What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2021-02-10 compared with 2020-02-12 · 374 added, 258 removed, 968 unchanged (40% of the section changed)

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Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

Change in Accounting Principle

As discussed in Note 1 to the financial statements, the Company has changed its method of accounting for leases in 2019 due to the adoption of Accounting Standards Update No.

2016-02, Leases (Topic 842) , as amended, using the modified retrospective approach.

Basis for Opinions

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o Assessing the reasonableness of the methods and assumptions used by management to identify uncertain tax positions including but not limited to:

◾ Evaluating former, ongoing and anticipated tax audits by tax authorities

◾ Evaluating former and ongoing tax audits by tax authorities

◾ Evaluating transactions for which third-party tax advice or tax opinions were received

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Year Ended December 31,

Total other comprehensive (loss) income, net of tax:

Total other comprehensive income (loss), net of tax:

Foreign currency translation adjustments

Unrealized gain (loss) on cash flow hedges

Unrealized (loss) gain on hedging activities

Pension and postretirement benefit plan adjustment

Total other comprehensive (loss) income, net of tax

Total other comprehensive income (loss), net of tax

Total comprehensive income

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Treasury stock, at cost;

0.8 and 0.7 shares as of December 31, 2019 and 2018, respectively

1.0 shares and 0.8 shares as of December 31, 2020 and 2019, respectively

Accumulated other comprehensive loss

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Balance January 1, 2018

Cumulative effect of adoption of revenue recognition standard

Reclassification of income tax effects resulting from the Tax Act (ASU 2018-02)

Other comprehensive income (loss)

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Balance December 31, 2018

Cumulative effect of adoption of revenue recognition standard

Reclassification of income tax effects resulting from the Tax Act (ASU 2018-02)

Other comprehensive income (loss)

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Balance December 31, 2019

Cumulative effect of adoption of credit loss standard (ASU 2016-13)

Other comprehensive income (loss)

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Proceeds from issuance of senior notes

Repayments of long-term debt

Repayments of senior notes and other long-term debt

Borrowings under credit facilities

Repayments under credit facilities

(Repayments) borrowings under commercial paper programs, net

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Payment of premiums and fees related to early extinguishment of debt

Payment of acquisition-related contingent consideration

Payment of deferred purchase price related to an acquisition

Purchase of treasury stock

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The results of companies acquired are included in the Consolidated Financial Statements from the effective date of acquisition.

Change in Presentation

Certain reclassifications of prior period amounts have been made to conform to the current period presentation, which had no impact on our consolidated results of operations, financial position or cash flows.

Such reclassifications included separating, as its own line item, other intangible assets, net from other long-term assets, on the Consolidated Balance Sheets, as well as separating office equipment and other fixed assets from machinery and equipment, in the table detailing the components of property, plant and equipment in Note 3 herein.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash and liquid investments with an original maturity of less than three months.

The carrying amounts approximate fair values of those instruments, the vast majority of which are in non-U.S.

The carrying amounts approximate fair values of those instruments, the majority of which are in non-U.S.

bank accounts.

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The Company regularly reviews accounts receivable balances and adjusts the receivable reserves as necessary whenever events or circumstances indicate the carrying value may not be recoverable.

Effective January 1, 2020, as a result of our adoption of Accounting Standards Update (“ASU”) No.

2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), the Company assesses and records an allowance for expected credit losses on accounts receivable.

Refer to the end of Note 1 herein for further discussion on the adoption of ASU 2016-13.

Inventories are stated at the lower of cost or net realizable value.

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There have been no impairments recorded in 2020, 2019 or 2018 as a result of such reviews.

As a result of the adoption of Accounting Standards Update No.

2016-02, Leases (Topic 842) (“Topic 842”), the Company established accounting policies and procedures surrounding the financial reporting of the Company’s right-of-use assets and related lease liabilities.

Refer to Recent Accounting Pronouncements within this Note 1, as well as Note 10 herein for further details regarding the adoption of Topic 842, along with the policies and additional information related to our lease portfolio.

Effective January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) No.

2016-02, Leases (Topic 842) (“Topic 842”) and its related subsequent amendments, which amended, among other things, the existing guidance by requiring lessees to recognize lease right-of-use assets (“ROU assets”) and liabilities arising from operating leases on the balance sheet, using the updated modified retrospective transition approach and did not restate prior periods.

The Company recognized ROU assets and related lease liabilities of approximately $ 180 on our Consolidated Balance Sheets as of January 1, 2019, which related to our operating lease commitments, and there was no cumulative impact on retained earnings as of January 1, 2019.

Topic 842 did not have a material impact on our Consolidated Statements of Income and Consolidated Statements of Cash Flow for the year ended December 31, 2019, nor did it have any impact on our compliance with debt covenants.

The adoption of Topic 842 provided various optional practical expedients in transition, some of which we have elected.

As part of the adoption, the Company elected the “package of 3” practical expedient, which among other things, permitted us not to reassess the historical lease classifications for existing or expired leases.

The accounting for finance leases (formerly referred to as “capital leases”) remained substantially unchanged.

As a result of the adoption of Topic 842 as of January 1, 2019, the Company established accounting policies and procedures surrounding the financial reporting of the Company’s right-of-use assets and related lease liabilities.

Amphenol is a lessee of buildings, office space, automobiles and equipment throughout the world, nearly all of which are classified as operating leases expiring at various dates.

The Company determines if an arrangement qualifies as a lease at lease inception.

Operating lease liabilities are recorded based on the present value of the future lease payments over the lease term, assessed as of the commencement date.

The Company’s real estate leases, which are comprised primarily of manufacturing facilities, warehouses and sales offices, represent the vast majority of our operating lease liabilities and generally have a lease term between 2 and 12 years .

The remaining leases consist primarily of machinery and equipment used in production, office equipment and vehicles, each with various lease terms.

The vast majority of our leases are comprised of fixed lease payments, with a small percentage of the Company’s real estate leases including lease payments tied to a rate or index which may be subject to variability.

Certain real estate

leases also include executory costs such as common area maintenance (non-lease component), as well as property insurance and property taxes (non-components).

As a practical expedient permitted under Topic 842, we elected to account for the lease and non-lease components as a single lease component for our real estate leases.

Lease payments, which may include lease components, non-lease components and non-components, are included in the measurement of the Company’s lease liabilities to the extent that such payments are either fixed amounts or variable amounts based on a rate or index (fixed in substance) as stipulated in the lease contract.

Any actual costs in excess of such amounts are expensed as incurred as variable lease cost.

Substantially all of our lease agreements do not specify an implicit borrowing rate, and as such, the Company utilizes its incremental borrowing rate by lease term, in order to calculate the present value of our future lease payments.

The discount rate represents a risk-adjusted rate on a secured basis, and is the rate at which the Company would borrow funds to satisfy the scheduled lease liability payment streams commensurate with the lease term.

On January 1, 2019, the discount rate used on existing leases at adoption was determined based on the remaining lease term using available data as of that date.

For new or renewed leases, the discount rate is determined using available data at lease commencement and based on the lease term including any reasonably certain renewal periods.

Some of our lease agreements, primarily related to real estate, include options for the Company to either renew (extend) or early terminate the lease.

Leases with renewal options allow the Company to extend the lease term typically between 1 and 6 years .

Renewal options are reviewed at lease commencement to determine if such options are reasonably certain of being exercised, which could impact the lease term.

When determining if a renewal option is reasonably certain of being exercised, the Company considers several factors, including but not limited to, the significance of leasehold improvements incurred on the property, whether the asset is difficult to replace, or specific characteristics unique to the particular lease that would make it reasonably certain that we would exercise such option.

In most cases and unless there is an economic, financial or business reason to do so, the Company has concluded that renewal and early termination options are not reasonably certain of being exercised by the Company (and thus not included in our ROU asset and lease liability).

Refer to Note 10 herein for further information related to our lease portfolio.

Goodwill represents the excess purchase cost over the fair value of net assets acquired in business combinations.

The Company performs its evaluation for the impairment of goodwill for the Company’s two reporting units on an annual basis as of each July 1 or more frequently if an event occurs or circumstances change that would indicate that a reporting unit’s carrying amount may be impaired.

The Company has defined its reporting units as the two reportable business segments “Interconnect Products and Assemblies” and “Cable Products and Solutions”, as the components of these reportable business segments have similar economic characteristics.

The Company reviews its reporting unit structure each year or more frequently based on changes in our organization.

We continue to define our reporting units as the two reportable business segments “Interconnect Products and Assemblies” and “Cable Products and Solutions”, as the components of these reportable business segments have similar economic characteristics.

In the third quarter of 2020, when testing for goodwill impairment, the Company performed a quantitative goodwill impairment assessment for each reporting unit.

As part of the quantitative assessment, the Company estimated the fair value of each of its reporting units using a market approach.

The Company believes the market-based guideline public company method provides the best indicator of fair value, by utilizing market prices and other relevant metrics for comparable publicly-traded companies with similar operating and investment characteristics, as well as recent transactions of similar businesses within the industry.

Significant judgments, estimates and assumptions were used in the Company’s goodwill impairment assessment, including historical profitability data, the determination and selection of appropriate publicly-traded market comparison companies, and the calculation of comparable earnings-based and other multiples derived from comparable publicly traded companies and from recent transactions within the industry.

As there are inherent uncertainties and management’s judgment related to impairment analyses, the Company evaluated whether there were reasonably likely changes to management’s estimates and assumptions that would have a material impact on the results of the goodwill impairment assessment.

As of July 1, 2020, the Company determined that the fair value of each of the Company’s reporting units was substantially in excess of their respective carrying amounts, and therefore, no goodwill impairment resulted from the assessment.

In 2019 and 2018 as part of our annual evaluations, the Company utilized the option to first assess qualitative factors to determine whether it was necessary to perform the quantitative goodwill impairment assessment.

As part of this assessment, the Company reviews qualitative factors which include, but are not limited to, economic, market and industry conditions, as well as the financial performance of each reporting unit.

In accordance with applicable guidance, an entity is not required to calculate the fair value of a reporting unit if, after assessing these qualitative factors, the Company determines that it is more likely than not that the fair value of each of its reporting units is greater than its

respective carrying amount.

As of July 1, 2019 and 2018, the Company determined that it was more likely than not that the fair value of its reporting units exceeded their respective carrying amounts and therefore, a quantitative assessment was not required.

There has been no goodwill impairment in 2019, 2018 or 2017 in connection with our impairment tests.

In accordance with applicable guidance, an entity is not required to calculate the fair value of a reporting unit if, after assessing these qualitative factors, the

Company determines that it is more likely than not that the fair value of each of its reporting units is greater than its respective carrying amount.

The Company has no t recognized any goodwill impairment in 2020, 2019 or 2018 in connection with our annual impairment assessments.

Intangible Assets

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The fair value associated with acquired identifiable intangible assets are generally valued based on discounted cash flow analyses, independent appraisals and certain estimates made by management.

The Company assesses and reviews its long-lived intangible assets, other than goodwill, for potential impairment including identifiable intangible assets subject to amortization whenever events or changes in circumstances indicate the carrying amount may not be recoverable.

The Company assesses and reviews its identifiable intangible assets, other than goodwill and including identifiable intangible assets subject to amortization, for potential impairment whenever events or changes in circumstances indicate the intangible assets’ carrying amount may not be recoverable.

Factors the Company considers important, which could trigger an impairment review, include significant changes in the manner of the use of the asset, changes in historical trends in operating performance, significant changes in projected operating performance, anticipated future cash flows and significant negative economic trends.

Indefinite-lived intangible assets that are not subject to amortization, which is comprised of certain trade names, are reviewed at least annually for impairment.

Any indefinite-lived intangible assets that are not subject to amortization, which are comprised of certain trade names, are reviewed at least annually for impairment.

In the third quarter of 2020, the Company performed its annual assessment of these identifiable indefinite-lived intangible assets.

Based on our qualitative assessment, the Company determined that it was more likely than not that the fair value of the indefinite-lived intangible assets exceeded their respective carrying amounts.

Based on our assessment, the Company determined that it was more likely than not that the fair value of the indefinite-lived intangible assets exceeded their respective carrying amounts.

There has been no intangible asset impairment in 2020, 2019 or 2018 as a result of such reviews.

