What changed in this filing

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Item 1. Financial Statements

2022-07-29 compared with 2022-04-29 · 251 added, 123 removed, 516 unchanged (42% of the section changed)

40 unchanged sentences

Three Months Ended

Six Months Ended

Cost of sales

Acquisition-related expenses

Selling, general and administrative expenses

2 unchanged sentences

Other income (expense), net

Income before income taxes

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 ($ 0.3 ) for 2021

Net income attributable to Amphenol Corporation

Net income attributable to Amphenol Corporation 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 attributable to Amphenol Corporation 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

Per share amounts may not add due to rounding.

See accompanying notes to condensed consolidated financial statements .

3 unchanged sentences

Three Months Ended

Six Months Ended

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:

1 unchanged sentence

Unrealized gain on hedging activities

Pension and postretirement benefit plan adjustment, net of tax of ($ 1.1 ) and ($ 1.6 ), respectively

Pension and postretirement benefit plan adjustment, net of tax of ($ 1.1 ) and ($ 2.2 ) for 2022, and ($ 1.6 ) and ($ 3.3 ) for 2021, respectively

Total other comprehensive (loss) income, net of tax

6 unchanged sentences

(dollars in millions)

Three Months Ended March 31,

Six Months Ended June 30,

Cash from operating activities:

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

Net income from continuing operations

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

Depreciation and amortization

3 unchanged sentences

Net change in other long-term assets and liabilities

Net cash provided by operating activities from continuing operations

Net cash used in operating activities from discontinued operations

Net cash provided by operating activities

5 unchanged sentences

Acquisitions, net of cash acquired

Net cash used in investing activities from continuing operations

Net cash used in investing activities from discontinued operations

Net cash used in investing activities

3 unchanged sentences

Proceeds from short-term borrowings

Repayments of short-term borrowings

Borrowings (repayments) under commercial paper programs, net

Payment of costs related to debt financing

Payment of deferred purchase price related to acquisitions

Purchase of treasury stock

2 unchanged sentences

Dividend payments

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

Net cash provided by financing activities from discontinued operations

Net cash (used in) provided by financing activities

Effect of exchange rate changes on cash and cash equivalents

Net increase in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents balance, beginning of period

Cash and cash equivalents balance, end of period

Cash and cash equivalents included in Current assets held for sale, end of period

Cash and cash equivalents balance of continuing operations, end of period

Cash paid for:

5 unchanged sentences

Note 1—Basis of Presentation and Principles of Consolidation

The Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021, and each of the related Condensed Consolidated Statements of Income, Condensed Consolidated Statements of Comprehensive Income and Condensed Consolidated Statements of Cash Flow for the three months ended March 31, 2022 and 2021, include the accounts of Amphenol Corporation and its subsidiaries (“Amphenol,” the “Company,” “we,” “our” or “us”).

The Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021, the related Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2022 and 2021, and the related Condensed Consolidated Statements of Cash Flow for the six months ended June 30, 2022 and 2021, include the accounts of Amphenol Corporation and its subsidiaries (“Amphenol,” the “Company,” “we,” “our” or “us”).

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

1 unchanged sentence

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

The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the full year.

The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the full year.

These condensed consolidated financial statements and the related notes should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the “2021 Annual Report”).

3 unchanged sentences

This new alignment replaces our historic reportable business segments.

The Company has begun reporting under its new reportable segments in connection with this Quarterly Report on Form 10-Q, which also includes the recasting of relevant prior year period segment information in order to enable year-over-year segment comparisons.

As a result of this new alignment, the Company began reporting under its new reportable segments in connection with the Company’s Quarterly Report on Form 10-Q for the first quarter of 2022.

As part of this Quarterly Report on Form 10-Q, the Company has included the recasting of relevant prior year period segment information in order to enable year-over-year segment comparisons.

Refer to Note 13 herein for further details related to the Company’s change in its reportable business segments effective January 1, 2022.

3 unchanged sentences

Refer to Note 12 herein for further details related to the carrying amount of goodwill by segment.

Discontinued Operations

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 (a) 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, (b) the completed sale is probable within one year , and (c) 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 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 Condensed Consolidated Financial Statements.

For further information related to the Company’s discontinued operations, refer to Note 11 herein.

Note 2—New Accounting Pronouncements

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2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides optional expedients and exceptions for applying accounting principles generally accepted in the United States (“U.S.

GAAP” or “GAAP”) to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate

expected to be discontinued by reference rate reform, and addresses operational issues likely to arise in modifying contracts to replace discontinued reference rates with new rates.

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

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

17 unchanged sentences

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

March 31, 2022

June 30, 2022

December 31, 2021

2 unchanged sentences

Euro Commercial Paper Program

Term Loan Credit Facility

3.20 % Senior Notes due April 2024

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

At March 31, 2022 and December 31, 2021, there were no outstanding borrowings under the Revolving Credit Facility.

