year-end. The leverage covenant is triggered above 3.75x consolidated debt to EBITDA, temporarily 4.25x after a qualifying acquisition; the company reported compliance. Management expects cash generation and available financing to cover foreseeable needs, including repayment of $400M of 3.125% senior notes due August 2027.

Fiscal 2026 acquisitions cost $212M net of cash acquired. In Q4, the company agreed to acquire Astrodyne for approximately $1.4B in cash, expected to close by calendar year-end 2026 subject to approvals and closing conditions. The transaction is expected to be funded with available cash and commercial paper, with the credit facility and/or new debt as potential additional sources. Fiscal 2026 also included earn-outs with an estimated acquisition-date fair value of approximately $150M. The company’s fiscal 2025 acquisition of Richards Manufacturing cost $2.3B.

Cash dividends paid totaled $869M, versus $803M in fiscal 2025; dividends paid were $2.98 per ordinary share. The board approved an additional $0.78-per-share interim dividend payable December 11, 2026. Fiscal 2026 share repurchases were $1.892B versus $1.356B; after a $3.0B increase to the authorization, $2.5B remained available at year-end.

Contractual cash obligations totaled $9.305B, including $2.290B due in fiscal 2027 and $7.015B thereafter. The schedule excludes $659M of unrecognized income-tax benefits and $42M of accrued interest and penalties, as well as pension obligations. It also excludes $150M of redeemable First Sensor noncontrolling interests; holders may retain shares for recurring compensation or put them for €33.27 per share. Letters of credit, guarantees and surety bonds totaled $282M.

Tariffs, costs and other risks

Following the February 2026 U.S. Supreme Court ruling on IEEPA tariffs and the subsequent refund process, the company received $91M of refunds in fiscal Q4 and expects to return $87M to customers; the net gross-margin benefit was $4M. It recognized no benefit for additional potential refunds because their timing and amount remain uncertain. Pricing and sourcing actions have largely mitigated tariff impacts. Fiscal 2026 restructuring charges were $110M, compared with $113M in fiscal 2025. Current actions are expected to yield about $65M in annualized savings, fully realized by fiscal 2029; fiscal 2027 charges are expected to be about $80M, with approximately $100M of cash spending funded from operations.

Raw-material prices rose year over year: copper averaged $4.81/lb versus $4.25, gold $3,550/troy oz versus $2,560, silver $46.99/troy oz versus $29.01, and palladium $1,275/troy oz versus $1,065. The company also paid $14M to U.S. Customs and Border Protection to resolve a voluntary disclosure concerning potential unpaid Section 301 duties, fees and interest; CBP review remains pending, with no material impact expected.

Principal exposures include cyclical demand, particularly in automotive; inflation, tariffs and supply-chain disruption; pricing and technology competition; raw-material availability and cost; foreign exchange; acquisition execution; geopolitical and natural-disaster risks; cybersecurity and IT disruption; product liability, warranties and recalls; environmental and trade regulation, litigation and compliance; and tax-law changes. Military conflicts and related disruptions did not significantly affect fiscal 2026 or 2025 results.

The fiscal 2026 goodwill impairment test found no impairment. Goodwill valuations rely primarily on projected cash flows and are sensitive to growth, discount-rate and tax assumptions; adverse operating or economic changes could trigger future impairment. Identifiable intangibles are principally customer relationships and intellectual property, with estimated useful lives of 1 to 50 years. Pension estimates are also rate-sensitive: a 25-basis-point discount-rate decrease would raise the present value of obligations by $53M, while an increase would reduce it by $51M. A 50-basis-point change in expected long-term asset returns would change fiscal 2026 pension expense by $9M in the opposite direction. The U.S. plans’ long-term target is 25% return-seeking and 75% liability-hedging assets, expected when funded status exceeds 110%.

Outlook and performance measures

Fiscal Q1 2027 sales are expected to be approximately $5.35B versus $4.67B in Q1 2026, with diluted EPS from continuing operations of approximately $3.04. The outlook includes favorable foreign-exchange effects of about $17M on sales and $0.06 per share on EPS, and excludes Astrodyne. Fiscal 2027 sales are expected to grow at a double-digit rate, led by Industrial Solutions (including Astrodyne) and, to a lesser extent, Transportation Solutions; organic growth is expected to be consistent with fiscal 2026 levels.

Management uses organic sales growth, which excludes foreign exchange and acquisitions and divestitures from the prior 12 months, alongside GAAP results to assess performance and determine a significant component of incentive compensation. It is a non-GAAP measure and may not be comparable across companies.

Item 7A — Market Risk

TE Connectivity manages foreign-exchange exposure with cross-currency swaps and foreign-currency forwards. Some are designated as cash-flow hedges of intercompany and other cash transactions; cross-currency swaps also hedge net investments in certain foreign operations. Gains or losses on these contracts generally are offset by opposite effects when the underlying transactions are revalued or settled.

Commodity cash-flow hedges cover a portion of forecast gold, silver, copper and palladium purchases over the next 18 months.

