Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Sep. 30, 2022 | Nov. 11, 2022 | Mar. 25, 2022 | |
Document and Entity Information | |||
Entity Registrant Name | TE CONNECTIVITY LTD. | ||
Entity Central Index Key | 0001385157 | ||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Sep. 30, 2022 | ||
Document Transition Report | false | ||
Entity File Number | 001-33260 | ||
Entity Incorporation, State or Country Code | V8 | ||
Entity Tax Identification Number | 98-0518048 | ||
Entity Address, Address Line One | Mühlenstrasse 26 | ||
Entity Address, City or Town | Schaffhausen | ||
Entity Address, Country | CH | ||
Entity Address, Postal Zip Code | CH-8200 | ||
Country Region | +41 | ||
City Area Code | (0)52 | ||
Local Phone Number | 633 66 61 | ||
Title of 12(b) Security | Common Shares, Par Value CHF 0.57 | ||
Trading Symbol | TEL | ||
Security Exchange Name | NYSE | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 42.6 | ||
Entity Common Stock, Shares Outstanding | 317,230,563 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Auditor Name | Deloitte & Touche LLP | ||
Auditor Firm ID | 34 | ||
Auditor Location | Philadelphia, Pennsylvania |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 24, 2021 | Sep. 25, 2020 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | |||
Net sales | $ 16,281 | $ 14,923 | $ 12,172 |
Cost of sales | 11,037 | 10,036 | 8,437 |
Gross margin | 5,244 | 4,887 | 3,735 |
Selling, general, and administrative expenses | 1,584 | 1,512 | 1,392 |
Research, development, and engineering expenses | 718 | 677 | 613 |
Acquisition and integration costs | 45 | 31 | 36 |
Restructuring and other charges, net | 141 | 233 | 257 |
Impairment of goodwill | 900 | ||
Operating income | 2,756 | 2,434 | 537 |
Interest income | 15 | 17 | 15 |
Interest expense | (66) | (56) | (48) |
Other income (expense), net | 28 | (17) | 20 |
Income from continuing operations before income taxes | 2,733 | 2,378 | 524 |
Income tax expense | (306) | (123) | (783) |
Income (loss) from continuing operations | 2,427 | 2,255 | (259) |
Income from discontinued operations, net of income taxes | 1 | 6 | 18 |
Net income (loss) | $ 2,428 | $ 2,261 | $ (241) |
Basic earnings (loss) per share: | |||
Income (loss) from continuing operations (in dollars per share) | $ 7.51 | $ 6.83 | $ (0.78) |
Income from discontinued operations (in dollars per share) | 0.02 | 0.05 | |
Net income (loss) (in dollars per share) | 7.52 | 6.85 | (0.73) |
Diluted earnings (loss) per share: | |||
Income (loss) from continuing operations (in dollars per share) | 7.47 | 6.77 | (0.78) |
Income from discontinued operations (in dollars per share) | 0.02 | 0.05 | |
Net income (loss) (in dollars per share) | $ 7.47 | $ 6.79 | $ (0.73) |
Weighted-average number of shares outstanding: | |||
Basic (in shares) | 323 | 330 | 332 |
Diluted (in shares) | 325 | 333 | 332 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 24, 2021 | Sep. 25, 2020 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||
Net income (loss) | $ 2,428 | $ 2,261 | $ (241) |
Other comprehensive income (loss): | |||
Currency translation | (510) | 144 | (11) |
Adjustments to unrecognized pension and postretirement benefit costs, net of income taxes | 259 | 138 | 34 |
Gains (losses) on cash flow hedges, net of income taxes | (95) | (3) | 40 |
Other comprehensive income (loss) | (346) | 279 | 63 |
Comprehensive income (loss) | 2,082 | 2,540 | (178) |
Less: comprehensive (income) loss attributable to noncontrolling interests | 19 | (2) | (5) |
Comprehensive income (loss) attributable to TE Connectivity Ltd. | $ 2,101 | $ 2,538 | $ (183) |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2022 | Sep. 24, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 1,088 | $ 1,203 |
Accounts receivable, net of allowance for doubtful accounts of $45 and $41, respectively | 2,865 | 2,928 |
Inventories | 2,676 | 2,511 |
Prepaid expenses and other current assets | 639 | 621 |
Total current assets | 7,268 | 7,263 |
Property, plant, and equipment, net | 3,567 | 3,778 |
Goodwill | 5,258 | 5,590 |
Intangible assets, net | 1,288 | 1,549 |
Deferred income taxes | 2,498 | 2,499 |
Other assets | 903 | 783 |
Total assets | 20,782 | 21,462 |
Current liabilities: | ||
Short-term debt | 914 | 503 |
Accounts payable | 1,593 | 1,911 |
Accrued and other current liabilities | 2,125 | 2,242 |
Total current liabilities | 4,632 | 4,656 |
Long-term debt | 3,292 | 3,589 |
Long-term pension and postretirement liabilities | 695 | 1,139 |
Deferred income taxes | 244 | 181 |
Income taxes | 304 | 302 |
Other liabilities | 718 | 847 |
Total liabilities | 9,885 | 10,714 |
Commitments and contingencies (Note 12) | ||
Redeemable noncontrolling interests | 95 | 114 |
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 | 146 | 148 |
Accumulated earnings | 12,832 | 11,709 |
Treasury shares, at cost, 12,749,540 and 9,060,919 shares, respectively | (1,681) | (1,055) |
Accumulated other comprehensive loss | (495) | (168) |
Total shareholders' equity | 10,802 | 10,634 |
Total liabilities, redeemable noncontrolling interests, and shareholders' equity | $ 20,782 | $ 21,462 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) $ in Millions | Sep. 30, 2022 USD ($) shares | Sep. 30, 2022 SFr / shares | Sep. 24, 2021 USD ($) shares | Sep. 24, 2021 SFr / shares |
CONSOLIDATED BALANCE SHEETS | ||||
Accounts receivable, allowance for doubtful accounts (in dollars) | $ | $ 45 | $ 41 | ||
Common shares, par value (in currency per share) | SFr / shares | SFr 0.57 | SFr 0.57 | ||
Common shares, shares authorized | 330,830,781 | 336,099,881 | ||
Common shares, shares issued | 330,830,781 | 336,099,881 | ||
Treasury shares | 12,749,540 | 9,060,919 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Millions, $ in Millions | Common Shares | Treasury Shares | Contributed Surplus | Accumulated Earnings | Accumulated Other Comprehensive Income (Loss) | Total |
Balance at Sep. 27, 2019 | $ 154 | $ (1,337) | $ 12,256 | $ (503) | $ 10,570 | |
Balance (in shares) at Sep. 27, 2019 | 351 | (16) | ||||
Increase (Decrease) in Shareholders' Equity: | ||||||
Net income (loss) | (241) | (241) | ||||
Other comprehensive income | 58 | 58 | ||||
Share-based compensation expense | $ 74 | 74 | ||||
Dividends | (634) | (634) | ||||
Exercise of share options | $ 55 | 55 | ||||
Exercise of share options (in shares) | 1 | |||||
Restricted share award vestings and other activity | $ 143 | (74) | (63) | 6 | ||
Restricted share award vestings and other activity (in shares) | 1 | |||||
Repurchase of common shares | $ (505) | $ (505) | ||||
Repurchase of common shares (in shares) | (6) | |||||
Cancellation of treasury shares | $ (5) | $ 975 | (970) | |||
Cancellation of treasury shares (in shares) | (12) | 12 | 12 | |||
Balance at Sep. 25, 2020 | $ 149 | $ (669) | 10,348 | (445) | $ 9,383 | |
Balance (in shares) at Sep. 25, 2020 | 339 | (8) | ||||
Increase (Decrease) in Shareholders' Equity: | ||||||
Net income (loss) | 2,261 | 2,261 | ||||
Other comprehensive income | 277 | 277 | ||||
Share-based compensation expense | 94 | 94 | ||||
Dividends | (656) | (656) | ||||
Exercise of share options | $ 167 | 167 | ||||
Exercise of share options (in shares) | 2 | |||||
Restricted share award vestings and other activity | $ 89 | (94) | 17 | 12 | ||
Restricted share award vestings and other activity (in shares) | 1 | |||||
Repurchase of common shares | $ (904) | $ (904) | ||||
Repurchase of common shares (in shares) | (7) | |||||
Cancellation of treasury shares | $ (1) | $ 262 | (261) | |||
Cancellation of treasury shares (in shares) | (3) | 3 | 3 | |||
Balance at Sep. 24, 2021 | $ 148 | $ (1,055) | 11,709 | (168) | $ 10,634 | |
Balance (in shares) at Sep. 24, 2021 | 336 | (9) | ||||
Increase (Decrease) in Shareholders' Equity: | ||||||
Net income (loss) | 2,428 | 2,428 | ||||
Other comprehensive income | (327) | (327) | ||||
Share-based compensation expense | 119 | 119 | ||||
Dividends | (714) | (714) | ||||
Exercise of share options | $ 54 | 54 | ||||
Restricted share award vestings and other activity | $ 20 | $ (119) | 116 | 17 | ||
Restricted share award vestings and other activity (in shares) | 1 | |||||
Repurchase of common shares | $ (1,409) | $ (1,409) | ||||
Repurchase of common shares (in shares) | (10) | |||||
Cancellation of treasury shares | $ (2) | $ 709 | (707) | |||
Cancellation of treasury shares (in shares) | (5) | 5 | 5 | |||
Balance at Sep. 30, 2022 | $ 146 | $ (1,681) | $ 12,832 | $ (495) | $ 10,802 | |
Balance (in shares) at Sep. 30, 2022 | 331 | (13) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 24, 2021 | Sep. 25, 2020 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 2,428 | $ 2,261 | $ (241) |
Income from discontinued operations, net of income taxes | (1) | (6) | (18) |
Income (loss) from continuing operations | 2,427 | 2,255 | (259) |
Adjustments to reconcile income (loss) from continuing operations to net cash provided by operating activities: | |||
Impairment of goodwill | 900 | ||
Depreciation and amortization | 785 | 769 | 711 |
Deferred income taxes | (147) | (354) | 535 |
Non-cash lease cost | 131 | 120 | 108 |
Provision for losses on accounts receivable and inventories | 70 | 46 | 14 |
Share-based compensation expense | 119 | 94 | 74 |
Other | 23 | (61) | 54 |
Changes in assets and liabilities, net of the effects of acquisitions and divestitures: | |||
Accounts receivable, net | 200 | (518) | (63) |
Inventories | (41) | (556) | (89) |
Prepaid expenses and other current assets | 50 | (19) | 51 |
Accounts payable | (396) | 560 | (80) |
Accrued and other current liabilities | (398) | 173 | (99) |
Income taxes | 32 | 106 | (9) |
Other | (387) | 61 | 143 |
Net cash provided by continuing operating activities | 2,468 | 2,676 | 1,991 |
Net cash provided by discontinued operating activities | 1 | ||
Net cash provided by operating activities | 2,468 | 2,676 | 1,992 |
Cash flows from investing activities: | |||
Capital expenditures | (768) | (690) | (560) |
Proceeds from sale of property, plant, and equipment | 106 | 86 | 17 |
Acquisition of businesses, net of cash acquired | (220) | (423) | (339) |
Other | 4 | (10) | 17 |
Net cash used in investing activities | (878) | (1,037) | (865) |
Cash flows from financing activities: | |||
Net increase (decrease) in commercial paper | 370 | (219) | |
Proceeds from issuance of debt | 588 | 661 | 593 |
Repayment of debt | (558) | (708) | (352) |
Proceeds from exercise of share options | 54 | 167 | 55 |
Repurchase of common shares | (1,412) | (831) | (523) |
Payment of common share dividends to shareholders | (685) | (647) | (625) |
Other | (41) | (28) | (33) |
Net cash used in continuing financing activities | (1,684) | (1,386) | (1,104) |
Net cash used in discontinued financing activities | (1) | ||
Net cash used in financing activities | (1,684) | (1,386) | (1,105) |
Effect of currency translation on cash | (21) | 5 | (4) |
Net increase (decrease) in cash, cash equivalents, and restricted cash | (115) | 258 | 18 |
Cash, cash equivalents, and restricted cash at beginning of fiscal year | 1,203 | 945 | 927 |
Cash, cash equivalents, and restricted cash at end of fiscal year | 1,088 | 1,203 | 945 |
Supplemental cash flow information: | |||
Interest paid on debt, net | 58 | 58 | 50 |
Income taxes paid, net of refunds | $ 421 | $ 371 | $ 257 |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Sep. 30, 2022 | |
Basis of Presentation | |
Basis of Presentation | 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 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 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 estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Actual results could differ from these estimates. 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 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2022 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 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 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 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, 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 5 1 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 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. 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 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. 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 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 recognized currently in earnings. For instruments designated as cash flow hedges, the effective portion of changes in the fair 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 ● 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). ● 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 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. 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. |
Restructuring and Other Charges
Restructuring and Other Charges, Net | 12 Months Ended |
Sep. 30, 2022 | |
Restructuring and Other Charges, Net | |
Restructuring and Other Charges, Net | 3. Restructuring and Other Charges, Net Net restructuring and other charges consisted of the following: Fiscal 2022 2021 2020 (in millions) Restructuring charges, net $ 137 $ 208 $ 257 Impairment of held for sale businesses and loss on divestitures, net 4 21 — Other charges, net — 4 — Restructuring and other charges, net $ 141 $ 233 $ 257 Net restructuring and related charges by segment were as follows: Fiscal 2022 2021 2020 (in millions) Transportation Solutions $ 80 $ 135 $ 113 Industrial Solutions 34 50 102 Communications Solutions 23 23 42 Restructuring charges, net 137 208 257 Plus: charges included in cost of sales (1) 16 — — Restructuring and related charges, net $ 153 $ 208 $ 257 (1) Charges included in cost of sales were attributable to inventory-related charges within the Industrial Solutions segment. Activity in our restructuring reserves was as follows: Balance at Balance at Beginning Currency End of Fiscal Changes in Cash Non-Cash Translation of Fiscal Year Charges Estimate Payments Items and Other Year (in millions) Fiscal 2022 Activity: Fiscal 2022 Actions: Employee severance $ — $ 126 $ — $ (15) $ — $ (3) $ 108 Facility and other exit costs — 2 — (1) — — 1 Property, plant, and equipment and other non-cash charges — 33 — — (33) — — Total — 161 — (16) (33) (3) 109 Fiscal 2021 Actions: Employee severance 152 2 (8) (83) — (14) 49 Facility and other exit costs 2 5 — (7) — — — Property, plant, and equipment — 3 — — (3) — — Total 154 10 (8) (90) (3) (14) 49 Fiscal 2020 Actions: Employee severance 104 — (17) (27) — (11) 49 Facility and other exit costs 15 — (2) (5) — (1) 7 Property, plant, and equipment — 4 (3) — (1) — — Total 119 4 (22) (32) (1) (12) 56 Pre-Fiscal 2020 Actions: Employee severance 31 — — (14) — (3) 14 Facility and other exit costs — 8 — (8) — — — Total 31 8 — (22) — (3) 14 Total fiscal 2022 activity $ 304 $ 183 $ (30) $ (160) $ (37) $ (32) $ 228 Fiscal 2021 Activity: Fiscal 2021 Actions: Employee severance $ — $ 199 $ (17) $ (26) $ — $ (4) $ 152 Facility and other exit costs — 4 — (2) — — 2 Property, plant, and equipment — 9 — — (9) — — Total — 212 (17) (28) (9) (4) 154 Fiscal 2020 Actions: Employee severance 180 5 — (84) — 3 104 Facility and other exit costs 8 11 — (4) — — 15 Property, plant, and equipment — 7 — — (7) — — Total 188 23 — (88) (7) 3 119 Pre-Fiscal 2020 Actions: Employee severance 93 — (9) (53) — — 31 Facility and other exit costs 4 2 — (6) — — — Property, plant, and equipment — — (3) — 3 — — Total 97 2 (12) (59) 3 — 31 Total fiscal 2021 activity $ 285 $ 237 $ (29) $ (175) $ (13) $ (1) $ 304 Fiscal 2020 Activity: Fiscal 2020 Actions: Employee severance $ — $ 214 $ — $ (35) $ — $ 1 $ 180 Facility and other exit costs — 8 — — — — 8 Property, plant, and equipment — 28 — — (28) — — Total — 250 — (35) (28) 1 188 Pre-Fiscal 2020 Actions: Employee severance 261 7 (26) (153) — 4 93 Facility and other exit costs 3 17 — (18) — 2 4 Property, plant, and equipment — 9 — — (9) — — Total 264 33 (26) (171) (9) 6 97 Total fiscal 2020 activity $ 264 $ 283 $ (26) $ (206) $ (37) $ 7 $ 285 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: Total Cumulative Remaining Expected Charges Expected Charges Incurred Charges (in millions) Transportation Solutions $ 99 $ 88 $ 11 Industrial Solutions 56 52 4 Communications Solutions 30 21 9 Total $ 185 $ 161 $ 24 Fiscal 2021 Actions 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 (in millions) Transportation Solutions $ 124 Industrial Solutions 49 Communications Solutions 24 Total $ 197 Fiscal 2020 Actions 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. Total Restructuring Reserves Restructuring reserves included on the Consolidated Balance Sheets were as follows: Fiscal Year End 2022 2021 (in millions) Accrued and other current liabilities $ 182 $ 236 Other liabilities 46 68 Restructuring reserves $ 228 $ 304 |
Acquisitions
Acquisitions | 12 Months Ended |
Sep. 30, 2022 | |
Acquisitions | |
Acquisitions | 4. 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. 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. |
Inventories
Inventories | 12 Months Ended |
Sep. 30, 2022 | |
Inventories | |
Inventories | 5. Inventories Inventories consisted of the following: Fiscal Year End 2022 2021 (in millions) Raw materials $ 390 $ 320 Work in progress 1,066 991 Finished goods 1,220 1,200 Inventories $ 2,676 $ 2,511 |
Property, Plant, and Equipment,
Property, Plant, and Equipment, Net | 12 Months Ended |
Sep. 30, 2022 | |
Property, Plant, and Equipment, Net | |
Property, Plant, and Equipment, Net | 6. Property, Plant, and Equipment, Net Net property, plant, and equipment consisted of the following: Fiscal Year End 2022 2021 (in millions) Property, plant, and equipment, gross: Land and improvements $ 106 $ 128 Buildings and improvements 1,331 1,469 Machinery and equipment 7,727 8,308 Construction in process 609 614 9,773 10,519 Accumulated depreciation (6,206) (6,741) Property, plant, and equipment, net $ 3,567 $ 3,778 Depreciation expense was $593 million, $576 million, and $529 million in fiscal 2022, 2021, and 2020, respectively. |
Goodwill
Goodwill | 12 Months Ended |
Sep. 30, 2022 | |
Goodwill | |
Goodwill | 7. Goodwill The changes in the carrying amount of goodwill by segment were as follows: Transportation Industrial Communications Solutions Solutions Solutions Total (in millions) Balance at fiscal year end 2020 (1) $ 1,527 $ 3,110 $ 587 $ 5,224 Acquisitions — 307 — 307 Currency translation and other 22 29 8 59 Balance at fiscal year end 2021 (1) 1,549 3,446 595 5,590 Acquisitions — — 141 141 Purchase price adjustments — (91) — (91) Currency translation and other (110) (228) (44) (382) Balance at fiscal year end 2022 (1) $ 1,439 $ 3,127 $ 692 $ 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. |
Intangible Assets, Net
Intangible Assets, Net | 12 Months Ended |
Sep. 30, 2022 | |
Intangible Assets, Net | |
