The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our Condensed Consolidated
Financial Statements and the accompanying notes included elsewhere in this
Quarterly Report on Form 10-Q. The following discussion may contain
forward-looking statements that reflect our plans, estimates, and beliefs. Our
actual results could differ materially from those discussed in these
forward-looking statements as a result of many factors, including but not
limited to those under the heading "Forward-Looking Information" and "Part II.
Item 1A. Risk Factors."

Our Condensed Consolidated Financial Statements have been prepared in United States ("U.S.") dollars, in accordance with accounting principles generally accepted in the U.S. ("GAAP").

The following discussion includes organic net sales growth (decline) which is a non-GAAP financial measure. See "Non-GAAP Financial Measure" for additional information regarding this measure.



                                    Overview

TE Connectivity Ltd. ("TE Connectivity" or the "Company," which may be referred
to as "we," "us," or "our") is a global industrial technology leader creating a
safer, sustainable, productive, and connected future. Our broad range of
connectivity and sensor solutions, proven in the harshest environments, enable
advancements in transportation, industrial applications, medical technology,
energy, data communications, and the home.

The second quarter and first six months of fiscal 2021 included the following:

Our net sales increased 17.0% and 14.1% in the second quarter and first six

months of fiscal 2021, respectively, as compared to the same periods of fiscal

2020 due to sales growth in the Transportation Solutions and the Communications

? Solutions segments, partially offset by sales declines in the Industrial

Solutions segment. On an organic basis, our net sales increased 11.0% and 8.6%

during the second quarter and first six months of fiscal 2021, respectively, as

compared to the same periods of fiscal 2020.

? Our net sales by segment were as follows:

Transportation Solutions-Our net sales increased 23.2% and 21.1% in the second

? quarter and first six months of fiscal 2021, respectively, with sales increases


   in all end markets.


   Industrial Solutions-Our net sales decreased 1.0% and 3.4% in the second

quarter and first six months of fiscal 2021, respectively, as a result of sales

? declines in the aerospace, defense, oil, and gas and the medical end markets,

partially offset by sales increases in the industrial equipment and the energy

end markets.

Communications Solutions-Our net sales increased 32.7% and 23.4% in the second

? quarter and first six months of fiscal 2021, respectively, due to sales

increases in both the appliances and the data and devices end markets.

? Net cash provided by operating activities was $1,220 million in the first six

months of fiscal 2021.

COVID-19 Pandemic and Economic Conditions


The COVID-19 pandemic has affected nearly all regions around the world and
resulted in business slowdowns or shutdowns and travel restrictions in affected
areas. The pandemic negatively affected our sales and operating results during
fiscal 2020 and continued to negatively affect certain of our businesses in the
first six months of fiscal 2021. We expect that

                                       21

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it will continue to have an impact on some of our businesses in the near term and may have a material impact on our financial condition, liquidity, and results of operations in future periods.



The COVID-19 pandemic is currently impacting, and we expect that it will
continue to impact, our business operations globally, causing further disruption
in our suppliers' and customers' supply chains, some of our business locations
to reduce or suspend operations, and a reduction in demand for certain products
from direct customers or end markets. In addition, the pandemic has had and may
continue to have far-reaching impacts on many additional aspects of our
operations, both directly and indirectly, including with respect to its impacts
on customer behaviors, business and manufacturing operations, inventory, our
employees, and the market generally, and the scope and nature of these impacts
continue to evolve. We will continue to assess the evolving impact of the
COVID-19 pandemic and intend to adjust our operations and businesses, a number
of which are operating as essential businesses, accordingly. Throughout our
operations, we have implemented additional health and safety measures for the
protection of our employees, including providing personal protective equipment,
enhanced cleaning and sanitizing of our facilities, and remote working
arrangements.

The extent to which the pandemic will continue to impact our business and the
markets we serve will depend on the success of, among other things, future
developments and public health advancements, including vaccine production and
distribution. We expect that the COVID-19 pandemic will continue to impact
several of the markets we serve, in particular the commercial aerospace market
in our Industrial Solutions segment; however, we expect this market to stabilize
in the second half of fiscal 2021. See "Outlook" below for additional
information regarding our expectations.

In response to the economic environment, we have taken and continue to focus on
actions to manage costs. These include restructuring and other cost reduction
initiatives, such as reducing discretionary spending, capital expenditures, and
travel. We will continue to actively monitor the situation and may take further
actions that alter our business operations as may be required by federal, state,
or local authorities or that we determine are in the best interests of our
employees, customers, suppliers, shareholders, and the communities in which

we
operate.

Outlook

In the third quarter of fiscal 2021, we expect our net sales to be approximately
$3.7 billion as compared to $2.5 billion in the third quarter of fiscal 2020.
This increase reflects sales growth in the Transportation Solutions segment and,
to a lesser degree, the Communications Solutions and Industrial Solutions
segments.

We expect diluted earnings per share from continuing operations to be
approximately $1.51 per share in the third quarter of fiscal 2021. This outlook
reflects the positive impact of foreign currency exchange rates on net sales and
earnings per share of approximately $108 million and $0.01 per share,
respectively, in the third quarter of fiscal 2021 as compared to the third
quarter of fiscal 2020.

The above outlook is based on foreign currency exchange rates that are consistent with current levels.



We are monitoring the current macroeconomic environment and its potential
effects on our customers and the end markets we serve, including developments
related to the COVID-19 pandemic. We have taken actions to manage costs and will
continue to closely manage our costs in line with economic conditions.
Additionally, we are managing our capital resources and monitoring capital
availability to ensure that we have sufficient resources to fund future capital
needs. See further discussion in "Liquidity and Capital Resources."

