What changed in TE Connectivity's 10-K — 2022 vs 2023
vs
Paragraph-level year-over-year comparison of TE Connectivity's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.
+145 added−141 removedSource: 10-K (2023-11-13) vs 10-K (2022-11-15)
Top changes in TE Connectivity's 2023 10-K
145 paragraphs added · 141 removed · 122 edited across 2 sections
- Item 6. [Reserved]+138 / −134 · 115 edited
- Item 4. Mine Safety Disclosures+7 / −7 · 7 edited
Item 4. Mine Safety Disclosures
Mine Safety Disclosures — required of mining issuers
7 edited+0 added−0 removed2 unchanged
Item 4. Mine Safety Disclosures
Mine Safety Disclosures — required of mining issuers
7 edited+0 added−0 removed2 unchanged
2022 filing
2023 filing
Biggest changeThe comparisons in the graph are based upon historical data and are not indicative of, nor intended to forecast, future performance of our common shares. Fiscal Year End 2017 2018 2019 2020 2021 2022 TE Connectivity Ltd. $ 100.00 $ 107.74 $ 116.07 $ 121.96 $ 187.03 $ 145.46 S&P 500 Index 100.00 117.91 122.30 138.81 190.29 155.55 Dow Jones Electrical Components and Equipment Index 100.00 111.20 107.06 112.22 162.93 135.08 (1) $100 invested on September 29, 2017 in TE Connectivity Ltd.’s common shares and in indexes.
Biggest changeThe comparisons in the graph are based upon historical data and are not indicative of, nor intended to forecast, future performance of our common shares. Fiscal Year End 2018 (1) 2019 2020 2021 2022 2023 TE Connectivity Ltd. $ 100.00 $ 107.73 $ 113.20 $ 173.60 $ 135.02 $ 153.89 S&P 500 Index 100.00 103.72 117.72 161.39 131.92 160.44 Dow Jones U.S.
Performance Graph The following graph compares the cumulative total shareholder return on our common shares against the cumulative return on the S&P 500 Index and the Dow Jones Electrical Components and Equipment Index.
Performance Graph The following graph compares the cumulative total shareholder return on our common shares against the cumulative return on the S&P 500 Index and the Dow Jones U.S. Electrical Components and Equipment Index.
The graph assumes the investment of $100 in our common shares and in each index at fiscal year end 2017 and assumes the reinvestment of all dividends and distributions. The graph shows the cumulative total return for the last five fiscal years.
The graph assumes the investment of $100 in our common shares and in each index at fiscal year end 2018 and assumes the reinvestment of all dividends and distributions. The graph shows the cumulative total return for the last five fiscal years.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 20 Table of Contents PART II ITEM 5.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 22 Table of Contents PART II ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Holders Our common shares are listed and traded on the NYSE under the symbol “TEL.” As of November 3, 2022, there were 16,860 shareholders of record of our common shares.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Holders Our common shares are listed and traded on the NYSE under the symbol “TEL.” As of November 8, 2023, there were 16,159 shareholders of record of our common shares.
Issuer Purchases of Equity Securities The following table presents information about our purchases of our common shares during the quarter ended September 30, 2022: Maximum Total Number of Approximate Shares Purchased Dollar Value as Part of of Shares that May Total Number Average Price Publicly Announced Yet Be Purchased of Shares Paid Per Plans or Under the Plans Period Purchased (1) Share (1) Programs (2) or Programs (2) June 25–July 22, 2022 602,818 $ 114.66 602,600 $ 1,949,678,000 July 23–August 26, 2022 920,046 132.46 915,800 1,828,380,436 August 27–September 30, 2022 1,209,425 121.56 1,208,700 1,681,457,030 Total 2,732,289 123.71 2,727,100 (1) These columns include the following transactions which occurred during the quarter ended September 30, 2022: (i) the acquisition of 5,189 common shares from individuals in order to satisfy tax withholding requirements in connection with the vesting of restricted share awards issued under equity compensation plans; and (ii) open market purchases totaling 2,727,100 common shares, summarized on a trade-date basis, in conjunction with the share repurchase program announced in September 2007.
Issuer Purchases of Equity Securities The following table presents information about our purchases of our common shares during the quarter ended September 29, 2023: Maximum Total Number of Approximate Shares Purchased Dollar Value as Part of of Shares that May Total Number Average Price Publicly Announced Yet Be Purchased of Shares Paid Per Plans or Under the Plans Period Purchased (1) Share (1) Programs (2) or Programs (2) July 1–July 28, 2023 428,261 $ 142.15 428,200 $ 999,101,703 July 29–September 1, 2023 1,067,083 133.55 1,060,900 857,423,534 September 2–September 29, 2023 964,156 126.54 963,800 735,467,902 Total 2,459,500 132.30 2,452,900 (1) These columns include the following transactions which occurred during the quarter ended September 29, 2023: (i) the acquisition of 6,600 common shares from individuals in order to satisfy tax withholding requirements in connection with the vesting of restricted share awards issued under equity compensation plans; and (ii) open market purchases totaling 2,452,900 common shares, summarized on a trade-date basis, in conjunction with the share repurchase program announced in September 2007.
Indexes calculated on month-end basis. 21 Table of Contents Dividends Future dividends on our common shares, if any, must be approved by our shareholders.
Electrical Components and Equipment Index 100.00 96.28 100.92 146.51 121.47 153.94 (1) $100 invested on September 28, 2018 in TE Connectivity Ltd.’s common shares and in indexes. Indexes calculated on month-end basis. 23 Table of Contents Dividends Future dividends on our common shares, if any, must be approved by our shareholders.
Item 6. [Reserved]
Selected Financial Data — reserved (removed by SEC in 2021)
115 edited+23 added−19 removed64 unchanged
Item 6. [Reserved]
Selected Financial Data — reserved (removed by SEC in 2021)
115 edited+23 added−19 removed64 unchanged
2022 filing
2023 filing
Biggest changeOperating Income The following table presents operating income and operating margin information: Fiscal 2022 2021 Change ($ in millions) Operating income $ 2,756 (1) $ 2,434 $ 322 Operating margin 16.9 % 16.3 % (1) Fiscal 2022 included an additional week. 27 Table of Contents Operating income included the following: Fiscal 2022 2021 (in millions) Acquisition-related charges: Acquisition and integration costs $ 45 $ 31 Charges associated with the amortization of acquisition-related fair value adjustments 8 3 53 34 Restructuring and other charges, net 141 233 Restructuring-related charges recorded in cost of sales 16 — Total $ 210 $ 267 See discussion of operating income below under “Segment Results.” Non-Operating Items The following table presents select non-operating information: Fiscal 2022 2021 Change ($ in millions) Other income (expense), net $ 28 $ (17) $ 45 Income tax expense 306 123 183 Effective tax rate 11.2 % 5.2 % Other Income (Expense).
