What changed in this filing

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Item 1. Financial Statements

2021-10-29 compared with 2021-07-30 · 199 added, 151 removed, 610 unchanged (36% of the section changed)

3 unchanged sentences

(dollars in millions)

September 30,

Current Assets:

34 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Cost of sales

9 unchanged sentences

Net income from continuing operations attributable to Amphenol Corporation

Income from discontinued operations attributable to Amphenol Corporation, net of income taxes of ($ 0.3 )

Income from discontinued operations attributable to Amphenol Corporation, net of income taxes of ($ 1.5 ) and ($ 1.8 ) for 2021, respectively

Net income attributable to Amphenol Corporation

15 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Net income from continuing operations

1 unchanged sentence

Net income before allocation to noncontrolling interests

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

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

Foreign currency translation adjustments

Unrealized gain (loss) on hedging activities

Unrealized (loss) gain on hedging activities

Pension and postretirement benefit plan adjustment, net of tax of ($ 1.6 ) and ($ 4.9 ) for 2021, and ($ 1.7 ) and ($ 5.0 ) for 2020, respectively

Total other comprehensive income (loss), net of tax

Total other comprehensive (loss) income, net of tax

Total comprehensive income

5 unchanged sentences

(dollars in millions)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash from operating activities:

3 unchanged sentences

Stock-based compensation expense

Deferred income tax provision

Deferred income tax provision (benefit)

Net change in components of working capital

1 unchanged sentence

Net cash provided by operating activities from continuing operations

Net cash used in operating activities from discontinued operations

Net cash provided by operating activities from discontinued operations

Net cash provided by operating activities

21 unchanged sentences

Dividend payments

Transfers to discontinued operations

Net cash provided by (used in) financing activities from continuing operations

Net cash provided by financing activities from discontinued operations

Net cash used in financing activities from discontinued operations

Net cash provided by (used in) financing activities

12 unchanged sentences

Note 1—Basis of Presentation and Principles of Consolidation

The Condensed Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020, the related Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2021 and 2020, and the related Condensed Consolidated Statements of Cash Flow for the six months ended June 30, 2021 and 2020, include the accounts of Amphenol Corporation and its subsidiaries (“Amphenol,” the “Company,” “we,” “our,” or “us”).

The Condensed Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020, the related Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2021 and 2020, and the related Condensed Consolidated Statements of Cash Flow for the nine months ended September 30, 2021 and 2020, include the accounts of Amphenol Corporation and its subsidiaries (“Amphenol,” the “Company,” “we,” “our,” or “us”).

All material intercompany balances and transactions have been eliminated in consolidation.

1 unchanged sentence

In the opinion of management, the condensed consolidated financial statements reflect all adjustments, including normal recurring adjustments considered necessary for a fair presentation of the results, in conformity with accounting principles generally accepted in the United States of America.

The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the full year.

The results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the full year.

These condensed consolidated financial statements and the related notes should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (the “2020 Annual Report”).

16 unchanged sentences

The Company expects to close on the sale of the MTS T&S business as soon as all required regulatory approvals have been received and other customary closing conditions have been satisfied, which the Company expects to be within the one-year period outlined above.

The Company concluded that the MTS T&S business met the “held for sale” criteria upon the closing of the MTS acquisition and, as such, the assets and liabilities are presented as held for sale and classified as current as of June 30, 2021 in the Condensed Consolidated Balance Sheets and accompanying Notes herein.

The Company concluded that the MTS T&S business met the “held for sale” criteria upon the closing of the MTS acquisition and, as such, the assets and liabilities are presented as held for sale and classified as current as of September 30, 2021 in the Condensed Consolidated Balance Sheets and accompanying Notes herein.

The financial results and cash flows associated with the MTS T&S business are also accounted for as discontinued operations in the accompanying Condensed Consolidated Statements of Income and Statements of Cash Flow, respectively, for all current year periods presented.

The comprehensive income associated with discontinued operations is not material and has not been separately presented in the Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2021.

Refer to Note 11 herein for further information related to the acquisition of MTS, along with Note 12 herein for further discussion of the Company’s discontinued operations associated with the MTS T&S business including the Company’s planned divestiture thereof.

4 unchanged sentences

Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which simplified income tax accounting in various areas.

The Company has evaluated and adopted ASU 2019-12 on January 1, 2021, which did not have a material impact on our consolidated financial statements.

The Company evaluated ASU 2019-12 and adopted the standard on January 1, 2021.

The adoption of ASU 2019-12 did not have a material impact on our consolidated financial statements.

In May 2020, the Securities and Exchange Commission (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 was effective for fiscal years beginning after December 31, 2020, with early application permitted.

The Company evaluated and adopted this SEC final rule on January 1, 2021, which, to date, has not had a material impact on our condensed consolidated financial statements.

The Company evaluated this SEC final rule, which we adopted on January 1, 2021.

To date, the final rule has not had a material impact on our condensed consolidated financial statements.

Its impact on any future SEC filings will be dependent on the size of future business combinations and/or divestitures.

9 unchanged sentences

Treasury-backed repurchase transacti ons.

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.

1 unchanged sentence

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

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.

Scope , 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 tied to LIBOR consists primarily of our Revolving Credit Facility (as defined below), which had no outstanding borrowings as of June 30, 2021.

Our current portfolio of debt and financial instruments tied to LIBOR consists primarily of our Revolving Credit Facility (as defined below), which had no outstanding borrowings as of September 30, 2021.

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

2 unchanged sentences

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 final rule was published in the Federal Register on January 11, 2021, became 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.