At June 30, 2022 and December 31, 2021, there were no outstanding borrowings under the Revolving Credit Facility.

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

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

On March 31, 2022, the Company was in compliance with the financial covenants under the Revolving Credit Facility .

On June 30, 2022, the Company was in compliance with the financial covenants under the Revolving Credit Facility .

Term Loan Credit Facility

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The 2022 Term Loan was undrawn at closing and may be drawn on up to five occasions over the life of the facility.

The 2022 Term Loan may be repaid at any time without premium or penalty, and, once prepaid, cannot be reborrowed.

The proceeds from the 2022 Term Loan are expected to be used for general corporate purposes.

The 2022 Term Loan may be repaid at any time without premium or penalty, and, once repaid, cannot be reborrowed.

When drawn upon, the proceeds from the 2022 Term Loan are expected to be used for general corporate purposes.

Interest rates under the 2022 Term Loan are based on a spread over either the base rate or the adjusted term SOFR, which spread varies based on the Company’s debt rating.

The carrying value of the 2022 Term Loan approximates its fair value due primarily to its market interest rates and is classified as Level 2 in the fair value hierarchy (Note 5).

The carrying value of any borrowings under the 2022 Term Loan would approximate its fair value due primarily to its market interest rates and would be classified as Level 2 in the fair value hierarchy (Note 5).

As of June 30, 2022, there were no outstanding borrowings under the 2022 Term Loan.

The 2022 Term Loan requires payment of certain commitment fees and requires that the Company satisfy certain financial covenants, which financial covenants are the same as those under the Revolving Credit Facility.

As of April 26, 2022, there were no outstanding borrowings under the 2022 Term Loan.

On June 30, 2022, the Company was in compliance with the financial covenants under the 2022 Term Loan.

Commercial Paper Programs

6 unchanged sentences

Commercial Paper Program for general corporate purposes, which recently has included fully or partially funding acquisitions, as well as to repay certain outstanding senior notes .

As of March 31, 2022, the amount of USCP Notes outstanding was $ 933.5 , with a weighted average interest rate of 0.95 % .

As of June 30, 2022, the amount of USCP Notes outstanding was $ 923.2 , with a weighted average interest rate of 1.98 % .

The Company and one of its wholly owned European subsidiaries (the “Euro Issuer”) also have a commercial paper program (the “Euro Commercial Paper Program” and, together with the U.S.

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dollars or other currencies.

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

As of March 31, 2022, there were no ECP Notes outstanding.

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

As of June 30, 2022, there were no ECP Notes outstanding.

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

In conjunction with the Revolving Credit Facility, as of March 31, 2022, the authorization from the Company’s Board of Directors (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.

In conjunction with the Revolving Credit Facility, as of June 30, 2022, the authorization from the Company’s Board of Directors (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.

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The Company may, at its option, redeem some or all of any series of U.S.

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.

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.

Euro Senior Notes

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

On March 31, 2022, the Company was in compliance with all requirements under its Senior Notes .

On June 30, 2022, the Company was in compliance with all requirements under its Senior Notes .

Note 5—Fair Value Measurements

Fair value is determined based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction

between market participants.

These requirements establish market or observable inputs as the preferred source of values.

18 unchanged sentences

The Company reviews the fair value hierarchy classifications on a quarterly basis and determines the appropriate classification of such assets and liabilities subject to the fair value hierarchy standards based on, among other things, the ability to observe valuation inputs.

The fair values of the Company’s financial and non-financial assets and liabilities subject to such standards as of March 31, 2022 and December 31, 2021 are as follows:

The fair values of the Company’s financial and non-financial assets and liabilities subject to such standards as of June 30, 2022 and December 31, 2021 are as follows:

Fair Value Measurements

3 unchanged sentences

Assets (Level 1)

March 31, 2022:

June 30, 2022:

Short-term investments

7 unchanged sentences

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

In addition, the Company also enters into foreign exchange forward

contracts, accounted for as net investment hedges, to hedge our exposure to variability in the U.S.

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

dollar equivalent of the net investments in certain foreign subsidiaries.

As of March 31, 2022, the fair value of such foreign exchange forward contracts in the table above consisted of (i) two outstanding foreign exchange forward contracts accounted for as cash flow hedges, each expiring within one year , (ii) various outstanding foreign exchange forward contracts accounted for as net investment hedges and (iii) various outstanding foreign exchange forward contracts that are not designated as hedging instruments.

The amounts recognized in Accumulated other comprehensive income (loss) associated with foreign exchange forward contracts and the amounts reclassified from Accumulated other comprehensive income (loss) to foreign exchange gain (loss), included in Cost of sales in the accompanying Condensed Consolidated Statements of Income during the three months ended March 31, 2022 and 2021, were not material.

