TE Connectivity Annual Report 2022

FY2022 Annual Report · TE Connectivity

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TE CONNECTIVITY
2022 ANNUAL REPORT

TOGETHER,
LET’S ENGINEER
THE FUTURE.

CORPORATE DATA

REGISTERED & PRINCIPAL
EXECUTIVE OFFICE
TE Connectivity Ltd.
Mühlenstrasse 26
CH-8200 Schaffhausen
Switzerland
+41.0.52.633.66.61

INDEPENDENT AUDITORS
Deloitte & Touche LLP
1700 Market Street
Philadelphia, PA 19103

Deloitte AG
Pfingstweidstrasse 11
8005 Zurich
Switzerland

STOCK EXCHANGE
The company’s common shares are traded on the New York
Stock Exchange (NYSE) under the ticker symbol TEL.

FORM 10-K
Copies of the company’s Annual Report on Form 10-K for
the fiscal year ended September 30, 2022 may be obtained
by shareholders without charge upon written request to:
TE Connectivity Ltd.
Mühlenstrasse 26
CH-8200 Schaffhausen
Switzerland
The Annual Report on Form 10-K is also available on the
company’s website at www.te.com.

SHAREHOLDER SERVICES
Registered shareholders (shares held in your own name
with our transfer agent) with requests such as change
of address or dividend checks should contact
TE Connectivity’s transfer agent at:
Equiniti Shareowner Services
1110 Centre Pointe Curve, Suite 101
Mendota Heights, MN 55120-4100
866.258.4745
www.shareowneronline.com

Beneficial shareholders (shares held with a bank or broker)
should contact the bank or brokerage holding their shares
with their requests. Other shareholder inquiries may be
directed to TE Connectivity Shareholder Services at the
company’s registered and principal executive office above.

www.te.com

“TE Connectivity” and “TE Connectivity (logo)” are trademarks. This report further contains other trademarks
of ours and additional trade names and trademarks of other companies that are not owned by TE Connectivity.
We do not intend our use or display of other companies’ trade names or trademarks to imply an endorsement or
sponsorship of us by such companies, or any relationship with any of these companies.

TE CONNECTIVITY LTD.
ANNUAL REPORT
TABLE OF CONTENTS

Business

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Quantitative and Qualitative Disclosures About Market Risk

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Controls and Procedures

Consolidated Financial Statements

Swiss Statutory Financial Statements

Swiss Statutory Compensation Report

Page

SPECIAL NOTE ABOUT FORWARD - LOOKING STATEMENTS

We have made forward - looking statements in this Annual Report that 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 also
include statements addressing our environmental, social, governance, and sustainability plans and goals. Such statements are
“forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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,” “aspire,” “estimate,” “predict,” “potential,” “goal,”
“target,” “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 risk factors discussed in this Annual Report and those discussed in our Annual Report on Form 10-K for the

fiscal year ended September 30, 2022 filed with the United States (“U.S.”) Securities and Exchange Commission (the “SEC”)
could cause our results to differ materially from those expressed in forward - looking statements. There may be other risks and
uncertainties that we are unable to predict at this time or that we currently do not expect to have a material adverse effect on
our business.

“TE Connectivity” and “TE Connectivity (logo)” are trademarks. This report further contains other trademarks of ours and
additional trade names and trademarks of other companies that are not owned by TE Connectivity. We do not intend our use
or display of other companies’ trade names or trademarks to imply an endorsement or sponsorship of us by such companies,
or any relationship with any of these companies.

BUSINESS

General

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.

We became an independent, publicly traded company in 2007; however, through our predecessor companies, we

trace our foundations in the connectivity business back to 1941. We are organized under the laws of Switzerland. The rights
of holders of our shares are governed by Swiss law, our Swiss articles of association, and our Swiss organizational
regulations.

We have a 52- or 53-week fiscal year that ends on the last Friday of September. Fiscal 2022 was 53 weeks in length
and ended on September 30, 2022; fiscal 2021 and 2020 were each 52 weeks in length and ended on September 24, 2021 and
September 25, 2020, respectively. For fiscal years in which there are 53 weeks, the fourth fiscal quarter includes 14 weeks.

Segments

We operate through three reportable segments: Transportation Solutions, Industrial Solutions, and Communications

Solutions. Overall, our markets have returned to levels similar to those prior to the COVID-19 pandemic. As of fiscal year
end 2022, we believe our three segments serve a combined market of approximately $200 billion.

Our net sales by segment as a percentage of our total net sales were as follows:

Transportation Solutions
Industrial Solutions
Communications Solutions

Total

Fiscal
2022 2021 2020
60 % 56 %
26
14
100 % 100 % 100 %

56 %
28
16

31
13

Below is a description of our reportable segments and the primary products, markets, and competitors of each

segment.

Transportation Solutions

The Transportation Solutions segment is a leader in connectivity and sensor technologies. The primary products sold
by the Transportation Solutions segment include terminals and connector systems and components, sensors, relays, antennas,
and application tooling. The Transportation Solutions segment’s products, which must withstand harsh conditions, are used in
the following end markets:

• Automotive (71% of segment’s net sales)—We are one of the leading providers of advanced automobile

connectivity solutions. The automotive industry uses our products in automotive technologies for body and
chassis systems, convenience applications, driver information, infotainment solutions, miniaturization solutions,
motor and powertrain applications, and safety and security systems. Hybrid and electronic mobility solutions
include in - vehicle technologies, battery technologies, and charging solutions.

• Commercial transportation (17% of segment’s net sales)—We deliver reliable connectivity products designed to
withstand harsh environmental conditions for on- and off - highway vehicles and recreational transportation,
including heavy trucks, construction, agriculture, buses, and other vehicles.

•

Sensors (12% of segment’s net sales)—We offer a portfolio of intelligent, efficient, and high - performing sensor
solutions that are used by customers across multiple industries, including automotive, industrial equipment,
commercial transportation, medical solutions, aerospace and defense, and consumer applications.

The Transportation Solutions segment’s major competitors include Yazaki, Aptiv, Sumitomo, Sensata, Honeywell,

Molex, and Amphenol.

Industrial Solutions

The Industrial Solutions segment is a leading supplier of products that connect and distribute power, data, and

signals. The primary products sold by the Industrial Solutions segment include terminals and connector systems and
components, interventional medical components, relays, heat shrink tubing, and wire and cable. The Industrial Solutions
segment’s products are used in the following end markets:

•

Industrial equipment (43% of segment’s net sales)—Our products are used in factory and warehouse automation
and process control systems such as industrial controls, robotics, human machine interface, industrial
communication, and power distribution. Our building automation and smart city infrastructure products are used
to connect lighting and offer solutions in HVAC, elevators/escalators, and security. Our rail products are used in
high - speed trains, metros, light rail vehicles, locomotives, and signaling switching equipment.

• Aerospace, defense, and marine (24% of segment’s net sales)—We design, develop, and manufacture a

comprehensive portfolio of critical electronic components and systems for the harsh operating conditions of the
commercial aerospace, defense, and marine industries. Our products and systems are designed and
manufactured to operate effectively in harsh conditions ranging from the depths of the ocean to the far reaches
of space.

• Energy (18% of segment’s net sales)—Our products are used by electric power utilities, OEMs, and engineering
procurement construction companies serving the electrical power grid and renewables industries. They include a
wide range of insulation, protection, and connection solutions for electrical power generation, transmission,
distribution, and industrial markets.

• Medical (15% of segment’s net sales)—Our products are used in imaging, diagnostic, surgical, and minimally
invasive interventional applications. We specialize in the design and manufacture of advanced surgical,
imaging, and interventional device solutions. Key markets served include cardiovascular, peripheral vascular,
structural heart, endoscopy, electrophysiology, and neurovascular therapies.

The Industrial Solutions segment competes primarily against Amphenol, Hubbell, Carlisle Companies, Integer

Holdings, Esterline, Molex, and Omron.

Communications Solutions

The Communications Solutions segment is a leading supplier of electronic components for the data and devices and

the appliances markets. The primary products sold by the Communications Solutions segment include terminals and
connector systems and components, relays, antennas, and heat shrink tubing. The Communications Solutions segment’s
products are used in the following end markets:

• Data and devices (62% of segment’s net sales)—We deliver products and solutions that are used in a variety of
equipment architectures within the networking equipment, data center equipment, and wireless infrastructure
industries. Additionally, we deliver a range of connectivity solutions for the Internet of Things, smartphones,
tablet computers, notebooks, virtual reality, and artificial intelligence applications to help our customers meet
their current challenges and future innovations.

• Appliances (38% of segment’s net sales)—We provide solutions to meet the daily demands of home appliances.
Our products are used in many household appliances, including washers, dryers, refrigerators, air conditioners,
dishwashers, cooking appliances, water heaters, air purifiers, floor care devices, and microwaves. Our
expansive range of standard products is supplemented by an array of custom - designed solutions.

The Communications Solutions segment’s major competitors include Amphenol, Molex, JST, and Korea Electric

Terminal (KET).

Customers

As an industry leader, we have established close working relationships with many of our customers. These

relationships allow us to better anticipate and respond to customer needs when designing new products and new technical
solutions. By working with our customers in developing new products and technologies, we believe we can identify and act
on trends and leverage knowledge about next - generation technology across our products.

Our approach to our customers is driven by our dedication to further develop our product families and ensure that
we are globally positioned to best provide our customers with sales and engineering support. We believe that as electronic
component technologies continue to proliferate, our broad product portfolio and engineering capability give us a potential
competitive advantage when addressing the needs of our global customers.

We manufacture and sell a broad portfolio of products to customers in various industries. Our customers include

many of the leaders in their respective industries, and our relationships with them typically date back many years. We believe
that our diversified customer base provides us an opportunity to leverage our skills and experience across markets and reduce
our exposure to individual end markets, thereby reducing the variability of our financial performance. Additionally, we
believe that the diversity of our customer base reduces the level of cyclicality in our results and distinguishes us from our
competitors.

No single customer accounted for a significant amount of our net sales in fiscal 2022, 2021, or 2020.

Sales and Distribution

We maintain a strong local presence in each of the geographic regions in which we operate. Our net sales by

geographic region(1) as a percentage of our total net sales were as follows:

Asia–Pacific
Europe/Middle East/Africa (“EMEA”)
Americas
Total

Fiscal
2022 2021 2020
36 % 35 %
37
27
100 % 100 % 100 %

35 %
35
30

35
30

(1)

Net sales to external customers are attributed to individual countries based on the legal entity
that records the sale.

We sell our products into approximately 140 countries primarily through direct selling efforts to manufacturers. In

fiscal 2022, our direct sales represented approximately 75% of total net sales. We also sell our products indirectly via
third - party distributors.

We maintain distribution centers around the world. Products are generally delivered to the distribution centers by

our manufacturing facilities and then subsequently delivered to the customer. In some instances, however, products are
delivered directly from our manufacturing facility to the customer. Our global coverage positions us near our customers’
locations and allows us to assist them in consolidating their supply base and lowering their production costs. We contract
with a wide range of transport providers to deliver our products globally via road, rail, sea, and air. We believe our balanced
sales distribution lowers our exposure to any particular geography and improves our financial profile.

Seasonality and Backlog

Typically, we experience a slight seasonal pattern to our business. Overall, the third and fourth fiscal quarters are

usually the strongest quarters of our fiscal year, whereas the first fiscal quarter is negatively affected by holidays and the
second fiscal quarter may be affected by adverse winter weather conditions in some of our markets.

Certain of our end markets experience some seasonality. Our sales in the automotive market are dependent upon
global automotive production, and seasonal declines in European production may negatively impact net sales in the fourth
fiscal quarter. Also, our sales in the energy market typically increase in the third and fourth fiscal quarters as customer
activity increases.

Customer orders and demand may fluctuate as a result of economic and market conditions, including the impacts of

the COVID-19 pandemic, supply chain disruptions, and inflationary cost pressures. Backlog by reportable segment was as
follows:

Transportation Solutions
Industrial Solutions
Communications Solutions

Total

Fiscal Year End
2021
2022

(in millions)
$ 3,179 $ 3,014
1,851
976
$ 6,496 $ 5,841

2,447
870

We expect that the majority of our backlog at fiscal year end 2022 will be filled during fiscal 2023. Backlog is not

necessarily indicative of future net sales as unfilled orders may be cancelled prior to shipment of goods.

Competition

The industries in which we operate are highly competitive, and we compete with thousands of companies that range
from large multinational corporations to local manufacturers. Competition is generally based on breadth of product offering,
product innovation, price, quality, delivery, and service. We have experienced, and expect to continue to experience,
downward pressure on prices. However, as a result of increased costs, certain of our businesses implemented price increases
in fiscal 2022 and 2021.

Raw Materials

We use a wide variety of raw materials in the manufacture of our products. The principal raw materials that we use

include plastic resins for molding; precious metals such as gold and silver for plating; and other metals such as copper,
aluminum, brass, and steel for manufacturing cable, contacts, and other parts that are used for cable and component bodies
and inserts. Many of these raw materials are produced in a limited number of countries around the world or are only available
from a limited number of suppliers. The prices of these materials are driven by global supply and demand. In recent years,
raw material prices and availability have been affected by worldwide economic conditions, including the impacts of the
COVID-19 pandemic, supply chain disruptions, and inflationary cost pressures.

Intellectual Property

Patents and other proprietary rights are important to our business. We also rely upon trade secrets, manufacturing

know - how, continuing technological innovations, and licensing opportunities to maintain and improve our competitive
position. We review third - party proprietary rights, including patents and patent applications, as available, in an effort to
develop an effective intellectual property strategy, avoid infringement of third - party proprietary rights, identify licensing
opportunities, and monitor the intellectual property claims of others.

We own a large portfolio of patents that relate principally to electrical, optical, and electronic products. We also own

a portfolio of trademarks and are a licensee of various patents and trademarks. Patents for individual products extend for
varying periods according to the date of patent filing or grant and the legal term of patents in the various countries where
patent protection is obtained. Trademark rights may potentially extend for longer periods of time and are dependent upon
national laws and use of the trademarks.

While we consider our patents and trademarks to be valued assets, we do not believe that our competitive position or

our operations are dependent upon or would be materially impacted by any single patent or group of related patents.

Human Capital Management

We have employees located throughout the world. As of fiscal year end 2022, we employed approximately
92,000 people worldwide, including contract employees. Approximately 27,000 were in the Asia–Pacific region, 37,000 were
in the EMEA region, and 28,000 were in the Americas region. Of our total employees, approximately 56,000 were employed
in manufacturing. Our strong employee base, along with their commitment to uncompromising values, provides the
foundation of our company’s success.

Our core values—integrity, accountability, teamwork, and innovation—govern us. They guide our decisions and our
actions, both individually and as an organization. Additionally, our employees are responsible for upholding our purpose—to
create a safer, sustainable, productive, and connected future. We track and report internally on key talent metrics including
workforce demographics, critical role pipeline data, diversity data, and engagement and inclusion indices. We aspire to have
more than 26% women in leadership roles by fiscal 2025 and are committed to increasing the total number of women across
all levels of the organization. Additionally, as part of its charter, the management development and compensation committee
of our board of directors oversees our policies and practices related to the management of human capital resources including
talent management, culture, diversity, and inclusion.

We embrace diversity and inclusion. A truly innovative workforce needs to be diverse and leverage the skills and

perspectives of a wealth of backgrounds and experiences. To drive our business outcomes globally, we believe we must build
a workforce and supplier network that represents our global markets and the customers we serve. We are also committed to a
work environment where all employees are engaged, feel differences are valued and mutually-respected, and believe that all
opinions count. Our people reflect our customers and markets. Our employees are in over 55 countries representing
approximately 125 nationalities, and our total employee population is over 40% women. Our employee resource groups
(“ERGs”) are company-sponsored, voluntary, employee-led groups that focus on diverse talent segments or shared
experiences of employees. These groups apply those perspectives to create value for our company as a whole. The ERGs
provide a space where employees can foster connections and develop in a supportive environment. As of fiscal year end
2022, we had eight ERGs—ALIGN (lesbian, gay, bisexual, transgender, and queer/questioning employees and their allies),
Women in Networking, TE Young Professionals, African Heritage, Asian Heritage, Latin Heritage, THRIVE (employees and
their allies with mental, emotional, and physical disabilities), and TE Veterans. Our ERGs have a total of over 8,000
members.

During fiscal 2022, we conducted our third annual employee engagement survey, which was a fully digital,

enterprise-wide survey available in 17 languages and focused on measuring engagement, inclusion, and leadership
effectiveness. We had a participation rate of over 85% in fiscal 2022 and year over year improvement in all three indices of
engagement, inclusion, and leadership effectiveness. Our engagement and inclusion scores were once again favorable when
compared to Glint Inc.’s external global manufacturing benchmark. By fiscal 2025, we aspire to be in the top tier of this
benchmark on engagement and inclusion. In addition to the overall improvement in our leadership effectiveness index, all
nine scores within the index also increased from fiscal 2021 levels.

We continue to emphasize employee development and training to support engagement and retention. To empower
employees to unleash their potential, we provide a range of development programs and opportunities, skills, and resources
they need to be successful. Our LEARN@TE platform supplements our talent development strategies. It is an online portal
that enables employees to access instructor-led classroom or virtual courses and self-directed web-based courses. Strategy,
execution, and talent (“SET”) leadership expectations, which focus on how we drive strategy, effectively execute, and build
talent, have been rolled out to all employees and are embedded in all of our leadership programs. We integrate these
behavioral expectations into the way we assess and select talent, manage performance, and develop and reward our people.

We are committed to identifying and developing our next generation of leaders. We have a robust talent and
succession planning process and have established specialized programs to support the development of our talent pipeline for
critical roles in general management, engineering, and operations, as well as the diversity of our talent. We are focused on
both the recruitment of diverse candidates and the development of our diverse employees to provide the opportunity to
advance their careers and move into leadership positions within the company. On an annual basis, we conduct an
organization and leadership review process with our chief executive officer and all segment, business unit, and function
leaders focusing on our high-performing and high-potential talent, diverse talent, and the succession for our most critical
roles. Also, our board of directors reviews and assesses management development plans for senior executives and the
succession plans relating to those positions.

We are committed to the safety, health, human rights, and well-being of our employees. We continuously evaluate
opportunities to raise safety and health standards through our environmental, health, and safety team. Compliance audits and
internal processes are in place to stay ahead of workplace hazards, and we aim to reduce our Occupational Safety and Health
Administration (“OSHA”) total recordable incident rate—a rate equivalent to the number of incidents per 100 employees or
200,000 work hours—to 0.12 by fiscal 2025. During the COVID-19 pandemic, we took additional actions to protect the
physical and mental health and well-being of our global employees. We have utilized our workplace flexibility guidelines,
promoted our Wellbeing Connection program and health care benefits to support the needs of all employees, and instituted
additional safety measures at all factories and sites. We are striving to implement a global human rights program. We have
recently instituted a global human rights policy and a human trafficking and modern slavery policy. We apply high standards
of human rights and require that our suppliers do the same.

We believe our management team has the experience necessary to effectively execute our strategy and advance our

product and technology leadership. Our chief executive officer and segment leaders average over 25 years of industry
experience. They are supported by an experienced and talented management team who is dedicated to maintaining and
expanding our position as a global leader in the industry. For discussion of the risks relating to the attraction and retention of
management and executive management employees, see “Part 1. Item 1A. Risk Factors” of our Annual Report on Form 10-K
for the fiscal year ended September 30, 2022 filed with the SEC.

Government Regulation and Supervision

The import and export of products are subject to regulation by the various jurisdictions where we conduct business.

A small portion of our products, including defense - related products, may require governmental import and export licenses,
whose issuance may be influenced by geopolitical and other events. We have a trade compliance organization and other
systems in place to apply for licenses and otherwise comply with such regulations. Any failure to maintain compliance with
domestic and foreign trade regulation could limit our ability to import and export raw materials and finished goods into or
from the relevant jurisdiction.

See Note 12 to the Consolidated Financial Statements for additional information regarding trade compliance matters.

Also, see “Part I. Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended September 30, 2022
filed with the SEC for discussion of the risks and uncertainties associated with trade regulations.

Environmental

Our operations are subject to numerous environmental, health, and safety laws and regulations, including those

regulating the discharge of materials into the environment, greenhouse gas emissions, hazardous materials in products, and
chemical usage. We are committed to complying with these laws and to the protection of our employees and the
environment. We maintain a global environmental, health, and safety program that includes appropriate policies and
standards; staff dedicated to environmental, health, and safety issues; periodic compliance auditing; training; and other
measures. We also have a program for compliance with the European Union (“EU”) Restriction of Hazardous Substances
(“RoHS”) and Waste Electrical and Electronic Equipment (“WEEE”) Directives; the China Administrative Measures for the
Restriction of Hazardous Substances in Electrical and Electronic Products (“China RoHS”) regulation; the EU Registration,
Evaluation, Authorization, and Restriction of Chemicals (“REACH”) regulation; and similar laws.

Compliance with these laws has increased our costs of doing business in a variety of ways and may continue to do

so in the future. For example, laws regarding product content and chemical registration require extensive and costly data
collection, management, and reporting, and laws regulating greenhouse gas emissions may increase our costs for energy and
certain materials and products. We also have projects underway at a number of current and former manufacturing sites to
investigate and remediate environmental contamination resulting from past operations. Based upon our experience, available
information, and applicable laws, as of fiscal year end 2022, we concluded that we would incur investigation and remediation
costs at these sites in the reasonably possible range of $17 million to $44 million, and we accrued $20 million as the probable
loss, which was the best estimate within this range. We do not anticipate any material capital expenditures during fiscal 2023
for environmental control facilities or other costs of compliance with laws or regulations relating to greenhouse gas
emissions.

Sustainability

We look to build on our strong foundation of environmental sustainability in our operations. Our One Connected

World strategy guides how we balance investor and customer expectations and drive improved environmental sustainability.

Our sustainability initiatives in our operations began more than ten years ago. From fiscal 2010 to 2022, we
achieved more than a 20% reduction in absolute energy usage, more than a 25% reduction in absolute water usage, and more
than a 50% reduction in absolute greenhouse gas emissions (Scopes 1 and 2). Over the last few years, we have recycled
approximately 80% of the waste materials from our operations. We have challenged ourselves to find new ways to continue
to drive sustainability improvements. In fiscal 2022, we:

•

continued to make progress on our goal to further reduce our absolute greenhouse gas emissions (Scopes 1 and
2) by more than 40%, from our fiscal 2020 baseline, by fiscal 2030;

• made progress towards our target to decrease water withdrawals by 15%, from our fiscal 2021 baseline, by

fiscal 2025 at 30 sites with extremely high and high water stress;

• made progress towards our target to decrease hazardous waste disposed by 15%, from our fiscal 2021 baseline,

by fiscal 2025;

•

remained committed to sourcing renewable energy, developing and implementing energy efficiency projects,
and strengthening operating standards; and

• worked with key suppliers to reduce Scope 3 emissions.

While sustainability is embedded in our operations, we are exploring opportunities with our direct suppliers and

logistics service providers to strengthen the environmental sustainability of our supply chain. The majority of our greenhouse
gas emissions are from the goods and services we use in our operations. In addition to improving the sustainability of our
operations and working with our suppliers to reduce their greenhouse gas emissions, we help our customers produce smaller,
lighter, and more energy-efficient products, reducing the environmental impact of the products our customers make through
the life of their products. With every product that comes out of our facilities, we support a safer, sustainable, productive, and
connected future.

Additional information regarding our sustainability initiatives and progress is available in our annual Corporate

Responsibility Report and Task Force on Climate-Related Financial Disclosures (“TCFD”) Report located on our website at
www.te.com under the heading “Corporate Responsibility.” The contents of our Corporate Responsibility Report and TCFD
Report are not incorporated by reference in this Annual Report on Form 10-K.

Available Information

All periodic and current reports, registration filings, and other filings that we are required to file with the SEC,

including Annual Reports on Form 10 - K, Quarterly Reports on Form 10 - Q, Current Reports on Form 8 - K, and amendments
to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended
(“Exchange Act”) are available free of charge through our internet website at www.te.com. Such documents are available as
soon as reasonably practicable after electronic filing or furnishing of the material with the SEC. The information on our
website is not incorporated by reference in this Annual Report on Form 10 - K.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES

Market Information and Holders

Our common shares are listed and traded on the NYSE under the symbol “TEL.” As of November 3, 2022, there

were 16,860 shareholders of record of our common shares.

Performance Graph

The following graph compares the cumulative total shareholder return on our common shares against the cumulative

return on the S&P 500 Index and the Dow Jones Electrical Components and Equipment Index. The graph assumes the
investment of $100 in our common shares and in each index at fiscal year end 2017 and assumes the reinvestment of all
dividends and distributions. The graph shows the cumulative total return for the last five fiscal years. The comparisons in the
graph are based upon historical data and are not indicative of, nor intended to forecast, future performance of our common
shares.

Comparison of Cumulative Five Year Total Return
Among TE Connectivity Ltd., S&P 500 Index, and
Dow Jones Electrical Components & Equipment Index

$200

$150

$100

$50

2017

2018

2019

2020

2021

2022

TE Connectivity Ltd.

S&P 500

Dow Jones Electrical Components & Equipment

TE Connectivity Ltd.
S&P 500 Index
Dow Jones Electrical Components and Equipment
Index

2017
$ 100.00
100.00

2018
$ 107.74
117.91

Fiscal Year End
2020
2019
$ 116.07
122.30

$ 121.96 $ 187.03
190.29

138.81

2021

2022
$ 145.46
155.55

100.00

111.20

107.06

112.22

162.93

135.08

(1)

$100 invested on September 29, 2017 in TE Connectivity Ltd.’s common shares and in indexes. Indexes calculated on month - end
basis.

Dividends

Future dividends on our common shares, if any, must be approved by our shareholders. In exercising their discretion

to recommend to the shareholders that such dividends be approved, our board of directors will consider our results of
operations, cash requirements and surplus, financial condition, statutory requirements of applicable law, contractual
restrictions, and other factors that they may deem relevant.

Issuer Purchases of Equity Securities

The following table presents information about our purchases of our common shares during the quarter ended

September 30, 2022:

Period
June 25–July 22, 2022
July 23–August 26, 2022
August 27–September 30, 2022

Total

Total Number of
Shares Purchased
as Part of

Maximum
Approximate
Dollar Value

Paid Per
Share(1)

of Shares that May
Total Number Average Price Publicly Announced Yet Be Purchased
Under the Plans
or Programs(2)
602,600 $ 1,949,678,000
1,828,380,436
915,800
1,208,700
1,681,457,030
2,727,100

of Shares
Purchased(1)
602,818
920,046
1,209,425
2,732,289

114.66
132.46
121.56
123.71

Plans or
Programs(2)

(1)

These columns include the following transactions which occurred during the quarter ended September 30, 2022:

(i)

(ii)

the acquisition of 5,189 common shares from individuals in order to satisfy tax withholding requirements in
connection with the vesting of restricted share awards issued under equity compensation plans; and

open market purchases totaling 2,727,100 common shares, summarized on a trade-date basis, in conjunction with
the share repurchase program announced in September 2007.

(2)

Our share repurchase program authorizes us to purchase a portion of our outstanding common shares from time to time through
open market or private transactions, depending on business and market conditions. The share repurchase program does not have
an expiration date.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in

conjunction with our Consolidated Financial Statements and the accompanying notes included elsewhere in this Annual
Report. 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. Factors that could cause or
contribute to these differences include those factors discussed below and elsewhere in this Annual Report, particularly in
“Forward - Looking Information” and “Part I. Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year
ended September 30, 2022 filed with the SEC.

Our Consolidated Financial Statements have been prepared in U.S. dollars, in accordance with accounting principles

generally accepted in the U.S. (“GAAP”).

Discussion of our financial condition and results of operations for fiscal 2022 compared to fiscal 2021 is presented

below. Discussion of our financial condition and results of operations for fiscal 2021 compared to fiscal 2020 can be found in
“Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual
Report on Form 10-K for the fiscal year ended September 24, 2021.

The following discussion includes organic net sales growth which is a non - GAAP financial measure. See

“Non - GAAP Financial Measure” for additional information regarding this measure.

Overview

We are 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.

Summary of Fiscal 2022 Performance

• Our fiscal 2022 net sales increased 9.1% from fiscal 2021 levels due to sales increases in the Communications
Solutions and Industrial Solutions segments and, to a lesser degree, the Transportation Solutions segment. On
an organic basis, our net sales increased 12.1% in fiscal 2022 as compared to fiscal 2021.

• Our net sales by segment were as follows:

•

Transportation Solutions—Our net sales increased 2.7% with sales increases in the automotive and
commercial transportation end markets, partially offset by sales declines in the sensors end market.

Industrial Solutions—Our net sales increased 17.6% primarily as a result of sales increases in the
industrial equipment end market.

• Communications Solutions—Our net sales increased 20.8% due primarily to sales increases in the data

and devices end market.

•

Fiscal 2022 included an additional week which contributed $306 million in net sales.

• During fiscal 2022, our shareholders approved a dividend payment to shareholders of $2.24 per share, payable
in four equal quarterly installments of $0.56 beginning in the third quarter of fiscal 2022 and ending in the
second quarter of fiscal 2023.

• Net cash provided by continuing operating activities was $2,468 million in fiscal 2022.

Economic Conditions

Our business and operating results have been and will continue to be affected by worldwide economic conditions.

The global economy has been impacted by the COVID-19 pandemic and the military conflict between Russia and Ukraine as
well as supply chain disruptions and inflationary cost pressures. See “Russia-Ukraine Military Conflict” and “COVID-19
Pandemic” for additional information.

Our business operates globally and changes in foreign currency exchange rates may have a significant impact on our

results. Foreign currency translation negatively impacted our net sales by $723 million in fiscal 2022 as compared to fiscal
2021. We expect translation to continue to have a negative impact on our operating results in fiscal 2023. We expect
translation to negatively impact our net sales by approximately $1 billion in fiscal 2023 as compared to fiscal 2022 as a result
of continued strength of the U.S. dollar against other currencies.

We are monitoring the current environment and its potential effects on our customers and the end markets we serve.
As a result of inflationary pressure, we have implemented price increases for a number of our products. Also, we have taken
and continue to focus on actions to manage costs, including restructuring and other cost reduction initiatives such as reducing
discretionary spending and travel. Additionally, we are managing our capital resources and monitoring capital availability to
ensure that we have sufficient resources to fund our future capital needs. See further discussion in “Liquidity and Capital
Resources.”