Intangible Assets, Net | 8. Intangible Assets, Net Intangible assets consisted of the following: 2022 2021 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount (in millions) Customer relationships $ 1,642 $ (687) $ 955 $ 1,766 $ (660) $ 1,106 Intellectual property 1,174 (852) 322 1,262 (832) 430 Other 16 (5) 11 19 (6) 13 Total $ 2,832 $ (1,544) $ 1,288 $ 3,047 $ (1,498) $ 1,549 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: (in millions) Fiscal 2023 $ 185 Fiscal 2024 156 Fiscal 2025 141 Fiscal 2026 135 Fiscal 2027 117 Thereafter 554 Total $ 1,288 |
Accrued and Other Current Liabi
Accrued and Other Current Liabilities | 12 Months Ended |
Sep. 30, 2022 | |
Accrued and Other Current Liabilities | |
Accrued and Other Current Liabilities | 9. Accrued and Other Current Liabilities Accrued and other current liabilities consisted of the following: Fiscal Year End 2022 2021 (in millions) Accrued payroll and employee benefits $ 535 $ 690 Dividends payable to shareholders 356 327 Restructuring reserves 182 236 Income taxes payable 162 146 Lease liability 126 118 Share repurchase program payable 70 73 Deferred revenue 63 51 Interest payable 28 28 Other 603 573 Accrued and other current liabilities $ 2,125 $ 2,242 |
Debt
Debt | 12 Months Ended |
Sep. 30, 2022 | |
Debt | |
Debt | 10. Debt Debt was as follows: Fiscal Year End 2022 2021 (in millions) Principal debt: Commercial paper, at a weighted-average interest rate of 3.45% at fiscal year end 2022 $ 370 $ — 3.50% senior notes due 2022 — 500 1.10% euro-denominated senior notes due 2023 538 644 3.45% senior notes due 2024 350 350 0.00% euro-denominated senior notes due 2025 538 644 3.70% senior notes due 2026 350 350 3.125% senior notes due 2027 400 400 0.00% euro-denominated senior notes due 2029 538 644 2.50% senior notes due in 2032 600 — 7.125% senior notes due 2037 477 477 Other 83 110 4,244 4,119 Unamortized discounts, premiums, and debt issuance costs, net (38) (29) Effects of fair value hedge-designated interest rate swap contracts — 2 Total debt $ 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 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”) Bank of America federal funds effective 1 / 2 the Term SOFR for a one-month interest period alternative currency daily rate alternative currency term rate 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 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. 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. At fiscal year end 2022, principal payments required for debt are as follows: (in millions) Fiscal 2023 $ 914 Fiscal 2024 352 Fiscal 2025 540 Fiscal 2026 351 Fiscal 2027 401 Thereafter 1,686 Total $ 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. |
Leases
Leases | 12 Months Ended |
Sep. 30, 2022 | |
Leases | |
Leases | 11. Leases The components of lease cost were as follows: Fiscal 2022 2021 2020 (in millions) Operating lease cost $ 131 $ 120 $ 108 Variable lease cost 52 49 49 Total lease cost $ 183 $ 169 $ 157 Amounts recognized on the Consolidated Balance Sheets were as follows: Fiscal Year End 2022 2021 ($ in millions) Operating lease ROU assets: Other assets $ 424 $ 444 Operating lease liabilities: Accrued and other current liabilities $ 126 $ 118 Other liabilities 308 334 Total operating lease liabilities $ 434 $ 452 Weighted-average remaining lease term (in years) 5.3 5.2 Weighted-average discount rate 2.0 % 1.2 % Cash flow information, including significant non-cash transactions, related to leases was as follows: Fiscal 2022 2021 2020 (in millions) Cash paid for amounts included in the measurement of lease liabilities: Payments for operating leases (1) $ 122 $ 123 $ 108 ROU assets, including modifications of existing leases, obtained in exchange for operating lease liabilities 135 123 28 (1) These payments are included in cash flows from continuing operating activities, primarily in changes in accrued and other current liabilities. At fiscal year end 2022, the maturities of operating lease liabilities were as follows: (in millions) Fiscal 2023 $ 126 Fiscal 2024 104 Fiscal 2025 81 Fiscal 2026 52 Fiscal 2027 29 Thereafter 68 Total lease payments 460 Less: interest (26) Present value of lease liabilities $ 434 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | 12. Commitments and Contingencies Legal Proceedings In the normal course of business, we are subject to various legal proceedings and claims, including patent infringement claims, product liability matters, employment disputes, disputes on agreements, other commercial disputes, environmental matters, antitrust claims, and tax matters, including non-income tax matters such as value added tax, sales and use tax, real estate tax, and transfer tax. Although it is not feasible to predict the outcome of these proceedings, based upon our experience, current information, and applicable law, we do not expect that the outcome of these proceedings, either individually or in the aggregate, will have a material effect on our results of operations, financial position, or cash flows. Trade Compliance Matters We 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. 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 Guarantees 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. |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements | 12 Months Ended |
Sep. 30, 2022 | |
Financial Instruments and Fair Value Measurements | |
Financial Instruments and Fair Value Measurements | 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 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. We expect that significantly all of the balance in accumulated other comprehensive income (loss) associated with the cash flow hedge-designated instruments addressing foreign exchange risks will be reclassified into the Consolidated Statement of Operations within the next twelve months. 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: Fiscal Year End 2021 (in millions) Other liabilities $ 20 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: Fiscal 2022 2021 2020 (in millions) Gains (losses) recorded in other comprehensive income (loss) $ (7) $ (6) $ 28 Gains (losses) excluded from the hedging relationship (1) 70 (6) (48) Gains reclassified from other comprehensive income (loss) into selling, general, and administrative expenses 2 — — (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. 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: Fiscal Year End 2022 2021 (in millions) Prepaid expenses and other current assets $ 55 $ 3 Other assets 172 18 Accrued and other current liabilities — 13 Other liabilities — 18 The impacts of our hedge of net investment programs were as follows: Fiscal 2022 2021 2020 (in millions) Foreign currency exchange gains (losses) on intercompany loans and external borrowings (1) $ 516 $ (12) $ (172) Gains (losses) on cross-currency swap contracts designated as hedges of net investment (1) 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: Fiscal Year End 2021 (in millions) Prepaid expenses and other current assets $ 7 Accrued and other current liabilities 38 The impacts of these forward starting interest rate swap contracts were as follows: Fiscal 2022 2021 2020 (in millions) Gains (losses) recorded in other comprehensive income (loss) $ 13 $ 33 $ (30) 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: Fiscal Year End 2022 2021 (in millions) Prepaid expenses and other current assets $ 2 $ 23 Accrued and other current liabilities 77 18 Other liabilities 7 4 The impacts of these commodity swap contracts were as follows: Fiscal 2022 2021 2020 (in millions) Gains (losses) recorded in other comprehensive income (loss) $ (86) $ 58 $ 60 Gains reclassified from accumulated other comprehensive income (loss) into cost of sales 22 92 11 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. |
Retirement Plans
Retirement Plans | 12 Months Ended |
Sep. 30, 2022 | |
Retirement Plans | |
Retirement Plans | 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: Non-U.S. Plans U.S. Plans Fiscal Fiscal 2022 2021 2020 2022 2021 2020 ($ in millions) Operating expense: Service cost $ 38 $ 48 $ 52 $ 8 $ 12 $ 10 Other (income) expense: Interest cost 32 30 25 26 30 36 Expected returns on plan assets (55) (57) (61) (47) (52) (59) Amortization of net actuarial loss 24 32 41 3 9 9 Amortization of prior service credit (5) (6) (6) — — — Settlement and curtailment losses (gains) (3) (2) — — 28 — Net periodic pension benefit cost (credit) $ 31 $ 45 $ 51 $ (10) $ 27 $ (4) Weighted-average assumptions used to determine net pension benefit cost (credit) during the fiscal year: Discount rate 1.37 % 1.13 % 1.01 % 2.84 % 2.57 % 3.14 % Expected returns on plan assets 3.77 % 3.65 % 4.07 % 5.90 % 5.60 % 6.50 % Rates of compensation increases 2.53 % 2.50 % 2.53 % — % — % — % 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: Non-U.S. Plans U.S. Plans Fiscal Fiscal 2022 2021 2022 2021 ($ in millions) Change in benefit obligation: Benefit obligation at beginning of fiscal year $ 2,520 $ 2,519 $ 952 $ 1,219 Service cost 38 48 8 12 Interest cost 32 30 26 30 Actuarial (gains) losses (660) 6 (204) (46) Benefits and administrative expenses paid (82) (85) (65) (80) Settlements and curtailments (10) (67) — (183) Currency translation (353) 63 — — Other 17 6 — — Benefit obligation at end of fiscal year 1,502 2,520 717 952 Change in plan assets: Fair value of plan assets at beginning of fiscal year 1,582 1,537 833 968 Actual returns on plan assets (320) 81 (158) 110 Employer contributions 40 43 2 18 Benefits and administrative expenses paid (82) (85) (65) (80) Settlements (10) (52) — (183) Currency translation (235) 54 — — Other 14 4 — — Fair value of plan assets at end of fiscal year 989 1,582 612 833 Funded status $ (513) $ (938) $ (105) $ (119) Amounts recognized on the Consolidated Balance Sheets: Other assets $ 92 $ 102 $ — $ — Accrued and other current liabilities (25) (30) (4) (4) Long-term pension and postretirement liabilities (580) (1,010) (101) (115) Net amount recognized $ (513) $ (938) $ (105) $ (119) 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 $ (176) $ (547) $ (149) $ (151) Prior service (cost) credit 16 26 (1) (1) Total $ (160) $ (521) $ (150) $ (152) Weighted-average assumptions used to determine pension benefit obligation at fiscal year end: Discount rate 3.80 % 1.37 % 5.53 % 2.84 % Rates of compensation increases 2.62 % 2.53 % — % — % 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: Non-U.S. Plans U.S. Plans Fiscal Fiscal 2022 2021 2022 2021 (in millions) Current year net actuarial gain (loss) recorded in accumulated other comprehensive income (loss) $ 350 $ 16 $ (1) $ 103 Amortization of net actuarial loss (1) 21 34 3 37 Current year prior service cost recorded in accumulated other comprehensive income (loss) (5) (1) — — Amortization of prior service (credit) cost (1) (5) (10) — 1 $ 361 $ 39 $ 2 $ 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 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. Target weighted-average asset allocation and weighted-average asset allocation for non-U.S. and U.S. pension plans were as follows: Non-U.S. Plans U.S. Plans Fiscal Fiscal Fiscal Fiscal Year End Year End Year End Year End Target 2022 2021 Target 2022 2021 Asset category: Equity securities 29 % 22 % 35 % 67 % 48 % 51 % Fixed income 37 63 48 33 52 49 Other 34 15 17 — — — Total 100 % 100 % 100 % 100 % 100 % 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: Non-U.S. Plans U.S. Plans (in millions) Fiscal 2023 $ 78 $ 63 Fiscal 2024 96 60 Fiscal 2025 75 60 Fiscal 2026 79 60 Fiscal 2027 82 59 Fiscal 2028-2032 475 281 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. Non-U.S. Plans U.S. Plans Fiscal Year End Fiscal Year End 2022 2021 2022 2021 (in millions) Accumulated benefit obligation $ 1,434 $ 2,410 $ 717 $ 952 Pension plans with accumulated benefit obligations in excess of plan assets: Accumulated benefit obligation 598 1,027 717 918 Fair value of plan assets 43 75 612 798 Pension plans with projected benefit obligations in excess of plan assets: Projected benefit obligation 689 1,166 717 918 Fair value of plan assets 84 128 612 798 We value our pension assets based on the fair value hierarchy of ASC 820, Fair Value Measurements and Disclosures Fiscal Year End 2022 Non-U.S. Plans U.S. Plans Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total (in millions) Equity: Commingled equity funds (1) $ — $ 159 $ — $ 159 $ — $ 161 $ — $ 161 Fixed income: Government and corporate bonds (2) — 6 — 6 — — — — Commingled fixed income funds (3) — 534 — 534 — 306 — 306 Other (4) — 141 — 141 — 14 — 14 Subtotal $ — $ 840 $ — 840 $ — $ 481 $ — 481 Items to reconcile to fair value of plan assets (5) 149 131 Fair value of plan assets $ 989 $ 612 Fiscal Year End 2021 Non-U.S. Plans U.S. Plans Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total (in millions) Equity: Commingled equity funds (1) $ — $ 220 $ — $ 220 $ — $ 280 $ — $ 280 Fixed income: Government and corporate bonds (2) — 6 — 6 — — — — Commingled fixed income funds (3) — 1,101 — 1,101 — 392 — 392 Other (4) — 178 — 178 — 23 — 23 Subtotal $ — $ 1,505 $ — 1,505 $ — $ 695 $ — 695 Items to reconcile to fair value of plan assets (5) 77 138 Fair value of plan assets $ 1,582 $ 833 (1) 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. (2) 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. (3) 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. (4) 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). (5) 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. 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. |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2022 | |
Income Taxes | |
Income Taxes | 15. Income Taxes Income Tax Expense Significant components of the income tax expense were as follows: Fiscal 2022 2021 2020 (in millions) Current income tax expense (benefit): U.S. Federal $ 20 $ 3 $ 9 U.S. State (19) 12 (23) Non-U.S. 452 462 262 453 477 248 Deferred income tax expense (benefit): U.S. Federal (90) (24) (16) U.S. State — (15) (10) Non-U.S. (57) (315) 561 (147) (354) 535 Income tax expense $ 306 $ 123 $ 783 The U.S. and non-U.S. components of income from continuing operations before income taxes were as follows: Fiscal 2022 2021 2020 (in millions) U.S. $ (4) $ (336) $ (1,053) Non-U.S. 2,737 2,714 1,577 Income from continuing operations before income taxes $ 2,733 $ 2,378 $ 524 The reconciliation between U.S. federal income taxes at the statutory rate and income tax expense was as follows: Fiscal 2022 2021 2020 (in millions) Notional U.S. federal income tax expense at the statutory rate (1) $ 574 $ 499 $ 110 Adjustments to reconcile to the income tax expense: U.S. state income tax benefit, net (15) (2) (26) Tax law changes 21 12 349 Tax credits (13) (13) (13) Non-U.S. net earnings (2) (105) (71) (88) Change in accrued income tax liabilities (14) 37 30 Valuation allowance (37) (353) 231 Legal entity restructurings and intercompany transactions (123) 19 — Divestitures and goodwill impairments — — 185 Excess tax benefits from share-based payments (15) (21) (6) Other 33 16 11 Income tax expense $ 306 $ 123 $ 783 (1) The U.S. federal statutory rate was 21% for fiscal 2022, 2021, and 2020. (2) 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. 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 2022 2021 (in millions) Deferred tax assets: Accrued liabilities and reserves $ 317 $ 313 Tax loss and credit carryforwards 8,288 3,836 Inventories 62 46 Intangible assets 563 535 Pension and postretirement benefits 71 177 Deferred revenue 1 7 Interest 406 310 Unrecognized income tax benefits 1 4 Lease liabilities 81 94 Other 1 9 Gross deferred tax assets 9,791 5,331 Valuation allowance (7,112) (2,729) Deferred tax assets, net of valuation allowance 2,679 2,602 Deferred tax liabilities: Property, plant, and equipment (101) (97) Write-down of investments in subsidiaries (125) (2) Lease ROU assets (79) (92) Other (120) (93) Total deferred tax liabilities (425) (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 No Fiscal 2027 Fiscal 2042 Expiration Total (in millions) U.S. Federal: Net operating loss carryforwards $ 30 $ 426 $ 55 $ 511 Tax credit carryforwards 53 110 — 163 U.S. State: Net operating loss carryforwards 52 19 4 75 Tax credit carryforwards 11 — 6 17 Non-U.S.: Net operating loss carryforwards 107 5,934 1,443 7,484 Tax credit carryforwards — — 1 1 Capital loss carryforwards 3 — 34 37 Total tax loss and credit carryforwards $ 256 $ 6,489 $ 1,543 $ 8,288 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: Fiscal 2022 2021 2020 (in millions) Balance at beginning of fiscal year $ 359 $ 414 $ 542 Additions for tax positions related to prior years 10 14 29 Reductions for tax positions related to prior years (17) (77) (87) Additions for tax positions related to the current year 37 50 39 Current year acquisitions — 4 — Settlements (2) (9) (12) Reductions due to lapse of applicable statutes of limitations (100) (37) (97) Balance at end of fiscal year $ 287 $ 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 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 As of fiscal year end 2022, under applicable statutes, the following tax years remained subject to examination in the major tax jurisdictions indicated: Jurisdiction Open Years Brazil 2017 through 2022 China 2012 through 2022 Czech Republic 2017 through 2022 France 2019 through 2022 Germany 2012 through 2022 Hong Kong 2016 through 2022 India 2012 through 2022 Ireland 2017 through 2022 Italy 2017 through 2022 Japan 2016 through 2022 Luxembourg 2017 through 2022 Mexico 2017 through 2022 Singapore 2017 through 2022 South Korea 2017 through 2022 Spain 2018 through 2022 Switzerland 2017 through 2022 Thailand 2020 through 2022 United Kingdom 2020 through 2022 U.S.—federal 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. 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. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 12 Months Ended |
Sep. 30, 2022 | |
Earnings (Loss) Per Share | |
Earnings (Loss) Per Share | 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: Fiscal 2022 2021 2020 (in millions) Basic 323 330 332 Dilutive impact of share-based compensation arrangements 2 3 — Diluted 325 333 332 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: Fiscal 2022 2021 2020 (in millions) Antidilutive share options 1 — 3 |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Sep. 30, 2022 | |
Shareholders' Equity | |
Shareholder' Equity | 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). 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 Annual Payment Per Share Payment Timing March 2019 $1.84, payable in four quarterly installments of $0.46 Third quarter of fiscal 2019 March 2020 $1.92, payable in four quarterly installments of $0.48 Third quarter of fiscal 2020 March 2021 $2.00, payable in four quarterly installments of $0.50 Third quarter of fiscal 2021 March 2022 $2.24, payable in four quarterly installments of $0.56 Third quarter of fiscal 2022 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: Fiscal 2022 2021 2020 (in millions) Number of common shares repurchased 10 7 6 Repurchase value $ 1,409 $ 904 $ 505 At fiscal year end 2022, we had $1.7 billion of availability remaining under our share repurchase authorization. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Sep. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss). | |
