What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-02-09 compared with 2021-02-10 · 473 added, 386 removed, 956 unchanged (47% of the section changed)

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Amphenol Corporation

To the stockholders and the Board of Directors of Amphenol Corporation

Opinions on the Financial Statements and Internal Control over Financial Reporting

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Loss on early extinguishment of debt

Other income, net

Income before income taxes

Other (expense) income, net

Income from continuing operations before income taxes

Provision for income taxes

Net income attributable to noncontrolling interests

Net income from continuing operations

Net income from continuing operations attributable to noncontrolling interests

Net income from continuing operations attributable to Amphenol Corporation

Income from discontinued operations attributable to Amphenol Corporation, net of income taxes of ($ 3.2 ) for 2021

Net income attributable to Amphenol Corporation

Net income per common share — Basic

Net income per common share attributable to Amphenol Corporation — Basic:

Continuing operations

Discontinued operations, net of income taxes

Net income attributable to Amphenol Corporation — Basic

Weighted average common shares outstanding — Basic

Net income per common share — Diluted

Net income per common share attributable to Amphenol Corporation — Diluted:

Continuing operations

Discontinued operations, net of income taxes

Net income attributable to Amphenol Corporation — Diluted

Weighted average common shares outstanding — Diluted

Dividends declared per common share

Per share amounts may not add due to rounding.

See accompanying notes to consolidated financial statements.

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Year Ended December 31,

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

Net income from continuing operations

Income from discontinued operations attributable to Amphenol Corporation, net of income taxes

Net income before allocation to noncontrolling interests

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

Foreign currency translation adjustments

Unrealized (loss) gain on hedging activities

Unrealized gain (loss) on hedging activities

Pension and postretirement benefit plan adjustment

Total other comprehensive income (loss), net of tax

Total other comprehensive (loss) income, net of tax

Total comprehensive income

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Other long-term assets

Liabilities & Equity

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY

Current Liabilities:

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Other long-term liabilities

Total Liabilities

Commitments and contingent liabilities (Note 15)

Redeemable noncontrolling interest

Class A Common Stock, $ 0.001 par value;

1,000.0 shares authorized;

300.3 shares issued and 299.3 shares outstanding as of December 31, 2020;

298.7 shares issued and 297.9 shares outstanding as of December 31, 2019

2,000.0 shares authorized, 600.7 shares issued and 599.1 shares outstanding at December 31, 2021;

1,000.0 shares authorized, 600.7 shares issued and 598.7 shares outstanding at December 31, 2020

Additional paid-in capital

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Accumulated other comprehensive loss

Total shareholders’ equity attributable to Amphenol Corporation

Total stockholders’ equity attributable to Amphenol Corporation

Noncontrolling interests

Total Liabilities, Redeemable Noncontrolling Interest and Equity

See accompanying notes to consolidated financial statements.

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Noncontrolling

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)

Interests (1)

Balance as of January 1, 2019

Other comprehensive income (loss)

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Stock-based compensation expense

Balance December 31, 2018

Balance as of December 31, 2019

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

Other comprehensive income (loss)

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Stock-based compensation expense

Balance December 31, 2019

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

Balance as of December 31, 2020

Other comprehensive income (loss)

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Stock-based compensation expense

Balance December 31, 2020

Balance as of December 31, 2021

(1) Excludes redeemable noncontrolling interest.

See accompanying notes to consolidated financial statements.

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Cash from operating activities:

Adjustments to reconcile net income to cash provided by operating activities:

Net income from continuing operations

Adjustments to reconcile net income from continuing operations to cash provided by operating activities from continuing operations:

Depreciation and amortization

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Loss on early extinguishment of debt

Deferred income tax provision (benefit)

Deferred income tax (benefit) provision

Net change in operating assets and liabilities, excluding effects of acquisitions:

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Other long-term assets and liabilities

Net cash provided by operating activities from continuing operations

Net cash provided by operating activities from discontinued operations

Net cash provided by operating activities

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Acquisitions, net of cash acquired

Net cash used in investing activities from continuing operations

Net cash provided by investing activities from discontinued operations

Net cash used in investing activities

Cash from financing activities:

Proceeds from issuance of senior notes

Proceeds from issuance of senior notes and other long-term debt

Repayments of senior notes and other long-term debt

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Repayments under credit facilities

(Repayments) borrowings under commercial paper programs, net

Borrowings (repayments) under commercial paper programs, net

Payment of costs related to debt financing

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Payment of acquisition-related contingent consideration

Payment of deferred purchase price related to an acquisition

Payment of deferred purchase price related to acquisitions

Purchase of treasury stock

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Dividend payments

Transfers to discontinued operations

Net cash used in financing activities from continuing operations

Net cash used in financing activities from discontinued operations

Net cash used in financing activities

Effect of exchange rate changes on cash and cash equivalents

Net change in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents balance, beginning of year

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The Company sells its products to customers worldwide.

The Company operates through two reportable business segments:

● Interconnect Products and Assemblies – 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.

● Cable Products and Solutions – 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.

Through December 31, 2021, the Company operated through two reportable business segments:

● Interconnect Products and Assemblies – The Interconnect Products and Assemblies segment primarily designed, manufactured and marketed 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.

● Cable Products and Solutions – The Cable Products and Solutions segment primarily designed, manufactured and marketed 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.

Effective January 1, 2022, the Company aligned its businesses into three newly formed reportable business segments:

(i) Harsh Environment Solutions, (ii) Communications Solutions and (iii) Interconnect and Sensor Systems .

This new alignment replaces our historic reportable business segments.

The Company is in the process of completing the update of its internal reporting to accommodate this new reporting segment structure.

The Company will begin reporting its new reportable segments in connection with its Quarterly Report on Form 10-Q for the quarterly period ending March 31, 2022, including the recasting of relevant prior year period segment information for conformity of presentation.

Refer to Note 16 herein for further details related to the Company’s change in its reportable business segments effective January 1, 2022.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S.

GAAP” or “GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

The Company’s management evaluates these significant estimates and assumptions that affect the consolidated financial statements and related disclosures.

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

Similarly, the results of companies divested are included in the Consolidated Financial Statements during the period of Amphenol’s ownership through the date of the divestiture.

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.

Specifically, in 2021,

the Company reclassified certain benefit costs that were previously recorded within “Other accrued expenses” to “Accrued salaries, wages and employee benefits” on the accompanying Consolidated Balance Sheets, which reclassifications were also reflected for the prior year in order to conform with the current year presentation.

On January 27, 2021, the Company announced that its Board of Directors (the “Board”) approved a two -for-one split of the Company’s Class A Common Stock (“Common Stock”).

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

The additional shares were distributed on March 4, 2021, and the Company’s Common Stock began trading on a split-adjusted basis on March 5, 2021.

As a result of the stock split, stockholders received one additional share of Common Stock for each share held as of the record date.

All current and prior year data impacted by the stock split and presented in the accompanying Consolidated Financial Statements and notes thereto, including but not limited to, number of shares and per share information, stock-based compensation data including stock options and restricted shares and related per share data, basic and diluted earnings per share, and dividends per share amounts, have been adjusted to reflect the effect of the stock split.

As a result of the stock split, certain prior period amounts have been reclassified to conform to the current period presentation in the Consolidated Financial Statements and the accompanying notes herein.

The impact to the Consolidated Balance Sheets and Consolidated Statements of Changes in Equity herein was an increase of $ 0.3 to Common Stock, with an offsetting decrease in Additional paid-in capital, which has been retroactively adjusted for all periods presented.

While the stock split did not change the number of authorized common shares of the Company, in May 2021, the Company’s stockholders approved an amendment to the Company’s Certificate of Incorporation to increase the number of authorized shares of Common Stock, which amendment was filed and became effective on May 21, 2021.

Refer to Note 7 herein for further details related to the increase in the number of shares of Common Stock authorized for issuance as a result of this amendment.

Cash and Cash Equivalents

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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.

The Company assesses and records an allowance for expected credit losses on accounts receivable.

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

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Leasehold building improvements are amortized over the shorter of the remaining lease term or estimated useful life of such improvements.

The Company periodically reviews fixed asset lives.

The Company periodically

reviews fixed asset lives.