No interest-rate swap contracts or floating-rate debt were outstanding at either fiscal year-end 2026 or 2025. The company may use swaps to change its exposure to fixed-rate debt or manage exposure ahead of anticipated fixed-rate issuance. Investment swaps are used to manage earnings exposure on certain nonqualified deferred-compensation liabilities.

Derivatives are not used for trading or speculation. Counterparties are primarily major financial institutions rated at least A/A2, and the company reports no significant single-counterparty concentration.

During the quarter ended September 25, 2026, no directors or officers adopted or terminated a Rule 10b5-1 or other covered trading arrangement, except CEO and Director Terrence R. Curtin. Curtin adopted a Rule 10b5-1 plan on August 18, 2026, scheduled to expire December 29, 2026. The plan permits the potential sale of net ordinary shares expected from the vesting and settlement of previously awarded performance stock units in December 2026, less up to 30,000 shares, and a potential charitable gift of up to 30,000 shares. Neither transaction may occur before the units vest and settle. Curtin entered into the plan during an open trading window, and it complies with the company’s insider-trading policies. Any actual sales will be reported in SEC filings.

TE Connectivity — FY2026

Consolidated results

Fiscal year ended September 25; amounts in $ millions, except per-share data.

Sales grew 15.2% in FY2026, accelerating from 8.9% growth in FY2025. Gross margin rate improved to about 36.2% from 35.2%. Net income rebounded as tax expense fell substantially from FY2025; FY2026’s effective tax rate was 17.6%, compared with Ireland’s 12.5% statutory rate. FY2026 tax expense included a $114 million net benefit, primarily from prior-period tax settlements, and a $59 million benefit from reducing valuation allowances.

Segments and sales mix

FY2026 segment sales increased 7.3% in Transportation Solutions and 25.8% in Industrial Solutions. Digital data networks and energy were particularly strong, consistent with demand in data centers, including AI-related applications, and energy networks. Segment sales exceed reported consolidated sales by $87 million, reflecting the tariff-refund customer adjustment. Segment operating income reconciles to consolidated operating income with a positive $4 million adjustment in FY2026.

Cash flow and capital allocation

The company spent $212 million on acquisitions, net of cash acquired, compared with $2.628 billion in FY2025. It repurchased $1.892 billion of shares and paid $869 million in dividends in FY2026 (FY2025: $1.347 billion and $803 million, respectively). The board added $3.0 billion to the repurchase authorization; $2.5 billion remained at year-end. Dividends per share were $3.05 in FY2026 versus $2.72 in FY2025.

Balance sheet, debt, and shares

Equity less goodwill and other intangible assets implies tangible common equity of approximately $4.122 billion, up from $3.232 billion. Goodwill increased mainly because of acquisitions; the annual impairment test found no impairment. Amortization expense was $227 million, up from $190 million in FY2025. Ordinary shares issued were 296,288,773 at FY2026 year-end versus 302,889,075 a year earlier; treasury shares were 8,788,224 versus 8,330,931.

FY2026 included issuance of $200 million of 4.50% senior notes due 2031 and $550 million of 4.875% notes due 2036. A new unsecured five-year $3.0 billion revolving facility, maturing February 2031, replaced a $1.5 billion facility; up to $1.0 billion of additional commitments may be available subject to conditions. Neither facility had year-end borrowings. Its leverage covenant is 3.75x consolidated total debt to EBITDA, temporarily rising to 4.25x following a qualifying acquisition.

Tax, transactions, and risks

Deferred-tax-asset realizability was the auditor’s critical audit matter, given reliance on forecasts of future taxable income, tax planning, and utilization before expiration. Gross deferred tax assets were $12.187 billion and the valuation allowance was $9.251 billion at FY2026 year-end; net deferred tax assets were $1.882 billion, down from $2.309 billion. Tax-effected carryforwards totaled $10.274 billion. Management expects sufficient future taxable income to realize remaining net deferred tax assets, but realization and uncertain tax positions remain sensitive to future facts, jurisdictional developments, and tax examinations. The auditor also reported unqualified opinions on the financial statements and internal control.

The company recorded $91 million of IEEPA tariff refunds as a reduction to cost of sales and expects to return $87 million to customers as a reduction to sales. It paid $14 million to resolve a prior customs disclosure; the related review remains open, with no material effect expected. Environmental remediation exposure was estimated at $20–$53 million, with $27 million accrued.

A new FY2026 restructuring program incurred $88 million of charges, primarily to optimize manufacturing and reduce costs; actions are expected to finish by FY2029, with about $20 million of additional charges anticipated. The company also agreed after year-end to acquire Astrodyne TDI for about $1.4 billion cash, subject to approvals and customary closing conditions. The acquisition adds execution and integration risk. Non-U.S. pension-plan deficit improved to $396 million from $540 million; expected minimum FY2027 contributions are $55 million to non-U.S. plans and $12 million to U.S. plans.