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2014-09, Revenue from Contracts with Customers (Topic 606) (collectively with its related subsequent amendments, “Topic 606”), resulting from the modified retrospective adoption of Topic 606 applied to those contracts which were not completed as of January 1, 2018.

The comparative results for the year ended December 31, 2017 were recognized in accordance with the Company’s revenue recognition policy then in effect under ASC Topic 605, Revenue Recognition (“Topic 605”), as discussed below.

The adoption of Topic 606 resulted in accounting policy changes surrounding revenue recognition which replaced previous revenue guidance under Topic 605.

In accordance with Topic 606, the Company recognizes revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for such goods or services.

T he Company recognizes revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for such goods or services.

The vast majority of our sales are recognized when products are shipped from our facilities or delivered to our customers, depending on the respective contractual terms.

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Refer to Note 13 herein for further discussion regarding the Company’s disaggregation of net sales.

are recognized at a point-in-time under the core principle of recognizing revenue when control transfers to the customer.

The Company’s primary source of revenues consist of product sales to either end customers and their appointed contract manufacturers (including original equipment manufacturers) or to distributors, and the vast majority of our sales are recognized at a point-in-time under the core principle of recognizing revenue when control transfers to the customer.

Revenues are derived from contracts with customers, which in most cases are customer purchase orders that may be governed by master sales agreements.

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Such capitalized contract costs were not material as of December 31, 2020 and 2019, and the related amortization expense was not material for the years ended December 31, 2020, 2019 and 2018.

Pre-adoption of Topic 606

The Company adopted Topic 606 using the modified retrospective method and as such, comparative results for the year ended December 31, 2017 were not retrospectively adjusted.

For the year ended December 31, 2017, revenue from sales of the Company’s products was recognized at the time the goods were delivered, title passed and the risks and rewards of ownership passed to the customer, provided the earnings process was complete and revenue was measurable.

Such recognition generally occurred when the products reached the shipping point, the sales price was fixed and determinable, and collection was reasonably assured.

Delivery was determined by the Company’s shipping terms, which was primarily freight on board shipping point.

Revenue was recorded at the net amount to be received after deductions for estimated discounts, allowances and returns.

These estimates and reserves were determined and adjusted as needed based upon historical experience, contract terms and other related factors.

The shipping costs for the majority of the Company’s sales were paid directly by the Company’s customers.

In the broadband communications market (approximately 6 % of net sales in 2017), the Company paid for shipping costs to the majority of its customers.

Shipping costs were also paid by the Company for certain customers in the Interconnect Products and Assemblies segment.

Retirement Pension Plans

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The expense of retiree medical benefit programs is recognized during the employees’ service with the Company.

The recognition of expense for retirement pension plans and medical benefit programs is significantly impacted by estimates made by management such as

discount rates used to value certain liabilities, expected return on assets, mortality projections and future health care costs.

The recognition of expense for retirement pension plans and medical benefit programs is significantly impacted by estimates made by management such as discount rates used to value certain liabilities, expected return on assets, mortality projections and future health care costs.

The Company uses third-party specialists to assist management in appropriately measuring the expense and obligations associated with pension and other postretirement plan benefits.

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Changes in estimated forfeitures are recognized in the period of change and impact the amount of expense to be recognized in future periods.

The expense incurred for stock-based compensation plans is included in Selling, general and administrative expenses in the accompanying Consolidated Statements of Income.

Deferred income taxes are provided for revenue and expenses which are recognized in different periods for income tax and financial statement reporting purposes.

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The Company includes estimated interest and penalties related to unrecognized tax benefits in the provision for income taxes.

As previously discussed, for the year ended December 31, 2017, as a result of the Tax Cuts and Jobs Act (“Tax Act”), the Company recorded (i) a provisional income tax charge related to the deemed repatriation of the accumulated unremitted earnings and profits of foreign subsidiaries, (ii) a provisional income tax charge related to changes in the Company’s permanent reinvestment assertion with regards to prior accumulated unremitted earnings from certain foreign subsidiaries, partially offset by (iii) a provisional income tax benefit associated with the remeasurement of its net deferred tax liabilities due to the U.S.

For the year ended December 31, 2017, as a result of the Tax Cuts and Jobs Act (“Tax Act”), the Company recorded (i) a provisional income tax charge related to the deemed repatriation of the accumulated unremitted earnings and profits of foreign subsidiaries, (ii) a provisional income tax charge related to changes in the Company’s permanent reinvestment assertion with regards to prior accumulated unremitted earnings from certain foreign subsidiaries, partially offset by (iii) a provisional income tax benefit associated with the remeasurement of its net deferred tax liabilities due to the U.S.

federal corporate tax rate reduction, and included these amounts in its consolidated financial statements.

The accounting associated with each of the provisional amounts was completed in 2018.

Beginning in 2018, the global intangible low-taxed income (“GILTI”) provision imposed a tax on certain earnings of foreign subsidiaries.

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The Company will account for the impact of additional guidance in the period in which any new guidance is released, if appropriate.

In December 2017, the SEC staff issued Staff Accounting Bulletin No.

118 (“SAB 118”), which was codified under ASU 2018-05, to address the application of U.S.

GAAP in situations where a registrant does not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting for certain income tax effects of the Tax Act.

In 2017, the Company recorded a provisional income tax charge of $ 398.5 as a result of the Tax Act.

Consistent with ASU 2018-05, t he Company completed its accounting and recorded an income tax benefit of $ 14.5 in 2018.

Foreign Currency Translation

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Assets and liabilities of such subsidiaries have been translated into U.S.

current exchange rates and related revenues and expenses have been translated at weighted average exchange rates.

dollars at current exchange rates and related revenues and expenses have been translated at weighted average exchange rates.

The aggregate effect of translation adjustments is included as a component of Accumulated other comprehensive income (loss) within equity.

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Any issuances from treasury shares are recorded using the weighted-average cost method.

Noncontrolling Interests

The Company presents noncontrolling interests in consolidated entities as its own caption within equity, separate from the Company’s equity attributable to Amphenol Corporation shareholders.

Net income attributable to noncontrolling interests is classified below net income.

Earnings per share is determined after the impact of the noncontrolling interests’ share in net income of the Company.

Derivative Financial Instruments

Derivative financial instruments, which are periodically used by the Company in the management of interest rate and foreign currency exposures, are accounted for as cash flow hedges.

The Company records each of its derivatives at fair value within the accompanying Consolidated Balance Sheets, and the respective accounting treatment for each derivative is based on its hedge designation.

We do not enter into derivative financial instruments for trading or speculative purposes , and our derivative financial instruments are with large financial institutions with strong credit ratings.

As of December 31, 2020, the Company does not have any significant concentration of exposure with any one counterparty.

Refer to Note 5 herein for further discussion of our derivative financial instruments.

Cash Flow Hedges

The Company periodically utilizes derivative financial instruments in the management of interest rate and foreign currency exposures.

Such cash flow hedges include foreign exchange forward contracts to hedge exposure to foreign currency exchange rate fluctuations for certain transactions denominated in foreign currencies.

As of December 31, 2020 and 2019, the aggregate notional value of our outstanding cash flow hedge contracts was approximately $ 94 and $ 101 , respectively.

Gains and losses on derivatives designated as cash flow hedges resulting from changes in fair value are recorded in Accumulated other comprehensive income (loss), and subsequently reflected in Cost of sales in the Consolidated Statements of Income in a manner that matches the timing of the actual income or expense of such instruments with that of the hedged transaction.

Any ineffective portion of the change in the fair value of designated hedging instruments is included in the Consolidated Statements of Income.

Cash flows from derivatives are classified and reported consistent with the cash flows associated with the underlying hedged item.

We do not enter into such derivative financial instruments for trading or speculative purposes.

Refer to Note 5 herein for further discussion of our derivative financial instruments.

Cash flows associated with cash flow hedges are classified and reported consistent with the cash flows associated with the underlying hedged item.

Net Investment Hedges

The Company is exposed to variability in the U.S.

dollar equivalent of the net investments in our foreign subsidiaries and, by extension, the U.S.

dollar equivalent of any foreign earnings repatriated to the U.S.

due to potential changes in foreign currency exchange rates.

As a result, the Company enters into foreign exchange forward contracts to hedge the net investments in certain foreign subsidiaries from which we expect to repatriate earnings to the United States.

As of December 31, 2020 and 2019, the aggregate notional value of our outstanding net investment hedge contracts was $ 250 and nil , respectively.

For such instruments that are designated and qualify as a net investment hedge, the effective portion of the hedging instrument’s gain or loss is reported as a component of other comprehensive income (loss) and recorded in Accumulated other comprehensive income (loss) on the Consolidated Balance Sheets.

The gain or loss will be subsequently reclassified into net earnings if the net investment in the hedged foreign operation is either sold or substantially liquidated.

Cash flows associated with net investment hedges are classified and reported within investing activities in the Consolidated Statements of Cash Flow.

Cash flows associated with our net investment hedges were not material for the years ended December 31, 2020, 2019 and 2018.

Non-Designated Derivatives

The Company enters into certain derivative financial instruments, from time to time, that are not designated as hedging instruments.

The Company enters into such foreign exchange forward contracts to reduce and minimize the impact of foreign currency fluctuations arising from the change in fair value of certain foreign currency denominated assets and liabilities.

These non-designated derivative instruments are adjusted to fair value each period through earnings, within the financial statement line item to which the derivative instrument relates.

For each of the three years ended December 31, 2020, such non-designated derivative instruments, including their impact to the Consolidated Statements of Income, were not material to the Company.

Cash flows associated with non-designated hedges are classified and reported consistent with the cash flows associated with the underlying hedged item.

Recent Accounting Pronouncements

Recently Adopted Accounting Standards

In February 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No.

2016-02, Leases (Topic 842) (“Topic 842”), which amended, among other things, the existing guidance by requiring lessees to recognize lease right-of-use assets (“ROU assets”) and liabilities arising from operating leases on the balance sheet.

Since issuing Topic 842, the FASB has issued various subsequent ASUs, including but not limited to, ASU 2018-10, Codification Improvements to Topic 842, Leases , which clarified various aspects of the guidance under Topic 842, as well as ASU 2018-11, Leases (Topic 842):

Targeted Improvements , which allows entities the option of recognizing the cumulative effect of applying Topic 842 as an adjustment to the opening balance of retained earnings in the year of adoption while continuing to present all prior periods under previous lease accounting guidance.

Prior to adoption, the Company evaluated Topic 842, including the initial review of any necessary changes to existing processes and systems that would be required to implement this standard, in order to determine its impact on our

consolidated financial statements and related disclosures.

In 2018, the Company implemented a new lease management system that facilitated the adoption of this standard and enabled the Company to fulfill its requirements for both reporting and disclosure purposes, as well as to better manage and monitor the Company’s ongoing lease portfolio.

On January 1, 2019, we adopted Topic 842 using the updated modified retrospective transition approach allowed under ASU 2018-11 and did not restate prior periods.

The Company recognized ROU assets and related lease liabilities on our Consolidated Balance Sheets as of January 1, 2019 of approximately $ 180 related to our operating lease commitments, and there was no cumulative impact on retained earnings as of January 1, 2019.

The adoption of Topic 842 provided various optional practical expedients in transition, some of which we have elected.

Going forward, the impact of Topic 842 on the Company’s consolidated financial statements will be dependent upon the Company’s lease portfolio.

The accounting for finance leases (formerly referred to as “capital leases”) remains substantially unchanged.

Refer to Note 10 herein for further details regarding the impact of the adoption of Topic 842 and other information related to our lease portfolio.

Other Recently Issued Accounting Standards

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which introduces an approach to estimate credit losses on certain types of financial instruments, including trade receivables, based on expected losses, as well as modifying the impairment model for available-for-sale debt securities.

ASU 2016-13, which is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, requires companies to make a cumulative-effect adjustment to retained earnings as of January 1, 2020.

The Company has evaluated ASU 2016-13 and will adopt the standard effective January 1, 2020, which is not expected to have a material impact on our consolidated financial statements.

Recently Adopted Accounting Standards and SEC Final Rules

In June 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No.

2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which introduced an approach to estimate credit losses on certain types of financial instruments, including trade receivables, based on expected losses, and modified the impairment model for available-for-sale debt securities.

ASU 2016-13, which is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, required companies to make a cumulative-effect adjustment to retained earnings as of January 1, 2020.