As of June 30, 2022, the fair value of such foreign exchange forward contracts in the table above consisted of (i) two outstanding foreign exchange forward contracts accounted for as cash flow hedges, each expiring within one year , (ii) various outstanding foreign exchange forward contracts accounted for as net investment hedges and (iii) various outstanding foreign exchange forward contracts that are not designated as hedging instruments.

The amounts recognized in Accumulated other comprehensive income (loss) associated with foreign exchange forward contracts and the amounts reclassified from Accumulated other comprehensive income (loss) to foreign exchange gain (loss), included in Cost of sales in the accompanying Condensed Consolidated Statements of Income during the three and six months ended June 30, 2022 and 2021, were not material.

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

1 unchanged sentence

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 March 31, 2022 and December 31, 2021 is related to the acquisition of Halo Technology Limited (“Halo”), which 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 redeemable noncontrolling interest as of June 30, 2022 and December 31, 2021 is related to the acquisition of Halo Technology Limited (“Halo”), which 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, and is recorded as Redeemable noncontrolling interest on the Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021.

Refer to Note 7 herein for a rollforward of the Redeemable noncontrolling interest for the three months ended March 31, 2022, as well as Note 1 of the Notes to Consolidated Financial Statements in the 2021 Annual Report for further discussion of the Company’s redeemable noncontrolling interest.

Refer to Note 7 herein for a rollforward of the Redeemable noncontrolling interest for the three and six months ended June 30, 2022, as well as Note 1 of the Notes to Consolidated Financial Statements in the 2021 Annual Report for further discussion of the Company’s redeemable noncontrolling interest.

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.

1 unchanged sentence

Three Months Ended

Six Months Ended

Provision for income taxes

Effective tax rate

For the three months ended March 31, 2022 and 2021, stock option exercise activity had the impact of decreasing our Provision for income taxes by $ 3.8 and $ 2.6 , respectively, and decreasing our effective tax rate by 70 basis points and 60 basis points, respectively, due to the recognition of excess tax benefits within Provision for income taxes in the accompanying Condensed Consolidated Statements of Income.

For the three months ended June 30, 2022 and 2021, stock option exercise activity had the impact of decreasing our Provision for income taxes by $ 7.5 and $ 19.3 , respectively, and decreasing our effective tax rate by 120 basis points and 430 basis points, respectively, due to the recognition of excess tax benefits within Provision for income taxes in the accompanying Condensed Consolidated Statements of Income.

For the six months ended June 30, 2022 and 2021, stock option exercise activity had the impact of decreasing our Provision for income taxes by $ 11.3 and $ 22.0 , respectively, and decreasing our effective tax rate by 100 basis points and 250 basis points, respectively.

For the three and six months ended June 30, 2021, acquisition-related expenses had the effect of increasing our effective tax rate by approximately 60 basis points and 30 basis points, respectively, and a discrete tax benefit of $ 14.9 related to the settlement of uncertain tax positions in certain non-U.S.

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

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

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.

The Company plans to pay its fifth annual installment of the Transition Tax, net of applicable tax credits and deductions, in the second quarter of 2022, and will pay the balance of the Transition Tax, net of applicable tax credits and deductions, over the remainder of the eight-year period ending 2025, as permitted under the Tax Act.

The current and long-term portions of the Transition Tax are recorded in Accrued income taxes and Other long-term liabilities, respectively, on the Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021.

The Company paid its fifth annual installment of the Transition Tax, net of applicable tax credits and deductions, in the second quarter of 2022, and will pay the balance of the Transition Tax, net of applicable tax credits and deductions, over the remainder of the eight-year period ending 2025, as permitted under the Tax Act.

The Company operates in the U.S.

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

As of March 31, 2022, the amount of unrecognized tax benefits, including penalties and interest, which if recognized would impact the effective tax rate, was approximately $ 183.1 .

As of June 30, 2022, the amount of unrecognized tax benefits, including penalties and interest, which if recognized would impact the effective tax rate, was approximately $ 182.9 .

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

1 unchanged sentence

Note 7—Stockholders’ Equity and Noncontrolling Interests

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

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.