Biggest changeOperating income included the following: Fiscal 2023 2022 (in millions) Acquisition-related charges: Acquisition and integration costs $ 33 $ 45 Charges associated with the amortization of acquisition-related fair value adjustments — 8 33 53 Restructuring and other charges, net 340 141 Restructuring-related charges recorded in cost of sales — 16 Total $ 373 $ 210 See discussion of operating income below under “Segment Results.” 29 Table of Contents Non-Operating Items The following table presents select non-operating information: Fiscal 2023 2022 Change ($ in millions) Interest income $ 60 $ 15 $ 45 Interest expense 80 66 14 Other income (expense), net (16) 28 (44) Income tax expense 364 306 58 Effective tax rate 16.0 % 11.2 % Interest Income and Expense.
It is also a significant component in our incentive compensation plans. We believe that investors benefit from having access to the same financial measures that management uses in evaluating operations. The tables presented in “Results of Operations” and “Segment Results” provide reconciliations of organic net sales growth to net sales growth calculated in accordance with GAAP.
It is also a significant component in our incentive compensation plans. We believe that investors benefit from having access to the same financial measures that management uses in evaluating operations. The tables presented in “Results of Operations” and “Segment Results” provide reconciliations of organic net sales growth (decline) to net sales growth (decline) calculated in accordance with GAAP.
Organic net sales growth provides useful information about our results and the trends of our business. Management uses this measure to monitor and evaluate performance. Also, management uses this measure together with GAAP financial measures in its decision-making processes related to the operations of our reportable segments and our overall company.
Organic net sales growth (decline) provides useful information about our results and the trends of our business. Management uses this measure to monitor and evaluate performance. Also, management uses this measure together with GAAP financial measures in its decision-making processes related to the operations of our reportable segments and our overall company.
The primary limitation of this measure is that it excludes the financial impact of items that would otherwise either increase or decrease our reported results. This limitation is best addressed by using organic net sales growth in combination with net sales growth to better understand the amounts, character, and impact of any increase or decrease in reported amounts.
The primary limitation of this measure is that it excludes the financial impact of items that would otherwise either increase or decrease our reported results. This limitation is best addressed by using organic net sales growth (decline) in combination with net sales growth (decline) to better understand the amounts, character, and impact of any increase or decrease in reported amounts.
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 do not account for 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.
Organic net sales growth is a non-GAAP financial measure and should not be considered a replacement for results in accordance with GAAP. This non-GAAP financial measure may not be comparable to similarly-titled measures reported by other companies.
Organic net sales growth (decline) is a non-GAAP financial measure and should not be considered a replacement for results in accordance with GAAP. This non-GAAP financial measure may not be comparable to similarly-titled measures reported by other companies.
Organic net sales growth represents net sales growth (the most comparable GAAP financial measure) excluding the impact of foreign currency exchange rates, and acquisitions and divestitures that occurred in the preceding twelve months, if any.
Organic net sales growth (decline) represents net sales growth (decline) (the most comparable GAAP financial measure) excluding the impact of foreign currency exchange rates, and acquisitions and divestitures that occurred in the preceding twelve months, if any.
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.
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 2023 or 2022.
A reporting unit is generally an operating segment or one level below an operating segment (a “component”) if the component constitutes a business for which discrete financial information is available and regularly reviewed by segment management. At fiscal year end 2022, we had five reporting units, all of which contained goodwill.
A reporting unit is generally an operating segment or one level below an operating segment (a “component”) if the component constitutes a business for which discrete financial information is available and regularly reviewed by segment management. At fiscal year end 2023, we had five reporting units, all of which contained goodwill.
The following discussion includes organic net sales growth which is a non-GAAP financial measure. See “Non-GAAP Financial Measure” for additional information regarding this measure. 22 Table of Contents Overview We are a global industrial technology leader creating a safer, sustainable, productive, and connected future.
The following discussion includes organic net sales growth which is a non-GAAP financial measure. See “Non-GAAP Financial Measure” for additional information regarding this measure. 24 Table of Contents Overview We are a global industrial technology leader creating a safer, sustainable, productive, and connected future.
Risk Factors” and “Forward-Looking Information.” Our Consolidated Financial Statements have been prepared in U.S. dollars, in accordance with accounting principles generally accepted in the U.S. (“GAAP”). Discussion of our financial condition and results of operations for fiscal 2022 compared to fiscal 2021 is presented below.
Risk Factors” and “Forward-Looking Information.” Our Consolidated Financial Statements have been prepared in U.S. dollars, in accordance with accounting principles generally accepted in the U.S. (“GAAP”). Discussion of our financial condition and results of operations for fiscal 2023 compared to fiscal 2022 is presented below.
As of fiscal year end 2022, our cash and cash equivalents were held in subsidiaries which are located in various countries throughout the world. Under current applicable laws, substantially all of these amounts can be repatriated to Tyco Electronics Group S.A.
As of fiscal year end 2023, our cash and cash equivalents were held in subsidiaries which are located in various countries throughout the world. Under current applicable laws, substantially all of these amounts can be repatriated to Tyco Electronics Group S.A.
The Credit Facility and our other debt agreements contain other customary covenants. None of our covenants are presently considered restrictive to our operations. As of fiscal year end 2022, we were in compliance with all of our debt covenants and believe that we will continue to be in compliance with our existing covenants for the foreseeable future.
The Credit Facility and our other debt agreements contain other customary covenants. None of our covenants are presently considered restrictive to our operations. As of fiscal year end 2023, we were in compliance with all of our debt covenants and believe that we will continue to be in compliance with our existing covenants for the foreseeable future.
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.
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 2023, our target asset allocation is 67% return-seeking and 33% liability-hedging.
(2) Interest payments exclude the impact of interest rate swap and cross-currency swap contracts. Interest payments on debt are projected for future periods using rates in effect as of fiscal year end 2022 and are subject to change in future periods. (3) Operating leases represents the undiscounted lease payments.
(2) Interest payments exclude the impact of interest rate swap and cross-currency swap contracts. Interest payments on debt are projected for future periods using rates in effect as of fiscal year end 2023 and are subject to change in future periods. (3) Operating leases represents the undiscounted lease payments.