Russia-Ukraine Military Conflict

We are monitoring the military conflict between Russia and Ukraine, escalating tensions in surrounding countries,
and associated sanctions. We suspended our business operations in Russia, and our operations in Ukraine have been reduced
to focus on the safety of our employees. We have experienced increased costs for transportation, energy, and raw materials
due in part to the negative impact of the Russia-Ukraine military conflict on the global economy. The increased costs and
supply chain disruptions resulting from the conflict have not been material to our business, and we have been able to partially

mitigate them through price increases or productivity. Neither Russia nor Ukraine represents a material portion of our
business, and the military conflict has not had a significant impact on our business, financial condition, or result of operations
during fiscal 2022.

The full impact of the military conflict on our business operations and financial performance remains uncertain. The

extent to which the conflict may impact our business in future periods will depend on future developments, including the
severity and duration of the conflict, its impact on regional and global economic conditions, and supply chain disruptions. We
will continue to actively monitor the conflict and assess the related sanctions and other effects and may take further actions if
necessary.

COVID-19 Pandemic

A novel strain of coronavirus (“COVID-19”) was first identified in China in December 2019 and subsequently

declared a pandemic by the World Health Organization. COVID-19 has surfaced in nearly all regions around the world and
resulted in business slowdowns or shutdowns and travel restrictions in affected areas. The pandemic had a negative impact on
certain of our businesses in fiscal 2021 and continued to impact certain of our operations in China for a period of time in
fiscal 2022. The pandemic has not had a significant impact on our ability to staff our operations, and we do not expect that it
will continue to have a significant impact on our businesses globally in the near term. Throughout our operations, we
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 COVID-19 pandemic has impacted and continues to impact our business operations globally, causing 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 had 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.

The extent to which the pandemic will continue to impact our business and the markets we serve will depend on

future developments which may include the further spread of the virus, variant strains of the virus, and the resumption of high
levels of infections and hospitalizations as well as the success of public health advancements, including vaccine production
and distribution. While certain of our operations were shut down in China for a period of time in fiscal 2022, we do not
expect the COVID-19 pandemic to have a significant impact on our businesses globally in the near term. However, it may
have a negative impact on our financial condition and results of operations in future periods.

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.

For further discussion of the risks and uncertainties associated with the COVID-19 pandemic, see “Part I. Item 1A.

Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended September 30, 2022 filed with the SEC.

Outlook

In the first quarter of fiscal 2023, we expect our net sales to be approximately $3.75 billion as compared to
$3.8 billion in the first quarter of fiscal 2022. We expect diluted earnings per share from continuing operations to be
approximately $1.31 per share in the first quarter of fiscal 2023. This outlook reflects the negative impact of foreign currency
exchange rates on net sales and earnings per share of approximately $400 million and $0.19 per share, respectively, in the
first quarter of fiscal 2023 as compared to the same period of fiscal 2022. Also, this outlook is based on foreign currency
exchange rates and commodity prices that are consistent with current levels.

Acquisitions

During fiscal 2022, we acquired three businesses for a combined cash purchase price of $245 million, net of cash

acquired. The acquisitions were reported as part of our Communications Solutions segment from the date of acquisition.

We acquired four businesses for a combined cash purchase price of $422 million, net of cash acquired, during fiscal

2021. The acquisitions were reported as part of our Industrial Solutions segment from the date of acquisition.

See Note 4 to the Consolidated Financial Statements for additional information regarding acquisitions.

Net Sales

Results of Operations

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

Fiscal

2022

2021

($ in millions)

Transportation Solutions
Industrial Solutions
Communications Solutions

Total

$ 9,219 56 % $ 8,974
28
16

3,844
2,105
100 % $ 14,923

4,520
2,542
$ 16,281

60 %
26
14
100 %

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

Transportation Solutions
Industrial Solutions
Communications Solutions

Total

Change in Net Sales for Fiscal 2022 versus Fiscal 2021

Net Sales
Growth

Organic Net Sales
Growth

($ in millions)

Acquisitions

Translation (Divestitures)

$ 245 2.7 % $ 727 8.1 % $

676
437
$ 1,358

638
17.6
20.8
438
9.1 % $ 1,803

16.6
20.8
12.1 % $

(482) $
(187)
(54)
(723) $

—
225
53
278

Net sales increased $1,358 million, or 9.1%, in fiscal 2022 as compared to fiscal 2021. The increase in net sales

resulted from organic net sales growth of 12.1% and net sales contributions of 1.9% from acquisitions and divestitures,
partially offset by the negative impact of foreign currency translation of 4.9% due to the weakening of certain foreign
currencies. In fiscal 2022, pricing actions positively affected organic net sales by $509 million. Fiscal 2022 included an
additional week which contributed $306 million in net sales. The impact of the additional week was estimated using an
average sales figure for the fourth quarter of the fiscal year. See further discussion of net sales below under “Segment
Results.”

Net Sales by Geographic Region. Our business operates in three geographic regions—Asia–Pacific, 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. We sell our products into approximately 140 countries, and
approximately 60% of our net sales were invoiced in currencies other than the U.S. dollar in fiscal 2022. The percentage of
net sales in fiscal 2022 by major currencies invoiced was as follows:

Currencies
U.S. dollar
Euro
Chinese renminbi
Japanese yen
All others
Total

Percentage

43 %
29
17
5
6
100 %

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

Asia–Pacific
EMEA
Americas
Total

Fiscal

2022

2021

$ 5,771

($ in millions)
35 % $ 5,374

36 %

5,707 35
4,803
30
$ 16,281

5,471 37
27
4,078
100 % $ 14,923 100 %

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

Asia–Pacific
EMEA
Americas
Total

Cost of Sales and Gross Margin

Change in Net Sales for Fiscal 2022 versus Fiscal 2021

Net Sales
Growth

Organic Net Sales
Growth

($ in millions)

Acquisitions

Translation (Divestitures)

$ 397

7.4 % $ 543

10.1 % $

595 10.9
236 4.3
16.3
17.8
665
725
12.1 % $
9.1 % $ 1,803
$ 1,358

(200) $
(520)
(3)
(723) $

54
161
63
278

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

Fiscal

Cost of sales

As a percentage of net sales

Gross margin

As a percentage of net sales

(1)

Fiscal 2022 included an additional week.

2022

2021
($ in millions)
$ 11,037 (1) $ 10,036

Change

$ 1,001

67.8 %

67.3 %

$ 5,244 (1) $ 4,887

$ 357

32.2 %

32.7 %

In fiscal 2022, gross margin increased $357 million as compared to fiscal 2021 primarily as a result of higher
volume and the positive impact of pricing actions, partially offset by inflationary pressure on material and operating costs and
the negative impact of foreign currency translation.

We use a wide variety of raw materials in the manufacture of our products, and cost of sales and gross margin are

subject to variability in raw material prices. In recent years, raw material prices and availability have been affected by
worldwide economic conditions, including the impacts of the COVID-19 pandemic, supply chain disruptions, and
inflationary cost pressures. As a result, we have experienced shortages and price increases in some of our input materials—
including copper, gold, silver, and palladium—however, we have been able to initiate pricing actions which have partially
offset these impacts. The following table presents the average prices incurred related to copper, gold, silver, and palladium:

Copper
Gold
Silver
Palladium

Fiscal

Measure

2022

2021

Lb.
Troy oz.
Troy oz.
Troy oz.

$ 4.08 $ 3.19
1,690
21.63
2,276

1,828
24.23
2,337

In fiscal 2022, we purchased approximately 215 million pounds of copper, 129,000 troy ounces of gold, 2.7 million

troy ounces of silver, and 13,000 troy ounces of palladium. We expect to purchase approximately 215 million pounds of
copper, 125,000 troy ounces of gold, 2.7 million troy ounces of silver, and 10,000 troy ounces of palladium in fiscal 2023.

Operating Expenses

The following table presents operating expense information:

Fiscal

Selling, general, and administrative expenses

As a percentage of net sales

Change

2022

2021
($ in millions)
$ 1,584 (1) $ 1,512

9.7 %

10.1 %

$ 72

Restructuring and other charges, net

141

233

$ (92)

(1)

Fiscal 2022 included an additional week.

Selling, General, and Administrative Expenses. In fiscal 2022, selling, general, and administrative expenses

increased $72 million as compared to fiscal 2021 due primarily to increased selling expenses to support higher sales levels,
the impact of inflation, and incremental expenses attributable to recent acquisitions, partially offset by the positive impact of
foreign currency translation.

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 2022 and 2021, we initiated restructuring programs associated with footprint consolidation and cost

structure improvements across all segments. We incurred net restructuring and related charges of $153 million, of which
$16 million was recorded in cost of sales, in fiscal 2022 and $208 million in fiscal 2021. Annualized cost savings related to
actions initiated in fiscal 2022 are expected to be approximately $120 million and are expected to be realized by the end of
fiscal 2025. Cost savings will be reflected primarily in cost of sales and selling, general, and administrative expenses. For
fiscal 2023, we expect total restructuring charges to be approximately $150 million and total spending, which will be funded
with cash from operations, to be approximately $165 million.

See Note 3 to the Consolidated Financial Statements for additional information regarding net restructuring and other

charges.

Operating Income

The following table presents operating income and operating margin information:

Fiscal

Change

2022

2021
($ in millions)
$ 2,756 (1) $ 2,434

16.9 %

16.3 %

$ 322

Operating income

Operating margin

(1) Fiscal 2022 included an additional week.

Operating income included the following:

Acquisition-related charges:

Acquisition and integration costs
Charges associated with the amortization of acquisition-related fair
value adjustments

Restructuring and other charges, net
Restructuring-related charges recorded in cost of sales

Total

Fiscal

2022

2021

(in millions)

$ 45 $ 31

8
53
141
16

3
34
233
—
$ 210 $ 267

See discussion of operating income below under “Segment Results.”

Non - Operating Items

The following table presents select non - operating information:

Other income (expense), net

Income tax expense
Effective tax rate

Fiscal

2022

2021 Change

$ 28

($ in millions)
$ (17)

$ 45

306
11.2 %

183

123
5.2 %

Other Income (Expense). We recorded net periodic pension benefit credit of $25 million and cost of $12 million in

net other income (expense) in fiscal 2022 and 2021, respectively. See Note 14 to the Consolidated Financial Statements for
additional information regarding our retirement plans. Also, in fiscal 2022, we recorded other income of $11 million related
to an indemnification receivable associated with an income tax audit. See Note 15 to the Consolidated Financial Statements
for further information regarding income taxes.

Income Taxes. See Note 15 to the Consolidated Financial Statements for discussion of items impacting income tax

expense and the effective tax rate.

The valuation allowance for deferred tax assets was $7,112 million and $2,729 million at fiscal year end 2022 and

2021, respectively. See Note 15 to the Consolidated Financial Statements for further information regarding the valuation
allowance for deferred tax assets.

As of fiscal year end 2022, certain subsidiaries had approximately $33.6 billion of cumulative undistributed earnings

that have been retained indefinitely and reinvested in our global manufacturing operations, including working capital;
property, plant, and equipment; intangible assets; and research and development activities. See Note 15 to the Consolidated
Financial Statements for additional information regarding undistributed earnings.

Transportation Solutions

Segment Results

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):

Automotive
Commercial transportation
Sensors
Total

Fiscal

2022

2021

($ in millions)
$ 6,527 71 % $ 6,379 71 %

1,582
1,110
$ 9,219

17
12

1,467
1,128
100 % $ 8,974 100 %

16
13

(1) Industry end market information is presented consistently with our internal 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 Fiscal 2022 versus Fiscal 2021

Automotive
Commercial transportation
Sensors
Total

$ 148
115
(18)
$ 245

Net Sales

Growth (Decline)

Translation

Organic Net Sales
Growth
($ in millions)
2.3 % $ 515
178
7.8
(1.6)
34
2.7 % $ 727

8.1 % $

12.1
3.0
8.1 % $

(367)
(63)
(52)
(482)

Net sales in the Transportation Solutions segment increased $245 million, or 2.7%, in fiscal 2022 from fiscal 2021

as a result of organic net sales growth of 8.1%, partially offset by the negative impact of foreign currency translation of 5.4%.
Fiscal 2022 included an additional week which contributed $180 million in net sales. In fiscal 2022, pricing actions positively
affected organic net sales by $330 million. Our organic net sales by industry end market were as follows:

• Automotive—Our organic net sales increased 8.1% in fiscal 2022 with increases of 9.8% in the Americas

region, 9.7% in the Asia–Pacific region, and 5.7% in the EMEA region. Our organic net sales growth across all
regions was attributable primarily to increased content per vehicle. Global automotive production was
consistent with fiscal 2021 levels.

• Commercial transportation—Our organic net sales increased 12.1% in fiscal 2022 due primarily to growth in

the Americas and EMEA regions driven by content and share gains.

•

Sensors—Our organic net sales increased 3.0% in fiscal 2022 as a result of growth in industrial applications,
partially offset by declines in transportation applications.

Operating Income. The following table presents the Transportation Solutions segment’s operating income and

operating margin information:

Operating income

Operating margin

(1) Fiscal 2022 included an additional week.

Fiscal

2022

2021
($ in millions)

Change

$ 1,534 (1) $ 1,526

16.6 %

17.0 %

Operating income in the Transportation Solutions segment increased $8 million in fiscal 2022 as compared to fiscal
2021. Excluding the items below, operating income decreased in fiscal 2022 primarily as a result of inflationary pressure on

material and operating costs and the negative impact of foreign currency translation, partially offset by the positive impact of
pricing actions and higher volume.

Acquisition-related charges:

Acquisition and integration costs
Charges associated with the amortization of acquisition-related fair
value adjustments

Restructuring and other charges, net

Total

Industrial Solutions

Fiscal

2022

2021

(in millions)

16 $

3
—
18
16
68
135
84 $ 153

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):

Industrial equipment
Aerospace, defense, and marine
Energy
Medical
Total

Fiscal

2022

2021

$ 1,934

($ in millions)
43 % $ 1,397

1,087 24
18
15

1,035
738
674
100 % $ 3,844

804
695
$ 4,520

36 %
27
19
18
100 %

(1)

Industry end market information is presented consistently with our internal management
reporting and may be revised periodically as management deems necessary.

The following table provides an analysis of the change in the Industrial Solutions segment’s net sales by industry

end market:

Industrial equipment
Aerospace, defense, and marine
Energy
Medical
Total

Change in Net Sales for Fiscal 2022 versus Fiscal 2021

Net Sales
Growth

Organic Net Sales
Growth

Acquisitions

Translation (Divestitures)

($ in millions)

$ 537 38.4 % $ 400 28.5 % $

52
66
21
$ 676

5.0
8.9
3.1

91
119
28
17.6 % $ 638

8.7
16.0
4.2

16.6 % $

(100) $
(38)
(42)
(7)
(187) $

237
(1)
(11)
—
225

In the Industrial Solutions segment, net sales increased $676 million, or 17.6%, in fiscal 2022 from fiscal 2021 due

to organic net sales growth of 16.6% and net sales contributions of 5.9% from acquisitions and divestitures, partially offset by
the negative impact of foreign currency translation of 4.9%. Fiscal 2022 included an additional week which contributed
$84 million in net sales. In fiscal 2022, pricing actions positively affected organic net sales by $147 million. Our organic net
sales by industry end market were as follows:

•

Industrial equipment—Our organic net sales increased 28.5% in fiscal 2022 as a result of growth in all regions
and continued strength in factory automation and controls applications.

• Aerospace, defense, and marine—Our organic net sales increased 8.7% in fiscal 2022 due primarily to growth

in the commercial aerospace market and, to a lesser degree, the defense market.

• Energy—Our organic net sales increased 16.0% in fiscal 2022 due to growth across all regions and continued

strength in renewable energy applications.

• Medical—Our organic net sales increased 4.2% in fiscal 2022 as a result of market growth in surgical and

imaging as well as interventional medical applications.

Operating Income. The following table presents the Industrial Solutions segment’s operating income and operating

margin information:

Operating income

Operating margin

(1) Fiscal 2022 included an additional week.

Fiscal

2022

2021
($ in millions)

Change

$ 620 (1) $ 469

$ 151

13.7 % 12.2 %

Operating income in the Industrial Solutions segment increased $151 million in fiscal 2022 from fiscal 2021.
Excluding the items below, operating income increased in fiscal 2022 primarily as a result of higher volume and the positive
impact of pricing actions, partially offset by inflationary pressure on material and operating costs.

Acquisition-related charges:

Acquisition and integration costs
Charges associated with the amortization of acquisition-related fair
value adjustments

Restructuring and other charges, net
Restructuring-related charges recorded in cost of sales

Total

Fiscal

2022

2021

(in millions)

24 $

8
32
50
16
98 $

—
15
73
—
88

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):

Data and devices
Appliances
Total

Fiscal

2022

2021

($ in millions)

$ 1,576 62 % $ 1,198 57 %

966
$ 2,542

907
100 % $ 2,105 100 %

(1)

Industry end market information is presented consistently with our internal 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:

Data and devices
Appliances
Total

Change in Net Sales for Fiscal 2022 versus Fiscal 2021

Net Sales
Growth

Organic Net Sales
Growth
($ in millions)

Translation Acquisitions

$ 378 31.6 % $ 355 29.6 % $

59
$ 437

6.5
83
20.8 % $ 438

9.2
20.8 % $

(30) $
(24)
(54) $

53
—
53

Net sales in the Communications Solutions segment increased $437 million, or 20.8%, in fiscal 2022 as compared to

fiscal 2021 due primarily to organic net sales growth of 20.8%. Fiscal 2022 included an additional week which contributed
$42 million in net sales. Our organic net sales by industry end market were as follows:

• Data and devices—Our organic net sales increased 29.6% in fiscal 2022 as a result of market strength in all

regions and content and share gains.

• Appliances—Our organic net sales increased 9.2% in fiscal 2022 due to sales growth in the Americas and
EMEA regions resulting primarily from share gains, partially offset by declines in the Asia–Pacific region.

Operating Income. The following table presents the Communications Solutions segment’s operating income and

operating margin information:

Operating income

Operating margin

(1) Fiscal 2022 included an additional week.

Fiscal

2022

2021
($ in millions)

Change

$ 602 (1) $ 439

$ 163

23.7 % 20.9 %

In the Communications Solutions segment, operating income increased $163 million in fiscal 2022 as compared to

fiscal 2021. Excluding the items below, operating income increased due primarily to higher volume, partially offset by
inflationary pressure on material and operating costs.

Acquisition and integration costs
Restructuring and other charges, net

Total

Liquidity and Capital Resources

Fiscal

2022

2021

(in millions)
5 $
23
28 $

1
25
26

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 €550 million of 1.10% senior notes due in March 2023. 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. We believe that we have sufficient financial resources and liquidity which will enable us to meet our ongoing
working capital and other cash flow needs.

As of fiscal year end 2022, our cash and cash equivalents were held in subsidiaries which are located in various

countries throughout the world. Under current applicable laws, substantially all of these amounts can be repatriated to Tyco
Electronics Group S.A. (“TEGSA”), our Luxembourg subsidiary, which is the obligor of substantially all of our debt, and to
TE Connectivity Ltd., our Swiss parent company; however, the repatriation of these amounts could subject us to additional
tax expense. We provide for tax liabilities on the Consolidated Financial Statements with respect to amounts that we expect
to repatriate; however, no tax liabilities are recorded for amounts that we consider to be retained indefinitely and reinvested
in our global manufacturing operations. As of fiscal year end 2022, we had approximately $7.0 billion of cash, cash
equivalents, and intercompany deposits, principally in our subsidiaries, that we have the ability to distribute to TEGSA and
TE Connectivity Ltd. but we consider to be permanently reinvested. We estimate that an immaterial amount of tax expense
would be recognized on the Consolidated Financial Statements if our intention to permanently reinvest these amounts were to
change. Our current plans do not demonstrate a need to repatriate cash, cash equivalents, and intercompany deposits that are
designated as permanently reinvested in order to fund our operations, including investing and financing activities.

Cash Flows from Operating Activities

Net cash provided by continuing operating activities decreased $208 million to $2,468 million in fiscal 2022 as
compared to $2,676 million in fiscal 2021. The decrease resulted primarily from the impact of increased working capital
levels, partially offset by higher pre-tax income. The amount of income taxes paid, net of refunds, during fiscal 2022 and
2021 was $421 million and $371 million, respectively.

Pension contributions were $42 million and $61 million in fiscal 2022 and 2021, respectively. We expect pension

contributions to be $43 million in fiscal 2023, before consideration of any voluntary contributions. For additional information
regarding pensions, see Note 14 to the Consolidated Financial Statements.

Cash Flows from Investing Activities

Capital expenditures were $768 million and $690 million in fiscal 2022 and 2021, respectively. We expect fiscal

2023 capital spending levels to be approximately 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 fiscal 2022, we acquired three businesses for a combined cash purchase price of $245 million, net of cash

acquired. We acquired four businesses for a combined cash purchase price of $422 million, net of cash acquired, during fiscal
2021. See Note 4 to the Consolidated Financial Statements for additional information regarding acquisitions.

Cash Flows from Financing Activities and Capitalization

Total debt at fiscal year end 2022 and 2021 was $4,206 million and $4,092 million, respectively. See Note 10 to the

Consolidated Financial Statements for additional information regarding debt.

During fiscal 2022, TEGSA, our wholly-owned subsidiary, issued $600 million aggregate principal amount of

2.50% senior notes due in February 2032. 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 June

2026 and total commitments of $1.5 billion. The Credit Facility contains provisions that allow for incremental commitments
of up to $500 million, an option to temporarily increase the financial ratio covenant following a qualified acquisition, and
borrowings in designated currencies. TEGSA had no borrowings under the Credit Facility at fiscal year end 2022 or 2021.

Borrowings under the Credit Facility bear interest at a rate per annum equal to, at the option of TEGSA, (1) the term

secured overnight financing rate (“Term SOFR”) (as defined in the Credit Facility), (2) an alternate base rate equal to the
highest of (i) Bank of America, N.A.’s base rate, (ii) the federal funds effective rate plus 1/2 of 1%, and (iii) the Term SOFR
for a one-month interest period plus 1%, (3) an alternative currency daily rate, or (4) an alternative currency term rate, plus,
in each case, an applicable margin based upon the senior, unsecured, long-term debt rating of TEGSA. TEGSA is required to
pay an annual facility fee. Based on the applicable credit ratings of TEGSA, this fee ranges from 5.0 to 12.5 basis points of
the lenders’ commitments under the Credit Facility.

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 fiscal year end 2022, 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.

Periodically, TEGSA issues commercial paper to U.S. institutional accredited investors and qualified institutional
buyers in accordance with available exemptions from the registration requirements of the Securities Act of 1933 as part of
our ongoing effort to maintain financial flexibility and to potentially decrease the cost of borrowings. Borrowings under the
commercial paper program are backed by the Credit Facility. At fiscal year end 2022, TEGSA had $370 million of
commercial paper outstanding at a weighted-average interest rate of 3.45%. TEGSA had no commercial paper outstanding at
fiscal year end 2021.

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 $685 million and $647 million in fiscal 2022 and 2021,

respectively. See Note 17 to the Consolidated Financial Statements for additional information regarding dividends on our
common shares.

In March 2022, our shareholders approved a dividend payment to shareholders of $2.24 per share, payable in four
equal quarterly installments of $0.56 per share beginning in the third quarter of fiscal 2022 and ending in the second quarter
of fiscal 2023.

Future dividends on our common shares, if any, must be approved by our shareholders. In exercising their discretion

In fiscal 2022, our board of directors authorized an increase of $1.5 billion in our share repurchase program. We
repurchased approximately ten million of our common shares for $1,409 million and approximately seven million of our
common shares for $904 million under the share repurchase program during fiscal 2022 and 2021, respectively. At fiscal year
end 2022, we had $1.7 billion of availability remaining under our share repurchase authorization.

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.

Balance Sheet Data:
Total current assets
Total noncurrent assets(1)

Total current liabilities
Total noncurrent liabilities(2)

Fiscal Year End
2021
2022

(in millions)

$ 1,400 $
2,769

452
1,829

1,937
15,871

1,144
12,443

(1)

(2)

Includes $2,601 million and $1,810 million as of fiscal year end 2022 and 2021, respectively, of
intercompany loans receivable from non-guarantor subsidiaries.

Includes $12,582 million and $8,832 million as of fiscal year end 2022 and 2021, respectively,
of intercompany loans payable to non-guarantor subsidiaries.

Statement of Operations Data:

Loss from continuing operations
Net loss

Fiscal

2022

2021

(in millions)

(35) $
(35)

(486)
(479)

Off-Balance Sheet Arrangements

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 2023
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 fiscal year end 2022, we had outstanding letters of credit, letters of guarantee, and surety bonds of $127 million,

excluding those related to our former 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 $115 million as of fiscal year
end 2022 and are expected to expire at various dates through fiscal 2027. 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.

The following table provides a summary of our contractual obligations and commitments for debt, minimum lease

payment obligations under non - cancelable leases, and other material obligations at fiscal year end 2022:

Commitments and Contingencies

Long-term debt:

Principal payments(1)
Interest payments on debt(2)

Operating leases(3)
Purchase obligations(4)

Total contractual cash obligations(5)(6)

Payments Due
In Fiscal 2023 Thereafter

Total

(in millions)

914 $
93
126
1,150
2,283 $

3,330
720
334
39
4,423

4,244
813
460
1,189
6,706

See Note 10 to the Consolidated Financial Statements for additional information regarding debt.

Interest payments exclude the impact of interest rate swap and cross-currency swap contracts. Interest payments on debt are
projected for future periods using rates in effect as of fiscal year end 2022 and are subject to change in future periods.

Operating leases represents the undiscounted lease payments. See Note 11 to the Consolidated Financial Statements for
additional information regarding leases.

Purchase obligations consist primarily of commitments for purchases of goods and services.

The above table does not reflect unrecognized income tax benefits of $287 million and related accrued interest and penalties of
$54 million, the timing of which is uncertain. See Note 15 to the Consolidated Financial Statements for additional information
regarding unrecognized income tax benefits, interest, and penalties.

The above table does not reflect pension obligations to certain employees and former employees. We are obligated to make
contributions to our pension plans; however, we are unable to determine the amount of plan contributions due to the inherent
uncertainties of obligations of this type, including timing, interest rate charges, investment performance, and amounts of benefit
payments. We expect to contribute $43 million to pension plans in fiscal 2023, before consideration of any voluntary
contributions. See Note 14 to the Consolidated Financial Statements for additional information regarding these plans and our
estimates of future contributions and benefit payments.

(1)

(2)

(3)

(4)

(5)

(6)

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 have been 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 the resulting investigations by the agencies remain ongoing. We have also been contacted
by the U.S. Department of Justice concerning aspects of these matters. 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. Although 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.

Critical Accounting Policies and Estimates

The preparation of the 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 significant accounting policies are summarized in Note 2
to the Consolidated Financial Statements. We believe the following accounting policies are the most critical as they require
significant judgments and assumptions that involve inherent risks and uncertainties. Management’s estimates are based on the
relevant information available at the end of each period.

Revenue Recognition

We account for revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from

Contracts with Customers. Our revenues are generated principally from the sale of our products. Revenue is recognized as
performance obligations under the terms of a contract, such as a purchase order with a customer, are satisfied; generally this
occurs with the transfer of control. We transfer control and recognize revenue when we ship product to our customers, the
customers accept and have legal title for the product, and we have a right to payment for such product. Revenue is measured
as the amount of consideration that we expect to receive in exchange for those products and excludes taxes assessed by
governmental authorities and collected from customers concurrent with the sale of products. Shipping and handling costs are
treated as fulfillment costs and are included in cost of sales. Since we typically invoice our customers when we satisfy our
performance obligations, we do not have material contract assets or contract liabilities. Our credit terms are customary and do
not contain significant financing components that extend beyond one year of fulfillment of performance obligations. We
apply the practical expedient of ASC 606 with respect to financing components and do not evaluate contracts in which
payment is due within one year of satisfaction of the related performance obligation. Since our performance obligations to
deliver products are part of contracts that generally have original durations of one year or less, we have elected to use the
optional exemption to not disclose the aggregate amount of transaction prices associated with unsatisfied or partially satisfied
performance obligations.

We generally warrant that our products will conform to our, or mutually agreed to, specifications and that our

products will be free from material defects in materials and workmanship for a limited time. We limit our warranty to the
replacement or repair of defective parts, or a refund or credit of the price of the defective product. We do not account for
these warranties as separate performance obligations.

Although products are generally sold at fixed prices, certain distributors and customers receive incentives or awards,

the estimated amounts to include in the transaction price are based primarily on our assessment of anticipated performance
and historical and forecasted information that is reasonably available to us.

Goodwill and Other Intangible Assets

We account for goodwill and other intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other.

Intangible assets include both indeterminable-lived residual goodwill and determinable-lived identifiable intangible
assets. Intangible assets with determinable lives primarily include intellectual property, consisting of patents, trademarks, and
unpatented technology, and customer relationships. Recoverability estimates range from 1 to 50 years and costs are generally
amortized on a straight-line basis. Evaluations of the remaining useful lives of determinable-lived intangible assets are
performed on a periodic basis and when events and circumstances warrant.

We test for goodwill impairment at the reporting unit level. A reporting unit is generally an operating segment or
one level below an operating segment (a “component”) if the component constitutes a business for which discrete financial
information is available and regularly reviewed by segment management. At fiscal year end 2022, we had five reporting
units, all of which contained goodwill. There were two reporting units in both the Transportation Solutions and Industrial
Solutions segments and one reporting unit in the Communications Solutions segment. When changes occur in the
composition of one or more reporting units, goodwill is reassigned to the reporting units affected based on their relative fair
values. We review our reporting unit structure each year as part of our annual goodwill impairment test, or more frequently
based on changes in our structure.

Goodwill impairment is evaluated by comparing the carrying value of each reporting unit to its fair value on the first

day of the fourth fiscal quarter of each year or more frequently if events or changes in circumstances indicate that the asset
may be impaired. In assessing a potential impairment, management relies on several reporting unit-specific factors including
operating results, business plans, economic projections, anticipated future cash flows, transactions, and marketplace data.
There are inherent uncertainties related to these factors and management’s judgment in applying these factors to the
impairment analysis.

When testing for goodwill impairment, we identify potential impairment by comparing the fair value of a reporting
unit with its carrying amount. If the carrying amount of a reporting unit exceeds its fair value, a goodwill impairment charge
will be recorded for the amount of the excess, limited to the total amount of goodwill allocated to the reporting unit.