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

A rollforward of consolidated changes in equity and redeemable noncontrolling interest for the three months ended March 31, 2022 is as follows:

A rollforward of consolidated changes in equity and redeemable noncontrolling interest for the three months ended June 30, 2022 is as follows:

Amphenol Corporation Stockholders

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(in millions)

Balance as of March 31, 2022

Other comprehensive income (loss)

Distributions to shareholders of noncontrolling interests

Purchase of treasury stock

Retirement of treasury stock

Stock options exercised

Dividends declared ($ 0.20 per common share)

Stock-based compensation expense

Balance as of June 30, 2022

A rollforward of consolidated changes in equity and redeemable noncontrolling interest for the six months ended June 30, 2022 is as follows:

Amphenol Corporation Stockholders

Treasury Stock

Comprehensive

(in millions)

Balance as of December 31, 2021

7 unchanged sentences

Stock-based compensation expense

Balance as of June 30, 2022

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

Amphenol Corporation Stockholders

Treasury Stock

Comprehensive

(in millions)

Balance as of March 31, 2021

A rollforward of consolidated changes in equity for the three months ended March 31, 2021 is as follows:

Other comprehensive income (loss)

Distributions to shareholders of noncontrolling interests

Purchase of treasury stock

Retirement of treasury stock

Stock options exercised

Dividends declared ($ 0.145 per common share)

Stock-based compensation expense

Balance as of June 30, 2021

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

Amphenol Corporation Stockholders

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Stock-based compensation expense

Balance as of March 31, 2021

Balance as of June 30, 2021

Stock Repurchase Programs

On April 27, 2021, the Board authorized a stock repurchase program under which the Company may purchase up to $ 2,000.0 of the Company’s Class A Common Stock (“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 Securities Exchange Act of 1934, as amended (the “Exchange Act”).

During the three months ended March 31, 2022, the Company repurchased 2.6 million shares of its Common Stock for $ 204.0 under the 2021 Stock Repurchase Program.

Of the total repurchases made during the first three months of 2022, 0.3 million shares, or $ 21.0 , were retained in Treasury stock at the time of repurchase.

During the three and six months ended June 30, 2022, the Company repurchased 2.7 million and 5.3 million shares of its Common Stock for $ 186.0 and $ 389.9 , respectively, under the 2021 Stock Repurchase Program.

Of the total repurchases made during the first six months of 2022, 0.3 million shares, or $ 21.0 , were retained in Treasury stock at the time of repurchase.

The remaining 5.0 million shares, or $ 368.9 , have been retired by the Company.

From April 1, 2022 to April 26, 2022, the Company repurchased 0.7 million additional shares of its Common Stock for $ 51.0 under the 2021 Stock Repurchase Program, and, as of April 27, 2022, the Company has remaining authorization to purchase up to $ 1,287.1 of its Common Stock under the 2021 Stock Repurchase Program.

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

From July 1, 2022 to July 26, 2022, the Company repurchased 0.7 million additional shares of its Common Stock for $ 48.0 under the 2021 Stock Repurchase Program, and, as of July 27, 2022, the Company has remaining authorization to purchase up to $ 1,104.2 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.

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 Exchange Act.

During the three months ended March 31, 2021, the Company repurchased 2.4 million shares of its Common Stock for $ 152.8 under the 2018 Stock Repurchase Program.

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

During the three and six months ended June 30, 2021, the Company repurchased 0.8 million and 3.1 million shares of its Common Stock for $ 51.0 and $ 203.8 , respectively, under the 2018 Stock Repurchase Program.

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 was terminated.

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

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

In April of 2021, the Company repurchased the remaining value of shares of its Common Stock authorized under the 2018 Stock Repurchase Program and, therefore, the 2018 Stock Repurchase Program was terminated.

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

The following table summarizes the dividends declared and paid for the three months ended March 31, 2022 and 2021:

Three Months Ended March 31,

The following table summarizes the dividends declared and paid for the three and six months ended June 30, 2022 and 2021:

Three Months Ended June 30,

Six Months Ended June 30,

Dividends declared

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Note 8—Stock-Based Compensation

For the three months ended March 31, 2022 and 2021, the Company’s Income before income taxes was reduced for stock-based compensation expense of $ 19.7 and $ 19.1 , respectively.

In addition, for the three months ended March 31, 2022 and 2021, the Company recognized aggregate income tax benefits (associated with stock-based compensation) of $ 5.8 and $ 4.5 , respectively, in Provision for income taxes in the accompanying Condensed Consolidated Statements of Income.

These aggregate income tax benefits during the three months ended March 31, 2022 and 2021 include excess tax benefits of $ 3.8 and $ 2.6 , respectively, from option exercises.

since the provision for income taxes will be impacted by the timing and intrinsic value of future stock-based compensation award exercises.

For the three months ended June 30, 2022 and 2021, the Company’s Income from continuing operations before income taxes was reduced for stock-based compensation expense of $ 20.9 and $ 20.0 , respectively.

In addition, for the three months ended June 30, 2022 and 2021, the Company recognized aggregate income tax benefits (associated with stock-based compensation) of $ 9.6 and $ 21.8 , respectively, in Provision for income taxes in the accompanying Condensed Consolidated Statements of Income.