Accumulated Other Comprehensive Income (Loss) | 18. Accumulated Other Comprehensive Income (Loss) The changes in each component of accumulated other comprehensive income (loss) were as follows: Foreign Unrecognized Gains (Losses) Accumulated Currency Pension and on Cash Other Translation Postretirement Flow Comprehensive Adjustments (1) Benefit Costs Hedges Income (Loss) (in millions) Balance at fiscal year end 2019 $ 188 $ (647) $ (44) $ (503) Other comprehensive income (loss), net of tax: Other comprehensive income (loss) before reclassifications (11) 8 58 55 Amounts reclassified from accumulated other comprehensive income (loss) — 44 (13) 31 Income tax expense — (18) (5) (23) Other comprehensive income (loss), net of tax (11) 34 40 63 Less: other comprehensive income attributable to noncontrolling interests (5) — — (5) Balance at fiscal year end 2020 $ 172 $ (613) $ (4) $ (445) Other comprehensive income (loss), net of tax: Other comprehensive income before reclassifications 144 120 84 348 Amounts reclassified from accumulated other comprehensive income (loss) — 62 (92) (30) Income tax (expense) benefit — (44) 5 (39) Other comprehensive income (loss), net of tax 144 138 (3) 279 Less: other comprehensive income attributable to noncontrolling interests (2) — — (2) Balance at fiscal year end 2021 $ 314 $ (475) $ (7) $ (168) Other comprehensive income (loss), net of tax: Other comprehensive income (loss) before reclassifications (510) 344 (76) (242) Amounts reclassified from accumulated other comprehensive income (loss) — 19 (26) (7) Income tax (expense) benefit — (104) 7 (97) Other comprehensive income (loss), net of tax (510) 259 (95) (346) Less: other comprehensive loss attributable to noncontrolling interests 19 — — 19 Balance at fiscal year end 2022 $ (177) $ (216) $ (102) $ (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 . |
Share Plans
Share Plans | 12 Months Ended |
Sep. 30, 2022 | |
Share Plans | |
Share Plans | 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. 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: Fiscal 2022 2021 2020 (in millions) Share-based compensation expense $ 119 $ 94 $ 74 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: Weighted-Average Grant-Date Shares Fair Value Nonvested at fiscal year end 2021 1,316,645 $ 96.03 Granted 720,801 150.99 Vested (484,884) 91.35 Forfeited (131,956) 116.72 Nonvested at fiscal year end 2022 1,420,606 $ 123.25 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. Performance share award activity was as follows: Weighted-Average Grant-Date Shares Fair Value Outstanding at fiscal year end 2021 526,071 $ 88.99 Granted 139,037 157.56 Vested (160,673) 72.85 Forfeited (35,002) 78.18 Outstanding at fiscal year end 2022 469,433 $ 114.88 The weighted-average grant-date fair value of performance share awards granted during fiscal 2022, 2021, and 2020 was 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: Weighted-Average Weighted-Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term Value (in years) (in millions) Outstanding at fiscal year end 2021 5,348,944 $ 88.00 Granted 873,300 157.02 Exercised (683,871) 74.32 Forfeited (187,019) 111.14 Outstanding at fiscal year end 2022 5,351,354 $ 100.21 6.6 $ 94 Vested and expected to vest at fiscal year end 2022 5,227,306 $ 99.60 6.6 $ 93 Exercisable at fiscal year end 2022 2,704,322 $ 84.86 5.4 $ 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. 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: Fiscal 2022 2021 2020 Weighted-average grant-date fair value $ 37.51 $ 22.21 $ 15.49 Assumptions: Expected share price volatility 29 % 28 % 21 % Risk-free interest rate 1.2 % 0.5 % 1.7 % Expected annual dividend per share $ 2.00 $ 1.92 $ 1.84 Expected life of options (in years) 5.1 5.4 5.1 |
Segment and Geographic Data
Segment and Geographic Data | 12 Months Ended |
Sep. 30, 2022 | |
Segment and Geographic Data | |
Segment and Geographic Data | 20. Segment and Geographic Data 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. Net sales by segment and industry end market (1) Fiscal 2022 2021 2020 (in millions) Transportation Solutions: Automotive $ 6,527 $ 6,379 $ 4,903 Commercial transportation 1,582 1,467 1,051 Sensors 1,110 1,128 891 Total Transportation Solutions 9,219 8,974 6,845 Industrial Solutions: Industrial equipment 1,934 1,397 1,098 Aerospace, defense, and marine 1,087 1,035 1,201 Energy 804 738 717 Medical 695 674 697 Total Industrial Solutions 4,520 3,844 3,713 Communications Solutions: Data and devices 1,576 1,198 973 Appliances 966 907 641 Total Communications Solutions 2,542 2,105 1,614 Total $ 16,281 $ 14,923 $ 12,172 (1) 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: Fiscal 2022 2021 2020 (in millions) Asia–Pacific: Transportation Solutions $ 3,537 $ 3,466 $ 2,662 Industrial Solutions 843 703 604 Communications Solutions 1,391 1,205 980 Total Asia–Pacific 5,771 5,374 4,246 Europe/Middle East/Africa (“EMEA”): Transportation Solutions 3,490 3,570 2,625 Industrial Solutions 1,871 1,586 1,359 Communications Solutions 346 315 236 Total EMEA 5,707 5,471 4,220 Americas: Transportation Solutions 2,192 1,938 1,558 Industrial Solutions 1,806 1,555 1,750 Communications Solutions 805 585 398 Total Americas 4,803 4,078 3,706 Total $ 16,281 $ 14,923 $ 12,172 Operating income (loss) by segment was as follows: Fiscal 2022 2021 2020 (in millions) Transportation Solutions $ 1,534 $ 1,526 $ (93) Industrial Solutions 620 469 412 Communications Solutions 602 439 218 Total $ 2,756 $ 2,434 $ 537 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 Capital Expenditures Fiscal Fiscal 2022 2021 2020 2022 2021 2020 (in millions) Transportation Solutions $ 505 $ 512 $ 463 $ 483 $ 487 $ 365 Industrial Solutions 194 189 184 153 121 139 Communications Solutions 86 68 64 132 82 56 Total $ 785 $ 769 $ 711 $ 768 $ 690 $ 560 Segment assets and a reconciliation of segment assets to total assets were as follows: Segment Assets Fiscal Year End 2022 2021 2020 (in millions) Transportation Solutions $ 5,530 $ 5,791 $ 4,973 Industrial Solutions 2,442 2,275 2,117 Communications Solutions 1,136 1,151 887 Total segment assets (1) 9,108 9,217 7,977 Other current assets 1,727 1,824 1,457 Other non-current assets 9,947 10,421 9,808 Total assets $ 20,782 $ 21,462 $ 19,242 (1) Segment assets are composed of accounts receivable, inventories, and net property, plant, and equipment. Net sales and net property, plant, and equipment by geographic region were as follows: Property, Plant, and Net Sales (1) Equipment, Net Fiscal Fiscal Year End 2022 2021 2020 2022 2021 2020 (in millions) Asia–Pacific: China $ 3,589 $ 3,297 $ 2,459 $ 779 $ 755 $ 659 Other Asia–Pacific 2,182 2,077 1,787 296 377 418 Total Asia–Pacific 5,771 5,374 4,246 1,075 1,132 1,077 EMEA: Switzerland 3,709 3,616 2,878 16 41 79 Germany 561 417 343 597 599 559 Other EMEA 1,437 1,438 999 821 937 871 Total EMEA 5,707 5,471 4,220 1,434 1,577 1,509 Americas: U.S. 4,280 3,615 3,348 947 960 963 Other Americas 523 463 358 111 109 101 Total Americas 4,803 4,078 3,706 1,058 1,069 1,064 Total $ 16,281 $ 14,923 $ 12,172 $ 3,567 $ 3,778 $ 3,650 (1) Net sales to external customers are attributed to individual countries based on the legal entity that records the sale. |
SCHEDULE II-VALUATION AND QUALI
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Sep. 30, 2022 | |
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | |
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | 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, and End of Description Fiscal Year Expenses and Other Deductions Fiscal Year (in millions) Fiscal 2022: Allowance for doubtful accounts receivable $ 41 15 (7) (4) $ 45 Valuation allowance on deferred tax assets 2,729 4,463 — (80) 7,112 Fiscal 2021: Allowance for doubtful accounts receivable $ 29 $ 15 $ 1 $ (4) $ 41 Valuation allowance on deferred tax assets 4,429 31 — (1,731) 2,729 Fiscal 2020: Allowance for doubtful accounts receivable $ 25 $ 10 $ (1) $ (5) $ 29 Valuation allowance on deferred tax assets 4,970 493 — (1,034) 4,429 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2022 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | 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”). |
Use of Estimates | Use of 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 revenues and expenses. Actual results could differ from these estimates. |
Fiscal Year | 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 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. |
Principles of Consolidation | 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 | Revenue Recognition We account for revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers 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 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, 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 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, 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 5 1 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 | 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. 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 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. |
Research and Development | 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 Income taxes are computed in accordance with the provisions of ASC 740, Income Taxes 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 | 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 recognized currently in earnings. For instruments designated as cash flow hedges, the effective portion of changes in the fair 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 | Fair Value Measurements ASC 820, Fair Value Measurements and Disclosures ● 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). ● 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 | 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 | 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 | 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 | Leases We account for leases in accordance with of ASC 842, Leases 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 | 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 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 | 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. |
Recently Issued Accounting Pronouncements | 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. |
Restructuring and Other Charg_2
Restructuring and Other Charges, Net (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Restructuring and Other Charges, Net | |
Schedule of net restructuring and other charges | Fiscal 2022 2021 2020 (in millions) Restructuring charges, net $ 137 $ 208 $ 257 Impairment of held for sale businesses and loss on divestitures, net 4 21 — Other charges, net — 4 — Restructuring and other charges, net $ 141 $ 233 $ 257 |
Net restructuring and related charges by segment | Fiscal 2022 2021 2020 (in millions) Transportation Solutions $ 80 $ 135 $ 113 Industrial Solutions 34 50 102 Communications Solutions 23 23 42 Restructuring charges, net 137 208 257 Plus: charges included in cost of sales (1) 16 — — Restructuring and related charges, net $ 153 $ 208 $ 257 (1) Charges included in cost of sales were attributable to inventory-related charges within the Industrial Solutions segment. |
Summary of activity in restructuring reserves | Balance at Balance at Beginning Currency End of Fiscal Changes in Cash Non-Cash Translation of Fiscal Year Charges Estimate Payments Items and Other Year (in millions) Fiscal 2022 Activity: Fiscal 2022 Actions: Employee severance $ — $ 126 $ — $ (15) $ — $ (3) $ 108 Facility and other exit costs — 2 — (1) — — 1 Property, plant, and equipment and other non-cash charges — 33 — — (33) — — Total — 161 — (16) (33) (3) 109 Fiscal 2021 Actions: Employee severance 152 2 (8) (83) — (14) 49 Facility and other exit costs 2 5 — (7) — — — Property, plant, and equipment — 3 — — (3) — — Total 154 10 (8) (90) (3) (14) 49 Fiscal 2020 Actions: Employee severance 104 — (17) (27) — (11) 49 Facility and other exit costs 15 — (2) (5) — (1) 7 Property, plant, and equipment — 4 (3) — (1) — — Total 119 4 (22) (32) (1) (12) 56 Pre-Fiscal 2020 Actions: Employee severance 31 — — (14) — (3) 14 Facility and other exit costs — 8 — (8) — — — Total 31 8 — (22) — (3) 14 Total fiscal 2022 activity $ 304 $ 183 $ (30) $ (160) $ (37) $ (32) $ 228 Fiscal 2021 Activity: Fiscal 2021 Actions: Employee severance $ — $ 199 $ (17) $ (26) $ — $ (4) $ 152 Facility and other exit costs — 4 — (2) — — 2 Property, plant, and equipment — 9 — — (9) — — Total — 212 (17) (28) (9) (4) 154 Fiscal 2020 Actions: Employee severance 180 5 — (84) — 3 104 Facility and other exit costs 8 11 — (4) — — 15 Property, plant, and equipment — 7 — — (7) — — Total 188 23 — (88) (7) 3 119 Pre-Fiscal 2020 Actions: Employee severance 93 — (9) (53) — — 31 Facility and other exit costs 4 2 — (6) — — — Property, plant, and equipment — — (3) — 3 — — Total 97 2 (12) (59) 3 — 31 Total fiscal 2021 activity $ 285 $ 237 $ (29) $ (175) $ (13) $ (1) $ 304 Fiscal 2020 Activity: Fiscal 2020 Actions: Employee severance $ — $ 214 $ — $ (35) $ — $ 1 $ 180 Facility and other exit costs — 8 — — — — 8 Property, plant, and equipment — 28 — — (28) — — Total — 250 — (35) (28) 1 188 Pre-Fiscal 2020 Actions: Employee severance 261 7 (26) (153) — 4 93 Facility and other exit costs 3 17 — (18) — 2 4 Property, plant, and equipment — 9 — — (9) — — Total 264 33 (26) (171) (9) 6 97 Total fiscal 2020 activity $ 264 $ 283 $ (26) $ (206) $ (37) $ 7 $ 285 |
Restructuring reserves included on Consolidated Balance Sheets | Fiscal Year End 2022 2021 (in millions) Accrued and other current liabilities $ 182 $ 236 Other liabilities 46 68 Restructuring reserves $ 228 $ 304 |
Fiscal 2021 Actions | |
Restructuring and Other Charges, Net | |
Schedule of expected, incurred and remaining charges by segment | The following table summarizes charges incurred for the fiscal 2021 program by segment as of fiscal year end 2022: Cumulative Charges Incurred (in millions) Transportation Solutions $ 124 Industrial Solutions 49 Communications Solutions 24 Total $ 197 |
Fiscal 2022 Actions | |
Restructuring and Other Charges, Net | |
Schedule of expected, incurred and remaining charges by segment | The following table summarizes expected, incurred, and remaining charges for the fiscal 2022 program by segment as of fiscal year end 2022: Total Cumulative Remaining Expected Charges Expected Charges Incurred Charges (in millions) Transportation Solutions $ 99 $ 88 $ 11 Industrial Solutions 56 52 4 Communications Solutions 30 21 9 Total $ 185 $ 161 $ 24 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Inventories | |
Schedule of inventories | Fiscal Year End 2022 2021 (in millions) Raw materials $ 390 $ 320 Work in progress 1,066 991 Finished goods 1,220 1,200 Inventories $ 2,676 $ 2,511 |
Property, Plant, and Equipmen_2
Property, Plant, and Equipment, Net (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Property, Plant, and Equipment, Net | |
Components of net property, plant, and equipment | Fiscal Year End 2022 2021 (in millions) Property, plant, and equipment, gross: Land and improvements $ 106 $ 128 Buildings and improvements 1,331 1,469 Machinery and equipment 7,727 8,308 Construction in process 609 614 9,773 10,519 Accumulated depreciation (6,206) (6,741) Property, plant, and equipment, net $ 3,567 $ 3,778 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Goodwill | |
Changes in the carrying amount of goodwill by segment | Transportation Industrial Communications Solutions Solutions Solutions Total (in millions) Balance at fiscal year end 2020 (1) $ 1,527 $ 3,110 $ 587 $ 5,224 Acquisitions — 307 — 307 Currency translation and other 22 29 8 59 Balance at fiscal year end 2021 (1) 1,549 3,446 595 5,590 Acquisitions — — 141 141 Purchase price adjustments — (91) — (91) Currency translation and other (110) (228) (44) (382) Balance at fiscal year end 2022 (1) $ 1,439 $ 3,127 $ 692 $ 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. |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Intangible Assets, Net | |
Schedule of finite-lived intangible assets | 2022 2021 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount (in millions) Customer relationships $ 1,642 $ (687) $ 955 $ 1,766 $ (660) $ 1,106 Intellectual property 1,174 (852) 322 1,262 (832) 430 Other 16 (5) 11 19 (6) 13 Total $ 2,832 $ (1,544) $ 1,288 $ 3,047 $ (1,498) $ 1,549 |
Schedule of finite-lived intangible assets, future amortization expense | (in millions) Fiscal 2023 $ 185 Fiscal 2024 156 Fiscal 2025 141 Fiscal 2026 135 Fiscal 2027 117 Thereafter 554 Total $ 1,288 |
Accrued and Other Current Lia_2
Accrued and Other Current Liabilities (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Accrued and Other Current Liabilities | |
Components of accrued and other current liabilities | Fiscal Year End 2022 2021 (in millions) Accrued payroll and employee benefits $ 535 $ 690 Dividends payable to shareholders 356 327 Restructuring reserves 182 236 Income taxes payable 162 146 Lease liability 126 118 Share repurchase program payable 70 73 Deferred revenue 63 51 Interest payable 28 28 Other 603 573 Accrued and other current liabilities $ 2,125 $ 2,242 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Debt | |
Schedule of debt | Fiscal Year End 2022 2021 (in millions) Principal debt: Commercial paper, at a weighted-average interest rate of 3.45% at fiscal year end 2022 $ 370 $ — 3.50% senior notes due 2022 — 500 1.10% euro-denominated senior notes due 2023 538 644 3.45% senior notes due 2024 350 350 0.00% euro-denominated senior notes due 2025 538 644 3.70% senior notes due 2026 350 350 3.125% senior notes due 2027 400 400 0.00% euro-denominated senior notes due 2029 538 644 2.50% senior notes due in 2032 600 — 7.125% senior notes due 2037 477 477 Other 83 110 4,244 4,119 Unamortized discounts, premiums, and debt issuance costs, net (38) (29) Effects of fair value hedge-designated interest rate swap contracts — 2 Total debt $ 4,206 $ 4,092 |
Aggregate amounts of principal payments maturing during the next five years and thereafter | (in millions) Fiscal 2023 $ 914 Fiscal 2024 352 Fiscal 2025 540 Fiscal 2026 351 Fiscal 2027 401 Thereafter 1,686 Total $ 4,244 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Leases | |
Schedule of components of lease cost | Fiscal 2022 2021 2020 (in millions) Operating lease cost $ 131 $ 120 $ 108 Variable lease cost 52 49 49 Total lease cost $ 183 $ 169 $ 157 |