Acquisition


During the first six months of fiscal 2021, we acquired one business for a cash
purchase price of $106 million, net of cash acquired. The acquisition was
reported as part of our Industrial Solutions segment from the date of
acquisition. See Note 3 to the Condensed Consolidated Financial Statements for
additional information regarding acquisitions.

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                             Results of Operations

Net Sales

The following table presents our net sales and the percentage of total net sales
by segment:


                                              For the                                 For the
                                          Quarters Ended                         Six Months Ended
                                   March 26,           March 27,           March 26,           March 27,
                                     2021                2020                2021                2020

                                                              ($ in millions)
Transportation Solutions         $ 2,287    61 %     $ 1,857    58 %     $ 4,511    62 %     $ 3,725    58 %
Industrial Solutions                 952    26           962    30         1,825    25         1,889    30
Communications Solutions             499    13           376    12           924    13           749    12
Total                            $ 3,738   100 %     $ 3,195   100 %     $ 7,260   100 %     $ 6,363   100 %


The following table provides an analysis of the change in our net sales by
segment:


                                             Change in Net Sales for the Quarter Ended March 26, 2021                                      Change in

Net Sales for the Six Months Ended March 26, 2021


                                              versus Net Sales for the Quarter Ended March 27, 2020                                         versus

Net Sales for the Six Months Ended March 27, 2020

Net Sales               Organic Net Sales                             Acquisitions             Net Sales                 Organic Net Sales                             Acquisitions
                               Growth (Decline)            Growth (Decline)           Translation       (Divestiture)        Growth (Decline)              Growth (Decline)            Translation      (Divestiture)

                                                                                                                  ($ in millions)
Transportation Solutions    $      430        23.2 %    $      284        15.3 %    $           104    $            42    $      786         21.1 %    $        517         13.8 %    $         180    $             89
Industrial Solutions              (10)       (1.0)            (40)       (4.2)                   31                (1)          (64)        (3.4)             (118)        (6.3)                 52                   2
Communications Solutions           123        32.7             108        28.7                   15                  -           175         23.4               151         20.2                 24                   -
Total                       $      543        17.0 %    $      352        11.0 %    $           150    $            41    $      897         14.1 %    $        550          8.6 %    $         256    $             91


Net sales increased $543 million, or 17.0%, in the second quarter of fiscal 2021
as compared to the second quarter of fiscal 2020. The increase in net sales
resulted from organic net sales growth of 11.0%, the positive impact of foreign
currency translation of 4.7% due to the strengthening of certain foreign
currencies, and net sales contributions of 1.3% from acquisitions and a
divestiture. In the second quarter of fiscal 2021, our net sales declines in the
Industrial Solutions segment reflected significant unfavorable impacts from the
COVID-19 pandemic. Price erosion adversely affected organic net sales by
$20 million in the second quarter of fiscal 2021.

In the first six months of fiscal 2021, net sales increased $897 million, or
14.1%, as compared to the first six months of fiscal 2020 due to organic net
sales growth of 8.6%, the positive impact of foreign currency translation of
4.0% due to the strengthening of certain foreign currencies, and net sales
contributions of 1.5% from acquisitions and a divestiture. In the first six
months of fiscal 2021, our net sales declines in the Industrial Solutions
segment reflected significant unfavorable impacts from the COVID-19 pandemic.
Price erosion adversely affected organic net sales by $46 million in the first
six months of fiscal 2021.

See further discussion of net sales below under "Segment Results."

Net Sales by Geographic Region. Our business operates in three geographic
regions-Asia-Pacific, Europe/Middle East/Africa ("EMEA"), and the Americas-and
our results of operations are influenced by changes in foreign currency exchange
rates. Increases or decreases in the value of the U.S. dollar, compared to other
currencies, will directly affect our reported results as we translate those
currencies into U.S. dollars at the end of each fiscal period.

Approximately 60% of our net sales were invoiced in currencies other than the U.S. dollar in the first six months of fiscal 2021.



                                       23

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The following table presents our net sales and the percentage of total net sales
by geographic region(1):


                             For the                                 For the
                         Quarters Ended                         Six Months Ended
                  March 26,           March 27,           March 26,           March 27,
                    2021                2020                2021                2020

                                             ($ in millions)
Asia-Pacific    $ 1,336    36 %     $   991    31 %     $ 2,629    36 %     $ 2,104    33 %
EMEA              1,390    37         1,188    37         2,706    37         2,285    36
Americas          1,012    27         1,016    32         1,925    27         1,974    31
Total           $ 3,738   100 %     $ 3,195   100 %     $ 7,260   100 %     $ 6,363   100 %

(1) Net sales to external customers are attributed to individual countries based

on the legal entity that records the sale.




