TEL TE Connectivity 8-K 2026-10-28 slides

Forward-Looking Statements and Non-GAAP Financial Measures

Forward-Looking Statements

This presentation contains certain "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to risks, uncertainty and changes in circumstances, which may cause actual results, performance, financial condition or achievements to differ materially from anticipated results, performance, financial condition or achievements. All statements contained herein that are not clearly historical in nature are forward-looking and the words "anticipate," "believe," "expect," "estimate," "plan," and similar expressions are generally intended to identify forward-looking statements. We have no intention and are under no obligation to update or alter (and expressly disclaim any such intention or obligation to do so) our forward-looking statements whether as a result of new information, future events or otherwise, except to the extent required by law. The forward-looking statements in this presentation include statements addressing our future financial condition and operating results. Examples of factors that could cause actual results to differ materially from those described in the forward-looking statements include, among others, the extent, severity and duration of business interruptions negatively affecting our business operations; business, economic, competitive and regulatory risks, such as conditions affecting demand for products in the automotive and other industries we serve; competition and pricing pressure; fluctuations in foreign currency exchange rates and commodity prices; natural disasters and political, economic and military instability in countries in which we operate, including continuing military conflict in certain parts of the world; developments in the credit markets; future goodwill impairment; compliance with current and future environmental and other laws and regulations; and the possible effects on us of changes in tax laws, tax treaties and other legislation. More detailed information about these and other factors is set forth in TE Connectivity plc's Annual Report on Form 10-K for the fiscal year ended Sept. 26, 2025, as well as in our Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports filed by us with the U.S. Securities and Exchange Commission.

Non-GAAP Financial Measures

Where we have used non-GAAP financial measures, reconciliations to the most comparable GAAP measure are provided, along with a disclosure on the usefulness of the non-GAAP financial measure, in this presentation.

Earnings Highlights

Q4 Results - Delivered an Increase of 12% in Sales and 21% in Adjusted EPS

• Sales of $5.3B, increased 12% reported and 13% on an organic basis Y/Y
• Orders of $6.1B, increased 29% Y/Y and 6% sequentially; book to bill of 1.14
• Adjusted Operating Margins of 22%, expanded 100bps Y/Y; Adjusted EPS of $3.14, increased 21% Y/Y
• Free Cash Flow generation of ~$1.2B with ~$800M returned to shareholders

FY26 - Achieved Full Year Records for Sales, Adjusted Operating Margins & EPS, and Free Cash Flow

• Sales of $19.9B, increased 15% reported and 12% on an organic basis Y/Y with broad growth across the portfolio
• Record orders of $22.2B supporting another year of strong double-digit growth in FY27
• Adjusted EPS increased 24% Y/Y to $11.52; Adjusted Operating Margins of 22% expanded 120bps Y/Y
• Free Cash Flow of ~$3.4B with 100% conversion; ~$2.8B returned to shareholders and committed ~$1.6B for bolt-on acquisitions

Q1 FY27 Guidance

• Expect Sales of ~$5.35B, increasing 15% on a reported and organic basis Y/Y
• Expect Adjusted EPS of ~$3.30, increasing 21% Y/Y
• Strong orders and backlog expected to result in FY27 Y/Y organic sales growth consistent with FY26

Organic Net Sales Growth (Decline), Adjusted Operating Margin, Adjusted EPS, Free Cash Flow, and Free Cash Flow Conversion are non-GAAP financial measures; see Appendix for descriptions and reconciliations

Segment Orders Summary

($ in millions)

• Industrial segment orders in Q4 reflect double-digit growth across all businesses; DDN orders in FY26 increased ~70%
• Transportation segment orders reflect continued content outperformance in Auto and ICT, with end markets improving in commercial transportation

Callout: Full year orders of $22.2B increased 27% Y/Y; record backlog entering FY27

Industrial Solutions

Q4 SALES

Reported: Up 20%
Organic: Up 20%

Q4 ADJUSTED OPERATING MARGIN

Margin expansion of 40bps while increasing growth investments

Q4 BUSINESS PERFORMANCE

Y/Y Growth Rates. $ in Millions.

• Digital Data Networks — Growth driven by continued momentum in AI applications; full year AI sales as expected
• Automation & Connected Living — Strong growth across all regions driven by automation applications
• Energy — Grid hardening and data center build-out continues to drive strong growth
• AD&M — Performance reflects ongoing strength in commercial air and defense markets
• Medical — Sales as expected

Ongoing momentum with broad growth across the segment and strong operational performance

Organic Net Sales Growth (Decline), Adjusted Operating Margin, and Adjusted EBITDA Margin are non-GAAP financial measures; see Appendix for descriptions and reconciliations.

Transportation Solutions

Q4 SALES
Reported: Up 8%
Organic: Up 7%

Q4 ADJUSTED OPERATING MARGIN

Strong margin expansion of 80bps reflects continued execution by our teams.