Depreciation expense is included in both Cost of sales and Selling, general and administrative expenses in the Consolidated Statements of Income, dependent upon the specific categorization and use of the underlying asset being depreciated.

The Company assesses the impairment of property and equipment subject to depreciation, whenever events or changes in circumstances indicate the carrying value may not be recoverable.

The Company assesses the impairment of property, plant and equipment subject to depreciation, whenever events or changes in circumstances indicate the carrying value 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, significant changes in historical trends in operating performance, significant changes in projected operating performance, and significant negative economic trends.

There have been no impairments recorded in 2021, 2020 or 2019 as a result of such reviews.

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.

Lease right-of-use (“ROU”) assets and lease liabilities for existing operating leases are recognized on the Consolidated Balance Sheets.

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.

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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.

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 Accounting Standards Update No.

2016-02, Leases (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.

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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.

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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.

Through December 31, 2021, we continued 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.

In 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.

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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.

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 in those years.

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

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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 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.

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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.

There has been no impairment associated with our intangible assets in 2021, 2020 or 2019 as a result of such reviews.

The Company accounts for acquisitions using the acquisition method of accounting, which requires that assets acquired and liabilities assumed be recognized at fair value as of the acquisition date.

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The Company may use independent valuation specialists to assist in determining the estimated fair values of assets acquired and liabilities assumed, which could require certain significant management assumptions and estimates.

Discontinued Operations and Held for Sale Accounting

The Company reports a component of an entity or group of components of an entity as a discontinued operation and held for sale upon acquisition if the Company has (i) executed a plan to sell the business as of the acquisition date or (ii) has begun to formulate a plan to sell the business and either currently meets or expects to meet the held for sale criteria within three months.

An entity meets the held for sale criteria when (i) management, having the authority to approve the action, commits to a plan to sell the discontinued operation, the plan of which is unlikely to have any significant changes or to be withdrawn, (ii) the completed sale is probable within one year and (iii) an active program to locate a buyer has been initiated with the operation actively marketed for sale at a price that is reasonable in relation to its current fair value and for immediate sale in its present condition.

The assets acquired and liabilities assumed from an entity that qualifies for held for sale accounting are measured and recorded at fair value less costs to sell, and are recorded as current assets held for sale and current liabilities held for sale when the planned sale is expected to close within one year.

The Company separately accounts for the operating results and related cash flows associated with discontinued operations until such operations are divested;

such discontinued operations are reported separately from the operating results and related cash flows associated with continuing operations in the accompanying Consolidated Financial Statements.

For the year ended December 31, 2021, the comprehensive income associated with discontinued operations was not material and has not been separately presented in the Consolidated Statements of Comprehensive Income .

F or further information related to the Company’s discontinued operations, refer to Note 12 herein.

Revenue Recognition

The Company’s net sales in the Consolidated Statements of Income for the years ended December 31, 2021, 2020 and 2019 are presented under Accounting Standards Update (“ASU”) No.

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.

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.

2014-09, Revenue from Contracts with Customers (Topic 606) (collectively with its related subsequent amendments, “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.

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.

For a nominal portion of our contracts where the accounting did change, the adoption of Topic 606 resulted in an increase to the opening balance of retained earnings of approximately $ 3.2 as of January 1, 2018.

This impact was primarily due to the acceleration of net sales and associated net income related to certain uncompleted contracts for the manufacture of goods with no alternative use and for which we have an enforceable right to payment, including a reasonable profit margin, from the customer for performance completed to date.

For these contracts, we recognize revenue over time as control of the goods transfers, rather than when the goods are delivered, and title, risk and reward of ownership are passed to the customer, as under previous guidance.

A nominal portion of our contracts have revenue recognized over time as control of the goods transfers, rather than when the goods are delivered, and title, risk and reward of ownership are passed to the customer, since they have no alternative use and for which the Company has an enforceable right to payment, including a reasonable profit margin, from the customer for performance completed to date.

Refer to Note 14 herein for further discussion regarding the Company’s disaggregation of net sales.

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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.

Based on the respective contract terms, most of our contracts’ revenues are recognized either (i) upon shipment based on free on board (“FOB”) shipping point, (ii) when the product arrives at its destination or (iii) when the product is pulled from consignment inventory.

For the years ended December 31, 2020, 2019 and 2018, 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.

Based on the respective contract terms, most of our contracts’ revenues are recognized either (i) upon shipment based on free on board (“FOB”) shipping point or (ii) when the product arrives at its destination.

For the years ended December 31, 2021, 2020 and 2019, 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.

For the contracts recognized over time, we typically record revenue using the input method, based on the materials and labor costs incurred to date relative to the contract’s total estimated costs.

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

The defined benefit plan obligation is based on significant assumptions such as mortality rates and discount rates, as determined by the Company in consultation with the respective benefit plan actuaries and investment advisors.

The recognition of expense and the related obligation for retirement pension plans and medical benefit programs is significantly impacted by estimates and assumptions 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 such as actuaries and investment advisors to assist management in appropriately measuring the expense and obligations associated with pension and other postretirement plan benefits.

Stock-Based Compensation

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Deferred income taxes are provided on undistributed earnings of foreign subsidiaries in the period in which the Company determines it no longer intends to permanently reinvest such earnings outside the United States.

As of December 31, 2020, the Company has not provided for deferred income taxes on undistributed foreign earnings related to certain geographies of approximately $ 900 , as it is the Company’s intention to permanently reinvest such earnings outside the United States.

As of December 31, 2021, the Company has not provided for deferred income taxes on undistributed foreign earnings of approximately $ 1,000 related to certain geographies, as it is the Company’s intention to permanently reinvest such earnings outside the United States.

It is impracticable to calculate the amount of taxes that would be payable if these undistributed foreign earnings were to be repatriated.

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The tax effects of an uncertain tax position taken or expected to be taken in income tax returns are recognized only if it is “more likely than not” to be sustained on examination by the taxing authorities, based on its technical merits as of the reporting date.

The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement.

The tax benefits recognized in the financial statements from such a position are measured based on

the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement.

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

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.

The Company has elected an accounting policy to account for GILTI as a period cost.

As a result of the U.S.

Tax Cuts and Jobs Act of 2017 (the “Tax Act”), the global intangible low-taxed income (“GILTI”) provision imposed a tax on certain earnings of foreign subsidiaries.

The Company elected an accounting policy to account for GILTI as a period cost.

Treasury Department has issued final interpretive guidance relating to certain provisions of the Tax Act and proposed additional guidance related to the same provisions.

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Diluted income per common share assumes the exercise of outstanding dilutive stock options using the treasury stock method.

Refer to Note 8 of the Notes to Consolidated Financial Statements for a reconciliation of the basic weighted average common shares outstanding to diluted weighted average common shares outstanding, used in the calculation of earnings per share (basic and diluted) from continuing operations, discontinued operations and for total Amphenol Corporation.

Treasury Stock

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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.

The Company presents noncontrolling interests in consolidated entities as its own caption within equity, separate from the Company’s equity attributable to Amphenol Corporation stockholders, to the extent that such noncontrolling interests do not have redemption features that are not solely within the control of the Company, as discussed below.

Net income from continuing operations attributable to noncontrolling interests is classified below net income from continuing operations.

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

Redeemable Noncontrolling Interest (i.e.

Temporary Equity)

The Company reports noncontrolling interests in the mezzanine (“temporary equity”) section, between liabilities and equity, of the Consolidated Balance Sheets, to the extent that such noncontrolling interests have redemption features, such as a put option, that is redeemable at a fixed or determinable price on a fixed or determinable date at the option of the holder, or upon the occurrence of an event that is not solely within the control of the Company.

The carrying amount of the redeemable noncontrolling interest, initially valued at fair value as part of acquisition accounting, is adjusted each reporting period to equal the greater of the (i) redemption value and (ii) carrying value of the noncontrolling interest, adjusted each reporting period for income or loss attributable to the noncontrolling interest and any distributions made to date.

The redemption value is generally calculated based on a multiple of earnings, which, for the redeemable NCI currently outstanding, approximates fair value.

Any measurement adjustments, if applicable, to the redeemable noncontrolling interest are recognized in Additional paid-in capital in the Consolidated Balance Sheets.