The following table provides an analysis of the change in our net sales by
geographic region:


                              Change in Net Sales for the Quarter Ended March 26, 2021                                Change in Net Sales for the

Six Months Ended March 26, 2021


                               versus Net Sales for the Quarter Ended March 27, 2020                                    versus Net Sales for the Six 

Months Ended March 27, 2020


                      Net Sales             Organic Net Sales                          Acquisitions            Net Sales                Organic Net Sales                          Acquisitions
                  Growth (Decline)           Growth (Decline)         Translation     (Divestiture)        Growth (Decline)             Growth (Decline)           Translation    (Divestiture)

                                                                                                ($ in millions)
Asia-Pacific    $    345         34.8 %    $     283       28.7 %    $          65    $          (3)    $      525         25.0 %    $      411         19.6 %    $         117   $          (3)
EMEA                 202         17.0             62        5.3                102                38           421         18.4             163          7.0                175               83
Americas             (4)        (0.4)              7        0.7               (17)                 6          (49)        (2.5)            (24)        (1.2)               (36)               11
Total           $    543         17.0 %    $     352       11.0 %    $         150    $           41    $      897         14.1 %    $      550          8.6 %    $         256   $           91

Cost of Sales and Gross Margin

The following table presents cost of sales and gross margin information:




                                                    For the                                    For the
                                                 Quarters Ended                           Six Months Ended
                                            March 26,      March 27,                  March 26,      March 27,
                                              2021           2020         Change         2021          2020         Change

                                                                           ($ in millions)
Cost of sales                              $     2,528    $     2,166    $    362     $    4,904    $     4,304    $    600
As a percentage of net sales                      67.6 %         67.8 %                     67.5 %         67.6 %

Gross margin                               $     1,210    $     1,029    $    181     $    2,356    $     2,059    $    297
As a percentage of net sales                      32.4 %         32.2 %                     32.5 %         32.4 %


Gross margin increased $181 million and $297 million in the second quarter and
first six months of fiscal 2021, respectively, as compared to the same periods
of fiscal 2020. The increases were primarily as a result of higher volume and,
to a lesser degree, positive foreign currency translation, lower material costs,
and improved manufacturing productivity, partially offset by price erosion.

We use a wide variety of raw materials in the manufacture of our products. Cost of sales and gross margin are subject to variability in raw material prices which continue to fluctuate for many of the raw materials we use, including copper, gold, silver, and palladium. We expect to purchase approximately 200 million pounds of copper, 120,000 troy ounces



                                       24

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of gold, 2.6 million troy ounces of silver, and 15,000 troy ounces of palladium
in fiscal 2021. The following table presents the average prices incurred related
to copper, gold, silver, and palladium:


                                  For the                       For the
                               Quarters Ended              Six Months Ended
                          March 26,      March 27,     March 26,      March 27,
             Measure        2021           2020           2021          2020
Copper            Lb.    $      2.95    $      2.78    $     2.93    $      2.81
Gold         Troy oz.          1,659          1,376         1,629          1,365
Silver       Troy oz.          20.48          16.17         20.11          16.21
Palladium    Troy oz.          2,114          2,270         2,125          2,032


Operating Expenses

The following table presents operating expense information:




                                                    For the                                   For the
                                                 Quarters Ended                           Six Months Ended
                                            March 26,      March 27,                 March 26,       March 27,
                                              2021           2020        Change         2021           2020        Change

                                                                           ($ in millions)
Selling, general, and administrative
expenses                                   $       401    $       352    $    49     $      762     $       719    $    43
As a percentage of net sales                      10.7 %         11.0 %                    10.5 %          11.3 %

Restructuring and other charges, net       $        17    $        22    $ 

 (5)     $      184     $        46    $   138
Impairment of goodwill                               -            900      (900)              -             900      (900)


Selling, General, and Administrative Expenses. Selling, general, and
administrative expenses increased $49 million and $43 million in the second
quarter and first six months of fiscal 2021, respectively, from the same periods
of fiscal 2020 primarily as a result of higher incentive compensation costs due
to improved operational performance.

Restructuring and Other Charges, Net. We are committed to continuous
productivity improvements, and we evaluate opportunities to simplify our global
manufacturing footprint, migrate facilities to lower-cost regions, reduce fixed
costs, and eliminate excess capacity. These initiatives are designed to help us
maintain our competitiveness in the industry, improve our operating leverage,
and position us for future growth.

During fiscal 2021 and 2020, we initiated restructuring programs across all
segments to optimize our manufacturing footprint and improve the cost structure
of the organization. We incurred net restructuring charges of $160 million
during the first six months of fiscal 2021, of which $153 million related to the
fiscal 2021 restructuring program. Annualized cost savings related to the fiscal
2021 actions commenced during the first six months of fiscal 2021 are expected
to be approximately $60 million and are expected to be realized by the end of
fiscal 2023. Cost savings will be reflected primarily in cost of sales and
selling, general, and administrative expenses. For fiscal 2021, we expect total
restructuring charges to be approximately $200 million and total spending, which
will be funded with cash from operations, to be approximately $230 million.

See Note 2 to the Condensed Consolidated Financial Statements for additional information regarding net restructuring and other charges.



Impairment of Goodwill. During the second quarter of fiscal 2020, we recorded a
goodwill impairment charge of $900 million related to the Sensors reporting unit
in our Transportation Solutions segment.

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  Table of Contents

Operating Income (Loss)

The following table presents operating income (loss) and operating margin
information:


                                                  For the                                   For the
                                               Quarters Ended                           Six Months Ended
                                          March 26,      March 27,                 March 26,       March 27,
                                            2021           2020        Change         2021           2020        Change

                                                                         ($ in millions)
Operating income (loss)                  $       612    $     (415)    $ 1,027     $    1,060     $        56    $ 1,004
Operating margin                                16.4 %       (13.0) %                    14.6 %           0.9 %

Operating income (loss) included the following:




                                                             For the                         For the
                                                         Quarters Ended                 Six Months Ended
                                                   March 26,        March 27,      March 26,        March 27,
                                                      2021            2020           2021              2020

                                                                          (in millions)
Acquisition-related charges:
Acquisition and integration costs                  $        6      $        12    $        14      $         19
Charges associated with the amortization of
acquisition-related fair value adjustments                  2                -              3                 -
                                                            8               12             17                19
Restructuring and other charges, net                       17              

22            184                46
Impairment of goodwill                                      -              900              -               900
Total                                              $       25      $       934    $       201      $        965

See discussion of operating income (loss) below under "Segment Results."