2 unchanged sentences

Inventories consist of:

September 30,

Raw materials and supplies

2 unchanged sentences

The Company’s debt (net of any unamortized discount) consists of the following:

June 30, 2021

September 30, 2021

December 31, 2020

10 unchanged sentences

2.800 % Senior Notes due February 2030

Less unamortized deferred debt issuance costs

Less current portion

2.200 % Senior Notes due September 2031

unamortized deferred debt issuance costs

current portion

Total long-term debt

2 unchanged sentences

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

At June 30, 2021 and December 31, 2020, there were no outstanding borrowings under the Revolving Credit Facility.

At September 30, 2021 and December 31, 2020, 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).

1 unchanged sentence

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

At June 30, 2021, the Company was in compliance with the financial covenants under the Revolving Credit Facility .

At September 30, 2021, the Company was in compliance with the financial covenants under the Revolving Credit Facility .

Commercial Paper Programs

4 unchanged sentences

T he maximum aggregate principal amount outstanding of USCP Notes at any time is $ 2,500.0 .

As of June 30, 2021, the amount of USCP Notes outstanding was $ 1,401.0 , with a weighted average interest rate of 0.21 % .

On April 7, 2021, a combination of borrowings under the U.S.

1 unchanged sentence

Refer to Note 11 herein for further discussion of the acquisition of MTS.

In addition, in the third quarter of 2021, the Company used borrowings under the U.S.

Commercial Paper Program to redeem its unsecured 3.125 % Senior Notes due September 15, 2021, of which $ 227.7 aggregate principal amount was outstanding.

As of September 30, 2021, the amount of USCP Notes outstanding was $ 924.3 , with a weighted average interest rate of 0.19 % .

The Company and one of its wholly owned European subsidiaries (collectively, the “Euro Issuer”) also has a 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.

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.

The maturities of the ECP Notes will vary, but may not exceed 183 days from the date of issue.

The ECP Notes are sold under customary terms in the

commercial paper market and may be issued at par or a discount therefrom or a premium thereto and bear varying interest rates on a fixed or floating basis.

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

The ECP Notes may be issued in Euros, Sterling, U.S.

1 unchanged sentence

T he maximum aggregate principal amount outstanding of ECP Notes at any time is $ 2,000.0 .

As of June 30, 2021, there were no ECP Notes outstanding.

As of September 30, 2021, there were no ECP Notes outstanding.

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

5 unchanged sentences

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

On September 14, 2021, the Company issued $ 750.0 principal amount of unsecured 2.200 % Senior Notes due September 15, 2031 at 99.634 % of face value (the “2031 Senior Notes”).

The 2031 Senior Notes are unsecured and rank equally in right of payment with the Company’s other unsecured senior indebtedness.

Interest on the 2031 Senior Notes is payable semiannually on March 15 and September 15 of each year, commencing on March 15, 2022.

Prior to June 15, 2031, the Company may, at its option, redeem some or all of the 2031 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 June 15, 2031, the Company may, at its option, redeem some or all of the 2031 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 2031 Senior Notes to repay certain outstanding borrowings under the U.S.

Commercial Paper Program.

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”).

12 unchanged sentences

Senior 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 remaining principal amounts outstanding associated with the Company’s 3.125 % Senior Notes due in September 2021 and 4.00 % Senior Notes due in February 2022 are each recorded, net of the related unamortized discount and debt issuance costs, within Current portion of long-term debt in the accompanying Condensed Consolidated Balance Sheets as of June 30, 2021.

The remaining principal amount outstanding associated with

the Company’s 4.00 % Senior Notes (the “2022 Senior Notes”) due in February 2022 is recorded, net of the related unamortized discount and debt issuance costs, within Current portion of long-term debt in the accompanying Condensed Consolidated Balance Sheets as of September 30, 2021.

On October 1, 2021, the Company issued a notice of full redemption to the holders of the 2022 Senior Notes, which will be redeemed at par value on November 1, 2021.

Senior Notes contain certain financial and non-financial covenants.

At June 30, 2021, the Company was in compliance with the financial covenants under its U.S.

At September 30, 2021, the Company was in compliance with the financial covenants under its U.S.

Senior Notes.

4 unchanged sentences

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.

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.

5 unchanged sentences

The Euro Notes contain certain financial and non-financial covenants.

At June 30, 2021, the Company was in compliance with the financial covenants under its Euro Notes .

At September 30, 2021, the Company was in compliance with the financial covenants under its Euro Notes .

Note 5—Fair Value Measurements

17 unchanged sentences

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.

impact 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 as of June 30, 2021 and December 31, 2020 are as follows:

The impact 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 as of September 30, 2021 and December 31, 2020 are as follows:

Fair Value Measurements

3 unchanged sentences

Assets (Level 1)

June 30, 2021:

September 30, 2021:

Short-term investments

3 unchanged sentences

Forward contracts

As of June 30, 2021, the fair value of such forward contracts in the table above consisted of (i) two outstanding foreign exchange forward contracts accounted for as cash flow hedges, with each expiring in 2021, (ii) various outstanding foreign exchange forward contracts accounted for as net investment hedges and (iii) various outstanding foreign exchange forward contracts that are not designated as hedging instruments.

The amounts recognized in Accumulated other comprehensive income (loss) associated with foreign exchange forward contracts and the amounts reclassified from Accumulated other comprehensive income (loss) to foreign exchange gain (loss), included in Cost of sales in the accompanying Condensed Consolidated Statements of Income during the three and six months ended June 30, 2021 and 2020, were not material.

As of September 30, 2021, the fair value of such forward contracts in the table above consisted of (i) two outstanding foreign exchange forward contracts accounted for as cash flow hedges, with each expiring within one year , (ii) various outstanding foreign exchange forward contracts accounted for as net investment hedges and (iii) various outstanding foreign exchange forward contracts that are not designated as hedging instruments.