Due to its redeemable features that are outside the control of the Company, the redeemable noncontrolling interest typically is and will continue to be reported in the mezzanine (temporary equity) section, between liabilities and equity, in the Consolidated Balance Sheets for as long as the put option is exercisable by the option holder.

Refer to Note 5 herein for further details related to the redeemable noncontrolling interest.

Derivative Financial Instruments

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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.

As of December 31, 2021 and 2020, the aggregate notional value of our outstanding net investment hedge contracts was $ 250 and $ 250 , 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.

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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 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 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 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):

Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which simplifies income tax accounting in various areas including, but not limited to, the accounting for hybrid tax regimes, tax implications related to business combinations, and interim period accounting for enacted changes in tax law, along with some codification improvements.

ASU 2019-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted.

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

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.

In December 2019, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No.

2019-12, Income Taxes (Topic 740):

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

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

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

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

In November 2020, the SEC issued Final Rule Release No.

33-10890 Management’s Discussion and Analysis, Selected Financial Data, and Supplementary Financial Information 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 final rule was 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.

As a result of the Company’s adoption of this final rule, the previously required disclosure under Item 6.

Selected Financial Data has been removed from this Annual Report on Form 10-K (“Annual Report”).

In addition, as there have not been any material retrospective changes to the Consolidated Statements of Income for any of the quarters in the previous two years, the selected quarterly financial data disclosure has also been removed from the accompanying Notes to Consolidated Financial Statements.

While most of the changes reduced or removed previously required information and disclosures, the final rule did expand the disclosure requirements surrounding certain aspects of MD&A under Regulation S-K.

The final rule was published in the Federal Register on January 11, 2021, became effective on February 10, 2021, and registrants are required to comply with this final rule in the registrant’s first fiscal year ending on or after August 9, 2021.

The Company evaluated this SEC final rule, which was adopted and whose requirements and amendments were incorporated, in its entirety, within this Annual Report.

The application of this SEC final rule 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 Not Yet Adopted

In October 2021, the FASB issued ASU No.

2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”), which amends ASC 805 by now requiring acquiring entities to apply ASC 606 to recognize and measure contract assets and contract liabilities in a business combination.

Under current GAAP, an acquirer generally recognizes such items at fair value on the acquisition date.

The intent of ASU 2021-08 is to address diversity in practice and improve comparability for both the recognition and measurement of acquired revenue contracts by providing (i) guidance on how to determine whether a contract

liability is recognized by the acquirer in a business combination and (ii) specific guidance on how to recognize and measure contract assets and contract liabilities from revenue contracts in a business combination.

ASU 2021-08 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2022, and the amendments should be applied prospectively to business combinations occurring on or after the effective date of the amendments, with early adoption permitted.

The Company is currently evaluating ASU 2021-08 and its potential impact on our consolidated financial statements.

The United Kingdom’s Financial Conduct Authority (the “FCA”), 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.

In December 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.

Subsequently in March 2021, the FCA announced some USD LIBOR tenors (overnight, 1-month, 3-month, 6-month and 12-month) will continue to be published until June 30, 2023.

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

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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.

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.

Effective November 30, 2021, the Revolving Credit Facility no longer references LIBOR for interest rate determinations.

Due to our current limited reliance on borrowings tied to LIBOR, the Company currently believes that the LIBOR transition will not have a material impact on its financial condition, results of operations or cash flows.

Note 2—Inventories

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Revolving Credit Facility

November 2026

Commercial Paper Program (less unamortized discount of nil and nil at December 31, 2021 and 2020, respectively)

November 2026

Euro Commercial Paper Program (plus unamortized premium of nil and nil at December 31, 2021 and 2020, respectively)

November 2026

3.125 % Senior Notes (less unamortized discount of nil at December 31, 2020

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

September 2021

4.00 % Senior Notes (less unamortized discount of $ 0.1 and $ 0.2 at December 31, 2020 and 2019, respectively)

4.00 % Senior Notes (less unamortized discount of $ 0.1 at December 31, 2020

February 2022

3.20 % Senior Notes (less unamortized discount of $ 0.1 and $ 0.2 at December 31, 2021 and 2020, respectively)

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

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

2.050 % Senior Notes (less unamortized discount of $ 0.4 and $ 0.6 at December 31, 2021 and 2020, respectively)

0.750 % Euro Senior Notes (less unamortized discount of $ 1.8 and $ 2.4 at December 31, 2021 and 2020, respectively)

2.000 % Euro Senior Notes (less unamortized discount of $ 1.9 and $ 2.4 at December 31, 2021 and 2020, respectively)

4.350 % Senior Notes (less unamortized discount of $ 0.3 and $ 0.4 at December 31, 2021 and 2020, respectively)

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February 2030

Less unamortized deferred debt issuance costs

Less current portion

2.200 % Senior Notes (less unamortized discount of $ 2.7 at December 31, 2021

September 2031

unamortized deferred debt issuance costs

current portion

Total long-term debt

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Revolving Credit Facility

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.

On November 30, 2021, the Company amended and restated its $ 2,500.0 unsecured revolving credit facility (the “Revolving Credit Facility”).

As a result, the Revolving Credit Facility no longer references LIBOR for interest rate determinations.

The Revolving Credit Facility maintains the lenders’ aggregate commitments under the facility at $ 2,500.0 .

The Revolving Credit Facility matures in November 2026 and gives the Company the ability to borrow, in various currencies, at a spread that varies based on the Company’s debt rating over certain currency-specific benchmark rates, which benchmark rates in the case of U.S.

dollar borrowings are either the base rate or the adjusted term SOFR.

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

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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).

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

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”).

The Company has a commercial paper program (the “U.S.

Commercial Paper Program”) pursuant to which the Company may issue 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 maturities of the USCP Notes vary, but may not exceed 397 days from the date of issue.

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.

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.

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

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

Commercial Paper Program and cash on hand were used to fund the acquisition of MTS Systems Corporation (“MTS”).

In 2021, the Company also used borrowings under the U.S.

Commercial Paper Program to (i) redeem, in the third quarter of 2021, its unsecured 3.125 % Senior Notes (the “2021 Senior Notes”) due September 15, 2021, of which $ 227.7 aggregate principal amount was outstanding and (ii) redeem, in the fourth quarter of 2021, its unsecured 4.00 % Senior Notes (the “2022 Senior Notes”) due February 1, 2022, of which $ 295.0 aggregate principal amount was outstanding.

At December 31, 2021, the amount of USCP Notes outstanding was $ 795.2 , with a weighted average interest rate of 0.29 %.

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

Commercial Paper Program.

In July 2018, the Company and one of its wholly owned European subsidiaries (the “Euro Issuer”) entered into 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, the “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 euro-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.

dollars or other currencies.

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 )% .

In addition, effective April 14, 2020 through March 22, 2021, a subsidiary of the Company was able to issue ECP Notes through the Bank of England’s COVID Corporate Financing Facility (the “BOE Facility”).

The BOE Facility expired on March 22, 2021, although the Company did not borrow under the BOE Facility.

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

At December 31, 2021 and 2020, there were no ECP Notes outstanding under the Euro Commercial Paper Program.

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

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 .

The Commercial Paper Programs are rated A-2 by Standard & Poor’s and P-2 by Moody’s and are currently backstopped by the Revolving Credit Facility, as amounts undrawn under the Company’s Revolving Credit Facility are available to repay Commercial Paper, if necessary.

In conjunction with the Revolving Credit Facility, as of December 31, 2021, the authorization from the Board limits the maximum principal amount outstanding of USCP Notes, ECP Notes, and any other commercial paper or similar programs, along with outstanding amounts under the Revolving Credit Facility, at any time to $ 2,500.0 in the aggregate.

The Commercial Paper Programs are rated A-2 by Standard & Poor’s and P-2 by Moody’s and, based on the Board’s authorization described above, are currently backstopped by the Revolving Credit Facility, as amounts undrawn under the Company’s Revolving Credit Facility are available to repay Commercial Paper, if necessary.

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

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 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 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 includes 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”).

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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.

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 includes 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 April 1, 2020, the Company used the net proceeds from the 2025 Senior Notes, together with cash on hand, to repay the $ 400.0 outstanding 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 the date of redemption.