These aggregate income tax benefits during the three months ended June 30, 2022 and 2021 include excess tax benefits of $ 7.5 and $ 19.3 , respectively, from option exercises.

For the six months ended June 30, 2022 and 2021, the Company’s Income from continuing operations before income taxes was reduced for stock-based compensation expense of $ 40.6 and $ 39.0 , respectively.

In addition, for the six months ended June 30, 2022 and 2021, the Company recognized aggregate income tax benefits (associated with stock-based compensation) of $ 15.4 and $ 26.4 , respectively, in Provision for income taxes in the accompanying Condensed Consolidated Statements of Income.

These aggregate income tax benefits during the six months ended June 30, 2022 and 2021 include excess tax benefits of $ 11.3 and $ 22.0 , respectively, from option exercises.

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

Stock-based compensation expense includes the estimated effects of forfeitures, which are adjusted over the requisite service period to the extent actual forfeitures differ or are expected to differ from such estimates.

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

As of March 31, 2022, there were 42,881,160 shares of Common Stock available for the granting of additional stock options under the 2017 Option Plan.

As of June 30, 2022, there were 36,674,120 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 Option Plan and the 2009 Employee Option Plan generally vest ratably over a period of five years from the date of grant and are generally exercisable over a period of ten years from the date of grant.

Stock option activity for the three months ended March 31, 2022 was as follows:

Options granted under the 2017 Option Plan and the

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

Stock option activity for the three and six months ended June 30, 2022 was as follows:

Exercise Price

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Options outstanding at March 31, 2022

Vested and non-vested options expected to vest at March 31, 2022

Exercisable options at March 31, 2022

A summary of the status of the Company’s non-vested options as of March 31, 2022 and changes during the three months then ended is as follows:

Options granted

Options exercised

Options forfeited

Options outstanding at June 30, 2022

Vested and non-vested options expected to vest at June 30, 2022

Exercisable options at June 30, 2022

A summary of the status of the Company’s non-vested options as of June 30, 2022 and changes during the three and six months then ended is as follows:

Fair Value at

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Non-vested options at March 31, 2022

During the three months ended March 31, 2022 and 2021, the following activity occurred under the Company’s option plans:

Options granted

Options vested

( 10,914,950 )

Options forfeited

Non-vested options at June 30, 2022

During the three and six months ended June 30, 2022 and 2021, the following activity occurred under the Company’s option plans:

Three Months Ended

Six Months Ended

Total intrinsic value of stock options exercised

Total fair value of stock options vested

As of March 31, 2022, the total compensation cost related to non-vested options not yet recognized was approximately $ 187.8 with a weighted average expected amortization period of 3.26 years.

As of June 30, 2022, the total compensation cost related to non-vested options not yet recognized was approximately $ 263.3 with a weighted average expected amortization period of 3.72 years.

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

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

As of March 31, 2022, the number of restricted shares available for grant under the 2012 Directors Restricted Stock Plan was 141,359 .

As of June 30, 2022, the number of restricted shares available for grant under the 2012 Directors Restricted Stock Plan was 120,047 .

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.

Restricted share activity for the three months ended March 31, 2022 was as follows:

Restricted share activity for the three and six months ended June 30, 2022 was as follows:

Weighted Average

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Restricted shares outstanding at March 31, 2022

As of March 31, 2022, the total compensation cost related to non-vested restricted shares not yet recognized was approximately $ 0.2 (with a weighted average expected amortization period of 0.13 years).

Shares vested and issued

Restricted shares granted

Restricted shares outstanding at June 30, 2022

As of June 30, 2022, the total compensation cost related to non-vested restricted shares not yet recognized was approximately $ 1.3 (with a weighted average expected amortization period of 0.88 years).

Note 9—Earnings Per Share

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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.

The following is a reconciliation of the basic weighted

average common shares outstanding to diluted weighted average common shares outstanding, which were used to calculate the earnings per share (basic and diluted) for the three months ended March 31, 2022 and 2021:

Three Months Ended March 31,

The following is a reconciliation of the basic weighted average common shares outs tanding to diluted weighted average common shares outstanding, which were used to

calculate the earnings per share (basic and diluted) for the three and six months ended June 30, 2022 and 2021 (note that per share amounts may not add due to rounding) :

Three Months Ended June 30,

Six Months Ended June 30,

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

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 ($ 0.3 ) for 2021

Net income attributable to Amphenol Corporation

Weighted average common shares outstanding — Basic

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Weighted average common shares outstanding — Diluted

Net income attributable to Amphenol Corporation per common share — Basic

Net income attributable to Amphenol Corporation per common share — Diluted

Excluded from the computations above were anti-dilutive common shares (primarily related to outstanding stock options) of 4.1 million and 0.1 million for the three months ended March 31, 2022 and 2021, respectively.