Non-Operating Items

The following table presents select non-operating information:




                                                    For the                                    For the
                                                 Quarters Ended                           Six Months Ended
                                            March 26,      March 27,                  March 26,       March 27,
                                              2021           2020        Change         2021            2020        Change

                                                                           ($ in millions)
Income tax expense                         $       106    $        42    $    64     $       166     $       489    $ (323)
Effective tax rate                                17.3 %       (10.2) %                     15.9 %         815.0 %


Income Taxes. See Note 12 to the Condensed Consolidated Financial Statements for
discussion of items impacting income tax expense and the effective tax rate for
the second quarters and first six months of fiscal 2021 and 2020, including the
Switzerland Federal Act on Tax Reform and AHV Financing and the termination of
the Tax Sharing Agreement in fiscal 2020.

                                       26

  Table of Contents

                                Segment Results

Transportation Solutions

Net Sales. The following table presents the Transportation Solutions segment's net sales and the percentage of total net sales by industry end market(1):




                                           For the                                  For the
                                       Quarters Ended                          Six Months Ended
                               March 26,            March 27,            March 26,           March 27,
                                  2021                 2020                2021                2020

                                                           ($ in millions)
Automotive                   $ 1,630     71 %     $ 1,365     73 %     $ 3,259    72 %     $ 2,770    74 %
Commercial transportation        382     17           294     16           713    16           552    15
Sensors                          275     12           198     11           539    12           403    11
Total                        $ 2,287    100 %     $ 1,857    100 %     $ 4,511   100 %     $ 3,725   100 %

Industry end market information is presented consistently with our internal (1) management reporting and may be revised periodically as management deems

necessary.

The following table provides an analysis of the change in the Transportation Solutions segment's net sales by industry end market:




                                            Change in Net Sales for the Quarter Ended March 26, 2021                                 Change in Net

Sales for the Six Months Ended March 26, 2021


                                             versus Net Sales for the Quarter Ended March 27, 2020                                     versus Net

Sales for the Six Months Ended March 27, 2020


                                   Net Sales              Organic Net Sales                                                  Net Sales              Organic Net Sales
                                    Growth                      Growth               Translation      Acquisition             Growth                      Growth               Translation        Acquisition

                                                                                                              ($ in millions)
Automotive                   $     265        19.4 %    $      184        13.5 %    $          81    $            -    $     489        17.7 %    $      345        12.4 %    $         144      $            -
Commercial transportation           88        29.9              73        24.8                 15                 -          161        29.2             138        24.9                 23                   -
Sensors                             77        38.9              27        13.4                  8                42          136        33.7              34         8.2                 13                  89
Total                        $     430        23.2 %    $      284        15.3 %    $         104    $           42    $     786        21.1 %    $      517        13.8 %    $         180      $           89


Net sales in the Transportation Solutions segment increased $430 million, or
23.2%, in the second quarter of fiscal 2021 from the second quarter of fiscal
2020 due to organic net sales growth of 15.3%, the positive impact of foreign
currency translation of 5.6%, and sales contributions from an acquisition of
2.3%. Our organic net sales by industry end market were as follows:

Automotive-Our organic net sales increased 13.5% in the second quarter of

fiscal 2021 with increases of 28.3% in the Asia-Pacific region, 5.9% in the

? Americas region, and 4.9% in the EMEA region. Our growth in the Asia-Pacific

and EMEA regions resulted from increases in automotive production as well as

content gains. Our growth in the Americas region was due primarily to content

gains.

Commercial transportation-Our organic net sales increased 24.8% in the second

? quarter of fiscal 2021 with growth across all regions as a result of market

growth and content gains.

? Sensors-Our organic net sales increased 13.4% in the second quarter of fiscal

2021 due to strength across all markets.




In the first six months of fiscal 2021, net sales in the Transportation
Solutions segment increased $786 million, or 21.1%, as compared to the first six
months of fiscal 2020 as a result of organic net sales growth of 13.8%, the
positive impact of foreign currency translation of 4.9%, and sales contributions
from an acquisition of 2.4%. Our organic net sales by industry end market were
as follows:

Automotive-Our organic net sales increased 12.4% in the first six months of

? fiscal 2021 with increases of 18.8% in the Asia-Pacific region, 8.7% in the


   EMEA region, and 7.2% in the Americas region. Our growth in


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  Table of Contents

the Asia-Pacific and EMEA regions was attributable to increases in automotive

production and content gains. In the Americas region, our growth was primarily a

result of content gains.

Commercial transportation-Our organic net sales increased 24.9% in the first

? six months of fiscal 2021 due to growth across all regions resulting from

market growth and content gains.

? Sensors-Our organic net sales increased 8.2% in the first six months of fiscal

2021 as a result of strength across all markets.