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 includes a make-whole premium), plus accrued and unpaid interest, if any, to 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 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”).

Commercial Paper Program, to repay the $ 750.0 outstanding 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 then outstanding (i) $ 375.0 principal amount of the 2021 Senior Notes and (ii) $ 500.0 principal amount of the 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.

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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.

On September 10, 2019, the Company issued $ 900.0 principal amount of unsecured 2.800 % Senior Notes due February 15, 2030 at 99.920 % of face value (the “2030 Senior Notes”).

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Interest on the 2030 Senior Notes is payable semiannually on February 15 and August 15 of each year, commencing on February 15, 2020.

Prior to November 15, 2029, the Company may, at its option, redeem some or all of the 2030 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 November 15, 2029, the Company may, at its option, redeem some or all of the 2030 Senior Notes at any time by paying the redemption price (which includes a make-whole premium), plus accrued and unpaid interest, if any, to, but not including, the date of redemption.

If redeemed on or after November 15, 2029, the Company may, at its option, redeem some or all of the 2030 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.

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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 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 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.

The 2026 Euro Notes are unsecured and rank equally in right of payment with the Company’s and 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.

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 includes 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.

The Company used the net proceeds from the 2026 Euro Notes to repay amounts outstanding under the then existing revolving credit facility.

In 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.

The 2028 Euro Notes are unsecured and rank equally in right of payment with the Company’s and 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.

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 includes a make-whole premium), 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.

The Company’s Senior Notes contain certain financial and non-financial covenants.

The fair value of each series of 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 Company’s Senior Notes impose certain obligations on the Company and prohibit various actions by the Company unless it satisfies certain financial requirements.

The maturity of the Company’s debt (exclusive of unamortized deferred debt issuance costs as of December 31, 2021) over each of the next five years ending December 31 and thereafter, is as follows:

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Level 3 Significant inputs to the valuation model are unobservable.

The Company believes that the assets or liabilities subject to such standards with fair value disclosure requirements are primarily debt instruments, pension plan assets, short-term investments, derivative instruments and contingent consideration payments.

Each of these assets and liabilities is discussed below, with the exception of debt instruments and pension plan assets, which are covered in Note 4 and Note 9, respectively, herein.

The Company believes that the assets or liabilities currently subject to such standards with fair value disclosure requirements are primarily debt instruments, pension plan assets, short-term investments, and derivative instruments.

Each of these assets and liabilities is discussed below, with the exception of debt instruments and pension plan assets, which are covered in Note 4 and Note 9, respectively, herein, as well as the fair value of assets acquired and liabilities assumed as part of acquisition accounting, which is covered in Note 11 herein.

Substantially all of the Company’s short-term investments consist of certificates of deposit with original maturities of twelve months or less and as such, are considered as Level 1 in the fair value hierarchy as they are traded in active markets for identical assets.

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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 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 at December 31, 2021 and December 31, 2020 are as follows:

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Forward contracts

Redeemable noncontrolling interest

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, hedging instruments accounted for as cash flow hedges, in the management of foreign currency exposures.

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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, 2021, the fair value of such foreign exchange forward contracts in the table above consisted primarily of (i) one outstanding foreign exchange forward contract accounted for as a cash flow hedge, expiring in September 2022, (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.

As of December 31, 2021 and 2020, 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.

Certain acquisitions may result in noncontrolling interest holders who, in certain cases, are entitled to a put option, giving them the ability to put some or all of their redeemable interest in the shares of the acquiree to the Company.

Specifically, if exercised by the noncontrolling interest holder, Amphenol would be required to purchase some or all of the option holder’s redeemable interest, at a redemption price during specified time period(s) stipulated in the respective acquisition agreement.

The redeemable noncontrolling interest as of December 31, 2021 was entirely related to an acquisition that closed in December 2021, and based on the terms of the agreement, will remain in temporary equity until the put option is either exercised and the entire redeemable noncontrolling interest is fully settled or the put option expires.

The redemption value of the redeemable noncontrolling interest is generally calculated using Level 3 unobservable inputs based on a multiple of earnings, which, for the redeemable NCI currently outstanding, approximates fair value.

As such, the redemption value is classified as Level 3 in the fair value hierarchy as included in the table above.

Since the initial measurement of the redeemable noncontrolling interest was recorded in December 2021, there were no material redemption value adjustments to the initial redemption value recorded as of December 31, 2021.

Refer to Note 1 herein for further discussion of redeemable noncontrolling interests.

As defined and further discussed in Note 12 herein, the Divested MTS business met the held for sale criteria upon the acquisition of MTS on April 7, 2021.

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.

At each reporting period in 2021, the Company reassessed the fair value of these assets held for sale and liabilities held for sale and noted that the carrying value of the disposal group did not exceed its fair value less costs to sell.

At December 31, 2021, there were no assets held for sale no r liabilities held for sale on the Consolidated Balance Sheets, as a result of the sale of the Divested MTS business in December 2021, as discussed in further detail in Note 12 herein.

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.

Note 6—Income Taxes

The components of income before income taxes and the provision for income taxes are as follows:

The components of income from continuing operations before income taxes and the provision for income taxes are as follows:

Year Ended December 31,

Income before income taxes:

Income from continuing operations before income taxes:

United States

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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.

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

In the second quarter of 2021, the Company paid the fourth 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.

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federal tax loss carryforwards, of which $ 114.3 , $ 84.1 and $ 13.8 , respectively, will either expire or be refunded at various dates through 2041 and the balance can be carried forward indefinitely.

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

At December 31, 2021, the Company had $ 0.6 of foreign tax credit carryforwards, $ 17.0 of U.S.

state tax credit carryforwards, and $ 0.9 of U.S.

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state tax credits.

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.

The valuation allowance for deferred tax assets increased by $ 4.8 and $ 4.9 in 2021 and 2020, respectively, which was primarily driven by U.S.

state and foreign net operating loss carryforwards in both years.

Differences between the U.S.

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tax on foreign income

Tax Act - transition tax

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

Settlements of uncertain tax positions in foreign jurisdictions including refund claims and related deferred taxes

Effective tax rate

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

During the years ended December 31, 2020, 2019 and 2018, the provision for income taxes included a net expense of $ 2.8 , $ 4.4 and $ 1.1 , respectively, in estimated interest and penalties.

During the years ended December 31, 2021, 2020 and 2019, the provision for income taxes included a net (benefit) expense of ($ 4.6 ), $ 2.8 and $ 4.4 , respectively, in estimated interest and penalties.

As of December 31, 2021, 2020 and 2019, the liability for unrecognized tax benefits included $ 34.5 , $ 39.2 and $ 42.2 , respectively, for tax-related interest and penalties.

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Stock-Based Compensation:

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.

For the years ended December 31, 2021, 2020 and 2019, the Company’s Income from continuing operations before income taxes was reduced for stock-based compensation expense of $ 83.0 , $ 70.5 and $ 63.0 , 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, 2021, 2020 and 2019, the Company recognized aggregate income tax benefits (associated with stock-based compensation) of $ 71.7 , $ 50.7 and $ 46.0 , respectively, in Provision for income taxes in the accompanying Consolidated Statements of Income.

These aggregate income tax benefits during the years ended December 31, 2021, 2020 and 2019 include excess tax benefits of $ 63.4 , $ 42.8 and $ 38.1 , respectively, from option exercises.

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Stock Options

In May 2017, the Company adopted the 2017 Stock Purchase and Option Plan for Key Employees of Amphenol and Subsidiaries (the “2017 Employee Option Plan”).

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

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.

The Company also continues to maintain the 2009 Stock Purchase and Option Plan for Key Employees of Amphenol and Subsidiaries, as amended (the “2009 Employee Option Plan”).

In May 2017, the Company adopted the 2017 Stock Purchase and Option Plan for Key Employees of Amphenol and Subsidiaries (the “2017 Employee Option Plan”), which provided for the issuance of 60,000,000 shares.

In March 2021, the Board authorized and approved the Amended and Restated 2017 Stock Purchase and Option Plan for Key Employees of Amphenol and Subsidiaries (the “Amended 2017 Employee Option Plan” and, together with the 2017 Employee Option Plan, the “2017 Option Plan”), which among other things, increased the number of shares reserved for issuance under the plan by 40,000,000 shares.