Fair value estimates used in the goodwill impairment tests are calculated using an income approach based on the

present value of future cash flows of each reporting unit. The income approach is supported by a guideline analysis (a market
approach). These approaches incorporate several assumptions including future growth rates, discount rates, income tax rates,
and market activity in assessing fair value and are reporting unit specific. Changes in economic and operating conditions
impacting these assumptions could result in goodwill impairments in future periods.

We completed our annual goodwill impairment test in the fourth quarter of fiscal 2022 and determined that no

impairment existed.

Income Taxes

In determining pre-tax income for financial statement purposes, we must make certain estimates and judgments.

These estimates and judgments affect the calculation of certain tax liabilities and the determination of the recoverability of
certain deferred tax assets, which arise from temporary differences between the income tax return and financial statement
recognition of revenue and expense.

In evaluating our ability to recover our deferred tax assets, we consider all available positive and negative evidence

including our past operating results, the existence of cumulative losses in the most recent years, and our forecast of taxable
income. In estimating future taxable income, we develop assumptions including the amount of pre-tax operating income in
various tax jurisdictions, the reversal of temporary differences, and the implementation of feasible and prudent tax planning
strategies. These assumptions require significant judgment about the forecasts of taxable income and are consistent with the
plans and estimates we are using to manage the underlying businesses.

We currently have recorded significant valuation allowances that we intend to maintain until it is more likely than

not the deferred tax assets will be realized. Our income tax expense recorded in the future will be reduced to the extent of

decreases in our valuation allowances. The realization of our remaining deferred tax assets is dependent primarily on future
taxable income in the appropriate jurisdictions. Any reduction in future taxable income including any future restructuring
activities may require that we record an additional valuation allowance against our deferred tax assets. An increase in the
valuation allowance would result in additional income tax expense in such period and could have a significant impact on our
future earnings.

Changes in tax laws and rates also could affect recorded deferred tax assets and liabilities in the future. Management
is not aware of any enacted changes that would have a material effect on our results of operations, financial position, or cash
flows.

The calculation of our tax liabilities includes estimates for uncertainties in the application of complex tax regulations

across multiple global jurisdictions where we conduct our operations. Under the uncertain tax position provisions of
ASC 740, Income Taxes, we recognize liabilities for tax and related interest for issues in tax jurisdictions based on our
estimate of whether, and the extent to which, additional taxes and related interest will be due. These tax liabilities and related
interest are reflected net of the impact of related tax loss carryforwards, as such tax loss carryforwards will be applied against
these tax liabilities and will reduce the amount of cash tax payments due upon the eventual settlement with the tax
authorities. These estimates may change due to changing facts and circumstances. Due to the complexity of these
uncertainties, the ultimate resolution may result in a settlement that differs from our current estimate of the tax liabilities and
related interest. These tax liabilities and related interest are recorded in income taxes and accrued and other current liabilities
on the Consolidated Balance Sheets.

Pension Plans

Our defined benefit pension plan expense and obligations are developed from actuarial assumptions. The funded

status of our plans is recognized on the Consolidated Balance Sheets and is measured as the difference between the fair value
of plan assets and the projected benefit obligation at the measurement date. The projected benefit obligation represents the
actuarial present value of benefits projected to be paid upon retirement factoring in estimated future compensation levels. The
fair value of plan assets represents the current market value of cumulative company and participant contributions made to
irrevocable trust funds, held for the sole benefit of participants, which are invested by the trustees of the funds. The benefits
under our defined benefit pension plans are based on various factors, such as years of service and compensation.

Net periodic pension benefit cost is based on the utilization of the projected unit credit method of calculation and is

charged to earnings on a systematic basis over the expected average remaining service lives of current participants, or, for
inactive plans, over the remaining life expectancy of participants.

Two critical assumptions in determining pension expense and obligations are discount rates and expected long-term
returns on plan assets. We evaluate these assumptions at least annually. Other assumptions reflect demographic factors such
as retirement, mortality, and employee turnover. These assumptions are evaluated periodically and updated to reflect our
actual experience. Actual results may differ from actuarial assumptions. Discount rates represent the market rate for high-
quality fixed income investments and are used to calculate the present value of the expected future cash flows for benefit
obligations to be paid under our pension plans. A decrease in discount rates increases the present value of pension benefit
obligations. At fiscal year end 2022, a 25-basis-point decrease in discount rates would have increased the present value of our
pension obligations by $64 million; a 25-basis-point increase would have decreased the present value of our pension
obligations by $61 million. We consider the current and expected asset allocations of our pension plans, as well as historical
and expected long-term rates of return on those types of plan assets, in determining the expected long-term rates of return on
plan assets. A 50-basis-point decrease or increase in the expected long-term returns on plan assets would have increased or
decreased, respectively, our fiscal 2022 pension expense by $11 million.

At fiscal year end 2022, the long-term target asset allocation in our U.S. plans’ master trust is 25% return-seeking

assets and 75% liability-hedging assets. Asset re-allocation to meet that target is occurring over a multi-year period based on
the funded status. We expect to reach our target allocation when the funded status of the plans exceeds 110%. Based on the
funded status of the plans as of fiscal year end 2022, our target asset allocation is 67% return-seeking and 33% liability-
hedging.

See Note 2 to the Consolidated Financial Statements for information regarding recently issued accounting

pronouncements.

Accounting Pronouncements

Organic Net Sales Growth

Non-GAAP Financial Measure

We present organic net sales growth 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 represents net sales growth (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 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 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 “Results of Operations” and
“Segment Results” provide reconciliations of organic net sales growth to net sales growth calculated in accordance with
GAAP.

Organic net sales growth 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 in
combination with net sales growth to better understand the amounts, character, and impact of any increase or decrease in
reported amounts.

Forward-Looking Information

Certain statements in this Annual Report are “forward-looking statements” within the meaning of the U.S. Private

Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Exchange Act. 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 also include statements addressing our environmental,
social, governance, and sustainability plans and goals. 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,” “aspire,” “estimate,” “predict,” “potential,” “goal,” “target,” “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. Item 1A. Risk Factors” of our Annual
Report on Form 10-K for the fiscal year ended September 30, 2022 filed with the SEC and elsewhere in this Annual Report,
could cause our results to differ materially from those expressed in forward- looking statements:

conditions in the global or regional economies and global capital markets, and cyclical industry conditions,
including recession, inflation, and higher interest rates;

conditions affecting demand for products in the industries we serve, particularly the automotive industry;

risk of future goodwill impairment;

competition and pricing pressure;

•

• market acceptance of our new product introductions and product innovations and product life cycles;

•

raw material availability, quality, and cost;

fluctuations in foreign currency exchange rates and impacts of offsetting hedges;

financial condition and consolidation of customers and vendors;

reliance on third-party suppliers;

risks associated with current and future acquisitions and divestitures;

global risks of business interruptions due to natural disasters or other disasters such as the COVID-19
pandemic, which have impacted and could continue to negatively impact our results of operations as well as
customer behaviors, business, and manufacturing operations as well as our facilities and the facilities of our
suppliers, and other aspects of our business;

global risks of political, economic, and military instability, including the continuing military conflict between
Russia and Ukraine resulting from Russia’s invasion of Ukraine or escalating tensions in surrounding countries,
and volatile and uncertain economic conditions in China;

risks associated with security breaches and other disruptions to our information technology infrastructure;

risks related to compliance with current and future environmental and other laws and regulations;

risks associated with compliance with applicable antitrust or competition laws or applicable trade regulations;

our ability to protect our intellectual property rights;

risks of litigation;

our ability to operate within the limitations imposed by our debt instruments;

the possible effects on us of various non-U.S. and U.S. legislative proposals and other initiatives that, if
adopted, could materially increase our worldwide corporate effective tax rate, increase global cash taxes, and
negatively impact our U.S. government contracts business;

various risks associated with being a Swiss corporation;

the impact of fluctuations in the market price of our shares; and

the impact of certain provisions of our articles of association on unsolicited takeover proposals.

There may be other risks and uncertainties that we are unable to predict at this time or that we currently do not

expect to have a material adverse effect on our business.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In the normal course of business, our financial position is routinely subject to a variety of risks, including market
risks associated with interest rate and foreign currency movements on outstanding debt and non-U.S. dollar denominated
assets and liabilities and commodity price movements. We utilize established risk management policies and procedures in
executing derivative financial instrument transactions to manage a portion of these risks.

We do not execute transactions or hold derivative financial instruments for trading or speculative purposes.
Substantially all counterparties to derivative financial instruments are limited to major financial institutions with at least an
A/A2 credit rating. There is no significant concentration of exposures with any one counterparty.

Foreign Currency Exposures

As part of managing the exposure to changes in foreign currency exchange rates, we utilize cross-currency swap
contracts and foreign currency forward contracts, a portion of which are designated as cash flow hedges. The objective of
these contracts is to minimize impacts to cash flows and profitability due to changes in foreign currency exchange rates on
intercompany and other cash transactions. In addition, we utilize cross-currency swap contracts to hedge our net investment
in certain foreign operations. A 10% appreciation or depreciation of the underlying currency in our cross-currency swap
contracts or foreign currency forward contracts from the fiscal year end 2022 market rates would have changed the unrealized
value of our contracts by $151 million. A 10% appreciation or depreciation of the underlying currency in our cross-currency
swap contracts or foreign currency forward contracts from the fiscal year end 2021 market rates would have changed the
unrealized value of our contracts by $240 million. Such gains or losses on these contracts would generally be offset by the
losses or gains on the revaluation or settlement of the underlying transactions.

Interest Rate and Investment Exposures

We issue debt, as needed, to fund our operations and capital requirements. Such borrowings can result in interest

rate exposure. To manage the interest rate exposure, we use interest rate swap contracts to convert a portion of fixed rate debt
into variable rate debt. There were no such contracts and no floating rate debt outstanding at fiscal year end 2022 or 2021.

We may use forward starting interest rate swap contracts to manage interest rate exposure in periods prior to the
anticipated issuance of fixed rate debt. At fiscal year end 2021, we had forward starting interest rate swap contracts which
had an aggregate notional value of $450 million and were designated as cash flow hedges. There were no forward starting
interest rate swap contracts at fiscal year end 2022.

We utilize investment swap contracts to manage earnings exposure on certain nonqualified deferred compensation

liabilities.

Commodity Exposures

Our worldwide operations and product lines may expose us to risks from fluctuations in commodity prices. To limit

the effects of fluctuations in the future market price paid and related volatility in cash flows, we utilize commodity swap
contracts designated as cash flow hedges. We continually evaluate the commodity market with respect to our forecasted
usage requirements over the next eighteen months and periodically enter into commodity swap contracts to hedge a portion of
usage requirements over that period. At fiscal year end 2022, our commodity hedges, which related to expected purchases of
gold, silver, copper, and palladium, were in a net loss position of $82 million and had a notional value of $566 million. At
fiscal year end 2021, our commodity hedges, which related to expected purchases of gold, silver, copper, and palladium, were
in a net gain position of $1 million and had a notional value of $512 million. A 10% appreciation or depreciation of
commodity prices from the fiscal year end 2022 prices would have changed the unrealized value of our forward contracts by
$48 million. A 10% appreciation or depreciation of commodity prices from the fiscal year end 2021 prices would have
changed the unrealized value of our forward contracts by $51 million.

See Note 13 to the Consolidated Financial Statements for additional information regarding financial instruments.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

None.

Evaluation of Disclosure Controls and Procedures

CONTROLS AND PROCEDURES

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the

effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of
September 30, 2022. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures were effective as of September 30, 2022.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting
(as defined in Rule 13a-15(f) under the Exchange Act). Management, with the participation of our Chief Executive Officer
and Chief Financial Officer, evaluated the effectiveness of our internal control over financial reporting based on the
framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on this evaluation, management concluded our internal control over financial reporting was
effective as of September 30, 2022.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with policies and procedures may deteriorate.

Deloitte & Touche LLP, an independent registered public accounting firm, has issued an attestation report on our

internal control over financial reporting as of September 30, 2022, which is included in this Annual Report.

Changes in Internal Control Over Financial Reporting

During the quarter ended September 30, 2022, there were no changes in our internal control over financial reporting

that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

(This page has been left blank intentionally)

TE CONNECTIVITY LTD.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Reports of Independent Registered Public Accounting Firm (PCAOB ID No. 34)

Consolidated Statements of Operations for the Fiscal Years Ended September 30, 2022, September 24, 2021, and
September 25, 2020

Consolidated Statements of Comprehensive Income (Loss) for the Fiscal Years Ended September 30, 2022,
September 24, 2021, and September 25, 2020

Consolidated Balance Sheets as of September 30, 2022 and September 24, 2021

Consolidated Statements of Shareholders’ Equity for the Fiscal Years Ended September 30, 2022, September 24,
2021, and September 25, 2020

Consolidated Statements of Cash Flows for the Fiscal Years Ended September 30, 2022, September 24, 2021, and
September 25, 2020

Notes to Consolidated Financial Statements

Schedule II—Valuation and Qualifying Accounts

Report of the Statutory Auditor on the Consolidated Financial Statements of TE Connectivity Ltd.

Page

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of TE Connectivity Ltd.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of TE Connectivity Ltd. and subsidiaries (the

“Company”) as of September 30, 2022 and September 24, 2021, the related consolidated statements of operations,
comprehensive income (loss), shareholders’ equity, and cash flows, for each of the three years in the period ended
September 30, 2022, and the related notes and the schedule listed in the Index (collectively referred to as the “financial
statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the
Company as of September 30, 2022 and September 24, 2021, and the results of its operations and its cash flows for each of
the three years in the period ended September 30, 2022, in conformity with accounting principles generally accepted in the
United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United

States) (PCAOB), the Company’s internal control over financial reporting as of September 30, 2022, based on criteria
established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the
Treadway Commission and our report dated November 15, 2022, expressed an unqualified opinion on the Company’s
internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an

opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the
PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and

perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement,
whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the
financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits
also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial

statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or
disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex
judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements,
taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the
critical audit matter or on the accounts or disclosures to which it relates.

Income Taxes — Realizability of Deferred Tax Assets — Refer to Notes 2 and 15 to the financial statements

Critical Audit Matter Description

The Company recognizes deferred income taxes for temporary differences between the amount of assets and
liabilities recognized for financial reporting and tax purposes. A valuation allowance is provided to offset deferred tax assets
if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
Future realization of deferred tax assets depends on the existence of sufficient taxable income of the appropriate character
prior to expiration. Sources of taxable income include future reversals of deferred tax assets and liabilities, expected future
taxable income, taxable income in prior carryback years if permitted under the tax law, and tax planning strategies.
Management has determined that it is more likely than not that sufficient taxable income will be generated in the future to

realize a portion of its deferred tax assets, and therefore, a valuation allowance of $7.1 billion has been recorded to offset the
Company’s gross deferred tax assets as of September 30, 2022 of $9.8 billion.

We identified the realizability of deferred tax assets as a critical audit matter because of the Company’s tax structure

and the significant judgments and estimates made by management to determine that sufficient taxable income will be
generated in the future prior to expiration to realize a portion of its deferred tax assets. This required a high degree of auditor
judgment and an increased extent of effort, including the need to involve our income tax specialists, when performing audit
procedures to evaluate the appropriateness of qualifying tax planning strategies and the reasonableness of management’s
estimates of taxable income prior to expiration.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the determination that it is more likely than not that sufficient taxable income will be

generated in the future to realize deferred tax assets included the following, among others:

• We tested the effectiveness of controls over management’s estimates of the realization of the deferred tax

assets, including those over the estimates of taxable income, the approval of tax planning strategies and the
determination of whether it is more likely than not that the deferred tax assets will be realized prior to
expiration.

• We evaluated the reasonableness of management’s assessment of the significance and weighting of negative

evidence and positive evidence that is objectively verifiable.

• We evaluated management’s ability to accurately estimate taxable income by comparing actual results to

management’s historical estimates and evaluating whether there have been any changes that would impact
management’s ability to continue accurately estimating taxable income.

• We tested the reasonableness of management’s estimates of taxable income by comparing the estimates to:

– Historical taxable income.

–

Internal communications to management and the board of directors.

– Management’s history of carrying out its stated plans and its ability to carry out its plans considering

contractual commitments, available financing, or debt covenants.

• We evaluated whether the estimates of future taxable income were consistent with evidence obtained in other

areas of the audit.

• We evaluated whether the taxable income in prior carryback years was of the appropriate character and

available under the tax law.

• With the assistance of our income tax specialists, we evaluated (1) the appropriateness of qualifying tax

planning strategies, including that they were prudent, feasible and would more likely than not result in the
realization of deferred tax assets and (2) management’s assessment that sufficient taxable income will be
generated in the future to realize a portion of the deferred tax assets prior to expiration.

/s/ Deloitte & Touche LLP

Philadelphia, Pennsylvania
November 15, 2022

We have served as the Company’s auditor since 2007.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of TE Connectivity Ltd.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of TE Connectivity Ltd. and subsidiaries (the

“Company”) as of September 30, 2022, based on criteria established in Internal Control—Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company
maintained, in all material respects, effective internal control over financial reporting as of September 30, 2022, based on
criteria established in Internal Control—Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United

States) (PCAOB), the financial statements as of and for the fiscal year ended September 30, 2022, of the Company and our
report dated November 15, 2022 expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and

for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying
Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the
Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the
PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and

perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was
maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting,
assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal
control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the company are being made only in accordance with authorizations of management and
directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

/s/ Deloitte & Touche LLP

Philadelphia, Pennsylvania
November 15, 2022

TE CONNECTIVITY LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

Fiscal Years Ended September 30, 2022, September 24, 2021, and September 25, 2020

Fiscal
2022
2020
2021
(in millions, except per share data)

Net sales
Cost of sales

Gross margin

Selling, general, and administrative expenses
Research, development, and engineering expenses
Acquisition and integration costs
Restructuring and other charges, net
Impairment of goodwill
Operating income

Interest income
Interest expense
Other income (expense), net

Income from continuing operations before income taxes

Income tax expense

Income (loss) from continuing operations

Income from discontinued operations, net of income taxes

Net income (loss)

Basic earnings (loss) per share:

Income (loss) from continuing operations
Income from discontinued operations
Net income (loss)

Diluted earnings (loss) per share:

Income (loss) from continuing operations
Income from discontinued operations
Net income (loss)

Weighted-average number of shares outstanding:

Basic
Diluted

$ 16,281 $ 14,923
10,036
4,887
1,512
677
31
233
—
2,434
17
(56)
(17)
2,378
(123)
2,255
6
2,261

11,037
5,244
1,584
718
45
141
—
2,756
15
(66)
28
2,733
(306)
2,427
1
2,428 $

7.51 $
—
7.52

7.47 $
—
7.47

323
325

6.83
0.02
6.85

6.77
0.02
6.79

330
333

See Notes to Consolidated Financial Statements.

12,172
8,437
3,735
1,392
613
36
257
900
537
15
(48)
20
524
(783)
(259)
18
(241)

(0.78)
0.05
(0.73)

332
332

TE CONNECTIVITY LTD.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Fiscal Years Ended September 30, 2022, September 24, 2021, and September 25, 2020

2022

2,428 $

Fiscal
2021
(in millions)
2,261

2020

(241)

(510)

144

259
(95)
(346)
2,082
19
2,101 $

138
(3)
279
2,540
(2)
2,538

(11)

34
40
63
(178)
(5)
(183)

Net income (loss)
Other comprehensive income (loss):

Currency translation
Adjustments to unrecognized pension and postretirement benefit costs, net of
income taxes
Gains (losses) on cash flow hedges, net of income taxes

Other comprehensive income (loss)

Comprehensive income (loss)
Less: comprehensive (income) loss attributable to noncontrolling interests
Comprehensive income (loss) attributable to TE Connectivity Ltd.

See Notes to Consolidated Financial Statements.

TE CONNECTIVITY LTD.

CONSOLIDATED BALANCE SHEETS

As of September 30, 2022 and September 24, 2021

Assets
Current assets:

Cash and cash equivalents
Accounts receivable, net of allowance for doubtful accounts of $45 and $41, respectively
Inventories
Prepaid expenses and other current assets

Total current assets

Property, plant, and equipment, net
Goodwill
Intangible assets, net
Deferred income taxes
Other assets

Total assets

Liabilities, redeemable noncontrolling interests, and shareholders’ equity
Current liabilities:
Short-term debt
Accounts payable
Accrued and other current liabilities

Total current liabilities

Long-term debt
Long-term pension and postretirement liabilities
Deferred income taxes
Income taxes
Other liabilities

Total liabilities

Commitments and contingencies (Note 12)
Redeemable noncontrolling interests
Shareholders’ equity:

Common shares, CHF 0.57 par value, 330,830,781 shares authorized and issued, and
336,099,881 shares authorized and issued, respectively
Accumulated earnings
Treasury shares, at cost, 12,749,540 and 9,060,919 shares, respectively
Accumulated other comprehensive loss

Total shareholders’ equity
Total liabilities, redeemable noncontrolling interests, and shareholders’ equity

See Notes to Consolidated Financial Statements.

Fiscal Year End

2022

2021

(in millions, except
share data)

1,088 $
2,865
2,676
639
7,268
3,567
5,258
1,288
2,498
903
20,782 $

914 $

1,593
2,125
4,632
3,292
695
244
304
718
9,885

1,203
2,928
2,511
621
7,263
3,778
5,590
1,549
2,499
783
21,462

503
1,911
2,242
4,656
3,589
1,139
181
302
847
10,714

114

146
12,832
(1,681)
(495)
10,802
20,782 $

148
11,709
(1,055)
(168)
10,634
21,462

TE CONNECTIVITY LTD.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Fiscal Years Ended September 30, 2022, September 24, 2021, and September 25, 2020

Accumulated
Other

Total

Common Shares Treasury Shares Contributed Accumulated Comprehensive Shareholders’
Shares Amount Shares Amount Surplus

Income (Loss)

Earnings

Equity

351 $
—
—
—
—
—

154
—
—
—
—
—

—
—
(12)
339 $
—
—
—
—
—

—
—
(3)
336 $
—
—
—
—
—

—
—
(5)
149
—
—
—
—
—

—
—
(1)
148
—
—
—
—
—

(16) $ (1,337) $
—
—
—
—
1

—
—
—
—
55

1
(6)
12
(8) $
—
—
—
—
2

143
(505)
975
(669) $
—
—
—
—
167

89
(904)
262

1
(7)
3
(9) $ (1,055) $
—
—
—
—
—

—
—
—
—
54

(in millions)
— $
—
—
74
—
—

(74)
—
—
— $
—
—
94
—
—

(94)
—
—
— $
—
—
119
—
—

—
—
(5)
331 $

—
—
(2)
146

1
(10)
5

20
(1,409)
709

(13) $ (1,681) $

(119)
—
—
— $

12,256 $
(241)
—
—
(634)
—

(63)
—
(970)
10,348 $
2,261
—
—
(656)
—

17
—
(261)
11,709 $
2,428
—
—
(714)
—

116
—
(707)
12,832 $

(503) $
—
58
—
—
—

—
—
—
(445) $
—
277
—
—
—

—
—
—
(168) $
—
(327)
—
—
—

—
—
—
(495) $

10,570
(241)
58
74
(634)
55

6
(505)
—
9,383
2,261
277
94
(656)
167

12
(904)
—
10,634
2,428
(327)
119
(714)
54

17
(1,409)
—
10,802

See Notes to Consolidated Financial Statements.

Balance at fiscal year end 2019
Net loss
Other comprehensive income
Share-based compensation expense
Dividends
Exercise of share options
Restricted share award vestings and
other activity
Repurchase of common shares
Cancellation of treasury shares
Balance at fiscal year end 2020
Net income
Other comprehensive income
Share-based compensation expense
Dividends
Exercise of share options
Restricted share award vestings and
other activity
Repurchase of common shares
Cancellation of treasury shares
Balance at fiscal year end 2021
Net income
Other comprehensive loss
Share-based compensation expense
Dividends
Exercise of share options
Restricted share award vestings and
other activity
Repurchase of common shares
Cancellation of treasury shares
Balance at fiscal year end 2022

TE CONNECTIVITY LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Fiscal Years Ended September 30, 2022, September 24, 2021, and September 25, 2020

Cash flows from operating activities:
Net income (loss)

Income from discontinued operations, net of income taxes

Income (loss) from continuing operations
Adjustments to reconcile income (loss) from continuing operations to net cash provided by
operating activities:

Impairment of goodwill
Depreciation and amortization
Deferred income taxes
Non-cash lease cost
Provision for losses on accounts receivable and inventories
Share-based compensation expense
Other

Changes in assets and liabilities, net of the effects of acquisitions and divestitures:

Accounts receivable, net
Inventories
Prepaid expenses and other current assets
Accounts payable
Accrued and other current liabilities
Income taxes
Other

Net cash provided by continuing operating activities
Net cash provided by discontinued operating activities
Net cash provided by operating activities

Cash flows from investing activities:
Capital expenditures
Proceeds from sale of property, plant, and equipment
Acquisition of businesses, net of cash acquired
Other

Net cash used in investing activities

Cash flows from financing activities:
Net increase (decrease) in commercial paper
Proceeds from issuance of debt
Repayment of debt
Proceeds from exercise of share options
Repurchase of common shares
Payment of common share dividends to shareholders
Other

Net cash used in continuing financing activities
Net cash used in discontinued financing activities
Net cash used in financing activities

Effect of currency translation on cash
Net increase (decrease) in cash, cash equivalents, and restricted cash
Cash, cash equivalents, and restricted cash at beginning of fiscal year
Cash, cash equivalents, and restricted cash at end of fiscal year

Supplemental cash flow information:
Interest paid on debt, net
Income taxes paid, net of refunds

See Notes to Consolidated Financial Statements.

2022

Fiscal
2021
(in millions)

2020

2,428 $
(1)
2,427

2,261
(6)
2,255

(241)
(18)
(259)

—
785
(147)
131
70
119
23

200
(41)
50
(396)
(398)
32
(387)
2,468
—
2,468

(768)
106
(220)
4
(878)

370
588
(558)
54
(1,412)
(685)
(41)
(1,684)
—
(1,684)
(21)
(115)
1,203
1,088 $

—
769
(354)
120
46
94
(61)

(518)
(556)
(19)
560
173
106
61
2,676
—
2,676

(690)
86
(423)
(10)
(1,037)

—
661
(708)
167
(831)
(647)
(28)
(1,386)
—
(1,386)
5
258
945
1,203

58 $

421

58
371

900
711
535
108
14
74
54

(63)
(89)
51
(80)
(99)
(9)
143
1,991
1
1,992

(560)
17
(339)
17
(865)

(219)
593
(352)
55
(523)
(625)
(33)
(1,104)
(1)
(1,105)
(4)
18
927
945

50
257

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

The Consolidated Financial Statements reflect the consolidated operations of TE Connectivity Ltd. and its

subsidiaries and have been prepared in United States (“U.S.”) dollars in accordance with accounting principles generally
accepted in the U.S. (“GAAP”).

Description of the Business

TE Connectivity Ltd. (“TE Connectivity” or the “Company,” which may be referred to as “we,” “us,” or “our”) is a

We operate through three reportable segments:

• Transportation Solutions—The Transportation Solutions segment is a leader in connectivity and sensor

technologies. Our products, which must withstand harsh conditions, are used in the automotive, commercial
transportation, and sensors markets.

•

Industrial Solutions—The Industrial Solutions segment is a leading supplier of products that connect and
distribute power, data, and signals. Our products are used in the industrial equipment; aerospace, defense, and
marine; energy; and medical markets.

• Communications Solutions—The Communications Solutions segment is a leading supplier of electronic

components for the data and devices and the appliances markets.

Use of Estimates

The preparation of the Consolidated Financial Statements in conformity with GAAP requires management to make

Fiscal Year

2. Summary of Significant Accounting Policies

Principles of Consolidation

We consolidate entities in which we own or control more than 50% of the voting shares or otherwise control through

similar rights. All intercompany transactions have been eliminated. The results of companies acquired or disposed of are
included on the Consolidated Financial Statements from the effective date of acquisition or up to the date of disposal.

Revenue Recognition

We account for revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from
Contracts with Customers, which is a single, comprehensive, five-step revenue recognition model. Our revenues are
generated principally from the sale of our products. Revenue is recognized as performance obligations under the terms of a
contract, such as a purchase order with a customer, are satisfied; generally this occurs with the transfer of control. We transfer
control and recognize revenue when we ship product to our customers, the customers accept and have legal title for the
product, and we have a right to payment for such product. Revenue is measured as the amount of consideration that we

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

expect to receive in exchange for those products and excludes taxes assessed by governmental authorities and collected from
customers concurrent with the sale of products. Shipping and handling costs are treated as fulfillment costs and are included
in cost of sales. Since we typically invoice our customers when we satisfy our performance obligations, we do not have
material contract assets or contract liabilities. Our credit terms are customary and do not contain significant financing
components that extend beyond one year of fulfillment of performance obligations. We apply the practical expedient of
ASC 606 with respect to financing components and do not evaluate contracts in which payment is due within one year of
satisfaction of the related performance obligation. Since our performance obligations to deliver products are part of contracts
that generally have original durations of one year or less, we have elected to use the optional exemption to not disclose the
aggregate amount of transaction prices associated with unsatisfied or partially satisfied performance obligations. See Note 20
for net sales disaggregated by industry end market and geographic region which is summarized by segment and that we
consider meaningful to depict the nature, amount, timing, and uncertainty of revenue and cash flows affected by economic
factors.

We generally warrant that our products will conform to our, or mutually agreed to, specifications and that our

Although products are generally sold at fixed prices, certain distributors and customers receive incentives or awards,

such as sales rebates, return allowances, scrap allowances, and other rights, which are accounted for as variable
consideration. We estimate these amounts in the same period revenue is recognized based on the expected value to be
provided to customers and reduce revenue accordingly. Our estimates of variable consideration and ultimate determination of
the estimated amounts to include in the transaction price are based primarily on our assessment of anticipated performance
and historical and forecasted information that is reasonably available to us.

Inventories

Inventories are recorded at the lower of cost or net realizable value using the first-in, first-out cost method.

Property, Plant, and Equipment, Net

Property, plant, and equipment is recorded at cost less accumulated depreciation. Maintenance and repair

expenditures are charged to expense when incurred. Depreciation is calculated using the straight - line method over the
estimated useful lives of the assets, which are 10 to 20 years for land improvements, 5 to 40 years for buildings and
improvements, and 1 to 15 years for machinery and equipment.