Q4 BUSINESS PERFORMANCE

Y/Y Growth Rates

• Automotive: Strong growth over market driven by content outperformance in Asia and Europe
• Commercial Transportation: Strong content growth across all regions along with the benefit of markets improving
• Sensors: Sales as expected

Callout: Continue to deliver content outperformance versus end markets with strong operational resiliency

Organic Net Sales Growth (Decline), Adjusted Operating Margin, and Adjusted EBITDA Margin are non-GAAP financial measures; see Appendix for descriptions and reconciliations.

Q4 Financial Summary

($ in Millions, except per share amounts)

Adjusted Operating Income, Adjusted Operating Margin, Adjusted Earnings Per Share, and Adjusted Effective Tax Rate are non-GAAP financial measures; see Appendix for descriptions and reconciliations.

*Represents Diluted Earnings Per Share from Continuing Operations

Fiscal 2026 Financial Performance

Sales ($ in Billions)

• Reported sales up 15% Y/Y
• Organic sales up 12% Y/Y

Adjusted Operating Margin

• 120bps of margin expansion

Adjusted EPS

• Up 24% Y/Y

Free Cash Flow ($ in Billions)

• 100% free cash flow conversion

Record Full Year Sales, Operating Margin, EPS, and Free Cash Flow

Organic Net Sales Growth, Adjusted Operating Margin, Adjusted Earnings Per Share, and Free Cash Flow are non-GAAP financial measures; see Appendix for descriptions and reconciliations.

Y/Y Q4 2026

¹Q4 includes IEEPA tariff refunds expected to be returned to customers impacting sales by ($87M) and EPS by $0.01

Adjusted Earnings Per Share is a non-GAAP financial measure; see Appendix for description and reconciliation.

Y/Y FY 2026

Adjusted Earnings Per Share is a non-GAAP financial measure; see Appendix for description and reconciliation.

¹FY26 includes IEEPA tariff refunds expected to be returned to customers impacting sales by ($87M) and EPS by $0.01

Y/Y Q1 2027

¹Q1 includes IEEPA tariff refunds expected to be returned to customers impacting sales by approximately ($50M) and no impact to EPS

Adjusted Earnings Per Share is a non-GAAP financial measure; see Appendix for description and reconciliation.

Balance Sheet and Cash Flow Summary

Free Cash Flow and Working Capital
($ in Millions)

Liquidity, Cash and Debt
($ in Millions)

Free Cash Flow is a non-GAAP financial measure, see Appendix for description and reconciliation

• Calculated on a quarterly basis and adjusted to exclude the impact of acquisitions and divestitures

Non-GAAP Financial Measures

We present non-GAAP performance and liquidity measures as we believe it is appropriate for investors to

Non-GAAP Financial Measures (cont.)

• Adjusted Earnings Per Share – represents diluted earnings per share from continuing operations (the most comparable GAAP financial measure) before special items including restructuring and other charges, acquisition-related charges, amortization expense on intangible assets, impairment of goodwill, other income or charges, and certain significant tax items, if any, and, if applicable, the related tax effects. This measure is a significant component in our incentive compensation plans.
• Adjusted EBITDA and Adjusted EBITDA Margin – represent net income and net income as a percentage of net sales, respectively, (the most comparable GAAP financial measures) before interest expense, interest income, income taxes, depreciation, and amortization, as adjusted for net other income (expense), income (loss) from discontinued operations, and special items including restructuring and other charges, acquisition-related charges, impairment of goodwill, and other income or charges, if any.
• Free Cash Flow (FCF) – is a useful measure of our ability to generate cash. The difference between net cash provided by operating activities (the most comparable GAAP financial measure) and Free Cash Flow consists mainly of significant cash outflows and inflows that we believe are useful to identify. We believe Free Cash Flow provides useful information to investors as it provides insight into the primary cash flow metric used by management to monitor and evaluate cash flows generated from our operations. Free Cash Flow is defined as net cash provided by operating activities excluding voluntary pension contributions and the cash impact of special items, if any, minus net capital expenditures. Voluntary pension contributions are excluded from the GAAP financial measure because this activity is driven by economic financing decisions rather than operating activity. Certain special items, including cash paid (collected) pursuant to collateral requirements related to cross-currency swap contracts, are also excluded by management in evaluating Free Cash Flow. Net capital expenditures consist of capital expenditures less proceeds from the sale of property, plant, and equipment. These items are subtracted because they represent long-term commitments. In the calculation of Free Cash Flow, we subtract certain cash items that are ultimately within management’s and the Board of Directors’ discretion to direct and may imply that there is less or more cash available for our programs than the most comparable GAAP financial measure indicates. It should not be inferred that the entire Free Cash Flow amount is available for future discretionary expenditures, as our definition of Free Cash Flow does not consider certain non-discretionary expenditures, such as debt payments. In addition, we may have other discretionary expenditures, such as discretionary dividends, share repurchases, and business acquisitions, that are not considered in the calculation of Free Cash Flow.
• Free Cash Flow Conversion – represents Free Cash Flow as a percentage of Adjusted Income from Continuing Operations. We use Free Cash Flow Conversion as an indicator of our ability to convert earnings to cash.