We completed our annual goodwill impairment test in the fourth quarter of fiscal 2022 and determined that no impairment existed. Income Taxes In determining pre-tax income for financial statement purposes, we must make certain estimates and judgments.
We completed our annual goodwill impairment test in the fourth quarter of fiscal 2023 and determined that no impairment existed. Income Taxes In determining pre-tax income for financial statement purposes, we must make certain estimates and judgments.
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. Goodwill and Other Intangible Assets We account for goodwill and other intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other .
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. 38 Table of Contents Goodwill and Other Intangible Assets We account for goodwill and other intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other .
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.
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 37 Table of Contents use tax, real estate tax, and transfer tax.
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 36 Table of Contents unpatented technology, and customer relationships. Recoverability estimates range from 1 to 50 years and costs are generally amortized on a straight-line basis.
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.
Economic Conditions Our business and operating results have been and will continue to be affected by worldwide economic conditions. The global economy has been impacted by the COVID-19 pandemic and the military conflict between Russia and Ukraine as well as supply chain disruptions and inflationary cost pressures.
Economic Conditions Our business and operating results have been and will continue to be affected by worldwide economic conditions. The global economy has been impacted in recent years by supply chain disruptions and inflationary cost pressures as well as the military conflict between Russia and Ukraine and the COVID-19 pandemic.
We sell our products into approximately 140 countries, and approximately 60% of our net sales were invoiced in currencies other than the U.S. dollar in fiscal 2022.
We sell our products into approximately 140 countries, and approximately 60% of our net sales were invoiced in currencies other than the U.S. dollar in fiscal 2023.
A 50-basis-point decrease or increase in the expected long-term returns on plan assets would have increased or decreased, respectively, our fiscal 2022 pension expense by $11 million. At fiscal year end 2022, the long-term target asset allocation in our U.S. plans’ master trust is 25% return-seeking assets and 75% liability-hedging assets.
A 50-basis-point decrease or increase in the expected long-term returns on plan assets would have increased or decreased, respectively, our fiscal 2023 pension expense by $8 million. At fiscal year end 2023, the long-term target asset allocation in our U.S. plans’ master trust is 25% return-seeking assets and 75% liability-hedging assets.
See Note 11 to the Consolidated Financial Statements for additional information regarding leases. (4) Purchase obligations consist primarily of commitments for purchases of goods and services. (5) The above table does not reflect unrecognized income tax benefits of $287 million and related accrued interest and penalties of $54 million, the timing of which is uncertain.
See Note 11 to the Consolidated Financial Statements for additional information regarding leases. (4) Purchase obligations consist primarily of commitments for purchases of goods and services. (5) The above table does not reflect unrecognized income tax benefits of $454 million and related accrued interest and penalties of $65 million, the timing of which is uncertain.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The following Consolidated Financial Statements and schedule specified by this Item, together with the reports thereon of Deloitte & Touche LLP, are presented following Item 15 and the signature pages of this report: Financial Statements: Reports of Independent Registered Public Accounting Firm Consolidated Statements of Operations for the Fiscal Years Ended September 30, 2022, September 24, 2021, and September 25, 2020 Consolidated Statements of Comprehensive Income (Loss) for the Fiscal Years Ended September 30, 2022, September 24, 2021, and September 25, 2020 Consolidated Balance Sheets as of September 30, 2022 and September 24, 2021 Consolidated Statements of Shareholders’ Equity for the Fiscal Years Ended September 30, 2022, September 24, 2021, and September 25, 2020 Consolidated Statements of Cash Flows for the Fiscal Years Ended September 30, 2022, September 24, 2021, and September 25, 2020 41 Table of Contents Notes to Consolidated Financial Statements Financial Statement Schedule: Schedule II—Valuation and Qualifying Accounts All other financial statements and schedules have been omitted since the information required to be submitted has been included on the Consolidated Financial Statements and related notes or because they are either not applicable or not required under the rules of Regulation S-X.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The following Consolidated Financial Statements and schedule specified by this Item, together with the reports thereon of Deloitte & Touche LLP, are presented following Item 15 and the signature pages of this report: Financial Statements: Reports of Independent Registered Public Accounting Firm Consolidated Statements of Operations for the Fiscal Years Ended September 29, 2023, September 30, 2022, and September 24, 2021 Consolidated Statements of Comprehensive Income for the Fiscal Years Ended September 29, 2023, September 30, 2022, and September 24, 2021 Consolidated Balance Sheets as of September 29, 2023 and September 30, 2022 Consolidated Statements of Shareholders’ Equity for the Fiscal Years Ended September 29, 2023, September 30, 2022, and September 24, 2021 Consolidated Statements of Cash Flows for the Fiscal Years Ended September 29, 2023, September 30, 2022, and September 24, 2021 Notes to Consolidated Financial Statements Financial Statement Schedule: Schedule II—Valuation and Qualifying Accounts All other financial statements and schedules have been omitted since the information required to be submitted has been included on the Consolidated Financial Statements and related notes or because they are either not applicable or not required under the rules of Regulation S-X.
A 10% appreciation or depreciation of the underlying currency in our cross-currency swap contracts or foreign currency forward contracts from the fiscal year end 2022 market rates would have changed the unrealized 40 Table of Contents value of our contracts by $151 million.
A 10% appreciation or depreciation of the underlying currency in our cross-currency swap contracts or foreign currency forward contracts from the fiscal year end 2022 market rates would have changed the unrealized value of our contracts by $151 million.
We use a wide variety of raw materials in the manufacture of our products, and cost of sales and gross margin are subject to variability in raw material prices. In recent years, raw material prices and availability have been affected by worldwide economic conditions, including the impacts of the COVID-19 pandemic, supply chain disruptions, and inflationary cost pressures.
We use a wide variety of raw materials in the manufacture of our products, and cost of sales and gross margin are subject to variability in raw material prices. In recent years, raw material prices and availability have been affected by worldwide economic conditions, including supply chain disruptions and inflationary cost pressures.
Organic net sales growth is a useful measure of our performance because it excludes items that are not completely under management’s control, such as the impact of changes in 38 Table of Contents foreign currency exchange rates, and items that do not reflect the underlying growth of the company, such as acquisition and divestiture activity.
Organic net sales growth (decline) is a useful measure of our performance because it excludes items that are not completely under management’s control, such as the impact of changes in foreign currency exchange rates, and items that do not reflect the underlying growth of the company, such as acquisition and divestiture activity.
Forward-looking statements include, among others, the information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, potential growth opportunities, potential operating performance improvements, acquisitions, divestitures, the effects of competition, and the effects of future legislation or regulations. Forward-looking statements also include statements addressing our environmental, social, governance, and sustainability plans and goals.