Schedule of Balance Sheet information related to leases | Fiscal Year End 2022 2021 ($ in millions) Operating lease ROU assets: Other assets $ 424 $ 444 Operating lease liabilities: Accrued and other current liabilities $ 126 $ 118 Other liabilities 308 334 Total operating lease liabilities $ 434 $ 452 Weighted-average remaining lease term (in years) 5.3 5.2 Weighted-average discount rate 2.0 % 1.2 % |
Schedule of Cash Flow information, including significant non-cash transactions, related to leases | Fiscal 2022 2021 2020 (in millions) Cash paid for amounts included in the measurement of lease liabilities: Payments for operating leases (1) $ 122 $ 123 $ 108 ROU assets, including modifications of existing leases, obtained in exchange for operating lease liabilities 135 123 28 (1) These payments are included in cash flows from continuing operating activities, primarily in changes in accrued and other current liabilities. |
Schedule of maturities of operating lease liabilities | (in millions) Fiscal 2023 $ 126 Fiscal 2024 104 Fiscal 2025 81 Fiscal 2026 52 Fiscal 2027 29 Thereafter 68 Total lease payments 460 Less: interest (26) Present value of lease liabilities $ 434 |
Financial Instruments and Fai_2
Financial Instruments and Fair Value Measurements (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Net investment hedges | |
Schedule of impacts of hedging program | Fiscal 2022 2021 2020 (in millions) Foreign currency exchange gains (losses) on intercompany loans and external borrowings (1) $ 516 $ (12) $ (172) Gains (losses) on cross-currency swap contracts designated as hedges of net investment (1) 265 (22) (69) (1) Recorded as currency translation, a component of accumulated other comprehensive income (loss). |
Cross-currency swap contracts | Cash flow hedges | |
Summary of fair value of derivative instruments | Fiscal Year End 2021 (in millions) Other liabilities $ 20 |
Schedule of impacts of hedging program | Fiscal 2022 2021 2020 (in millions) Gains (losses) recorded in other comprehensive income (loss) $ (7) $ (6) $ 28 Gains (losses) excluded from the hedging relationship (1) 70 (6) (48) Gains reclassified from other comprehensive income (loss) into selling, general, and administrative expenses 2 — — (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. |
Cross-currency swap contracts | Net investment hedges | |
Summary of fair value of derivative instruments | Fiscal Year End 2022 2021 (in millions) Prepaid expenses and other current assets $ 55 $ 3 Other assets 172 18 Accrued and other current liabilities — 13 Other liabilities — 18 |
Forward starting interest rate swaps | Cash flow hedges | |
Summary of fair value of derivative instruments | Fiscal Year End 2021 (in millions) Prepaid expenses and other current assets $ 7 Accrued and other current liabilities 38 |
Schedule of impacts of hedging program | Fiscal 2022 2021 2020 (in millions) Gains (losses) recorded in other comprehensive income (loss) $ 13 $ 33 $ (30) |
Commodity swap contracts | Cash flow hedges | |
Summary of fair value of derivative instruments | Fiscal Year End 2022 2021 (in millions) Prepaid expenses and other current assets $ 2 $ 23 Accrued and other current liabilities 77 18 Other liabilities 7 4 |
Schedule of impacts of hedging program | Fiscal 2022 2021 2020 (in millions) Gains (losses) recorded in other comprehensive income (loss) $ (86) $ 58 $ 60 Gains reclassified from accumulated other comprehensive income (loss) into cost of sales 22 92 11 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Retirement Plans | |
Net periodic pension benefit cost | Non-U.S. Plans U.S. Plans Fiscal Fiscal 2022 2021 2020 2022 2021 2020 ($ in millions) Operating expense: Service cost $ 38 $ 48 $ 52 $ 8 $ 12 $ 10 Other (income) expense: Interest cost 32 30 25 26 30 36 Expected returns on plan assets (55) (57) (61) (47) (52) (59) Amortization of net actuarial loss 24 32 41 3 9 9 Amortization of prior service credit (5) (6) (6) — — — Settlement and curtailment losses (gains) (3) (2) — — 28 — Net periodic pension benefit cost (credit) $ 31 $ 45 $ 51 $ (10) $ 27 $ (4) Weighted-average assumptions used to determine net pension benefit cost (credit) during the fiscal year: Discount rate 1.37 % 1.13 % 1.01 % 2.84 % 2.57 % 3.14 % Expected returns on plan assets 3.77 % 3.65 % 4.07 % 5.90 % 5.60 % 6.50 % Rates of compensation increases 2.53 % 2.50 % 2.53 % — % — % — % |
Changes in benefit obligation and plan assets and the net amount recognized on the Consolidated Balance Sheets | Non-U.S. Plans U.S. Plans Fiscal Fiscal 2022 2021 2022 2021 ($ in millions) Change in benefit obligation: Benefit obligation at beginning of fiscal year $ 2,520 $ 2,519 $ 952 $ 1,219 Service cost 38 48 8 12 Interest cost 32 30 26 30 Actuarial (gains) losses (660) 6 (204) (46) Benefits and administrative expenses paid (82) (85) (65) (80) Settlements and curtailments (10) (67) — (183) Currency translation (353) 63 — — Other 17 6 — — Benefit obligation at end of fiscal year 1,502 2,520 717 952 Change in plan assets: Fair value of plan assets at beginning of fiscal year 1,582 1,537 833 968 Actual returns on plan assets (320) 81 (158) 110 Employer contributions 40 43 2 18 Benefits and administrative expenses paid (82) (85) (65) (80) Settlements (10) (52) — (183) Currency translation (235) 54 — — Other 14 4 — — Fair value of plan assets at end of fiscal year 989 1,582 612 833 Funded status $ (513) $ (938) $ (105) $ (119) Amounts recognized on the Consolidated Balance Sheets: Other assets $ 92 $ 102 $ — $ — Accrued and other current liabilities (25) (30) (4) (4) Long-term pension and postretirement liabilities (580) (1,010) (101) (115) Net amount recognized $ (513) $ (938) $ (105) $ (119) 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 $ (176) $ (547) $ (149) $ (151) Prior service (cost) credit 16 26 (1) (1) Total $ (160) $ (521) $ (150) $ (152) Weighted-average assumptions used to determine pension benefit obligation at fiscal year end: Discount rate 3.80 % 1.37 % 5.53 % 2.84 % Rates of compensation increases 2.62 % 2.53 % — % — % |
Pre-tax amounts recognized in accumulated other comprehensive income (loss) for all non-U.S. and U.S. defined benefit pension plans | Non-U.S. Plans U.S. Plans Fiscal Fiscal 2022 2021 2022 2021 (in millions) Current year net actuarial gain (loss) recorded in accumulated other comprehensive income (loss) $ 350 $ 16 $ (1) $ 103 Amortization of net actuarial loss (1) 21 34 3 37 Current year prior service cost recorded in accumulated other comprehensive income (loss) (5) (1) — — Amortization of prior service (credit) cost (1) (5) (10) — 1 $ 361 $ 39 $ 2 $ 141 (1) Includes amounts reflected as settlement and curtailment losses (gains) in the above net periodic pension benefit cost (credit) table. |
Target weighted average asset allocation and weighted average asset allocation for non-U.S. and U.S. pension plans | Non-U.S. Plans U.S. Plans Fiscal Fiscal Fiscal Fiscal Year End Year End Year End Year End Target 2022 2021 Target 2022 2021 Asset category: Equity securities 29 % 22 % 35 % 67 % 48 % 51 % Fixed income 37 63 48 33 52 49 Other 34 15 17 — — — Total 100 % 100 % 100 % 100 % 100 % 100 % |
Expected future benefit payments | Non-U.S. Plans U.S. Plans (in millions) Fiscal 2023 $ 78 $ 63 Fiscal 2024 96 60 Fiscal 2025 75 60 Fiscal 2026 79 60 Fiscal 2027 82 59 Fiscal 2028-2032 475 281 |
Accumulated benefit obligation, projected benefit obligation, and fair value of plan assets information | Non-U.S. Plans U.S. Plans Fiscal Year End Fiscal Year End 2022 2021 2022 2021 (in millions) Accumulated benefit obligation $ 1,434 $ 2,410 $ 717 $ 952 Pension plans with accumulated benefit obligations in excess of plan assets: Accumulated benefit obligation 598 1,027 717 918 Fair value of plan assets 43 75 612 798 Pension plans with projected benefit obligations in excess of plan assets: Projected benefit obligation 689 1,166 717 918 Fair value of plan assets 84 128 612 798 |
Defined benefit pension plans' asset categories and associated fair value | Fiscal Year End 2022 Non-U.S. Plans U.S. Plans Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total (in millions) Equity: Commingled equity funds (1) $ — $ 159 $ — $ 159 $ — $ 161 $ — $ 161 Fixed income: Government and corporate bonds (2) — 6 — 6 — — — — Commingled fixed income funds (3) — 534 — 534 — 306 — 306 Other (4) — 141 — 141 — 14 — 14 Subtotal $ — $ 840 $ — 840 $ — $ 481 $ — 481 Items to reconcile to fair value of plan assets (5) 149 131 Fair value of plan assets $ 989 $ 612 Fiscal Year End 2021 Non-U.S. Plans U.S. Plans Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total (in millions) Equity: Commingled equity funds (1) $ — $ 220 $ — $ 220 $ — $ 280 $ — $ 280 Fixed income: Government and corporate bonds (2) — 6 — 6 — — — — Commingled fixed income funds (3) — 1,101 — 1,101 — 392 — 392 Other (4) — 178 — 178 — 23 — 23 Subtotal $ — $ 1,505 $ — 1,505 $ — $ 695 $ — 695 Items to reconcile to fair value of plan assets (5) 77 138 Fair value of plan assets $ 1,582 $ 833 (1) 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. (2) 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. (3) 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. (4) 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). (5) 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. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Income Taxes | |
Significant components of the income tax expense (benefit) | Fiscal 2022 2021 2020 (in millions) Current income tax expense (benefit): U.S. Federal $ 20 $ 3 $ 9 U.S. State (19) 12 (23) Non-U.S. 452 462 262 453 477 248 Deferred income tax expense (benefit): U.S. Federal (90) (24) (16) U.S. State — (15) (10) Non-U.S. (57) (315) 561 (147) (354) 535 Income tax expense $ 306 $ 123 $ 783 |
U.S. and non-U.S. components of income from continuing operations before income taxes | Fiscal 2022 2021 2020 (in millions) U.S. $ (4) $ (336) $ (1,053) Non-U.S. 2,737 2,714 1,577 Income from continuing operations before income taxes $ 2,733 $ 2,378 $ 524 |
Reconciliation between U.S. federal income taxes at the statutory rate and income tax expense (benefit) on continuing operations | Fiscal 2022 2021 2020 (in millions) Notional U.S. federal income tax expense at the statutory rate (1) $ 574 $ 499 $ 110 Adjustments to reconcile to the income tax expense: U.S. state income tax benefit, net (15) (2) (26) Tax law changes 21 12 349 Tax credits (13) (13) (13) Non-U.S. net earnings (2) (105) (71) (88) Change in accrued income tax liabilities (14) 37 30 Valuation allowance (37) (353) 231 Legal entity restructurings and intercompany transactions (123) 19 — Divestitures and goodwill impairments — — 185 Excess tax benefits from share-based payments (15) (21) (6) Other 33 16 11 Income tax expense $ 306 $ 123 $ 783 (1) The U.S. federal statutory rate was 21% for fiscal 2022, 2021, and 2020. (2) Excludes items which are separately presented. |
Components of net deferred income tax asset | Fiscal Year End 2022 2021 (in millions) Deferred tax assets: Accrued liabilities and reserves $ 317 $ 313 Tax loss and credit carryforwards 8,288 3,836 Inventories 62 46 Intangible assets 563 535 Pension and postretirement benefits 71 177 Deferred revenue 1 7 Interest 406 310 Unrecognized income tax benefits 1 4 Lease liabilities 81 94 Other 1 9 Gross deferred tax assets 9,791 5,331 Valuation allowance (7,112) (2,729) Deferred tax assets, net of valuation allowance 2,679 2,602 Deferred tax liabilities: Property, plant, and equipment (101) (97) Write-down of investments in subsidiaries (125) (2) Lease ROU assets (79) (92) Other (120) (93) Total deferred tax liabilities (425) (284) Net deferred tax assets $ 2,254 $ 2,318 |
Tax loss and credit carryforwards | Expiration Period Fiscal 2028 Through Through No Fiscal 2027 Fiscal 2042 Expiration Total (in millions) U.S. Federal: Net operating loss carryforwards $ 30 $ 426 $ 55 $ 511 Tax credit carryforwards 53 110 — 163 U.S. State: Net operating loss carryforwards 52 19 4 75 Tax credit carryforwards 11 — 6 17 Non-U.S.: Net operating loss carryforwards 107 5,934 1,443 7,484 Tax credit carryforwards — — 1 1 Capital loss carryforwards 3 — 34 37 Total tax loss and credit carryforwards $ 256 $ 6,489 $ 1,543 $ 8,288 |
Activity of unrecognized income tax benefits | Fiscal 2022 2021 2020 (in millions) Balance at beginning of fiscal year $ 359 $ 414 $ 542 Additions for tax positions related to prior years 10 14 29 Reductions for tax positions related to prior years (17) (77) (87) Additions for tax positions related to the current year 37 50 39 Current year acquisitions — 4 — Settlements (2) (9) (12) Reductions due to lapse of applicable statutes of limitations (100) (37) (97) Balance at end of fiscal year $ 287 $ 359 $ 414 |
Tax years subject to examination in major tax jurisdictions | Jurisdiction Open Years Brazil 2017 through 2022 China 2012 through 2022 Czech Republic 2017 through 2022 France 2019 through 2022 Germany 2012 through 2022 Hong Kong 2016 through 2022 India 2012 through 2022 Ireland 2017 through 2022 Italy 2017 through 2022 Japan 2016 through 2022 Luxembourg 2017 through 2022 Mexico 2017 through 2022 Singapore 2017 through 2022 South Korea 2017 through 2022 Spain 2018 through 2022 Switzerland 2017 through 2022 Thailand 2020 through 2022 United Kingdom 2020 through 2022 U.S.—federal 2019 through 2022 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Weighted-average number of shares outstanding: | |
Schedule of weighted-average shares outstanding, basic and diluted | Fiscal 2022 2021 2020 (in millions) Basic 323 330 332 Dilutive impact of share-based compensation arrangements 2 3 — Diluted 325 333 332 |
Schedule of antidilutive securities excluded from computation of earnings per share | Fiscal 2022 2021 2020 (in millions) Antidilutive share options 1 — 3 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Shareholders' Equity | |
Schedule of dividends and cash distributions to shareholders | Approval Date Annual Payment Per Share Payment Timing March 2019 $1.84, payable in four quarterly installments of $0.46 Third quarter of fiscal 2019 March 2020 $1.92, payable in four quarterly installments of $0.48 Third quarter of fiscal 2020 March 2021 $2.00, payable in four quarterly installments of $0.50 Third quarter of fiscal 2021 March 2022 $2.24, payable in four quarterly installments of $0.56 Third quarter of fiscal 2022 |
Schedule of common shares repurchased | Fiscal 2022 2021 2020 (in millions) Number of common shares repurchased 10 7 6 Repurchase value $ 1,409 $ 904 $ 505 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss). | |
Components of accumulated other comprehensive income (loss) | Foreign Unrecognized Gains (Losses) Accumulated Currency Pension and on Cash Other Translation Postretirement Flow Comprehensive Adjustments (1) Benefit Costs Hedges Income (Loss) (in millions) Balance at fiscal year end 2019 $ 188 $ (647) $ (44) $ (503) Other comprehensive income (loss), net of tax: Other comprehensive income (loss) before reclassifications (11) 8 58 55 Amounts reclassified from accumulated other comprehensive income (loss) — 44 (13) 31 Income tax expense — (18) (5) (23) Other comprehensive income (loss), net of tax (11) 34 40 63 Less: other comprehensive income attributable to noncontrolling interests (5) — — (5) Balance at fiscal year end 2020 $ 172 $ (613) $ (4) $ (445) Other comprehensive income (loss), net of tax: Other comprehensive income before reclassifications 144 120 84 348 Amounts reclassified from accumulated other comprehensive income (loss) — 62 (92) (30) Income tax (expense) benefit — (44) 5 (39) Other comprehensive income (loss), net of tax 144 138 (3) 279 Less: other comprehensive income attributable to noncontrolling interests (2) — — (2) Balance at fiscal year end 2021 $ 314 $ (475) $ (7) $ (168) Other comprehensive income (loss), net of tax: Other comprehensive income (loss) before reclassifications (510) 344 (76) (242) Amounts reclassified from accumulated other comprehensive income (loss) — 19 (26) (7) Income tax (expense) benefit — (104) 7 (97) Other comprehensive income (loss), net of tax (510) 259 (95) (346) Less: other comprehensive loss attributable to noncontrolling interests 19 — — 19 Balance at fiscal year end 2022 $ (177) $ (216) $ (102) $ (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 . |
Share Plans (Tables)
Share Plans (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Share Plans | |
Share-based compensation expense | Fiscal 2022 2021 2020 (in millions) Share-based compensation expense $ 119 $ 94 $ 74 |
Summary of restricted share award activity | Weighted-Average Grant-Date Shares Fair Value Nonvested at fiscal year end 2021 1,316,645 $ 96.03 Granted 720,801 150.99 Vested (484,884) 91.35 Forfeited (131,956) 116.72 Nonvested at fiscal year end 2022 1,420,606 $ 123.25 |
Summary of performance share award activity | Weighted-Average Grant-Date Shares Fair Value Outstanding at fiscal year end 2021 526,071 $ 88.99 Granted 139,037 157.56 Vested (160,673) 72.85 Forfeited (35,002) 78.18 Outstanding at fiscal year end 2022 469,433 $ 114.88 |
Summary of share option award activity. | Weighted-Average Weighted-Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term Value (in years) (in millions) Outstanding at fiscal year end 2021 5,348,944 $ 88.00 Granted 873,300 157.02 Exercised (683,871) 74.32 Forfeited (187,019) 111.14 Outstanding at fiscal year end 2022 5,351,354 $ 100.21 6.6 $ 94 Vested and expected to vest at fiscal year end 2022 5,227,306 $ 99.60 6.6 $ 93 Exercisable at fiscal year end 2022 2,704,322 $ 84.86 5.4 $ 69 |
Weighted-average assumptions | Fiscal 2022 2021 2020 Weighted-average grant-date fair value $ 37.51 $ 22.21 $ 15.49 Assumptions: Expected share price volatility 29 % 28 % 21 % Risk-free interest rate 1.2 % 0.5 % 1.7 % Expected annual dividend per share $ 2.00 $ 1.92 $ 1.84 Expected life of options (in years) 5.1 5.4 5.1 |
Segment and Geographic Data (Ta
Segment and Geographic Data (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Segment and Geographic Data | |
Schedule of net sales by segment | Net sales by segment and industry end market (1) Fiscal 2022 2021 2020 (in millions) Transportation Solutions: Automotive $ 6,527 $ 6,379 $ 4,903 Commercial transportation 1,582 1,467 1,051 Sensors 1,110 1,128 891 Total Transportation Solutions 9,219 8,974 6,845 Industrial Solutions: Industrial equipment 1,934 1,397 1,098 Aerospace, defense, and marine 1,087 1,035 1,201 Energy 804 738 717 Medical 695 674 697 Total Industrial Solutions 4,520 3,844 3,713 Communications Solutions: Data and devices 1,576 1,198 973 Appliances 966 907 641 Total Communications Solutions 2,542 2,105 1,614 Total $ 16,281 $ 14,923 $ 12,172 (1) 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: Fiscal 2022 2021 2020 (in millions) Asia–Pacific: Transportation Solutions $ 3,537 $ 3,466 $ 2,662 Industrial Solutions 843 703 604 Communications Solutions 1,391 1,205 980 Total Asia–Pacific 5,771 5,374 4,246 Europe/Middle East/Africa (“EMEA”): Transportation Solutions 3,490 3,570 2,625 Industrial Solutions 1,871 1,586 1,359 Communications Solutions 346 315 236 Total EMEA 5,707 5,471 4,220 Americas: Transportation Solutions 2,192 1,938 1,558 Industrial Solutions 1,806 1,555 1,750 Communications Solutions 805 585 398 Total Americas 4,803 4,078 3,706 Total $ 16,281 $ 14,923 $ 12,172 |