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

As of December 31, 2021, there were 43,277,741 shares of Common Stock available for the granting of additional stock options under the 2017 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”).

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

Options granted under the 2017 Employee 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.

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 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.

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

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 2019, 2020 and 2021 was as follows:

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As of December 31, 2021, the total compensation cost related to non-vested options not yet recognized was approximately $ 197.3 , with a weighted average expected amortization period of 3.35 years.

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 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.

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The risk-free interest rate is based on U.S.

Treasury zero-coupon issuances with a remaining term equal to the expected life assumed at the date of grant.

zero-coupon issuances with a remaining term equal to the expected life assumed at the date of grant.

The expected annual dividend per share is based on the Company’s dividend rate.

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In 2012, the Company adopted the 2012 Restricted Stock Plan for Directors of Amphenol Corporation (the “2012 Directors Restricted Stock Plan”).

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

The 2012 Directors Restricted Stock Plan is administered by the Board.

As of December 31, 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.

Restricted shares granted under the 2012 Directors Restricted Stock Plan vest on the earlier of the first anniversary of the date of grant or the day immediately prior to the date of the next regular annual meeting of the Company’s stockholders following such date of grant.

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

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As of December 31, 2021, the total compensation cost related to non-vested restricted shares not yet recognized was approximately $ 0.5 (with a weighted average expected amortization period of 0.38 years).

Stock Repurchase Program:

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, 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;

Authorized Shares for Issuance

On May 19, 2021, the Company’s stockholders approved an amendment to the Company’s Certificate of Incorporation, which increased the total number of shares of Common Stock that the Company is authorized to issue to 2 billion shares, an increase of 1 billion shares from the amount previously authorized.

The amendment was filed and became effective on May 21, 2021.

Stock Repurchase Programs:

On April 24, 2018, the Board 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 year ended December 31, 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 in 2021 under the 2018 Stock Repurchase Program, 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.

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

During the years ended December 31, 2020 and 2019, the Company repurchased 12.0 million and 13.1 million shares of its Common Stock for $ 641.3 and $ 601.7 , respectively, under the 2018 Stock Repurchase Program.

Of the total repurchases made in 2020, 2.7 million shares, or $ 153.9 , were retained in Treasury stock at the time of repurchase;

the remaining 9.3 million shares, or $ 487.4 , 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 , 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.

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.

Of the total repurchases made in 2019, 2.0 million shares, or $ 87.6 , were retained in Treasury stock at the time of repurchase;

the remaining 11.1 million shares, or $ 514.1 , were retired by the Company.

On April 27, 2021, the Board 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 year ended December 31, 2021, the Company repurchased 6.2 million shares of its Common Stock for $ 457.9 under the 2021 Stock Repurchase Program.

Of the total repurchases made in 2021 under the 2021 Stock Repurchase Program, 0.4 million shares, or $ 33.0 , have been retained in Treasury stock at the time of repurchase;

the remaining 5.8 million shares, or $ 424.9 , have been or will be retired by the Company.

From January 1, 2022 through January 31, 2022, the Company repurchased 0.6 million additional shares of its Common Stock for $ 50.0 under the 2021 Stock Repurchase Program, and, as of February 1, 2022, has remaining authorization to purchase up to $ 1,492.1 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 options exercised 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 Board, the Company pays a quarterly dividend on shares of its Common Stock.

On October 20, 2020, the Board 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 Board.

The following table summarizes the quarterly declared dividends per share for each of the three years ended December 31, 2021, 2020 and 2019:

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Balance at January 1, 2019

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, 2021

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.

For the years ended December 31, 2021, 2020 and 2019, as it relates to the Company’s cash flow hedges, which is comprised of foreign exchange forward contracts, the amounts recognized in Accumulated other comprehensive (loss) income associated with foreign exchange forward contracts, as well as 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, 2021 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.

The amortization of actuarial losses are included in the computation of net pension expense discussed in more detail within Note 9 herein.

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 (expense) 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.

The amortization of actuarial losses is included in the computation of net pension expense discussed in more detail within Note 9 herein.

Note 8—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 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:

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 years ended December 31, 2021, 2020 and 2019 is as follows (note - per share amounts may not add due to rounding) :

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

Net income attributable to Amphenol Corporation shareholders

Basic weighted average common shares outstanding

Net income attributable to Amphenol Corporation stockholders:

Net income from continuing operations attributable to Amphenol Corporation

Income from discontinued operations attributable to Amphenol Corporation, net of income taxes of ($ 3.2 ) for 2021

Net income attributable to Amphenol Corporation

Weighted average common shares outstanding — Basic

Effect of dilutive stock options

Diluted weighted average common shares outstanding

Earnings per share attributable to Amphenol Corporation shareholders:

Weighted average common shares outstanding — Diluted

Net income per common share attributable to Amphenol Corporation — Basic:

Continuing operations

Discontinued operations, net of income taxes

Net income attributable to Amphenol Corporation — Basic

Net income per common share attributable to Amphenol Corporation — Diluted:

Continuing operations

Discontinued operations, net of income taxes

Net income attributable to Amphenol Corporation — Diluted

As discussed in further detail in Note 1 herein, all current and prior year data presented in the table above, including the number of shares and per share information , have been adjusted to reflect the effect of the stock split that went into effect in March 2021.

Excluded from the computations above were anti-dilutive common shares (primarily related to outstanding stock options) of 3.5 million, 9.4 million and 14.2 million for the years ended December 31, 2021, 2020 and 2019, 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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employees are not covered by the U.S.

Plans and are covered by defined contribution plans.

Plans and are instead covered by various 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 loss

Actuarial (gain) loss

Foreign exchange translation

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Fair value of plan assets at end of year

Underfunded status at end of year

Over (under) funded status at end of year

Amounts recognized on the balance sheet as of December 31:

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Accrued pension and postretirement benefit obligations

Underfunded status at end of year

Over (under) funded status at end of year

Accumulated other comprehensive loss, net

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Rate of compensation increase

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 projected benefit obligation decreased in 2021 primarily due to both actuarial gains, resulting from the impact of higher discount rates on our projected benefit obligation, and benefits paid during the year.

The projected benefit obligations increased in 2020 primarily due to 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 $ 753.7 and $ 818.4 at December 31, 2021 and 2020, respectively.

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The pension expense for the Plans is calculated based upon a number of actuarial assumptions established on January 1 of the applicable year, including mortality projections as well as a weighted average discount rate, rate of increase in future compensation levels and an expected long-term rate of return on the respective Plans’ assets which are detailed in the table above.

The Company records service costs in the same line item as the respective employee compensation costs and within operating income, while all other pension-related costs including interest cost, expected return on plan assets, amortization of prior service cost and amortization of net actuarial losses are reported separately within Other income, net in the Consolidated Statements of Income.

The Company records service costs in the same line item as the respective employee compensation costs and within operating income, while all other pension-related costs including interest cost, expected return on plan assets, amortization of prior service cost and amortization of net actuarial losses are reported separately within Other (expense) income, net in the Consolidated Statements of Income.

The discount rate used by the Company for valuing pension liabilities is based on a review of high quality corporate bond yields with maturities approximating the remaining life of the projected benefit obligations.

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Plans on this basis was 2.69 % and 2.30 % at December 31, 2021 and 2020, respectively.

The decrease in the discount rate for the U.S.

Plans resulted in an increase in the benefit obligation of approximately $ 45 at December 31, 2020.

The increase in the discount rate for the U.S.

Plans resulted in a decrease in the benefit obligation of approximately $ 23 at December 31, 2021.

The weighted average discount rate for the Foreign Plans was 1.58 % and 1.12 % at December 31, 2021 and 2020, respectively.

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 decrease in the benefit obligation associated with our Foreign Plans at December 31, 2021 was primarily driven by the increase 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.

The mortality assumptions used by the Company reflect commonly used mortality tables and improvement scales for each plan and increased life expectancies for plan participants.

The primary investment objective of the Plans is to build and ensure an adequate pool of assets to support the benefit obligations to participants, retirees and beneficiaries.