Segment Summary

($ in millions)

Net Sales

Operating Income and Operating Margin

Adjusted Operating Income (3) and Adjusted Operating Margin (3)

(1) Reconciling item relates to IEEPA tariff refunds received in fiscal 2026 that are expected to be returned to customers.
(2) Reconciling item relates to the net impact of IEEPA tariff refunds received in fiscal 2026.
(3) Adjusted operating income and adjusted operating margin are non-GAAP financial measures. See description of non-GAAP financial measures.

Reconciliation of Net Sales Growth

Change in Net Sales for the Quarter Ended September 25, 2026 versus Net Sales for the Quarter Ended September 26, 2025
($ in millions)

Change in Net Sales for the Year Ended September 25, 2026 versus Net Sales for the Year Ended September 26, 2025
($ in millions)

(1) Organic net sales growth (decline) is a non-GAAP financial measure. See description of non-GAAP financial measures.
(2) Represents the change in net sales resulting from changes in foreign currency exchange rates and IEEPA tariff refunds.
(3) Reconciling item relates to IEEPA tariff refunds received in fiscal 2026 that are expected to be returned to customers.

Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended September 25, 2026

($ in millions, except per share data)

(1) The tax effect of each non-GAAP adjustment is calculated based on the jurisdictions in which the expense (income) is incurred and the tax laws in effect for each such jurisdiction.

(2) Represents a $59 million income tax benefit related to a decrease in the valuation allowance for certain tax loss and credit carryforwards.

(3) See description of non-GAAP financial measures.

(4) Reconciling item relates to the net impact of IEEPA tariff refunds received in fiscal 2026.

Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended September 26, 2025

($ in millions, except per share data)

(1) The tax effect of each non-GAAP adjustment is calculated based on the jurisdictions in which the expense (income) is incurred and the tax laws in effect for each such jurisdiction.

(2) Represents income tax expense of $44 million related to an increase in the valuation allowance for certain U.S. tax loss and credit carryforwards and an income tax benefit of $13 million related to the revaluation of deferred tax liabilities as a result of a decrease in the corporate tax rate in a non-U.S. jurisdiction.

(3) See description of non-GAAP financial measures.

Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 25, 2026

($ in millions, except per share data)

(1) The tax effect of each non-GAAP adjustment is calculated based on the jurisdictions in which the expense (income) is incurred and the tax laws in effect for each such jurisdiction.

(2) Represents a $114 million net income tax benefit related primarily to the settlement of prior period tax matters and a $59 million income tax benefit related to a decrease in the valuation allowance for certain tax loss and credit carryforwards.

(3) See description of non-GAAP financial measures.

(4) Reconciling item relates to the net impact of IEEPA tariff refunds received in fiscal 2026.

Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 26, 2025

($ in millions, except per share data)

(1) The tax effect of each non-GAAP adjustment is calculated based on the jurisdictions in which the expense (income) is incurred and the tax laws in effect for each such jurisdiction.

(2) Represents income tax expense of $574 million related to a net increase in the valuation allowance for certain deferred tax assets associated with a ten-year tax credit obtained by a Swiss subsidiary in fiscal 2024 as well as income tax expense of $44 million related to an increase in the valuation allowance for certain U.S. tax loss and credit carryforwards.

(3) See description of non-GAAP financial measures.

Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended December 26, 2025

($ in millions, except per share data)

(1) The tax effect of each non-GAAP adjustment is calculated based on the jurisdictions in which the expense (income) is incurred and the tax laws in effect for each such jurisdiction.
(2) See description of non-GAAP financial measures.

Reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin

For the Quarters Ended
($ in millions)

For the Quarters Ended
($ in millions)

(1) See description of non-GAAP financial measures.
(2) Reconciling item relates to IEEPA tariff refunds received in fiscal 2026.

Reconciliation of Free Cash Flow

(in millions)

(1) Free cash flow is a non-GAAP financial measure. See description of non-GAAP financial measures.

Free Cash Flow Conversion

($ in millions)

(1) See description of non-GAAP financial measures.

Reconciliation of Forward-Looking Non-GAAP Financial Measures to Forward-Looking GAAP Financial Measures

(1) Outlook is as of October 28, 2026.
(2) See description of non-GAAP financial measures.
(3) Includes IEEPA tariff refunds expected to be received in fiscal 2027 and returned to customers.
(4) Includes adjustments for special tax items and the tax effect of acquisition-related charges and net restructuring and other charges, calculated based on the jurisdictions in which the expense (income) is incurred and the tax laws in effect for each such jurisdiction.