What changed in this filing

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Item 1. Business

2022-11-15 compared with 2021-11-09 · 39 added, 43 removed, 174 unchanged (32% of the section changed)

7 unchanged sentences

We have a 52- or 53-week fiscal year that ends on the last Friday of September.

Fiscal 2021, 2020, and 2019 were each 52 weeks in length and ended on September 24, 2021, September 25, 2020, and September 27, 2019, respectively.

For fiscal years in which there are 53 weeks, the fourth fiscal quarter includes 14 weeks, with the next such occurrence taking place in fiscal 2022.

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 significant, negative impact on our sales and operating results during fiscal 2020 and continued to negatively affect certain of our businesses in fiscal 2021.

See “Part II.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” for discussion regarding the impact of the COVID-19 pandemic on our financial results.

Also, see “Part I.

Risk Factors” for discussion of the risks and uncertainties associated with the COVID-19 pandemic.

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.

We operate through three reportable segments:

Transportation Solutions, Industrial Solutions, and Communications Solutions.

Prior to the COVID-19 pandemic, our three segments served a combined market of approximately $190 billion.

Although COVID-19 negatively affected our markets in fiscal 2020, certain of our markets experienced recovery in fiscal 2021.

We expect this recovery will continue and our three segments will once again serve a combined market of approximately $190 billion in future periods.

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:

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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, heat shrink tubing, and application tooling.

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:

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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, heat shrink tubing, relays, and wire and cable.

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:

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Our rail products are used in high-speed trains, metros, light rail vehicles, locomotives, and signaling switching equipment.

● Aerospace, defense, oil, and gas (27% 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.

● 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.

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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, heat shrink tubing, and antennas.

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, and virtual reality applications to help our customers meet their current challenges and future innovations.

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.

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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.

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:

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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 2021.

However, as a result of increased costs, certain of our businesses implemented price increases in fiscal 2022 and 2021.

Raw Materials

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The prices of these materials are driven by global supply and demand.

As markets recover from the COVID-19 pandemic, increases in consumer demand have led to shortages and price increases in some of our input materials.

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

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As of fiscal year end 2022, we employed approximately 92,000 people worldwide, including contract employees.

Approximately 37,000 were in the EMEA region, 24,000 were in the Asia–Pacific region, and 28,000 were in the Americas region.

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.

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The ERGs provide a space where employees can foster connections and develop in a supportive environment.

As of fiscal year end 2021, 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 mixed mental, emotional, and physical abilities), and TE Veterans.

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 2021, we conducted our second consecutive employee engagement survey which was a fully digital, enterprise-wide survey available in 15 languages and focused on measuring engagement, inclusion, and leadership effectiveness.

We had a participation rate of over 80% in fiscal 2021.

Both our participation rate and engagement score improved in fiscal 2021 while our inclusion score remained consistent with fiscal 2020.

Fiscal 2021 was the first year leadership effectiveness was measured as part of this survey.

Additionally, our survey results for fiscal 2021 were favorable when compared to Glint Inc.’s external global manufacturing benchmark .

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.

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.

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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.

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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 have taken additional actions to protect the physical and mental health and well-being of our global employees.

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.

In fiscal 2021, we implemented a human rights policy for the organization outlining our commitment to operating with respect for human rights.

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.

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and other measures.

We also have a program for compliance with the European Union (“EU”) Restriction of Hazardous Substances and Waste Electrical and Electronic Equipment Directives, the China Administrative Measures for the Restriction of Hazardous Substances in Electrical and Electronic Products, the EU Registration, Evaluation, Authorization, and Restriction of Chemicals (“REACH”) Regulation, and similar laws.

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.

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.

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

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

Our sustainability initiatives in our operations began more than 10 years ago.

From fiscal 2010 to 2020, we achieved more than a 25% reduction in absolute energy usage, absolute greenhouse gas emissions (Scopes 1 and 2), and absolute water usage.

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.

1 unchanged sentence

In fiscal 2022, we:

● established a new goal to further reduce our greenhouse gas emissions from our operations by more than 40%, on an absolute basis, by fiscal 2030 and made measurable progress towards this goal;

● improved our energy efficiency through energy efficient solutions such as implementing operating standards and advancing our equipment infrastructure (for example, LED lighting, compressor controls, and HVAC);

● reported our Scope 3 emissions to CDP for the first time.

● 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;

● 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.

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Available Information

All periodic and current reports, registration filings, and other filings that we are required to file with the United States Securities and Exchange Commission (“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 (“Exchange Act”) are available free of charge through our internet website at www.te.com .

All periodic and current reports, registration filings, and other filings that we are required to file with the United States Securities and Exchange Commission (“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.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business