The Company adopted ASU 2016-13 effective January 1, 2020, which resulted in the Company recording a cumulative adjustment that reduced beginning retained earnings by $ 3.8 , arising from the estimated credit losses associated with the Company’s accounts receivable balance as of the date of adoption.

The adoption of ASU 2016-13 did not have a material impact on the Company’s financial position and its consolidated financial statements.

Prior periods presented herein remain in accordance with then effective accounting standards.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820):

Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which adds, amends and removes certain disclosure requirements related to fair value measurements.

Among other changes, this standard requires certain additional disclosure surrounding Level 3 assets, including changes in unrealized gains or losses in other comprehensive income and certain inputs in those measurements.

Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which added, amended and removed certain disclosure requirements related to fair value measurements.

Among other changes, this standard required certain additional disclosure surrounding Level 3 assets, including changes in unrealized gains or losses in other comprehensive income and certain inputs in those measurements.

ASU 2018-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.

Certain amended or eliminated disclosures in this standard may be adopted early, while certain additional disclosure requirements in this standard can be adopted on its effective date.

Certain amended or eliminated disclosures in this standard may be adopted early, while certain additional disclosure requirements in this standard may be adopted on its effective date.

In addition, certain changes in the standard require retrospective adoption, while other changes must be adopted prospectively.

The Company has evaluated ASU 2018-13 and will adopt the standard on January 1, 2020, which is not expected to have a material impact on our consolidated financial statements.

The Company adopted ASU 2018-13 effective January 1, 2020, which did not have a material impact on our consolidated financial statements.

In August 2020, the Securities and Exchange Commission (the “SEC”) issued a new rule that modernizes the disclosure requirements in Regulation S-K, Item 101 “Description of Business” , Item 103 “Legal Proceedings” and Item 105 “Risk Factors” .

The intent of this rule was to improve the readability of disclosures, reduce repetition, and eliminate immaterial information, thereby simplifying compliance for registrants and making disclosures more meaningful for investors.

While most of the changes involved reducing or eliminating previously required disclosures, the rule expanded the disclosure requirements related to human capital and more specifically, any human capital measures or objectives that management focuses on in managing the business.

The final rule was effective thirty days after its date of publication in the Federal Register.

The Company evaluated this SEC final rule, which was adopted and incorporated in this filing, and it did not have a material impact on this current SEC filing nor is it expected to have a material impact on future SEC filings.

Other Recently Issued Accounting Standards and SEC Final Rules

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):

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Certain changes in the standard require retrospective or modified retrospective adoption, while other changes must be adopted prospectively.

The Company is currently evaluating ASU 2019-12 and its impact on our consolidated financial statements.

The Company has evaluated ASU 2019-12, which we will adopt on January 1, 2021, and this standard will not have a material impact on our consolidated financial statements.

The United Kingdom’s Financial Conduct Authority, which regulates the London Interbank Offered Rate (“LIBOR”), announced in July 2017 its intent to phase out the use of LIBOR by the end of 2021.

On December 4, 2020, the ICE Benchmark Administration published a consultation on its intention to extend the publication of certain U.S.

dollar LIBOR (“USD LIBOR”) rates until June 30, 2023.

Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S.

financial institutions, identified the Secured Overnight Financing Rate (the “SOFR”) as its preferred benchmark alternative to USD LIBOR.

The SOFR represents a measure of the cost of borrowing cash overnight, collateralized by U.S.

Treasury securities, and is calculated based on directly observable U.S.

Treasury-backed repurchase transactions.

In March 2020, in response to this transition, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides optional expedients and exceptions for applying U.S.

GAAP to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued by reference rate reform, and addresses operational issues likely to arise in modifying contracts to replace discontinued reference rates with new rates.

ASU 2020-04 is effective as of March 12, 2020 through December 31, 2022.

In January 2021, the FASB also issued ASU 2021-01 Reference Rate Reform (Topic 848):

Scope (“ASU 2021-01”), which permits entities to elect certain optional expedients and exceptions when accounting for derivatives and certain hedging relationships affected by changes in interest rates and the transition.

The Company is evaluating the potential impact of the replacement of LIBOR from both a risk management and financial reporting perspective.

Our current portfolio of debt and financial instruments currently tied to LIBOR consists primarily of our Revolving Credit Facility, which had no outstanding borrowings as of December 31, 2020.

We do not currently believe that this transition will have a material impact on our financial condition, results of operations or cash flows.

In May 2020, the SEC issued a new rule regarding the financial statement requirements for acquisitions and dispositions of a business, which included, among other things, amending (i) certain criteria in the significance tests for acquired or to-be-acquired businesses, (ii) related pro forma financial information requirements, including its form and content, and (iii) related disclosure requirements, including the number of acquiree financial statement periods required to be presented in SEC filings.

The final rule is effective for fiscal years beginning after December 31, 2020, with early application permitted.

The Company has evaluated this SEC final rule, which we will adopt on January 1, 2021, and its impact on any future SEC filings will be dependent on the size of future business combinations.

In November 2020, the SEC issued a new rule that modernizes and simplifies various aspects and financial disclosure requirements in Regulation S-K, specifically related to Item 301 “Selected Financial Data” , Item 302 “Supplementary Financial Information” and Item 303 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”).

The intent of this new rule is to (i) eliminate duplicative disclosures, (ii) enhance and promote more principles-based MD&A disclosures with the objective of making them more meaningful for investors, all while (iii) simplifying the compliance requirements and efforts for registrants, by providing them with the flexibility to present management’s perspective on the registrant’s financial condition and results of operations.

While most of the changes involve reducing or eliminating previously required information and disclosures, the rule does expand the disclosure requirements surrounding certain aspects of the various items in Regulation S-K discussed above.

The final rule was published in the Federal Register on January 11, 2021, is effective thirty days after its publication date, or February 10, 2021, and registrants are required to comply with this final rule in the registrant’s first fiscal year ending on or after the date that is 210 days after the publication date (August 9, 2021).

The Company has evaluated this SEC final rule, and we plan to incorporate the requirements and amendments of this SEC rule, in its entirety, as part of our Form 10-K for the year ending December 31, 2021.

The application of this new SEC rule is not expected to have a material impact on our future SEC filings.

Note 2—Inventories

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Revolving Credit Facility

Commercial Paper Program (less unamortized discount of nil and $ 0.5 at December 31, 2019 and 2018, respectively)

Commercial Paper Program (less unamortized discount of nil and nil at December 31, 2020 and 2019, respectively)

Euro Commercial Paper Program (plus unamortized premium of nil and nil at December 31, 2020 and 2019, respectively)

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3.125 % Senior Notes (less unamortized discount of nil and $ 0.1 at December 31, 2020 and 2019, respectively)

3.125 % Senior Notes (less unamortized discount of $ 0.1 and $ 0.1 at December 31, 2019 and 2018, respectively)

September 2021

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3.20 % Senior Notes (less unamortized discount of $ 0.2 and $ 0.2 at December 31, 2020 and 2019, respectively)

2.000 % Euro Senior Notes (less unamortized discount of $ 2.5 and $ 2.8 at December 31, 2019 and 2018, respectively)

2.050 % Senior Notes (less unamortized discount of $ 0.6 at December 31, 2020)

2.800 % Senior Notes (less unamortized discount of $ 0.7 at December 31, 2019)

0.750 % Euro Senior Notes (less unamortized discount of $ 2.4 at December 31, 2020)

2.000 % Euro Senior Notes (less unamortized discount of $ 2.4 and $ 2.5 at December 31, 2020 and 2019, respectively)

4.350 % Senior Notes (less unamortized discount of $ 0.4 and $ 0.4 at December 31, 2020 and 2019, respectively)

2.800 % Senior Notes (less unamortized discount of $ 0.6 and $ 0.7 at December 31, 2020 and 2019, respectively)

February 2030

Notes payable to foreign banks and other debt

Less unamortized deferred debt issuance costs

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Revolving Credit Facility

On January 15, 2019, the Company amended its $ 2,000.0 unsecured credit facility with a $ 2,500.0 unsecured credit facility (“Revolving Credit Facility”).

The Revolving Credit Facility, which matures January 2024, gives the Company the ability to borrow at a spread over LIBOR.

On January 15, 2019, the Company amended its existing $ 2,000.0 unsecured credit facility with a $ 2,500.0 unsecured credit facility (“Revolving Credit Facility”).

The Revolving Credit Facility, which matures January 2024, gives the Company the ability to borrow, in various currencies, at a spread over LIBOR.

The Company may utilize the Revolving Credit Facility for general corporate purposes.

Due to the significant volatility in the credit and capital markets resulting from the outbreak of the COVID-19 pandemic, the Company borrowed approximately $ 1,255.6 under the Revolving Credit Facility in the first quarter of 2020, at a weighted average interest rate of 1.82 % .

The outstanding borrowings as of March 31, 2020 included € 200.0 ($ 217.4 at date of issuance) of euro-denominated borrowings, with the remainder of the outstanding borrowings denominated in U.S.

The borrowings under the Revolving Credit Facility during the first quarter of 2020 were used in part to repay outstanding balances under the U.S.

Commercial Paper Program and the Euro Commercial Paper Program (each as defined below).

During the second quarter of 2020, the Company repaid all of the outstanding borrowings under the Revolving Credit Facility using cash and cash equivalents on hand as well as the net proceeds from the 2026 Euro Notes (defined below).

At December 31, 2020 and 2019, there were no outstanding borrowings under the Revolving Credit Facility.

The carrying value of any borrowings under the Revolving Credit Facility would approximate their fair value due primarily to their market interest rates and would be classified as Level 2 in the fair value hierarchy (Note 5).

At December 31, 2019 and 2018, there were no borrowings under the Revolving Credit Facility.

The Revolving

Credit Facility requires payment of certain annual agency and commitment fees and requires that the Company satisfy certain financial covenants.

Commercial Paper

The Company has a commercial paper program pursuant to which the Company issues short-term unsecured commercial paper notes (“U.S.

Commercial Paper” or “USCP Notes”) in one or more private placements in the United States (the “U.S.

Any outstanding borrowings under the Revolving Credit Facility are classified as long-term debt in the accompanying Consolidated Balance Sheets.

The Revolving Credit Facility requires payment of certain annual agency and commitment fees and requires that the Company satisfy certain financial covenants.

Other Line of Credit Facilities

On March 20, 2020, the Company, through one of its wholly owned foreign subsidiaries, borrowed $ 100.0 (the maximum borrowing capacity) on an uncommitted line of credit, at a variable LIBOR-based interest rate, initially set at 1.92 % .

This line of credit, which was guaranteed by the Company and carried an interest rate of LIBOR plus 80 basis points, expired on December 19, 2020.

Borrowings under this line of credit arrangement were used for general corporate purposes.

The carrying value of this borrowing approximated its fair value due primarily to its market interest rates and was classified as Level 2 in the fair value hierarchy (Note 5).

Prior to maturity, on May 5, 2020, the Company repaid, in full, the outstanding borrowing on this uncommitted line of credit, using cash and cash equivalents on hand.

Commercial Paper Programs

The Company has a commercial paper program pursuant to which the Company issues short-term unsecured commercial paper notes (the “USCP Notes” or “U.S.

Commercial Paper”) in one or more private placements in the United States (the “U.S.

Commercial Paper Program”).

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The USCP Notes are sold under customary terms in the commercial paper market and may be issued at par or a discount therefrom, and bear varying interest rates on a fixed or floating basis.

The average interest rate on the U.S.

Commercial Paper as of December 31, 2019 and 2018 was 1.85 % and 2.88 %, respectively.

On July 10, 2018, the Company and one of its wholly owned European subsidiaries (the “Euro Issuer”) entered into a euro-commercial paper program (the “Euro Commercial Paper Program” and, together with the U.S.

As of December 31, 2020, there were no USCP Notes outstanding under the U.S.

Commercial Paper Program, while there was $ 160.0 of USCP Notes outstanding as of December 31, 2019.

The average interest rate on the outstanding USCP Notes as of December 31, 2019 was 1.85 %.

On July 10, 2018, the Company and one of its wholly owned European subsidiaries (collectively, the “Euro Issuer”) entered into a euro-commercial paper program (the “Euro Commercial Paper Program” and, together with the U.S.

Commercial Paper Program, the “Commercial Paper Programs”) pursuant to which the Euro Issuer may issue short-term unsecured commercial paper notes (the “ECP Notes” and, together with the USCP Notes, “Commercial Paper”), which are guaranteed by the Company and are to be issued outside of the United States.