To meet this objective, the Plans seek to earn a rate of return on assets greater than the liability discount rate, with a prudent level of risk and diversification.

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

The current target allocations for the U.S.

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

Short-term strategic ranges for investments are established within these long term target percentages.

The primary investment objective of the Plans is to ensure an adequate pool of assets to support the benefit obligations to participants, retirees and beneficiaries.

Over time, the Plans have aimed to earn a rate of return on assets greater than the liability discount rate, with a prudent level of risk and diversification.

Plans, this has resulted in assets exceeding benefit obligations.

As a result, in an effort to reduce the funding status volatility of the Plans, the Company has shifted the target asset allocations for the U.S.

Plans from 60 % equities and 40 % fixed income at the end of 2020 to 25 % equities and 75 % fixed income at the end of 2021.

Short-term strategic ranges for investments will continue to be established within these new long-term target percentages.

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

The Company invests in a diversified investment portfolio through various investment managers and evaluates its plan assets for the existence of concentration risks.

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The Plans may indirectly hold the Company’s securities as a result of external investment management in certain commingled funds.

Such holdings would not be material relative to the Plans’ total assets.

Such holdings would not be material relative to the

Plans’ total assets.

The Company’s Foreign Plans primarily invest in equity and debt securities and insurance contracts, as determined by each Plans’ Trustees or investment managers.

In developing the expected long-term rate of return assumption for the U.S.

Plans, the Company evaluated input from its external actuaries and investment consultants as well as consideration of long-term inflation assumptions.

Projected returns by such consultants are based on broad equity and bond indices.

The Company also considered its historical compounded return of approximately 8.5 %, which has been in excess of these broad equity and bond benchmark indices.

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

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.

Plans, the Company relies primarily on projected long-term asset returns by asset class prepared annually by our investment consultants.

During 2021, the expected long-term rate of return on the U.S.

Plans’ assets was 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 4.5 %).

The Company’s Plan assets, the vast majority of which relate to the U.S.

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fixed income securities — long term

fixed income securities — high yield

International fixed income securities — other

Insurance contracts

Real estate funds

Cash and cash equivalents

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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

(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 .

(b) The majority of the cash and cash equivalents on hand at December 31, 2019, which is primarily within the U.S.

Plans, was subsequently invested, in early January 2020, in certain equity securities within the International equities-other category .

Equity securities consist primarily of publicly traded U.S.

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Our valuation of Level 3 assets is based on insurance company or third-party actuarial valuations, representing an estimation of the surrender or market values of the insurance contract between the Company and the insurance companies.

Our Level 3 pension plan assets also include certain investments in commingled real estate funds which are valued based on unobservable market price inputs.

In prior years, our Level 3 pension plan assets also included certain investments in commingled real estate funds which were valued based on unobservable market price inputs.

The following table sets forth a summary of changes of the fair value of the Level 3 pension plan assets for the years ended December 31, 2021 and 2020:

Balance on January 1

Unrealized gains (losses), net

Unrealized (losses) gains, net

Purchases, sales and settlements, net

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The Company made cash contributions to the Plans of $ 6.8 , $ 6.5 , and $ 6.6 in 2021, 2020, and 2019, respectively.

In January 2018, the Company made voluntary cash contributions of approximately $ 81.0 to fund the U.S.

There is no current requirement for cash contributions to any of the U.S.

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The Company’s share of the cost of such plans for most participants is fixed, and any increase in the cost of such plans will be the responsibility of the retirees.

The Company funds the benefit costs for such plans on a pay-as-you-go basis.

Company funds the benefit costs for such plans on a pay-as-you-go basis.

As of December 31, 2021 and 2020, t he total liability associated with postretirement benefit obligations was approximately $ 6.0 and $ 6.8 , respectively, the majority of which is included in Accrued pension and postretirement benefit obligations on the accompanying Consolidated Balance Sheets.

The weighted average discount rate used to determine the projected benefit obligation as of December 31, 2021 and 2020 was 2.75 % and 2.40 %, respectively.

Net postretirement benefit expense on the accompanying Consolidated Statements of Income for the years ended December 31, 2020, 2019 and 2018 were $ 0.2 , $ 0.3 and $ 0.8 , respectively.

Net postretirement benefit expense on the accompanying Consolidated Statements of Income for the years ended December 31, 2021, 2020 and 2019 were nil , $ 0.2 and $ 0.3 , respectively.

Since the Company’s obligation for postretirement medical plans is fixed and since the benefit obligation and the net postretirement benefit expense are not material in relation to the Company’s financial condition or results of operations, the Company believes any change in medical costs from that estimated will not have a significant impact on the Company.

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Participation in these plans is based on certain eligibility requirements.

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.

The Company matches employee contributions to the U.S.

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

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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 and (ii) a reconciliation of the undiscounted lease payments to the present value of the lease liabilities recognized, all as of December 31, 2020:

The following summarizes (i) the future minimum undiscounted lease payments under non-cancelable operating 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, 2021:

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:

The following summarizes the operating lease-related account balances on our Consolidated Balance Sheets, as of December 31, 2021 and 2020:

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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Our lease agreements generally do not include residual value guarantees nor do we enter into sublease arrangements with external parties.

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 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.

Finance Leases

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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.

2021 Acquisitions

During the year ended December 31, 2021, the Company completed seven acquisitions for $ 2,225.4 , net of cash acquired, while also completing the divestiture of the Divested MTS business, as discussed below and in Note 12 herein.

Six of the acquisitions were included in the Interconnect Products and Assemblies segment, while one acquisition was included in the Cable Products and Solutions segment.

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

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The operating results of the 2021 acquisitions have been included in the Consolidated Statements of Income for the year ended December 31, 2021, 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.

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 of MTS Systems Corporation

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

MTSC) (“MTS”) for $ 58.50 per share in cash.

Prior to the acquisition, MTS was a leading global supplier of precision sensors, advanced test systems and motion simulators.

MTS was historically organized into two business segments:

Sensors (“MTS Sensors”) and Test & Simulation (“MTS T&S”).

The MTS Sensors business provides the Company with 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 MTS (including the MTS T&S business, but excluding the MTS Sensors business) to Illinois Tool Works Inc.

Throughout this Annual Report, we refer to MTS (including the MTS T&S business, but excluding the MTS Sensors business) as the “Divested MTS business”.

On April 7, 2021, the Company completed the acquisition of MTS for a total enterprise value of approximately $ 1,700 , net of cash acquired and including the repayment of all outstanding debt and certain liabilities.

The MTS acquisition was funded through a combination of borrowings under the U.S.

Commercial Paper Program, as discussed in Note 4 herein, and cash on hand.

At closing, the Company paid approximately $ 1,300 , net of cash acquired, for 100 % of the common stock of MTS, including certain liabilities settled at closing, which is reflected within Net cash used in investing activities from continuing operations in the accompanying Consolidated Statements of Cash Flow for the year ended December 31, 2021.

In addition, the Company also assumed MTS’s then-outstanding $ 350.0 principal amount of senior notes due August 15, 2027.

Shortly after the closing, the Company repaid and settled the MTS senior notes 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 repayment of the outstanding senior notes, including the make-whole premium and excluding interest, was reflected within Net cash used in financing activities from continuing operations in the accompanying Consolidated Statements of Cash Flow for the year ended December 31, 2021.

On December 1, 2021, the Company completed the sale of the Divested MTS business to ITW for approximately $ 750 , net of cash divested and excluding related transaction fees and expenses.

After giving effect to the sale of the Divested MTS business as well as the repayment of the aforementioned MTS senior notes as part of the MTS acquisition, the Company paid approximately $ 950 , net of cash acquired and excluding related transaction fees and expenses, for the retained MTS Sensors business.

Refer to Note 12 herein for further details related to the Company’s discontinued operations and the completed divestiture of the Divested MTS business.

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

The preliminary purchase price allocation for the MTS Sensors business is being performed separately from the Divested MTS business, the latter of which was accounted for as discontinued operations and whose assets acquired, including associated goodwill, and liabilities assumed were reported as current assets held for sale and liabilities held for sale in the Company’s balance sheet.