Forward-looking statements include, among others, the information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, potential growth opportunities, potential operating performance improvements, acquisitions, divestitures, the effects of competition, and the effects of future legislation or regulations. Forward-looking statements also include statements addressing our ESG, and sustainability plans and goals.
For additional information regarding pensions, see Note 14 to the Consolidated Financial Statements. Cash Flows from Investing Activities Capital expenditures were $768 million and $690 million in fiscal 2022 and 2021, respectively. We expect fiscal 2023 capital spending levels to be approximately 5% of net sales.
For additional information regarding pensions, see Note 14 to the Consolidated Financial Statements. Cash Flows from Investing Activities Capital expenditures were $732 million and $768 million in fiscal 2023 and 2022, respectively. We expect fiscal 2024 capital spending levels to be approximately 5% of net sales.
Any reduction in future taxable income including any future restructuring activities may require that we record an additional valuation allowance against our deferred tax assets. An increase in the valuation allowance would result in additional income tax expense in such period and could have a significant impact on our future earnings.
Any reduction in future taxable income including any future restructuring activities may require that we record an additional valuation allowance against our deferred tax assets. An increase in the 39 Table of Contents valuation allowance would result in additional income tax expense in such period and could have a significant impact on our future earnings.
Discussion of our financial condition and results of operations for fiscal 2021 compared to fiscal 2020 can be found in “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended September 24, 2021.
Discussion of our financial condition and results of operations for fiscal 2022 compared to fiscal 2021 can be found in “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2022.
We recorded net periodic pension benefit credit of $25 million and cost of $12 million in net other income (expense) in fiscal 2022 and 2021, respectively. See Note 14 to the Consolidated Financial Statements for additional information regarding our retirement plans.
Other Income (Expense). We recorded net periodic pension benefit cost of $16 million and credit of $25 million in net other income (expense) in fiscal 2023 and 2022, respectively. See Note 14 to the Consolidated Financial Statements for additional information regarding our retirement plans.
We expect to contribute $43 million to pension plans in fiscal 2023, before consideration of any voluntary contributions. See Note 14 to the Consolidated Financial Statements for additional information regarding these plans and our estimates of future contributions and benefit payments.
We expect to contribute $70 million to pension plans in fiscal 2024, before consideration of any voluntary contributions. See Note 14 to the Consolidated Financial Statements for additional information regarding these plans and our estimates of future contributions and benefit payments.
There may be other risks and uncertainties that we are unable to predict at this time or that we currently do not expect to have a material adverse effect on our business. ITEM 7A.
There may be other risks and uncertainties that we are unable to predict at this time or that we currently do not expect to have a material adverse effect on our business. 42 Table of Contents ITEM 7A.
A 10% appreciation or depreciation of the underlying currency in our cross-currency swap contracts or foreign currency forward contracts from the fiscal year end 2021 market rates would have changed the unrealized value of our contracts by $240 million.
A 10% appreciation or depreciation of the underlying currency in our cross-currency swap contracts or foreign currency forward contracts from the fiscal year end 2023 market rates would have changed the unrealized value of our contracts by $368 million.
Fiscal 2022 included an additional week which contributed $180 million in net sales. In fiscal 2022, pricing actions positively affected organic net sales by $330 million.
In fiscal 2023, pricing actions positively affected organic net sales by $375 million. Fiscal 2022 included an additional week which contributed $180 million in net sales.
Fiscal 2022 included an additional week which contributed $84 million in net sales. In fiscal 2022, pricing actions positively affected organic net sales by $147 million.
In fiscal 2023, pricing actions positively affected organic net sales by $242 million. Fiscal 2022 included an additional week which contributed $84 million in net sales.
A 10% appreciation or depreciation of commodity prices from the fiscal year end 2022 prices would have changed the unrealized value of our forward contracts by $48 million. A 10% appreciation or depreciation of commodity prices from the fiscal year end 2021 prices would have changed the unrealized value of our forward contracts by $51 million.
A 10% appreciation or depreciation of commodity prices from the fiscal year end 2023 prices would have changed the unrealized value of our forward contracts by $44 million. A 10% appreciation or depreciation of commodity prices from the fiscal year end 2022 prices would have changed the unrealized value of our forward contracts by $48 million.
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.
As of fiscal year end 2023, certain subsidiaries had approximately $38.0 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.
The valuation allowance for deferred tax assets was $7,112 million and $2,729 million at fiscal year end 2022 and 2021, respectively. See Note 15 to the Consolidated Financial Statements for further information regarding the valuation allowance for deferred tax assets.
The valuation allowance for deferred tax assets was $7,416 million and $7,112 million at fiscal year end 2023 and 2022, respectively. See Note 15 to the Consolidated Financial Statements for further information regarding the valuation allowance for deferred tax assets.
(2) Includes $12,582 million and $8,832 million as of fiscal year end 2022 and 2021, respectively, of intercompany loans payable to non-guarantor subsidiaries. Fiscal 2022 2021 (in millions) Statement of Operations Data: Loss from continuing operations $ (35) $ (486) Net loss (35) (479) Off-Balance Sheet Arrangements In certain instances, we have guaranteed the performance of third parties and provided financial guarantees for uncompleted work and financial commitments.
(2) Includes $4,056 million and $12,582 million as of fiscal year end 2023 and 2022, respectively, of intercompany loans payable to non-guarantor subsidiaries. Fiscal 2023 2022 (in millions) Statement of Operations Data: Loss from continuing operations $ (606) $ (35) Net loss (606) (35) Off-Balance Sheet Arrangements In certain instances, we have guaranteed the performance of third parties and provided financial guarantees for uncompleted work and financial commitments.
As of fiscal year end 2022, we had approximately $7.0 billion of cash, cash equivalents, and intercompany deposits, principally in our subsidiaries, that we have the ability to distribute to TEGSA and TE Connectivity Ltd. but we consider to be permanently reinvested.
As of fiscal year end 2023, we had approximately $2.6 billion of cash, cash equivalents, and intercompany deposits, principally in our subsidiaries, that we have the ability to distribute to TEGSA and TE Connectivity Ltd. but we consider to be permanently reinvested.
Also, we have taken and continue to focus on actions to manage costs, including restructuring and other cost reduction initiatives such as reducing discretionary spending and travel. Additionally, we are managing our capital resources and monitoring capital availability to ensure that we have sufficient resources to fund our future capital needs.