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dollars or other currencies.

As of December 31, 2019 and 2018, the amount of ECP Notes outstanding was € 210.0 (approximately $ 235.5 ) and € 60.0 (approximately $ 68.8 ), respectively.

The average interest rate on the ECP Notes outstanding as of December 31, 2019 and 2018 was ( 0.13 )% and ( 0.10 )% , respectively.

In addition, effective April 14, 2020, a subsidiary of the Company is able to issue ECP Notes through the Bank of England’s COVID Corporate Financing Facility (the “BOE Facility”).

The BOE Facility will be available until March 22, 2021, although the Company has no current intentions to borrow under the BOE Facility.

As of December 31, 2020, there were no ECP Notes outstanding under the Euro Commercial Paper Program.

As of December 31, 2019, the amount of ECP Notes outstanding was € 210.0 (approximately $ 235.5 ), with an average interest rate on such outstanding ECP Notes of ( 0.13 )% .

Amounts available under the Commercial Paper Programs may be borrowed, repaid and re-borrowed from time to time.

As of December 31, 2019, the authorization from the Company’s Board of Directors limits the maximum aggregate principal amount outstanding of USCP Notes, ECP Notes, and any other commercial paper, euro-commercial paper or similar programs at any time to $ 2,500.0 , consistent with the Revolving Credit Facility.

As of December 31, 2020, the authorization from the Company’s Board of Directors limits the maximum

aggregate principal amount outstanding of USCP Notes, ECP Notes, and any other commercial paper, euro-commercial paper or similar programs at any time to $ 2,500.0 , consistent with the Revolving Credit Facility.

In addition, t he maximum aggregate principal amount outstanding of USCP Notes at any time is $ 2,500.0 , while the maximum aggregate principal amount outstanding of ECP Notes at any time is $ 2,000.0 .

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Net proceeds of the issuances of Commercial Paper are expected to be used for general corporate purposes.

The Commercial Paper is classified as long-term debt in the accompanying Consolidated Balance Sheets since the Company has the intent and ability to refinance the Commercial Paper on a long-term basis using the Company’s Revolving Credit Facility.

Any outstanding Commercial Paper is classified as long-term debt in the accompanying Consolidated Balance Sheets since the Company has the intent and ability to refinance the Commercial Paper on a long-term basis using the Company’s Revolving Credit Facility.

The Commercial Paper is actively traded and is therefore classified as Level 1 in the fair value hierarchy (Note 5).

The carrying value of Commercial Paper borrowings approximates their fair value.

On February 20, 2020, the Company issued $ 400.0 principal amount of unsecured 2.050 % Senior Notes due March 1, 2025 at 99.829 % of face value (the “2025 Senior Notes”).

The 2025 Senior Notes are unsecured and rank equally in right of payment with the Company’s other unsecured senior indebtedness.

Interest on the 2025 Senior Notes is payable semiannually on March 1 and September 1 of each year, commencing on September 1, 2020.

Prior to February 1, 2025, the Company may, at its option, redeem some or all of the 2025 Senior Notes at any time by paying the redemption price (which may include a make-whole premium), plus accrued and unpaid interest, if any, to, but not including, the date of redemption.

If redeemed on or after February 1, 2025, the Company may, at its option, redeem some or all of the 2025 Senior Notes at any time by paying the redemption price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the date of redemption.

On April 1, 2020, the Company used the net proceeds from the 2025 Senior Notes to repay the $ 400.0 principal amount of unsecured 2.20 % Senior Notes due April 1, 2020 upon maturity.

On January 9, 2019, the Company issued $ 500.0 principal amount of unsecured 4.350 % Senior Notes due June 1, 2029 at 99.904 % of face value (the “2029 Senior Notes”).

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Interest on the 2029 Senior Notes is payable semiannually on June 1 and December 1 of each year, commencing on June 1, 2019.

Prior to March 1, 2029, the Company may, at its option, redeem some or all of the 2029 Senior Notes at any time by paying the redemption price (which may include a make-whole premium), plus accrued and unpaid interest, if any, to, but not including, the date of redemption.

If redeemed on or after March 1, 2029, the Company may, at its option, redeem some or all of the 2029 Senior Notes at any time by paying the redemption price equal to 100 % of the principal amount thereof plus accrued and unpaid interest, if any, to, but not including, the date of redemption.

The Company used the net proceeds from the 2029 Senior Notes, along with proceeds from borrowings under the U.S.

Commercial Paper Program, to repay the $ 750.0 of 2.55 % Senior Notes due in January 2019.

On September 4, 2019, the Company commenced tender offers (“Tender Offers”) to purchase for cash any and all of the Company’s outstanding (i) $ 375.0 principal amount of its 3.125 % Senior Notes due September 2021 (“2021 Senior Notes”) and (ii) $ 500.0 principal amount of its 4.00 % Senior Notes due February 2022 (“2022 Senior Notes”).

On September 11, 2019, as a result of the Tender Offers, the Company accepted for payment $ 147.3 aggregate principal amount of the 2021 Senior Notes and $ 205.0 aggregate principal amount of the 2022 Senior Notes for 101.9 % and 104.5 % of par value, respectively (collectively, the “Tendered Notes”), plus accrued and unpaid interest to, but not

including, the settlement date of the Tender Offers.

If redeemed on or after March 1, 2029, the Company may, at its option, redeem some or all of the 2029 Senior Notes at any time by paying the redemption price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of redemption.

In January 2019, the Company used the net proceeds from the 2029 Senior Notes, along with proceeds from borrowings under the U.S.

Commercial Paper Program, to repay the $ 750.0 principal amount of unsecured 2.55 % Senior Notes due in January 2019.

On September 4, 2019, the Company commenced tender offers (the “Tender Offers”) to purchase for cash any and all of the Company’s outstanding (i) $ 375.0 principal amount of 3.125 % Senior Notes due September 2021 (the “2021 Senior Notes”) and (ii) $ 500.0 principal amount of 4.00 % Senior Notes due February 2022 (the “2022 Senior Notes”).

The total consideration for the Tendered Notes was $ 368.8 , which in addition to the Tendered Notes, included $ 13.4 of premiums and fees paid related to the early extinguishment of debt and $ 3.1 of accrued interest.

For the year ended December 31, 2019, the Company recorded a loss on early debt extinguishment of $ 14.3 ($ 12.5 after-tax, or $ 0.04 per diluted share) within Loss on early extinguishment of debt on the accompanying Consolidated Statements of Income.

This charge is primarily comprised of the premiums and fees incurred related to the Tendered Notes, along with the non-cash charge associated with the write-off of the remaining unamortized deferred debt issuance costs associated with the Tendered Notes.

This charge was primarily comprised of the premiums and fees incurred related to the Tendered Notes, along with the non-cash charge associated with the write-off of the remaining unamortized deferred debt issuance costs associated with the Tendered Notes.

The remaining principal amounts associated with the 2021 Senior Notes and 2022 Senior Notes, which were not redeemed as a result of the Tender Offers, remain outstanding as of December 31, 2020, as noted in the table above.

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Commercial Paper Program.

On April 5, 2017, the Company issued $ 400.0 principal amount of unsecured 2.20 % Senior Notes due April 1, 2020 at 99.922 % of face value (the “2020 Senior Notes”) and $ 350.0 principal amount of unsecured 3.20 % Senior Notes due April 1, 2024 at 99.888 % of face value (the “2024 Senior Notes” and, together with the 2020 Senior Notes, the “2020 and 2024 Notes”).

Interest on each of the 2020 Senior Notes and 2024 Senior Notes is payable semiannually on April 1 and October 1 of each year, commencing on October 1, 2017.

Prior to maturity, the Company may, at its option, redeem some or all of the 2020 Senior Notes at any time by paying the redemption price (which may include a make-whole premium), plus accrued and unpaid interest, if any, to, but not including, the date of redemption.

Prior to February 1, 2024, the Company may, at its option, redeem some or all of the 2024 Senior Notes at any time by paying the redemption price (which may include a make-whole premium), plus accrued and unpaid interest, if any, to, but not including, the date of redemption.

If redeemed on or after February 1, 2024, the Company may, at its option, redeem some or all of the 2024 Senior Notes at any time by paying the redemption price equal to 100 % of the principal amount thereof plus accrued and unpaid interest, if any, to, but not including, the date of redemption.

In September 2017, the Company used the net proceeds from the 2020 and 2024 Notes to repay all of its outstanding $ 375.0 principal amount of 1.55 % Senior Notes due September 15, 2017, with the remainder of the net proceeds being used for general corporate purposes.

All of the Company’s outstanding senior notes in the United States (“U.S.

All of the Company’s outstanding senior notes in the United States (the “U.S.

Senior Notes”) are unsecured and rank equally in right of payment with the Company’s other unsecured senior indebtedness.

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Senior Notes at any time subject to certain terms and conditions, which include paying 100 % of the principal amount, plus accrued and unpaid interest, if any, to the date of redemption, and, with certain exceptions, a make-whole premium.

The Company’s 2.20 % Senior Notes are due in April 2020 and are therefore recorded, net of the related unamortized discount and debt issuance costs, within Current portion of long-term debt in the accompanying Consolidated Balance Sheets as of December 31, 2019.

The Company’s 2021 Senior Notes are due in September 2021 and are therefore recorded, net of the related unamortized discount and debt issuance costs, within Current portion of long-term debt in the accompanying Consolidated Balance Sheets as of December 31, 2020.

Euro Senior Notes

On October 8, 2018, the Euro Issuer issued € 500.0 (approximately $ 574.6 at date of issuance) principal amount of unsecured 2.000 % Senior Notes due October 8, 2028 at 99.498 % of face value (the “2028 Euro Notes” or “ 2.000 % Euro Senior Notes”, and collectively with the U.S.

Senior Notes, “Senior Notes”).

On May 4, 2020, the Euro Issuer issued € 500.0 (approximately $ 545.4 at date of issuance) principal amount of unsecured 0.750 % Senior Notes due May 4, 2026 at 99.563 % of face value (the “2026 Euro Notes” or the “ 0.750 % Euro Senior Notes”).

The 2026 Euro Notes are unsecured and rank equally in right of payment with the Euro Issuer’s other unsecured senior indebtedness, and are fully and unconditionally guaranteed on a senior unsecured basis by the Company.

Interest on the 2026 Euro Notes is payable annually on May 4 of each year, commencing on May 4, 2021.

Prior to February 4, 2026, the Company may, at its option, redeem some or all of the 2026 Euro Notes at any time by paying the redemption price (which may include a make-whole premium), plus accrued and unpaid interest, if any, to, but not including, the date of redemption.

If redeemed on or after February 4, 2026, the Company may, at its option, redeem some or all of the 2026 Euro Notes at any time by paying the redemption price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the date of redemption.

The fair value of the 2026 Euro Notes is based on recent bid prices in an active market and is therefore classified as Level 1 in the fair value hierarchy (Note 5).

The Company used the net proceeds from the 2026 Euro Notes to repay amounts outstanding under its Revolving Credit Facility.

On October 8, 2018, the Euro Issuer issued € 500.0 (approximately $ 574.6 at date of issuance) principal amount of unsecured 2.000 % Senior Notes due October 8, 2028 at 99.498 % of face value (the “2028 Euro Notes” or the “ 2.000 % Euro Senior Notes”, collectively with the 2026 Euro Notes, the “Euro Notes”, and collectively with the U.S.

Senior Notes and 2026 Euro Notes, the “Senior Notes”).

The 2028 Euro Notes are unsecured and rank equally in right of payment with the Euro Issuer’s other unsecured senior indebtedness, and are fully and unconditionally guaranteed on a senior unsecured basis by the Company.

Interest on the 2028 Euro Notes is payable annually on October 8 of each year, commencing on October 8, 2019.

Prior to July 8, 2028, the Company may, at its option, redeem some or all of the 2028 Euro Notes at any time by paying the redemption price (which may include a make-whole premium), plus accrued and unpaid interest, if any, to, but not including, the date of redemption.

redeemed on or after July 8, 2028, the Company may, at its option, redeem some or all of the 2028 Euro Notes at any time by paying the redemption price equal to 100 % of the principal amount thereof plus accrued and unpaid interest, if any, to, but not including, the date of redemption.