The amounts recognized in Accumulated other comprehensive income (loss) associated with foreign exchange forward contracts and the amounts reclassified from Accumulated other comprehensive income (loss) to foreign exchange gain (loss), included in Cost of sales in the accompanying Condensed Consolidated Statements of Income during the three and nine months ended September 30, 2021 and 2020, were not material.

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 Condensed Consolidated Balance Sheets, depending on their value and remaining contractual period.

1 unchanged sentence

As a result, the disposal group was measured at fair value less costs to sell, which is considered a Level 3 fair value measurement based on the transaction’s expected consideration.

The Company reassessed the fair value of these assets held for sale and liabilities held for sale as of June 30, 2021 and noted that the carrying value of the disposal group did not exceed its fair value less costs to sell.

The Company reassessed the fair value of these assets held for sale and liabilities held for sale as of September 30, 2021 and noted that the carrying value of the disposal group did not exceed its fair value less costs to sell.

With the exception of the fair value of the assets acquired and liabilities assumed in connection with acquisition accounting as well as the assets held for sale and liabilities held for sale discussed above, 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.

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Provision for income taxes

Effective tax rate

For the three months ended June 30, 2021 and 2020, stock option exercise activity had the impact of decreasing our Provision for income taxes by $ 19.3 and $ 12.4 , respectively, and decreasing our effective tax rate by 430 basis points and 380 basis points, respectively, due to the recognition of excess tax benefits within Provision for income taxes in the accompanying Condensed Consolidated Statements of Income.

For the six months ended June 30, 2021 and 2020, stock option exercise activity had the impact of decreasing our Provision for income taxes by $ 22.0 and $ 17.4 , respectively, and decreasing our effective tax rate by 250 basis points and 280 basis points, respectively.

For the three and six months ended June 30, 2021, acquisition-related expenses had the effect of increasing the effective tax rate by approximately 60

basis points and 30 basis points, respectively, and a discrete tax benefit of $ 14.9 related to the settlement of uncertain tax positions in certain non-U.S.

jurisdictions had the effect of decreasing the effective tax rate by 330 basis points and 170 basis points, respectively.

For the six months ended June 30, 2020, the effective tax rate also includes a discrete tax benefit related to the settlements of refund claims in a non-U.S.

For the three months ended September 30, 2021 and 2020, stock option exercise activity had the impact of decreasing our Provision for income taxes by $ 12.3 and $ 10.7 , respectively, and decreasing our effective tax rate by 230 basis points and 240 basis points, respectively, due to the recognition of excess tax benefits within Provision for income taxes in the accompanying Condensed Consolidated Statements of Income.

For the nine months ended September 30, 2021 and 2020, stock option exercise activity had the impact of decreasing our Provision for income taxes by $ 34.3 and $ 28.1 , respectively, and decreasing our effective tax rate by 240 basis points and 260 basis points, respectively.

For the nine months ended September 30, 2021, the effective tax rate includes a discrete tax benefit of $ 14.9 related to the settlement of uncertain tax positions in certain non-U.S.

jurisdictions, which had the effect of decreasing the effective tax rate by 100 basis points, as well as the impact of acquisition-related expenses, which had the effect of increasing the effective tax rate by approximately 20 basis points.

For the nine months ended September 30, 2020, the effective tax rate also included a discrete tax benefit related to the settlements of refund claims in a non-U.S.

jurisdiction and the resulting adjustments to deferred taxes, which had the impact of decreasing our Provision for income taxes and effective tax rate by $ 19.9 and 190 basis points, respectively.

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The Company paid its fourth annual installment of the Transition Tax, net of applicable tax credits and deductions, in the second quarter of 2021, and 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 Condensed Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020.

The Company operates in the U.S.

3 unchanged sentences

The Company evaluates its tax positions and establishes liabilities for uncertain tax positions that may be challenged by tax authorities and may not be fully sustained, despite the Company’s belief that the underlying tax positions are fully supportable.

As of June 30, 2021, the amount of unrecognized tax benefits, including penalties and interest, which if recognized would impact the effective tax rate, was approximately $ 157.1 .

As of September 30, 2021, the amount of unrecognized tax benefits, including penalties and interest, which if recognized would impact the effective tax rate, was approximately $ 157.0 .

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.

4 unchanged sentences

In addition, the equity attributable to noncontrolling interests is presented as a separate caption within equity.

A rollforward of consolidated changes in equity for the three months ended June 30, 2021 is as follows:

A rollforward of consolidated changes in equity for the three months ended September 30, 2021 is as follows:

Amphenol Corporation Shareholders

5 unchanged sentences

Paid-In Capital

Balance as of March 31, 2021

Balance as of June 30, 2021

Other comprehensive income (loss)

5 unchanged sentences

Stock-based compensation expense

Balance as of June 30, 2021

A rollforward of consolidated changes in equity for the six months ended June 30, 2021 is as follows:

Balance as of September 30, 2021

A rollforward of consolidated changes in equity for the nine months ended September 30, 2021 is as follows:

Amphenol Corporation Shareholders

15 unchanged sentences

Stock-based compensation expense

Balance as of June 30, 2021

A rollforward of consolidated changes in equity for the three months ended June 30, 2020 is as follows:

Balance as of September 30, 2021

A rollforward of consolidated changes in equity for the three months ended September 30, 2020 is as follows:

Amphenol Corporation Shareholders

5 unchanged sentences

Paid-In Capital

Balance as of March 31, 2020

Balance as of June 30, 2020

Other comprehensive income (loss)

Acquisitions resulting in noncontrolling interest

Distributions to shareholders of noncontrolling interests

4 unchanged sentences

Stock-based compensation expense

Balance as of June 30, 2020

A rollforward of consolidated changes in equity for the six months ended June 30, 2020 is as follows:

Balance as of September 30, 2020

A rollforward of consolidated changes in equity for the nine months ended September 30, 2020 is as follows:

Amphenol Corporation Shareholders

16 unchanged sentences

Stock-based compensation expense

Balance as of June 30, 2020

Balance as of September 30, 2020

Authorized Shares for Issuance

3 unchanged sentences

On April 24, 2018, the Company’s Board of Directors authorized a stock repurchase program under which the Company could 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 three and six months ended June 30, 2021, the Company repurchased 0.8 million and 3.1 million shares of its Common Stock for $ 51.0 and $ 203.8 , respectively, under the 2018 Stock Repurchase Program.