Operating Income (Loss). The following table presents the Transportation
Solutions segment's operating income (loss) and operating margin information:


                                                   For the                                    For the
                                                Quarters Ended                            Six Months Ended
                                           March 26,      March 27,                  March 26,        March 27,
                                             2021           2020        Change          2021            2020         Change

                                                                           ($ in millions)
Operating income (loss)                   $       398    $     (606)    $ 1,004     $        706     $     (290)    $    996
Operating margin                                 17.4 %       (32.6) %                      15.7 %         (7.8) %


Operating income (loss) in the Transportation Solutions segment increased $1,004
million and $996 million in the second quarter and first six months of fiscal
2021, respectively, as compared to the same periods of fiscal 2020. Excluding
the items below, operating income (loss) increased primarily as a result of

higher volume.


                                                       For the                         For the
                                                   Quarters Ended                 Six Months Ended
                                             March 26,        March 27,      March 26,        March 27,
                                                2021            2020           2021              2020

                                                                    (in millions)
Acquisition-related charges:

Acquisition and integration costs            $        3      $        10    $         7      $         15
Charges associated with the amortization
of acquisition-related fair value
adjustments                                           2                -              3                 -
                                                      5               10             10                15
Restructuring and other charges, net                 10               18            128                22
Impairment of goodwill                                -              900   

          -               900
Total                                        $       15      $       928    $       138      $        937


Industrial Solutions

Net Sales. The following table presents the Industrial Solutions segment's net sales and the percentage of total net sales by industry end market(1):




                                                For the                                For the
                                            Quarters Ended                        Six Months Ended
                                     March 26,          March 27,           March 26,           March 27,
                                        2021               2020               2021                2020

                                                                ($ in millions)

Aerospace, defense, oil, and gas $ 267 28 % $ 318 33 % $


  517    28 %     $   627    33 %
Industrial equipment                   339    36          280    29           634    35           543    29
Medical                                161    17          186    19           317    17           365    19
Energy                                 185    19          178    19           357    20           354    19
Total                               $  952   100 %     $  962   100 %     $ 1,825   100 %     $ 1,889   100 %

Industry end market information is presented consistently with our internal (1) management reporting and may be revised periodically as management deems


    necessary.


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  Table of Contents

The following table provides an analysis of the change in the Industrial Solutions segment's net sales by industry end market:




                                        Change in Net Sales for the Quarter Ended March 26, 2021                                       Change in Net 

Sales for the Six Months Ended March 26, 2021


                                         versus Net Sales for the Quarter Ended March 27, 2020                                           versus Net 

Sales for the Six Months Ended March 27, 2020

Net Sales                 Organic Net Sales                             Acquisition              Net Sales                  Organic Net Sales                             Acquisition
                          Growth (Decline)              Growth (Decline)          Translation       (Divestiture)         Growth (Decline)               Growth (Decline)           Translation       (Divestiture)

                                                                                                             ($ in millions)
Aerospace,
defense, oil, and
gas                   $     (51)        (16.0) %    $     (66)        (20.8) %   $            7    $             8    $     (110)        (17.5) %    $     (134)        (21.4) %   $           13    $            11
Industrial
equipment                     59          21.1              44          15.7                 15                  -             91          16.8               65          11.8                 26                  -
Medical                     (25)        (13.4)            (25)        (13.4)                  -                  -           (48)        (13.2)             (49)        (13.5)                  1                  -
Energy                         7           3.9               7           4.0                  9                (9)              3           0.8                -           0.1                 12                (9)
Total                 $     (10)         (1.0) %    $     (40)         (4.2) %   $           31    $           (1)    $      (64)         (3.4) %    $     (118)         (6.3) %   $           52    $             2


In the Industrial Solutions segment, net sales decreased $10 million, or 1.0%,
in the second quarter of fiscal 2021 as compared to the second quarter of fiscal
2020 due primarily to organic net sales declines of 4.2%, partially offset by
the positive impact of foreign currency translation of 3.2%. Net sales in the
second quarter of fiscal 2021 included significant unfavorable impacts from the
COVID-19 pandemic. Our organic net sales by industry end market were as follows:

Aerospace, defense, oil, and gas-Our organic net sales decreased 20.8% in the

? second quarter of fiscal 2021 due primarily to reduced demand in the commercial

aerospace market.

Industrial equipment-Our organic net sales increased 15.7% in the second

? quarter of fiscal 2021 due to growth in all regions primarily as a result of

strength in factory automation and controls applications.

? Medical-Our organic net sales decreased 13.4% in the second quarter of fiscal

2021 due primarily to continued delays in elective procedures.

? Energy-Our organic net sales increased 4.0% in the second quarter of fiscal

2021 primarily as a result of growth in solar applications.




In the first six months of fiscal 2021, net sales in the Industrial Solutions
segment decreased $64 million, or 3.4%, as compared to the first six months of
fiscal 2020 primarily as a result of organic net sales declines of 6.3%,
partially offset by the positive impact of foreign currency translation of 2.8%.
Our net sales declines reflected significant unfavorable impacts of the COVID-19
pandemic in the first six months of fiscal 2021. Our organic net sales by
industry end market were as follows:

Aerospace, defense, oil, and gas-Our organic net sales decreased 21.4% in the

? first six months of fiscal 2021 primarily as a result of reduced demand in the

commercial aerospace market.

Industrial equipment-Our organic net sales increased 11.8% in the first six

? months of fiscal 2021 with growth in all regions due primarily to strength in

factory automation and controls applications.

? Medical-Our organic net sales decreased 13.5% in the first six months of fiscal


   2021 primarily as a result of continued delays in elective procedures.

Energy-Our organic net sales were flat in the first six months of fiscal 2021

? with growth in the Americas region primarily attributable to strength in solar


   applications, offset by declines in the EMEA region.


