TE Connectivity : 2021 Annual Report (PDF 4.92 MB)

TE CONNECTIVITY 2021 ANNUAL REPORT

WHEN TECHNOLOGY CONNECTS, SO DOES HUMANITY.

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 24, 2021 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

© 2022 TE Connectivity Ltd. All Rights Reserved. 001-AR-FY2021

"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	Page
1
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	8
Management's Discussion and Analysis of Financial Condition and Results of Operations	9
Quantitative and Qualitative Disclosures About Market Risk	27
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	29
Controls and Procedures	29
Consolidated Financial Statements	31
Swiss Statutory Financial Statements	85
Swiss Statutory Compensation Report	101

i

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 include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words "believe," "expect," "plan," "intend," "anticipate," "estimate," "predict," "potential," "continue," "may," and "should," or the negative of these terms or similar expressions.

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

The risk factors described in this Annual Report and those discussed in our Annual Report on Form 10-K for the fiscal year ended September 24, 2021 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.

ii

"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.

© 2022 TE Connectivity Ltd. All Rights Reserved.

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 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 "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. Item 1A. Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended September 24, 2021 filed with the SEC for discussion of the risks and uncertainties associated with the COVID-19 pandemic.

Segments

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.

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

					Fiscal
		2021			2020			2019
Transportation Solutions	60 %		56 %		58 %
Industrial Solutions	26			31			30
Communications Solutions	14			13			12
Total		100	%		100	%		100	%

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

segment.

1