As a result of the sale of the Divested MTS business on December 1, 2021, the Company completed the acquisition accounting associated with the Divested MTS business and the associated current assets held for sale and current liabilities held for sale are no longer reported on the Company’s Consolidated Balance Sheets as of December 31, 2021.

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 $ 741.1 of goodwill, $ 54.0 of indefinite-lived tradename intangible assets and $ 178.2 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 $ 122.9 , $ 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.

Other than these intangible assets, the remainder of the purchase price has been allocated to other identifiable assets acquired and liabilities assumed.

As part of acquisition accounting, the Company also recorded $ 47.0 of deferred tax liabilities associated with certain basis differences, the majority of which the Company recognized for tax purposes and paid in the fourth quarter of 2021 upon the sale of the Divested MTS business.

The excess purchase price over the fair value of the underlying assets acquired (net of liabilities assumed) was allocated to goodwill, which primarily represents the value of assembled workforce and the anticipated cost savings and efficiencies associated with the integration of the MTS Sensors business, along with other intangible assets acquired that do not qualify for separate recognition.

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

Since the current purchase price allocation is based on preliminary assessments made by management as of December 31, 2021, the acquisition accounting is subject to final adjustment and it is possible that the final assessment of values may differ from this preliminary assessment.

The operating results for the MTS Sensors business have been included within continuing operations in the Consolidated Statements of Income since the acquisition date, while the operating results for the Divested MTS business have been classified and reported as discontinued operations as discussed further in Note 12 herein.

Acquisition of Halo Technology Limited

On December 1, 2021, the Company completed the acquisition of approximately 97 % of the common stock of Halo Technology Limited (“Halo”) for a purchase price of approximately $ 694 , net of cash acquired.

The sellers retained a less than 3 % noncontrolling interest in Halo, which includes redeemable features that are outside the control of the

Company and therefore, has been classified as temporary equity on the Consolidated Balance Sheet as of December 31, 2021, as discussed in more detail in Notes 1 and 5 herein.

The acquisition was funded with cash on hand.

Halo, which is headquartered in the United States (California), is a leading provider of active and passive fiber optic interconnect components, with product offerings that are highly complementary to our existing high-speed and fiber optic interconnect solutions for the communications infrastructure markets.

The Company has begun the process of analyzing the allocation of the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed, as part of acquisition accounting.

As of December 31, 2021, the Halo acquisition resulted in the recognition of $ 528.3 of goodwill, $ 28.0 of indefinite-lived tradename intangible assets and $ 156.0 of definite-lived intangible assets.

The definite-lived intangible assets are comprised of customer relationships, proprietary technology, and backlog of $ 31.0 , $ 116.0 and $ 9.0 , respectively, and are amortized based upon the underlying pattern of economic benefit with weighted average useful lives of 10 years , 15 years and one month , respectively.

Other than these intangible assets, the remainder of the purchase price has been allocated to other identifiable assets acquired and liabilities and noncontrolling interests (including redeemable noncontrolling interests) assumed.

As part of acquisition accounting, the excess purchase price over the fair value of the underlying assets acquired (net of liabilities and noncontrolling interests assumed) was allocated to goodwill, which primarily represents the value of assembled workforce and the anticipated cost savings and efficiencies associated with the integration of Halo, along with other intangible assets acquired that do not qualify for separate recognition.

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

Since the current purchase price allocation is based on an initial preliminary assessment made by management as of December 31, 2021, the acquisition accounting for Halo is subject to final adjustment and it is possible that the final assessment of values may differ from our initial preliminary assessment.

The operating results for Halo have been included within continuing operations in the Consolidated Statements of Income since the acquisition date.

The acquisition of Halo, which is reported within our Interconnect Products and Assemblies segment, was not material to the Company’s financial results.

2020 Acquisitions

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

The Company completed the acquisition accounting, including the analyses of the fair value of the assets acquired and liabilities assumed, for both 2020 acquisitions, and the final assessments of values did not differ materially from the preliminary assessments.

2019 Acquisitions

During the year ended December 31, 2019, the Company completed nine acquisitions 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.

Approximately $ 455 of the goodwill recognized from acquisitions in 2019 will be deductible for tax purposes.

The Company completed the acquisition accounting, including its analyses of the fair value of the assets acquired and liabilities assumed, for all 2019 acquisitions, and the final assessments of values did not differ materially from the preliminary assessments.

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

Pro forma financial information, as well as further details regarding the purchase price allocation related to these acquisitions, was not 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.

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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.

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

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 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 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.

In 2021, the Company incurred $ 70.4 ($ 57.3 after-tax) of acquisition-related expenses, comprised primarily of transaction, severance, restructuring and certain non-cash purchase accounting costs related to the MTS acquisition in the second quarter of 2021, along with external transaction costs and certain non-cash purchase accounting costs related to the Halo acquisition in the fourth quarter of 2021.

In 2020, the Company incurred approximately $ 11.5 ($ 10.7 after-tax) of acquisition-related expenses, comprised primarily 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, comprised primarily of the amortization of $ 15.7 related to the value associated with acquired backlog (of which $ 12.5 related to the acquisition of SSI), with the remainder representing external transaction costs.

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

Note 12—Discontinued Operations

Presentation and Sale of the Divested MTS Business

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

As a result of the a greement to sell the Divested MTS business to ITW, the Company concluded that the Divested MTS business met the discontinued operations reporting criteria and “held for sale” accounting criteria as of the MTS acquisition date of April 7, 2021, and consequently, the Company did not assign the Divested MTS business to either of its two reportable business segments.

Accordingly, since the Divested MTS business has never been nor was expected to ever be considered part of our continuing operations, the Company accounted for the operating results and related cash flows associated with the Divested MTS business as discontinued operations in the accompanying Consolidated Statements of Income and Consolidated Statements of Cash Flow, respectively, as of the MTS acquisition date through December 1, 2021, the date of the sale of the Divested MTS business.

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

In 2021, the assets and liabilities associated with the Divested MTS business were presented as current assets held for sale and current liabilities held for sale, respectively, on the Company’s balance sheet throughout the period in which Amphenol owned the business.

As discussed in Note 11 herein, the purchase price allocation associated with the Divested MTS business was performed separately from the MTS Sensors business, as the Divested MTS business met the “held for sale” accounting criteria.

The assets acquired and liabilities assumed resulting from the purchase price allocation for the Divested MTS business were measured and recorded at fair value less costs to sell as of the date of the MTS acquisition and recorded as current assets held for sale and current liabilities held for sale, as separate single line items in the Company’s balance sheet from the MTS acquisition date through December 1, 2021, the date of the sale of the Divested MTS business.

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.

This contingent consideration was recorded within current liabilities held for sale in the Company’s balance sheet as of the acquisition date.

During the third quarter of 2021, the Company made a capital contribution to the Divested MTS business, which in turn used the funding to settle the contingent consideration.

On December 1, 2021, the Company completed the sale of the Divested MTS business to ITW for approximately $ 750 , net of cash divested and excluding related transaction fees and expenses .

The proceeds from the sale of the Divested MTS business were included in Net cash provided by investing activities from discontinued operations in the Consolidated Statements of Cash Flow for the year ended December 31, 2021.

Amphenol has no continuing involvement with the Divested MTS business now that its sale has been consummated .

At December 31, 2021, there were no assets held for sale no r liabilities held for sale on the Consolidated Balance Sheets, as a result of the sale of the Divested MTS business in December 2021.

In addition, there were no material adjustments to previously reported balances associated with the assets held for sale and liabilities held for sale.

The sale of the Divested MTS business did not result in any significant gain or loss recorded to discontinued operations in the Consolidated Statements of Income for the year ended December 31, 2021.

Note 13—Goodwill and Other Intangible Assets

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Goodwill at December 31, 2021

Other than goodwill noted above, the following is a summary of the Company’s intangible assets as of December 31, 2020 and 2019:

The increase in goodwill during 2021 was primarily driven by the acquisition of MTS and Halo, along with the other acquisitions that closed during the year, as described in Note 11 herein.

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

December 31, 2021

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Trade names (indefinite-lived)

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

The increase in the gross carrying amount of intangible assets in 2021 was driven by certain customer relationships recognized resulting from acquisition accounting associated with our 2021 acquisitions, as well as certain proprietary technology and indefinite-lived trade names associated with both the MTS and Halo acquisitions.