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  Table of Contents

Operating Income. The following table presents the Industrial Solutions segment's operating income and operating margin information:




                                                    For the                                   For the
                                                 Quarters Ended                           Six Months Ended
                                            March 26,      March 27,                 March 26,       March 27,
                                              2021           2020        Change         2021           2020        Change

                                                                           ($ in millions)
Operating income                           $       111    $       142    $  (31)     $      187     $       257    $  (70)
Operating margin                                  11.7 %         14.8 %                    10.2 %          13.6 %

Operating income in the Industrial Solutions segment decreased $31 million and $70 million in the second quarter and first six months of fiscal 2021, respectively, as compared to the same periods of fiscal 2020. Excluding the items below, operating income decreased due primarily to lower volume.




                                                         For the                         For the
                                                     Quarters Ended                  Six Months Ended
                                               March 26,         March 27,      March 26,       March 27,
                                                 2021               2020           2021            2020

                                                                     (in

millions)


Acquisition and integration costs            $           3      $          2    $        7      $        4
Restructuring and other charges, net                     5                

1            43              16
Total                                        $           8      $          3    $       50      $       20


Communications Solutions

Net Sales. The following table presents the Communications Solutions segment's net sales and the percentage of total net sales by industry end market(1):




                                For the                               For the
                            Quarters Ended                       Six Months Ended
                     March 26,          March 27,          March 26,          March 27,
                        2021               2020               2021               2020

                                               ($ in millions)
Data and devices    $  278    56 %     $  218    58 %     $  512    55 %     $  437    58 %
Appliances             221    44          158    42          412    45          312    42
Total               $  499   100 %     $  376   100 %     $  924   100 %     $  749   100 %

Industry end market information is presented consistently with our internal (1) management reporting and may be revised periodically as management deems

necessary.

The following table provides an analysis of the change in the Communications Solutions segment's net sales by industry end market:




                                            Change in Net Sales for the Quarter Ended March 26, 2021                          Change in Net Sales

for the Six Months Ended March 26, 2021


                                              versus Net Sales for the Quarter Ended March 27, 2020                            versus Net Sales

for the Six Months Ended March 27, 2020


                                          Net Sales                   Organic Net Sales                                     Net Sales            

Organic Net Sales


                                           Growth                          Growth                  Translation               Growth                            Growth                   Translation

                                                                                                           ($ in millions)
Data and devices                  $        60          27.5 %     $        52          24.0 %     $           8    $         75           17.2 %     $         62           14.4 %     $          13
Appliances                                 63          39.9                56          35.3                   7             100           32.1                 89           28.3                  11
Total                             $       123          32.7 %     $       108          28.7 %     $          15    $        175           23.4 %     $        151           20.2 %     $          24


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Net sales in the Communications Solutions segment increased $123 million, or
32.7%, in the second quarter of fiscal 2021 as compared to the second quarter of
fiscal 2020 due primarily to organic net sales growth of 28.7%. Our organic net
sales by industry end market were as follows:

Data and devices-Our organic net sales increased 24.0% in the second quarter of

? fiscal 2021 primarily as a result of market strength as well as market share

gains and content growth in high-speed cloud applications.

Appliances-Our organic net sales increased 35.3% in the second quarter of

? fiscal 2021 due to sales growth in all regions primarily attributable to market

improvements and market share gains.

In the first six months of fiscal 2021, net sales in the Communications Solutions segment increased $175 million, or 23.4%, as compared to the first six months of fiscal 2020 primarily as a result of organic net sales growth of 20.2%. Our organic net sales by industry end market were as follows:

Data and devices-Our organic net sales increased 14.4% in the first six months

? of fiscal 2021 due primarily to market strength as well as market share gains

and content growth in high-speed cloud applications.

Appliances-Our organic net sales increased 28.3% in the first six months of

? fiscal 2021 as a result of sales growth in all regions due primarily to market

improvements and market share gains.

Operating Income. The following table presents the Communications Solutions segment's operating income and operating margin information:




                                                    For the                                   For the
                                                 Quarters Ended                           Six Months Ended
                                            March 26,      March 27,                 March 26,       March 27,
                                              2021           2020        Change         2021           2020        Change

                                                                           ($ in millions)
Operating income                           $       103    $        49    $    54     $      167     $        89    $    78
Operating margin                                  20.6 %         13.0 %                    18.1 %          11.9 %


Operating income in the Communications Solutions segment increased $54 million
and $78 million in the second quarter and first six months of fiscal 2021,
respectively, as compared to the same periods of fiscal 2020. Excluding the item
below, operating income increased due primarily to higher volume and improved
manufacturing productivity.


                                                         For the                            For the
                                                     Quarters Ended                     Six Months Ended
                                               March 26,         March 27,       March 26,          March 27,
                                                 2021               2020           2021                2020

                                                                        (in

millions)


Restructuring and other charges, net         $           2      $         

3    $        13       $            8






                        Liquidity and Capital Resources

Our ability to fund our future capital needs will be affected by our ongoing
ability to generate cash from operations and may be affected by our access to
capital markets, money markets, or other sources of funding, as well as the
capacity and terms of our financing arrangements. We believe that cash generated
from operations and, to the extent necessary, these other sources of potential
funding will be sufficient to meet our anticipated capital needs for the
foreseeable future, including the payment of €350 million of fixed-to-floating
rate senior notes due in June 2021 and $500 million of 3.50% senior notes due in
February 2022. We may use excess cash to purchase a portion of our common shares
pursuant to our authorized share repurchase program, to acquire strategic
businesses or product lines, to pay dividends on our common shares, or to reduce
our outstanding debt. The cost or availability of future funding may be impacted
by financial market conditions. We will continue to monitor financial markets
and respond as necessary to changing conditions, including future developments
related to the COVID-19 pandemic. There is continued uncertainty surrounding the
duration and scope of the pandemic and it may have a material impact on our
liquidity and financial conditions. We believe that we have sufficient financial
resources and liquidity

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which, along with managing expenses and capital structure flexibility, will enable us to meet our ongoing working capital and other cash flow needs during the COVID-19 pandemic and resulting period of economic uncertainty.