Schedule of operating income by segment | Fiscal 2022 2021 2020 (in millions) Transportation Solutions $ 1,534 $ 1,526 $ (93) Industrial Solutions 620 469 412 Communications Solutions 602 439 218 Total $ 2,756 $ 2,434 $ 537 |
Depreciation and amortization and capital expenditures by segment | Depreciation and Amortization Capital Expenditures Fiscal Fiscal 2022 2021 2020 2022 2021 2020 (in millions) Transportation Solutions $ 505 $ 512 $ 463 $ 483 $ 487 $ 365 Industrial Solutions 194 189 184 153 121 139 Communications Solutions 86 68 64 132 82 56 Total $ 785 $ 769 $ 711 $ 768 $ 690 $ 560 |
Segment assets and a reconciliation of segment assets to total assets | Segment Assets Fiscal Year End 2022 2021 2020 (in millions) Transportation Solutions $ 5,530 $ 5,791 $ 4,973 Industrial Solutions 2,442 2,275 2,117 Communications Solutions 1,136 1,151 887 Total segment assets (1) 9,108 9,217 7,977 Other current assets 1,727 1,824 1,457 Other non-current assets 9,947 10,421 9,808 Total assets $ 20,782 $ 21,462 $ 19,242 (1) Segment assets are composed of accounts receivable, inventories, and net property, plant, and equipment. |
Net sales by segment and geographic region | Property, Plant, and Net Sales (1) Equipment, Net Fiscal Fiscal Year End 2022 2021 2020 2022 2021 2020 (in millions) Asia–Pacific: China $ 3,589 $ 3,297 $ 2,459 $ 779 $ 755 $ 659 Other Asia–Pacific 2,182 2,077 1,787 296 377 418 Total Asia–Pacific 5,771 5,374 4,246 1,075 1,132 1,077 EMEA: Switzerland 3,709 3,616 2,878 16 41 79 Germany 561 417 343 597 599 559 Other EMEA 1,437 1,438 999 821 937 871 Total EMEA 5,707 5,471 4,220 1,434 1,577 1,509 Americas: U.S. 4,280 3,615 3,348 947 960 963 Other Americas 523 463 358 111 109 101 Total Americas 4,803 4,078 3,706 1,058 1,069 1,064 Total $ 16,281 $ 14,923 $ 12,172 $ 3,567 $ 3,778 $ 3,650 (1) Net sales to external customers are attributed to individual countries based on the legal entity that records the sale. |
Basis of Presentation (Details)
Basis of Presentation (Details) | 12 Months Ended |
Sep. 30, 2022 segment | |
Basis of Presentation | |
Number of Reportable Segments | 3 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Other (Details) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 USD ($) item | Sep. 24, 2021 USD ($) | Sep. 25, 2020 USD ($) | |
Principles of Consolidation | |||
Percentage of voting shares that triggers consolidation, minimum | 50% | ||
Revenue Recognition | |||
Practical expedient with respect to financing components | true | ||
Optional exemption not to disclose aggregate amount of transaction prices associated with unsatisfied or partially satisfied performance obligations | true | ||
Goodwill and Other Intangible Assets | |||
Number of reporting units | 5 | ||
Research and Development | |||
Research and development expenditures | $ | $ 610 | $ 612 | $ 539 |
Leases | |||
Single lease component election | true | ||
Option to terminate lease | true | ||
Transportation Solutions | |||
Goodwill and Other Intangible Assets | |||
Number of reporting units | 2 | ||
Industrial Solutions | |||
Goodwill and Other Intangible Assets | |||
Number of reporting units | 2 | ||
Communications Solutions | |||
Goodwill and Other Intangible Assets | |||
Number of reporting units | 1 | ||
Minimum | |||
Goodwill and Other Intangible Assets | |||
Useful life of intangible assets with a determinable life | 1 year | ||
Maximum | |||
Goodwill and Other Intangible Assets | |||
Useful life of intangible assets with a determinable life | 50 years | ||
Land and improvements | Minimum | |||
Property, Plant, and Equipment, Net and Long-Lived Assets | |||
Estimated useful life | 10 years | ||
Land and improvements | Maximum | |||
Property, Plant, and Equipment, Net and Long-Lived Assets | |||
Estimated useful life | 20 years | ||
Buildings and improvements | Minimum | |||
Property, Plant, and Equipment, Net and Long-Lived Assets | |||
Estimated useful life | 5 years | ||
Buildings and improvements | Maximum | |||
Property, Plant, and Equipment, Net and Long-Lived Assets | |||
Estimated useful life | 40 years | ||
Machinery and equipment | Minimum | |||
Property, Plant, and Equipment, Net and Long-Lived Assets | |||
Estimated useful life | 1 year | ||
Machinery and equipment | Maximum | |||
Property, Plant, and Equipment, Net and Long-Lived Assets | |||
Estimated useful life | 15 years |
Restructuring and Other Charg_3
Restructuring and Other Charges, Net - Restructuring and Other Charges (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 24, 2021 | Sep. 25, 2020 | |
Restructuring and other charges, net | |||
Restructuring charges, net | $ 137 | $ 208 | $ 257 |
Impairment of held for sale businesses and loss on divestitures, net | 4 | 21 | |
Other charges, net | 4 | ||
Restructuring and other charges, net | 141 | 233 | 257 |
Operating expenses | |||
Restructuring and other charges, net | |||
Restructuring charges, net | 153 | 208 | 257 |
Restructuring charges, net | |||
Restructuring and other charges, net | |||
Restructuring charges, net | 137 | 208 | 257 |
Restructuring charges, net | Transportation Solutions | |||
Restructuring and other charges, net | |||
Restructuring charges, net | 80 | 135 | 113 |
Restructuring charges, net | Industrial Solutions | |||
Restructuring and other charges, net | |||
Restructuring charges, net | 34 | 50 | 102 |
Restructuring charges, net | Communications Solutions | |||
Restructuring and other charges, net | |||
Restructuring charges, net | 23 | $ 23 | $ 42 |
Cost of sales | |||
Restructuring and other charges, net | |||
Restructuring charges, net | $ 16 |
Restructuring and Other Charg_4
Restructuring and Other Charges, Net - Restructuring Reserve Activity (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 24, 2021 | Sep. 25, 2020 | |
Restructuring reserve | |||
Restructuring reserve at the beginning of the period | $ 304 | $ 285 | $ 264 |
Charges | $ 183 | $ 237 | $ 283 |
Restructuring, Incurred Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Restructuring and Asset Impairment Charges (Credits) and Disposal Group Not Discontinued Operation Gain (Loss) on Disposal | Restructuring and Asset Impairment Charges (Credits) and Disposal Group Not Discontinued Operation Gain (Loss) on Disposal | Restructuring and Asset Impairment Charges (Credits) and Disposal Group Not Discontinued Operation Gain (Loss) on Disposal |
Changes in Estimate | $ (30) | $ (29) | $ (26) |
Cash Payments | (160) | (175) | (206) |
Non-Cash Items | (37) | (13) | (37) |
Currency Translation and Other | (32) | (1) | 7 |
Restructuring reserve at the end of the period | 228 | 304 | 285 |
Fiscal 2022 Actions | |||
Restructuring reserve | |||
Charges | 161 | ||
Cash Payments | (16) | ||
Non-Cash Items | (33) | ||
Currency Translation and Other | (3) | ||
Restructuring reserve at the end of the period | 109 | ||
Fiscal 2022 Actions | Employee severance | |||
Restructuring reserve | |||
Charges | 126 | ||
Cash Payments | (15) | ||
Currency Translation and Other | (3) | ||
Restructuring reserve at the end of the period | 108 | ||
Fiscal 2022 Actions | Facility and other exit costs | |||
Restructuring reserve | |||
Charges | 2 | ||
Cash Payments | (1) | ||
Restructuring reserve at the end of the period | 1 | ||
Fiscal 2022 Actions | Property, plant, and equipment and other non-cash charges | |||
Restructuring reserve | |||
Charges | 33 | ||
Non-Cash Items | (33) | ||
Fiscal 2021 Actions | |||
Restructuring reserve | |||
Restructuring reserve at the beginning of the period | 154 | ||
Charges | 10 | 212 | |
Changes in Estimate | (8) | (17) | |
Cash Payments | (90) | (28) | |
Non-Cash Items | (3) | (9) | |
Currency Translation and Other | (14) | (4) | |
Restructuring reserve at the end of the period | 49 | 154 | |
Fiscal 2021 Actions | Employee severance | |||
Restructuring reserve | |||
Restructuring reserve at the beginning of the period | 152 | ||
Charges | 2 | 199 | |
Changes in Estimate | (8) | (17) | |
Cash Payments | (83) | (26) | |
Currency Translation and Other | (14) | (4) | |
Restructuring reserve at the end of the period | 49 | 152 | |
Fiscal 2021 Actions | Facility and other exit costs | |||
Restructuring reserve | |||
Restructuring reserve at the beginning of the period | 2 | ||
Charges | 5 | 4 | |
Cash Payments | (7) | (2) | |
Restructuring reserve at the end of the period | 2 | ||
Fiscal 2021 Actions | Property, plant, and equipment | |||
Restructuring reserve | |||
Charges | 3 | 9 | |
Non-Cash Items | (3) | (9) | |
Fiscal 2020 Actions | |||
Restructuring reserve | |||
Restructuring reserve at the beginning of the period | 119 | 188 | |
Charges | 4 | 23 | 250 |
Changes in Estimate | (22) | ||
Cash Payments | (32) | (88) | (35) |
Non-Cash Items | (1) | (7) | (28) |
Currency Translation and Other | (12) | 3 | 1 |
Restructuring reserve at the end of the period | 56 | 119 | 188 |
Fiscal 2020 Actions | Employee severance | |||
Restructuring reserve | |||
Restructuring reserve at the beginning of the period | 104 | 180 | |
Charges | 5 | 214 | |
Changes in Estimate | (17) | ||
Cash Payments | (27) | (84) | (35) |
Currency Translation and Other | (11) | 3 | 1 |
Restructuring reserve at the end of the period | 49 | 104 | 180 |
Fiscal 2020 Actions | Facility and other exit costs | |||
Restructuring reserve | |||
Restructuring reserve at the beginning of the period | 15 | 8 | |
Charges | 11 | 8 | |
Changes in Estimate | (2) | ||
Cash Payments | (5) | (4) | |
Currency Translation and Other | (1) | ||
Restructuring reserve at the end of the period | 7 | 15 | 8 |
Fiscal 2020 Actions | Property, plant, and equipment | |||
Restructuring reserve | |||
Charges | 4 | 7 | 28 |
Changes in Estimate | (3) | ||
Non-Cash Items | (1) | (7) | (28) |
Pre-Fiscal 2020 Actions | |||
Restructuring reserve | |||
Restructuring reserve at the beginning of the period | 31 | 97 | 264 |
Charges | 8 | 2 | 33 |
Changes in Estimate | (12) | (26) | |
Cash Payments | (22) | (59) | (171) |
Non-Cash Items | 3 | (9) | |
Currency Translation and Other | (3) | 6 | |
Restructuring reserve at the end of the period | 14 | 31 | 97 |
Pre-Fiscal 2020 Actions | Employee severance | |||
Restructuring reserve | |||
Restructuring reserve at the beginning of the period | 31 | 93 | 261 |
Charges | 7 | ||
Changes in Estimate | (9) | (26) | |
Cash Payments | (14) | (53) | (153) |
Currency Translation and Other | (3) | 4 | |
Restructuring reserve at the end of the period | 14 | 31 | 93 |
Pre-Fiscal 2020 Actions | Facility and other exit costs | |||
Restructuring reserve | |||
Restructuring reserve at the beginning of the period | 4 | 3 | |
Charges | 8 | 2 | 17 |
Cash Payments | $ (8) | (6) | (18) |
Currency Translation and Other | 2 | ||
Restructuring reserve at the end of the period | 4 | ||
Pre-Fiscal 2020 Actions | Property, plant, and equipment | |||
Restructuring reserve | |||
Charges | 9 | ||
Changes in Estimate | (3) | ||
Non-Cash Items | $ 3 | $ (9) |
Restructuring and Other Charg_5
Restructuring and Other Charges, Net - Actions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 24, 2021 | Sep. 25, 2020 | |
Restructuring Charges | |||
Charges Incurred | $ 137 | $ 208 | $ 257 |
Fiscal 2022 Actions | |||
Restructuring Charges | |||
Total Expected Charges | 185 | ||
Cumulative Charges Incurred | 161 | ||
Remaining Expected Charges | 24 | ||
Charges Incurred | 161 | ||
Fiscal 2022 Actions | Transportation Solutions | |||
Restructuring Charges | |||
Total Expected Charges | 99 | ||
Cumulative Charges Incurred | 88 | ||
Remaining Expected Charges | 11 | ||
Fiscal 2022 Actions | Industrial Solutions | |||
Restructuring Charges | |||
Total Expected Charges | 56 | ||
Cumulative Charges Incurred | 52 | ||
Remaining Expected Charges | 4 | ||
Fiscal 2022 Actions | Communications Solutions | |||
Restructuring Charges | |||
Total Expected Charges | 30 | ||
Cumulative Charges Incurred | 21 | ||
Remaining Expected Charges | 9 | ||
Fiscal 2021 Actions | |||
Restructuring Charges | |||
Cumulative Charges Incurred | 197 | ||
Charges Incurred | 2 | 195 | |
Fiscal 2021 Actions | Transportation Solutions | |||
Restructuring Charges | |||
Cumulative Charges Incurred | 124 | ||
Fiscal 2021 Actions | Industrial Solutions | |||
Restructuring Charges | |||
Cumulative Charges Incurred | 49 | ||
Fiscal 2021 Actions | Communications Solutions | |||
Restructuring Charges | |||
Cumulative Charges Incurred | 24 | ||
Fiscal 2020 Actions | |||
Restructuring Charges | |||
Charges Incurred | (18) | 23 | 250 |
Pre-Fiscal 2020 Actions | |||
Restructuring Charges | |||
Charges Incurred | $ 8 | $ (10) | $ 7 |
Restructuring and Other Charg_6
Restructuring and Other Charges, Net - Restructuring Reserve Balances (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Sep. 24, 2021 | Sep. 25, 2020 | Sep. 27, 2019 |
Restructuring reserves included on the Consolidated Balance Sheets | ||||
Accrued and other current liabilities | $ 182 | $ 236 | ||
Other liabilities | 46 | 68 | ||
Restructuring reserves | $ 228 | $ 304 | $ 285 | $ 264 |
Acquisitions - Assets Acquired
Acquisitions - Assets Acquired (Details) € / shares in Units, € in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Sep. 24, 2021 item | Sep. 30, 2022 USD ($) item | Sep. 30, 2022 € / shares | Sep. 24, 2021 USD ($) item | Sep. 25, 2020 USD ($) item | Jul. 31, 2020 USD ($) | Jul. 31, 2020 EUR (€) | |
Acquisitions | |||||||
Net cash paid | $ 220 | $ 423 | $ 339 | ||||
2022 Acquisitions | |||||||
Acquisitions | |||||||
Number of Businesses Acquired | item | 3 | ||||||
Net cash paid | $ 245 | ||||||
2021 Acquisitions | |||||||
Acquisitions | |||||||
Number of Businesses Acquired | item | 2 | 4 | |||||
Net cash paid | $ 422 | ||||||
Customary net working capital settlement amount | $ 25 | ||||||
2020 Acquisitions | |||||||
Acquisitions | |||||||
Number of Businesses Acquired | item | 5 | ||||||
Net cash paid | $ 336 | ||||||
Domination And Profit And Loss Transfer Agreement ("DPLTA") | First Sensor AG | |||||||
Acquisitions | |||||||
Percentage of voting interest acquired | 72% | 72% | |||||
Fair value of noncontrolling interest | $ 107 | € 96 | |||||
First Sensor minority shareholders recurring annual compensation (in euro per share) | € / shares | € 0.56 | ||||||
First Sensor minority shareholders exchange compensation amount (in euro per share) | € / shares | € 33.27 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Sep. 24, 2021 |
Inventories | ||
Raw materials | $ 390 | $ 320 |
Work in progress | 1,066 | 991 |
Finished goods | 1,220 | 1,200 |
Inventories | $ 2,676 | $ 2,511 |
Property, Plant, and Equipmen_3
Property, Plant, and Equipment, Net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 24, 2021 | Sep. 25, 2020 | |
Net property, plant, and equipment | |||
Property, plant, and equipment, gross | $ 9,773 | $ 10,519 | |
Accumulated depreciation | (6,206) | (6,741) | |
Property, plant, and equipment, net | 3,567 | 3,778 | $ 3,650 |
Depreciation expense | 593 | 576 | $ 529 |
Land and improvements | |||
Net property, plant, and equipment | |||
Property, plant, and equipment, gross | 106 | 128 | |
Buildings and improvements | |||
Net property, plant, and equipment | |||
Property, plant, and equipment, gross | 1,331 | 1,469 | |
Machinery and equipment | |||
Net property, plant, and equipment | |||
Property, plant, and equipment, gross | 7,727 | 8,308 | |
Construction in process | |||
Net property, plant, and equipment | |||
Property, plant, and equipment, gross | $ 609 | $ 614 |
Goodwill (Details)
Goodwill (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Sep. 30, 2022 USD ($) | Sep. 24, 2021 USD ($) item | Sep. 25, 2020 USD ($) | Mar. 27, 2020 USD ($) | Sep. 30, 2022 USD ($) | Sep. 24, 2021 USD ($) | Sep. 25, 2020 USD ($) | |
Goodwill: | |||||||
Goodwill, beginning balance | $ 5,590 | $ 5,224 | |||||
Impairment of goodwill | $ 0 | $ 0 | $ (900) | ||||
Acquisitions | 141 | 307 | |||||
Purchase price adjustments | (91) | ||||||
Currency translation and other | (382) | 59 | |||||
Goodwill, ending balance | 5,258 | $ 5,590 | 5,224 | 5,258 | 5,590 | 5,224 | |
Transportation Solutions | |||||||
Goodwill: | |||||||
Goodwill, beginning balance | 1,549 | 1,527 | |||||
Currency translation and other | (110) | 22 | |||||
Goodwill, ending balance | 1,439 | 1,549 | 1,527 | 1,439 | 1,549 | 1,527 | |
Accumulated impairment losses | 3,091 | 3,091 | 3,091 | 3,091 | 3,091 | 3,091 | |
Transportation Solutions | Sensors | |||||||
Goodwill: | |||||||
Impairment of goodwill | $ (900) | ||||||
Fair value of reporting unit | 1,000 | ||||||
Amount of carrying amount of reporting unit in excess of fair value | $ 900 | ||||||
Industrial Solutions | |||||||
Goodwill: | |||||||
Goodwill, beginning balance | 3,446 | 3,110 | |||||
Acquisitions | 307 | ||||||
Purchase price adjustments | (91) | ||||||
Currency translation and other | (228) | 29 | |||||
Goodwill, ending balance | 3,127 | 3,446 | 3,110 | 3,127 | 3,446 | 3,110 | |
Accumulated impairment losses | 669 | $ 669 | 669 | 669 | 669 | 669 | |
Number of businesses acquired | item | 2 | ||||||
Communications Solutions | |||||||
Goodwill: | |||||||
Goodwill, beginning balance | 595 | 587 | |||||
Acquisitions | 141 | ||||||
Currency translation and other | (44) | 8 | |||||
Goodwill, ending balance | 692 | $ 595 | 587 | 692 | 595 | 587 | |
Accumulated impairment losses | $ 489 | $ 489 | $ 489 | $ 489 | $ 489 | $ 489 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 24, 2021 | Sep. 25, 2020 | |
Finite-Lived Intangible Assets | |||
Gross Carrying Amount | $ 2,832 | $ 3,047 | |
Accumulated Amortization | (1,544) | (1,498) | |
Net Carrying Amount | 1,288 | 1,549 | |
Finite-lived intangible assets, amortization expense | 192 | 193 | $ 182 |
Aggregate amortization expense on intangible assets | |||
Fiscal 2023 | 185 | ||
Fiscal 2024 | 156 | ||
Fiscal 2025 | 141 | ||
Fiscal 2026 | 135 | ||
Fiscal 2027 | 117 | ||
Thereafter | 554 | ||
Net Carrying Amount | 1,288 | 1,549 | |
Customer relationships | |||
Finite-Lived Intangible Assets | |||
Gross Carrying Amount | 1,642 | 1,766 | |
Accumulated Amortization | (687) | (660) | |
Net Carrying Amount | 955 | 1,106 | |
Aggregate amortization expense on intangible assets | |||
Net Carrying Amount | 955 | 1,106 | |
Intellectual property | |||
Finite-Lived Intangible Assets | |||
Gross Carrying Amount | 1,174 | 1,262 | |
Accumulated Amortization | (852) | (832) | |
Net Carrying Amount | 322 | 430 | |
Aggregate amortization expense on intangible assets | |||
Net Carrying Amount | 322 | 430 | |
Other | |||
Finite-Lived Intangible Assets | |||
Gross Carrying Amount | 16 | 19 | |
Accumulated Amortization | (5) | (6) | |
Net Carrying Amount | 11 | 13 | |
Aggregate amortization expense on intangible assets | |||
Net Carrying Amount | $ 11 | $ 13 |
Accrued and Other Current Lia_3
Accrued and Other Current Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Sep. 24, 2021 |