We periodically evaluate, when events and circumstances warrant, the net realizable value of property, plant, and

equipment and other long-lived assets, relying on several factors including operating results, business plans, economic
projections, and anticipated future cash flows. When indicators of potential impairment are present, the carrying values of the
asset group are evaluated in relation to the operating performance and estimated future undiscounted cash flows of the
underlying asset group. Impairment of the carrying value is recognized whenever anticipated future undiscounted cash flow
estimates are less than the carrying value of the asset. Fair value estimates are based on assumptions concerning the amount
and timing of estimated future cash flows and discount rates, reflecting varying degrees of perceived risk.

Goodwill and Other Intangible Assets

We account for goodwill and other intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other.

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

At fiscal year end 2022, we had five reporting units, all of which contained goodwill. There were two reporting units

in both the Transportation Solutions and Industrial Solutions segments and one reporting unit in the Communications
Solutions segment. When changes occur in the composition of one or more reporting units, goodwill is reassigned to the
reporting units affected based on their relative fair values.

Goodwill impairment is evaluated by comparing the carrying value of each reporting unit to its fair value on the first

Fair value estimates used in the goodwill impairment tests are calculated using an income approach based on the

Research and Development

Research and development expenditures are expensed when incurred and are included in research, development, and

engineering expenses on the Consolidated Statements of Operations. Research and development expenses include salaries,
direct costs incurred, and building and overhead expenses. The amounts expensed in fiscal 2022, 2021, and 2020 were
$610 million, $612 million, and $539 million, respectively.

Income Taxes

Income taxes are computed in accordance with the provisions of ASC 740, Income Taxes. Deferred tax liabilities
and assets are recognized for the expected future tax consequences of events that have been reflected on the Consolidated
Financial Statements. Deferred tax liabilities and assets are determined based on the differences between the book and tax
bases of particular assets and liabilities and operating loss carryforwards using tax rates in effect for the years in which the
differences are expected to reverse. A valuation allowance is provided to offset deferred tax assets if, based upon the
available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The calculation of our tax liabilities includes estimates for uncertainties in the application of complex tax regulations

across multiple global jurisdictions where we conduct our operations. Under the uncertain tax position provisions of
ASC 740, we recognize liabilities for tax and related interest for issues in tax jurisdictions based on our estimate of whether,
and the extent to which, additional taxes and related interest will be due. These tax liabilities and related interest are reflected
net of the impact of related tax loss carryforwards, as such tax loss carryforwards will be applied against these tax liabilities
and will reduce the amount of cash tax payments due upon the eventual settlement with the tax authorities. These estimates
may change due to changing facts and circumstances. Due to the complexity of these uncertainties, the ultimate resolution
may result in a settlement that differs from our current estimate of the tax liabilities and related interest.

Financial Instruments

Our financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable,

debt, and derivative financial instruments.

We account for derivative financial instrument contracts on the Consolidated Balance Sheets at fair value. For
instruments not designated as hedges under ASC 815, Derivatives and Hedging, the changes in the instruments’ fair value are
recognized currently in earnings. For instruments designated as cash flow hedges, the effective portion of changes in the fair

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

value of a derivative is recorded in other comprehensive income (loss) and reclassified into earnings in the same period or
periods during which the underlying hedged item affects earnings. Amounts excluded from the hedging relationship are
recognized currently in earnings. Changes in the fair value of instruments designated as fair value hedges affect the carrying
value of the asset or liability hedged, with changes in both the derivative instrument and the hedged asset or liability being
recognized currently in earnings.

We determine the fair value of our financial instruments using methods and assumptions that are based on market

conditions and risks existing at each balance sheet date. Standard market conventions are used to determine the fair value of
financial instruments, including derivatives.

The cash flows related to derivative financial instruments are reported in the operating activities section of the

Consolidated Statements of Cash Flows.

Our derivative financial instruments present certain market and counterparty risks. Concentration of counterparty
risk is mitigated, however, by our use of financial institutions worldwide, substantially all of which have long-term S&P,
Moody’s, and/or Fitch credit ratings of A/A2 or higher. In addition, we utilize only conventional derivative financial
instruments. We are exposed to potential losses if a counterparty fails to perform according to the terms of its agreement.
With respect to counterparty net asset positions recognized at fiscal year end 2022, we have assessed the likelihood of
counterparty default as remote. We currently provide guarantees from a wholly-owned subsidiary to the counterparties to our
commodity swap derivatives and, prior to maturity, exchanged cash collateral with the counterparties to certain of our cross-
currency swap contracts. The likelihood of performance on the guarantees has been assessed as remote. For all other
derivative financial instruments, we are not required to provide, nor do we require counterparties to provide, collateral or
other security.

Fair Value Measurements

ASC 820, Fair Value Measurements and Disclosures, specifies a fair value hierarchy based upon the observable

inputs utilized in valuation of certain assets and liabilities. Observable inputs (highest level) reflect market data obtained from
independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. Fair value
measurements are classified under the following hierarchy:

• Level 1—Quoted prices in active markets for identical assets and liabilities.

• Level 2—Quoted prices in active markets for similar assets and liabilities, or other inputs that are observable for

the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

• Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair
value of the assets and liabilities. This includes certain pricing models, discounted cash flows methodologies,
and similar techniques that use significant unobservable inputs.

Derivative financial instruments measured at fair value on a recurring basis are generally valued using level 2 inputs.

Financial instruments other than derivative instruments include cash and cash equivalents, accounts receivable,

accounts payable, and debt. These instruments are recorded on the Consolidated Balance Sheets at book value. For cash and
cash equivalents, accounts receivable, and accounts payable, we believe book value approximates fair value due to the short-
term nature of these instruments. See Note 10 for disclosure of the fair value of debt. The following is a description of the
valuation methodologies used for the respective financial instruments:

• Cash and cash equivalents—Cash and cash equivalents are valued at book value, which we consider to be

equivalent to unadjusted quoted prices (level 1).

• Accounts receivable—Accounts receivable are valued based on the net value expected to be realized. The net

realizable value generally represents an observable contractual agreement (level 2).

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

• Accounts payable—Accounts payable are valued based on the net value expected to be paid, generally

supported by an observable contractual agreement (level 2).

• Debt—The fair value of debt, including both current and non - current maturities, is derived from quoted market

prices or other pricing determinations based on the results of market approach valuation models using
observable market data such as recently reported trades, bid and offer information, and benchmark securities
(level 2).

Pension Plans

The funded status of our defined benefit pension plans is recognized on the Consolidated Balance Sheets and is

measured as the difference between the fair value of plan assets and the projected benefit obligation at the measurement date.
The projected benefit obligation represents the actuarial present value of benefits projected to be paid upon retirement
factoring in estimated future compensation levels. The fair value of plan assets represents the current market value of
cumulative company and participant contributions made to irrevocable trust funds, held for the sole benefit of participants,
which are invested by the trustees of the funds. The benefits under our defined benefit pension plans are based on various
factors, such as years of service and compensation.

Net periodic pension benefit cost is based on the utilization of the projected unit credit method of calculation and is

charged to earnings on a systematic basis over the expected average remaining service lives of current participants, or, for
inactive plans, over the remaining life expectancy of participants.

The measurement of benefit obligations and net periodic benefit cost is based on estimates and assumptions
determined by our management. These valuations reflect the terms of the plans and use participant - specific information such
as compensation, age, and years of service, as well as certain assumptions, including estimates of discount rates, expected
returns on plan assets, rates of compensation increases, interest crediting rates, and mortality rates.

Share - Based Compensation

We determine the fair value of share awards on the date of grant. Share options are valued using the

Black - Scholes - Merton valuation model; restricted share awards and performance awards are valued using our end - of - day
share price on the date of grant. The fair value is expensed ratably over the expected service period, with an allowance made
for estimated forfeitures based on historical employee activity. Estimates regarding the attainment of performance criteria are
reviewed periodically; the cumulative impact of a change in estimate regarding the attainment of performance criteria is
recorded in the period in which that change is made.

Earnings Per Share

Basic earnings per share is computed by dividing net income by the basic weighted-average number of common

shares outstanding. Diluted earnings per share is computed by dividing net income by the weighted-average number of
common shares outstanding adjusted for the potentially dilutive impact of share-based compensation arrangements.

Leases

We account for leases in accordance with of ASC 842, Leases. We have facility, land, vehicle, and equipment leases

that expire at various dates. We determine if a contract qualifies as a lease at inception. A contract is or contains a lease if it
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The right to
control the use of an asset includes the right to obtain substantially all of the economic benefits of the identified asset and the
right to direct the use of the identified asset.

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Lease right-of-use (“ROU”) assets and lease liabilities are recognized at the commencement date of the lease based

on the present value of remaining lease payments over the lease term. Lease ROU assets represent our right to use the
underlying assets for the lease term and lease liabilities represent the obligation to make lease payments arising from the
leases. We do not recognize ROU assets or lease liabilities that arise from short-term leases. Since our lease contracts do not
contain a readily determinable implicit rate, we determine a fully-collateralized incremental borrowing rate that reflects a
similar term to the lease and the economic environment of the applicable country or region in which the asset is leased.

We have elected to account for fixed lease and non-lease components in our real estate leases as a single lease

component; other leases generally do not contain non-lease components. The non-lease components in our real estate leases
include logistics services, warehousing, and other operational costs. Many of these costs are variable, fluctuating based on
services provided, such as pallets shipped in and out of a location or square footage of space occupied. These costs, and any
other variable rental costs, are excluded from our ROU assets and lease liabilities and are expensed as incurred. Some of our
leases may include options to either renew or early terminate the lease. The exercise of these options is generally at our sole
discretion and would only occur if there is an economic, financial, or business reason to do so. Such options are included in
the lease term if we determine it is reasonably certain they will be exercised.

Currency Translation

For our non - U.S. dollar functional currency subsidiaries, assets and liabilities are translated into U.S. dollars using

fiscal year end exchange rates. Sales and expenses are translated at average monthly exchange rates. Foreign currency
translation gains and losses are included as a component of accumulated other comprehensive income (loss) within equity.
Gains and losses resulting from foreign currency transactions are included in earnings.

Restructuring Charges

Restructuring activities involve employee-related termination costs, facility exit costs, and asset impairments
resulting from reductions-in-force, migration of facilities or product lines from higher-cost to lower-cost countries, or
consolidation of facilities within countries. We recognize termination costs based on requirements established by severance
policy, government law, or previous actions. Facility exit costs generally reflect the accelerated rent expense for ROU assets,
expected lease termination costs, or costs that will continue to be incurred under the facility lease without future economic
benefit to us. Restructuring activities often result in the disposal or abandonment of assets that require an acceleration of
depreciation or impairment reflecting the excess of the assets’ carrying values over fair value.

The recognition of restructuring costs require that we make certain judgments and estimates regarding the nature,

timing, and amount of costs associated with the planned exit activity. To the extent our actual results differ from our
estimates and assumptions, we may be required to revise the estimated liabilities, requiring the recognition of additional
restructuring costs or the reduction of liabilities already recognized. At the end of each reporting period, we evaluate the
remaining accrued balances to ensure these balances are properly stated and the utilization of the reserves are for their
intended purpose in accordance with developed exit plans.

Contingent Liabilities

We record a loss contingency when the available information indicates it is probable that we have incurred a liability

and the amount of the loss is reasonably estimable. When a range of possible losses with equal likelihood exists, we record
the low end of the range. The likelihood of a loss with respect to a particular contingency is often difficult to predict, and
determining a meaningful estimate of the loss or a range of loss may not be practicable based on information available. In
addition, it is not uncommon for such matters to be resolved over many years, during which time relevant developments and
new information must continuously be evaluated to determine whether a loss is probable and a reasonable estimate of that
loss can be made. When a loss is probable but a reasonable estimate cannot be made, or when a loss is at least reasonably
possible, disclosure is provided.

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Recently Issued Accounting Pronouncements

In September 2022, the Financial Accounting Standards Board issued Accounting Standards Update No. 2022-04 to

enhance transparency and introduce new disclosures related to a buyer’s use of supplier finance programs. This update is
effective for us in the first quarter of fiscal 2024. We are currently assessing the impact of adopting the update, but do not
expect adoption to have a material impact on our Consolidated Financial Statements.

3. Restructuring and Other Charges, Net

Net restructuring and other charges consisted of the following:

Restructuring charges, net
Impairment of held for sale businesses and loss on
divestitures, net
Other charges, net

Restructuring and other charges, net

Net restructuring and related charges by segment were as follows:

2022

$ 137

Fiscal
2021
(in millions)
$ 208 $ 257

2020

4
—
$ 141

21
4

—
—
$ 233 $ 257

Transportation Solutions
Industrial Solutions
Communications Solutions

Restructuring charges, net

Plus: charges included in cost of sales(1)
Restructuring and related charges, net

2022

80
34
23
137
16
$ 153

2020

Fiscal
2021
(in millions)
$ 135 $ 113
102
42
257
—
$ 208 $ 257

50
23
208
—

(1)

Charges included in cost of sales were attributable to inventory-related charges within the
Industrial Solutions segment.

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Activity in our restructuring reserves was as follows:

Balance at
Beginning
of Fiscal
Year

Changes in Cash

Charges Estimate Payments
(in millions)

Currency
Non-Cash Translation of Fiscal
and Other Year

Items

Balance at
End

Fiscal 2022 Activity:

Fiscal 2022 Actions:

Employee severance
Facility and other exit costs
Property, plant, and equipment and other non-cash
charges

Total
Fiscal 2021 Actions:

Employee severance
Facility and other exit costs
Property, plant, and equipment

Total
Fiscal 2020 Actions:

Employee severance
Facility and other exit costs
Property, plant, and equipment

Total

Pre-Fiscal 2020 Actions:
Employee severance
Facility and other exit costs

Total

Total fiscal 2022 activity

Fiscal 2021 Activity:

Fiscal 2021 Actions:

Employee severance
Facility and other exit costs
Property, plant, and equipment

Total
Fiscal 2020 Actions:

Employee severance
Facility and other exit costs
Property, plant, and equipment

Total

Pre-Fiscal 2020 Actions:
Employee severance
Facility and other exit costs
Property, plant, and equipment

Total

Total fiscal 2021 activity

Fiscal 2020 Activity:

Fiscal 2020 Actions:

Employee severance
Facility and other exit costs
Property, plant, and equipment

Total

Pre-Fiscal 2020 Actions:
Employee severance
Facility and other exit costs
Property, plant, and equipment

Total

Total fiscal 2020 activity

— $
—

126

$
2

— $
—

(15)
$
(1)

—
—

33
161

152
2
—
154

2
5
3
10

104 —
15 —
4
—
4
119

31 —
8
—
8
31
183 $
304 $

— $
—
—
—

199

$
4
9
212

180
8
—
188

5
11
7
23

93 —
2
— —
2
97
237 $
285 $

— $
—
—
—

214

$
8
28
250

261
3

7
17

—
264
264

33
283

—
—

(8)
—
—
(8)

(17)
(2)
(3)
(22)

—
—
—
(30) $

(17)
$
—
—
(17)

—
—
—
—

(9)
—
(3)
(12)
(29) $

— $
—
—
—

(26)
—
—
(26)
(26)

—
(16)

(83)
(7)
—
(90)

(27)
(5)
—
(32)

(33)
(33)

—
—
(3)
(3)

—
—
(1)
(1)

(14)
(8)
(22)
(160) $

—
—
—
(37) $

(26)
$
(2)
—
(28)

(84)
(4)
—
(88)

(53)
(6)
—
(59)
(175) $

(35)
$
—
—
(35)

(153)
(18)
—

(171)
(206)

—
—
(9)
(9)

—
—
(7)
(7)

—
—
3
3

(13) $

—
—
(28)
(28)

—
—
(9)
(9)
(37) $

(3)
$
—

—
(3)

(14)
—
—
(14)

(11)
(1)
—
(12)

(3)
—
(3)
(32) $

(4)
$
—
—
(4)

3
—
—
3

—
—
—
—
(1) $

$
—
—
1

4
2

—

6
7

108
1

—
109

49
—
—
49

49
7
—
56

14
—
14
228

152
2
—
154

104
15
—
119

31
—
—
31
304

180
8
—
188

93
4
—
97
285

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Fiscal 2022 Actions

During fiscal 2022, we initiated a restructuring program associated with footprint consolidation and cost structure

improvements across all segments. In connection with this program, during fiscal 2022, we recorded restructuring and related
charges of $161 million. We expect to complete all restructuring actions commenced during fiscal 2022 by the end of fiscal
2024 and to incur additional charges of approximately $24 million related primarily to employee severance and facility exit
costs.

The following table summarizes expected, incurred, and remaining charges for the fiscal 2022 program by segment

as of fiscal year end 2022:

Transportation Solutions
Industrial Solutions
Communications Solutions

Total

Fiscal 2021 Actions

Cumulative Remaining
Charges Expected

Total
Expected
Charges Incurred Charges
(in millions)
$

99
56
30
$ 185

88 $
52
21
161 $

11
4
9
24

During fiscal 2021, we initiated a restructuring program across all segments to optimize our manufacturing footprint
and improve the cost structure of the organization. In connection with this program, during fiscal 2022 and 2021, we recorded
net restructuring charges of $2 million and $195 million, respectively. We expect additional charges related to fiscal 2021
actions to be insignificant.

The following table summarizes charges incurred for the fiscal 2021 program by segment as of fiscal year end 2022:

Cumulative
Charges
Incurred

Transportation Solutions
Industrial Solutions
Communications Solutions

Total

Fiscal 2020 Actions

(in millions)
124
49
24
197

During fiscal 2020, we initiated a restructuring program associated with footprint consolidation and structural

improvements, due in part to the COVID-19 pandemic, across all segments. In connection with this program, during fiscal
2022, 2021, and 2020, we recorded net restructuring credits of $18 million, charges of $23 million, and charges of
$250 million, respectively. We expect that any additional charges related to fiscal 2020 actions will be insignificant.

Pre-Fiscal 2020 Actions

During fiscal 2022, 2021, and 2020, we recorded net restructuring charges of $8 million, credits of $10 million, and

charges of $7 million, respectively, related to pre-fiscal 2020 actions. We expect that any additional charges related to
restructuring actions commenced prior to fiscal 2020 will be insignificant.

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Total Restructuring Reserves

Restructuring reserves included on the Consolidated Balance Sheets were as follows:

Accrued and other current liabilities
Other liabilities

Restructuring reserves

4. Acquisitions

Fiscal Year End
2021
2022

(in millions)
182 $
46
228 $

236
68
304

During fiscal 2022, we acquired three businesses for a combined cash purchase price of $245 million, net of cash

acquired. The acquisitions were reported as part of our Communications Solutions segment from the date of acquisition.

We acquired four businesses for a combined cash purchase price of $422 million, net of cash acquired, during fiscal
2021. The acquisitions were reported as part of our Industrial Solutions segment from the date of acquisition. In fiscal 2021,
due to the timing of two transactions that closed in the fourth quarter, we preliminarily allocated the purchase price of those
acquisitions to goodwill and identifiable intangibles assets. During fiscal 2022, we finalized the purchase price allocation,
which included the recognition of $25 million of cash acquired, and the associated goodwill was reduced. See Note 7 for
additional information.

During fiscal 2020, we acquired five businesses, including First Sensor AG (“First Sensor”), for a combined cash
purchase price of $336 million, net of cash acquired. The acquisitions were reported as part of our Transportation Solutions
and Industrial Solutions segments from the date of acquisition.

In connection with our acquisition of approximately 72% of the outstanding shares of First Sensor, we and First
Sensor entered into a Domination and Profit and Loss Transfer Agreement (“DPLTA”) which became effective in fiscal
2020. Under the terms of the DPLTA, First Sensor minority shareholders can elect either (1) to remain First Sensor minority
shareholders and receive recurring annual compensation of €0.56 per First Sensor share or (2) to put their First Sensor shares
in exchange for compensation of €33.27 per First Sensor share. The ultimate amount and timing of any future cash payments
related to the DPLTA is uncertain. Our First Sensor noncontrolling interest balance, which was originally recorded at a fair
value of €96 million at the acquisition date (equivalent to $107 million), is recorded as redeemable noncontrolling interest
outside of equity on the Consolidated Balance Sheets as of fiscal year end 2022 and 2021 as the exercise of the put right by
First Sensor minority shareholders is not within our control.

5. Inventories

Inventories consisted of the following:

Raw materials
Work in progress
Finished goods
Inventories

Fiscal Year End
2021
2022

(in millions)
390 $

320
991
1,200
$ 2,676 $ 2,511

1,066
1,220

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

6. Property, Plant, and Equipment, Net

Net property, plant, and equipment consisted of the following:

Fiscal Year End
2021
2022

(in millions)

Property, plant, and equipment, gross:

Land and improvements
Buildings and improvements
Machinery and equipment
Construction in process

Accumulated depreciation

Property, plant, and equipment, net

106 $

128
1,469
8,308
614
10,519
(6,741)
$ 3,567 $ 3,778

1,331
7,727
609
9,773
(6,206)

Depreciation expense was $593 million, $576 million, and $529 million in fiscal 2022, 2021, and 2020, respectively.

7. Goodwill

The changes in the carrying amount of goodwill by segment were as follows:

Transportation Industrial Communications
Solutions

Solutions

Total

Balance at fiscal year end 2020(1)

Acquisitions
Currency translation and other
Balance at fiscal year end 2021(1)

Acquisitions
Purchase price adjustments
Currency translation and other
Balance at fiscal year end 2022(1)

(in millions)

1,527
—
22
1,549
—
—
(110)
1,439

$ 3,110 $
307
29
3,446
—
(91)
(228)
$ 3,127 $

587
—
8
595
141
—
(44)
692

$ 5,224
307
59
5,590
141
(91)
(382)
$ 5,258

(1)

At fiscal year end 2022, 2021, and 2020, accumulated impairment losses for the Transportation Solutions, Industrial Solutions,
and Communications Solutions segments were $3,091 million, $669 million, and $489 million, respectively.

During fiscal 2022 and 2021, we recognized goodwill of $141 million and $307 million, respectively, in connection

with new acquisitions. Also during fiscal 2022, we recognized purchase price adjustments in connection with prior year
acquisitions, including two acquisitions that closed late in the fourth quarter of fiscal 2021. See Note 4 for additional
information regarding acquisitions.

We completed our annual goodwill impairment test in the fourth quarter of fiscal 2022 and determined that no

impairment existed.

During the second quarter of fiscal 2020, as a result of current and projected declines in sales and profitability of the

Sensors reporting unit of the Transportation Solutions segment, due in part to the impact of the COVID-19 pandemic and
projected reductions in global automotive production as of March 2020, we determined that an indicator of impairment had
occurred and goodwill impairment testing of this reporting unit was required. We determined the fair value of the Sensors
reporting unit to be $1.0 billion as of March 27, 2020. This valuation was based on a discounted cash flows analysis
incorporating our estimate of future operating performance, which we consider to be a level 3 unobservable input in the fair
value hierarchy, and was corroborated using a market approach valuation. The goodwill impairment test indicated that the
carrying value of the reporting unit exceeded its fair value by $900 million. As a result, we recorded a partial impairment
charge of $900 million in the quarter ended March 27, 2020. No additional impairment was identified during our annual
goodwill impairment test in the fourth quarter of fiscal 2020.

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

8. Intangible Assets, Net

Intangible assets consisted of the following:

2022

2021

Gross

Net

Gross

Net

Customer relationships
Intellectual property
Other

Total

Carrying Accumulated Carrying Carrying Accumulated Carrying
Amount Amortization Amount Amount Amortization Amount
(in millions)
955
322
11
(1,544) $ 1,288

(660) $ 1,106
430
(832)
13
(6)
(1,498) $ 1,549

$ 1,766 $
1,262
19
$ 3,047 $

$ 1,642
1,174
16
$ 2,832

(687) $
(852)
(5)

Intangible asset amortization expense was $192 million, $193 million, and $182 million for fiscal 2022, 2021, and

2020, respectively. At fiscal year end 2022, the aggregate amortization expense on intangible assets is expected to be as
follows:

Fiscal 2023
Fiscal 2024
Fiscal 2025
Fiscal 2026
Fiscal 2027
Thereafter
Total

9. Accrued and Other Current Liabilities

Accrued and other current liabilities consisted of the following:

(in millions)
185
$
156
141
135
117
554
1,288

Fiscal Year End
2021
2022

Accrued payroll and employee benefits
Dividends payable to shareholders
Restructuring reserves
Income taxes payable
Lease liability
Share repurchase program payable
Deferred revenue
Interest payable
Other

Accrued and other current liabilities

(in millions)
535 $
356
182
162
126
70
63
28
603

690
327
236
146
118
73
51
28
573
$ 2,125 $ 2,242

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

10. Debt

Debt was as follows:

Fiscal Year End
2021
2022

(in millions)

Principal debt:

Commercial paper, at a weighted-average interest rate of 3.45% at
fiscal year end 2022
3.50% senior notes due 2022
1.10% euro-denominated senior notes due 2023
3.45% senior notes due 2024
0.00% euro-denominated senior notes due 2025
3.70% senior notes due 2026
3.125% senior notes due 2027
0.00% euro-denominated senior notes due 2029
2.50% senior notes due in 2032
7.125% senior notes due 2037
Other

Unamortized discounts, premiums, and debt issuance costs, net
Effects of fair value hedge-designated interest rate swap contracts

Total debt

370 $
—
538
350
538
350
400
538
600
477
83
4,244
(38)
—

—
500
644
350
644
350
400
644
—
477
110
4,119
(29)
2
$ 4,206 $ 4,092

During fiscal 2022, Tyco Electronics Group S.A. (“TEGSA”), our wholly-owned subsidiary, issued $600 million

aggregate principal amount of 2.50% senior notes due in February 2032. 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 June

Borrowings under the Credit Facility bear interest at a rate per annum equal to, at the option of TEGSA, (1) the term

secured overnight financing rate (“Term SOFR”) (as defined in the Credit Facility), (2) an alternate base rate equal to the
highest of (i) Bank of America, N.A.’s base rate, (ii) the federal funds effective rate plus 1/2 of 1%, and (iii) the Term SOFR
for a one-month interest period plus 1%, (3) an alternative currency daily rate, or (4) an alternative currency term rate, plus,
in each case, an applicable margin based upon the senior, unsecured, long - term debt rating of TEGSA. TEGSA is required to
pay an annual facility fee. Based on the applicable credit ratings of TEGSA, this fee ranges from 5.0 to 12.5 basis points of
the lenders’ commitments under the Credit Facility.

The Credit Facility contains a financial ratio covenant providing that if, as of the last day of each fiscal quarter, our

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.

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

At fiscal year end 2022, principal payments required for debt are as follows:

Fiscal 2023
Fiscal 2024
Fiscal 2025
Fiscal 2026
Fiscal 2027
Thereafter
Total

(in millions)
914
$
352
540
351
401
1,686
4,244

The fair value of our debt, based on indicative valuations, was approximately $3,990 million and $4,465 million at

fiscal year end 2022 and 2021, respectively.

11. Leases

The components of lease cost were as follows:

Operating lease cost
Variable lease cost
Total lease cost

2022

131
52
183

Amounts recognized on the Consolidated Balance Sheets were as follows:

Operating lease ROU assets:

Other assets

Operating lease liabilities:

Accrued and other current liabilities
Other liabilities

Total operating lease liabilities

Weighted-average remaining lease term (in years)
Weighted-average discount rate

Fiscal
2021
(in millions)
$

2020

120 $
49
169 $

108
49
157

Fiscal Year End
2021
2022

($ in millions)

424 $ 444

126 $ 118
308
334
434 $ 452

5.3
2.0 %

5.2
1.2 %

Cash flow information, including significant non-cash transactions, related to leases was as follows:

Cash paid for amounts included in the measurement of lease liabilities:

Payments for operating leases(1)

2022

Fiscal
2021
(in millions)

2020

122 $

123

108

ROU assets, including modifications of existing leases, obtained in exchange for
operating lease liabilities

135

123

(1)

These payments are included in cash flows from continuing operating activities, primarily in changes in accrued and other current
liabilities.

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

At fiscal year end 2022, the maturities of operating lease liabilities were as follows:

Fiscal 2023
Fiscal 2024
Fiscal 2025
Fiscal 2026
Fiscal 2027
Thereafter

Total lease payments

Less: interest
Present value of lease liabilities

12. Commitments and Contingencies

Legal Proceedings

(in millions)
$

126
104
81
52
29
68
460
(26)
434

In the normal course of business, we are subject to various legal proceedings and claims, including patent

Trade Compliance Matters

We have been investigating our past compliance with relevant U.S. trade controls and have made voluntary

Environmental Matters

We are involved in various stages of investigation and cleanup related to environmental remediation matters at a
number of sites. The ultimate cost of site cleanup is difficult to predict given the uncertainties regarding the extent of the
required cleanup, the interpretation of applicable laws and regulations, and alternative cleanup methods. As of fiscal year end
2022, we concluded that we would incur investigation and remediation costs at these sites in the reasonably possible range of
$17 million to $44 million, and we accrued $20 million as the probable loss, which was the best estimate within this range.
We believe that any potential payment of such estimated amounts will not have a material adverse effect on our results of
operations, financial position, or cash flows.

Guarantees

In disposing of assets or businesses, we often provide representations, warranties, and/or indemnities to cover

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

At fiscal year end 2022, we had outstanding letters of credit, letters of guarantee, and surety bonds of $127 million,

excluding those related to our former Subsea Communications (“SubCom”) business which are discussed below.

13. Financial Instruments and Fair Value Measurements

We use derivative and non - derivative financial instruments to manage certain exposures to foreign currency, interest

rate, investment, and commodity risks.

Foreign Currency Exchange Rate Risk

During fiscal 2015, we entered into cross-currency swap contracts, which were designated as cash flow hedges, to

reduce our exposure to foreign currency exchange rate risk associated with certain intercompany loans. The aggregate
notional value of these contracts was €700 million at fiscal year end 2021. During fiscal 2022, certain contracts were
terminated and the remaining contracts matured. Under the terms of the contracts that matured in fiscal 2022, we made
interest payments in euros at 3.50% per annum and received interest in U.S. dollars at a weighted-average rate of 5.26% per
annum. Upon maturity, we paid the notional value of the remaining contracts in euros and received U.S. dollars from our
counterparties. In connection with the cross-currency swap contracts, both counterparties to each contract were required to
provide cash collateral. As of fiscal year end 2022, all collateral positions related to these cross-currency swap contracts were
settled.

