Tyco Electronics Group S.A.

12 Months Ended

Sep. 25, 2015

Tyco Electronics Group S.A.

Tyco Electronics Group S.A.

25. 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 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
For the Fiscal Year Ended September 25, 2015

	TE Connectivity Ltd.			TEGSA			Other Subsidiaries			Consolidating Adjustments			Total
	(in millions)
Net sales	$	—		$	—		$	12,233		$	—		$	12,233
Cost of sales		—			—			8,146			—			8,146
Gross margin		—			—			4,087			—			4,087
Selling, general, and administrative expenses, net(1)		163			835			506			—			1,504
Research, development, and engineering expenses		—			—			627			—			627
Acquisition and integration costs		—			—			55			—			55
Restructuring and other charges, net		—			—			152			—			152
Operating income (loss)		(163	)		(835	)		2,747			—			1,749
Interest income		—			—			17			—			17
Interest expense		—			(135	)		(1	)		—			(136	)
Other expense, net		—			—			(55	)		—			(55	)
Equity in net income of subsidiaries		1,398			2,318			—			(3,716	)		—
Equity in net income of subsidiaries of discontinued operations		1,182			365			—			(1,547	)		—
Intercompany interest income (expense), net		3			50			(53	)		—			—
Income from continuing operations before income taxes		2,420			1,763			2,655			(5,263	)		1,575
Income tax expense		—			—			(337	)		—			(337	)
Income from continuing operations		2,420			1,763			2,318			(5,263	)		1,238
Income from discontinued operations, net of income taxes		—			817			365			—			1,182
Net income attributable to TE Connectivity Ltd., TEGSA, or Other Subsidiaries		2,420			2,580			2,683			(5,263	)		2,420
Other comprehensive loss		(356	)		(356	)		(368	)		724			(356	)
Comprehensive income attributable to TE Connectivity Ltd., TEGSA, or Other Subsidiaries	$	2,064		$	2,224		$	2,315		$	(4,539	)	$	2,064

(1) TEGSA selling, general, and administrative expenses include losses of $846 million related to intercompany transactions. These losses are offset by corresponding gains recorded by Other Subsidiaries.

Condensed Consolidating Statement of Operations
For the Fiscal Year Ended September 26, 2014

	TE Connectivity Ltd.			TEGSA			Other Subsidiaries			Consolidating Adjustments			Total
	(in millions)
Net sales	$	—		$	—		$	11,973		$	—		$	11,973
Cost of sales		—			—			8,001			—			8,001
Gross margin		—			—			3,972			—			3,972
Selling, general, and administrative expenses, net(1)		131			1,877			(474	)		—			1,534
Research, development, and engineering expenses		—			—			583			—			583
Acquisition and integration costs		—			—			31			—			31
Restructuring and other charges, net		—			—			19			—			19
Operating income (loss)		(131	)		(1,877	)		3,813			—			1,805
Interest income		—			—			19			—			19
Interest expense		—			(126	)		(1	)		—			(127	)
Other income (expense), net		18			(3	)		48			—			63
Equity in net income of subsidiaries		1,729			3,672			—			(5,401	)		—
Equity in net income of subsidiaries of discontinued operations		167			167			—			(334	)		—
Intercompany interest income (expense), net		(2	)		63			(61	)		—			—
Income from continuing operations before income taxes		1,781			1,896			3,818			(5,735	)		1,760
Income tax expense		—			—			(146	)		—			(146	)
Income from continuing operations		1,781			1,896			3,672			(5,735	)		1,614
Income from discontinued operations, net of income taxes		—			—			167			—			167
Net income attributable to TE Connectivity Ltd., TEGSA, or Other Subsidiaries		1,781			1,896			3,839			(5,735	)		1,781
Other comprehensive loss		(320	)		(320	)		(328	)		648			(320	)
Comprehensive income attributable to TE Connectivity Ltd., TEGSA, or Other Subsidiaries	$	1,461		$	1,576		$	3,511		$	(5,087	)	$	1,461

(1) TEGSA selling, general, and administrative expenses include losses of $1,874 million related to intercompany transactions. These losses are offset by corresponding gains recorded by Other Subsidiaries.