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

Excluded from the computations above were anti-dilutive common shares (primarily related to outstanding stock options) of 11.1 million and 3.8 million for the three months ended June 30, 2022 and 2021, respectively.

Excluded from the computations above were anti-dilutive common shares (primarily related to outstanding stock options) of 7.6 million and 2.2 million for the six months ended June 30, 2022 and 2021, respectively.

Note 10—Benefit Plans and Other Postretirement Benefits

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Plans, the “Plans”).

The following is a summary, based on the most recent actuarial valuations of the Company’s net cost for pension benefits, of the Plans for the three months ended March 31, 2022 and 2021:

Pension Benefits

Three Months Ended March 31:

The following is a summary, based on the most recent actuarial valuations of the Company’s net cost for pension benefits, of the Plans for the three and six months ended June 30, 2022 and 2021:

Three Months Ended June 30,

Six Months Ended June 30,

Interest cost

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

During the three months ended March 31, 2022 and 2021, the Company provided matching contributions to the U.S.

During the six months ended June 30, 2022 and 2021, the Company provided matching contributions to the U.S.

defined contribution plans of approximately $ 9.6 and $ 8.4 , respectively.

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2022 Acquisitions

In the second quarter of 2022, the Company completed one acquisition for approximately $ 74.5 , net of cash acquired, which has been included in the Harsh Environment Solutions segment.

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

Commercial Paper Program and cash on hand.

The Company has begun the process of analyzing the allocation of the fair value of the assets acquired and liabilities assumed.

Since the current purchase price allocation is based on an initial preliminary assessment made by management as of June 30, 2022, the acquisition accounting is subject to final adjustment, and it is possible that the final assessment of values may differ materially from our initial preliminary assessment.

The operating results of this acquisition has been included in the Condensed Consolidated Statements of Income since the date of acquisition.

Pro forma financial information, as well as further details regarding the purchase price allocation related to the acquisition, has not been presented, since the acquisition was not material to the Company’s financial results.

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 more detail in the 2021 Annual Report.

One of the acquisitions was included in the Harsh Environment Solutions segment, three acquisitions were included in the Communications Solutions segment and three acquisitions were included in the Interconnect and Sensor Systems segment.

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

For the three remaining 2021 acquisitions, the Company is in the process of completing its analyses of the fair value of the assets acquired and liabilities assumed, and anticipates that the final assessments of values for these acquisitions will not differ materially from the preliminary assessments.

The Company completed the acquisition accounting, including the analyses of the fair value of the assets acquired and liabilities assumed, for six of the acquisitions, for each of which the final assessment of values did not differ materially from their previous preliminary assessments.

For the Halo acquisition, as discussed further below, the Company is in the process of completing its analyses of the fair value of the assets acquired and liabilities assumed, and anticipates that the final assessments of values for these acquisitions will not differ materially from the preliminary assessments.

The operating results of the 2021 acquisitions were included in the Condensed Consolidated Statements of Income since their respective dates of acquisition.

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The Divested MTS business met the “held for sale” criteria at its acquisition date and accordingly, the Company did not assign the Divested MTS business to any of its reportable business segments.

The Company accounted for the operating results and related cash flows associated with the Divested MTS business as discontinued operations in the Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Cash Flow, respectively, as of the MTS acquisition date of April 7, 2021 through December 1, 2021, the date of the sale of the Divested MTS business.

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 in connection with the MTS acquisition, which was recognized at fair value as part of acquisition accounting.

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 liability.

The Company accounted for the operating results and related cash flows associated with the Divested MTS business as discontinued operations in the Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Cash Flow, respectively, as of the MTS acquisition date of April 7, 2021 through June 30, 2021, and ultimately, through December 1, 2021, the date of the sale of the Divested MTS business.

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

Upon the sale of the Divested MTS business in December 2021, the Company completed the acquisition accounting associated with the Divested MTS business, which was performed separately from the purchase price allocation of the retained MTS Sensors business.

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The retained MTS Sensors business is reported within our Interconnect and Sensor Systems segment.

The Company is in the process of completing its analyses of the purchase price allocation of the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed, as part of the acquisition accounting associated with the MTS Sensors business.

The Company has completed its analysis of the purchase price allocation of the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed, as part of the acquisition accounting associated with the MTS Sensors business.

The final assessment of values for the MTS acquisition did not differ materially from previous preliminary assessments.

The MTS acquisition resulted in the recognition of $ 738.7 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.

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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.

While the Company is in the process of completing its analyses of the fair value of the assets acquired and liabilities assumed, we do not anticipate that the final assessment of values for the MTS acquisition will differ materially from the current assessment.