At fiscal year end 2021, these cross-currency swap contracts were recorded on the Consolidated Balance Sheet as

follows; there were no such balances at fiscal year end 2022:

Other liabilities

Fiscal Year End
2021
(in millions)

At fiscal year end 2021, collateral received from or paid to our counterparties approximated the net derivative

position. Collateral was recorded in accrued and other current liabilities when the contracts were in a net asset position, or
prepaid expenses and other current assets when the contracts were in a net liability position on the Consolidated Balance
Sheets. The impacts of these cross-currency swap contracts were as follows:

Gains (losses) recorded in other comprehensive income (loss)
Gains (losses) excluded from the hedging relationship(1)
Gains reclassified from other comprehensive income (loss) into selling, general, and administrative expenses

Fiscal
2022 2021 2020
(in millions)
$ (6)
(6)
—

$ (7)
70
2

$ 28
(48)
—

(1)

Gains and losses excluded from the hedging relationship are recognized prospectively in selling, general, and administrative
expenses and are offset by losses and gains generated as a result of re-measuring certain intercompany loans to the U.S. dollar.

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Hedge of Net Investment

We hedge our net investment in certain foreign operations using intercompany loans and external borrowings

denominated in the same currencies. The aggregate notional value of these hedges was $1,658 million and $3,798 million at
fiscal year end 2022 and 2021, respectively.

We also use a cross-currency swap program to hedge our net investment in certain foreign operations. The aggregate

notional value of the contracts under this program was $1,873 million and $1,430 million at fiscal year end 2022 and 2021,
respectively. Under the terms of these contracts, we receive interest in U.S. dollars at a weighted-average rate of 1.57% per
annum and pay no interest. Upon the maturity of these contracts at various dates through fiscal 2026, we will pay the notional
value of the contracts in the designated foreign currency and receive U.S. dollars from our counterparties. We are not
required to provide collateral for these contracts.

These cross-currency swap contracts were recorded on the Consolidated Balance Sheets as follows:

Prepaid expenses and other current assets
Other assets
Accrued and other current liabilities
Other liabilities

The impacts of our hedge of net investment programs were as follows:

Foreign currency exchange gains (losses) on intercompany loans and external
borrowings(1)
Gains (losses) on cross-currency swap contracts designated as hedges of net
investment(1)

Fiscal Year End
2021
2022

(in millions)
55 $
172
—
—

3
18
13
18

2022

Fiscal
2021
(in millions)

2020

516 $

(12)

(172)

265

(22)

(69)

(1)

Recorded as currency translation, a component of accumulated other comprehensive income (loss).

Interest Rate and Investment Risk Management

We issue debt, as needed, to fund our operations and capital requirements. Such borrowings can result in interest

rate exposure. To manage the interest rate exposure, we use interest rate swap contracts to convert a portion of fixed rate debt
into variable rate debt. We may use forward starting interest rate swap contracts to manage interest rate exposure in periods
prior to the anticipated issuance of fixed rate debt. During fiscal 2022, we terminated forward starting interest rate swap
contracts with an aggregate notional value of $450 million as a result of the issuance of our 2.50% senior notes due in 2032.
At fiscal year end 2021, these forward starting interest rate swap contracts were recorded on the Consolidated Balance Sheet
as follows; there were no such balances at fiscal year end 2022:

Prepaid expenses and other current assets
Accrued and other current liabilities

The impacts of these forward starting interest rate swap contracts were as follows:

Fiscal Year End
2021
(in millions)

7
38

Gains (losses) recorded in other comprehensive income (loss)

13 $

33 $

(30)

2022

Fiscal
2021
(in millions)

2020

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

We also utilize investment swap contracts to manage earnings exposure on certain nonqualified deferred

compensation liabilities.

Commodity Hedges

As part of managing the exposure to certain commodity price fluctuations, we utilize commodity swap contracts.

The objective of these contracts is to minimize impacts to cash flows and profitability due to changes in prices of
commodities used in production. These contracts had an aggregate notional value of $566 million and $512 million at fiscal
year end 2022 and 2021, respectively, and were designated as cash flow hedges. These commodity swap contracts were
recorded on the Consolidated Balance Sheets as follows:

Prepaid expenses and other current assets
Accrued and other current liabilities
Other liabilities

The impacts of these commodity swap contracts were as follows:

Gains (losses) recorded in other comprehensive income (loss)
Gains reclassified from accumulated other comprehensive income (loss) into cost
of sales

Fiscal Year End
2021
2022

(in millions)
2 $
77
7

23
18
4

2022

Fiscal
2021
(in millions)

(86) $

58 $

2020

We expect that significantly all of the balance in accumulated other comprehensive income (loss) associated with

commodity hedges will be reclassified into the Consolidated Statement of Operations within the next twelve months.

Fair Value Measurements

Financial instruments recorded at fair value on a recurring basis, which consist of marketable securities and

derivative instruments not discussed above, were immaterial at fiscal year end 2022 and 2021.

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

14. Retirement Plans

Defined Benefit Pension Plans

We have several contributory and noncontributory defined benefit retirement plans covering certain of our non-U.S.

and U.S. employees, designed in accordance with local customs and practice.

The net periodic pension benefit cost (credit) for all non-U.S. and U.S. defined benefit pension plans was as follows:

Operating expense:
Service cost

Other (income) expense:

Interest cost
Expected returns on plan assets
Amortization of net actuarial loss
Amortization of prior service credit
Settlement and curtailment losses (gains)

Net periodic pension benefit cost (credit)
Weighted-average assumptions used to determine net
pension benefit cost (credit) during the fiscal year:
Discount rate
Expected returns on plan assets
Rates of compensation increases

Non-U.S. Plans
Fiscal
2021

2022

2020

2022

($ in millions)

U.S. Plans
Fiscal
2021

2020

32
(55)
24
(5)
(3)
31

30
(57)
32
(6)
(2)
45

25
(61)
41
(6)
—
51

26
(47)
3
—
—
$ (10)

30
(52)
9
—
28
27

36
(59)
9
—
—
(4)

1.37 % 1.13 % 1.01 % 2.84 % 2.57 % 3.14 %
3.77 % 3.65 % 4.07 % 5.90 % 5.60 % 6.50 %
— % — %
2.53 % 2.50 % 2.53 %

— %

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table represents the changes in benefit obligation and plan assets and the net amount recognized on

the Consolidated Balance Sheets for all non-U.S. and U.S. defined benefit pension plans:

Change in benefit obligation:
Benefit obligation at beginning of fiscal year

Service cost
Interest cost
Actuarial (gains) losses
Benefits and administrative expenses paid
Settlements and curtailments
Currency translation
Other

Benefit obligation at end of fiscal year

Change in plan assets:
Fair value of plan assets at beginning of fiscal year

Actual returns on plan assets
Employer contributions
Benefits and administrative expenses paid
Settlements
Currency translation
Other

Fair value of plan assets at end of fiscal year

Funded status

Amounts recognized on the Consolidated Balance Sheets:
Other assets
Accrued and other current liabilities
Long-term pension and postretirement liabilities

Net amount recognized

Pre-tax amounts included in accumulated other comprehensive income
(loss) which have not yet been recognized in net periodic pension benefit
cost:
Net actuarial loss
Prior service (cost) credit

Total

Weighted-average assumptions used to determine pension benefit
obligation at fiscal year end:
Discount rate
Rates of compensation increases

Non-U.S. Plans
Fiscal

U.S. Plans
Fiscal

2022

2021

2022

2021

($ in millions)

$ 2,520
38
32
(660)
(82)
(10)
(353)
17
1,502

1,582
(320)
40
(82)
(10)
(235)
14
989
$ (513)

$ 2,519
48
30
6
(85)
(67)
63
6
2,520

1,537
81
43
(85)
(52)
54
4
1,582
(938)

92
(25)
(580)
$ (513)

102
(30)
(1,010)
(938)

952
8
26
(204)
(65)
—
—
—
717

833
(158)
2
(65)
—
—
—
612
(105)

$ 1,219
12
30
(46)
(80)
(183)
—
—
952

968
110
18
(80)
(183)
—
—
833
(119)

—
(4)
(101)
(105)

$ —
(4)
(115)
(119)

$ (176)
16
$ (160)

(547)
26
(521)

(149)
(1)
(150)

(151)
(1)
(152)

3.80 %
2.62 %

1.37 %
2.53 %

5.53 %
— %

2.84 %
— %

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The pre-tax amounts recognized in accumulated other comprehensive income (loss) for all non-U.S. and U.S.

defined benefit pension plans were as follows:

Current year net actuarial gain (loss) recorded in accumulated other
comprehensive income (loss)
Amortization of net actuarial loss(1)
Current year prior service cost recorded in accumulated other
comprehensive income (loss)
Amortization of prior service (credit) cost(1)

Non-U.S. Plans
Fiscal

U.S. Plans
Fiscal

2022

2021

2022

2021

(in millions)

350
21

(5)
(5)
361

16 $
34

(1) $
3

(1)
(10)
39 $

—
—
2

103
37

—
1
141

(1)

Includes amounts reflected as settlement and curtailment losses (gains) in the above net periodic pension benefit cost (credit)
table.

As part of our continued effort to manage U.S. pension plan obligations, during fiscal 2021, we transferred
approximately $190 million of U.S. pension plan liabilities to an insurance company through the purchase of a group annuity
contract funded by a transfer of plan assets totaling approximately $180 million. As a result of this transaction, we recognized
a settlement charge of $28 million, which was recorded in net other income (expense) on the Consolidated Statement of
Operations.

In fiscal 2022, unrecognized actuarial gains recorded in accumulated other comprehensive income (loss) were
primarily the result of higher discount rates, partially offset by unfavorable asset performance, for our non-U.S. defined
benefit pension plans as compared to fiscal 2021. In fiscal 2021, unrecognized actuarial gains recorded in accumulated other
comprehensive income (loss) were primarily the result of favorable asset performance and higher discount rates for our non-
U.S. and U.S. defined benefit pension plans as compared to fiscal 2020.

In determining the expected returns on plan assets, we consider the relative weighting of plan assets by class and

individual asset class performance expectations.

The investment strategies for non-U.S. and U.S. pension plans are governed locally. Our investment strategy for our
pension plans is to manage the plans on a going concern basis. Current investment policy is to achieve a reasonable return on
assets, subject to a prudent level of portfolio risk, for the purpose of enhancing the security of benefits for participants.
Projected returns are based primarily on pro forma asset allocation, expected long-term returns, and forward-looking
estimates of active portfolio and investment management.

At fiscal year end 2022, the long-term target asset allocation in our U.S. plans’ master trust is 25% return-seeking

assets and 75% liability-hedging assets. Return-seeking assets, including non-U.S. and U.S. equity securities, are assets
intended to generate returns in excess of pension liability growth. Liability-hedging assets, including government and
corporate bonds, are assets intended to have characteristics similar to pension liabilities and are used to better match asset
cash flows with expected obligation cash flows. Asset re-allocation to meet that target is occurring over a multi-year period
based on the funded status. We expect to reach our target allocation when the funded status of the plans exceeds 110%. Based
on the funded status of the plans as of fiscal year end 2022, our target asset allocation is 67% return-seeking and 33%
liability-hedging.

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Target weighted-average asset allocation and weighted-average asset allocation for non-U.S. and U.S. pension plans

were as follows:

Asset category:

Equity securities
Fixed income
Other

Total

Non-U.S. Plans

Fiscal

U.S. Plans
Fiscal

Fiscal

Year End Year End

Target

2022

2021

Target

2022

2021

29 %
37
34

22 %
63
15

35 %
48
17

67 %
33
—

48 %
52
—

100 %

100 % 100 %

100 %

51 %
49
—
100 %

Our common shares are not a direct investment of our pension funds; however, the pension funds may indirectly

include our shares. The aggregate amount of our common shares would not be considered material relative to the total
pension fund assets.

Our funding policy is to make contributions in accordance with the laws and customs of the various countries in

which we operate as well as to make discretionary voluntary contributions from time to time. We expect to make the
minimum required contributions of $39 million and $4 million to our non-U.S. and U.S. pension plans, respectively, in fiscal
2023. We may also make voluntary contributions at our discretion.

At fiscal year end 2022, benefit payments, which reflect future expected service, as appropriate, are expected to be

paid as follows:

Fiscal 2023
Fiscal 2024
Fiscal 2025
Fiscal 2026
Fiscal 2027
Fiscal 2028-2032

Non-U.S. Plans U.S. Plans
(in millions)
78 $
96
75
79
82
475

63
60
60
60
59
281

Presented below is the accumulated benefit obligation for all non-U.S. and U.S. pension plans as well as additional

information related to plans with an accumulated benefit obligation in excess of plan assets and plans with a projected benefit
obligation in excess of plan assets.

Accumulated benefit obligation
Pension plans with accumulated benefit obligations in excess of plan
assets:

Accumulated benefit obligation
Fair value of plan assets

Pension plans with projected benefit obligations in excess of plan assets:

Projected benefit obligation
Fair value of plan assets

Non-U.S. Plans
Fiscal Year End

U.S. Plans
Fiscal Year End

2022

2021

2022

2021

(in millions)

$ 1,434

$ 2,410 $

717

952

598
43

689
84

1,027
75

1,166
128

717
612

918
798

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

We value our pension assets based on the fair value hierarchy of ASC 820, Fair Value Measurements and

Disclosures. Details of the fair value hierarchy are described in Note 2. The following table presents our defined benefit
pension plans’ asset categories and their associated fair value within the fair value hierarchy:

Equity:

Commingled equity funds(1)

Fixed income:

Government and corporate bonds(2)
Commingled fixed income funds(3)

Other(4)
Subtotal
Items to reconcile to fair value of plan assets(5)

Fair value of plan assets

Equity:

Commingled equity funds(1)

Fixed income:

Government and corporate bonds(2)
Commingled fixed income funds(3)

Other(4)
Subtotal
Items to reconcile to fair value of plan assets(5)

Fair value of plan assets

Non-U.S. Plans

U.S. Plans

Fiscal Year End 2022

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

(in millions)

$ — $ 159

$ — $ 161 $ — $ 161

—
—
—

6
534
141
$ — $ 840

—
—
—
$ —

6
534
141
840
149
$ 989

—
—
—

—
306
14

—
—
—
$ — $ 481 $ —

—
306
14
481
131
$ 612

Fiscal Year End 2021

Non-U.S. Plans

U.S. Plans

Level 1 Level 2 Level 3 Total

(in millions)

$ — $

220

$ — $

220

$ — $ 280 $ — $ 280

—
6
— 1,101
178
—
$ — $ 1,505

—
6
— 1,101
178
—
$ — 1,505
77
$ 1,582

—
—
—

—
392
23

—
—
— 392
23
—
$ — $ 695 $ — 695
138
$ 833

Commingled equity funds are pooled investments in multiple equity - type securities. Fair value is calculated as the closing price
of the underlying investments, an observable market condition, divided by the number of shares of the fund outstanding.

Government and corporate bonds are marked to fair value based on quoted market prices or market approach valuation models
using observable market data such as quotes, spreads, and data points for yield curves.

Commingled fixed income funds are pooled investments in multiple fixed income-type securities. Fair value is calculated as the
closing price of the underlying investments, an observable market condition, divided by the number of shares of the fund
outstanding.

Other investments are composed of insurance contracts, derivatives, short-term investments, structured products such as
collateralized obligations and mortgage- and asset-backed securities, real estate investments, and hedge funds. Insurance
contracts are valued using cash surrender value, or face value of the contract if a cash surrender value is unavailable (level 2), as
these values represent the amount that the plan would receive on termination of the underlying contract. Derivatives, short-term
investments, and structured products are marked to fair value using models that are supported by observable market-based data
(level 2). Real estate investments include investments in commingled real estate funds and are valued at net asset value which is
calculated using unobservable inputs that are supported by little or no market activity (level 3). Hedge funds are valued at their
net asset value which is calculated using unobservable inputs that are supported by little or no market activity (level 3).

Items to reconcile to fair value of plan assets include certain investments containing no significant redemption restrictions that
were measured at net asset value (“NAV”) using the NAV practical expedient available in ASC 820 and amounts receivable or
payable for unsettled transactions and cash balances, both of which are considered to be carried at book value.

(1)

(2)

(3)

(4)

(5)

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Defined Contribution Retirement Plans

We maintain several defined contribution retirement plans, the most significant of which is located in the U.S. These

plans include 401(k) matching programs, as well as qualified and nonqualified profit sharing and share bonus retirement
plans. Expense for the defined contribution plans is computed as a percentage of participants’ compensation and was
$59 million, $60 million, and $60 million for fiscal 2022, 2021, and 2020, respectively.

Deferred Compensation Plans

We maintain nonqualified deferred compensation plans, which permit eligible employees to defer a portion of their

compensation. A record-keeping account is set up for each participant and the participant chooses from a variety of
measurement funds for the deemed investment of their accounts. The measurement funds correspond to several funds in our
401(k) plans and the account balance fluctuates with the investment returns on those funds. At fiscal year end 2022 and 2021,
total deferred compensation liabilities were $206 million and $263 million, respectively, and were recorded in other liabilities
on the Consolidated Balance Sheets. See Note 13 for additional information regarding our risk management strategy related
to deferred compensation liabilities.

Postretirement Benefit Plans

In addition to providing pension and 401(k) benefits, we also provide certain health care coverage continuation for

qualifying retirees from the date of retirement to age 65 or lifetime, as applicable. The accumulated postretirement benefit
obligation was $13 million and $16 million at fiscal year end 2022 and 2021, respectively, and the underfunded status of the
postretirement benefit plans was included primarily in long-term pension and postretirement liabilities on the Consolidated
Balance Sheets. Activity during fiscal 2022, 2021, and 2020 was not significant.

15. Income Taxes

Income Tax Expense

Significant components of the income tax expense were as follows:

Current income tax expense (benefit):

U.S. Federal
U.S. State
Non-U.S.

Deferred income tax expense (benefit):

U.S. Federal
U.S. State
Non-U.S.

Income tax expense

2022

Fiscal
2021
(in millions)

2020

20
(19)
452
453

3 $
12
462
477

9
(23)
262
248

(90)
—
(57)
(147)
$ 306

(24)
(15)
(315)
(354)

(16)
(10)
561
535
$ 123 $ 783

The U.S. and non-U.S. components of income from continuing operations before income taxes were as follows:

2022

Fiscal
2021
(in millions)

2020

U.S.
Non-U.S.

Income from continuing operations before income taxes

(4) $ (336) $ (1,053)
1,577
524

2,714
$ 2,378 $

2,737
$ 2,733

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The reconciliation between U.S. federal income taxes at the statutory rate and income tax expense was as follows:

Notional U.S. federal income tax expense at the statutory
rate(1)
Adjustments to reconcile to the income tax expense:

U.S. state income tax benefit, net
Tax law changes
Tax credits
Non-U.S. net earnings(2)
Change in accrued income tax liabilities
Valuation allowance
Legal entity restructurings and intercompany transactions
Divestitures and goodwill impairments
Excess tax benefits from share-based payments
Other

Income tax expense

2022

Fiscal
2021
(in millions)

2020

$ 574

$ 499 $ 110

(15)
21
(13)
(105)
(14)
(37)
(123)
—
(15)
33
$ 306

(2)
12
(13)
(71)
37
(353)
19
—
(21)
16

(26)
349
(13)
(88)
30
231
—
185
(6)
11
$ 123 $ 783

(1)

(2)

The U.S. federal statutory rate was 21% for fiscal 2022, 2021, and 2020.

Excludes items which are separately presented.

The income tax expense for fiscal 2022 included a $124 million income tax benefit related to the tax impacts of

certain intercompany transactions, a $64 million income tax benefit related primarily to a lapse of a statute of limitation, and
a $51 million income tax benefit related to the release of a valuation allowance associated primarily with improved current
and expected future operating profit and taxable income. In addition, the income tax expense for fiscal 2022 included
$27 million of income tax expense related to the write-down of certain deferred tax assets to the lower corporate tax rate
enacted in the canton of Schaffhausen and $12 million of income tax expense related to an income tax audit of an acquired
entity. As we are entitled to indemnification of pre-acquisition period tax obligations under the terms of the purchase
agreement, we recorded an associated indemnification receivable and other income of $11 million during fiscal 2022.

The income tax expense for fiscal 2021 included a $353 million income tax benefit related to changes in valuation
allowances, of which $327 million related to the net reduction in valuation allowances associated primarily with certain tax
planning actions as well as improved current and expected future operating profit and taxable income. In addition, the income
tax expense for fiscal 2021 included a $29 million income tax benefit related to an Internal Revenue Service approved change
in the tax method of depreciating or amortizing certain assets and $23 million of income tax expense associated with the tax
impacts of an intercompany transaction.

The income tax expense for fiscal 2020 included $355 million of income tax expense related to the tax impacts of
certain measures of the Switzerland Federal Act on Tax Reform and AHV Financing (“Swiss Tax Reform”) and an income
tax benefit of $31 million related to pre-separation tax matters and the termination of the Tax Sharing Agreement. See “Swiss
Tax Reform” and “Tax Sharing Agreement” below for additional information. In addition, the income tax expense for fiscal
2020 included $226 million of income tax expense related to increases to the valuation allowance for certain deferred tax
assets, related primarily to the COVID-19 pandemic. As a result of the pandemic and its negative impact on our current and
expected operating profit and taxable income, we believed it was more likely than not that a portion of our deferred tax assets
would not be realized. The pre-tax goodwill impairment charge of $900 million recorded during fiscal 2020 resulted in a tax
benefit of $4 million as the associated goodwill was primarily not deductible for income tax purposes. See Note 7 for
additional information regarding the impairment of goodwill.

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Deferred Tax Assets and Liabilities

Deferred income taxes result from temporary differences between the amount of assets and liabilities recognized for

financial reporting and tax purposes. The components of the net deferred income tax asset were as follows:

Fiscal Year End
2021
2022

(in millions)

Deferred tax assets:

Accrued liabilities and reserves
Tax loss and credit carryforwards
Inventories
Intangible assets
Pension and postretirement benefits
Deferred revenue
Interest
Unrecognized income tax benefits
Lease liabilities
Other

Gross deferred tax assets
Valuation allowance
Deferred tax assets, net of valuation allowance

Deferred tax liabilities:

Property, plant, and equipment
Write-down of investments in subsidiaries
Lease ROU assets
Other

Total deferred tax liabilities

317 $

8,288
62
563
71
1
406
1
81
1
9,791
(7,112)
2,679

313
3,836
46
535
177
7
310
4
94
9
5,331
(2,729)
2,602

(101)
(125)
(79)
(120)
(425)

(97)
(2)
(92)
(93)
(284)

Net deferred tax assets

$ 2,254 $ 2,318

Our tax loss and credit carryforwards (tax effected) at fiscal year end 2022 were as follows:

Expiration Period
Fiscal 2028
Through Through

Fiscal 2027 Fiscal 2042 Expiration Total

(in millions)

U.S. Federal:

Net operating loss carryforwards
Tax credit carryforwards

U.S. State:

Net operating loss carryforwards
Tax credit carryforwards

Non-U.S.:

Net operating loss carryforwards
Tax credit carryforwards
Capital loss carryforwards

Total tax loss and credit carryforwards

30
53

52
11

107
—
3
256

426
110

55 $ 511
163
—

19
—

4
6

75
17

5,934
—
—
$ 6,489

1,443
1
34

7,484
1
37
$ 1,543 $ 8,288

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The valuation allowance for deferred tax assets of $7,112 million and $2,729 million at fiscal year end 2022 and

2021, respectively, related principally to the uncertainty of the utilization of certain deferred tax assets, primarily tax loss and
credit carryforwards in various jurisdictions. During fiscal 2022, the valuation allowance increased primarily as a result of
$4,464 million (tax effected) net write-downs of investments in subsidiaries in certain jurisdictions, with a corresponding
increase to tax loss and credit carryforwards. We believe that we will generate sufficient future taxable income to realize the
income tax benefits related to the remaining net deferred tax assets on the Consolidated Balance Sheet.

We have provided income taxes for earnings that are currently distributed as well as the taxes associated with

several subsidiaries’ earnings that are expected to be distributed in the future. No additional provision has been made for
Swiss or non - Swiss income taxes on the undistributed earnings of subsidiaries or for unrecognized deferred tax liabilities for
temporary differences related to basis differences in investments in subsidiaries, as such earnings are expected to be
permanently reinvested, the investments are essentially permanent in duration, or we have concluded that no additional tax
liability will arise as a result of the distribution of such earnings. As of fiscal year end 2022, certain subsidiaries had
approximately $33.6 billion of cumulative undistributed earnings that have been retained indefinitely and reinvested in our
global manufacturing operations, including working capital; property, plant, and equipment; intangible assets; and research
and development activities. A liability could arise if our intention to permanently reinvest such earnings were to change and
amounts are distributed by such subsidiaries or if such subsidiaries are ultimately disposed. It is not practicable to estimate
the additional income taxes related to permanently reinvested earnings or the basis differences related to investments in
subsidiaries. As of fiscal year end 2022, we had approximately $7.0 billion of cash, cash equivalents, and intercompany
deposits, principally in our subsidiaries, that we have the ability to distribute to TEGSA, our Luxembourg subsidiary, which
is the obligor of substantially all of our debt, and to TE Connectivity Ltd., our Swiss parent company, but we consider to be
permanently reinvested. We estimate that an immaterial amount of tax expense would be recognized on the Consolidated
Financial Statements if our intention to permanently reinvest these amounts were to change. Our current plans do not
demonstrate a need to repatriate cash, cash equivalents, and intercompany deposits that are designated as permanently
reinvested in order to fund our operations, including investing and financing activities.

Uncertain Tax Positions

The following table summarizes the activity related to unrecognized income tax benefits:

Balance at beginning of fiscal year

Additions for tax positions related to prior years
Reductions for tax positions related to prior years
Additions for tax positions related to the current year
Current year acquisitions
Settlements
Reductions due to lapse of applicable statutes of
limitations

Balance at end of fiscal year

2022

$ 359
10
(17)
37
—
(2)

2020

Fiscal
2021
(in millions)
$ 414 $ 542
29
(87)
39
—
(12)

14
(77)
50
4
(9)

(100)
$ 287

(37)

(97)
$ 359 $ 414

The total amount of unrecognized tax benefits that, if recognized, would reduce income tax expense and the

effective tax rate were $272 million, $378 million, and $393 million at fiscal year end 2022, 2021, and 2020, respectively.

We record accrued interest and penalties related to uncertain tax positions as part of income tax expense (benefit).

As of fiscal year end 2022 and 2021, we had $54 million and $53 million, respectively, of accrued interest and penalties
related to uncertain tax positions on the Consolidated Balance Sheets, recorded primarily in income taxes. During fiscal 2022,
2021, and 2020, we recognized income tax expense of $3 million, expense of $12 million, and benefits of $1 million,
respectively, related to interest and penalties on the Consolidated Statements of Operations.

We file income tax returns on a unitary, consolidated, or stand - alone basis in multiple state and local jurisdictions,

which generally have statutes of limitations ranging from 3 to 4 years. Various state and local income tax returns are
currently in the process of examination or administrative appeal.

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Our non - U.S. subsidiaries file income tax returns in the countries in which they have operations. Generally, these

countries have statutes of limitations ranging from 3 to 10 years. Various non - U.S. subsidiary income tax returns are
currently in the process of examination by taxing authorities.

As of fiscal year end 2022, under applicable statutes, the following tax years remained subject to examination in the

major tax jurisdictions indicated:

Jurisdiction
Brazil
China
Czech Republic
France
Germany
Hong Kong
India
Ireland
Italy
Japan
Luxembourg
Mexico
Singapore
South Korea
Spain
Switzerland
Thailand
United Kingdom
U.S.—federal

Open Years
2017 through 2022
2012 through 2022
2017 through 2022
2019 through 2022
2012 through 2022
2016 through 2022
2012 through 2022
2017 through 2022
2017 through 2022
2016 through 2022
2017 through 2022
2017 through 2022
2017 through 2022
2017 through 2022
2018 through 2022
2017 through 2022
2020 through 2022
2020 through 2022
2019 through 2022

In most jurisdictions, taxing authorities retain the ability to review prior tax years and to adjust any net operating

loss and tax credit carryforwards from these years that are utilized in a subsequent period.

Although it is difficult to predict the timing or results of our worldwide examinations, we estimate that

approximately $20 million of unrecognized income tax benefits, excluding the impact relating to accrued interest and
penalties, could be resolved within the next twelve months.

We are not aware of any other matters that would result in significant changes to the amount of unrecognized

income tax benefits reflected on the Consolidated Balance Sheet as of fiscal year end 2022.

Other Income Tax Matters

Swiss Tax Reform

In September 2018, Swiss Parliament approved the Federal Act on Tax Reform and AHV Financing, which was

approved by public vote in May 2019. Swiss Tax Reform eliminated certain preferential tax items and implemented new tax
rates at both the federal and cantonal levels.

The federal provisions of Swiss Tax Reform were enacted into law in fiscal 2019 and became effective in January

2020. Additionally, in fiscal 2019, the federal tax authority issued guidance abolishing certain interest deductions which
became effective in January 2020.

In October 2019, the canton of Schaffhausen enacted Swiss Tax Reform into law, including reductions in tax rates.

Consequently, during fiscal 2020, we recognized $355 million of income tax expense related primarily to cantonal
implementation and the resulting write-down of certain deferred tax assets to the lower tax rates.

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Tax Sharing Agreement

Upon our separation from Tyco International plc in fiscal 2007, we entered into a Tax Sharing Agreement with Tyco
International plc (now part of Johnson Controls International plc) and Covidien plc (now part of Medtronic plc) under which
we shared certain income tax liabilities for periods prior to and including June 29, 2007. Pursuant to the Tax Sharing
Agreement, we entered into certain guarantee commitments and indemnifications.

In fiscal 2020, we, Johnson Controls International plc, and Medtronic plc entered into an agreement to terminate the

Tax Sharing Agreement. We believe that substantially all income tax matters that may be subject to the Tax Sharing
Agreement have been settled with tax authorities and we do not expect any remaining tax matters to have a material effect on
our results of operations, financial position, or cash flows. Accordingly, during fiscal 2020, we recognized an income tax
benefit of $31 million and net other income of $8 million representing settlement of the remaining shared pre-separation
income tax matters and indemnification balances.

16. Earnings (Loss) Per Share

The weighted - average number of shares outstanding used in the computations of basic and diluted earnings (loss)

per share were as follows:

Basic

Dilutive impact of share-based compensation arrangements

Diluted

2022

323
2
325

Fiscal
2021
(in millions)
330
3
333

2020

332
—
332

For fiscal 2020, there were two million nonvested share awards and options outstanding with underlying exercise

prices less than the average market prices of our common shares; however, these were excluded from the calculation of
diluted loss per share as inclusion would be antidilutive as a result of our loss during the period.