During the first nine months of 2021, the Company repurchased 3.1 million shares of its Common Stock for $ 203.8 under the 2018 Stock Repurchase Program.

As a result of these purchases, the Company completed all purchases authorized under the 2018 Stock Repurchase Program and, therefore, the 2018 Stock Repurchase Program has terminated.

Of the total repurchases made during the first six months of 2021, 0.3 million shares, or $ 19.8 , have been retained in Treasury stock at the time of repurchase;

the remaining 2.8 million shares, or $ 184.0 , have been retired by the Company.

The Company did no t repurchase any of its Common Stock during the three months ended June 30, 2020.

During the six months ended June 30, 2020, the Company repurchased 5.4 million shares of its Common Stock for $ 257.2 under the 2018 Stock Repurchase Program.

All of the shares repurchased during the first six months of 2020 were retired by the Company.

Of the total repurchases made during the first nine months of 2021, 0.3 million shares, or $ 19.8 , were retained in Treasury stock at the time of repurchase;

the remaining 2.8 million shares, or $ 184.0 , were retired by the Company.

During the three and nine months ended September 30, 2020, the Company repurchased 3.7 million and 9.1 million shares of its Common Stock for $ 201.9 and $ 459.2 , respectively, under the 2018 Stock Repurchase Program.

Of the total repurchases made during the first nine months of 2020, 2.0 million shares, or $ 110.3 , were retained in Treasury stock at the time of repurchase;

the remaining 7.1 million shares, or $ 348.9 , were retired by the Company.

On April 27, 2021, the Company’s Board of Directors authorized a new 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 27, 2024 (the “2021 Stock Repurchase Program”) in accordance with the requirements of Rule 10b-18 of the Exchange Act.

During the three months ended June 30, 2021, the Company repurchased 1.7 million shares of its Common Stock for $ 116.3 under the 2021 Stock Repurchase Program.

All of the shares repurchased under the 2021 Stock Repurchase Program during the second quarter of 2021 have been or will be retired by the Company.

From July 1, 2021 to July 27, 2021, the Company repurchased 0.7 million additional shares of its Common Stock for $ 48.8 under the 2021 Stock Repurchase Program, and has remaining authorization to purchase up to $ 1,834.9 of its Common Stock under the 2021 Stock Repurchase Program.

During the three and nine months ended September 30, 2021, the Company repurchased 2.3 million and 4.1 million shares of its Common Stock for $ 170.9 and $ 287.2 , respectively, under the 2021 Stock Repurchase Program.

All of the shares repurchased under the 2021 Stock Repurchase Program during the nine months ended September 30, 2021 have been or will be retired by the Company.

From October 1, 2021 to October 26, 2021, the Company repurchased 0.6 million additional shares of its Common Stock for $ 46.1 under the 2021 Stock Repurchase Program, and has remaining authorization to purchase up to $ 1,666.6 of its Common Stock under the 2021 Stock Repurchase Program.

The price and timing of any future purchases under the 2021 Stock Repurchase Program will depend on a number of factors such as levels of cash generation from operations, the volume of stock option exercises by employees, cash requirements for acquisitions, dividends paid, economic and market conditions and the price of the Company’s Common Stock.

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

The following table summarizes the dividends declared and paid for the three and six months ended June 30, 2021 and 2020:

Three Months Ended June 30,

Six Months Ended June 30,

The following table summarizes the dividends declared and paid for the three and nine months ended September 30, 2021 and 2020:

Three Months Ended September 30,

Nine Months Ended September 30,

Dividends declared

Dividends paid (including those declared in the prior year)

On October 20, 2020, the Company’s Board of Directors approved an increase to its quarterly dividend rate from $ 0.125 per share to $ 0.145 per share effective with dividends declared in the fourth quarter of 2020, and then on October 26, 2021, approved a further increase to its quarterly dividend rate from $ 0.145 per share to $ 0.20 per share effective with dividends declared in the fourth quarter of 2021, contingent upon declaration by the Company’s Board of Directors.

Note 8—Stock-Based Compensation

For the three months ended June 30, 2021 and 2020, the Company’s Income from continuing operations before income taxes was reduced for stock-based compensation expense of $ 20.0 and $ 16.6 , respectively.

In addition, for the three months ended June 30, 2021 and 2020, the Company recognized aggregate income tax benefits of $ 21.8 and $ 14.3 , respectively, in Provision for income taxes in the accompanying Condensed Consolidated Statements of Income associated with stock-based compensation.

These aggregate income tax benefits during the three months ended June 30, 2021 and 2020 include excess tax benefits of $ 19.3 and $ 12.4 , respectively, from option exercises.

For the six months ended June 30, 2021 and 2020, the Company’s Income from continuing operations before income taxes was reduced for stock-based compensation expense of $ 39.0 and $ 32.0 , respectively.

In addition, for the six months ended June 30, 2021 and 2020, the Company recognized aggregate income tax benefits of $ 26.4 and $ 21.1 , respectively, in Provision for income taxes in the accompanying Condensed Consolidated Statements of Income associated with stock-based compensation.

These aggregate income tax benefits during the six months ended June 30, 2021 and 2020 include excess tax benefits of $ 22.0 and $ 17.4 , respectively, from option exercises.

For the three months ended September 30, 2021 and 2020, the Company’s Income from continuing operations before income taxes was reduced for stock-based compensation expense of $ 21.2 and $ 19.0 , respectively.