The operating results for the MTS Sensors business have been included within continuing operations in the Condensed Consolidated Statements of Income since the acquisition date of April 7, 2021, while the operating results for the Divested MTS business were classified and reported as discontinued operations as discussed above.

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 Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021, as discussed in more detail in Note 5 herein.

The sellers retained a noncontrolling interest of less than 3 % in Halo, which includes redeemable features that are outside the control of the Company and therefore, has been classified as temporary equity on the Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021, as discussed in more detail in Note 5 herein.

The acquisition was funded with cash on hand.

The Company is in 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 March 31, 2022, the Halo acquisition resulted in the recognition of $ 530.7 of goodwill, $ 28.0 of indefinite-lived tradename intangible assets and $ 156.0 of definite-lived intangible assets.

The Company is in 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 June 30, 2022, the Halo acquisition resulted in the recognition of $ 520.8 of goodwill, $ 29.0 of indefinite-lived tradename intangible assets and $ 168.0 of definite-lived intangible assets.

The definite-lived intangible assets are comprised of customer relationships, proprietary technology, and backlog of $ 44.0 , $ 115.0 and $ 9.0 , respectively, and are amortized based upon the underlying pattern of economic benefit with weighted average useful lives of 13 years , 15 years and one month , respectively.

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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 a preliminary assessment made by management as of March 31, 2022, the acquisition accounting for Halo is subject to final adjustment and it is possible that the final assessment of values may differ from our preliminary assessment.

The current purchase price allocation is based on a preliminary assessment made by management as of June 30, 2022.

The acquisition accounting for Halo is subject to final adjustment, and it is possible that the final assessment of values may differ from our preliminary assessment.

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

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Acquisition-related Expenses

During 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.

To the extent such expenses are incurred in the periods presented, such acquisition-related expenses are presented separately in the Condensed Consolidated Statements of Income.

During the three and six months ended June 30, 2021, the Company incurred $ 55.4 ($ 44.6 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.

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

Note 12—Goodwill and Other Intangible Assets

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Foreign currency translation

Goodwill at March 31, 2022

Other than goodwill noted above, the Company’s intangible assets as of March 31, 2022 and December 31, 2021 were as follows:

March 31, 2022

Goodwill at June 30, 2022

The decrease in goodwill during the first six months of 2022 was primarily driven by foreign currency translation, partially offset by goodwill recognized from one acquisition that closed during the first six months of 2022.

Other than goodwill noted above, the Company’s intangible assets as of June 30, 2022 and December 31, 2021 were as follows:

June 30, 2022

December 31, 2021

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Trade names (indefinite-lived)

Amortization expense for the three months ended March 31, 2022 and 2021 was approximately $ 18.0 and $ 12.3 , respectively.

As of March 31, 2022, amortization expense relating to the Company’s current intangible assets estimated for the remainder of 2022 is approximately $ 49.9 and for each of the next five fiscal years is approximately $ 64.6 in 2023, $ 59.0 in 2024, $ 49.7 in 2025, $ 47.9 in 2026 and $ 41.2 in 2027.

The increase in the gross carrying amount of intangible assets in the first six months of 2022 was primarily driven by certain customer relationships and acquired backlog recognized as a result of the acquisition accounting associated with recent acquisitions.

Amortization expense for the three months ended June 30, 2022 and 2021 was approximately $ 16.8 and $ 32.6 , respectively.

Amortization expense for the six months ended June 30, 2022 and 2021 was approximately $ 34.8 and $ 44.9 , respectively.

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

As of June 30, 2022, amortization expense relating to the Company’s current intangible assets estimated for the remainder of 2022 is approximately $ 38.4 and for each of the next five fiscal years is approximately $ 66.4 in 2023, $ 61.0 in 2024, $ 51.7 in 2025, $ 50.0 in 2026 and $ 43.3 in 2027.

Note 13—Reportable Business Segments

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This new segment structure reflects (i) 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, and (ii) how the Company operates its businesses, assesses performance, and communicates results and strategy, among other items, to the Company’s Board and its stockholders.

In conjunction with the new alignment of our business, the Company appointed three new segment managers (“Segment Managers”) to lead their respective reportable business segments, each reporting directly to the

Chief Executive Officer.

The Company organizes its reportable business segments based on the manner in which management evaluates the performance of the Company, combined with the nature of the individual business activities and the product-based solutions offered.

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

The Company also incurs general corporate expenses and costs which are not allocated to the reportable business segments, but have been included in “Corporate / Other” in the following tables for reconciliation purposes.

The Company also incurs general corporate expenses and costs which are not allocated to the reportable business segments, but have been included in “Corporate / Other” in the following tables for

reconciliation purposes.

Assets are reviewed by the CODM on a consolidated basis and therefore are not presented by reportable business segment.