If redeemed on or after July 8, 2028, the Company may, at its option, redeem some or all of the 2028 Euro Notes at any time by paying the redemption price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the date of redemption.

The Company used a portion of the net proceeds from the 2028 Euro Notes to repay a portion of the outstanding amounts under its Commercial Paper Programs, with the remainder of the net proceeds being used for general corporate purposes.

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bank accounts, approximate their fair value.

The Company’s derivative instruments represent foreign exchange forward contracts, which are valued using bank quotations based on market observable inputs such as forward and spot rates and are therefore classified as Level 2 in the fair value hierarchy.

The contingent consideration payment related to the SSI acquisition is valued using Level 3 unobservable inputs, such as probability weighted payout projections, within the fair value hierarchy.

The impact of the

credit risk related to these financial assets is immaterial.

The Company’s derivative instruments primarily consist of foreign exchange forward contracts, which are valued using bank quotations based on market observable inputs such as forward and spot rates and are therefore classified as Level 2 in the fair value hierarchy.

The contingent consideration payment (related to the SSI acquisition in January 2019, described further in Note 11 herein) was valued using Level 3 unobservable inputs, such as probability weighted payout projections, within the fair value hierarchy.

The calculation of the contingent consideration was finalized in the first quarter of 2020 based on actual financial data used for inputs, and the consideration was paid in June 2020.

of the credit risk related to these financial assets is immaterial.

The fair values of the Company’s financial and non-financial assets and liabilities subject to such standards at December 31, 2020 and December 31, 2019 are as follows:

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Forward contracts

Contingent consideration

Short-term investments

Forward contracts

Contingent consideration

With the exception of the fair value of the assets acquired and liabilities assumed in connection with acquisition accounting, the Company does not have any other significant financial or non-financial assets and liabilities that are measured at fair value on a non-recurring basis.

The Company utilizes foreign exchange forward contracts to hedge exposure to foreign currency exchange rate fluctuations for certain transactions denominated in foreign currencies.

As of December 31, 2019, the fair value of such contracts in the table above consisted primarily of two outstanding forward contracts, which fixed intercompany Korean Won and Great Britain Pound exposures into Hong Kong Dollar, with each expiring in 2020.

These forward contracts are designated hedging instruments accounted for as cash flow hedges.

For the years ended December 31, 2019 and 2018, the amounts recognized in Accumulated other comprehensive loss associated with foreign exchange forward contracts were not material.

For the years ended December 31, 2019, 2018 and 2017, the amounts reclassified from Accumulated other comprehensive loss to foreign exchange gain (loss), included within Cost of sales in the accompanying Consolidated Statements of Income, were not material.

The amount included in Accumulated other comprehensive loss as of December 31, 2019 associated with these forward contracts is expected to be reclassified into earnings within the next twelve months.

The Company utilizes foreign exchange forward contracts, hedging instruments accounted for as cash flow hedges, in the management of foreign currency exposures.

In addition, the Company also enters into foreign exchange forward contracts, accounted for as net investment hedges, to hedge our exposure to variability in the U.S.

dollar equivalent of the net investments in certain foreign subsidiaries.

As of December 31, 2020, the fair value of such contracts in the table above consisted primarily of (i) two outstanding forward contracts accounted for as cash flow hedges, with each expiring in 2021 and (ii) outstanding forward contracts accounted for as net investment hedges.

For the years ended December 31, 2020 and 2019, the amounts recognized in Accumulated other comprehensive (loss) income associated with foreign exchange forward contracts were not material, as discussed in more detail in Note 7 herein.

As of December 31, 2020 and 2019, the fair values of the Company’s forward contracts are recorded within Prepaid expenses and other current assets, Other long-term assets, Other accrued expenses and Other long-term liabilities in the accompanying Consolidated Balance Sheets, depending on their value and remaining contractual period.

For further discussion on the Company’s derivative financial instruments and related policies, refer to Note 1 herein.

Note 6—Income Taxes

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United States

Current tax provision:

Current tax provision (benefit):

United States

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Total provision for income taxes

As described in Note 1 herein, the United States federal government enacted the Tax Act in 2017.

T he Tax Act provides for a transition tax on the accumulated unremitted foreign earnings and profits of the Company’s foreign subsidiaries (“Transition Tax”) and a reduction of the U.S.

federal corporate income tax rate from 35 % to 21 % , among other changes.

In 2017, the Company recorded a provisional income tax charge of $ 398.5 (“Tax Act Charge”) that was comprised of (i) the Transition Tax of $ 259.4 , (ii) a charge of $ 176.6 related to changes in the Company’s permanent reinvestment assertion with regards to prior accumulated unremitted earnings from certain foreign subsidiaries, partially offset by (iii) a tax benefit of $ 37.5 associated with the remeasurement of the Company’s U.S.

net deferred tax liabilities due to the U.S.

federal corporate tax rate reduction, all of which was included in the 2017 provision and reflected the then estimated impacts of the Tax Act as previously disclosed.

The Company analyzed guidance and technical interpretations issued in 2018 related to the provisions of the Tax Act, and refined, analyzed and updated the underlying data, computations and assumptions used to prepare the Tax Act Charge.

As a result, the Company completed its accounting within the one-year measurement period and recorded an income tax benefit of $ 14.5 in 2018.

The Company paid its second annual installment of the Transition Tax in the second quarter of 2019.

The Company will pay the Transition Tax, net of applicable tax credits and deductions, over an eight-year period until 2025, as permitted under the Tax Act.

The United States federal government enacted the Tax Cuts and Jobs Act (“Tax Act”) in 2017.

Consistent with the requirements of ASU 2018-05, Income Taxes (Topic 740):

Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No.

118 , the Company recorded a provisional charge (“Tax Act Charge”) in 2017 and completed its

accounting for the Tax Act within the one-year measurement period.

As such, the Company recorded an income tax benefit of $ 14.5 in 2018.

In addition, in 2017, the Company recorded a transition tax (“Transition Tax”) of $ 259.4 related to the deemed repatriation of the accumulated unremitted earnings and profits of the Company’s foreign subsidiaries.

In the third quarter of 2020, the Company paid the third annual installment of the Transition Tax, net of applicable tax credits and deductions.

The Company will pay the balance of the Transition Tax, net of applicable tax credits and deductions, over the remainder of the eight-year period ending 2025, as permitted under the Tax Act.

The current and long-term portions of the Transition Tax are recorded in Accrued income taxes and Other long-term liabilities, respectively, on the Consolidated Balance Sheets as of December 31, 2020 and 2019.

The Company also recorded a tax charge, related to changes in the Company’s permanent reinvestment assertion, in 2017 due to our intention to repatriate prior accumulated unremitted earnings from certain foreign subsidiaries over time.

In addition, as a result of the Tax Act, the Company also recorded a tax charge, in 2017, related to changes in the Company’s permanent reinvestment assertion, due to our intention to repatriate prior accumulated unremitted earnings from certain foreign subsidiaries over time.

We will pay such taxes when those respective earnings are repatriated.

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federal tax loss carryforwards, of which $ 126.1 , $ 78.6 and $ 8.2 , respectively, will either expire or be refunded at various dates through 2040 and the balance can be carried forward indefinitely.

The Company had $ 3.8 of foreign tax credit carryforwards and $ 13.7 of U.S.

state tax credit carryforwards, of which $ 3.8 and $ 7.9 , respectively, will either expire or be refunded at various dates through 2039 and the balance can be carried forward indefinitely.

The Company had $ 3.2 of foreign tax credit carryforwards, $ 15.4 of U.S.

state tax credit carryforwards, and $ 0.4 of U.S.

federal tax credit carryforwards, of which $ 3.2 , $ 9.6 , and $ 0.4 , respectively, will either expire or be refunded at various dates through 2040 and the balance can be carried forward indefinitely.

A valuation allowance of $ 40.1 and $ 35.2 at December 31, 2020 and 2019, respectively, has been recorded which relates primarily to the U.S.

federal and state and foreign net operating loss carryforwards and U.S.

state and foreign net operating loss carryforwards and U.S.

state tax credits.

The net change in the valuation allowance for deferred tax assets in both 2019 and 2018 was not material.

The net change in the valuation allowance for deferred tax assets in 2020 was an increase of $ 4.9 , which related primarily to U.S.

state and foreign net operating loss carryforwards.

The net change in the valuation allowance for deferred tax assets in 2019 was not material.

Differences between the U.S.

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Tax Act - transition tax

Tax Act - remeasurement of deferred tax liabilities, net

Tax Act - change in indefinite reinvestment assertion

Excess tax benefits related to stock-based compensation

Settlements of refund claims in foreign jurisdictions including related deferred taxes

Effective tax rate

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Unremitted foreign earnings

Contingent consideration

Total deferred tax liabilities

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As of December 31, 2020 and 2019, the amount of unrecognized tax benefits, including penalties and interest, which if recognized would impact the effective tax rate, was approximately $ 169.3 and $ 171.0 , respectively.

Unrecognized tax benefits are reviewed on an ongoing basis and are adjusted for changing facts and circumstances, including progress of tax audits and the closing of statutes of limitations.

Based on information currently available, management anticipates that over the next twelve-month

period, audit activity could be completed and statutes of limitations may close relating to existing unrecognized tax benefits of approximately $ 42.3 .

Unrecognized tax benefits are reviewed on an ongoing basis and are adjusted for changing facts and circumstances, including the progress of tax audits and the closing of statutes of limitations.

Based on information currently available, management anticipates that over the next twelve-month period, audit activity could be completed and statutes of limitations may close relating to existing unrecognized tax benefits of approximately $ 24.6 .

Note 7—Equity

Stock-Based Compensation:

The Company’s income before income taxes was reduced by $ 63.0 , $ 55.6 and $ 49.7 for the years ended December 31, 2019, 2018 and 2017, respectively, related to the expense incurred for stock-based compensation plans, which is included in Selling, general and administrative expenses in the accompanying Consolidated Statements of Income.

In addition, for the years ended December 31, 2019, 2018 and 2017, the Company recognized aggregate income tax benefits of $ 46.0 , $ 27.5 and $ 78.3 , respectively, in the provision for income taxes in the accompanying Consolidated Statements of Income associated with stock-based compensation.

These aggregate income tax benefits during the years ended December 31, 2019, 2018 and 2017 include excess tax benefits of $ 38.1 , $ 19.8 and $ 66.6 , respectively, from option exercises during these years.

For the years ended December 31, 2020, 2019 and 2018, the Company’s income before income taxes was reduced for stock-based compensation expense of $ 70.5 , $ 63.0 and $ 55.6 , respectively, the expense of which is included in Selling, general and administrative expenses in the accompanying Consolidated Statements of Income.

In addition, for the years ended December 31, 2020, 2019 and 2018, the Company recognized aggregate income tax benefits (associated with stock-based compensation) of $ 50.7 , $ 46.0 and $ 27.5 , respectively, in the provision for income taxes in the accompanying Consolidated Statements of Income.

These aggregate income tax benefits during the years ended December 31, 2020, 2019 and 2018 include excess tax benefits of $ 42.8 , $ 38.1 and $ 19.8 , respectively, from option exercises.

The impact associated with recognizing excess tax benefits from option exercises in the provision for income taxes on our consolidated financial statements could result in significant fluctuations in our effective tax rate in the future, since the provision for income taxes will be impacted by the timing and intrinsic value of future stock-based compensation award exercises.

Stock Options

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A committee of the Company’s Board of Directors has been authorized to grant stock options pursuant to the 2017 Employee Option Plan.

The number of shares of the Company’s Class A Common Stock (“Common Stock”) reserved for issuance under the 2017 Employee Option Plan is 30,000,000 shares.

At the time of its adoption, the number of shares of the Company’s Class A Common Stock (“Common Stock”) reserved for issuance under the 2017 Employee Option Plan is 30,000,000 shares.

As of December 31, 2020, there were 5,142,520 shares of Common Stock available for the granting of additional stock options under the 2017 Employee Option Plan.

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In 2004, the Company adopted the 2004 Stock Option Plan for Directors of Amphenol Corporation (the “2004 Directors Option Plan”).

The 2004 Directors Option Plan is administered by the Company’s Board of Directors.

The 2004 Directors Option Plan expired in May 2014, except that its terms continue with respect to any outstanding options granted thereunder.

The 2004 Directors Option Plan was administered by the Company’s Board of Directors.