In addition, for the three months ended September 30, 2021 and 2020, the Company recognized aggregate income tax benefits of $ 14.0 and $ 12.7 , respectively, in Provision for income taxes in the accompanying Condensed Consolidated Statements of Income associated with stock-based compensation.

These aggregate income tax benefits during the three months ended September 30, 2021 and 2020 include excess tax benefits of $ 12.3 and $ 10.7 , respectively, from option exercises.

For the nine months ended September 30, 2021 and 2020, the Company’s Income from continuing operations before income taxes was reduced for stock-based compensation expense of $ 60.2 and $ 51.0 , respectively.

In addition, for the nine months ended September 30, 2021 and 2020, the Company recognized aggregate income tax benefits of $ 40.4 and $ 33.8 , respectively, in Provision for income taxes in the accompanying Condensed Consolidated Statements of Income associated with stock-based compensation.

These aggregate income tax benefits during the nine months ended September 30, 2021 and 2020 include excess tax benefits of $ 34.3 and $ 28.1 , 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.

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The Amended 2017 Employee Option Plan was approved by the Company’s shareholders and became effective on May 19, 2021.

As of June 30, 2021, there were 42,932,620 shares of Common Stock available for the granting of additional stock options under the Amended 2017 Employee Option Plan.

Prior to the approval of the 2017 Employee Option Plan, the Company issued stock options under the 2009 Stock

Purchase and Option Plan for Key Employees of Amphenol and Subsidiaries, and its amendment (the “2009 Employee Option Plan”).

As of September 30, 2021, there were 43,038,110 shares of Common Stock available for the granting of additional stock options under the Amended 2017 Employee

Prior to the approval of the 2017 Employee Option Plan, the Company issued stock options under the 2009 Stock Purchase and Option Plan for Key Employees of Amphenol and Subsidiaries, and its amendment (the “2009 Employee Option Plan”).

No additional stock options will be granted under the 2009 Employee Option Plan.

Options granted under the 2017 Option Plan and the 2009 Employee Option Plan generally vest ratably over a period of five years from the date of grant and are generally exercisable over a period of ten years from the date of grant.

Stock option activity for the three and six months ended June 30, 2021 was as follows:

Stock option activity for the three and nine months ended September 30, 2021 was as follows:

Exercise Price

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Options outstanding at June 30, 2021

Vested and non-vested options expected to vest at June 30, 2021

Exercisable options at June 30, 2021

A summary of the status of the Company’s non-vested options as of June 30, 2021 and changes during the three and six months then ended is as follows:

Options granted

Options exercised

( 2,494,842 )

Options forfeited

Options outstanding at September 30, 2021

Vested and non-vested options expected to vest at September 30, 2021

Exercisable options at September 30, 2021

A summary of the status of the Company’s non-vested options as of September 30, 2021 and changes during the three and nine months then ended is as follows:

Fair Value at

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Non-vested options at June 30, 2021

During the three and six months ended June 30, 2021 and 2020, the following activity occurred under the Company’s option plans:

Options granted

Options vested

Options forfeited

Non-vested options at September 30, 2021

During the three and nine months ended September 30, 2021 and 2020, the following activity occurred under the Company’s option plans:

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Total intrinsic value of stock options exercised

Total fair value of stock options vested

As of June 30, 2021, the total compensation cost related to non-vested options not yet recognized was approximately $ 234.3 with a weighted average expected amortization period of 3.72 years.

As of September 30, 2021, the total compensation cost related to non-vested options not yet recognized was approximately $ 216.1 with a weighted average expected amortization period of 3.54 years.

The grant-date fair value of each option grant under the 2009 Employee Option Plan and the 2017 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.

The fair value is then

amortized on a straight-line basis over the requisite service period of the awards, which is generally the vesting period.

The fair value is then amortized on a straight-line basis over the requisite service period of the awards, which is generally the vesting period.

Use of a valuation model for option grants requires management to make certain assumptions with respect to selected model inputs.

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The 2012 Directors Restricted Stock Plan is administered by the Company’s Board of Directors.

As of June 30, 2021, the number of restricted shares available for grant under the 2012 Directors Restricted Stock Plan was 143,196 .

As of September 30, 2021, the number of restricted shares available for grant under the 2012 Directors Restricted Stock Plan was 141,359 .

Restricted shares granted under the 2012 Directors Restricted Stock Plan generally vest on the first anniversary of the grant date.

Grants under the 2012 Directors Restricted Stock Plan entitle the holder to receive shares of the Company’s Common Stock without payment.

Restricted share activity for the three and six months ended June 30, 2021 was as follows:

Restricted share activity for the three and nine months ended September 30, 2021 was as follows:

Weighted Average

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Restricted shares outstanding at June 30, 2021

As of June 30, 2021, the total compensation cost related to non-vested restricted shares not yet recognized was approximately $ 1.1 (with a weighted average expected amortization period of 0.88 years).

Restricted shares granted

Restricted shares outstanding at September 30, 2021

As of September 30, 2021, the total compensation cost related to non-vested restricted shares not yet recognized was approximately $ 0.9 (with a weighted average expected amortization period of 0.62 years).