We have implemented select price increases for certain products. Also, we have taken and continue to focus on actions to manage costs, including restructuring and other cost reduction initiatives such as reducing discretionary spending and travel. Additionally, we are managing our capital resources and monitoring capital availability to ensure that we have sufficient resources to fund our future capital needs.
Risk Factors,” as well as other risks described in this Annual Report, could cause our results to differ materially from those expressed in forward- looking statements: ● conditions in the global or regional economies and global capital markets, and cyclical industry conditions, including recession, inflation, and higher interest rates; ● conditions affecting demand for products in the industries we serve, particularly the automotive industry; ● risk of future goodwill impairment; ● competition and pricing pressure; ● market acceptance of our new product introductions and product innovations and product life cycles; ● raw material availability, quality, and cost; ● fluctuations in foreign currency exchange rates and impacts of offsetting hedges; ● financial condition and consolidation of customers and vendors; 39 Table of Contents ● reliance on third-party suppliers; ● risks associated with current and future acquisitions and divestitures; ● global risks of business interruptions due to natural disasters or other disasters such as the COVID-19 pandemic, which have impacted and could continue to negatively impact our results of operations as well as customer behaviors, business, and manufacturing operations as well as our facilities and the facilities of our suppliers, and other aspects of our business; ● global risks of political, economic, and military instability, including the continuing military conflict between Russia and Ukraine resulting from Russia’s invasion of Ukraine or escalating tensions in surrounding countries, and volatile and uncertain economic conditions in China; ● risks associated with security breaches and other disruptions to our information technology infrastructure; ● risks related to compliance with current and future environmental and other laws and regulations; ● risks associated with compliance with applicable antitrust or competition laws or applicable trade regulations; ● our ability to protect our intellectual property rights; ● risks of litigation; ● our ability to operate within the limitations imposed by our debt instruments; ● the possible effects on us of various non-U.S. and U.S. legislative proposals and other initiatives that, if adopted, could materially increase our worldwide corporate effective tax rate, increase global cash taxes, and negatively impact our U.S. government contracts business; ● various risks associated with being a Swiss corporation; ● the impact of fluctuations in the market price of our shares; and ● the impact of certain provisions of our articles of association on unsolicited takeover proposals.
Risk Factors,” as well as other risks described in this Annual Report, could cause our results to differ materially from those expressed in forward- looking statements: ● conditions in the global or regional economies and global capital markets, and cyclical industry conditions, including recession, inflation, and higher interest rates; ● conditions affecting demand for products in the industries we serve, particularly the automotive industry; ● risk of future goodwill impairment; ● pricing pressure and competition, including competitive risks associated with the pace of technological change; 41 Table of Contents ● market acceptance of our new product introductions and product innovations and product life cycles; ● raw material availability, quality, and cost; ● product liability, warranty, and product recall claims and our ability to defend such claims; ● fluctuations in foreign currency exchange rates and impacts of offsetting hedges; ● financial condition and consolidation of customers and vendors; ● reliance on third-party suppliers; ● risks associated with current and future acquisitions and divestitures; ● global risks of business interruptions due to natural disasters or other disasters which have impacted and could continue to negatively impact our results of operations as well as customer behaviors, business, and manufacturing operations as well as our facilities and the facilities of our suppliers, and other aspects of our business; ● global risks of political, economic, and military instability, including the continuing military conflict between Russia and Ukraine resulting from Russia’s invasion of Ukraine or escalating tensions in surrounding countries, and volatile and uncertain economic conditions and the evolving regulatory system in China; ● risks associated with cybersecurity incidents and other disruptions to our information technology infrastructure; ● risks related to compliance with current and future environmental and other laws and regulations, including those related to climate change; ● risks related to the increasing scrutiny and expectations regarding ESG matters; ● risks associated with compliance with applicable antitrust or competition laws or applicable trade regulations; ● our ability to protect our intellectual property rights; ● risks of litigation, regulatory actions, and compliance issues; ● our ability to operate within the limitations imposed by our debt instruments; ● the possible effects on us of various non-U.S. and U.S. legislative proposals and other initiatives that, if adopted, could materially increase our worldwide corporate effective tax rate, increase global cash taxes, and negatively impact our U.S. government contracts business; ● requirements related to chemical usage, hazardous material content, recycling, and other circular economy initiatives; ● various risks associated with being a Swiss corporation; ● the impact of fluctuations in the market price of our shares; and ● the impact of certain provisions of our articles of association on unsolicited takeover proposals.
During fiscal 2022 and 2021, we initiated restructuring programs associated with footprint consolidation and cost structure improvements across all segments. We incurred net restructuring and related charges of $153 million, of which $16 million was recorded in cost of sales, in fiscal 2022 and $208 million in fiscal 2021.
During fiscal 2023 and 2022, we initiated restructuring programs associated with cost structure improvements across all segments. We incurred net restructuring charges of $260 million in fiscal 2023 and net restructuring and related charges of $153 million, of which $16 million was recorded in cost of sales, in fiscal 2022.
Future dividends on our common shares, if any, must be approved by our shareholders. In exercising their discretion to recommend to the shareholders that such dividends be approved, our board of directors will consider our results of operations, cash requirements and surplus, financial condition, statutory requirements of applicable law, contractual restrictions, and other factors that they may deem relevant.
In exercising their discretion to recommend to the shareholders that such dividends be approved, our board of directors will consider our results of operations, cash requirements and surplus, financial condition, statutory requirements of applicable law, contractual restrictions, and other factors that they may deem relevant.
Accounting Pronouncements See Note 2 to the Consolidated Financial Statements for information regarding recently issued accounting pronouncements. Non-GAAP Financial Measure Organic Net Sales Growth We present organic net sales growth as we believe it is appropriate for investors to consider this adjusted financial measure in addition to results in accordance with GAAP.
Accounting Pronouncement See Note 2 to the Consolidated Financial Statements for information regarding a recently issued accounting pronouncement. 40 Table of Contents Non-GAAP Financial Measure Organic Net Sales Growth (Decline) We present organic net sales growth (decline) as we believe it is appropriate for investors to consider this adjusted financial measure in addition to results in accordance with GAAP.
At fiscal year end 2022, a 25-basis-point decrease in discount rates would have increased the present value of our pension obligations by $64 million; a 25-basis-point increase would have decreased the present value of our pension obligations by $61 million.
At fiscal year end 2023, a 25-basis-point decrease in discount rates would have increased the present value of our pension obligations by $60 million; a 25-basis-point increase would have decreased the present value of our pension obligations by $57 million.