Accrued and Other Current Liabilities | ||
Accrued payroll and employee benefits | $ 535 | $ 690 |
Dividends payable to shareholders | 356 | 327 |
Restructuring reserves | 182 | 236 |
Income taxes payable | 162 | 146 |
Lease liability | 126 | 118 |
Share repurchase program payable | 70 | 73 |
Deferred revenue | 63 | 51 |
Interest payable | 28 | 28 |
Other | 603 | 573 |
Accrued and other current liabilities | $ 2,125 | $ 2,242 |
Debt - Summary (Details)
Debt - Summary (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Sep. 24, 2021 |
Debt | ||
Principal debt | $ 4,244 | $ 4,119 |
Other Debt | 83 | 110 |
Unamortized discounts, premiums, and debt issuance costs, net | (38) | (29) |
Effects of fair value hedge-designated interest rate swaps | 2 | |
Total debt | 4,206 | 4,092 |
Commercial paper | ||
Debt | ||
Commercial paper | $ 370 | |
Weighted-average interest rate (as a percent) | 3.45% | |
3.50% senior notes due 2022 | ||
Debt | ||
Principal debt | $ 500 | |
Debt instrument, interest rate (as a percent) | 3.50% | |
1.10% euro-denominated senior notes due 2023 | ||
Debt | ||
Principal debt | $ 538 | $ 644 |
Debt instrument, interest rate (as a percent) | 1.10% | 1.10% |
3.45% senior notes due 2024 | ||
Debt | ||
Principal debt | $ 350 | $ 350 |
Debt instrument, interest rate (as a percent) | 3.45% | 3.45% |
0.00% euro-denominated senior notes due 2025 | ||
Debt | ||
Principal debt | $ 538 | $ 644 |
Debt instrument, interest rate (as a percent) | 0% | 0% |
3.70% senior notes due 2026 | ||
Debt | ||
Principal debt | $ 350 | $ 350 |
Debt instrument, interest rate (as a percent) | 3.70% | 3.70% |
3.125% senior notes due 2027 | ||
Debt | ||
Principal debt | $ 400 | $ 400 |
Debt instrument, interest rate (as a percent) | 3.125% | 3.125% |
0.00% euro-denominated senior notes due 2029 | ||
Debt | ||
Principal debt | $ 538 | $ 644 |
Debt instrument, interest rate (as a percent) | 0% | 0% |
2.50% senior notes due 2032 | ||
Debt | ||
Principal debt | $ 600 | |
Debt instrument, interest rate (as a percent) | 2.50% | |
Debt instrument principal amount | $ 600 | |
7.125% senior notes due 2037 | ||
Debt | ||
Principal debt | $ 477 | $ 477 |
Debt instrument, interest rate (as a percent) | 7.125% | 7.125% |
Debt - Narrative (Details)
Debt - Narrative (Details) $ in Millions | 12 Months Ended | |
Sep. 30, 2022 USD ($) item | Sep. 24, 2021 USD ($) | |
Debt | ||
Fair value of debt | $ 3,990 | $ 4,465 |
2.50% senior notes due 2032 | ||
Debt | ||
Debt instrument principal amount | $ 600 | |
Debt instrument, interest rate (as a percent) | 2.50% | |
Five-Year Credit Facility | ||
Debt | ||
Revolving credit facility term | 5 years | |
Maximum borrowing capacity | $ 1,500 | |
Incremental borrowing capacity | 500 | |
Borrowings under the Credit Facility | $ 0 | $ 0 |
Number of consecutive fiscal quarters | item | 4 | |
Consolidated Total Debt to Consolidated EBITDA ratio, Maximum (as a percent) | 375% | |
Five-Year Credit Facility | Minimum | ||
Debt | ||
Annual facility fee, basis points (as a percent) | 0.05% | |
Five-Year Credit Facility | Maximum | ||
Debt | ||
Annual facility fee, basis points (as a percent) | 0.125% | |
Five-Year Credit Facility | Term SOFR | ||
Debt | ||
Debt instrument description of variable rate basis | Term SOFR, plus margin based on debt rating | |
Five-Year Credit Facility | Bank of America Base Rate | ||
Debt | ||
Debt instrument description of variable rate basis | Bank of America base rate plus margin based on debt rating | |
Five-Year Credit Facility | Federal funds effective rate | ||
Debt | ||
Debt instrument description of variable rate basis | federal funds effective rate plus margin based on debt rating | |
Debt instrument basis spread on variable rate (as a percent) | 0.50% | |
Five-Year Credit Facility | One-Month Term SOFR | ||
Debt | ||
Debt instrument description of variable rate basis | Term SOFR for a one-month interest period, plus margin based on debt rating | |
Debt instrument basis spread on variable rate (as a percent) | 1% | |
Five-Year Credit Facility | Alternative currency daily rate | ||
Debt | ||
Debt instrument description of variable rate basis | Alternative currency daily rate plus margin based on debt rating | |
Five-Year Credit Facility | Alternative currency term rate | ||
Debt | ||
Debt instrument description of variable rate basis | Alternative currency term rate plus margin based on debt rating | |
Commercial paper | ||
Debt | ||
Weighted-average interest rate (as a percent) | 3.45% |
Debt - Principal Payments Sched
Debt - Principal Payments Schedule (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Sep. 24, 2021 |
Aggregate amounts of principal payments maturing during the next five years and thereafter | ||
Fiscal 2023 | $ 914 | |
Fiscal 2024 | 352 | |
Fiscal 2025 | 540 | |
Fiscal 2026 | 351 | |
Fiscal 2027 | 401 | |
Thereafter | 1,686 | |
Total principal payments | $ 4,244 | $ 4,119 |
Leases - Components of Lease Co
Leases - Components of Lease Cost (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 24, 2021 | Sep. 25, 2020 | |
Leases | |||
Operating lease cost | $ 131 | $ 120 | $ 108 |
Variable lease cost | 52 | 49 | 49 |
Total lease cost | $ 183 | $ 169 | $ 157 |
Leases - Balance Sheet Informat
Leases - Balance Sheet Information (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Sep. 24, 2021 |
Leases | ||
Operating lease ROU assets | $ 424 | $ 444 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other Assets, Noncurrent | Other Assets, Noncurrent |
Operating lease liabilities, current | $ 126 | $ 118 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other Liabilities, Current | Other Liabilities, Current |
Operating lease liabilities, non-current | $ 308 | $ 334 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other Liabilities, Noncurrent | Other Liabilities, Noncurrent |
Total operating lease liabilities | $ 434 | $ 452 |
Weighted-average remaining lease term (in years) - Operating leases | 5 years 3 months 18 days | 5 years 2 months 12 days |
Weighted-average discount rate (as a percent) - Operating leases | 2% | 1.20% |
Leases - Cash Flow Information
Leases - Cash Flow Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 24, 2021 | Sep. 25, 2020 | |
Leases | |||
Payments for operating leases | $ 122 | $ 123 | $ 108 |
Right-of-use assets, including modifications of existing leases, obtained in exchange for operating lease liabilities | $ 135 | $ 123 | $ 28 |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Sep. 24, 2021 |
Operating Leases | ||
Fiscal 2023 | $ 126 | |
Fiscal 2024 | 104 | |
Fiscal 2025 | 81 | |
Fiscal 2026 | 52 | |
Fiscal 2027 | 29 | |
Thereafter | 68 | |
Total lease payments | 460 | |
Less: interest | (26) | |
Present value of lease liabilities | $ 434 | $ 452 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Loss Contingencies | |
Accrual environmental loss contingency, estimate of probable loss | $ 20 |
Environmental Loss Contingency, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Current, Other Liabilities, Noncurrent |
Minimum | |
Loss Contingencies | |
Accrual environmental loss contingency, estimate of probable loss | $ 17 |
Maximum | |
Loss Contingencies | |
Accrual environmental loss contingency, estimate of probable loss | 44 |
Outstanding letters of credit, letters of guarantee and surety bonds | |
Guarantees | |
Guarantor obligations, maximum exposure | 127 |
Discontinued Operations, Disposed of by Sale | Subsea Communications | |
Guarantees | |
Guarantor obligations, maximum exposure | $ 115 |
Financial Instruments and Fai_3
Financial Instruments and Fair Value Measurements (Details) € in Millions, $ in Millions | 12 Months Ended | ||||||
Sep. 30, 2022 USD ($) | Sep. 24, 2021 USD ($) | Sep. 25, 2020 USD ($) | Sep. 30, 2022 EUR (€) | Sep. 30, 2022 USD ($) | Sep. 24, 2021 EUR (€) | Sep. 24, 2021 USD ($) | |
Cash flow hedges | Foreign currency contracts | |||||||
Financial Instruments and Fair Value Measurements | |||||||
Period over which all of the balance in accumulated other comprehensive income (loss) will be reclassified into the Consolidated Statement of Operations | 12 months | ||||||
Cash flow hedges | Cross-currency swap contracts | |||||||
Financial Instruments and Fair Value Measurements | |||||||
Notional amount | € | € 0 | € 700 | |||||
Interest paid in foreign currency, fixed interest rate | 3.50% | 3.50% | |||||
Interest received in U.S. dollars, weighted-average fixed interest rate | 5.26% | 5.26% | |||||
Gains (losses) recorded in other comprehensive income (loss) | $ (7) | $ (6) | $ 28 | ||||
Gains (losses) reclassified from accumulated other comprehensive income (loss) into cost of sales | 2 | ||||||
Gains (losses) excluded from the hedging relationship | $ 70 | $ (6) | $ (48) | ||||
Derivative, Excluded Component, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Selling, General and Administrative Expense | Selling, General and Administrative Expense | Selling, General and Administrative Expense | ||||
Cash flow hedges | Cross-currency swap contracts | Other liabilities | |||||||
Financial Instruments and Fair Value Measurements | |||||||
Fair Value of Liability Positions | $ 20 | ||||||
Cash flow hedges | Forward starting interest rate swaps | |||||||
Financial Instruments and Fair Value Measurements | |||||||
Notional amount | $ 0 | 450 | |||||
Gains (losses) recorded in other comprehensive income (loss) | $ 13 | $ 33 | $ (30) | ||||
Debt instrument, interest rate (as a percent) | 2.50% | 2.50% | |||||
Cash flow hedges | Forward starting interest rate swaps | Prepaid expenses and other current assets | |||||||
Financial Instruments and Fair Value Measurements | |||||||
Fair Value of Asset Positions | 7 | ||||||
Cash flow hedges | Forward starting interest rate swaps | Accrued and other current liabilities | |||||||
Financial Instruments and Fair Value Measurements | |||||||
Fair Value of Liability Positions | 38 | ||||||
Cash flow hedges | Commodity swap contracts | |||||||
Financial Instruments and Fair Value Measurements | |||||||
Period over which all of the balance in accumulated other comprehensive income (loss) will be reclassified into the Consolidated Statement of Operations | 12 months | ||||||
Notional amount | $ 566 | 512 | |||||
Gains (losses) recorded in other comprehensive income (loss) | $ (86) | 58 | 60 | ||||
Gains (losses) reclassified from accumulated other comprehensive income (loss) into cost of sales | 22 | 92 | 11 | ||||
Cash flow hedges | Commodity swap contracts | Prepaid expenses and other current assets | |||||||
Financial Instruments and Fair Value Measurements | |||||||
Fair Value of Asset Positions | 2 | 23 | |||||
Cash flow hedges | Commodity swap contracts | Accrued and other current liabilities | |||||||
Financial Instruments and Fair Value Measurements | |||||||
Fair Value of Liability Positions | 77 | 18 | |||||
Cash flow hedges | Commodity swap contracts | Other liabilities | |||||||
Financial Instruments and Fair Value Measurements | |||||||
Fair Value of Liability Positions | 7 | 4 | |||||
Net investment hedges | Intercompany loans and external borrowings | |||||||
Financial Instruments and Fair Value Measurements | |||||||
Notional amount of non-derivative instruments | 1,658 | 3,798 | |||||
Foreign currency exchange gains (losses) on intercompany loans and external borrowings | 516 | (12) | (172) | ||||
Net investment hedges | Cross-currency swap contracts | |||||||
Financial Instruments and Fair Value Measurements | |||||||
Notional amount | $ 1,873 | 1,430 | |||||
Interest paid in foreign currency, fixed interest rate | 0% | 0% | |||||
Interest received in U.S. dollars, weighted-average fixed interest rate | 1.57% | 1.57% | |||||
Gains (losses) on cross-currency swap contracts designated as hedges of net investment | $ 265 | $ (22) | $ (69) | ||||
Net investment hedges | Cross-currency swap contracts | Prepaid expenses and other current assets | |||||||
Financial Instruments and Fair Value Measurements | |||||||
Fair Value of Asset Positions | $ 55 | 3 | |||||
Net investment hedges | Cross-currency swap contracts | Other assets | |||||||
Financial Instruments and Fair Value Measurements | |||||||
Fair Value of Asset Positions | $ 172 | 18 | |||||
Net investment hedges | Cross-currency swap contracts | Accrued and other current liabilities | |||||||
Financial Instruments and Fair Value Measurements | |||||||
Fair Value of Liability Positions | 13 | ||||||
Net investment hedges | Cross-currency swap contracts | Other liabilities | |||||||
Financial Instruments and Fair Value Measurements | |||||||
Fair Value of Liability Positions | $ 18 |
Retirement Plans - Defined Bene
Retirement Plans - Defined Benefit Pension Plan Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 24, 2021 | Sep. 25, 2020 | |
Other (income) expense: | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Interest Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Expected Return (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Amortization of Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Amortization of Prior Service Cost (Credit), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Settlement and Curtailment Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Non-U.S. Plans | |||
Operating expense: | |||
Service cost | $ 38 | $ 48 | $ 52 |
Other (income) expense: | |||
Interest cost | 32 | 30 | 25 |
Expected return on plan assets | (55) | (57) | (61) |
Amortization of net actuarial loss | 24 | 32 | 41 |
Amortization of prior service credit and other | (5) | (6) | (6) |
Settlements and curtailment loss (gain) | (3) | (2) | |
Net periodic pension benefit cost (credit) | $ 31 | $ 45 | $ 51 |
Weighted average assumptions used to determine net postretirement benefit cost (credit) during the fiscal year: | |||
Discount rate (as a percent) | 1.37% | 1.13% | 1.01% |
Expected return on plan assets (as a percent) | 3.77% | 3.65% | 4.07% |
Rate of compensation increase (as a percent) | 2.53% | 2.50% | 2.53% |
U.S. Plans | |||
Operating expense: | |||
Service cost | $ 8 | $ 12 | $ 10 |
Other (income) expense: | |||
Interest cost | 26 | 30 | 36 |
Expected return on plan assets | (47) | (52) | (59) |
Amortization of net actuarial loss | 3 | 9 | 9 |
Settlements and curtailment loss (gain) | 28 | ||
Net periodic pension benefit cost (credit) | $ (10) | $ 27 | $ (4) |
Weighted average assumptions used to determine net postretirement benefit cost (credit) during the fiscal year: | |||
Discount rate (as a percent) | 2.84% | 2.57% | 3.14% |
Expected return on plan assets (as a percent) | 5.90% | 5.60% | 6.50% |
Retirement Plans - Change in Be
Retirement Plans - Change in Benefit Obligations and Plan Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 24, 2021 | Sep. 25, 2020 | |
Change in benefit obligation: | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Interest Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Amounts recognized on the Consolidated Balance Sheets: | |||
Other assets | $ 903 | $ 783 | |
Long-term pension and postretirement liabilities | (695) | (1,139) | |
Non-U.S. Plans | |||
Change in benefit obligation: | |||
Benefit obligation at beginning of fiscal year | 2,520 | 2,519 | |
Service cost | 38 | 48 | $ 52 |
Interest cost | 32 | 30 | 25 |
Actuarial (gains) losses | (660) | 6 | |
Benefits and administrative expenses paid | (82) | (85) | |
Settlements and Curtailments | (10) | (67) | |
Currency translation | (353) | 63 | |
Other | 17 | 6 | |
Benefit obligation at end of fiscal year | 1,502 | 2,520 | 2,519 |
Change in plan assets: | |||
Fair value of plan assets at beginning of fiscal year | 1,582 | 1,537 | |
Actual return on plan assets | (320) | 81 | |
Employer contributions | 40 | 43 | |
Benefits and administrative expenses paid | (82) | (85) | |
Settlements | (10) | (52) | |
Currency translation | (235) | 54 | |
Other | 14 | 4 | |
Fair value of plan assets at end of fiscal year | 989 | 1,582 | 1,537 |
Funded status | (513) | (938) | |
Amounts recognized on the Consolidated Balance Sheets: | |||
Other assets | 92 | 102 | |
Accrued and other current liabilities | (25) | (30) | |
Long-term pension and postretirement liabilities | (580) | (1,010) | |
Net amount recognized | (513) | (938) | |
Pre-tax amounts included in accumulated other comprehensive income (loss) which have not yet been recognized in net periodic benefit cost: | |||
Net actuarial loss | (176) | (547) | |
Prior service (cost) credit | 16 | 26 | |
Total | $ (160) | $ (521) | |
Weighted-average assumptions used to determine pension benefit obligation at fiscal year end: | |||
Discount rate (as a percent) | 3.80% | 1.37% | |
Rate of compensation increase (as a percent) | 2.62% | 2.53% | |
U.S. Plans | |||
Change in benefit obligation: | |||
Benefit obligation at beginning of fiscal year | $ 952 | $ 1,219 | |
Service cost | 8 | 12 | 10 |
Interest cost | 26 | 30 | 36 |
Actuarial (gains) losses | (204) | (46) | |
Benefits and administrative expenses paid | (65) | (80) | |
Settlements and Curtailments | (183) | ||
Benefit obligation at end of fiscal year | 717 | 952 | 1,219 |
Change in plan assets: | |||
Fair value of plan assets at beginning of fiscal year | 833 | 968 | |
Actual return on plan assets | (158) | 110 | |
Employer contributions | 2 | 18 | |
Benefits and administrative expenses paid | (65) | (80) | |
Settlements | (183) | ||
Fair value of plan assets at end of fiscal year | 612 | 833 | $ 968 |
Funded status | (105) | (119) | |
Amounts recognized on the Consolidated Balance Sheets: | |||
Accrued and other current liabilities | (4) | (4) | |
Long-term pension and postretirement liabilities | (101) | (115) | |
Net amount recognized | (105) | (119) | |
Pre-tax amounts included in accumulated other comprehensive income (loss) which have not yet been recognized in net periodic benefit cost: | |||
Net actuarial loss | (149) | (151) | |
Prior service (cost) credit | (1) | (1) | |
Total | $ (150) | $ (152) | |
Weighted-average assumptions used to determine pension benefit obligation at fiscal year end: | |||
Discount rate (as a percent) | 5.53% | 2.84% |
Retirement Plans - Pre-Tax in A
Retirement Plans - Pre-Tax in AOCI for Defined Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2022 | Sep. 24, 2021 | |
Defined Benefit Plan Disclosure | ||
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Settlement Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | |
Non-U.S. Plans | ||
Defined Benefit Plan Disclosure | ||
Current year net actuarial gain (loss) recorded in accumulated other comprehensive income (loss) | $ 350 | $ 16 |
Amortization of net actuarial loss | 21 | 34 |
Current year prior service cost recorded in accumulated other comprehensive income (loss) | (5) | (1) |
Amortization of prior service cost (credit) | (5) | (10) |
Total | 361 | 39 |
U.S. Plans | ||
Defined Benefit Plan Disclosure | ||
Current year net actuarial gain (loss) recorded in accumulated other comprehensive income (loss) | (1) | 103 |
Amortization of net actuarial loss | 3 | 37 |