Condensed Consolidating Statement of Operations
For the Fiscal Year Ended September 27, 2013

	TE Connectivity Ltd.			TEGSA			Other Subsidiaries			Consolidating Adjustments			Total
	(in millions)
Net sales	$	—		$	—		$	11,390		$	—		$	11,390
Cost of sales		—			—			7,739			—			7,739
Gross margin		—			—			3,651			—			3,651
Selling, general, and administrative expenses		156			3			1,281			—			1,440
Research, development, and engineering expenses		—			—			590			—			590
Acquisition and integration costs		—			—			14			—			14
Restructuring and other charges, net		—			—			222			—			222
Operating income (loss)		(156	)		(3	)		1,544			—			1,385
Interest income		—			—			17			—			17
Interest expense		—			(135	)		(4	)		—			(139	)
Other expense, net		—			—			(183	)		—			(183	)
Equity in net income of subsidiaries		1,323			1,411			—			(2,734	)		—
Equity in net income of subsidiaries of discontinued operations		122			122			—			(244	)		—
Intercompany interest income (expense), net		(13	)		54			(41	)		—			—
Income from continuing operations before income taxes		1,276			1,449			1,333			(2,978	)		1,080
Income tax (expense) benefit		—			(4	)		79			—			75
Income from continuing operations		1,276			1,445			1,412			(2,978	)		1,155
Income from discontinued operations, net of income taxes		—			—			122			—			122
Net income		1,276			1,445			1,534			(2,978	)		1,277
Less: net income attributable to noncontrolling interests		—			—			(1	)		—			(1	)
Net income attributable to TE Connectivity Ltd., TEGSA, or Other Subsidiaries		1,276			1,445			1,533			(2,978	)		1,276
Other comprehensive income		74			74			64			(138	)		74
Comprehensive income attributable to TE Connectivity Ltd., TEGSA, or Other Subsidiaries	$	1,350		$	1,519		$	1,597		$	(3,116	)	$	1,350

Condensed Consolidating Balance Sheet
As of September 25, 2015

	TE Connectivity Ltd.		TEGSA		Other Subsidiaries		Consolidating Adjustments			Total
	(in millions)
Assets
Current assets:
Cash and cash equivalents	$	—	$	—	$	3,329	$	—		$	3,329
Accounts receivable, net		—		—		2,120		—			2,120
Inventories		—		—		1,615		—			1,615
Intercompany receivables		813		389		66		(1,268	)		—
Prepaid expenses and other current assets		4		6		468		—			478
Deferred income taxes		—		—		345		—			345
Total current assets		817		395		7,943		(1,268	)		7,887
Property, plant, and equipment, net		—		—		2,920		—			2,920
Goodwill		—		—		4,824		—			4,824
Intangible assets, net		—		—		1,555		—			1,555
Deferred income taxes		—		—		2,144		—			2,144
Investment in subsidiaries		9,505		19,645		—		(29,150	)		—
Intercompany loans receivable		22		2,328		8,110		(10,460	)		—
Receivable from Tyco International plc and Covidien plc		—		—		964		—			964
Other assets		—		44		270		—			314
Total Assets	$	10,344	$	22,412	$	28,730	$	(40,878	)	$	20,608
Liabilities and Equity
Current liabilities:
Current maturities of long-term debt	$	—	$	500	$	—	$	—		$	500
Accounts payable		2		—		1,141		—			1,143
Accrued and other current liabilities		442		75		1,232		—			1,749
Deferred revenue		—		—		185		—			185
Intercompany payables		311		824		133		(1,268	)		—
Total current liabilities		755		1,399		2,691		(1,268	)		3,577
Long-term debt		—		3,402		1		—			3,403
Intercompany loans payable		4		8,106		2,350		(10,460	)		—
Long-term pension and postretirement liabilities		—		—		1,327		—			1,327
Deferred income taxes		—		—		329		—			329
Income taxes		—		—		1,954		—			1,954
Other liabilities		—		—		433		—			433
Total Liabilities		759		12,907		9,085		(11,728	)		11,023
Total Equity		9,585		9,505		19,645		(29,150	)		9,585
Total Liabilities and Equity	$	10,344	$	22,412	$	28,730	$	(40,878	)	$	20,608