Note 9—Earnings Per Share

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 outstanding common shares, including 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, along with the earnings per share (basic and

diluted) for the three and six months ended June 30, 2021 and 2020 is as follows (note - per share amounts may not add due to rounding) :

Three Months Ended June 30,

Six Months Ended June 30,

Diluted EPS is computed by dividing net income attributable to Amphenol Corporation by the weighted average number of outstanding common shares, including 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, along with the earnings per share (basic and diluted) for the three and nine months ended September 30, 2021 and 2020 is as follows (note - per share amounts may not add due to rounding) :

Three Months Ended September 30,

Nine Months Ended September 30,

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

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Net income from continuing operations attributable to Amphenol Corporation

Income from discontinued operations attributable to Amphenol Corporation, net of income taxes of ($ 0.3 )

Income from discontinued operations attributable to Amphenol Corporation, net of income taxes of ($ 1.5 ) and ($ 1.8 ) for 2021, respectively

Net income attributable to Amphenol Corporation

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Net income attributable to Amphenol Corporation — Diluted

Excluded from the computations above were anti-dilutive common shares (primarily related to outstanding stock options) of 3.8 million and 27.3 million for the three months ended June 30, 2021 and 2020, respectively.

Excluded from the computations above were anti-dilutive common shares (primarily related to outstanding stock options) of 2.2 million and 15.7 million for the six months ended June 30, 2021 and 2020, respectively.

Excluded from the computations above were anti-dilutive common shares (primarily related to outstanding stock options) of 7.4 million and 9.2 million for the three months ended September 30, 2021 and 2020, respectively.

Excluded from the computations above were anti-dilutive common shares (primarily related to outstanding stock options) of 3.8 million and 12.2 million for the nine months ended September 30, 2021 and 2020, respectively.

Note 10—Benefit Plans and Other Postretirement Benefits

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Plans, the “Plans”).

The following is a summary, based on the most recent actuarial valuations of the Company’s net cost for pension benefits, of the Plans for the three and six months ended June 30, 2021 and 2020:

The following is a summary, based on the most recent actuarial valuations of the Company’s net cost for pension benefits, of the Plans for the three and nine months ended September 30, 2021 and 2020:

Pension Benefits

Three Months Ended June 30:

Three Months Ended September 30:

Interest cost

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Net pension expense

Six Months Ended June 30:

Nine Months Ended September 30:

Interest cost

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

During the six months ended June 30, 2021 and 2020, the Company provided matching contributions to the U.S.

During the nine months ended September 30, 2021 and 2020, the Company provided matching contributions to the U.S.

defined contribution plans of approximately $ 12.1 and $ 10.0 , respectively.

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2021 Acquisitions

During the first six months of 2021, the Company completed six acquisitions for approximately $ 1,531.0 , net of cash acquired.

During the first nine months of 2021, the Company completed six acquisitions for approximately $ 1,531.0 , net of cash acquired.

Five of the acquisitions have been included in the Interconnect Products and Assemblies segment, while one acquisition has been included in the Cable Products and Solutions segment.

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

The MTS Sensors business further expands the Company’s range of sensor and sensor-based products across a wide array of industries and is reported as part of our continuing operations and within

our Interconnect Products and Assemblies segment.

On January 19, 2021 and prior to the closing of the MTS acquisition, the Company entered into a definitive agreement to sell the MTS T&S business to Illinois Tool Works Inc.

The MTS Sensors business further expands the Company’s range of sensor and sensor-based products across a wide array of industries and is reported as part of our continuing operations and within our Interconnect Products and Assemblies segment.

On January 19, 2021 and prior to the closing of the MTS

acquisition, the Company entered into a definitive agreement to sell the MTS T&S business to Illinois Tool Works Inc.

(“ITW”) (NYSE:

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In addition to the purchase price, the Company also assumed MTS’s then-outstanding $ 350.0 principal amount of senior notes due August 15, 2027, which the Company repaid and settled shortly after the closing for approximately $ 387.3 , which included accrued interest and a make-whole premium incurred as a result of the early extinguishment of the senior notes.

The Company has begun the acquisition accounting related to MTS, specifically the allocation of the MTS purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed of MTS based upon their estimated fair values.

The Company is in the process of completing the acquisition accounting related to MTS, specifically the allocation of the MTS purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed of MTS based upon their estimated fair values.

This preliminary purchase price allocation is being performed separately for the MTS Sensors business and the MTS T&S business, the latter of which is being accounted for as discontinued operations and whose assets acquired, including associated goodwill, and liabilities assumed are reported as current assets held for sale and liabilities held for sale on the accompanying Condensed Consolidated Balance Sheets.

While the Company is in the process of completing its analyses of the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed, as of June 30, 2021, the MTS acquisition resulted in the recognition of $ 740.3 of goodwill, $ 54.0 of indefinite-lived tradename intangible assets and $ 183.4 of definite-lived intangible assets, each associated with the MTS Sensors business.

While the Company is in the process of completing its analyses of the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed, as part of acquisition accounting, the MTS acquisition resulted in the recognition of $ 720.4 of goodwill, $ 54.0 of indefinite-lived tradename intangible assets and $ 183.4 of definite-lived intangible assets, each associated with the MTS Sensors business.

The definite-lived intangible assets are comprised of customer relationships, proprietary technology, and backlog of $ 128.1 , $ 39.1 and $ 16.2 , respectively, and are amortized based upon the underlying pattern of economic benefit with weighted-average useful lives of 11 years , 15 years and 0.25 years, respectively.

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The Company does no t expect any of the recognized goodwill associated with the acquisition of MTS to be deductible for tax purposes.

Since the current purchase price allocation is based on preliminary assessments made by management as of June 30, 2021, the acquisition accounting for MTS is subject to final adjustment and it is possible that the final assessment of values may differ from this preliminary assessment.

Since the current purchase price allocation is based on preliminary assessments made by management as of September 30, 2021, the acquisition accounting for MTS is subject to final adjustment and it is possible that the final assessment of values may differ from this preliminary assessment.

With the exception of the MTS T&S business, which has been classified and reported as discontinued operations as discussed further in Note 12 herein, the operating results for MTS have been included within continuing operations in the Condensed Consolidated Statements of Income since the acquisition date.

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During the year ended December 31, 2020, the Company completed two acquisitions, which are included in the Interconnect Products and Assemblies segment, for approximately $ 50 , net of cash acquired.