Cash Flows from Operating Activities



In the first six months of fiscal 2021, net cash provided by operating
activities increased $328 million to $1,220 million from $892 million in the
first six months of fiscal 2020. The increase resulted primarily from higher
pre-tax income levels and improved working capital. The amount of income taxes
paid, net of refunds, during the first six months of fiscal 2021 and 2020 was
$181 million and $144 million, respectively.

Cash Flows from Investing Activities



Capital expenditures were $284 million and $309 million in the first six months
of fiscal 2021 and 2020, respectively. We expect fiscal 2021 capital spending
levels to be approximately 4-5% of net sales. We believe our capital funding
levels are adequate to support new programs, and we continue to invest in our
manufacturing infrastructure to further enhance productivity and manufacturing
capabilities.

During the first six months of fiscal 2021, we acquired one business for a cash
purchase price of $106 million, net of cash acquired. We acquired four
businesses, including First Sensor AG, for a combined cash purchase price of
$356 million, net of cash acquired, during the first six months of 2020. See
Note 3 to the Condensed Consolidated Financial Statements for additional
information regarding acquisitions.

Cash Flows from Financing Activities and Capitalization

Total debt at March 26, 2021 and September 25, 2020 was $4,521 million and $4,146 million, respectively. See Note 7 to the Condensed Consolidated Financial Statements for additional information regarding debt.



In the second quarter of fiscal 2021, Tyco Electronics Group S.A. ("TEGSA"), our
wholly-owned subsidiary, issued €550 million aggregate principal amount of 0.00%
senior notes due in February 2029. The notes are TEGSA's unsecured senior
obligations and rank equally in right of payment with all existing and any
future senior indebtedness of TEGSA and senior to any subordinated indebtedness
that TEGSA may incur.

TEGSA has a five-year unsecured senior revolving credit facility ("Credit
Facility") with a maturity date of November 2023 and total commitments of $1.5
billion. TEGSA had no borrowings under the Credit Facility at March 26, 2021 or
September 25, 2020.

The Credit Facility contains a financial ratio covenant providing that if, as of
the last day of each fiscal quarter, our ratio of Consolidated Total Debt to
Consolidated EBITDA (as defined in the Credit Facility) for the then most
recently concluded period of four consecutive fiscal quarters exceeds 3.75 to
1.0, an Event of Default (as defined in the Credit Facility) is triggered. The
Credit Facility and our other debt agreements contain other customary covenants.
None of our covenants are presently considered restrictive to our operations. As
of March 26, 2021, we were in compliance with all of our debt covenants and
believe that we will continue to be in compliance with our existing covenants
for the foreseeable future.

In addition to the Credit Facility, TEGSA is the borrower under our senior notes
and commercial paper. TEGSA's payment obligations under its senior notes,
commercial paper, and Credit Facility are fully and unconditionally guaranteed
on an unsecured basis by its parent, TE Connectivity Ltd.

Payments of common share dividends to shareholders were $318 million and $307 million in the first six months of fiscal 2021 and 2020, respectively.



We repurchased approximately 3 million of our common shares for $309 million and
approximately 5 million of our common shares for $423 million under the share
repurchase program during the first six months of fiscal 2021 and 2020,
respectively. At March 26, 2021, we had $686 million of availability remaining
under our share repurchase authorization.



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  Table of Contents

Summarized Guarantor Financial Information


As discussed above, our senior notes, commercial paper, and Credit Facility are
issued by TEGSA and are fully and unconditionally guaranteed on an unsecured
basis by TEGSA's parent, TE Connectivity Ltd. In addition to being the issuer of
our debt securities, TEGSA owns, directly or indirectly, all of our operating
subsidiaries. The following tables present summarized financial information,
excluding investments in and equity in earnings of our non-guarantor
subsidiaries, for TE Connectivity Ltd. and TEGSA on a combined basis.


                                    March 26,      September 25,
                                      2021             2020

                                           (in millions)
Balance Sheet Data:
Total current assets               $       120    $           134
Total noncurrent assets(1)               3,130              3,282

Total current liabilities                1,761              1,237
Total noncurrent liabilities(2)         23,685             23,549


Includes $3,118 million and $3,275 million as of March 26, 2021 and September

(1) 25, 2020, respectively, of intercompany loans receivable from non-guarantor

subsidiaries.

Includes $20,050 million and $20,016 million as of March 26, 2021 and

(2) September 25, 2020, respectively, of intercompany loans payable to


     non-guarantor subsidiaries.