The following share options were not included in the computation of diluted earnings (loss) per share because the

instruments’ underlying exercise prices were greater than the average market prices of our common shares and inclusion
would be antidilutive:

Antidilutive share options

2022

Fiscal
2021
(in millions)

2020

—

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

17. Shareholders’ Equity

Common Shares

We are organized under the laws of Switzerland. The rights of holders of our shares are governed by Swiss law, our
Swiss articles of association, and our Swiss organizational regulations. The par value of our common shares is stated in Swiss
francs (“CHF”); however, we use the U.S. dollar as our reporting currency on the Consolidated Financial Statements.

Subject to certain conditions specified in our articles of association, we are authorized to increase our conditional

share capital by issuing new shares in aggregate not exceeding 50% of our authorized shares. Until recently, Swiss law
provided for the option to create authorized share capital that could be issued by the board of directors, but this authorization
was limited to authorized share capital up to 50% of the existing registered shares with the authorization valid for a maximum
of two years. Such authorization period under our articles of association ended on March 11, 2022. As part of the Swiss
corporate law reform, effective as of January 1, 2023, the concept of authorized share capital will be replaced by a capital
band. Under a capital band, the articles of association may authorize the board of directors for a maximum period of five
years to increase the ordinary share capital registered in the commercial register to a maximum of 150% and/or reduce it to a
minimum of 50% of the share capital existing at the time of the introduction of the capital band. Our articles of association do
not currently provide for a capital band.

Common Shares Held in Treasury

At fiscal year end 2022, approximately 13 million common shares were held in treasury, of which 5 million were

owned by one of our subsidiaries. At fiscal year end 2021, approximately 9 million common shares were held in treasury, of
which 4 million were owned by one of our subsidiaries. Shares held both directly by us and by our subsidiary are presented
as treasury shares on the Consolidated Balance Sheets.

In fiscal 2022, 2021, and 2020, our shareholders approved the cancellation of 5 million, 3 million, and 12 million

shares, respectively, purchased under our share repurchase program. These capital reductions by cancellation of shares were
subject to a notice period and filing with the commercial register in Switzerland.

Contributed Surplus

As a result of cumulative equity transactions, including dividend activity and treasury share cancellations, our

contributed surplus balance was reduced to zero with residual activity recorded against accumulated earnings as reflected on
the Consolidated Statement of Shareholders’ Equity. To the extent that the contributed surplus balance continues to be zero,
the impact of future transactions that normally would have been recorded as a reduction of contributed surplus will be
recorded in accumulated earnings. Contributed surplus established for Swiss tax and statutory purposes (“Swiss Contributed
Surplus”) is not impacted by our GAAP treatment.

Swiss Contributed Surplus, subject to certain conditions, is a freely distributable reserve. As of fiscal year end 2022

and 2021, Swiss Contributed Surplus was CHF 4,239 million and CHF 4,902 million, respectively (equivalent to
$3,191 million and $3,905 million, respectively).

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Dividends

We paid cash dividends to shareholders of $2.12, $1.96, and $1.88 per share in fiscal 2022, 2021, and 2020,

respectively.

Under Swiss law, subject to certain conditions, dividends paid from reserves from capital contributions (equivalent

to Swiss Contributed Surplus) are exempt from Swiss withholding tax. Dividends on our shares must be approved by our
shareholders.

Our shareholders approved the following dividends on our common shares:

Approval Date
March 2019

Annual Payment Per Share
$1.84, payable in four quarterly installments of $0.46

March 2020

$1.92, payable in four quarterly installments of $0.48

March 2021

$2.00, payable in four quarterly installments of $0.50

March 2022

$2.24, payable in four quarterly installments of $0.56

Payment Timing

Third quarter of fiscal 2019
Fourth quarter of fiscal 2019
First quarter of fiscal 2020
Second quarter of fiscal 2020
Third quarter of fiscal 2020
Fourth quarter of fiscal 2020
First quarter of fiscal 2021
Second quarter of fiscal 2021
Third quarter of fiscal 2021
Fourth quarter of fiscal 2021
First quarter of fiscal 2022
Second quarter of fiscal 2022
Third quarter of fiscal 2022
Fourth quarter of fiscal 2022
First quarter of fiscal 2023
Second quarter of fiscal 2023

Upon shareholders’ approval of a dividend payment, we record a liability with a corresponding charge to
shareholders’ equity. At fiscal year end 2022 and 2021, the unpaid portion of the dividends recorded in accrued and other
current liabilities on the Consolidated Balance Sheets totaled $356 million and $327 million, respectively.

Share Repurchase Program

In both fiscal 2022 and 2021, our board of directors authorized increases of $1.5 billion in our share repurchase

program. Common shares repurchased under the share repurchase program were as follows:

Number of common shares repurchased
Repurchase value

2022

10
$ 1,409

2020

Fiscal
2021
(in millions)
7

6
$ 904 $ 505

At fiscal year end 2022, we had $1.7 billion of availability remaining under our share repurchase authorization.

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

18. Accumulated Other Comprehensive Income (Loss)

The changes in each component of accumulated other comprehensive income (loss) were as follows:

Foreign
Currency

Unrecognized Gains (Losses) Accumulated
on Cash
Pension and
Flow
Translation Postretirement
Adjustments(1) Benefit Costs
Hedges

Other
Comprehensive
Income (Loss)

Balance at fiscal year end 2019

188 $

(647) $

(44) $

(503)

(in millions)

Other comprehensive income (loss), net of tax:

Other comprehensive income (loss) before reclassifications
Amounts reclassified from accumulated other comprehensive
income (loss)
Income tax expense

Other comprehensive income (loss), net of tax

Less: other comprehensive income attributable to noncontrolling
interests

Balance at fiscal year end 2020

Other comprehensive income (loss), net of tax:

Other comprehensive income before reclassifications
Amounts reclassified from accumulated other comprehensive
income (loss)
Income tax (expense) benefit

Other comprehensive income (loss), net of tax

Less: other comprehensive income attributable to noncontrolling
interests

Balance at fiscal year end 2021

Other comprehensive income (loss), net of tax:

Other comprehensive income (loss) before reclassifications
Amounts reclassified from accumulated other comprehensive
income (loss)
Income tax (expense) benefit

Other comprehensive income (loss), net of tax

Less: other comprehensive loss attributable to noncontrolling
interests

Balance at fiscal year end 2022

(11)

—
—
(11)

44
(18)
34

(13)
(5)
40

(5)
172 $

—
(613) $

—
(4) $

144

—
—
144

120

62
(44)
138

(92)
5
(3)

(2)
314 $

—
(475) $

—
(7) $

(510)

—
—
(510)

344

19
(104)
259

(76)

(26)
7
(95)

19
(177) $

—
(216) $

—
(102) $

31
(23)
63

(5)
(445)

348

(30)
(39)
279

(2)
(168)

(242)

(7)
(97)
(346)

19
(495)

(1)

Includes hedges of net investment foreign currency exchange gains or losses which offset foreign currency exchange losses or
gains attributable to the translation of the net investments.

19. Share Plans

Our equity compensation plans, of which the TE Connectivity Ltd. 2007 Stock and Incentive Plan, amended and

restated as of September 17, 2020 (the “2007 Plan”), is the primary plan, provide for the award of annual performance
bonuses and long - term performance awards, including share options; restricted, performance, and deferred share units; and
other share - based awards (collectively, “Awards”) and allow for the use of unissued shares or treasury shares to be used to
satisfy such Awards. As of fiscal year end 2022, the 2007 Plan provided for a maximum of 70 million shares to be issued as
Awards, subject to adjustment as provided under the terms of the plan. A total of 11 million shares remained available for
issuance under the 2007 Plan as of fiscal year end 2022.

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Share - Based Compensation Expense

Share - based compensation expense, which was included primarily in selling, general, and administrative expenses

on the Consolidated Statements of Operations, was as follows:

Share-based compensation expense

2022

$ 119

Fiscal
2021
(in millions)
$

94 $

2020

We recognized a related tax benefit associated with our share - based compensation arrangements of $24 million,

$19 million, and $15 million in fiscal 2022, 2021, and 2020, respectively.

Restricted Share Awards

Restricted share awards, which are generally in the form of restricted share units, are granted subject to certain

restrictions. Conditions of vesting are determined at the time of grant. All restrictions on an award will lapse upon death or
disability of the employee. If the employee satisfies retirement requirements, all or a portion of the award may vest,
depending on the terms and conditions of the particular grant. Recipients of restricted share units have no voting rights, but
do receive dividend equivalents. For grants that vest through passage of time, the fair value of the award at the time of the
grant is amortized to expense over the period of vesting. The fair value of restricted share awards is determined based on the
closing value of our shares on the grant date. Restricted share awards generally vest in increments over a period of four years
as determined by the management development and compensation committee of our board of directors.

Restricted share award activity was as follows:

Nonvested at fiscal year end 2021

Granted
Vested
Forfeited

Nonvested at fiscal year end 2022

Weighted-Average
Grant-Date
Fair Value

96.03
150.99
91.35
116.72
123.25

Shares
1,316,645
720,801
(484,884)
(131,956)
1,420,606

The weighted - average grant - date fair value of restricted share awards granted during fiscal 2022, 2021, and 2020

was $150.99, $112.54, and $92.94, respectively.

The total fair value of restricted share awards that vested during fiscal 2022, 2021, and 2020 was $44 million,

$43 million, and $44 million, respectively.

As of fiscal year end 2022, there was $88 million of unrecognized compensation expense related to nonvested

restricted share awards, which is expected to be recognized over a weighted - average period of 1.7 years.

Performance Share Awards

Performance share awards, which are generally in the form of performance share units, are granted with pay - out
subject to vesting requirements and certain performance conditions that are determined at the time of grant. Based on our
performance, the pay - out of performance share units can range from 0% to 200% of the number of units originally granted.
The grant-date fair value of performance share awards is expensed over the period of performance once achievement of the
performance criteria is deemed probable. Recipients of performance share units have no voting rights but do receive dividend
equivalents. Performance share awards generally vest after a period of three years as determined by the management
development and compensation committee of our board of directors.

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Performance share award activity was as follows:

Outstanding at fiscal year end 2021

Granted
Vested
Forfeited

Outstanding at fiscal year end 2022

Weighted-Average
Grant-Date
Fair Value

88.99
157.56
72.85
78.18
114.88

Shares
526,071
139,037
(160,673)
(35,002)
469,433

The weighted-average grant-date fair value of performance share awards granted during fiscal 2022, 2021, and 2020

was $157.56, $105.86, and $83.30, respectively.

The total fair value of performance share awards that vested during fiscal 2022, 2021, and 2020 was $12 million,

$10 million, and $20 million, respectively.

As of fiscal year end 2022, there was $17 million of unrecognized compensation expense related to nonvested

performance share awards, which is expected to be recognized over a weighted-average period of 1.2 years.

Share Options

Share options are granted to purchase our common shares at prices which are equal to or greater than the market

price of the common shares on the date the option is granted. Conditions of vesting are determined at the time of grant. All
restrictions on the award will lapse upon death or disability of the employee. If the employee satisfies retirement
requirements, all or a portion of the award may vest, depending on the terms and conditions of the particular grant. Options
generally vest and become exercisable in equal annual installments over a period of four years and expire ten years after the
date of grant.

Share option award activity was as follows:

Outstanding at fiscal year end 2021

Granted
Exercised
Forfeited

Outstanding at fiscal year end 2022
Vested and expected to vest at fiscal year end 2022
Exercisable at fiscal year end 2022

5,348,944
873,300
(683,871)
(187,019)
5,351,354
5,227,306
2,704,322

$
$
$

Weighted-Average

Exercise
Price

Weighted-Average
Remaining
Contractual
Term
(in years)

Aggregate
Intrinsic

Value

(in millions)

88.00
157.02
74.32
111.14
100.21
99.60
84.86

6.6
6.6
5.4

$
$
$

94
93
69

The weighted - average exercise price of share option awards granted during fiscal 2022, 2021, and 2020 was

$157.02, $106.52, and $93.39, respectively.

The total intrinsic value of options exercised during fiscal 2022, 2021, and 2020 was $49 million, $49 million, and

$39 million, respectively. We received cash related to the exercise of options of $54 million, $167 million, and $55 million in
fiscal 2022, 2021, and 2020, respectively.

As of fiscal year end 2022, there was $32 million of unrecognized compensation expense related to nonvested share

options granted under our share option plans, which is expected to be recognized over a weighted - average period of
1.5 years.

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Share - Based Compensation Assumptions

The grant-date fair value of each share option grant was estimated using the Black-Scholes-Merton option pricing
model. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs.
We employ our historical share volatility when calculating the grant-date fair value of our share option grants using the
Black-Scholes-Merton option pricing model. Currently, we do not have exchange-traded options of sufficient duration to
employ an implied volatility assumption in the calculation and therefore rely solely on the historical volatility calculation.
The average expected life was based on the contractual term of the option and expected employee exercise and post-vesting
employment termination behavior. The risk-free interest rate was based on U.S. Treasury zero-coupon issues with a
remaining term that approximated the expected life assumed at the date of grant. The expected annual dividend per share was
based on our expected dividend rate. The recognized share-based compensation expense was net of estimated forfeitures,
which are based on voluntary termination behavior as well as an analysis of actual option forfeitures.

The weighted-average grant-date fair value of options granted and the weighted-average assumptions we used in the

Black-Scholes-Merton option pricing model were as follows:

Weighted-average grant-date fair value

Assumptions:
Expected share price volatility
Risk-free interest rate
Expected annual dividend per share
Expected life of options (in years)

20. Segment and Geographic Data

2022
$ 37.51

Fiscal
2021
$ 22.21

2020
$ 15.49

29 %
1.2 %

28 %
0.5 %

21 %
1.7 %

$ 2.00
5.1

$ 1.92
5.4

$ 1.84
5.1

We operate through three reportable segments: Transportation Solutions, Industrial Solutions, and Communications

Solutions. See Note 1 for a description of the segments in which we operate.

Segment performance is evaluated based on net sales and operating income. Generally, we consider all expenses to
be of an operating nature and, accordingly, allocate them to each reportable segment. Costs specific to a segment are charged
to the segment. Corporate expenses, such as headquarters administrative costs, are allocated to the segments based on
segment operating income. Intersegment sales are not material. Corporate assets are allocated to the segments based on
segment assets.

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Net sales by segment and industry end market(1) were as follows:

Transportation Solutions:

Automotive
Commercial transportation
Sensors

Total Transportation Solutions

Industrial Solutions:

Industrial equipment
Aerospace, defense, and marine
Energy
Medical

Total Industrial Solutions

Communications Solutions:

Data and devices
Appliances

Total Communications Solutions

Total

(1)

2022

Fiscal
2021
(in millions)

2020

$ 6,527
1,582
1,110
9,219

$ 6,379 $ 4,903
1,051
891
6,845

1,467
1,128
8,974

1,934
1,087
804
695
4,520

1,397
1,035
738
674
3,844

1,098
1,201
717
697
3,713

1,576
966
2,542
$ 16,281

1,198
907
2,105

973
641
1,614
$ 14,923 $ 12,172

Industry end market information is presented consistently with our internal management
reporting and may be revised periodically as management deems necessary.

Net sales by geographic region and segment were as follows:

Asia–Pacific:

Transportation Solutions
Industrial Solutions
Communications Solutions

Total Asia–Pacific

Europe/Middle East/Africa (“EMEA”):

Transportation Solutions
Industrial Solutions
Communications Solutions

Total EMEA

Americas:

Transportation Solutions
Industrial Solutions
Communications Solutions

Total Americas

Total

2022

Fiscal
2021
(in millions)

2020

$ 3,537
843
1,391
5,771

$ 3,466 $ 2,662
604
980
4,246

703
1,205
5,374

3,490
1,871
346
5,707

3,570
1,586
315
5,471

2,625
1,359
236
4,220

2,192
1,806
805
4,803
$ 16,281

1,938
1,555
585
4,078

1,558
1,750
398
3,706
$ 14,923 $ 12,172

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Operating income (loss) by segment was as follows:

Transportation Solutions
Industrial Solutions
Communications Solutions

Total

2022

$ 1,534
620
602
$ 2,756

2020

Fiscal
2021
(in millions)
$ 1,526 $ (93)
412
218
$ 2,434 $ 537

469
439

No single customer accounted for a significant amount of our net sales in fiscal 2022, 2021, or 2020.

As we are not organized by product or service, it is not practicable to disclose net sales by product or service.

Depreciation and amortization and capital expenditures were as follows:

Depreciation and
Amortization
Fiscal
2021

2020

2022

Capital Expenditures
Fiscal
2021

2020

2022

Transportation Solutions
Industrial Solutions
Communications Solutions

Total

(in millions)

$ 505
194
86
$ 785

$ 512
189
68
$ 769

$ 463
184
64
$ 711

$ 483 $ 487
121
82

153
132

$ 768 $ 690 $

365
139
56
560

Segment assets and a reconciliation of segment assets to total assets were as follows:

Transportation Solutions
Industrial Solutions
Communications Solutions
Total segment assets(1)

Other current assets
Other non-current assets

Total assets

2022

$ 5,530
2,442
1,136
9,108
1,727
9,947
$ 20,782

2020

Segment Assets
Fiscal Year End
2021
(in millions)
$ 5,791 $ 4,973
2,117
887
7,977
1,457
9,808
$ 21,462 $ 19,242

2,275
1,151
9,217
1,824
10,421

(1)

Segment assets are composed of accounts receivable, inventories, and net property, plant,
and equipment.

TE CONNECTIVITY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Net sales and net property, plant, and equipment by geographic region were as follows:

Asia–Pacific:
China
Other Asia–Pacific

Total Asia–Pacific

EMEA:

Switzerland
Germany
Other EMEA

Total EMEA

Americas:
U.S.
Other Americas

Total Americas

Total

(1)

Net Sales(1)
Fiscal
2021

2022

Property, Plant, and
Equipment, Net
Fiscal Year End
2021

2020

2020
(in millions)

2022

$ 3,589
2,182
5,771

$ 3,297
2,077
5,374

$ 2,459
1,787
4,246

779 $
296
1,075

755
377
1,132

3,709
561
1,437
5,707

3,616
417
1,438
5,471

2,878
343
999
4,220

16
597
821
1,434

41
599
937
1,577

659
418
1,077

79
559
871
1,509

4,280
523
4,803
$ 16,281

3,615
463
4,078
$ 14,923

3,348
358
3,706
$ 12,172

960
947
109
111
1,069
1,058
$ 3,567 $ 3,778

963
101
1,064
$ 3,650

Net sales to external customers are attributed to individual countries based on the legal entity that records the sale.

TE CONNECTIVITY LTD.

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

Fiscal Years Ended September 30, 2022, September 24, 2021, and September 25, 2020

Additions

Balance at Charged to Acquisitions, Write-offs Balance at
Beginning of Costs and Divestitures,
Fiscal Year Expenses and Other Deductions Fiscal Year
(in millions)

End of

and

41
2,729

15
4,463

(7)
—

(4) $
(80)

45
7,112

29
4,429

25
4,970

15
31

10
493

1 $
—

(1,731)

(4) $

(1) $
—

(1,034)

(5) $

41
2,729

29
4,429

Description

Fiscal 2022:

Allowance for doubtful accounts receivable
Valuation allowance on deferred tax assets

Fiscal 2021:

Allowance for doubtful accounts receivable
Valuation allowance on deferred tax assets

Fiscal 2020:

Allowance for doubtful accounts receivable
Valuation allowance on deferred tax assets

Report of the Statutory Auditor on the Consolidated Financial Statements of TE Connectivity Ltd.

To the General meeting of
TE CONNECTIVITY LTD., SCHAFFHAUSEN

Report of the Statutory Auditor on the consolidated financial statements

As Statutory Auditor, we have audited the accompanying consolidated financial statements of TE Connectivity Ltd. (the
“Company”), which comprise the consolidated balance sheet as of September 30, 2022, and the consolidated statement of
operations, consolidated statement of comprehensive income (loss), consolidated statement of shareholders’ equity,
consolidated statement of cash flows and notes to the consolidated financial statements for the year then ended.

Board of Directors’ Responsibility
The Board of Directors is responsible for the preparation and fair presentation of the consolidated financial statements in
accordance with accounting principles generally accepted in the United States of America and the requirements of Swiss law.
This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation
and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or
error. The Board of Directors is further responsible for selecting and applying appropriate accounting policies and making
accounting estimates that are reasonable in the circumstances.

Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our
audit in accordance with Swiss law, Swiss Auditing Standards and auditing standards generally accepted in the United States
of America. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the
consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated
financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of
material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers the internal control system relevant to the entity’s preparation and fair presentation of the
consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control system. An audit also includes
evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made, as well
as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion
In our opinion, the consolidated financial statements for the year ended September 30, 2022 present fairly, in all material
respects, the financial position of the Company and the result of its operations and its cash flows in accordance with
accounting principles generally accepted in the United States of America, and comply with Swiss law.

Report on Key Audit Matter based on the circular 1/2015 of the Federal Audit Oversight Authority

The key audit matter is a matter that, in our professional judgment, was of most significance in our audit of the consolidated
financial statements of the current period. This matter was addressed in the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter.

Key Audit Matter (KAM):

How the scope of our audit responded to the key audit matter:

Income Taxes — Realizability of Deferred Tax
Assets — Refer to Notes 2 and 15 to the financial
statements

The Company recognizes deferred income taxes for
temporary differences between the amount of assets
and liabilities recognized for financial reporting and
tax purposes. A valuation allowance is provided to
offset deferred tax assets if, based upon the available
evidence, it is more likely than not that some or all of
the deferred tax assets will not be realized. Future
realization of deferred tax assets depends on the
existence of sufficient taxable income of the
appropriate character prior to expiration. Sources of
taxable income include future reversals of deferred
tax assets and liabilities, expected future taxable
income, taxable income in prior carryback years if
permitted under the tax law, and tax planning
strategies. Management has determined that it is
more likely than not that sufficient taxable income
will be generated in the future to realize a portion of
its deferred tax assets, and therefore, a valuation
allowance of $7.1 billion has been recorded to offset
the Company’s gross deferred tax assets as of
September 30, 2022 of $9.8 billion.

We identified the realizability of deferred tax assets
as a critical audit matter because of the Company’s
tax structure and the significant judgments and
estimates made by management to determine that
sufficient taxable income will be generated in the
future prior to expiration to realize a portion of its
deferred tax assets. This required a high degree of
auditor judgment and an increased extent of effort,
including the need to involve our income tax
specialists, when performing audit procedures to
evaluate the appropriateness of qualifying tax
planning strategies and the reasonableness of
management’s estimates of taxable income prior to
expiration.

Our audit procedures related to the determination that it is more
likely than not that sufficient taxable income will be generated in
the future to realize deferred tax assets included the following,
among others:

• We tested the effectiveness of controls over management’s
estimates of the realization of the deferred tax assets,
including those over the estimates of taxable income, the
approval of tax planning strategies and the determination of
whether it is more likely than not that the deferred tax assets
will be realized prior to expiration.

• We evaluated the reasonableness of management’s assessment
of the significance and weighting of negative evidence and
positive evidence that is objectively verifiable.

• We evaluated management’s ability to accurately estimate

taxable income by comparing actual results to management’s
historical estimates and evaluating whether there have been
any changes that would impact management’s ability to
continue accurately estimating taxable income.

• We tested the reasonableness of management’s estimates of

taxable income by comparing the estimates to:

o Historical taxable income.

o Internal communications to management and the board of

directors.

o Management’s history of carrying out its stated plans and
its ability to carry out its plans considering contractual
commitments, available financing, or debt covenants.

• We evaluated whether the estimates of future taxable income
were consistent with evidence obtained in other areas of the
audit.

• We evaluated whether the taxable income in prior carryback
years was of the appropriate character and available under the
tax law.

• With the assistance of our income tax specialists, we evaluated
(1) the appropriateness of qualifying tax planning strategies,
including that they were prudent, feasible and would more
likely than not result in the realization of deferred tax assets
and (2) management’s assessment that sufficient taxable
income will be generated in the future to realize a portion of
the deferred tax assets prior to expiration.

Report on Other Legal Requirements

We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (“AOA”) and
independence (Article 728 Code of Obligations (“CO”) and Article 11, AOA) and that there are no circumstances
incompatible with our independence.

In accordance with Article 728a, paragraph 1, item 3, CO, and Swiss Auditing Standard 890, we confirm that an internal
control system exists, which has been designed for the preparation of the consolidated financial statements according to the
instructions of the Board of Directors.

We recommend that the consolidated financial statements submitted to you be approved.

Deloitte AG

/s/ Andreas Bodenmann
Licensed Audit Expert
Auditor in charge

Zurich, November 15, 2022

/s/ Dominik Voegtli
Licensed Audit Expert

(This page has been left blank intentionally)

TE CONNECTIVITY LTD.

INDEX TO SWISS STATUTORY FINANCIAL STATEMENTS

Statements of Operations for the Fiscal Years Ended September 30, 2022 and September 24, 2021 ..............................

Balance Sheets as of September 30, 2022 and September 24, 2021 .................................................................................

Notes to Swiss Statutory Financial Statements .................................................................................................................

Proposed Appropriation of Available Earnings ................................................................................................................

Report of the Statutory Auditor ........................................................................................................................................

Page

TE CONNECTIVITY LTD.

SWISS STATUTORY FINANCIAL STATEMENTS

STATEMENTS OF OPERATIONS

Fiscal Years Ended September 30, 2022 and September 24, 2021

Income
Income from distributions made by subsidiaries (Note 8)
Insurance premiums charged to subsidiaries

Total income

Expenses
Salary and social costs
General and administrative costs
Legal and consulting costs
Insurance premiums
Remeasurement (gain) loss on foreign currency transactions
Expenses for services provided by subsidiaries
Intercompany interest expense

Total expenses

Net Income

Fiscal 2022

Fiscal 2021

U.S. dollars Swiss francs U.S. dollars Swiss francs
(in millions)

1,310 CHF 1,245
13
1,258

13
1,323

750 CHF 692
6
698

7
757

4
4
6
18
(11)
53
123
197

4
4
6
17
(10)
50
116
187
1,126 CHF 1,071

11
12
3
4
5
6
10
11
13
14
58
64
60
66
177
160
580 CHF 538

See Notes to Swiss Statutory Financial Statements.

TE CONNECTIVITY LTD.

SWISS STATUTORY FINANCIAL STATEMENTS

BALANCE SHEETS

As of September 30, 2022 and September 24, 2021

Assets
Current assets:

Accounts receivable from subsidiaries
Prepaid expenses and other current assets

Total current assets

Investments in subsidiaries (Notes 2 and 8)

Total assets

Liabilities and shareholders’ equity
Current liabilities:
Accounts payable
Accounts payable to subsidiaries
Loans from subsidiaries (Note 3)
Accrued and other current liabilities
Approved but unpaid distributions to shareholders (Note 4)

Total current liabilities

Unrealized translation gains (Note 2)

Total liabilities

Commitments, contingencies, and guarantees (Note 3)
Shareholders’ equity (Note 4):

Share capital, CHF 0.57 par value, 330,830,781 shares authorized
and issued, and 336,099,881 shares authorized and issued,
respectively
Statutory reserves:

General reserve from earnings

Free reserves:

Reserves from capital contributions (Note 4)
Allocated reserves for the acquisition of treasury shares by a
subsidiary (Note 2)

Unappropriated accumulated earnings
Own shares held in treasury
Reserves for treasury shares (Note 2)

Total shareholders’ equity
Total liabilities and shareholders’ equity

Fiscal Year End 2022

Fiscal Year End 2021

U.S. dollars Swiss francs U.S. dollars Swiss francs
(in millions, except share data)

61 CHF
3
64
9,633
9,697 CHF 10,489 $

60 $
3
63
10,426

238 CHF

220
4
4
224
242
9,633
10,426
9,875 CHF 10,650

2 CHF

57
4,959
75
356
5,449
—
5,449

146

2 $
56
4,882
74
331
5,345
563
5,908

1 CHF

74
4,463
79
327
4,944
—
4,944

189

148

1
68
4,127
73
304
4,573
868
5,441

192

3,191

4,239

3,905

4,902

(586)
1,968
(1,095)
586
4,248
9,697 CHF 10,489 $

(538)
1,140
(1,036)
538
4,581

(320)
(346)
715
1,549
(649)
(709)
320
346
4,931
5,209
9,875 CHF 10,650

See Notes to Swiss Statutory Financial Statements.

TE CONNECTIVITY LTD.
NOTES TO SWISS STATUTORY FINANCIAL STATEMENTS

1. Basis of Presentation

TE Connectivity Ltd. (“TE Connectivity” or the “Company,” which may be referred to as “we,” “us,” or “our”),

incorporated in Schaffhausen, Switzerland, is the ultimate holding company of TE Connectivity Ltd. and its subsidiaries (the
“TE Group”) with a listing on the New York Stock Exchange. We employed less than 10 full time positions during the fiscal
years ended September 30, 2022 and September 24, 2021. For additional information on the TE Group, see our Annual
Report on Form 10-K filed with the United States (“U.S.”) Securities and Exchange Commission (“SEC”) for the fiscal year
ended September 30, 2022.

The accompanying statements of operations reflect the results of operations for the fiscal years ended

September 30, 2022 and September 24, 2021 and have been prepared in accordance with the requirements of Swiss law for
companies, the Swiss Code of Obligations. The financial statements present the results of the holding company on a stand-
alone basis and do not represent the consolidated operations of the TE Group.

Fiscal Year

We have a 52- or 53-week fiscal year that ends on the last Friday of September. Fiscal 2022 was 53 weeks in length
and ended on September 30, 2022; fiscal 2021 was 52 weeks in length and ended on September 24, 2021. For fiscal years in
which there are 53 weeks, the fourth fiscal quarter includes 14 weeks.