Annualized cost savings related to actions initiated in fiscal 2022 are expected to be approximately $120 million and are expected to be realized by the end of fiscal 2025. Cost savings will be reflected primarily in cost of sales and selling, general, and administrative expenses.
Annualized cost savings related to actions initiated in fiscal 2023 are expected to be approximately $200 million and are expected to be fully realized by the end of fiscal 2026. Cost savings will be reflected primarily in cost of sales and selling, general, and administrative expenses.
The following table presents the Transportation Solutions segment’s net sales and the percentage of total net sales by industry end market (1) : Fiscal 2022 2021 ($ in millions) Automotive $ 6,527 71 % $ 6,379 71 % Commercial transportation 1,582 17 1,467 16 Sensors 1,110 12 1,128 13 Total $ 9,219 100 % $ 8,974 100 % (1) Industry end market information is presented consistently with our internal management reporting and may be revised periodically as management deems necessary.
The following table presents the Transportation Solutions segment’s net sales and the percentage of total net sales by industry end market (1) : Fiscal 2023 2022 ($ in millions) Automotive $ 6,951 72 % $ 6,527 71 % Commercial transportation 1,525 16 1,582 17 Sensors 1,112 12 1,110 12 Total $ 9,588 100 % $ 9,219 100 % (1) Industry end market information is presented consistently with our internal management reporting and may be revised periodically as management deems necessary.
See Note 10 to the Consolidated Financial Statements for additional information regarding debt. During fiscal 2022, TEGSA, our wholly-owned subsidiary, issued $600 million aggregate principal amount of 2.50% senior notes due in February 2032.
See Note 10 to the Consolidated Financial Statements for additional information regarding debt. During fiscal 2023, TEGSA, our wholly-owned subsidiary, issued $500 million aggregate principal amount of 4.50% senior notes due in February 2026.
The following tables present summarized financial information, excluding investments in and equity in earnings of our non-guarantor subsidiaries, for TE Connectivity Ltd. and TEGSA on a combined basis. Fiscal Year End 2022 2021 (in millions) Balance Sheet Data: Total current assets $ 1,400 $ 452 Total noncurrent assets (1) 2,769 1,829 Total current liabilities 1,937 1,144 Total noncurrent liabilities (2) 15,871 12,443 (1) Includes $2,601 million and $1,810 million as of fiscal year end 2022 and 2021, respectively, of intercompany loans receivable from non-guarantor subsidiaries.
The following tables present summarized financial information, excluding investments in and equity in earnings of our non-guarantor subsidiaries, for TE Connectivity Ltd. and TEGSA on a combined basis. Fiscal Year End 2023 2022 (in millions) Balance Sheet Data: Total current assets $ 1,632 $ 1,400 Total noncurrent assets (1) 2,857 2,769 Total current liabilities 1,303 1,937 Total noncurrent liabilities (2) 7,592 15,871 (1) Includes $2,783 million and $2,601 million as of fiscal year end 2023 and 2022, respectively, of intercompany loans receivable from non-guarantor subsidiaries.
There were no forward starting interest rate swap contracts at fiscal year end 2022. We utilize investment swap contracts to manage earnings exposure on certain nonqualified deferred compensation liabilities. Commodity Exposures Our worldwide operations and product lines may expose us to risks from fluctuations in commodity prices.
There were no such contracts and no floating debt outstanding at fiscal year end 2023 or 2022. We utilize investment swap contracts to manage earnings exposure on certain nonqualified deferred compensation liabilities. Commodity Exposures Our worldwide operations and product lines may expose us to risks from fluctuations in commodity prices.
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.
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.
See Note 13 to the Consolidated Financial Statements for additional information regarding financial instruments. ITEM 8.
See Note 13 to the Consolidated Financial Statements for additional information regarding financial instruments. 43 Table of Contents ITEM 8.
We believe our capital funding levels are adequate to support new programs, and we continue to invest in our manufacturing infrastructure to further enhance productivity and manufacturing capabilities. During fiscal 2022, we acquired three businesses for a combined cash purchase price of $245 million, net of cash acquired.
We believe our capital funding levels are adequate to support new programs, and we continue to invest in our manufacturing infrastructure to further enhance productivity and manufacturing capabilities. During fiscal 2023, we acquired one business for a cash purchase price of $110 million, net of cash acquired.
As a result, we have experienced shortages and price increases in some of our input materials—including copper, gold, silver, and palladium—however, we have been able to initiate pricing actions which have partially offset these impacts.
As a result, we have experienced shortages and price increases in some of our input materials—including certain metals—however, we have been able to initiate pricing actions to offset these impacts.
At fiscal year end 2021, our commodity hedges, which related to expected purchases of gold, silver, copper, and palladium, were in a net gain position of $1 million and had a notional value of $512 million.
At fiscal year end 2023, our commodity hedges, which related to expected purchases of gold, silver, copper, and palladium, were in a net loss position of $23 million and had a notional value of $459 million.
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. 24 Table of Contents See Note 4 to the Consolidated Financial Statements for additional information regarding acquisitions.
We acquired three businesses for a combined cash purchase price of $245 million, net of cash acquired, during fiscal 2022. The acquisitions were reported as part of our Communications Solutions segment from the date of acquisition. See Note 4 to the Consolidated Financial Statements for additional information regarding acquisitions.
Also, this outlook is based on foreign currency exchange rates and commodity prices that are consistent with current levels. Acquisitions During fiscal 2022, we acquired three businesses for a combined cash purchase price of $245 million, net of cash acquired. The acquisitions were reported as part of our Communications Solutions segment from the date of acquisition.
Also, this outlook is based on foreign currency exchange rates and commodity prices that are consistent with current levels. Acquisitions During fiscal 2023, we acquired one business for a cash purchase price of $110 million, net of cash acquired. The acquisition was reported as part of our Industrial Solutions segment from the date of acquisition.
Excluding the items below, operating income increased due primarily to higher volume, partially offset by inflationary pressure on material and operating costs. Fiscal 2022 2021 (in millions) Acquisition and integration costs $ 5 $ 1 Restructuring and other charges, net 23 25 Total $ 28 $ 26 Liquidity and Capital Resources Our ability to fund our future capital needs will be affected by our ongoing ability to generate cash from operations and may be affected by our access to capital markets, money markets, or other sources of funding, as well as the capacity and terms of our financing arrangements.