Amortization of prior service cost (credit) | 1 | |
Total | $ 2 | 141 |
Pension plan liabilities transferred to insurance company | 190 | |
Pension plan assets transferred to fund purchase of group annuity contract | 180 | |
Settlement charge from transfer to insurance company | $ (28) |
Retirement Plans - Weighted Ave
Retirement Plans - Weighted Average Allocations (Details) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 24, 2021 | |
Non-U.S. Plans | ||
Target asset allocation | ||
Target weighted average asset allocations (as a percent) | 100% | |
Weighted average asset allocations | ||
Total weighted average asset allocations (as a percent) | 100% | 100% |
Non-U.S. Plans | Equity securities | ||
Target asset allocation | ||
Target weighted average asset allocations (as a percent) | 29% | |
Weighted average asset allocations | ||
Total weighted average asset allocations (as a percent) | 22% | 35% |
Non-U.S. Plans | Fixed income | ||
Target asset allocation | ||
Target weighted average asset allocations (as a percent) | 37% | |
Weighted average asset allocations | ||
Total weighted average asset allocations (as a percent) | 63% | 48% |
Non-U.S. Plans | Other | ||
Target asset allocation | ||
Target weighted average asset allocations (as a percent) | 34% | |
Weighted average asset allocations | ||
Total weighted average asset allocations (as a percent) | 15% | 17% |
U.S. Plans | ||
Target asset allocation | ||
Target asset allocation funded status minimum (as a percent) | 110% | |
Target weighted average asset allocations (as a percent) | 100% | |
Weighted average asset allocations | ||
Total weighted average asset allocations (as a percent) | 100% | 100% |
U.S. Plans | Equity securities | ||
Target asset allocation | ||
Target weighted average asset allocations (as a percent) | 67% | |
Weighted average asset allocations | ||
Total weighted average asset allocations (as a percent) | 48% | 51% |
U.S. Plans | Fixed income | ||
Target asset allocation | ||
Target weighted average asset allocations (as a percent) | 33% | |
Weighted average asset allocations | ||
Total weighted average asset allocations (as a percent) | 52% | 49% |
Long-term Target Asset Allocation | U.S. Plans | Equity securities | ||
Target asset allocation | ||
Target weighted average asset allocations (as a percent) | 25% | |
Long-term Target Asset Allocation | U.S. Plans | Fixed income | ||
Target asset allocation | ||
Target weighted average asset allocations (as a percent) | 75% |
Retirement Plans - Future Benef
Retirement Plans - Future Benefit Payments (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Non-U.S. Plans | |
Defined Benefit Plan Disclosure | |
Minimum required contributions to pension plans in fiscal 2023 | $ 39 |
Minimum required contributions and expected benefit payments | |
Expected benefit payments, fiscal 2023 | 78 |
Expected benefit payments, fiscal 2024 | 96 |
Expected benefit payments, fiscal 2025 | 75 |
Expected benefit payments, fiscal 2026 | 79 |
Expected benefit payments, fiscal 2027 | 82 |
Expected benefit payments, fiscal 2028-2032 | 475 |
U.S. Plans | |
Defined Benefit Plan Disclosure | |
Minimum required contributions to pension plans in fiscal 2023 | 4 |
Minimum required contributions and expected benefit payments | |
Expected benefit payments, fiscal 2023 | 63 |
Expected benefit payments, fiscal 2024 | 60 |
Expected benefit payments, fiscal 2025 | 60 |
Expected benefit payments, fiscal 2026 | 60 |
Expected benefit payments, fiscal 2027 | 59 |
Expected benefit payments, fiscal 2028-2032 | $ 281 |
Retirement Plans - Non U.S. and
Retirement Plans - Non U.S. and U.S. Pension Plans (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Sep. 24, 2021 |
Non-U.S. Plans | ||
Defined Benefit Plan Disclosure | ||
Accumulated benefit obligation | $ 1,434 | $ 2,410 |
Pension plans with accumulated benefit obligations in excess of plan assets: | ||
Accumulated benefit obligation | 598 | 1,027 |
Fair value of plan assets | 43 | 75 |
Pension plans with projected benefit obligations in excess of plan assets: | ||
Projected benefit obligation | 689 | 1,166 |
Fair value of plan assets | 84 | 128 |
U.S. Plans | ||
Defined Benefit Plan Disclosure | ||
Accumulated benefit obligation | 717 | 952 |
Pension plans with accumulated benefit obligations in excess of plan assets: | ||
Accumulated benefit obligation | 717 | 918 |
Fair value of plan assets | 612 | 798 |
Pension plans with projected benefit obligations in excess of plan assets: | ||
Projected benefit obligation | 717 | 918 |
Fair value of plan assets | $ 612 | $ 798 |
Retirement Plans - Defined Be_2
Retirement Plans - Defined Benefit Pension Plan Asset Categories and Fair Value Hierarchy (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Sep. 24, 2021 | Sep. 25, 2020 |
Non-U.S. Plans | |||
Summary of asset fair value | |||
Fair value of plan assets | $ 989 | $ 1,582 | $ 1,537 |
Non-U.S. Plans | Fair Value | |||
Summary of asset fair value | |||
Fair value of plan assets | 989 | 1,582 | |
Non-U.S. Plans | Subtotal | Level 2 | |||
Summary of asset fair value | |||
Fair value of plan assets | 840 | 1,505 | |
Non-U.S. Plans | Subtotal | Fair Value | |||
Summary of asset fair value | |||
Fair value of plan assets | 840 | 1,505 | |
Non-U.S. Plans | Commingled equity funds | Level 2 | |||
Summary of asset fair value | |||
Fair value of plan assets | 159 | 220 | |
Non-U.S. Plans | Commingled equity funds | Fair Value | |||
Summary of asset fair value | |||
Fair value of plan assets | 159 | 220 | |
Non-U.S. Plans | Government and Corporate Bonds | Level 2 | |||
Summary of asset fair value | |||
Fair value of plan assets | 6 | 6 | |
Non-U.S. Plans | Government and Corporate Bonds | Fair Value | |||
Summary of asset fair value | |||
Fair value of plan assets | 6 | 6 | |
Non-U.S. Plans | Commingled fixed income funds | Level 2 | |||
Summary of asset fair value | |||
Fair value of plan assets | 534 | 1,101 | |
Non-U.S. Plans | Commingled fixed income funds | Fair Value | |||
Summary of asset fair value | |||
Fair value of plan assets | 534 | 1,101 | |
Non-U.S. Plans | Other | Level 2 | |||
Summary of asset fair value | |||
Fair value of plan assets | 141 | 178 | |
Non-U.S. Plans | Other | Fair Value | |||
Summary of asset fair value | |||
Fair value of plan assets | 141 | 178 | |
Non-U.S. Plans | Items to reconcile to fair value of plan assets | Fair Value | |||
Summary of asset fair value | |||
Fair value of plan assets | 149 | 77 | |
U.S. Plans | |||
Summary of asset fair value | |||
Fair value of plan assets | 612 | 833 | $ 968 |
U.S. Plans | Fair Value | |||
Summary of asset fair value | |||
Fair value of plan assets | 612 | 833 | |
U.S. Plans | Subtotal | Level 2 | |||
Summary of asset fair value | |||
Fair value of plan assets | 481 | 695 | |
U.S. Plans | Subtotal | Fair Value | |||
Summary of asset fair value | |||
Fair value of plan assets | 481 | 695 | |
U.S. Plans | Commingled equity funds | Level 2 | |||
Summary of asset fair value | |||
Fair value of plan assets | 161 | 280 | |
U.S. Plans | Commingled equity funds | Fair Value | |||
Summary of asset fair value | |||
Fair value of plan assets | 161 | 280 | |
U.S. Plans | Commingled fixed income funds | Level 2 | |||
Summary of asset fair value | |||
Fair value of plan assets | 306 | 392 | |
U.S. Plans | Commingled fixed income funds | Fair Value | |||
Summary of asset fair value | |||
Fair value of plan assets | 306 | 392 | |
U.S. Plans | Other | Level 2 | |||
Summary of asset fair value | |||
Fair value of plan assets | 14 | 23 | |
U.S. Plans | Other | Fair Value | |||
Summary of asset fair value | |||
Fair value of plan assets | 14 | 23 | |
U.S. Plans | Items to reconcile to fair value of plan assets | Fair Value | |||
Summary of asset fair value | |||
Fair value of plan assets | $ 131 | $ 138 |
Retirement Plans - Defined Cont
Retirement Plans - Defined Contribution and Postretirement Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 24, 2021 | Sep. 25, 2020 | |
Defined Contribution Retirement Plans | |||
Expense for the defined contribution plans | $ 59 | $ 60 | $ 60 |
Deferred Compensation Plans | |||
Total deferred compensation liabilities | 206 | 263 | |
Postretirement Benefit Plans | |||
Change in benefit obligation: | |||
Benefit obligation | $ 13 | $ 16 |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expense (Benefit) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 24, 2021 | Sep. 25, 2020 | |
Current income tax expense (benefit): | |||
U.S: Federal | $ 20 | $ 3 | $ 9 |
U.S: State | (19) | 12 | (23) |
Non-U.S | 452 | 462 | 262 |
Current income tax expense (benefit) | 453 | 477 | 248 |
Deferred income tax expense (benefit): | |||
U.S: Federal | (90) | (24) | (16) |
U.S: State | (15) | (10) | |
Non-U.S | (57) | (315) | 561 |
Deferred income tax expense (benefit) | (147) | (354) | 535 |
Income tax expense | $ 306 | $ 123 | $ 783 |
Income Taxes - U.S. and Non U.S
Income Taxes - U.S. and Non U.S. Components (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 24, 2021 | Sep. 25, 2020 | |
U.S. and non-U.S. components of income from continuing operations before income taxes | |||
U.S | $ (4) | $ (336) | $ (1,053) |
Non-U.S | 2,737 | 2,714 | 1,577 |
Income from continuing operations before income taxes | $ 2,733 | $ 2,378 | $ 524 |
Income Taxes - Recon between U.
Income Taxes - Recon between U.S. Federal Taxes and Statutory Rate (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 24, 2021 | Sep. 25, 2020 | |
Reconciliation between U.S. federal income taxes at the statutory rate and income tax expense (benefit) on continuing operations | |||
Notional U.S. federal income tax expense at the statutory rate | $ 574 | $ 499 | $ 110 |
U.S. state income tax benefit, net | (15) | (2) | (26) |
Tax law changes | 21 | 12 | 349 |
Tax credits | (13) | (13) | (13) |
Non-U.S. net earnings | (105) | (71) | (88) |
Change in accrued income tax liabilities | (14) | 37 | 30 |
Valuation allowance | (37) | (353) | 231 |
Legal entity restructuring and intercompany transactions | (123) | 19 | |
Divestitures and goodwill impairment | 185 | ||
Excess tax benefits from share-based payments | (15) | (21) | (6) |
Other | 33 | 16 | 11 |
Income tax expense | $ 306 | $ 123 | $ 783 |
U.S. federal statutory rate | 21% | 21% | 21% |
Income Taxes - Tax Reconciliati
Income Taxes - Tax Reconciliation Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2022 | Sep. 25, 2020 | Sep. 30, 2022 | Sep. 24, 2021 | Sep. 25, 2020 | |
Significant components of the income tax provision (benefit) | |||||
Income tax expense (benefit) associated with intercompany transactions | $ (124) | $ 23 | |||
Income Tax Charges Associated With Income Tax Audit Of Pre Acquisition Period Of Acquired Entity | 12 | ||||
Other Income Associated With Indemnification Receivable | 11 | ||||
Income tax benefit resulting from lapses of statutes of limitation | 64 | ||||
Income tax benefit related to the release of a valuation allowance associated primarily with improved current and expected future operating profit and taxable income | 51 | ||||
Income tax expense related to the write-down of certain deferred tax assets to the lower corporate tax rate | 27 | ||||
Income tax (expense) benefit associated with (increase) reduction in valuation allowance | $ 37 | 353 | $ (231) | ||
Income tax benefit for the net reduction in VA primarily associated with certain tax planning actions and improved current and future operating profits | 327 | ||||
Income tax benefit related to Internal Revenue Service approved change in tax method of depreciation or amortization of certain assets. | $ 29 | ||||
Income tax expense related to tax impacts of Swiss Tax Reform | 355 | ||||
Income tax benefit related to pre-separation tax matters and termination of the tax sharing agreement | 31 | ||||
Income tax expense related to the increases to the valuation allowance for certain deferred tax assets | 226 | ||||
Impairment of goodwill | $ 0 | $ 0 | 900 | ||
Goodwill impairment tax benefit | $ 4 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Asset and Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Sep. 24, 2021 |
Deferred tax assets: | ||
Accrued liabilities and reserves | $ 317 | $ 313 |
Tax loss and credit carryforwards | 8,288 | 3,836 |
Inventories | 62 | 46 |
Intangible assets | 563 | 535 |
Pension and postretirement benefits | 71 | 177 |
Deferred revenue | 1 | 7 |
Interest | 406 | 310 |
Unrecognized income tax benefits | 1 | 4 |
Lease liabilities | 81 | 94 |
Other | 1 | 9 |
Gross deferred tax assets | 9,791 | 5,331 |
Valuation allowance | (7,112) | (2,729) |
Deferred tax assets, net of valuation allowance | 2,679 | 2,602 |
Deferred tax liabilities: | ||
Property, plant, and equipment | (101) | (97) |
Write-down of investments in subsidiaries | (125) | (2) |
Lease ROU assets | (79) | (92) |
Other | (120) | (93) |
Total deferred tax liabilities | (425) | (284) |
Net deferred tax assets | $ 2,254 | $ 2,318 |
Income Taxes - Tax Loss and Cre
Income Taxes - Tax Loss and Credit Carryforwards (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Sep. 24, 2021 |
Tax loss and credit carryforward | ||
Total tax loss and credit carryforwards | $ 8,288 | $ 3,836 |
U.S. Federal | ||
Tax loss and credit carryforward | ||
Net operating loss carryforwards | 511 | |
Tax credit carryforwards | 163 | |
U.S. State | ||
Tax loss and credit carryforward | ||
Net operating loss carryforwards | 75 | |
Tax credit carryforwards | 17 | |
Non-U.S. Jurisdictions | ||
Tax loss and credit carryforward | ||
Net operating loss carryforwards | 7,484 | |
Tax credit carryforwards | 1 | |
Capital loss carryforwards | 37 | |
Through Fiscal 2027 | ||
Tax loss and credit carryforward | ||
Total tax loss and credit carryforwards | 256 | |
Through Fiscal 2027 | U.S. Federal | ||
Tax loss and credit carryforward | ||
Net operating loss carryforwards | 30 | |
Tax credit carryforwards | 53 | |
Through Fiscal 2027 | U.S. State | ||
Tax loss and credit carryforward | ||
Net operating loss carryforwards | 52 | |
Tax credit carryforwards | 11 | |
Through Fiscal 2027 | Non-U.S. Jurisdictions | ||
Tax loss and credit carryforward | ||
Net operating loss carryforwards | 107 | |
Capital loss carryforwards | 3 | |
Fiscal 2028 Through Fiscal 2042 | ||
Tax loss and credit carryforward | ||
Total tax loss and credit carryforwards | 6,489 | |
Fiscal 2028 Through Fiscal 2042 | U.S. Federal | ||
Tax loss and credit carryforward | ||
Net operating loss carryforwards | 426 | |
Tax credit carryforwards | 110 | |
Fiscal 2028 Through Fiscal 2042 | U.S. State | ||
Tax loss and credit carryforward | ||
Net operating loss carryforwards | 19 | |
Fiscal 2028 Through Fiscal 2042 | Non-U.S. Jurisdictions | ||
Tax loss and credit carryforward | ||
Net operating loss carryforwards | 5,934 | |
No Expiration | ||
Tax loss and credit carryforward | ||
Total tax loss and credit carryforwards | 1,543 | |
No Expiration | U.S. Federal | ||
Tax loss and credit carryforward | ||
Net operating loss carryforwards | 55 | |
No Expiration | U.S. State | ||
Tax loss and credit carryforward | ||
Net operating loss carryforwards | 4 | |
Tax credit carryforwards | 6 | |
No Expiration | Non-U.S. Jurisdictions | ||
Tax loss and credit carryforward | ||
Net operating loss carryforwards | 1,443 | |
Tax credit carryforwards | 1 | |
Capital loss carryforwards | $ 34 |
Income Taxes - Valuation Allowa
Income Taxes - Valuation Allowance (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2022 | Sep. 24, 2021 | |
Valuation allowance | ||
Valuation allowance | $ 7,112 | $ 2,729 |
Increase in the valuation allowance | $ 4,464 |
Income Taxes - Undistributed Su
Income Taxes - Undistributed Subsidiary Earnings (Details) $ in Billions | Sep. 30, 2022 USD ($) |
Income Taxes | |
Cumulative undistributed earnings | $ 33.6 |
Cash, cash equivalents and intercompany deposits available to distribute but considered to be permanently reinvested | $ 7 |
Income Taxes - Unrecognized Inc
Income Taxes - Unrecognized Income Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 24, 2021 | Sep. 25, 2020 | |
Activity related to the Company's unrecognized income tax benefits | |||
Balance at beginning of fiscal year | $ 359 | $ 414 | $ 542 |
Additions for tax positions related to prior years | 10 | 14 | 29 |
Reductions for tax positions related to prior years | (17) | (77) | (87) |
Additions for tax positions related to current year | 37 | 50 | 39 |
Current year acquisitions | 4 | ||
Settlements | (2) | (9) | (12) |
Reductions due to lapse of applicable statute of limitations | (100) | (37) | (97) |
Balance at end of fiscal year | 287 | 359 | 414 |
Unrecognized income tax benefits that would impact income tax provision and effective tax rate | 272 | 378 | 393 |
Accrued interest and penalties related to uncertain tax positions | 54 | 53 | |
Income tax expense (benefit) related to interest and penalties | 3 | $ 12 | $ (1) |
Unrecognized income tax benefits, approximate amount that could be resolved in next twelve months | $ 20 |
Income Taxes - Statutes of limi
Income Taxes - Statutes of limitations (Details) | 12 Months Ended |
Sep. 30, 2022 | |
Minimum | |
Income Taxes | |
Statutes of limitations, income tax returns filed by the Company, state and local | 3 years |
Statutes of limitations, income tax returns filed by non-U.S. subsidiaries | 3 years |
Maximum | |
Income Taxes | |
Statutes of limitations, income tax returns filed by the Company, state and local | 4 years |
Statutes of limitations, income tax returns filed by non-U.S. subsidiaries | 10 years |
Income Taxes - Other Income Tax
Income Taxes - Other Income Tax Matters (Details) $ in Millions | 12 Months Ended |
Sep. 25, 2020 USD ($) | |
Income Taxes | |
Income tax expense related to tax impacts of Swiss Tax Reform | $ 355 |
Income tax benefit related to pre-separation tax matters and termination of the tax sharing agreement | 31 |
Net other income related to pre-separation tax matters and the termination of the tax sharing agreement | $ 8 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - shares shares in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 24, 2021 | Sep. 25, 2020 | |
Weighted-average number of shares outstanding: | |||
Basic (in shares) | 323 | 330 | 332 |
Dilutive impact of share-based compensation arrangements (in shares) | 2 | 3 | |
Diluted (in shares) | 325 | 333 | 332 |
Nonvested share awards and options, antidilutive due to loss in period | |||
Antidilutive shares excluded from computation of earnings per share | |||
Antidilutive share options | 2 | ||
Share options | |||
Antidilutive shares excluded from computation of earnings per share | |||
Antidilutive share options | 1 | 3 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) $ / shares in Units, SFr in Millions, $ in Millions | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Mar. 11, 2022 | Mar. 31, 2022 installment $ / shares | Mar. 31, 2021 installment $ / shares | Mar. 31, 2020 installment $ / shares | Mar. 31, 2019 installment $ / shares | Sep. 29, 2023 | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 24, 2021 USD ($) $ / shares shares | Sep. 25, 2020 USD ($) $ / shares shares | Sep. 30, 2022 CHF (SFr) shares | Sep. 24, 2021 CHF (SFr) shares | |