While the Company has completed the acquisition accounting for one of the acquisitions in 2020, the Company is in the process of completing the analyses of the fair value of the assets acquired and liabilities assumed for the other 2020 acquisition.

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

The Company has completed the acquisition accounting, including the analyses of the fair value of the assets acquired and liabilities assumed, for both 2020 acquisitions.

The final assessments of values did not differ materially from the preliminary assessments.

Pro forma financial information, as well as further details regarding the purchase price allocation 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.

Acquisition-related Expenses

During the three and six months ended June 30, 2021, the Company incurred $ 55.4 ($ 44.6 after-tax) of acquisition-related expenses, primarily comprised of transaction, severance, restructuring and certain non-cash costs related to the MTS acquisition.

During the nine months ended September 30, 2021, the Company incurred $ 55.4 ($ 44.6 after-tax) of acquisition-related expenses, primarily comprised of transaction, severance, restructuring and certain non-cash costs related to the MTS acquisition.

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

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On January 19, 2021 and prior to the closing of the MTS acquisition, the Company entered into a definitive agreement to sell the MTS T&S business to ITW.

The agreed-upon sale price is approximately $ 750 , subject to certain post-closing adjustments and excluding any outstanding net debt assumed by Amphenol related to the MTS T&S business.

The agreed-upon sale price is approximately $ 750 , excluding any outstanding net debt assumed by Amphenol related to the MTS T&S business and subject to post-closing adjustment.

The Company expects to close on the sale of the MTS T&S business upon the receipt of all required regulatory approvals and the satisfaction of other customary closing conditions, which is expected to be within one year of the date of the acquisition of MTS.

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These assets acquired and liabilities assumed resulting from the MTS T&S purchase price allocation are measured and recorded at fair value less costs to sell as of the date of the MTS acquisition;

such accounts are included in Current assets held for sale and Current liabilities held for sale, respectively, in the Condensed Consolidated Balance Sheets, each presented as separate single line items in the Condensed Consolidated Balance Sheets as of June 30, 2021.

The Company expects to close on the sale of the MTS T&S business within one year of the date of the acquisition of MTS, and as such, these associated assets held for sale and liabilities held for sale have been classified as current as of June 30, 2021.

In addition, the Company assumed a $ 28.7 contingent consideration liability from the MTS acquisition, which was recognized at fair value as part of acquisition accounting and was recorded within Current liabilities held for sale in the Condensed Consolidated Balance Sheets upon acquisition.

During the third quarter of 2021, the Company made a capital contribution to its MTS T&S business (discontinued operations), which in turn used the funding to settle the contingent consideration.

The Company also ceased recording depreciation and amortization on the held for sale assets as of the MTS acquisition date.

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Foreign currency translation

Goodwill at June 30, 2021

The increase in goodwill during the first six months of 2021 was primarily driven by the acquisition of MTS, along with the other acquisitions that closed during the period, as described in Note 11 herein.

Other than goodwill noted above, the Company’s intangible assets as of June 30, 2021 and December 31, 2020 were as follows:

June 30, 2021

Goodwill at September 30, 2021

The increase in goodwill during the first nine months of 2021 was primarily driven by the acquisition of MTS, along with the other acquisitions that closed during the period, as described in Note 11 herein.

The Company performs its evaluation for the impairment of goodwill for the Company’s 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 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”.

In the third quarter of 2021, 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, 2021, 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.

As a result, no goodwill impairment resulted from the assessment as of July 1, 2021.

The Company has no t recognized any goodwill impairment in 2021, 2020 or 2019 in connection with our annual impairment assessments.

Other than goodwill noted above, the Company’s intangible assets as of September 30, 2021 and December 31, 2020 were as follows:

September 30, 2021

December 31, 2020

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Trade names (indefinite-lived)

The increase in the gross carrying amount of intangible assets in the first six months of 2021 was driven by certain customer relationships recognized as a result of the acquisition accounting associated with our 2021 acquisitions, primarily from the MTS acquisition.

Amortization expense for the three months ended June 30, 2021 and 2020 was approximately $ 32.6 and $ 12.5 , respectively.

Amortization expense for the six months ended June 30, 2021 and 2020 was approximately $ 44.9 and $ 25.4 , respectively.

Amortization expense for the three and six months ended June 30, 2021 includes $ 16.2 related to the amortization of acquired backlog resulting from the MTS acquisition.

As of June 30, 2021, amortization expense relating to the Company’s current intangible assets estimated for the remainder of 2021 is approximately $ 32.1 and for each of the next five fiscal years is approximately $ 57.5 in 2022, $ 54.7 in 2023, $ 48.9 in 2024, $ 39.5 in 2025 and $ 37.8 in 2026.

The increase in the gross carrying amount of intangible assets in the first nine months of 2021 was driven by certain customer relationships recognized as a result of the acquisition accounting associated with our 2021 acquisitions, primarily from the MTS acquisition.

Amortization expense for the three months ended September 30, 2021 and 2020 was approximately $ 16.4 and $ 12.3 , respectively.

Amortization expense for the nine months ended September 30, 2021 and 2020 was approximately $ 61.3 and $ 37.6 , respectively.

Amortization expense for the nine months ended September 30, 2021 includes $ 16.2 related to the amortization of acquired backlog resulting from the MTS acquisition.

As of September 30, 2021, amortization expense relating to the Company’s current intangible assets estimated for the remainder of 2021 is approximately $ 15.6 and for each of the next five fiscal years is approximately $ 57.3 in 2022, $ 54.5 in 2023, $ 48.8 in 2024, $ 39.4 in 2025 and $ 37.7 in 2026.