The 2004 Directors Option Plan expired in May 2014.

Options were last granted under the 2004 Directors Option Plan in May 2011.

Options granted under the 2004 Directors Option Plan are fully vested and are generally exercisable over a period of ten years from the date of grant.

All options granted under the 2004 Directors Option Plan have been either exercised or forfeited.

Stock option activity for 2018, 2019 and 2020 was as follows:

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As of December 31, 2020, the total compensation cost related to non-vested options not yet recognized was approximately $ 177.3 , with a weighted average expected amortization period of 3.40 years.

The grant date fair value of each option grant under the 2009 Employee Option Plan, the 2017 Employee Option Plan and the 2004 Directors Option Plan is estimated using the Black-Scholes option pricing model.

The grant-date fair value of each option grant under the 2009 Employee Option Plan and the 2017 Employee Option Plan is estimated using the Black-Scholes option pricing model.

The grant-date fair value of each share grant is determined based on the closing share price of the Company’s Common Stock on the date of the grant.

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On April 24, 2018, the Company’s Board of Directors authorized a stock repurchase program under which the Company may purchase up to $ 2,000.0 of the Company’s Common Stock during the three-year period ending April 24, 2021 (the “2018 Stock Repurchase Program”) in accordance with the requirements of Rule 10b-18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

During the years ended December 31, 2019 and 2018, the Company repurchased 6.5 million and 6.4 million shares of its Common Stock for $ 601.7 and $ 553.2 , respectively, under the 2018 Stock Repurchase Program.

Of the total repurchases in 2019, 5.5 million shares, or $ 514.1 , have been retired by the Company;

the remaining 1.0 million shares, or $ 87.6 , were retained in Treasury stock at time of repurchase.

Of the total repurchases in 2018, 5.7 million shares, or $ 498.2 , have been retired by the Company;

the remaining 0.7 million shares, or $ 55.0 , had been retained in Treasury stock at time of repurchase.

From January 1, 2020 through January 31, 2020, the Company repurchased 0.3 million additional shares of its Common Stock for $ 29.0 , leaving $ 816.1 available to purchase under the 2018 Stock Repurchase Program.

The price and timing of any future purchases under the 2018 Stock Repurchase Program will depend on factors such as levels of cash generation from operations, the volume of stock option exercises by employees, cash requirements for acquisitions, dividends, economic and market conditions and stock price.

During the years ended December 31, 2020, 2019 and 2018, the Company repurchased 6.0 million, 6.5 million and 6.4 million shares of its Common Stock for $ 641.3 , $ 601.7 and $ 553.2 , respectively, under the 2018 Stock Repurchase Program.

Of the total repurchases in 2020, 1.4 million shares, or $ 153.9 , have been retained in Treasury stock at time of repurchase;

the remaining 4.6 million shares, or $ 487.4 , have been retired by the Company.

Of the total repurchases in 2019, 1.0 million shares, or $ 87.6 , were retained in Treasury stock at time of repurchase;

the remaining 5.5 million shares, or $ 514.1 , were retired by the Company.

Of the total repurchases in 2018, 0.7 million shares, or $ 55.0 , were retained in Treasury stock at time of repurchase;

the remaining 5.7 million shares, or $ 498.2 , were retired by the Company.

From January 1, 2021 through January 31, 2021, the Company repurchased $ 4.0 of its Common Stock, and has remaining authorization to purchase up to $ 199.8 of its Common Stock under the 2018 Stock Repurchase Program.

The price and timing of any future purchases under the 2018 Stock Repurchase Program will depend on a number of factors such as levels of cash generation from operations, the level of uncertainty relating to the COVID-19 pandemic, the volume of stock option exercises by employees, cash requirements for acquisitions, dividends, economic and market conditions and stock price.

On January 24, 2017, the Company’s Board of Directors authorized a stock repurchase program under which the Company could purchase up to $ 1,000.0 of the Company’s Common Stock during the two-year period ending January 24, 2019 (the “2017 Stock Repurchase Program”) in accordance with the requirements of Rule 10b-18 of the Exchange Act.

During the three months ended March 31, 2018, the Company repurchased 4.2 million shares of its Common Stock for $ 382.0 , while during the year ended December 31, 2017, the Company repurchased 8.4 million shares of its Common Stock for $ 618.0 .

These shares have been retired by the Company .

These repurchases of 12.6 million shares for $ 1,000.0 completed the 2017 Stock Repurchase Program.

The repurchases in the first quarter of 2018, coupled with the Company’s repurchase of 6.4 million shares of its Common Stock for $ 553.2 under the 2018 Stock Repurchase Program during the nine months ended December 31, 2018, resulted in total repurchases of 10.6 million shares for $ 935.2 during the year ended December 31, 2018.

During the three months ended March 31, 2018, the Company repurchased 4.2 million shares of its Common Stock for $ 382.0 , all of which were retired by the Company;

these repurchases completed the $ 1,000.0 2017 Stock Repurchase Program.

T he repurchases in the first quarter of 2018, coupled with the Company’s repurchase of 6.4 million shares of its Common Stock for $ 553.2 under the 2018 Stock Repurchase Program during the nine months ended December 31, 2018, resulted in total repurchases of 10.6 million shares for $ 935.2 during the year ended December 31, 2018.

Contingent upon declaration by the Board of Directors, the Company generally pays a quarterly dividend on shares of its Common Stock.

The following table summarizes the declared quarterly dividends per share for each of the three years ended December 31, 2019, 2018 and 2017:

On October 20, 2020, the Company’s Board of Directors approved an increase to its quarterly dividend rate from $ 0.25 per share to $ 0.29 per share effective with dividends declared in the fourth quarter of 2020.

The following table summarizes the quarterly declared dividends per share for each of the three years ended December 31, 2020, 2019 and 2018:

First Quarter

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Comprehensive

Income (Loss)

(Loss) Income

Balance at January 1, 2018

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Amounts reclassified from Accumulated other comprehensive income (loss) to earnings, net of tax of ($ 6.4 )

Amounts reclassified from Accumulated other comprehensive income (loss) to retained earnings, resulting from income tax effects of the Tax Act (ASU 2018-02)

Balance at December 31, 2018

Other comprehensive income (loss) before reclassifications, net of tax of nil , ($ 0.1 ) and $ 6.6 , respectively

Other comprehensive income (loss) before reclassifications, net of tax of nil , nil and $ 5.3 , respectively

Amounts reclassified from Accumulated other comprehensive income (loss) to earnings, net of tax of ($ 4.9 )

Amounts reclassified from Accumulated other comprehensive income (loss) to retained earnings, resulting from income tax effects of the Tax Act (ASU 2018-02)

Balance at December 31, 2019

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Balance at December 31, 2020

The amounts reclassified from Accumulated other comprehensive income (loss) for unrealized gain (loss) on cash flow hedges, which comprised of foreign exchange forward contracts, are included in Cost of sales in the Consolidated Statements of Income.

For the years ended December 31, 2020, 2019 and 2018, as it relates to the Company’s cash flow hedges, which comprised of foreign exchange forward contracts, the amounts reclassified from Accumulated other comprehensive income (loss) to foreign exchange gain (loss), included in Cost of sales in the accompanying Consolidated Statements of Income, were not material.

There were no reclassifications associated with our net investment hedges from Accumulated other comprehensive income (loss) to earnings during the years presented in the table above.

The amount included in Accumulated other comprehensive loss as of December 31, 2020 associated with our cash flow hedges is expected to be reclassified into earnings within the next twelve months.

The amounts reclassified from Accumulated other comprehensive income (loss) to earnings, related to pension and other postretirement benefit plans in the table above, are reported within Other income, net in the Consolidated Statements of Income, the vast majority of which is related to the amortization of actuarial losses associated with our defined benefit plans.

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Basic earnings per share (“EPS”) is computed by dividing net income attributable to Amphenol Corporation by the weighted average number of common shares outstanding.

Diluted EPS is computed by dividing net income attributable to Amphenol Corporation by the weighted average number of common shares and dilutive common shares outstanding, which relates to stock options.

A reconciliation of the basic weighted average common shares outstanding to diluted weighted average common shares outstanding for the years ended December 31, 2019, 2018 and 2017 is as follows:

Diluted EPS is computed by dividing net income attributable to Amphenol Corporation by the weighted average number of outstanding common shares and dilutive common shares, the dilutive effect of which relates to stock options.

A reconciliation of the basic weighted average common shares

outstanding to diluted weighted average common shares outstanding for the years ended December 31, 2020, 2019 and 2018 is as follows:

(dollars and shares in millions, except per share data)

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Excluded from the computations above were anti-dilutive common shares (primarily related to outstanding stock options) of 4.7 million, 7.1 million and 3.3 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Subsequent Event - Stock Split

On January 27, 2021, the Company announced that its Board of Directors approved a two -for-one split of the Company’s common stock.

The stock split will be effected in the form of a stock dividend paid to shareholders of record as of the close of business on February 16, 2021.

The Company expects the additional shares will be distributed on March 4, 2021.

Below are the pro forma weighted average common shares outstanding and earnings per share (basic and diluted) to give the effect of this stock split as if it had been effective for all years presented.

(table below is unaudited)

(dollars and shares in millions, except per share data)

Net income attributable to Amphenol Corporation shareholders

Basic weighted average common shares outstanding

Effect of dilutive stock options

Diluted weighted average common shares outstanding

Earnings per share attributable to Amphenol Corporation shareholders:

Note 9—Benefit Plans and Other Postretirement Benefits

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Plans’ benefits are generally based on years of service and compensation and are generally noncontributory.

employees not covered by the U.S.

Plans are covered by defined contribution plans.

The majority of U.S.

employees are not covered by the U.S.

Plans and are covered by defined contribution plans.

Certain foreign subsidiaries have defined benefit plans covering their employees (the “Foreign Plans” and, together with the U.S.

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Plan amendments

Actuarial (gain) loss

Actuarial loss

Foreign exchange translation

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Amounts recognized on the balance sheet as of December 31:

Other long-term assets

Other accrued expenses

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Rate of compensation increase

The projected benefit obligation increased in 2019 primarily due to higher actuarial losses in 2019, primarily resulting from the impact of lower discount rates on our projected benefit obligation.

The projected benefit obligation decreased in 2018 primarily due to actuarial gains in 2018 resulting from the impact of higher discount rates on our projected benefit obligation.

The projected benefit obligation increased in both 2020 and 2019 primarily due to higher actuarial losses, resulting from the impact of lower discount rates on our projected benefit obligation.

The accumulated benefit obligation for the Company’s defined benefit pension plans was $ 818.4 and $ 748.4 at December 31, 2020 and 2019, respectively.

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Plans was $ 525.1 and $ 495.0 , respectively, and for the Foreign Plans was $ 293.3 and $ 253.4 , respectively.

All of the Company’s U.S.

Plans and Foreign Plans have accumulated benefit obligations (and projected benefit obligations) in excess of plan assets as of December 31, 2019 and 2018.

The following summarizes information for defined benefit plans with an accumulated benefit obligation in excess of plan assets as of December 31, 2020 and 2019:

Foreign Plans

Accumulated benefit obligation

Fair value of plan assets

The following summarizes information for defined benefit plans with a projected benefit obligation in excess of plan assets as of December 31, 2020 and 2019:

Foreign Plans

Projected benefit obligation

Fair value of plan assets

The amounts, before tax, included in Accumulated other comprehensive loss at December 31, 2020 and 2019 that have not yet been recognized as expense were as follows:

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The weighted average discount rate for the Foreign Plans was 1.12 % and 1.59 % at December 31, 2020 and 2019, respectively.

The increase in the benefit obligation associated with our Foreign Plans at December 31, 2019 was primarily driven by the decrease in the discount rate.

The increase in the benefit obligation associated with our Foreign Plans at December 31, 2020 was primarily driven by the decrease in the discount rate, along with foreign currency translation.

The Company calculates its service and interest costs by applying a split discount rate approach under which specific spot rates along the selected yield curve are applied to the relevant projected cash flows as the Company believes this method more precisely measures its obligations.

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The current investment policy includes a strategy to maintain an adequate level of diversification, subject to portfolio risks.

The target allocations for the U.S.

The current target allocations for the U.S.

Plans are generally 60 % equity and 40 % fixed income.

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As described above, the expected long-term rate of return on the U.S.