Maximum percentage of conditional shares that we may authorize for issuance | 50% | ||||||||||
Maximum percentage of shares that the board may authorize for issuance | 50% | ||||||||||
Maximum duration of the board's authorization to increase share capital | 2 years | ||||||||||
Swiss Law Capital Band, Maximum Duration of Authorization | 5 years | ||||||||||
Swiss Law Capital Band, Maximum Percentage of Increase of Share Capital | 150% | ||||||||||
Swiss Law Capital Band, Maximum Percentage of Reduction of Share Capital | 50% | ||||||||||
Dividends paid per common share | $ / shares | $ 2.12 | $ 1.96 | $ 1.88 | ||||||||
Treasury shares | shares | 12,749,540 | 9,060,919 | 12,749,540 | 9,060,919 | |||||||
Common shares held in treasury, owned by subsidiary | shares | 5,000,000 | 4,000,000 | 5,000,000 | 4,000,000 | |||||||
Cancellation of treasury shares (in shares) | shares | 5,000,000 | 3,000,000 | 12,000,000 | ||||||||
Contributed surplus established for Swiss tax and statutory purposes ("Swiss Contributed Surplus") | $ 3,191 | $ 3,905 | SFr 4,239 | SFr 4,902 | |||||||
Dividend or cash distribution approved (in currency per share) | $ / shares | $ 2.24 | $ 2 | $ 1.92 | $ 1.84 | |||||||
Number of quarterly dividend installments | installment | 4 | 4 | 4 | 4 | |||||||
Cash distribution quarterly installment payable (in dollars per share) | $ / shares | $ 0.56 | $ 0.50 | $ 0.48 | $ 0.46 | |||||||
Unpaid portion of the dividend payment recorded in accrued and other current liabilities | $ | 356 | 327 | |||||||||
Share repurchase program, increase in authorized amount | $ | 1,500 | 1,500 | |||||||||
Repurchase value | $ | 1,409 | $ 904 | $ 505 | ||||||||
Amount available for repurchase, at end of period | $ | $ 1,700 | ||||||||||
Treasury Shares | |||||||||||
Cancellation of treasury shares (in shares) | shares | 5,000,000 | 3,000,000 | 12,000,000 | ||||||||
Number of common shares repurchased | shares | 10,000,000 | 7,000,000 | 6,000,000 | ||||||||
Repurchase value | $ | $ 1,409 | $ 904 | $ 505 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 24, 2021 | Sep. 25, 2020 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax. | |||
Balance at the beginning of fiscal year | $ (168) | ||
Other comprehensive income (loss) | (346) | $ 279 | $ 63 |
Balance at the end of fiscal year | (495) | (168) | |
Currency Translation | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax. | |||
Balance at the beginning of fiscal year | 314 | 172 | 188 |
Other comprehensive income (loss) before reclassifications | (510) | 144 | (11) |
Other comprehensive income (loss) | (510) | 144 | (11) |
Less: other comprehensive (income) loss attributable to noncontrolling interest | 19 | (2) | (5) |
Balance at the end of fiscal year | (177) | 314 | 172 |
Unrecognized Pension and Postretirement Benefit Costs | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax. | |||
Balance at the beginning of fiscal year | (475) | (613) | (647) |
Other comprehensive income (loss) before reclassifications | 344 | 120 | 8 |
Amounts reclassified from accumulated other comprehensive income (loss) | 19 | 62 | 44 |
Income tax (expense) benefit | (104) | (44) | (18) |
Other comprehensive income (loss) | 259 | 138 | 34 |
Balance at the end of fiscal year | (216) | (475) | (613) |
Gains (Losses) on Cash Flow Hedges | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax. | |||
Balance at the beginning of fiscal year | (7) | (4) | (44) |
Other comprehensive income (loss) before reclassifications | (76) | 84 | 58 |
Amounts reclassified from accumulated other comprehensive income (loss) | (26) | (92) | (13) |
Income tax (expense) benefit | 7 | 5 | (5) |
Other comprehensive income (loss) | (95) | (3) | 40 |
Balance at the end of fiscal year | (102) | (7) | (4) |
Accumulated Other Comprehensive Income (Loss) | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax. | |||
Balance at the beginning of fiscal year | (168) | (445) | (503) |
Other comprehensive income (loss) before reclassifications | (242) | 348 | 55 |
Amounts reclassified from accumulated other comprehensive income (loss) | (7) | (30) | 31 |
Income tax (expense) benefit | (97) | (39) | (23) |
Other comprehensive income (loss) | (346) | 279 | 63 |
Less: other comprehensive (income) loss attributable to noncontrolling interest | 19 | (2) | (5) |
Balance at the end of fiscal year | $ (495) | $ (168) | $ (445) |
Share Plans (Details)
Share Plans (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 24, 2021 | Sep. 25, 2020 | |
Share Based Compensation Arrangements: | |||
Maximum number of common shares to be issued as awards | 70,000,000 | ||
Shares available for issuance | 11,000,000 | ||
Share-based compensation expense | $ 119 | $ 94 | $ 74 |
Tax benefit associated with share based compensation arrangements | $ 24 | $ 19 | $ 15 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology | |||
Weighted-average grant-date fair value (in dollars per share) | $ 37.51 | $ 22.21 | $ 15.49 |
Expected share price volatility (as a percent) | 29% | 28% | 21% |
Risk-free interest rate (as a percent) | 1.20% | 0.50% | 1.70% |
Expected annual dividend per share | $ 2 | $ 1.92 | $ 1.84 |
Expected life of options (in years) | 5 years 1 month 6 days | 5 years 4 months 24 days | 5 years 1 month 6 days |
Additional disclosures | |||
Total cash received by the Company related to the exercise of options | $ 54 | $ 167 | $ 55 |
Restricted share awards | |||
Share Based Compensation Arrangements: | |||
Vesting period | 4 years | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested | |||
Outstanding shares at the beginning of the period | 1,316,645 | ||
Shares granted | 720,801 | ||
Shares vested | (484,884) | ||
Shares forfeited | (131,956) | ||
Outstanding shares at the end of the period | 1,420,606 | 1,316,645 | |
Weighted-average grant-date fair value at the beginning of the period (in dollars per share) | $ 96.03 | ||
Shares granted, weighted-average grant-date fair value (in dollars per share) | 150.99 | $ 112.54 | $ 92.94 |
Shares vested, weighted-average grant-date fair value (in dollars per share) | 91.35 | ||
Shares forfeited, weighted-average grant-date fair value (in dollars per share) | 116.72 | ||
Weighted-average grant-date fair value at the end of the period (in dollars per share) | $ 123.25 | $ 96.03 | |
Share Based Compensation Expenses Not Recognized | |||
Share-based compensation, share-based awards, total compensation expense not yet recognized | $ 88 | ||
Share-based compensation, share-based awards, total compensation expense not yet recognized, expected period for recognition | 1 year 8 months 12 days | ||
Additional disclosures | |||
Total fair value of share awards, vested during the period | $ 44 | $ 43 | $ 44 |
Performance share awards | |||
Share Based Compensation Arrangements: | |||
Vesting period | 3 years | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested | |||
Outstanding shares at the beginning of the period | 526,071 | ||
Shares granted | 139,037 | ||
Shares vested | (160,673) | ||
Shares forfeited | (35,002) | ||
Outstanding shares at the end of the period | 469,433 | 526,071 | |
Weighted-average grant-date fair value at the beginning of the period (in dollars per share) | $ 88.99 | ||
Shares granted, weighted-average grant-date fair value (in dollars per share) | 157.56 | $ 105.86 | $ 83.30 |
Shares vested, weighted-average grant-date fair value (in dollars per share) | 72.85 | ||
Shares forfeited, weighted-average grant-date fair value (in dollars per share) | 78.18 | ||
Weighted-average grant-date fair value at the end of the period (in dollars per share) | $ 114.88 | $ 88.99 | |
Share Based Compensation Expenses Not Recognized | |||
Share-based compensation, share-based awards, total compensation expense not yet recognized | $ 17 | ||
Share-based compensation, share-based awards, total compensation expense not yet recognized, expected period for recognition | 1 year 2 months 12 days | ||
Additional disclosures | |||
Total fair value of share awards, vested during the period | $ 12 | $ 10 | $ 20 |
Performance share awards | Minimum | |||
Share Based Compensation Expenses Not Recognized | |||
Pay-out of performance share award (as a percent) | 0% | ||
Performance share awards | Maximum | |||
Share Based Compensation Expenses Not Recognized | |||
Pay-out of performance share award (as a percent) | 200% | ||
Share options | |||
Share Based Compensation Arrangements: | |||
Vesting period | 4 years | ||
Expiration period | 10 years | ||
Share Based Compensation Expenses Not Recognized | |||
Share-based compensation, share-based awards, total compensation expense not yet recognized | $ 32 | ||
Share-based compensation, share-based awards, total compensation expense not yet recognized, expected period for recognition | 1 year 6 months | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding | |||
Outstanding share options at the beginning of the period | 5,348,944 | ||
Share options granted | 873,300 | ||
Share options exercised | (683,871) | ||
Share options forfeited | (187,019) | ||
Outstanding share options at the end of the period | 5,351,354 | 5,348,944 | |
Share options outstanding, weighted-average exercise price at the beginning of the period (in dollars per share) | $ 88 | ||
Share options granted, weighted-average exercise price (in dollars per share) | 157.02 | $ 106.52 | $ 93.39 |
Share options exercised, weighted-average exercise price (in dollars per share) | 74.32 | ||
Share options forfeited, weighted-average exercise price (in dollars per share) | 111.14 | ||
Share options outstanding, weighted-average exercise price at the end of the period (in dollars per share) | $ 100.21 | $ 88 | |
Share options vested and expected to vest at end of period | 5,227,306 | ||
Share options exercisable at end of period | 2,704,322 | ||
Share options vested and expected to vest at end of period, weighted-average exercise price (in dollars per share) | $ 99.60 | ||
Share options exercisable at end of period, weighted-average exercise price (in dollars per share) | $ 84.86 | ||
Share options outstanding at end of period, weighted-average remaining contractual term | 6 years 7 months 6 days | ||
Share options vested and expected to vest at end of period, weighted-average remaining contractual term | 6 years 7 months 6 days | ||
Share options exercisable at end of period, weighted-average remaining contractual term | 5 years 4 months 24 days | ||
Share options outstanding at end of period, aggregate intrinsic value | $ 94 | ||
Share options vested and expected to vest at end of period, aggregate intrinsic value | 93 | ||
Share options exercisable at end of period, aggregate intrinsic value | 69 | ||
Additional disclosures | |||
Total intrinsic value of the Company's options exercised | 49 | $ 49 | $ 39 |
Total cash received by the Company related to the exercise of options | $ 54 | $ 167 | $ 55 |
Segment and Geographic Data - N
Segment and Geographic Data - Net Sales by Segment and Industry End Market (Details) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 USD ($) segment | Sep. 24, 2021 USD ($) | Sep. 25, 2020 USD ($) | |
Segment and Geographic Data | |||
Number of reportable segments | segment | 3 | ||
Net sales | $ 16,281 | $ 14,923 | $ 12,172 |
Total Asia-Pacific | |||
Segment and Geographic Data | |||
Net sales | 5,771 | 5,374 | 4,246 |
Total Europe/Middle East/Africa | |||
Segment and Geographic Data | |||
Net sales | 5,707 | 5,471 | 4,220 |
Total Americas | |||
Segment and Geographic Data | |||
Net sales | 4,803 | 4,078 | 3,706 |
Transportation Solutions | |||
Segment and Geographic Data | |||
Net sales | 9,219 | 8,974 | 6,845 |
Transportation Solutions | Total Asia-Pacific | |||
Segment and Geographic Data | |||
Net sales | 3,537 | 3,466 | 2,662 |
Transportation Solutions | Total Europe/Middle East/Africa | |||
Segment and Geographic Data | |||
Net sales | 3,490 | 3,570 | 2,625 |
Transportation Solutions | Total Americas | |||
Segment and Geographic Data | |||
Net sales | 2,192 | 1,938 | 1,558 |
Transportation Solutions | Automotive | |||
Segment and Geographic Data | |||
Net sales | 6,527 | 6,379 | 4,903 |
Transportation Solutions | Commercial transportation | |||
Segment and Geographic Data | |||
Net sales | 1,582 | 1,467 | 1,051 |
Transportation Solutions | Sensors | |||
Segment and Geographic Data | |||
Net sales | 1,110 | 1,128 | 891 |
Industrial Solutions | |||
Segment and Geographic Data | |||
Net sales | 4,520 | 3,844 | 3,713 |
Industrial Solutions | Total Asia-Pacific | |||
Segment and Geographic Data | |||
Net sales | 843 | 703 | 604 |
Industrial Solutions | Total Europe/Middle East/Africa | |||
Segment and Geographic Data | |||
Net sales | 1,871 | 1,586 | 1,359 |
Industrial Solutions | Total Americas | |||
Segment and Geographic Data | |||
Net sales | 1,806 | 1,555 | 1,750 |
Industrial Solutions | Industrial equipment | |||
Segment and Geographic Data | |||
Net sales | 1,934 | 1,397 | 1,098 |
Industrial Solutions | Aerospace, defense, and marine | |||
Segment and Geographic Data | |||
Net sales | 1,087 | 1,035 | 1,201 |
Industrial Solutions | Energy | |||
Segment and Geographic Data | |||
Net sales | 804 | 738 | 717 |
Industrial Solutions | Medical | |||
Segment and Geographic Data | |||
Net sales | 695 | 674 | 697 |
Communications Solutions | |||
Segment and Geographic Data | |||
Net sales | 2,542 | 2,105 | 1,614 |
Communications Solutions | Total Asia-Pacific | |||
Segment and Geographic Data | |||
Net sales | 1,391 | 1,205 | 980 |
Communications Solutions | Total Europe/Middle East/Africa | |||
Segment and Geographic Data | |||
Net sales | 346 | 315 | 236 |
Communications Solutions | Total Americas | |||
Segment and Geographic Data | |||
Net sales | 805 | 585 | 398 |
Communications Solutions | Data and devices | |||
Segment and Geographic Data | |||
Net sales | 1,576 | 1,198 | 973 |
Communications Solutions | Appliances | |||
Segment and Geographic Data | |||
Net sales | $ 966 | $ 907 | $ 641 |
Segment and Geographic Data - O
Segment and Geographic Data - Operating Income (Loss) by Segment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 24, 2021 | Sep. 25, 2020 | |
Segment and Geographic Data | |||
Operating income (loss) | $ 2,756 | $ 2,434 | $ 537 |
Transportation Solutions | |||
Segment and Geographic Data | |||
Operating income (loss) | 1,534 | 1,526 | (93) |
Industrial Solutions | |||
Segment and Geographic Data | |||
Operating income (loss) | 620 | 469 | 412 |
Communications Solutions | |||
Segment and Geographic Data | |||
Operating income (loss) | $ 602 | $ 439 | $ 218 |
Segment and Geographic Data - D
Segment and Geographic Data - Depreciation and Amortization and CapEX (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 24, 2021 | Sep. 25, 2020 | |
Segment and Geographic Data | |||
Depreciation and Amortization | $ 785 | $ 769 | $ 711 |
Capital Expenditures | 768 | 690 | 560 |
Transportation Solutions | |||
Segment and Geographic Data | |||
Depreciation and Amortization | 505 | 512 | 463 |
Capital Expenditures | 483 | 487 | 365 |
Industrial Solutions | |||
Segment and Geographic Data | |||
Depreciation and Amortization | 194 | 189 | 184 |
Capital Expenditures | 153 | 121 | 139 |
Communications Solutions | |||
Segment and Geographic Data | |||
Depreciation and Amortization | 86 | 68 | 64 |
Capital Expenditures | $ 132 | $ 82 | $ 56 |
Segment and Geographic Data - A
Segment and Geographic Data - Assets (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Sep. 24, 2021 | Sep. 25, 2020 |
Segment and Geographic Data | |||
Assets | $ 20,782 | $ 21,462 | $ 19,242 |
Other non-current assets | 903 | 783 | |
Total segment assets | |||
Segment and Geographic Data | |||
Assets | 9,108 | 9,217 | 7,977 |
Reconciling items | |||
Segment and Geographic Data | |||
Other current assets | 1,727 | 1,824 | 1,457 |
Other non-current assets | 9,947 | 10,421 | 9,808 |
Transportation Solutions | |||
Segment and Geographic Data | |||
Assets | 5,530 | 5,791 | 4,973 |
Industrial Solutions | |||
Segment and Geographic Data | |||
Assets | 2,442 | 2,275 | 2,117 |
Communications Solutions | |||
Segment and Geographic Data | |||
Assets | $ 1,136 | $ 1,151 | $ 887 |
Segment and Geographic Data - B
Segment and Geographic Data - By Region (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 24, 2021 | Sep. 25, 2020 | |
Segment and Geographic Data | |||
Net sales | $ 16,281 | $ 14,923 | $ 12,172 |
Property, Plant, and Equipment, Net | 3,567 | 3,778 | 3,650 |
China | |||
Segment and Geographic Data | |||
Net sales | 3,589 | 3,297 | 2,459 |
Property, Plant, and Equipment, Net | 779 | 755 | 659 |
Other Asia-Pacific | |||
Segment and Geographic Data | |||
Net sales | 2,182 | 2,077 | 1,787 |
Property, Plant, and Equipment, Net | 296 | 377 | 418 |
Total Asia-Pacific | |||
Segment and Geographic Data | |||
Net sales | 5,771 | 5,374 | 4,246 |
Property, Plant, and Equipment, Net | 1,075 | 1,132 | 1,077 |
Switzerland | |||
Segment and Geographic Data | |||
Net sales | 3,709 | 3,616 | 2,878 |
Property, Plant, and Equipment, Net | 16 | 41 | 79 |
Germany | |||
Segment and Geographic Data | |||
Net sales | 561 | 417 | 343 |
Property, Plant, and Equipment, Net | 597 | 599 | 559 |
Other Europe/Middle East/Africa | |||
Segment and Geographic Data | |||
Net sales | 1,437 | 1,438 | 999 |
Property, Plant, and Equipment, Net | 821 | 937 | 871 |
Total Europe/Middle East/Africa | |||
Segment and Geographic Data | |||
Net sales | 5,707 | 5,471 | 4,220 |
Property, Plant, and Equipment, Net | 1,434 | 1,577 | 1,509 |
U.S. | |||
Segment and Geographic Data | |||
Net sales | 4,280 | 3,615 | 3,348 |
Property, Plant, and Equipment, Net | 947 | 960 | 963 |
Other Americas | |||
Segment and Geographic Data | |||
Net sales | 523 | 463 | 358 |
Property, Plant, and Equipment, Net | 111 | 109 | 101 |
Total Americas | |||
Segment and Geographic Data | |||
Net sales | 4,803 | 4,078 | 3,706 |
Property, Plant, and Equipment, Net | $ 1,058 | $ 1,069 | $ 1,064 |
SCHEDULE II-VALUATION AND QUA_2
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 24, 2021 | Sep. 25, 2020 | |
Allowance for doubtful accounts receivable | |||
Valuation and qualifying accounts. | |||
Balance at Beginning of Fiscal Year | $ 41 | $ 29 | $ 25 |
Additions Charged to Costs and Expenses | 15 | 15 | 10 |
Acquisitions, Divestitures and Other | (7) | 1 | (1) |
Write-offs and Deductions | (4) | (4) | (5) |
Balance at End of Fiscal Year | 45 | 41 | 29 |
Valuation allowance on deferred tax assets | |||
Valuation and qualifying accounts. | |||
Balance at Beginning of Fiscal Year | 2,729 | 4,429 | 4,970 |
Additions Charged to Costs and Expenses | 4,463 | 31 | 493 |
Write-offs and Deductions | (80) | (1,731) | (1,034) |
Balance at End of Fiscal Year | $ 7,112 | $ 2,729 | $ 4,429 |