The Company reviews its identifiable intangible assets subject to amortization whenever events or changes in circumstances indicate the intangible asset’s carrying amount may not be recoverable, while 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 2021, the Company performed its annual assessment of these identifiable indefinite-lived intangible assets.

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 impairment associated with our intangible assets in 2021, 2020 or 2019 as a result of such reviews.

Note 14—Reportable Business Segments

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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 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.

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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.

The segment results for the three and six months ended June 30, 2021 and 2020 are as follows:

The segment results for the three and nine months ended September 30, 2021 and 2020 are as follows:

Interconnect Products

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Total Consolidated

Three Months Ended June 30:

Three Months Ended September 30:

Segment operating income

Six Months Ended June 30:

Nine Months Ended September 30:

Segment operating income

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the reconciliation of segment operating income to consolidated results is included in the table below.

A reconciliation of segment operating income to consolidated income from continuing operations before income taxes for the three and six months ended June 30, 2021 and 2020 is summarized as follows:

Three Months Ended June 30,

Six Months Ended June 30,

A reconciliation of segment operating income to consolidated income from continuing operations before income taxes for the three and nine months ended September 30, 2021 and 2020 is summarized as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Segment operating income

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With limited exceptions, the Company recognizes revenue at the point in time when we ship or deliver the product from our manufacturing facility to our customer, when our customer accepts and has legal title of the goods, and where the Company has a present right to payment for such goods.

For the three and six months ended June 30, 2021 and 2020, less than 5 % of our net sales were recognized over time, where the associated contracts relate to the sale of goods with no alternative use as they are only sold to a single customer and whose underlying contract terms provide the Company with an enforceable right to payment, including a reasonable profit margin, for performance completed to date, in the event of customer termination.

Since we typically invoice our customers at the same time that we satisfy our performance obligations, contract assets and contract liabilities related to our contracts with customers recorded in the Company’s Condensed Consolidated Balance Sheets were not significant as of June 30, 2021 and December 31, 2020.

These amounts are recorded in the accompanying Condensed Consolidated Balance Sheets within Prepaid expenses and other current assets or Other accrued expenses as of June 30, 2021 and December 31, 2020.

For the three and nine months ended September 30, 2021 and 2020, less than 5 % of our net sales were recognized over time, where the associated contracts relate to the sale of goods with no alternative use as they are only sold to a single customer and whose underlying contract terms provide the Company with an enforceable right to payment, including a reasonable profit margin, for performance completed to date, in the event of customer termination.

These amounts are

recorded in the accompanying Condensed Consolidated Balance Sheets within Prepaid expenses and other current assets or Other accrued expenses as of September 30, 2021 and December 31, 2020.

The Company receives customer orders negotiated with multiple delivery dates that may extend across more than one reporting period until the contract is fulfilled, the end of the order period is reached, or a pre-determined maximum order value has been reached.

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It is generally expected that a substantial portion of our remaining performance obligations will be fulfilled within three months , and nearly all of our performance obligations are fulfilled within one year .

Since our performance obligations are part of contracts that generally have original durations of one year or less, we have not

disclosed the aggregate amount of transaction prices associated with unsatisfied or partially unsatisfied performance obligations as of June 30, 2021.

While the Company typically offers standard product warranty coverage which provides assurance that our products will conform to the contractually agreed-upon specifications for a limited period from the date of shipment, the Company’s warranty liabilities as of June 30, 2021 and December 31, 2020, and related warranty expense for the three and six months ended June 30, 2021 and 2020, have not been and were not material in the accompanying Condensed Consolidated Financial Statements.

Since our performance obligations are part of contracts that generally have original durations of one year or less, we have not disclosed the aggregate amount of transaction prices associated with unsatisfied or partially unsatisfied performance obligations as of September 30, 2021.

While the Company typically offers standard product warranty coverage which provides assurance that our products will conform to the contractually agreed-upon specifications for a limited period from the date of shipment, the Company’s warranty liabilities as of September 30, 2021 and December 31, 2020, and related warranty expense for the three and nine months ended September 30, 2021 and 2020, have not been and were not material in the accompanying Condensed Consolidated Financial Statements.

Disaggregation of Net Sales

The following tables show our net sales disaggregated into categories the Company considers meaningful to depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors for the three and six months ended June 30, 2021 and 2020:

Interconnect Products

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Business Segments

Three Months Ended June 30,

Three Months Ended September 30,

Net sales by:

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Other foreign locations

Six Months Ended June 30,

Nine Months Ended September 30,

Net sales by:

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Note 16—Commitments and Contingencies

The Company has been named as a defendant in several legal actions arising from normal business activities.

From time to time, the Company has been threatened with, or named as a defendant in, various legal or regulatory actions in the ordinary course of business.

The Company records a loss contingency liability when a loss is considered probable and the amount can be reasonably estimated.

Although the potential liability with respect to certain of such legal actions cannot be reasonably estimated, none of such matters is expected to have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

Although the potential liability with respect to certain of such legal or regulatory actions cannot be reasonably estimated, none of such matters is expected to have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

The Company’s legal costs associated with defending itself are recorded to expense as incurred.

In August 2018, the Company received a subpoena from the U.S.

Department of Defense, Office of the Inspector General, requesting documents pertaining to certain products manufactured by the Company’s Military and Aerospace Group that are purchased or used by the U.S.

This matter is ongoing and the Company is cooperating with the request.

Department of Defense, Office of the Inspector General (the “OIG”), requesting documents pertaining to certain products manufactured by the Company’s Military and Aerospace Group that are purchased or used by the U.S.

As of the date of this filing, the Company has responded to several production requests from the OIG, with the most recent being completed during the third quarter of 2021.

This matter is ongoing and the Company continues to cooperate with the OIG on its requests.

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 .

From December 2019 through October 2020, the Company was 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”).

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

What changed 10-Q

Item 1. Financial Statements