Plans’ assets is based on an asset allocation assumption of approximately 60 % with equity managers (with an expected long-term rate of return of approximately 8 %) and 40 % with fixed income managers (with an expected long-term rate of return of approximately 6 %).

The Company believes that the long-term asset allocation on average will approximate 60 % with equity managers and 40 % with fixed income managers.

Plans’ assets is currently based on an asset allocation assumption of approximately 60 % with equity managers (with an expected long-term rate of return of approximately 8 %) and 40 % with fixed income managers (with an expected long-term rate of return of approximately 6 %).

The Company regularly reviews the actual asset allocation and periodically rebalances investments to its targeted allocation when considered appropriate.

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Fixed income securities:

fixed income securities — short term

fixed income securities — intermediate term

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Real estate funds

Cash and cash equivalents (b)

Cash and cash equivalents

December 31, 2019

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fixed income securities — intermediate term

fixed income securities — long term

fixed income securities — high yield

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Real estate funds

Cash and cash equivalents

Cash and cash equivalents (b)

(a) Certain investments measured at fair value using the net asset value (NAV) practical expedient have been removed from the fair value hierarchy but included in the table above in order to permit the reconciliation of the fair value hierarchy to total plan assets.

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Participation in these plans is based on certain eligibility requirements.

Through 2018, the Company matched the majority of employee contributions to the U.S.

defined contribution plans with cash contributions up to a maximum of 5 % of eligible compensation.

Through 2018, the Company matched employee contributions to the U.S.

defined contribution plans up to a maximum of 5 % of eligible compensation.

Effective January 1, 2019, the Company increased its matching of employee contributions to the U.S.

defined contribution plans to a maximum of 6 % of eligible compensation.

defined contribution plans up to a maximum of 6 % of eligible compensation.

The Company provided matching contributions to the U.S.

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Note 10—Leases

Amphenol is a lessee of buildings, office space, automobiles and equipment throughout the world, nearly all of which are classified as operating leases expiring at various dates.

The Company determines if an arrangement qualifies as a lease at lease inception.

The Company adopted Topic 842 effective January 1, 2019.

Operating lease liabilities are recorded based on the present value of the future lease payments over the lease term, assessed as of the commencement date.

The remaining leases consist primarily of machinery and equipment used in production, office equipment and vehicles, each with various lease terms.

Certain real estate leases also include executory costs such as common area maintenance (non-lease component), as well as property insurance and property taxes (non-components).

As a practical expedient permitted under Topic 842, we have elected to account for the lease and non-lease components as a single lease component for our real estate leases.

Any actual costs in excess of such amounts are expensed as incurred as variable lease cost.

On January 1, 2019, the discount rate used on existing leases at adoption was determined based on the remaining lease term using available data as of that date.

For new or renewed leases starting in 2019, the discount rate is determined using available data at lease commencement and based on the lease term including any reasonably certain renewal periods.

Some of our lease agreements, primarily related to real estate, include options for the Company to either renew (extend) or early terminate the lease.

Leases with renewal options allow the Company to extend the lease term typically between 1 and 6 years .

Renewal options are reviewed at lease commencement to determine if such options are reasonably certain of being exercised, which could impact the lease term.

When determining if a renewal option is

reasonably certain of being exercised, the Company considers several factors, including but not limited to, the significance of leasehold improvements incurred on the property, whether the asset is difficult to replace, or specific characteristics unique to the particular lease that would make it reasonably certain that we would exercise such option.

In most cases, the Company has concluded that renewal and early termination options are not reasonably certain of being exercised by the Company (and thus not included in our ROU asset and lease liability) unless there is an economic, financial or business reason to do so.

Operating Leases

For the year ended December 31, 2019, total operating lease cost was $ 97.6 , which includes an immaterial amount of variable lease cost, and is recorded in Cost of sales and Selling, general and administrative expenses, dependent on the nature of the leased asset.

For the years ended December 31, 2020 and 2019, total operating lease cost was $ 98.7 , and $ 97.6 , respectively, which include an immaterial amount of variable lease cost, and is recorded in Cost of sales and Selling, general and administrative expenses, dependent on the nature of the leased asset.

Other than variable lease cost, operating lease cost is recognized on a straight-line basis over the lease term.

The following summarizes:

(i) the future minimum undiscounted lease payments under non-cancelable leases for each of the next five years and thereafter, incorporating the practical expedient to account for lease and non-lease components as a single lease component for our existing real estate leases, (ii) a reconciliation of the undiscounted lease payments to the present value of the lease liabilities recognized, and (iii) the lease-related account balances on our Consolidated Balance Sheets, all as of December 31, 2019:

The following summarizes (i) the future minimum undiscounted lease payments under non-cancelable leases for each of the next five years and thereafter, incorporating the practical expedient to account for lease and non-lease components as a single lease component for our existing real estate leases and (ii) a reconciliation of the undiscounted lease payments to the present value of the lease liabilities recognized, all as of December 31, 2020:

Year Ending December 31,

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Total present value of future minimum lease payments

The following summarizes the lease-related account balances on our Consolidated Balance Sheets, as of December 31, 2020 and 2019:

As of December 31 :

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The following summarizes additional supplemental data related to our operating leases:

Operating Leases

Year Ended December 31 :

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Prior to January 1, 2019, the Company accounted for its leases in accordance with Topic 840, Leases .

Total rent expense under operating leases for the years ended December 31, 2018 and 2017 was approximately $ 87.2 and $ 58.5 ,

respectively, which was recorded in Cost of sales and Selling, general and administrative expenses, dependent on the nature of the leased asset.

Total rent expense under operating leases for the year ended December 31, 2018 was approximately $ 87.2 , which was recorded in Cost of sales and Selling, general and administrative expenses, dependent on the nature of the leased asset.

At December 31, 2018, the Company was committed under operating leases for buildings, office space, automobiles and equipment, which expired at various dates.

As previously disclosed in our 2018 Annual Report and under previous lease accounting guidance, future minimum lease payments (undiscounted) under non-cancelable operating leases as of December 31, 2018 was as follows:

Total minimum obligation

Finance Leases

In rare circumstances, the Company may enter into finance leases (formerly referred to as “capital leases”) for specific equipment used in manufacturing, in which the Company takes ownership of the asset upon the end of the lease.

In rare circumstances, the Company may enter into finance leases for specific equipment used in manufacturing, in which the Company takes ownership of the asset upon the end of the lease.

The Company records its finance leases within Property, plant and equipment, net, Current portion of long-term debt and Long-term debt on the accompanying Consolidated Balance Sheets.

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Note 11—Acquisitions

During the year ended December 31, 2020, the Company completed two acquisitions, each included in the Interconnect Products and Assemblies segment, for $ 50.4 , net of cash acquired.

The Company is in the process of completing its analyses of the fair value of the assets acquired and liabilities assumed.

The Company anticipates that the final assessments of values will not differ materially from the preliminary assessments.

The operating results of the 2020 acquisitions have been included in the Consolidated Statements of Income for the year ended December 31, 2020, since their respective dates of acquisition.

Pro forma financial information related to these acquisitions has not been presented, since these acquisitions were not material, either individually or in the aggregate, to the Company’s financial results.

In January 2019, the Company acquired SSI Controls Technologies (“SSI”), the sensor manufacturing division of SSI Technologies, Inc., for approximately $ 400 , net of cash acquired, plus a performance-related contingent payment.

SSI, which is headquartered in the United States (Wisconsin), is a leading designer and manufacturer of sensors and sensing solutions for the global automotive and industrial markets.

The acquisition of SSI is not material to the Company.

The contingent consideration payment is based on certain 2019 revenue and profitability levels of SSI.

The SSI acquisition was not material to the Company.

The contingent consideration payment was based on certain 2019 revenue and profitability levels of SSI.

The Company determined the fair value of this liability using Level 3 unobservable inputs, such as probability weighted payout projections, and is classified as Level 3 in the fair value hierarchy (Note 5).

The contingent consideration is payable in 2020 and recorded in Other accrued expenses on the accompanying Consolidated Balance Sheets as of December 31, 2019.

During the twelve months ended December 31, 2019, the Company completed nine acquisitions, including SSI, for $ 937.4 , net of cash acquired.

All but one of the acquisitions are in the Interconnect Products and Assemblies segment.

In 2019, acquisitions resulted in the recognition of $ 784.6 of goodwill and $ 111.8 of definite-lived intangible assets, primarily related to customer relationships and proprietary technology, with the remainder of the purchase price being allocated to other identifiable assets acquired and liabilities and noncontrolling interests assumed.

These definite-lived intangible assets are being amortized based upon the underlying pattern of economic benefit as reflected by the future net cash inflows, with the vast majority having useful lives ranging from 5 to 10 years .

The calculation of the contingent consideration was finalized in the first quarter of 2020 as $ 75.0 , based on actual financial data used for inputs, and was paid in the second quarter of 2020.

The contingent consideration was recorded in Other accrued expenses on the accompanying Consolidated Balance Sheets as of December 31, 2019.

During the year ended December 31, 2019, the Company completed nine acquisitions, including SSI, for $ 937.4 , net of cash acquired.

All but one of the acquisitions were included in the Interconnect Products and Assemblies segment.

The 2019 acquisitions resulted in the recognition, in 2019, of $ 784.6 of goodwill and $ 111.8 of definite-lived intangible assets, primarily related to customer relationships and proprietary technology, with the remainder of the purchase price being allocated to other identifiable assets acquired and liabilities and noncontrolling interests assumed.

These definite-lived intangible assets are being amortized based upon the underlying pattern of economic benefit, with the vast majority having useful lives ranging from 5 to 10 years .

The excess purchase price over the fair value of the underlying net assets acquired was allocated to goodwill, which primarily represents the value of the assembled workforce along with other intangible assets acquired that do not qualify for separate recognition.

The Company expects that approximately $ 455 of the goodwill recognized from acquisitions in 2019 will be deductible for tax purposes.

The Company is in the process of completing its analyses of the fair value of the assets acquired and liabilities assumed.

The Company anticipates that the final assessments of values will not differ materially from the preliminary assessments.

The operating results of the 2019 acquisitions have been included in the Consolidated Statements of Income for the year ended December 31, 2019, since their respective dates of acquisition.

The Company has completed its analyses of the fair value of the assets acquired and liabilities assumed for all 2019 acquisitions.

The operating results of the 2019 acquisitions have been included in the Consolidated Statements of Income for the years ended December 31, 2020 and 2019, since their respective dates of acquisition.

During the twelve months ended December 31, 2018, the Company completed three acquisitions, all in the Interconnect Products and Assemblies segment, for $ 158.9 , net of cash acquired.

During the year ended December 31, 2018, the Company completed three acquisitions, all in the Interconnect Products and Assemblies segment, for $ 158.9 , net of cash acquired.

The Company has completed its analyses of the fair value of the assets acquired and liabilities assumed for all 2018 acquisitions.

The acquisitions in 2018 were not material, either individually or in the aggregate, to the Company’s financial results, and therefore, pro forma financial information related to these acquisitions has not been presented.

Acquisition of MTS Systems Corporation (“MTS”)

On December 9, 2020, Amphenol announced that the Company entered into a definitive agreement under which Amphenol will acquire MTS Systems Corporation (Nasdaq:

MTSC) (“MTS”) for $ 58.50 per share in cash, or approximately $ 1,700 , net of cash acquired and including the assumption of outstanding debt and liabilities.

MTS, which is headquartered in the state of Minnesota in the United States, is a leading global supplier of precision sensors, advanced test systems and motion simulators.

MTS is organized into two business segments:

Sensors and Test & Simulation.

The Sensors segment represents a highly complementary offering of high-technology, harsh environment sensors sold into diverse end markets and applications.

The Company expects the MTS acquisition to further expand our range of sensor and sensor-based products across a wide array of industries.

The definitive agreement to acquire MTS has been unanimously approved by the boards of both companies and is expected to close by the middle of 2021, subject to certain regulatory approvals, approval from MTS’s shareholders and other customary closing conditions.

Amphenol expects to fund the MTS acquisition through a combination of cash and cash equivalents on hand, along with borrowings under our existing revolving credit or commercial paper facilities.

On January 19, 2021, the Company announced that it has entered into an agreement to sell the MTS Test & Simulation business to Illinois Tool Works Inc.

The sale of this business is expected to close following the anticipated closing of our acquisition of MTS, subject to certain regulatory approvals and other customary closing conditions.