Amortization expense for the years ended December 31, 2021, 2020 and 2019 was approximately $ 86.4 , $ 49.6 and $ 67.3 , respectively.

Amortization expense in 2021 includes $ 16.2 and $ 9.0 related to the amortization of acquired backlog resulting from the MTS and Halo acquisitions, respectively, while amortization expense in 2019 included $ 15.7 related to the amortization of acquired backlog, primarily from the SSI acquisition.

As of December 31, 2021, amortization expense relating to the Company’s current intangible assets estimated for each of the next five fiscal years is approximately $ 67.5 in 2022, $ 64.7 in 2023, $ 59.1 in 2024, $ 49.7 in 2025, and $ 48.0 in 2026.

Note 14—Reportable Business Segments and International Operations

The Company has two reportable business segments:

Through December 31, 2021, the Company had two reportable business segments:

(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, 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 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 Company organized its reportable business segments based upon similar economic characteristics and business groupings of products, services, and customers, and did not include any aggregated operating segments.

These reportable business segments were determined based upon how the Company operated its businesses, assessed operating performance, made resource allocation decisions, and communicated results,

outlook and strategy to the Board and stockholders.

The Interconnect Products and Assemblies segment primarily designed, manufactured and marketed 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 designed, manufactured and marketed 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 were the same as those for the Company as a whole, as described in Note 1 herein.

The Company evaluated the performance of the segments and allocated 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 Company also provided general corporate services to its reportable business segments, which continued to be reported as “Corporate/Other”, a non-reportable business segment.

Effective January 1, 2022, the Company aligned its businesses into three newly formed reportable business segments:

(i) Harsh Environment Solutions , (ii) Communications Solutions and (iii) Interconnect and Sensor Systems .

Refer to Note 16 herein for further details related to the Company’s change in its reportable business segments.

The segment results and segment assets the years ended December 31, 2021, 2020 and 2019 were as follows:

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.

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

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

For the Years Ended December 31,

Segment operating income

4 unchanged sentences

Loss on early extinguishment of debt

Other income, net

Income before income taxes

Other (expense) income, net

Income from continuing operations before income taxes

Reconciliation of segment assets to consolidated total assets:

1 unchanged sentence

Consolidated total assets

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:

Other assets in both years were comprised primarily of corporate-held cash and cash equivalents on hand, along with other corporate identifiable assets.

Net sales by geographic area for the years ended December 31, 2021, 2020 and 2019 and long-lived assets by geographic area as of December 31 were as follows:

United States

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Other foreign locations

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

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.

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

Disaggregation of Net Sales

6 unchanged sentences

Business Segments

Year ended December 31,

Net sales by:

5 unchanged sentences

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

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.

No single customer accounted for 10% or more of the Company’s net sales for the year ended December 31, 2021.

During the year ended December 31, 2020, aggregate sales to the Company’s largest customer accounted for approximately 11 % of the Company’s net sales.

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

It is impracticable to disclose net sales by product or group of products.

1 unchanged sentence

Note 15—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.

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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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.

All the costs incurred relating to these lawsuits have been 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 have been 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.

In March 2021, a non-material customer of the Company filed a formal request for arbitration against the Company relating to a product sold to such customer that the customer alleges did not meet the agreed upon product specification.

The customer is pursuing breach of warranty claims against the Company, among other assertions, and is seeking damages relating to its estimated costs of replacing the product.

While the customer has claimed damages of approximately € 90 , the arbitrator will have discretion to determine the actual amount of damages as well as the apportionment of responsibility between the parties.

The Company has denied that its product caused the damages, that its product did not meet the agreed upon specifications and that the claimed damages are appropriate, and is vigorously defending itself in the arbitration.

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

The Company believes that its operations are currently in substantial compliance with applicable environmental laws and regulations and that the costs of continuing compliance will not have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

1 unchanged sentence

At December 31, 2021, the Company had purchase commitments of $ 793.6 in 2022, $ 40.6 in 2023 and 2024, combined, and $ 4.1 beyond 2024.

Note 15— Selected Quarterly Financial Data (Unaudited)

Three Months Ended

September 30,

Operating income

Net income attributable to Amphenol Corporation

Net income per common share—Basic

Net income per common share—Diluted

Operating income

Net income attributable to Amphenol Corporation

Net income per common share—Basic

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.

Net income and net income per common share also includes excess tax benefits related to stock-based compensation of $ 6.8 ( $ 0.02 per diluted share).

These items had the aggregate effect of decreasing Operating income, Net income, Net income attributable to Amphenol Corporation, and Net income per common share-Diluted by $ 16.5 , $ 6.4 , $ 6.4 , and $ 0.02 per share, respectively, for the three months ended March 31, 2019.

(6) Operating income, net income and net income per common share includes acquisition-related expenses of $ 8.9 ( $ 7.8 after-tax, or $ 0.03 per diluted share) primarily related to external transaction costs, as well as amortization related to the value associated with acquired backlog from an acquisition closed in the second quarter of 2019.

Net income and net income per common share also includes excess tax benefits related to stock-based compensation of $ 12.9 ( $ 0.04 per diluted share).

These items had the aggregate effect of decreasing Operating income by $ 8.9 , while increasing Net income, Net income attributable to Amphenol Corporation, and Net income per common share-Diluted by $ 5.1 , $ 5.1 , and $ 0.01 per share, respectively, for the three months ended June 30, 2019.

(7) Net income and net income per common share includes the excess tax benefits related to stock-based compensation of $ 1.6 ( $ 0.01 per diluted share) and the refinancing-related costs associated with the early extinguishment of debt of $ 14.3 ( $ 12.5 after-tax, or $ 0.04 per diluted share).

These items had the aggregate effect of decreasing Net income, Net income attributable to Amphenol Corporation, and Net income per common share-Diluted by $ 10.9 , $ 10.9 , and $ 0.03 per share, respectively, for the three months ended September 30, 2019.

(8) Net income and net income per common share includes the excess tax benefits related to stock-based compensation of $ 16.8 .

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 .

Note 16—Subsequent Events

New Reportable Business Segments

Effective January 1, 2022, the Company aligned its businesses into three newly formed reportable business segments:

(i) Harsh Environment Solutions , (ii) Communications Solutions and (iii) Interconnect and Sensor Systems .

This new alignment replaces our historic reportable business segments.

All businesses previously reported in the Interconnect Products and Assemblies segment have now been aligned with one of the three newly formed segments.

All businesses previously reported in the Cable Products and Solutions segment have now been aligned with our newly formed Communications Solutions segment.

This new alignment reinforces the Company’s entrepreneurial culture and the clear accountability of each of our business unit general managers, while enhancing the scalability of Amphenol’s business for the future.

The segment structure reflects the manner in which the Chief Operating Decision Maker (“CODM”), who is the Company’s Chief Executive Officer, regularly assesses information for decision-making purposes, including the allocation of resources, effective January 1, 2022.

In conjunction with the new alignment of our business, the Company appointed three new segment managers to lead their respective reportable business segments, each reporting directly to the Company’s Chief Executive Officer.

The Company’s three new reportable business segments have been identified as:

● Harsh Environment Solutions – the Harsh Environment Solutions segment designs, manufactures and markets a broad range of ruggedized interconnect products, including connectors and interconnect systems, printed circuits and printed circuit assemblies and other products for use in the industrial, military, commercial aerospace, automotive, mobile networks and information technology and data communications end markets.

● Communications Solutions – the Communications Solutions segment designs, manufactures and markets a broad range of connector and interconnect systems, including high speed, radio frequency, power, fiber optic and other products, together with antennas, for use in the information technology and data communications, mobile devices, industrial, mobile networks, broadband communications, automotive, commercial aerospace and military end markets.

● Interconnect and Sensor Systems – the Interconnect and Sensor Systems segment designs, manufactures and markets a broad range of sensors, sensor-based systems, connectors and value-add interconnect systems used in the automotive, industrial, information technology and data communications, mobile networks, military and commercial aerospace end markets.

The Company is in the process of completing the update of its internal reporting to accommodate this new reporting segment structure.

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