Net sales by segment for the three months ended March 31, 2022 and 2021 are as follows:

Three Months Ended March 31:

Net sales by segment for the three and six months ended June 30, 2022 and 2021 are as follows:

Three Months Ended June 30:

Harsh Environment Solutions

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Consolidated Net sales

Segment operating income and the reconciliation of segment operating income to consolidated income before income taxes for the three months ended March 31, 2022 and 2021:

Three Months Ended March 31,

Six Months Ended June 30:

Harsh Environment Solutions

Communications Solutions

Interconnect and Sensor Systems

Consolidated Net sales

Segment operating income and the reconciliation of segment operating income to consolidated income from continuing operations before income taxes for the three and six months ended June 30, 2022 and 2021:

Three Months Ended June 30,

Six Months Ended June 30,

Segment operating income:

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Stock-based compensation expense

Acquisition-related expenses

Other operating expenses

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Other income (expense), net

Income before income taxes

Depreciation and amortization expense by segment for the three months ended March 31, 2022 and 2021:

Three Months Ended March 31,

Income from continuing operations before income taxes

Depreciation and amortization expense by segment for the three and six months ended June 30, 2022 and 2021:

Three Months Ended June 30,

Six Months Ended June 30,

Harsh Environment Solutions

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

For the three months ended March 31, 2022 and 2021, less than 5 % of our net sales were recognized over time, where the associated contracts relate to the sale of goods with no alternative use as they are only sold to a single customer and whose underlying contract terms provide the Company with an enforceable right to payment, including a reasonable profit margin, for performance completed to date, in the event of customer termination.

Since we typically invoice our customers at the same time that we satisfy our performance obligations, contract assets and contract liabilities related to our contracts with customers recorded in the Condensed Consolidated Balance Sheets were not material as of March 31, 2022 and December 31, 2021.

These amounts are recorded in the accompanying Condensed Consolidated Balance Sheets within Prepaid expenses and other current assets or Other accrued expenses as of March 31, 2022 and December 31, 2021.

For the three and six months ended June 30, 2022 and 2021, less than 5 % of our net sales were recognized over time, where the associated contracts relate to the sale of goods with no alternative use as they are only sold to a single customer and whose underlying contract terms provide the Company with an enforceable right to payment, including a reasonable profit margin, for performance completed to date, in the event of customer termination.

These amounts are recorded in the accompanying Condensed Consolidated Balance Sheets within Prepaid expenses and other current assets or Other accrued expenses as of June 30, 2022 and December 31, 2021.

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

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

performance obligations are part of contracts that generally have original durations of one year or less, we have not disclosed the aggregate amount of transaction prices associated with unsatisfied or partially unsatisfied performance obligations as of March 31, 2022.

While the Company typically offers standard product warranty coverage which provides assurance that our products will conform to the contractually agreed-upon specifications for a limited period from the date of shipment, the Company’s warranty liabilities as of March 31, 2022 and December 31, 2021, and related warranty expense for the three months ended March 31, 2022 and 2021, have not been and were not material in the accompanying Condensed Consolidated Financial Statements.

Since our performance obligations are part of contracts that generally have original durations of one year or less, we have not disclosed the aggregate amount of transaction prices associated with unsatisfied or partially unsatisfied performance obligations as of June 30, 2022.

While the Company typically offers standard product warranty coverage which provides assurance that our products will conform to the contractually agreed-upon specifications for a limited period from the date of shipment, the Company’s warranty liabilities as of June 30, 2022 and December 31, 2021, and related warranty expense for the three and six months ended June 30, 2022 and 2021, have not been and were not material in the accompanying Condensed Consolidated Financial Statements.

Disaggregation of Net Sales

The following table shows our net sales disaggregated into categories the Company considers meaningful to depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors for the three months ended March 31, 2022 and 2021:

The following tables show our net sales disaggregated into categories the Company considers meaningful to depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors for the three and six months ended June 30, 2022 and 2021:

Communications

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Business Segments

Three Months Ended March 31,

Three Months Ended June 30,

Net sales by:

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Other foreign locations

Communications

Interconnect and

Total Reportable

Sensor Systems

Business Segments

Six Months Ended June 30,

Net sales by:

Sales channel:

End customers and contract manufacturers

Distributors and resellers

United States

Other foreign locations

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

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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

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.

The Company continues to communicate and cooperate with the OIG on this ongoing matter.

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

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”).

The Site was shut down in 1983, more than three years before the

Company acquired the Site as part of a larger acquisition that led to the establishment of the Company’s business in 1987 (the “Acquisition”).

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

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

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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.

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 € 112 , 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.

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 alleged did not meet certain agreed upon product specifications.

During the second quarter of 2022, the Company settled this matter for an immaterial amount.

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.

1 unchanged sentence

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

What changed 10-Q

Item 1. Financial Statements