Acquisitions Subsequent to Year-end

In January 2021, the Company also completed two acquisitions, each in the Interconnect Products and Assemblies segment, for approximately $ 145 , net of cash acquired.

The Company is in the process of completing its analyses of the fair value of the assets acquired and liabilities assumed.

These acquisitions, which were funded using cash and cash equivalents on hand, are not material, either individually or in the aggregate, to the Company’s financial results.

Acquisition-related Expenses

In 2019, the Company incurred approximately $ 25.4 ($ 21.0 after-tax) of acquisition-related expenses primarily related to the amortization of $ 15.7 related to the value associated with acquired backlog (primarily related to the SSI acquisition), with the remainder representing external transaction costs.

In 2018, the Company incurred approximately $ 8.5 ($ 7.2 after-tax) of acquisition-related expenses in the fourth quarter related to external transaction costs.

In 2017, the Company incurred approximately $ 4.0 ($ 3.7 after-tax) of acquisition-related expenses in the second quarter related to external transaction costs.

In 2020, the Company incurred approximately $ 11.5 ($ 10.7 after-tax) of acquisition-related expenses, primarily comprised of external transaction costs related to acquisitions that were announced or closed.

In 2019, the Company incurred approximately $ 25.4 ($ 21.0 after-tax) of acquisition-related expenses, primarily comprised of the amortization of $ 15.7 related to the value associated with acquired backlog (of which $ 12.5 related to the SSI acquisition), with the remainder representing external transaction costs.

In 2018, the Company incurred approximately $ 8.5 ($ 7.2 after-tax) of acquisition-related expenses related to external transaction costs.

Such acquisition-related expenses are separately presented in the accompanying Consolidated Statements of Income.

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Trade names (indefinite-lived)

The increase in the carrying amounts of intangible assets in 2019 was primarily due to intangible assets acquired as a result of the SSI acquisition, along with the other acquisitions closed during the year.

The increase in the gross carrying amounts of intangible assets in 2020 was primarily due to the impact of foreign currency translation.

The amortization expense for the years ended December 31, 2020, 2019 and 2018 was approximately $ 49.6 , $ 67.3 and $ 46.9 , respectively.

The amortization expense in 2019 includes $ 15.7 related to the amortization of acquired backlog, primarily from the SSI acquisition.

As of December 31, 2019, amortization expense relating to the Company’s curr ent intangible assets estimated for each of the next five fiscal years is approximately $ 49.3 in 2020, $ 44.7 in 2021, $ 37.4 in 2022, $ 34.7 in 2023, and $ 29.3 in 2024.

The amortization expense in 2019 included $ 15.7 related to the amortization of acquired backlog, primarily from the SSI acquisition.

As of December 31, 2020, amortization expense relating to the Company’s current intangible assets estimated for each of the next five fiscal years is approximately $ 46.2 in 2021, $ 38.5 in 2022, $ 35.7 in 2023, $ 30.0 in 2024, and $ 20.5 in 2025.

Note 13—Reportable Business Segments and International Operations

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(i) Interconnect Products and Assemblies and (ii) Cable Products and Solutions.

The Company organizes its reportable business segments based upon similar economic characteristics and business groupings of products, services, and customers.

These reportable business segments are determined based upon how the Company reviews its businesses, assesses operating performance and makes investing and resource allocation decisions.

The Company organizes its reportable business segments based upon similar economic characteristics and business groupings of products, services, and customers, and do not include any aggregated operating segments.

These reportable business segments are determined based upon how the Company operates its businesses, assesses operating performance, makes resource allocation decisions, and communicates results, outlook and strategy to our Board of Directors and shareholders.

The Interconnect Products and Assemblies segment primarily designs, manufactures and markets a broad range of connector and connector systems, value-add products and other products, including antennas and sensors, used in a broad range of applications in a diverse set of end markets.

The Cable Products and Solutions segment primarily designs, manufactures and markets cable, value-add products and components for use primarily in the broadband communications and information technology markets as well as certain applications in other markets.

The accounting policies of the segments are the same as those for the Company as a whole and are described in Note 1 herein.

The Company evaluates the performance of business units and allocates resources to them based on,

among other things, profit or loss from operations before interest, headquarters’ expense allocations, stock-based compensation expense, income taxes, amortization related to certain intangible assets and nonrecurring gains and losses.

The accounting policies of the segments are the same as those for the Company as a whole and are described in

Note 1 herein.

The Company evaluates the performance of the segments and allocates resources to them based on, among other things, profit or loss from operations before interest, headquarters’ expense allocations, stock-based compensation expense, income taxes, amortization related to certain intangible assets and nonrecurring gains and losses.

Interconnect Products

10 unchanged sentences

The reconciliation of segment operating income and segment assets (excluding goodwill) to consolidated results is included in the tables below.

Reconciliation of segment operating income to consolidated income before income taxes:

A reconciliation of segment operating income to consolidated income before income taxes is summarized as follows:

Segment operating income

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Other assets are comprised primarily of corporate identifiable assets such as cash and cash equivalents.

The increase in other assets in 2020 is primarily driven by an increase in corporate-held cash and cash equivalents on hand.

Net sales by geographic area for the years ended December 31, 2020, 2019 and 2018 and property, plant and equipment, net by geographic area as of December 31 were as follows:

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(1) Long-lived assets in this table are comprised of property, plant and equipment, net, for all years presented.

In addition, for 2019, operating lease right-of-use assets are also included, as a result of the Company’s adoption of Topic 842 effective January 1, 2019.

Refer to Note 10 herein for further details on the impact of Topic 842.

In addition, for 2020 and 2019, operating lease right-of-use assets are also included, as a result of the Company’s adoption of Topic 842 effective January 1, 2019.

Refer to Note 1 and Note 10 herein for further details on the impact of Topic 842.

Disaggregation of Net Sales

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Net sales by geographic area are based on the customer location to which the product is shipped.

No single customer represented 10% or more of the Company’s net sales for the year ended December 31, 2019.

During the year ended December 31, 2018, aggregate sales to the Company’s largest customer, including sales of products to EMS companies that the Company believes are manufacturing products on their behalf, represented approximately 12 % of the Company’s net sales.

During the years ended December 31, 2020 and 2018, aggregate sales to the Company’s largest customer, including sales of products to EMS companies that the Company believes are manufacturing products on their behalf, represented approximately 11 % and 12 %, respectively, of the Company’s net sales.

No single customer represented 10% or more of the Company’s net sales for the year ended December 31, 2019.

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The Company is currently unable to estimate the timing or outcome of the matter.

From December 2019 through October 2020, the Company has been named as one of several defendants in four separate lawsuits filed in the State of Indiana .

The lawsuits relate to a manufacturing site in Franklin, Indiana (the “Site”) where the Company has been conducting an environmental clean-up effort under the direction of the United States Environmental Protection Agency (the “EPA”).

The Site was shut down in 1983, more than three years before the Company acquired the Site as part of a larger acquisition that led to the establishment of the Company’s business in 1987 (the “Acquisition”).

In connection with the Acquisition, the Company agreed, and has continued, to work closely with the EPA regarding the ongoing clean-up effort at the Site, subject to an indemnity from the seller (the “Seller”).

In 1989, the Company sold the property where the Site is located.

The lawsuits collectively seek, among other things, compensation for personal injuries and for past, present and future medical expenses, compensation for loss of property values near the Site and costs related to medical monitoring for individuals living close to the Site, in each case arising from alleged exposure to hazardous chemicals.

The Company denies any wrongdoing and is defending each of the above described lawsuits.

All the costs incurred relating to these lawsuits are reimbursed by the Seller based on the Seller’s indemnification obligations entered into in connection with the Acquisition (the “1987 Indemnification Agreement”).

In addition, the environmental investigation, remediation and monitoring activities undertaken by the Company relating to the Site are reimbursed under the 1987 Indemnification Agreement.

As a result, the Company does not believe that the costs associated with these lawsuits or the resolution of the related environmental matters will have a material adverse effect on the Company’s consolidated financial condition, results of operations or cash flows.

Certain operations of the Company are subject to environmental laws and regulations which govern the discharge of pollutants into the air and water, as well as the handling and disposal of solid and hazardous wastes.

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Net income per common share—Diluted

(1) Net income and net income per common share includes excess tax benefits related to stock-based compensation of $ 5.0 ( $ 0.02 per diluted share) and a discrete tax benefit of $ 19.9 ( $ 0.06 per diluted share) related to the settlements of refund claims in certain non-U.S.

jurisdictions and the resulting adjustments to deferred taxes.

These items had the aggregate effect of increasing Net income, Net income attributable to Amphenol Corporation, and Net income per common share-Diluted by $ 24.9 , $ 24.9 , and $ 0.08 per share, respectively, for the three months ended March 31, 2020.

(2) Net income and net income per common share includes excess tax benefits related to stock-based compensation of $ 12.4 .

The excess tax benefits had the effect of increasing Net income, Net income attributable to Amphenol Corporation, and Net income per common share-Diluted by $ 12.4 , $ 12.4 , and $ 0.04 per share, respectively, for the three months ended June 30, 2020.

(3) Net income and net income per common share includes excess tax benefits related to stock-based compensation of $ 10.7 .

The excess tax benefits had the effect of increasing Net income, Net income attributable to Amphenol Corporation, and Net income per common share-Diluted by $ 10.7 , $ 10.7 , and $ 0.03 per share, respectively, for the three months ended September 30, 2020.

(4) Operating income, net income and net income per common share includes acquisition-related expenses of $ 11.5 ( $ 10.7 after-tax, or $ 0.03 per diluted share) primarily comprised of external transaction costs related to acquisitions that were announced or closed.

Net income and net income per common share also includes excess tax benefits related to stock-based compensation of $ 14.8 ($ 0.05 per diluted share).

These items had the aggregate effect of decreasing Operating income by $ 11.5 , while increasing Net income, Net income attributable to Amphenol Corporation, and Net income per common share-Diluted by $ 4.1 , $ 4.1 , and $ 0.02 per share, respectively, for the three months ended December 31, 2020.

(5) Operating income, net income and net income per common share includes acquisition-related expenses of $ 16.5 ( $ 13.2 after-tax, or $ 0.04 per diluted share) primarily comprised of amortization related to the value associated with acquired backlog from the SSI acquisition, along with external transaction costs.

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The excess tax benefits had the effect of increasing Net income, Net income attributable to Amphenol Corporation, and Net income per common share-Diluted by $ 16.8 , $ 16.8 , and $ 0.05 per share, respectively, for the three months ended December 31, 2019 .

(5) Net income and net income per common share includes excess tax benefits related to stock-based compensation of $ 4.1 .

The excess tax benefits had the effect of increasing Net income, Net income attributable to Amphenol Corporation, and Net income per common share-Diluted by $ 4.1 , $ 4.1 , and $ 0.01 per share, respectively, for the three months ended March 31, 2018.

(6) Net income and net income per common share includes excess tax benefits related to stock-based compensation of $ 3.0 .

The excess tax benefits had the effect of increasing Net income, Net income attributable to Amphenol Corporation, and Net income per common share-Diluted by $ 3.0 , $ 3.0 , and $ 0.01 per share, respectively, for the three months ended June 30, 2018.

(7) Net income and net income per common share includes excess tax benefits related to stock-based compensation of $ 7.0 .

The excess tax benefits had the effect of increasing Net income, Net income attributable to Amphenol Corporation, and Net income per common share-Diluted by $ 7.0 , $ 7.0 , and $ 0.02 per share, respectively, for the three months ended September 30, 2018.

(8) Operating income, net income and net income per common share includes acquisition-related expenses of $ 8.5 ($ 7.2 after-tax, or $ 0.02 per diluted share) primarily related to external transaction costs.

Net income and net income per common share also includes an income tax benefit of $ 14.5 ( $ 0.04 per diluted share) recorded in 2018 related to the completion of its accounting for the provisional Tax Act Charge from 2017 resulting from the enactment of the Tax Cuts and Jobs Act, and the excess tax benefits related to stock-based compensation of $ 5.7 ($ 0.02 per diluted share).

These items had the aggregate effect of decreasing Operating income by $ 8.5 , while increasing Net income, Net income attributable to Amphenol Corporation, and Net income per common share-Diluted by $ 13.0 , $ 13.0 , and $ 0.04 per share, respectively, for the three months ended December 31, 2018 .

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data