                                        For the                For the
                                    Six Months Ended      Fiscal Year Ended
                                       March 26,            September 25,
                                          2021                  2020

                                                 (in millions)
Statement of Operations Data:
Loss from continuing operations    $            (141)    $             (206)
Net loss                                        (134)                  (202)




                         Commitments and Contingencies

Legal Proceedings

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

Trade Compliance Matters


We are investigating our past compliance with relevant U.S. trade controls and
have made voluntary disclosures of apparent trade controls violations to the
U.S. Department of Commerce's Bureau of Industry and Security ("BIS") and the
U.S. State Department's Directorate of Defense Trade Controls ("DDTC"). We are
cooperating with the BIS and DDTC on these matters, and both our internal
assessment and the resulting investigations by the agencies remain ongoing. We
are unable to predict the timing and final outcome of the agencies'
investigations. An unfavorable outcome may include fines or penalties imposed in
response to our disclosures, but we are not yet able to reasonably estimate the
extent of any such fines or penalties. While we have reserved for potential
fines and penalties relating to these matters based on our current understanding
of the facts, the investigations into these matters have yet to be completed and
the final outcome of such investigations and related fines and penalties may
differ from amounts currently reserved.

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  Table of Contents

Guarantees

In certain instances, we have guaranteed the performance of third parties and
provided financial guarantees for uncompleted work and financial commitments.
The terms of these guarantees vary with end dates ranging from fiscal 2021
through the completion of such transactions. The guarantees would be triggered
in the event of nonperformance, and the potential exposure for nonperformance
under the guarantees would not have a material effect on our results of
operations, financial position, or cash flows.

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

At March 26, 2021, we had outstanding letters of credit, letters of guarantee, and surety bonds of $157 million, excluding those related to our Subsea Communications ("SubCom") business which are discussed below.



During fiscal 2019, we sold our SubCom business. In connection with the sale, we
contractually agreed to continue to honor performance guarantees and letters of
credit related to the SubCom business' projects that existed as of the date of
sale. These performance guarantees and letters of credit had a combined value of
approximately $130 million as of March 26, 2021 and are expected to expire at
various dates through fiscal 2025. During the second quarter of fiscal 2021, we
amended our agreement with SubCom and removed the requirement to issue new
performance guarantees. We have contractual recourse against the SubCom business
if we are required to perform on any SubCom guarantees; however, based on
historical experience, we do not anticipate having to perform.

                   Critical Accounting Policies and Estimates

The preparation of the Condensed Consolidated Financial Statements in conformity
with GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent assets
and liabilities, and the reported amounts of revenue and expenses.

Our accounting policies for revenue recognition, goodwill and other intangible
assets, income taxes, and pension are based on, among other things, judgments
and assumptions made by management. For additional information regarding these
policies and the underlying accounting assumptions and estimates used in these
policies, refer to the Consolidated Financial Statements and accompanying notes
contained in our Annual Report on Form 10-K for the fiscal year ended September
25, 2020. There were no significant changes to this information during the first
six months of fiscal 2021.

                           Non-GAAP Financial Measure

Organic Net Sales Growth (Decline)



We present organic net sales growth (decline) as we believe it is appropriate
for investors to consider this adjusted financial measure in addition to results
in accordance with GAAP. Organic net sales growth (decline) represents net sales
growth (decline) (the most comparable GAAP financial measure) excluding the
impact of foreign currency exchange rates, and acquisitions and divestitures
that occurred in the preceding twelve months, if any. Organic net sales growth
(decline) is a useful measure of our performance because it excludes items that
are not completely under management's control, such as the impact of changes in
foreign currency exchange rates, and items that do not reflect the underlying
growth of the company, such as acquisition and divestiture activity.

Organic net sales growth (decline) provides useful information about our results
and the trends of our business. Management uses this measure to monitor and
evaluate performance. Also, management uses this measure together with GAAP
financial measures in its decision-making processes related to the operations of
our reportable segments and our overall company. It is also a significant
component in our incentive compensation plans. We believe that investors benefit
from having access to the same financial measures that management uses in
evaluating operations. The tables presented in

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Table of Contents

"Results of Operations" and "Segment Results" provide reconciliations of organic net sales growth (decline) to net sales growth (decline) calculated in accordance with GAAP.



Organic net sales growth (decline) is a non-GAAP financial measure and should
not be considered a replacement for results in accordance with GAAP. This
non-GAAP financial measure may not be comparable to similarly-titled measures
reported by other companies. The primary limitation of this measure is that it
excludes the financial impact of items that would otherwise either increase or
decrease our reported results. This limitation is best addressed by using
organic net sales growth (decline) in combination with net sales growth
(decline) to better understand the amounts, character, and impact of any
increase or decrease in reported amounts.

                          Forward-Looking Information

Certain statements in this Quarterly Report on Form 10-Q are "forward-looking
statements" within the meaning of the U.S. Private Securities Litigation Reform
Act of 1995. These statements are based on our management's beliefs and
assumptions and on information currently available to our management.
Forward-looking statements include, among others, the information concerning our
possible or assumed future results of operations, business strategies, financing
plans, competitive position, potential growth opportunities, potential operating
performance improvements, acquisitions, divestitures, the effects of
competition, and the effects of future legislation or regulations.
Forward-looking statements include all statements that are not historical facts
and can be identified by the use of forward-looking terminology such as the
words "believe," "expect," "plan," "intend," "anticipate," "estimate,"
"predict," "potential," "continue," "may," and "should," or the negative of
these terms or similar expressions.

Forward-looking statements involve risks, uncertainties, and assumptions. Actual
results may differ materially from those expressed in these forward-looking
statements. Investors should not place undue reliance on any forward-looking
statements. We do not have any intention or obligation to update forward-looking
statements after we file this report except as required by law.

The following and other risks, which are described in greater detail in "Part I.

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