Condensed Consolidating Balance Sheet
As of September 26, 2014

	TE Connectivity Ltd.		TEGSA		Other Subsidiaries		Consolidating Adjustments			Total
	(in millions)
Assets
Current assets:
Cash and cash equivalents	$	—	$	1	$	2,456	$	—		$	2,457
Accounts receivable, net		—		—		2,057		—			2,057
Inventories		—		—		1,509		—			1,509
Intercompany receivables		932		230		30		(1,192	)		—
Prepaid expenses and other current assets		6		3		510		—			519
Deferred income taxes		—		—		324		—			324
Assets held for sale		—		—		2,013		—			2,013
Total current assets		938		234		8,899		(1,192	)		8,879
Property, plant, and equipment, net		—		—		2,920		—			2,920
Goodwill		—		—		3,726		—			3,726
Intangible assets, net		—		—		1,087		—			1,087
Deferred income taxes		—		—		2,047		—			2,047
Investment in subsidiaries		8,602		19,966		—		(28,568	)		—
Intercompany loans receivable		20		2,160		9,883		(12,063	)		—
Receivable from Tyco International plc and Covidien plc		—		—		1,037		—			1,037
Other assets		—		30		426		—			456
Total Assets	$	9,560	$	22,390	$	30,025	$	(41,823	)	$	20,152
Liabilities and Equity
Current liabilities:
Current maturities of long-term debt	$	—	$	577	$	—	$	—		$	577
Accounts payable		1		—		1,229		—			1,230
Accrued and other current liabilities		282		50		1,262		—			1,594
Deferred revenue		—		—		176		—			176
Intercompany payables		260		—		932		(1,192	)		—
Liabilities held for sale		—		—		416		—			416
Total current liabilities		543		627		4,015		(1,192	)		3,993
Long-term debt		—		3,281		—		—			3,281
Intercompany loans payable		4		9,880		2,179		(12,063	)		—
Long-term pension and postretirement liabilities		—		—		1,280		—			1,280
Deferred income taxes		—		—		229		—			229
Income taxes		—		—		2,044		—			2,044
Other liabilities		—		—		312		—			312
Total Liabilities		547		13,788		10,059		(13,255	)		11,139
Total Equity		9,013		8,602		19,966		(28,568	)		9,013
Total Liabilities and Equity	$	9,560	$	22,390	$	30,025	$	(41,823	)	$	20,152

Condensed Consolidating Statement of Cash Flows
For the Fiscal Year Ended September 25, 2015

	TE Connectivity Ltd.			TEGSA			Other Subsidiaries			Consolidating Adjustments			Total
	(in millions)
Cash Flows From Operating Activities:
Net cash provided by continuing operating activities(1)	$	1,186		$	1,270		$	1,824		$	(2,661	)	$	1,619
Net cash provided by discontinued operating activities		—			—			294			—			294
Net cash provided by operating activities		1,186			1,270			2,118			(2,661	)		1,913
Cash Flows From Investing Activities:
Capital expenditures		—			—			(600	)		—			(600	)
Proceeds from sale of property, plant, and equipment		—			—			17			—			17
Acquisition of business, net of cash acquired		—			—			(1,725	)		—			(1,725	)
Proceeds from divestiture of discontinued operations, net of cash retained by sold operations		—			709			2,248			—			2,957
Change in intercompany loans		—			(1,304	)		—			1,304			—
Other		—			—			12			—			12
Net cash provided by (used in) continuing investing activities		—			(595	)		(48	)		1,304			661
Net cash used in discontinued investing activities		—			—			(25	)		—			(25	)
Net cash provided by (used in) investing activities		—			(595	)		(73	)		1,304			636
Cash Flows From Financing Activities:
Changes in parent company equity(2)		80			624			(704	)		—			—
Net decrease in commercial paper		—			(328	)		—			—			(328	)
Proceeds from issuance of long-term debt		—			617			—			—			617
Repayment of long-term debt		—			(250	)		(223	)		—			(473	)
Proceeds from exercise of share options		—			—			103			—			103
Repurchase of common shares		(916	)		—			(107	)		—			(1,023	)
Payment of common share dividends to shareholders		(515	)		—			13			—			(502	)
Intercompany distributions(1)		—			(1,335	)		(1,326	)		2,661			—
Loan activity with parent		165			—			1,139			(1,304	)		—
Transfers from discontinued operations		—			—			269			—			269
Other		—			(4	)		4			—			—
Net cash used in continuing financing activities		(1,186	)		(676	)		(832	)		1,357			(1,337	)
Net cash used in discontinued financing activities		—			—			(269	)		—			(269	)
Net cash used in financing activities		(1,186	)		(676	)		(1,101	)		1,357			(1,606	)
Effect of currency translation on cash		—			—			(71	)		—			(71	)
Net increase (decrease) in cash and cash equivalents		—			(1	)		873			—			872
Cash and cash equivalents at beginning of fiscal year		—			1			2,456			—			2,457
Cash and cash equivalents at end of fiscal year	$	—		$	—		$	3,329		$	—		$	3,329

(1)	During fiscal 2015, other subsidiaries made distributions to TEGSA in the amount of $1,326 million and TEGSA made distributions to TE Connectivity Ltd. in the amount of $1,335 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
For the Fiscal Year Ended September 26, 2014