2. Summary of Significant Accounting Policies

Currency Translation

Our functional currency is the U.S. dollar. We present our financial statements in both U.S. dollars and Swiss francs
(“CHF”). Assets and liabilities in U.S. dollars are converted to Swiss francs for presentation purposes using historical foreign
exchange rates (for investments in subsidiaries, shares held in treasury, approved but unpaid distributions to shareholders
payable, and equity accounts) and current foreign exchange rates (for all other assets and liabilities; at fiscal year end 2022
and 2021, exchange rates were CHF 0.9846:$1 and CHF 0.9248:$1, respectively). Revenue and expenses, excluding income
from distributions made by subsidiaries, are translated using the average foreign exchange rates in effect for the period
presented (exchange rates were CHF 0.9432:$1 and CHF 0.9097:$1 for fiscal 2022 and 2021, respectively). Income from
distributions made by subsidiaries is translated using the exchange rate in effect on the date that each distribution was made
to us. Net unrealized foreign currency translation gains are deferred in the balance sheets, while unrealized translation losses
and realized transactional gains and losses are reflected in the statements of operations. We consider all foreign currency
transactional gains and losses associated with current assets and liabilities to be realized.

Own Shares Held in Treasury and Allocated Reserves for the Acquisition of Treasury Shares by a Subsidiary

Shares held in treasury that are directly owned by us are recorded at historical cost and presented as reductions to
equity on our balance sheets. Reserves for treasury shares reflects all treasury shares held by a subsidiary and is recorded at
historical cost.

As management deems appropriate, we can establish reserves for treasury shares by charging either accumulated
earnings or allocated reserves for the acquisition of treasury shares by a subsidiary. During fiscal 2022 and 2021, allocated
reserves for the acquisition of treasury shares by a subsidiary were charged to establish reserves. As shares acquired by a
subsidiary are re-issued for use in share-based compensation arrangements, we credit the same account impacted by initial
acquisition.

Investments in Subsidiaries and Income from Distributions Made by Subsidiaries

Investments in subsidiaries are equity interests held on a long-term basis for the purpose of our business activities.

Investments in subsidiaries are carried at a value no higher than cost less adjustments for impairment.

TE CONNECTIVITY LTD.
NOTES TO SWISS STATUTORY FINANCIAL STATEMENTS

Salaries and Social Costs

Salaries and social costs include cash and equity compensation paid to our directors.

3. Commitments, Contingencies, and Guarantees

Affiliated Debt and Loans Receivable

We utilize a cash pooling relationship with a wholly-owned subsidiary (the “Cash Pool”) to fund operations,

including the repurchase of common shares. The Cash Pool does not have an expiration date and accrues interest based on
USD LIBOR or, upon phase-out of LIBOR, a successor rate.

During fiscal 2022, we entered into a new revolving loan agreement with a subsidiary that provides for up to CHF

4.9 billion of borrowings (equivalent to $5.0 billion). The revolving loan matures in fiscal 2032 and bears interest of 3-month
USD LIBOR or, upon phase-out of LIBOR, a successor rate, plus 1.50% on drawn balances.

At fiscal year end 2022 and 2021, we had the following loans to subsidiaries included in accounts receivable from

subsidiaries on our balance sheets:

Fiscal Year End 2022

Fiscal Year End 2021

Cash Pool asset

U.S. dollars Swiss francs U.S. dollars Swiss francs
(in millions)
$
13

189 CHF 175

13 CHF

As of fiscal year end 2022 and 2021, we had the following loans from subsidiaries on our balance sheets:

Revolving loan due 2025
Revolving loan due 2032
CHF-denominated borrowings

Loans from subsidiaries

Fiscal Year End 2022

Fiscal Year End 2021

U.S. dollars Swiss francs U.S. dollars Swiss francs
(in millions)

4,311 CHF 4,244 $

476
172

469
169

4,959 CHF 4,882 $

4,118 CHF 3,808
—
319
4,463 CHF 4,127

—
345

We have fully and unconditionally guaranteed the debt of a subsidiary, Tyco Electronics Group S.A., totaling CHF

4,166 million (equivalent to $4,231 million) and CHF 3,792 million (equivalent to $4,100 million) at fiscal year end 2022
and 2021, respectively. As of fiscal year end 2022, we have not been required to perform on our guarantee.

Performance Guarantees

From time to time, we provide performance guarantees and surety bonds in favor of our subsidiaries. At fiscal year

end 2022 and 2021, these performance guarantees were as follows:

Fiscal Year End 2022

Fiscal Year End 2021

Performance Guarantees

U.S. dollars Swiss francs U.S. dollars Swiss francs
(in millions)
89 $

97 CHF

91 CHF

In addition to these amounts, all of which are quantifiable, we have issued a parent company guarantee in behalf of a

U.S.-based aerospace customer that does not have a limit. We do not anticipate having to perform under these guarantees.

We are the leader of a Swiss value-added tax (“VAT”) group (“VAT Group”). All companies in the VAT Group

maintain primary responsibility for their own VAT liabilities. However, in the event of non-compliance by any company in
the VAT Group, all companies within the VAT Group assume joint and several responsibilities for any VAT liabilities. As
VAT Group leader, we have not had to assume responsibility for any events of noncompliance by the other companies in the
VAT Group.

TE CONNECTIVITY LTD.
NOTES TO SWISS STATUTORY FINANCIAL STATEMENTS

4. Equity

Changes in Equity Accounts

The following table presents activity related to our equity accounts during fiscal 2022 and 2021 in Swiss francs.

Allocated
Reserves for
the Acquisition

Reserves

for

General
Reserve Reserves from of Treasury Unappropriated Own Shares

Treasury
Shares

Total

Share
Shares by a
Capital Earnings Contributions Subsidiary

Capital

from

Accumulated
Earnings

Held in
Treasury

held by a Shareholders’
Subsidiary

Equity

(in CHF millions)
(395) CHF

Fiscal year end 2020

CHF 193 CHF 49 CHF 5,513 CHF

Dividends
Repurchase of common shares
Cancellation of treasury shares
Transfer of reserves for
treasury shares and other
Net income

—
—
(1)

—
—

—
—
—

—
—

(611)
—
—

—
—

—
—
—

75
—

Fiscal year end 2021

CHF 192 CHF 49 CHF 4,902 CHF

(320) CHF

Dividends
Repurchase of common shares
Cancellation of treasury shares
Transfer of reserves for
treasury shares
Net income

—
—
(3)

—
—

—
—
—

—
—

(663)
—
—

—
—

—
—
—

(218)
—

Fiscal year end 2022

CHF 189 CHF 49 CHF 4,239 CHF

(538) CHF

432 CHF
—
—
(255)

(256) CHF 395 CHF 5,931
(611)
—
(649)
—
—
—

—
(649)
256

—
538
715 CHF
—
—
(646)

—
—

-
(75)
538
—
(649) CHF 320 CHF 5,209
(663)
—
(1,036)
—
—
—

—
(1,036)
649

—
—
1,071
1,071
1,140 CHF (1,036) CHF 538 CHF 4,581

—
—

218
—

The following table presents activity related to our equity accounts during fiscal 2022 and 2021 in U.S. dollars.

General
Reserve Reserves from of Treasury Unappropriated Own Shares

Treasury
Shares

Total

Allocated
Reserves for
the Acquisition

Reserves

for

Share
Shares by a
Capital Earnings Contributions Subsidiary

Capital

from

Accumulated
Earnings

Held in
Treasury

held by a Shareholders’
Subsidiary

Equity

Fiscal year end 2020

Dividends
Repurchase of common shares
Cancellation of treasury shares
Transfer of reserves for treasury
shares and other
Net income

Fiscal year end 2021

Dividends
Repurchase of common shares
Cancellation of treasury shares
Transfer of reserves for treasury
shares
Net income

Fiscal year end 2022

149 $
—
—
(1)

—
—
148 $
—
—
(2)

—
—
146 $

38 $
—
—
—

—
—
38 $
—
—
—

—
—
38 $

4,561 $
(656)
—
—

—
—
3,905 $
(714)
—
—

—
—
3,191 $

Conditional and Authorized Share Capital

(in USD millions)
(407) $
—
—
—

1,230 $
—
—
(261)

61
—
(346) $
—
—
—

(240)
—
(586) $

—
580
1,549 $
—
—
(707)

—
1,126
1,968 $

(262) $
—
(709)
262

—
—
(709) $
—
(1,095)
709

—
—

(1,095) $

407 $
—
—
—

(61)
—
346 $
—
—
—

240
—
586 $

5,716
(656)
(709)
—

—
580
4,931
(714)
(1,095)
—

—
1,126
4,248

Subject to certain conditions specified in our articles of association, we are authorized to increase our conditional
share capital by issuing new shares in aggregate not exceeding 50% of our existing registered shares. Until recently, Swiss
law provided for the option to create authorized share capital that could be issued by the board of directors, but this
authorization was limited to authorized share capital up to 50% of the existing registered shares with the authorization valid

TE CONNECTIVITY LTD.
NOTES TO SWISS STATUTORY FINANCIAL STATEMENTS

for a maximum of two years. Such authorization period under our articles of association ended on March 11, 2022. As part of
the Swiss corporate law reform, effective as of January 1, 2023, the concept of authorized share capital will be replaced by a
capital band. Under a capital band, the articles of association may authorize the board of directors for a maximum period of
five years to increase the ordinary share capital registered in the commercial register to a maximum of 150% and/or reduce it
to a minimum of 50% of the share capital existing at the time of the introduction of the capital band. Our articles of
association do not currently provide for a capital band.

Own Shares Held in Treasury and Treasury Shares Held by a Subsidiary

During fiscal 2022 and 2021, activity related to common shares held in treasury by us and by a subsidiary was as

follows:

Common shares held as of fiscal year end 2020
Repurchases under share repurchase program
Other additions(1)
Reissuances
Shareholder approved cancellations

Common shares held as of fiscal year end 2021
Repurchases under share repurchase program
Other additions(1)
Reissuances
Shareholder approved cancellations

Common shares held as of fiscal year end 2022

Common Shares Held By Us

Common Shares Held By a Subsidiary

Total Cost

Number of
Shares

U.S
Dollars

Swiss
Francs

Number of
Shares

U.S
Dollars

Swiss
Francs

3
5
—
—
(3)
5
8
—
—
(5)
8

262 CHF
709
—
—
(262)
709 CHF

(in millions)
256
649
—
—
(256)
649
1,036
1,095
—
—
—
—
(709)
(649)
1,095 CHF 1,036

5 $
2
—
(3)
—
4 $
2
—
(1)
—
5 $

407 CHF
195
21
(277)
—
346 CHF
314
33
(107)
—

586 CHF

395
175
19
(269)
—
320
293
31
(106)
—
538

(1)

Other additions include shares withheld to cover employee taxes under share-based compensation arrangements. These additions
are not part of the share repurchase program.

In fiscal 2022 and 2021, our shareholders approved the cancellation of five million and three million shares,
respectively, purchased under our share repurchase program. These capital reductions by cancellation of shares were subject
to a notice period and filing with the commercial register in Switzerland.

In both fiscal 2022 and 2021, our board of directors authorized increases of $1.5 billion in our share repurchase
program. At fiscal year end 2022, we had CHF 1.7 billion (equivalent to $1.7 billion) of availability remaining under our
share repurchase authorization. Purchases made both by us and a subsidiary are subject to this authorization.

Reserves from Capital Contributions

Reserves from capital contributions, subject to certain conditions, are freely distributable reserves. As of fiscal year

end 2022 and 2021, reserves from capital contributions were as follows:

Reserves from capital contributions

General Reserve from Earnings

Fiscal Year End 2022

Fiscal Year End 2021

U.S. dollars Swiss francs U.S. dollars Swiss francs
(in millions)

3,191 CHF 4,239 $

3,905 CHF 4,902

To comply with the Swiss Code of Obligations, 5% of annual net income must be appropriated to our general

reserve until the general reserve, a non-distributable reserve, equals 20% of share capital. Our current appropriation of CHF
49 million (equivalent to $38 million) satisfies the requirements of the Swiss Code of Obligations with respect to the general
reserve.

TE CONNECTIVITY LTD.
NOTES TO SWISS STATUTORY FINANCIAL STATEMENTS

Dividends

We paid cash dividends to shareholders of $2.12 and $1.96 per share in fiscal 2022 and 2021, respectively.

Under current Swiss tax law, subject to certain conditions, dividends paid from reserves from capital contributions

are exempt from Swiss withholding tax. Dividends on our shares must be approved by our shareholders.

Our shareholders approved the following dividends on our common shares:

Approval Date
March 2020

March 2021

March 2022

Annual Payment Per Share
$1.92, payable in four quarterly installments
of $0.48

$2.00, payable in four quarterly installments
of $0.50

$2.24, payable in four quarterly installments
of $0.56

Payment Timing

Third quarter of fiscal 2020
Fourth quarter of fiscal 2020
First quarter of fiscal 2021
Second quarter of fiscal 2021
Third quarter of fiscal 2021
Fourth quarter of fiscal 2021
First quarter of fiscal 2022
Second quarter of fiscal 2022
Third quarter of fiscal 2022
Fourth quarter of fiscal 2022
First quarter of fiscal 2023
Second quarter of fiscal 2023

Upon shareholders’ approval of a dividend payment, we record a liability with a corresponding charge to

shareholders’ equity.

5. Non-Employee Director and Executive Compensation

For information regarding non-employee director and executive compensation, see our Swiss Statutory

Compensation Report.

TE CONNECTIVITY LTD.
NOTES TO SWISS STATUTORY FINANCIAL STATEMENTS

6. Security Ownership of Board of Directors and Executive Officers

Board of Directors

The following table sets forth the shares, options and share units held as of fiscal year end 2022 and 2021 by each

member of our board of directors serving on our board at fiscal year end 2022. The share ownership of Mr. Curtin, our Chief
Executive Officer, and Mr. Mitts, our Executive Vice President and Chief Financial Officer, both of whom are members of
the board of directors, is set forth in Executive Management.

Board of Directors:
Carol A. (“John”) Davidson

Lynn A. Dugle

William A. Jeffrey

Syaru Shirley Lin(2)
Thomas J. Lynch(3)

Yong Nam

Abhijit Y. Talwalkar

Mark C. Trudeau

Dawn C. Willoughby

Laura H. Wright

Years

2022
2021
2022
2021
2022
2021
2022
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021

Shares
Held

Options

Held

Exercise Price(1)

Fiscal Years
of Expiration

RSUs
Held

PSUs
Held

14,137
13,202
3,215
2,280
20,266
19,331
622
143,937
161,602
19,781
18,912
9,631
8,696
10,537
9,602
3,215
2,280
14,489
13,554

—
—
—
—
—
—
—
43,700
43,700
—
—
—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
$93.36
$93.36
—
—
—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
2028
2028
—
—
—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—

(1)

(2)

(3)

Each option provides the right to purchase one share at the exercise price. Subject to acceleration upon certain events, the share
options are exercisable in equal installments on anniversaries of the grant dates.

Ms. Lin joined our board of directors on March 9, 2022.

Mr. Lynch served as Chief Executive Officer of the Company until March 8, 2017 and as Executive Chairman of the Company
until March 14, 2018. Since March 2018, Mr. Lynch has served as Non-Executive Chairman of the board of directors. Shares
held as of September 30, 2022 include 15,000 shares held in a charitable trust and 11,750 shares held in a grantor retained
annuity trust. Shares held as of September 24, 2021 include 15,000 shares held in a charitable trust and 38,425 shares held in a
grantor retained annuity trust.

TE CONNECTIVITY LTD.
NOTES TO SWISS STATUTORY FINANCIAL STATEMENTS

Executive Management

The following table sets forth the shares, options and share units held as of fiscal year end 2022 and 2021 by each

member of our executive management serving in such position as of fiscal year end 2022.

Executive Management:
Terrence R. Curtin(4)

John S. Jenkins, Jr.

Shad W. Kroeger

Steven T. Merkt

Heath A. Mitts(5)

Timothy J. Murphy

Aaron K. Stucki(6)

Years

Shares
Held

Options
Held

Options
Exercise Price(1)

Fiscal Years
RSUs
of Expiration Held(2)

PSUs
Held(3)

2022 94,969
2021 94,969
2022 19,456
2021 16,872
2022 15,595
2021 11,499
2022 47,720
2021 40,129
2022 28,163
2021 28,163
2022 17,754
2021 14,741
2022 12,317
2021 11,920

1,199,371
1,237,700
186,325
162,075
248,000
221,550
285,675
245,275
355,350
306,150
201,100
191,500
113,350
91,300

$66.74-$158.00
$66.74-$105.86
$76.66-$158.00
$76.66-$105.86
$51.61-$158.00
$51.61-$105.86
$76.66-$158.00
$76.66-$105.86
$76.66-$158.00
$76.66-$105.86
$51.61-$158.00
$34.05-$105.86
$66.74-$158.00
$66.74-$105.86

2027-2032
2027-2031
2028-2032
2028-2031
2024-2032
2024-2031
2028-2032
2028-2031
2028-2032
2028-2031
2024-2032
2023-2031
2027-2032
2027-2031

— 134,020
— 144,132
23,603
27,191
22,296
24,377
35,346
40,829
40,400
45,818
14,012
16,791
13,454
11,242

724
2,143
—
—
—
—
—
—
—
—
4,526
4,454

(1)

(2)

(3)

(4)

(5)

(6)

Subject to acceleration upon certain events, the RSUs vest over time, are settled in shares upon vesting on a one-for-one basis,
and receive dividend equivalent units.

The PSU amounts in the table above assume achievement of target level of performance including target dividend equivalent
units through September 30, 2022 and September 24, 2021, respectively. Under the terms of the PSUs, shares of stock are earned
based on the company’s earnings per share growth relative to the Standard & Poor’s 500 Non-Financial Companies Index over a
three-year performance cycle, subject to various conditions, and the PSUs earn dividend equivalent units. Subject to acceleration
upon certain events, vesting of reserved PSUs occurs when the management development and compensation committee certifies
year three results following the close of the three-year performance cycle. Annual PSU awards for the last three fiscal years were
granted on November 8, 2021, November 9, 2020, November 11, 2019.

Mr. Curtin is a member of the board of directors and chief executive officer. Shares held include 40,000 shares held in a family
trust.

Mr. Mitts is a member of the board of directors and executive vice president and chief financial officer.

Mr. Stucki became a member of executive management effective October 1, 2020.

For additional information regarding share-based compensation arrangements, see the TE Group’s consolidated

financial statements and our Swiss Statutory Compensation Report.

TE CONNECTIVITY LTD.
NOTES TO SWISS STATUTORY FINANCIAL STATEMENTS

7. Significant Shareholders

The following table sets forth the information indicated for persons or groups known to us to be beneficial owners of

more than 5% of our outstanding shares beneficially owned as of fiscal year end 2022.

Name and Address of Beneficial Owner
The Vanguard Group(1)
100 Vanguard Blvd.
Malvern, PA 19355
Capital World Investors(2)

333 South Hope Street, 55th Floor
Los Angeles, CA 90071

Dodge & Cox(3)

555 California Street, 40th Floor
San Francisco, CA 94104

Number of
Shares

27,312,606

20,907,589

17,125,955

Percentage
of Class

8.4 %

6.4 %

5.2 %

(1)

(2)

(3)

This information is based on a Schedule 13G/A filed with the SEC on February 10, 2022 by The Vanguard Group, which
reported sole voting power, sole dispositive power, and shared dispositive power as follows: sole voting power—0, shared voting
power—452,089, sole dispositive power—26,080,301, and shared dispositive power—1,232,305.

This information is based on a Schedule 13G filed with the SEC on February 11, 2022 by Capital World Investors, which
reported sole voting power and sole dispositive power as follows: sole voting power— 20,863,075 and sole dispositive power—
20,907,589.

This information is based on a Schedule 13G/A filed with the SEC on February 14, 2022 by Dodge & Cox, which reported sole
voting power and sole dispositive power as follows: sole voting power—16,443,955 and sole dispositive power—17,125,955.

8. Subsidiaries

We are the ultimate holding company of all subsidiaries of the TE Group. Our direct subsidiaries and significant
subsidiaries of the TE Group, as determined based on net sales or total assets, were as follows as of fiscal year end 2022:

Entity Name
Tyco Electronics Group S.A.
TE Connectivity Corporation
TE Connectivity Germany GmbH
TE Connectivity HK Limited
TE Connectivity Holding International II S.a r.l.
TE Connectivity Solutions GmbH
Tyco Electronics (Shanghai) Co., Ltd.
Tyco Electronics AMP Korea Co., Ltd.
Tyco Electronics Japan G.K.
Tyco Electronics Singapore Pte Ltd.

Jurisdiction
Luxembourg
United States
Germany
Hong Kong
Luxembourg
Switzerland
China
South Korea
Japan
Singapore

Direct or Indirect
Holding(1)
Direct
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect

Nominal
Capital
(in millions)
1
$
—
$
79
EUR
7,877
HKD
—
$
—
CHF
USD
8
KRW 6,812
JPY 17,300
237

SGD

Purpose(2)
F
M
M
S
F
S
M
M
M
S

(1)

(2)

The subsidiary labeled as “direct” is wholly-owned by us. All subsidiaries labeled as “indirect” are wholly-owned indirectly
by us.

“F” denotes the primary purpose as a holding or financing company; “M” denotes the primary purpose as manufacturing and
production; “S” denotes the primary purpose as sales and distribution.

TE CONNECTIVITY LTD.
NOTES TO SWISS STATUTORY FINANCIAL STATEMENTS

During fiscal 2022, as a result of a series of intercompany transactions, our indirect subsidiary TE Connectivity

Investments Holding S.a r.l. ceased to be significant and is not included in the above table.

During fiscal 2022 and 2021, subsidiaries distributed CHF 1,245 million (equivalent to $1,310 million) and CHF

692 million (equivalent to $750 million), respectively, to us. The distributions are included in income from distributions
made by subsidiaries in our statements of operations.

9. Subsequent Events

We have evaluated subsequent events through November 15, 2022, the date the Swiss Statutory Financial

Statements were issued, and determined that no significant subsequent events have occurred through this date requiring
adjustment to the Swiss Statutory Financial Statements or disclosures.

Proposed Appropriation of Accumulated Earnings

Our board of directors will propose, in conjunction with our annual general meeting, that we carry forward

unappropriated accumulated earnings of CHF 1,140 million as included in our balance sheet as of September 30, 2022.

Report of the Statutory Auditor on the Swiss Statutory Financial Statements of
TE Connectivity Ltd.

To the General meeting of
TE CONNECTIVITY LTD., SCHAFFHAUSEN

Report of the Statutory Auditor on the financial statements

As Statutory Auditor, we have audited the accompanying financial statements of TE Connectivity Ltd. (the “Company”),
which comprise the balance sheet as of September 30, 2022, and the statement of operations and notes for the year then
ended.

Board of Directors’ Responsibility
The Board of Directors is responsible for the preparation of the financial statements in accordance with the requirements of
Swiss law and the Company’s articles of association. This responsibility includes designing, implementing and maintaining
an internal control system relevant to the preparation of financial statements that are free from material misstatement,
whether due to fraud or error. The Board of Directors is further responsible for selecting and applying appropriate accounting
policies and making accounting estimates that are reasonable in the circumstances.

Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with Swiss law and Swiss Auditing Standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers the internal control system relevant to the entity’s preparation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the entity’s internal control system. An audit also includes evaluating the appropriateness of the accounting policies used and
the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion
In our opinion, the financial statements for the year ended September 30, 2022 comply with Swiss law and the Company’s
articles of association.

Report on Key Audit Matters based on the circular 1/2015 of the Federal Audit Oversight Authority

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period. We have determined that there are no key audit matters to communicate in our report.

Report on Other Legal Requirements

We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (“AOA”) and
independence (Article 728 Code of Obligations (“CO”), and Article 11, AOA) and that there are no circumstances
incompatible with our independence.

In accordance with Article 728a, paragraph 1, item 3, CO, and Swiss Auditing Standard 890, we confirm that an internal
control system exists, which has been designed for the preparation of financial statements according to the instructions of the
Board of Directors.

We further confirm that the proposed appropriation of accumulated earnings complies with Swiss law and the Company’s
articles of association. We recommend that the financial statements submitted to you be approved.

Deloitte AG

/s/ Andreas Bodenmann
Licensed Audit Expert
Auditor in charge

/s/ Dominik Voegtli
Licensed Audit Expert

Zurich, November 15, 2022

(This page has been left blank intentionally)

TE CONNECTIVITY LTD.

INDEX TO SWISS STATUTORY COMPENSATON REPORT

General

Compensation of the Board of Directors

Compensation of Executive Management

Security Ownership of the Board of Directors and Executive Management

Directors and Executive Management Biographies

Report of the Statutory Auditor on the Swiss Statutory Compensation Report of TE Connectivity Ltd.

Page

100

103

106

108

114

General

Under Swiss law we are required to prepare a separate Swiss Statutory Compensation Report each year that contains

specific items in a presentation format determined by these regulations. This report must be included in the materials made
available to our shareholders each year.

Our executive management (as defined under Swiss law, hereafter referred to as “Executive Management”) for

fiscal 2022 consisted of Terrence Curtin, Chief Executive Officer; John Jenkins, Jr., Executive Vice President and General
Counsel; Shadrak Kroeger, President, Industrial Solutions; Heath Mitts, Executive Vice President and Chief Financial
Officer; Steven Merkt, President, Transportation Solutions; Timothy Murphy, Senior Vice President and Chief Human
Resource Officer; and Aaron Stucki, President, Communications Solutions. Thomas Lynch, former Executive Chairman,
who during fiscal 2021 continued to receive dividend equivalent units on equity awards granted to him as a member of
Executive Management, is included in this report. Kevin Rock, former President, Industrial Solutions is included in this
report for fiscal 2021. Mr. Rock retired as the President, Industrial Solutions on October 1, 2020.

The following sets forth, for the fiscal years ended September 30, 2022, and September 24, 2021, the compensation

of the members of the Board of Directors and Executive Management for all the functions that they have performed for TE
Connectivity Ltd. (“TE Connectivity” or the “Company,” which may be referred to as “we,” “us,” or “our”). This report
contains all elements of compensation paid, granted or promised to the Board of Directors and Executive Management.

For more detailed information about compensation for our Board of Directors and Executive Management, please

review our Definitive Proxy Statement for our 2023 Annual Meeting of Shareholders. You may access this report on the
Investor Relations section of our website at http://investors.te.com/financial-reports/annual-reports/default.aspx.

Compensation of the Board of Directors

Compensation paid for fiscal 2022 to each director who is not our salaried employee, or an employee of our

subsidiaries was based on the following fee structures:

Annual retainer
Additional annual fees:

Non-Executive Chairman
Lead Independent Director
Audit Committee Chair
Audit Committee Member
Nominating, Governance & Compliance
Committee Chair
Management, Development & Compensation
Committee Chair
Science Advisory Board Retainer

$
$
$
$

$
$

Fee Structure Effective
October 2021

Cash

Equity

100,000

200,000

170,000
40,000
25,000
15,000

15,000

20,000
10,000

100

Compensation paid for fiscal 2021 to each director who is not our salaried employee, or an employee of our

subsidiaries was based on the following fee structures:

Annual retainer
Additional annual fees:

$
$
$
$

$
$

Fee Structure Effective
October 2017

Cash

Equity

90,000 $

185,000

170,000
40,000
25,000
10,000

15,000

20,000
10,000

In addition to the compensation described above, TE Connectivity will also provide Company matching gift

contributions under the Company’s matching gift program up to a maximum of $10,000 per year.

Our board members also receive non-compensatory reimbursement for expenses incurred in attending board and

committee meetings or performing other services for us in their capacities as directors. Such expenses include food, lodging
and transportation. Directors who are TE Connectivity employees or employees of our subsidiaries do not receive any
compensation for their services as directors. Messrs. Curtin and Mitts are employees of the Company and do not receive any
additional compensation for their service on the board.

Each non-employee director received the equity component of their compensation in the form of a grant of common

shares of TE Connectivity Ltd.

101

The following table discloses the cash and equity awards paid to each of our non-employee directors for fiscal 2022

and 2021.

Table 1

Name

Fiscal Year

Fees Earned or
Paid in Cash
($) (1)

Stock Awards
($) (2)

Dividend Equivalent
Units and Other
Compensation
($) (3)

Total
($) (4)

Pierre R. Brondeau (6)

Carol A. (John) Davidson

Lynn A. Dugle

William A. Jeffrey

David M. Kerko (7)

Syaru Shirley Lin (5)

Thomas J. Lynch

Yong Nam

Daniel J. Phelan (6)

Abhijit Y. Talwalkar

Mark C. Trudeau

Dawn C. Willoughby

Laura H. Wright

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

$64,583

$145,000

$148,333

$115,000

$100,000

$118,750

$100,000

$41,667

$58,333

$270,000

$260,000

$100,000

$90,000

$41,667

$98,333

$120,000

$101,667

$100,000

$90,000

$100,000

$90,000

$115,000

$100,000

$97,898

$188,960

$195,954

$188,960

$195,954

$188,960

$195,954

$188,960

$116,667

$195,954

$188,960

$195,954

$188,960

$97,898

$188,960

$195,954

$188,960

$195,954

$188,960

$195,954

$188,960

$195,954

$188,960

—

$10,000

$9,960

—

$10,000

—

$10,000

—

$150

$10,000

—

$162,481

$333,960

$344,287

$303,960

$320,954

$298,960

$324,664

$288,960

$230,627

$175,000

$465,954

$458,960

$295,954

$278,960

$149,565

$297,293

$325,954

$290,627

$295,954

$279,110

$305,954

$288,960

$320,954

$288,960

The amounts shown represent the amount of cash compensation earned in fiscal 2022 and 2021 for Board and committee
services. We pay additional annual cash retainers to our Non-Executive Chairman, Lead Independent Director, Chairperson of
each of our committees of the Board, members of the audit committee and our science advisory board member.

The amounts shown represent the amount of equity compensation granted in fiscal 2022 and 2021 for Board services. On
December 9, 2021, each non-employee director excluding Dr. Brondeau and Mr. Phelan received a grant of 1,247 common
shares; Dr. Brondeau and Mr. Phelan each received a grant of 623 common shares. In determining the number of common shares
to be issued, we used the average daily closing price for the 20-day period prior to the grant date ($160.38 per share), the same
methodology used to determine employee equity awards. The grant date fair value of these awards, as shown above for fiscal
year 2022, was calculated by using the closing price of TE Connectivity Ltd. common shares on the date of grant ($157.14 per
share). On March 10, 2022, Ms. Lin received a grant of 830 common shares. In determining the number of common shares to be
issued, we used the average daily closing price for the 20-

(1)

(2)

102

day period prior to the grant date ($140.41 per share), the same methodology used to determine employee equity awards. The
grant date fair value of this award as shown above for fiscal 2022, was calculated by using the closing price of TE Connectivity
Ltd. common shares on the date of grant ($130.29 per share). For fiscal 2021, each non-employee director received a grant of
common shares. For fiscal 2021, Mr. Lynch received shares relating to a performance stock award (“PSU”) that vested on
December 9, 2020. That equity award was granted to Mr. Lynch when he was serving as a member of Executive Management of
the Company.