Excluding the items below, operating income decreased in fiscal 2023 due primarily to lower volume. Fiscal 2023 2022 (in millions) Acquisition and integration costs $ 3 $ 5 Restructuring and other charges, net 45 23 Total $ 48 $ 28 Liquidity and Capital Resources Our ability to fund our future capital needs will be affected by our ongoing ability to generate cash from operations and may be affected by our access to capital markets, money markets, or other sources of funding, as well as the capacity and terms of our financing arrangements.
Excluding the items below, operating income increased in fiscal 2022 primarily as a result of higher volume and the positive impact of pricing actions, partially offset by inflationary pressure on material and operating costs. Fiscal 2022 2021 (in millions) Acquisition-related charges: Acquisition and integration costs $ 24 $ 15 Charges associated with the amortization of acquisition-related fair value adjustments 8 — 32 15 Restructuring and other charges, net 50 73 Restructuring-related charges recorded in cost of sales 16 — Total $ 98 $ 88 Communications Solutions Net Sales.
Excluding the items below, operating income increased slightly in fiscal 2023 primarily as a result of the positive impact of pricing actions, partially offset by lower volume, the negative impact of foreign currency translation, and higher material and operating costs. Fiscal 2023 2022 (in millions) Acquisition-related charges: Acquisition and integration costs $ 27 $ 24 Charges associated with the amortization of acquisition-related fair value adjustments — 8 27 32 Restructuring and other charges, net 84 50 Restructuring-related charges recorded in cost of sales — 16 Total $ 111 $ 98 Communications Solutions Net Sales.
The following table presents the Communications Solutions segment’s net sales and the percentage of total net sales by industry end market (1) : Fiscal 2022 2021 ($ in millions) Data and devices $ 1,576 62 % $ 1,198 57 % Appliances 966 38 907 43 Total $ 2,542 100 % $ 2,105 100 % (1) Industry end market information is presented consistently with our internal management reporting and may be revised periodically as management deems necessary.
The following table presents the Communications Solutions segment’s net sales and the percentage of total net sales by industry end market (1) : Fiscal 2023 2022 ($ in millions) Data and devices $ 1,162 61 % $ 1,606 62 % Appliances 733 39 966 38 Total $ 1,895 100 % $ 2,572 100 % (1) Industry end market information is presented consistently with our internal management reporting and may be revised periodically as management deems necessary.
This outlook reflects the negative impact of foreign currency exchange rates on net sales and earnings per share of approximately $400 million and $0.19 per share, respectively, in the first quarter of fiscal 2023 as compared to the same period of fiscal 2022.
This outlook reflects the impact of foreign currency exchange rates which is a positive impact of approximately $17 million on net sales and a negative impact of approximately $0.02 per share on earnings per share in the first quarter of fiscal 2024 as compared to the same period of fiscal 2023.
We believe that cash generated from operations and, to the extent necessary, these other sources of potential funding will be sufficient to meet our anticipated capital needs for the foreseeable future, including the payment of €550 million of 1.10% senior notes due in March 2023.
We believe that cash generated from operations and, to the extent necessary, these other sources of potential funding will be sufficient to meet our anticipated capital needs for the foreseeable future, including the pending acquisition of Schaffner and payment of $350 million of 3.45% senior notes due in August 2024.
The amount of income taxes paid, net of refunds, during fiscal 2022 and 2021 was $421 million and $371 million, respectively. Pension contributions were $42 million and $61 million in fiscal 2022 and 2021, respectively. We expect pension contributions to be $43 million in fiscal 2023, before consideration of any voluntary contributions.
The amount of income taxes paid, net of refunds, during fiscal 2023 and 2022 was $425 million and $421 million, respectively. 34 Table of Contents Pension contributions were $71 million and $42 million in fiscal 2023 and 2022, respectively. We expect pension contributions to be $70 million in fiscal 2024, before consideration of any voluntary contributions.
See further discussion in “Liquidity and Capital Resources.” Russia-Ukraine Military Conflict We are monitoring the military conflict between Russia and Ukraine, escalating tensions in surrounding countries, and associated sanctions. We suspended our business operations in Russia, and our operations in Ukraine have been reduced to focus on the safety of our employees.
See further discussion in “Liquidity and Capital Resources.” We continue to monitor the military conflict between Russia and Ukraine, escalating tensions in surrounding countries, and associated sanctions. We sold our business operations in Russia, and our operations in Ukraine have been reduced.
The following table presents the Industrial Solutions segment’s net sales and the percentage of total net sales by industry end market (1) : Fiscal 2022 2021 ($ in millions) Industrial equipment $ 1,934 43 % $ 1,397 36 % Aerospace, defense, and marine 1,087 24 1,035 27 Energy 804 18 738 19 Medical 695 15 674 18 Total $ 4,520 100 % $ 3,844 100 % (1) Industry end market information is presented consistently with our internal management reporting and may be revised periodically as management deems necessary.
The following table presents the Industrial Solutions segment’s net sales and the percentage of total net sales by industry end market (1) : Fiscal 2023 2022 ($ in millions) Industrial equipment $ 1,706 38 % $ 1,904 43 % Aerospace, defense, and marine 1,178 26 1,087 24 Energy 883 19 804 18 Medical 784 17 695 15 Total $ 4,551 100 % $ 4,490 100 % (1) Industry end market information is presented consistently with our internal management reporting and may be revised periodically as management deems necessary.
The following table presents the Industrial Solutions segment’s operating income and operating margin information: Fiscal 2022 2021 Change ($ in millions) Operating income $ 620 (1) $ 469 $ 151 Operating margin 13.7 % 12.2 % (1) Fiscal 2022 included an additional week.
The following table presents the Industrial Solutions segment’s operating income and operating margin information: Fiscal 2023 2022 Change ($ in millions) Operating income $ 602 $ 607 (1) $ (5) Operating margin 13.2 % 13.5 % (1) Fiscal 2022 included an additional week.
Summary of Fiscal 2022 Performance ● Our fiscal 2022 net sales increased 9.1% from fiscal 2021 levels due to sales increases in the Communications Solutions and Industrial Solutions segments and, to a lesser degree, the Transportation Solutions segment.
Summary of Fiscal 2023 Performance ● Our fiscal 2023 net sales decreased 1.5% from fiscal 2022 levels due to sales declines in the Communications Solutions segment, partially offset by sales increases in the Transportation Solutions segment and, to a lesser degree, the Industrial Solutions segment.
The following table presents the average prices incurred related to copper, gold, silver, and palladium: Fiscal Measure 2022 2021 Copper Lb. $ 4.08 $ 3.19 Gold Troy oz. 1,828 1,690 Silver Troy oz. 24.23 21.63 Palladium Troy oz. 2,337 2,276 In fiscal 2022, we purchased approximately 215 million pounds of copper, 129,000 troy ounces of gold, 2.7 million troy ounces of silver, and 13,000 troy ounces of palladium.