	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(1)	$	(296	)	$	1,829		$	2,153		$	(1,882	)	$	1,804
Net cash provided by discontinued operating activities		—			—			279			—			279
Net cash provided by (used in) operating activities		(296	)		1,829			2,432			(1,882	)		2,083
Cash Flows From Investing Activities:
Capital expenditures		—			—			(635	)		—			(635	)
Proceeds from sale of property, plant, and equipment		—			—			129			—			129
Acquisition of business, net of cash acquired		—			—			(522	)		—			(522	)
Intercompany distribution receipts(1)		—			99			—			(99	)		—
Change in intercompany loans		—			347			—			(347	)		—
Other		—			—			(10	)		—			(10	)
Net cash provided by (used in) continuing investing activities		—			446			(1,038	)		(446	)		(1,038	)
Net cash used in discontinued investing activities		—			—			(37	)		—			(37	)
Net cash provided by (used in) investing activities		—			446			(1,075	)		(446	)		(1,075	)
Cash Flows From Financing Activities:
Changes in parent company equity(2)		67			(3,259	)		3,192			—			—
Net decrease in commercial paper		—			(23	)		—			—			(23	)
Proceeds from issuance of long-term debt		—			1,322			—			—			1,322
Repayment of long-term debt		—			(303	)		(57	)		—			(360	)
Proceeds from exercise of share options		—			—			156			—			156
Repurchase of common shares		(127	)		—			(451	)		—			(578	)
Payment of common share dividends to shareholders		(452	)		—			9			—			(443	)
Intercompany distributions(1)		—			—			(1,981	)		1,981			—
Loan activity with parent		808			—			(1,155	)		347			—
Transfers from discontinued operations		—			—			242			—			242
Other		—			(11	)		2			—			(9	)
Net cash provided by (used in) continuing financing activities		296			(2,274	)		(43	)		2,328			307
Net cash used in discontinued financing activities		—			—			(242	)		—			(242	)
Net cash provided by (used in) financing activities		296			(2,274	)		(285	)		2,328			65
Effect of currency translation on cash		—			—			(19	)		—			(19	)
Net increase in cash and cash equivalents		—			1			1,053			—			1,054
Cash and cash equivalents at beginning of fiscal year		—			—			1,403			—			1,403
Cash and cash equivalents at end of fiscal year	$	—		$	1		$	2,456		$	—		$	2,457

(1)	During fiscal 2014, other subsidiaries made distributions to TEGSA in the amount of $1,981 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
For the Fiscal Year Ended September 27, 2013

	TE Connectivity Ltd.			TEGSA			Other Subsidiaries			Consolidating Adjustments			Total
	(in millions)
Cash Flows From Operating Activities:
Net cash provided by continuing operating activities(1)	$	3,621		$	1,972		$	2,058		$	(5,876	)	$	1,775
Net cash provided by discontinued operating activities		—			—			271			—			271
Net cash provided by operating activities		3,621			1,972			2,329			(5,876	)		2,046
Cash Flows From Investing Activities:
Capital expenditures		—			—			(581	)		—			(581	)
Proceeds from sale of property, plant, and equipment		1			—			21			—			22
Acquisition of business, net of cash acquired		—			—			(6	)		—			(6	)
Proceeds from divestiture of discontinued operations, net of cash retained by sold operations		—			—			14			—			14
Intercompany distribution receipts(1)		—			1,100			—			(1,100	)		—
Change in intercompany loans		—			1,566			—			(1,566	)		—
Other		(3	)		—			26			—			23
Net cash provided by (used in) continuing investing activities		(2	)		2,666			(526	)		(2,666	)		(528	)
Net cash used in discontinued investing activities		—			—			(17	)		—			(17	)
Net cash provided by (used in) investing activities		(2	)		2,666			(543	)		(2,666	)		(545	)
Cash Flows From Financing Activities:
Changes in parent company equity(2)		(826	)		(174	)		1,000			—			—
Net increase in commercial paper		—			50			—			—			50
Repayment of long-term debt		—			(714	)		—			—			(714	)
Proceeds from exercise of share options		—			—			214			—			214
Repurchase of common shares		(602	)		—			(242	)		—			(844	)
Payment of common share dividends and cash distributions to shareholders		(391	)		—			7			—			(384	)
Intercompany distributions(1)		—			(3,800	)		(3,176	)		6,976			—
Loan activity with parent		(1,800	)		—			234			1,566			—
Transfers from discontinued operations		—			—			254			—			254
Net cash used in continuing financing activities		(3,619	)		(4,638	)		(1,709	)		8,542			(1,424	)
Net cash used in discontinued financing activities		—			—			(254	)		—			(254	)
Net cash used in financing activities		(3,619	)		(4,638	)		(1,963	)		8,542			(1,678	)
Effect of currency translation on cash		—			—			(9	)		—			(9	)
Net decrease in cash and cash equivalents		—			—			(186	)		—			(186	)
Cash and cash equivalents at beginning of fiscal year		—			—			1,589			—			1,589
Cash and cash equivalents at end of fiscal year	$	—		$	—		$	1,403		$	—		$	1,403

(1)	During fiscal 2013, other subsidiaries made distributions to TEGSA in the amount of $3,176 million and TEGSA made distributions to TE Connectivity Ltd. in the amount of $3,800 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.