Amounts shown represent company matching gift contributions made on behalf of certain directors under TE Connectivity’s
matching gift program. For fiscal 2021, Mr. Lynch received dividend equivalent units (“DEUs”) on PSU awards granted to him
while serving as a member of Executive Management; the value of the DEUs, is not included in this Table 1 but is included in
Table 2 below.

The Company has not made any loans or extended credit to any current or former member of the Board of Directors.

On March 9, 2022, Ms. Lin was elected to our Board of Directors. Cash and equity compensation for Ms. Lin was pro-rated for
her service during fiscal 2022.

Dr. Brondeau and Mr. Phelan left the board effective March 9, 2022. Cash and equity compensation was pro-rated for their
service during fiscal 2022.

Mr. Kerko resigned from the Board of Directors effective February 16, 2021. Cash compensation for Mr. Kerko was pro-rated for
his service during fiscal 2021

(3)

(4)

(5)

(6)

(7)

Compensation of Executive Management

The following table presents information concerning Executive Management’s fiscal 2022 and 2021 compensation.

Table 2

Name and
Principal
Position
Terrence R. Curtin
Chief Executive Officer

Year

Salary
($)(3)

Bonus
($)

Stock
Awards
($)(4)

Option
Awards
($)(5)

Change in
Pension
Value and
Nonqualified
Deferred
Compen -
sation
Earnings
($)(7)

Non - Equity
Incentive
Plan
Compen -
sation
($)(6)

All Other
Compen -
sation
($)(8)

Total
($)(9)

All Other Executive
Management (1) (2)

2022
2021

$3,713,206
$3,471,682

2022 $1,262,532
2021 $1,200,000

—
—

$5,872,860
$5,006,119

$6,085,856
$5,208,994

$2,074,067
$2,903,400

$6,394,260
$5,821,242

$6,626,277
$6,057,150

$4,075,917
$5,178,322

—
—

$632,551
$397,343

$15,927,866
$14,715,856

$1,743,940
$1,499,617

$22,553,600
$22,028,013

(1)

(2)

(3)

For fiscal 2022, the Executive Management team for Swiss reporting purposes includes Mr. Jenkins, Mr. Kroeger, Mr. Merkt,
Mr. Mitts, Mr. Murphy, and Mr. Stucki.

For fiscal 2021, the Executive Management team for Swiss reporting purposes includes Mr. Jenkins, Mr. Kroeger, Mr. Merkt,
Mr. Mitts, Mr. Murphy, and Mr. Rock until his retirement as a member of Executive Management. Mr. Lynch is also included as
he continued to receive compensation for fiscal 2021 for DEUs on equity awards.

Amounts shown are not reduced to reflect Executive Management’s elections, if any, to defer receipt of salary into the
Supplemental Savings and Retirement Plan (“SSRP”), a nonqualified supplemental retirement plan for management and
executive level employees.

103

(4)

(5)

(6)

(7)

(8)

This amount represents the grant date fair value of PSUs calculated using the provisions of Accounting Standards Codification
(“ASC”) 718, Compensation—Stock Compensation. The value of PSUs included in the table assumes target performance. All
dividend equivalent units earned on unvested restricted share awards (“RSUs”) and PSUs are reported in the All Other
Compensation column.

This amount represents the grant date fair value of stock options calculated using the provisions of ASC 718.

Represents amounts earned under the TE Connectivity Ltd. annual incentive program. Amounts shown are not reduced to reflect
Executive Management’s elections, if any, to defer receipt of awards into the SSRP.

Represents the aggregate change in actuarial present value of the accumulated benefits in fiscal 2022 and 2021 under the frozen
pension plan. For fiscal 2022, the change in pension value is a decrease from fiscal 2021. Rather than report a negative value, a
change of zero is reported.

See the All Other Compensation table below for a breakdown of amounts which include perquisites, matching contributions
associated with the Company’s 401(k) plan and nonqualified defined contribution plan, dividend equivalent units and other
amounts. The amounts reflected in the table for perquisites are our incremental cost. We also provide group life, health,
hospitalization and medical reimbursement plans which do not discriminate in scope, terms or operation in favor of officers and
are available to all full - time employees; the values of the benefits are not shown in the table.

(9)

The Company has not made any loans or extended credit to any current or former member of Executive Management.

All Other Compensation

Dollar
Value of
Dividends
not
factored
into Grant
Date Fair
Value
($)(b)
$305,933
— $298,253

Perquisites
($)(a)

$33,455

Employee
Stock
Purchase
Plan
(“ESPP”)
Company
Match
($)(d)

—
—

Company
Contributions
to DC plans
($)(c)
$293,163
$99,090

Total All Other
Compen -
sation
($)

$632,551
$397,343

$997,631
$905,567

$356,949
$366,082

$384,297
$223,093

$5,063
$4,875

$1,743,940
$1,499,617

Name
Terrence R. Curtin

All Other Executive
Management

Year

2022
2021

(a) Perquisites consist of the following:

For fiscal 2022, the incremental pre - tax cost to us of Mr. Curtin’s non - business use of our aircraft. Mr. Curtin is permitted to use
the aircraft for business and non - business purposes.

Amounts for All Other Executive Management include various assignment allowances, miscellaneous fees and expenses,
personal tax preparation assistance, international tax payments and U.S. tax gross-up payments pertaining to an expatriate
assignment for one executive in fiscal 2022 and 2021. Due to the timing of payments, the following range of exchange rates,
primarily as determined by TE Connectivity finance, were used to convert amounts reported or paid in Swiss francs to US
dollars: $0.9953—$1.0987: CHF:1 in fiscal 2022 and $1.08—$1.28: CHF:1 in fiscal 2021

(b) The value of dividend equivalent units credited in the fiscal year to each individual’s unvested RSUs and PSUs using the closing price
on the date of the crediting. The dividend equivalent unit value associated with the PSUs reflects target performance and will be
adjusted based on certified performance results following the close of the three - year performance period.

104

(c) Contributions made on behalf of Executive Management under TE Connectivity’s qualified defined contribution plan and accruals on

behalf of Executive Management under the SSRP (a nonqualified defined contribution excess plan).

Name
Terrence R. Curtin

All Other Executive Management

Year

2022
2021
2022
2021

Company Matching
Contribution
(Qualified Plan)

Company
Contribution
(Non - Qualified Plan)

$21,350
$17,993
$69,850
$66,438

$271,813
$81,097
$314,447
$156,655

(d) The Company made matching contributions under the TE Connectivity employee stock purchase plan for two executives for fiscal

2022 and 2021.

105

Security Ownership of the Board of Directors and Executive Management

Board of Directors

The following table sets forth the shares, options and share units held as of fiscal year end 2022 and 2021 by each

Name

Years

Shares
Held

Options

Held

Exercise Price (1)

Fiscal Years
of Expiration

RSUs
Held

PSUs
Held

Carol A. (“John”) Davidson

2022

14,137

Lynn A. Dugle

William A. Jeffrey

Syaru Shirley Lin(2)

Thomas J. Lynch(3)

2021

2022

2021

13,202

3,215

2,280

2022

20,266

2021

2022

19,331

622

—

2022

143,937

43,700

2021

161,602

43,700

$93.36

Yong Nam

2022

19,781

Abhijit Y. Talwalkar

Mark C. Trudeau

Dawn C. Willoughby

Laura H. Wright

2021

2022

2021

2022

2021

2022

2021

2022

18,912

9,631

8,696

10,537

9,602

3,215

2,280

14,489

2021

13,554

—

2028

—

Ms. Lin joined our board of directors on March 9, 2022.

(1)

(2)

(3)

106

Executive Management

The following table sets forth the shares, options and share units held as of fiscal year end 2022 and 2021 by each

member of our executive management serving in such position as of fiscal year end 2022.

Name

Years

Shares
Held

Options
Held

Options
Exercise Price(1)

Fiscal Years
RSUs
of Expiration Held(2)

PSUs
Held(3)

Terrence R. Curtin(4)

2022

94,969

1,199,371

$66.74-$158.00

2027-2032

2021

94,969

1,237,700

$66.74-$105.86

2027-2031

—

134,020

144,132

John S. Jenkins, Jr.

2022

19,456

186,325

$76.66-$158.00

2028-2032

724

23,603

2021

16,872

162,075

$76.66-$105.86

2028-2031

2,143

Shad W. Kroeger

2022

15,595

248,000

$51.61-$158.00

2024-2032

2021

11,499

221,550

$51.61-$105.86

2024-2031

Steven T. Merkt

2022

47,720

285,675

$76.66-$158.00

2028-2032

Heath A. Mitts(5)

2022

28,163

355,350

$76.66-$158.00

2028-2032

2021

40,129

245,275

$76.66-$105.86

2028-2031

Timothy J. Murphy

2022

17,754

201,100

$51.61-$158.00

2024-2032

2021

28,163

306,150

$76.66-$105.86

2028-2031

2021

14,741

191,500

$34.05-$105.86

2023-2031

—

Aaron K. Stucki(6)

2022

12,317

113,350

$66.74-$158.00

2027-2032

4,526

27,191

22,296

24,377

35,346

40,829

40,401

45,818

14,012

16,791

13,454

2021

11,920

91,300

$66.74-$105.86

2027-2031

4,454

11,242

(1)

(2)

(3)

Subject to acceleration upon certain events, the RSUs vest over time, are settled in shares upon vesting on a one-for-one basis,
and receive dividend equivalent units.

(4)

Mr. Curtin is a member of the board of directors and chief executive officer. Shares held include 40,000 shares held in a family
trust.

(5)

Mr. Mitts is a member of the board of directors and executive vice president and chief financial officer.

(6)

Mr. Stucki became a member of executive management effective October 1, 2020.

107

E. Directors and Executive Management Biographies

Directors

Age 54

Executive Director since 2016

Chief Executive Officer since
2017

Current Public Company
Directorships

• DuPont de Nemours Inc.

Other Public Company
Directorships within the past
five years

• None

Terrence R. Curtin

Mr. Curtin has served as the Chief Executive Officer of TE Connectivity since
March 2017. Previously Mr. Curtin served as President of TE Connectivity
from March 2015 and immediately prior to that served as Executive Vice
President and President, Industrial Solutions since August 2012. Previously he
served as Executive Vice President and Chief Financial Officer from October
2006 through July 2012. Mr. Curtin served on the TE Connectivity Board prior
to our separation from Tyco International and was Vice President and
Corporate Controller at Tyco Electronics since 2001. Prior to joining TE
Connectivity, Mr. Curtin worked for Arthur Andersen LLP. Mr. Curtin has a
Bachelor’s degree in Accounting from Albright College.

Age 67

Carol A. (“John”) Davidson

Director since 2016

Current Public Company
Directorships

• FMC Corporation
• International Flavors &

Fragrances Inc.

Other Public Company
Directorships within the past
five years

• Allergan plc
• Legg Mason, Inc
• DaVita Inc.
• Pentair plc

Age 63

Director since 2020

Current Public Company
Directorships

• KBR, Inc.
• Micron Technology Inc.

Other Public Company
Directorships within the past
five years

• State Street Corporation

Mr. Davidson served as the Senior Vice President, Controller and Chief
Accounting Officer of Tyco International Ltd., a provider of diversified
industrial products and services, from January 2004 to September 2012.
Between 1997 and 2004, Mr. Davidson held a variety of leadership roles at
Dell Inc., a computer and technology services company, including the
positions of Vice President, Audit, Risk and Compliance, and Vice President,
Corporate Controller. From 1981 to 1997, Mr. Davidson held a variety of
accounting and financial leadership roles at Eastman Kodak Company, a
provider of imaging technology products and services. He holds a Bachelor of
Science in Accounting from St. John Fisher College and an MBA from the
University of Rochester.

Lynn A. Dugle

Ms. Dugle joined Engility in 2016 and formerly served as Engility’s (NYSE:
EGL) chief executive officer, president and chairman of the board of directors
before leading the sale of the company to SAIC (NYSE: SAIC) in 2019. Prior
to joining Engility, Ms. Dugle spent more than a decade in senior management
positions at Raytheon and retired from the company in March 2015 as a
Raytheon Company vice president and President of Raytheon Intelligence,
Information and Services (IIS) which housed Raytheon’s Cyber and Special
Operations division. Prior to her President’s role, Ms. Dugle was vice
president of engineering, technology and quality for the former Raytheon
Network Centric Systems (NCS). Before joining Raytheon in April 2004,
Ms. Dugle held a number of officer-level positions culminating in a general
management role with ADC Telecommunications. Ms. Dugle earned a
bachelor’s of science in technical management and a bachelor’s of arts in
Spanish from Purdue University. She received a master’s of business
administration from The University of Texas at Dallas. Ms. Dugle also serves
on the Board of Directors of Avantus Federal, a privately held company.

108

Age 62

William A. Jeffrey

Director since 2012

Current Public Company
Directorships

• None

Other Public Company
Directorships within the past
five years

• None

The Honorable Dr. William A. Jeffrey served as Chief Executive Officer of
SRI International, a research and development organization serving
government and industry, from September 2014 to December 2021. From
September 2008 through August 2014, Dr. Jeffrey was Chief Executive
Officer and President of HRL Laboratories, LLC, an automotive, aerospace
and defense research and development laboratory. From 2007 through 2008,
he was the Director of the Science and Technology Division of the Institute for
Defense Analyses and prior to that he was Director of the National Institute of
Standards and Technology from 2005. From 2002 to 2005, Dr. Jeffrey served
in the White House as Senior Director of Homeland and National Security and
Assistant Director of Space and Aeronautics in the Executive Office of the
President, Office of Science and Technology Policy. He began his career at the
Institute for Defense Analyses in 1988. Mr. Jeffrey also serves on the Board
of Directors of the following privately held companies: Airstream Venture
Partners, Diraq and Rising Sky.

Age 68

Director since 2007

Non-Executive Chairman since
2018

Current Public Company
Directorships

• Automatic Data Processing,

Inc.

• Cummins Inc.

Other Public Company
Directorships within the past
five years

• Thermo Fisher Scientific Inc

Thomas J. Lynch

Mr. Lynch has served as the Non-Executive Chairman of TE Connectivity
since March 2018 and was Executive Chairman from March 2017. He served
as Chief Executive Officer of TE Connectivity from January 2006 to March
2017. Previously, he was President of Tyco Engineered Products and Services
since joining Tyco International in September 2004. Prior to joining Tyco
International, Mr. Lynch was at Motorola where he was Executive Vice
President and President and Chief Executive Officer, Personal
Communications Sector from August 2002 to September 2004; Executive
Vice President and President, Integrated Electronic Systems Sector from
January 2001 to August 2002; Senior Vice President and General Manager,
Satellite & Broadcast Network Systems, Broadband Communications Sector
from February 2000 to January 2001; and Senior Vice President and General
Manager, Satellite & Broadcast Network Systems, General Instrument
Corporation from May 1998 to February 2000. Mr. Lynch holds a Bachelor of
Science degree in commerce from Rider University

109

Age 74

Yong Nam

Director since 2012

Current Public Company
Directorships

• DL E&C Co., Ltd (Chair)

Other Public Company
Directorships within the past
five years

• Daelim Industrial Co. Ltd.

Mr. Nam has served as an advisor to the chief executive officer of DL E&C
(formerly Daelim Industrial Co., Ltd) since April 2013 and an advisor to the
CEO of DL Chemical since January 2021, both of which are wholly-owned
subsidiaries of DL Group, a Korean company. From April 2011 until March
2015, he served as an advisor to LG Electronics, Inc., a global provider of
consumer electronics, mobile communications and home appliances. From
2007 through March 2011, Mr. Nam served as Vice Chairman and Chief
Executive Officer of LG Electronics. He previously served as President of LG
Corp., the global conglomerate of the LG group of companies, from 2006 to
2007, and as Chief Executive Officer of LG Telecom from 1998 until 2006.
Mr. Nam’s 35 year career with LG began in 1976. Mr. Nam received a
bachelor’s degree in economics from Seoul National University. Mr. Nam is a
Director of ADT Korea, a commercial and residential security services
provider since June 2014 and previously served as a director of GS Retail, a
South Korean retailer, until May 2014 and Pohang Iron and Steel Company
(POSCO) until March 2013. Mr. Nam also serves as Chairman of the Board of
Directors of Kraton Corporation.

Age 54

Syaru Shirley Lin

Director since 2022

Current Public Company
Directorships

• Langham Hospitality

Investments

Other Public Company
Directorships within the past
five years

• Swire Pacific
• Mercuries Life Insurance

Professor Lin has been Research Professor since 2022 and had previously
been Compton Visiting Professor of World Politics since 2019 at the Miller
Center of Public Affairs at the University of Virginia. She is also a
Nonresident Senior Fellow in the Foreign Policy Program at the Brookings
Institution and an Adjunct Professor at the Chinese University of Hong Kong
and chairs the Center for Asia-Pacific Resilience and Innovation (CAPRI).
Previously, she was with The Goldman Sachs Group, Inc. holding multiple
positions, including Managing Director and Partner, Principal Investment
Area, based in Hong Kong from 2000 to 2003, Vice President, Principal
Investment Area from 1997 to 2000, and Associate, Corporate Finance,
Investment Banking from 1994 to 1997. Prof. Lin earned a doctoral degree in
Politics and Public Administration in 2010 from the University of Hong
Kong; a master’s degree in International and Public Affairs, in 2005 from the
University of Hong Kong and an A.B. degree in East Asian Studies, in 1990
from Harvard College. Ms. Lin also serves as a Member of the Board of
Directors of Goldman Sachs Asia Bank.

Age 51

Heath A. Mitts

Director since 2021

Current Public Company
Directorships

• Columbus McKinnon

Corporation

Other Public Company
Directorships within the past
five years

• None

Mr. Mitts has been Executive Vice President and Chief Financial Officer at TE
Connectivity since September 2016. Previously he was Senior Vice President
and Chief Financial Officer at IDEX Corporation, a globally diversified
company specializing in fluid, metering, health and science technologies, as
well as fire, safety and other products, from March 2011 until September 2016.
Mr. Mitts joined IDEX as Vice President, Corporate Finance in September
2005. Mr. Mitts holds an MBA in finance from Pennsylvania State University
and a Bachelor’s degree in finance and political science from Southern
Methodist University.

110

Age 58

Abhijit Y. Talwalkar

Director since 2017

Current Public Company
Directorships

• Advanced Micro Devices,

Inc.

• iRhythm Technologies

(Chair)

• Lam Research Corporation

(Chair)

Other Public Company
Directorships within the past
five years

• None

Mr. Talwalkar is the former President and Chief Executive Officer of LSI
Corporation, a leading provider of silicon, systems and software technologies
for the storage and networking markets, a position he held from May 2005
until the completion of LSI’s merger with Avago Technologies in May 2014.
From 1993 to 2005, Mr. Talwalkar was employed by Intel Corporation, the
largest semiconductor manufacturer in the industry. At Intel, he held a
number of senior management positions, including Corporate Vice President
and Co-General Manager of the Digital Enterprise Group, which was
comprised of Intel’s business client, server, storage and communications
businesses, and as Vice President and General Manager for the Intel
Enterprise Platform Group, where he focused on developing, marketing, and
driving Intel business strategies for enterprise computing. Prior to joining
Intel, Mr. Talwalkar held senior engineering and marketing positions at
Sequent Computer Systems, a multiprocessing computer systems design and
manufacturer that later became a part of IBM; Bipolar Integrated Technology,
Inc., a VLSI bipolar semiconductor company; and Lattice Semiconductor
Inc., a service driven developer of programmable design solutions widely
used in electronic systems. Mr. Talwalkar has a Bachelor of Science degree
in electrical engineering from Oregon State University.

Age 61

Mark C. Trudeau

Director since 2016

Current Public Company
Directorships

• None

Other Public Company
Directorships within the past
five years

• Mallinckrodt plc

Mr. Trudeau served from June 2013 until June 2022 as the President, Chief
Executive Officer and a director of Mallinckrodt plc, a global business that
develops, manufactures, markets and distributes specialty pharmaceuticals and
therapies, which filed for bankruptcy protection under Chapter 11 of the U.S.
Bankruptcy Code in October 2020. Prior to that, Mr. Trudeau served as Senior
Vice President and President of the Pharmaceuticals business of Covidien plc
beginning in February 2012. He joined Covidien from Bayer HealthCare
Pharmaceuticals LLC USA, the U.S. healthcare business of Bayer AG, where
he served as Chief Executive Officer. He simultaneously served as President
of Bayer HealthCare Pharmaceuticals, the U.S. organization of Bayer’s global
pharmaceuticals business. In addition, he served as Interim President of the
global specialty medicine business unit from January to August 2010. Prior to
joining Bayer in 2009, Mr. Trudeau headed the immuno science Division at
Bristol Myers Squibb. During his 10 plus years at Bristol Myers Squibb, he
served in multiple senior roles, including President of the Asia/Pacific region,
President and General Manager of Canada and General Manager/Managing
Director in the United Kingdom. Mr. Trudeau also served in a variety of
executive positions at Abbott Laboratories from 1988 to 1998. Mr. Trudeau
holds a Bachelor’s degree in Chemical Engineering and an MBA, both from
the University of Michigan.

111

Age 53

Director since 2020

Current Public Company
Directorships

• J. M. Smucker Company

Other Public Company
Directorships within the past
five years

• None

Dawn C. Willoughby

Ms. Willoughby was the Executive Vice President and Chief Operating
Officer of The Clorox Company, a manufacturer and marketer of consumer
and professional products, from September 2014 through January 2019. She
also served as the company’s Senior Vice President and General Manager,
Clorox Cleaning Division; Vice President and General Manager, Home Care
Products; and Vice President and General Manager, Glad Products, along
with several other positions since she began there in 2001. Prior to her career
at The Clorox Company, Ms. Willoughby spent nine years with The Procter
& Gamble Company, where she held several positions in sales management.
Ms. Willoughby obtained a Bachelor of Arts in sports management from the
University of Minnesota and an MBA from the University of California, Los
Angeles Anderson School of Business. Ms. Willoughby serves on the board
of directors of Wine.com.

Age 62

Laura H. Wright

Ms. Wright retired in 2012 as Chief Financial Officer of Southwest Airlines, a
provider of air transportation in the United States. During her 25 year career
at Southwest, she served in a variety of financial roles including Chief
Financial Officer, Senior Vice President Finance, Treasurer and Assistant
Treasurer. She began her career at Arthur Young & Co. in 1982 as a member
of their tax staff, following which she became a Tax Manager from 1986
through 1988. Ms. Wright holds Bachelor and Master of Science degrees in
accounting from the University of North Texas and is a Certified Public
Accountant. Ms. Wright also serves on the Board of Directors of SRI
International and on the Board of Regents for the University of North Texas
System.

Director since 2014

Current Public Company
Directorships

• Spirit AeroSystems Holdings,

Inc.

• CMS Energy, and its

subsidiary Consumers Energy

• Joby Aviation

Other Public Company
Directorships within the past
five years

• None

Executive Management

The biographical information for Mr. Curtin and Mr. Mitts is set forth above under Directors.

John S. Jenkins, Jr. is the Executive Vice President, General Counsel of TE Connectivity. Mr. Jenkins is

responsible for the Company’s global legal, compliance, corporate governance, government affairs, intellectual property,
security and risk management, and corporate social responsibility activities. He is also responsible for bringing TE’s
industry-leading connectivity solutions, engineering, and operations expertise to the emerging markets with focus on India,
China, and South America. He joined TE Connectivity in October 2012.

Prior to joining TE Connectivity, Mr. Jenkins was with Tyco International for ten years and was the Vice President,

Corporate Secretary, and International General Counsel. He was responsible for the Board of Directors activities, securities
and capital markets transactions and reporting, mergers and acquisitions, executive compensation, global procurement, real
estate, and tax planning.

Prior to 2003, Mr. Jenkins worked as a litigator with McGuireWoods, LLP. He began his career in 1987 as an

Officer in the United States Navy and served as a judge advocate both as Military Prosecutor and Senior Defense Counsel,
and finally as Legislative Counsel to the Secretary of the Navy.

112

Shadrak W. Kroeger has been President, Industrial Solutions at TE Connectivity since October 2020. Previously

he was President, Communications Solutions at TE Connectivity from November 2017 to September 2020. Previously,
Mr. Kroeger served as the Senior Vice President and General Manager for the Appliances business unit at TE Connectivity
from 2013 to 2017. Since joining TE Connectivity in 1995, Mr. Kroeger has held leadership positions in general
management, strategy, product management, sales and engineering and his roles have spanned the automotive, industrial and
consumer markets.

Steven T. Merkt has been President, Transportation Solutions at TE Connectivity since August 2012. Prior to this

position, Mr. Merkt served as President of TE Connectivity’s Automotive business since May 2011 and has held various
leadership positions in general management, operations, engineering, marketing, supply chain and new product launches
since joining TE Connectivity in 1989. Mr. Merkt serves as a Director for Livent Corporation.

Timothy J. Murphy has been Senior Vice President and Chief Human Resources Officer, Global Human Resources

at TE Connectivity since March 2016. Previously he was Vice President, Human Resources for the Transportation Solutions
business segment from January 2015 to February 2016 and Vice President, Global Talent Management for TE Connectivity
from November 2011 to December 2014. Prior to joining TE, Mr. Murphy held various business partner positions and served
for three years in international human resource assignments over a nearly 20 year human resource career at Merck.

Aaron K. Stucki has been President, Communications Solutions at TE Connectivity since October 2020.
Previously, Mr. Stucki was the General Manager of the Industrial & Commercial Transportation (ICT) business unit, since
May 2017. From April 2015 to May 2017, Mr. Stucki served as Senior Vice President & General Manager SubCom. From
October 2013 to April 2015, Mr. Stucki served as Senior Vice President & General Manager Consumer Devices. From July
2011 to October 2013, Mr. Stucki served as Vice President and Chief Financial Officer Consumer Solutions segment. Prior
to joining TE in 2011, Mr. Stucki spent 13 years at General Electric.

113

Report of the Statutory Auditor on the Swiss Statutory Compensation Report of TE Connectivity Ltd.

To the General Meeting of
TE CONNECTIVITY LTD., SCHAFFHAUSEN

We have audited Tables 1 and 2 within the accompanying compensation report of TE Connectivity Ltd. for the year ended
September 30, 2022.

Board of Directors’ Responsibility
The Board of Directors is responsible for the preparation and overall fair presentation of the compensation report in
accordance with Swiss law and the Ordinance against Excessive Compensation in Stock Exchange Listed Companies (the
“Ordinance”). The Board of Directors is also responsible for designing the compensation system and defining individual
compensation packages.

Auditor’s Responsibility
Our responsibility is to express an opinion on the accompanying compensation report. We conducted our audit in accordance
with Swiss Auditing Standards. Those standards require that we comply with ethical requirements and plan and perform the
audit to obtain reasonable assurance about whether the compensation report complies with Swiss law and articles 14 – 16 of
the Ordinance.

An audit involves performing procedures to obtain audit evidence on the disclosures made in the compensation report with
regard to compensation, loans and credits in accordance with articles 14 – 16 of the Ordinance. The procedures selected
depend on the auditor’s judgment, including the assessment of the risks of material misstatements in the compensation report,
whether due to fraud or error. This audit also includes evaluating the reasonableness of the methods applied to value
components of compensation, as well as assessing the overall presentation of the compensation report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion
In our opinion, the compensation report of TE Connectivity Ltd. for the year ended September 30, 2022 complies with Swiss
law and articles 14 – 16 of the Ordinance.

Deloitte AG

/s/ Andreas Bodenmann
Licensed audit expert
Auditor in charge

Zurich, December 21, 2022

/s/ Dominik Voegtli
Licensed audit expert

114

BOARD OF DIRECTORS

Thomas J. Lynch
Non-Executive Chairman
and Former CEO,
TE Connectivity Ltd.

Terrence R. Curtin
Director and
Chief Executive Officer,
TE Connectivity Ltd.

Carol A. “John” Davidson*
Former Senior Vice President,
Controller and
Chief Accounting Officer,
Tyco International Ltd.

Lynn A. Dugle
Former CEO and President,
Engility Holdings, Inc.

Dr. William A. Jeffrey
Retired Chief Executive Officer,
SRI International

Syaru Shirley Lin
Research Professor,
University of Virginia

Heath A. Mitts
Director and Executive Vice
President, Chief Financial Officer
TE Connectivity Ltd.

Yong Nam
Former Chief Executive Officer,
LG Electronics Inc.

Abhijit Y. Talwalkar
Former President and
Chief Executive Officer,
LSI Corporation

Mark C. Trudeau
Former President and
Chief Executive Officer,
Mallinckrodt plc

Dawn C. Willoughby
Former Executive Vice President
and COO,
The Clorox Company

Laura H. Wright
Former Chief Financial Officer,
Southwest Airlines Co.

*Lead Independent Director of the TE Connectivity Ltd. Board of Directors

LEADERSHIP TEAM AND OFFICERS

Terrence R. Curtin
Chief Executive Officer
and Director

Claudia Anderson
Vice President and
Chief Continuous
Improvement Officer

Teresa Dickerson
Vice President,
Chief Supply Chain Officer

Jennifer Diener
Senior Vice President,
General Manager, Channel

Jean-Jacques Fotzeu
Senior Vice President,
Treasurer

John S. Jenkins, Jr.
Executive Vice President,
General Counsel

Arvind Kaushal
Senior Vice President,
Chief Strategy Officer

Ralf Kläedtke
Vice President and
Chief Technology Officer,
Transportation Solutions

Joel Dubs
Senior Vice President,
Operations

Shad W. Kroeger
President,
Industrial Solutions

Heath A. Mitts
Executive Vice President,
Chief Financial Officer and
Director

Timothy J. Murphy
Senior Vice President and
Chief Human Resources Officer

Maushumi Nerurkar
Senior Vice President and
Chief Tax Officer

Robert J. Ott
Senior Vice President,
Corporate Controller

Jeanne Quirk
Senior Vice President,
Mergers and Acquisitions

Joseph F. Eckroth, Jr.
Senior Vice President,
Chief Information Officer

Steven T. Merkt
President,
Transportation Solutions

Aaron K. Stucki
President, Communications
Solutions

TE CONNECTIVITY

2022 ANNUAL REPORT

TOGETHER,

LET’S ENGINEER

THE FUTURE.