The following table presents the average prices incurred related to copper, gold, silver, and palladium: Fiscal Measure 2023 2022 Copper Lb. $ 4.09 $ 4.08 Gold Troy oz. 1,860 1,828 Silver Troy oz. 23.33 24.23 Palladium Troy oz. 2,162 2,337 In fiscal 2023, we purchased approximately 181 million pounds of copper, 112,000 troy ounces of gold, 2.4 million troy ounces of silver, and 7,000 troy ounces of palladium.
In fiscal 2022, gross margin increased $357 million as compared to fiscal 2021 primarily as a result of higher volume and the positive impact of pricing actions, partially offset by inflationary pressure on material and operating costs and the negative impact of foreign currency translation.
In fiscal 2023, gross margin decreased $189 million as compared to fiscal 2022 due primarily to higher material and operating costs, lower volume, and the negative impact of foreign currency translation, partially offset by the positive impact of pricing actions.
Although it is not feasible to predict the outcome of these proceedings, based upon our experience, current information, and applicable law, we do not expect that the outcome of these proceedings, either individually or in the aggregate, will have a material effect on our results of operations, financial position, or cash flows. 35 Table of Contents Trade Compliance Matters We have been investigating our past compliance with relevant U.S. trade controls and have made voluntary disclosures of apparent trade controls violations to the U.S.
Although it is not feasible to predict the outcome of these proceedings, based upon our experience, current information, and applicable law, we do not expect that the outcome of these proceedings, either individually or in the aggregate, will have a material effect on our results of operations, financial position, or cash flows.
The following table provides an analysis of the change in the Transportation Solutions segment’s net sales by industry end market: Change in Net Sales for Fiscal 2022 versus Fiscal 2021 Net Sales Organic Net Sales Growth (Decline) Growth Translation ($ in millions) Automotive $ 148 2.3 % $ 515 8.1 % $ (367) Commercial transportation 115 7.8 178 12.1 (63) Sensors (18) (1.6) 34 3.0 (52) Total $ 245 2.7 % $ 727 8.1 % $ (482) Net sales in the Transportation Solutions segment increased $245 million, or 2.7%, in fiscal 2022 from fiscal 2021 as a result of organic net sales growth of 8.1%, partially offset by the negative impact of foreign currency translation of 5.4%.
The following table provides an analysis of the change in the Transportation Solutions segment’s net sales by industry end market: Change in Net Sales for Fiscal 2023 versus Fiscal 2022 Net Sales Organic Net Sales Growth (Decline) Growth (Decline) Translation ($ in millions) Automotive $ 424 6.5 % $ 662 10.2 % $ (238) Commercial transportation (57) (3.6) (17) (1.1) (40) Sensors 2 0.2 20 1.8 (18) Total $ 369 4.0 % $ 665 7.2 % $ (296) Net sales in the Transportation Solutions segment increased $369 million, or 4.0%, in fiscal 2023 from fiscal 2022 as a result of organic net sales growth of 7.2%, partially offset by the negative impact of foreign currency translation of 3.2%.
In the Communications Solutions segment, operating income increased $163 million in fiscal 2022 as compared to fiscal 2021.
In the Communications Solutions segment, operating income decreased $364 million in fiscal 2023 as compared to fiscal 2022.
On an organic basis, our net sales increased 12.1% in fiscal 2022 as compared to fiscal 2021. ● Our net sales by segment were as follows: ● Transportation Solutions —Our net sales increased 2.7% with sales increases in the automotive and commercial transportation end markets, partially offset by sales declines in the sensors end market. ● Industrial Solutions —Our net sales increased 17.6% primarily as a result of sales increases in the industrial equipment end market. ● Communications Solutions —Our net sales increased 20.8% due primarily to sales increases in the data and devices end market. ● Fiscal 2022 included an additional week which contributed $306 million in net sales. ● During fiscal 2022, our shareholders approved a dividend payment to shareholders of $2.24 per share, payable in four equal quarterly installments of $0.56 beginning in the third quarter of fiscal 2022 and ending in the second quarter of fiscal 2023. ● Net cash provided by continuing operating activities was $2,468 million in fiscal 2022.
Fiscal 2022 included an additional week which contributed $306 million in net sales. ● Our net sales by segment were as follows: ● Transportation Solutions —Our net sales increased 4.0% due primarily to sales increases in the automotive end market. ● Industrial Solutions —Our net sales increased 1.4% as a result of sales increases in the aerospace, defense, and marine, the energy, and the medical end markets, partially offset by declines in the industrial equipment end market. ● Communications Solutions —Our net sales decreased 26.3% due to sales declines in both the data and devices and the appliances end markets. ● During fiscal 2023, our shareholders approved a dividend payment to shareholders of $2.36 per share, payable in four equal quarterly installments of $0.59 beginning in the third quarter of fiscal 2023 and ending in the second quarter of fiscal 2024. ● Net cash provided by operating activities was $3,132 million in fiscal 2023.
The extent to which the pandemic will continue to impact our business and the markets we serve will depend on future developments which may include the further spread of the virus, variant strains of the virus, and the resumption of high levels of infections and hospitalizations as well as the success of public health advancements, including vaccine production and distribution.
While the pandemic impacted certain aspects of our business, the extent to which the pandemic will continue to impact our business and the markets we serve will depend on future developments which may include the resurgence of the spread of the virus and variant strains of the virus as well as the success of public health advancements.
The following table presents the Communications Solutions segment’s operating income and operating margin information: Fiscal 2022 2021 Change ($ in millions) Operating income $ 602 (1) $ 439 $ 163 Operating margin 23.7 % 20.9 % (1) Fiscal 2022 included an additional week.
The following table presents the Communications Solutions segment’s operating income and operating margin information: Fiscal 2023 2022 Change ($ in millions) Operating income $ 251 $ 615 (1) $ (364) Operating margin 13.2 % 23.9 % (1) Fiscal 2022 included an additional week.
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 34 Table of Contents 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.
The guarantees would be triggered in the event of nonperformance, and the potential exposure for nonperformance under the guarantees would not have a material effect on our results of operations, financial position, or cash flows. 36 Table of Contents 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.
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 2023, we had outstanding letters of credit, letters of guarantee, and surety bonds of $198 million, including letters of credit of $29 million associated with our divesture of the Subsea Communications business.
… 77 more changes not shown on this page.