What changed in this filing

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Item 1. Financial Statements

2024-07-26 compared with 2024-04-26 · 258 added, 122 removed, 467 unchanged (45% of the section changed)

40 unchanged sentences

Three Months Ended

Six Months Ended

Cost of sales

3 unchanged sentences

Interest expense

Gain on bargain purchase acquisition

Other income (expense), net

12 unchanged sentences

Three Months Ended

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

Six Months Ended

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

Foreign currency translation adjustments

Pension and postretirement benefit plan adjustment, net of tax of ($ 0.3 ) and ($ 0.2 ), respectively

Total other comprehensive income (loss), net of tax

Pension and postretirement benefit plan adjustment, net of tax of ($ 0.2 ) and ($ 0.5 ) for 2024, and ($ 0.2 ) and ($ 0.4 ) for 2023, respectively

Total other comprehensive (loss) income, net of tax

Total comprehensive income

5 unchanged sentences

(dollars in millions)

Three Months Ended March 31,

Six Months Ended June 30,

Cash from operating activities:

2 unchanged sentences

Stock-based compensation expense

Deferred income tax provision

Deferred income tax benefit

Gain on bargain purchase acquisition

Net change in components of working capital

17 unchanged sentences

Dividend payments

Net cash used in financing activities

Net cash provided by (used in) financing activities

Effect of exchange rate changes on cash and cash equivalents

Net increase in cash and cash equivalents

Net decrease in cash and cash equivalents

Cash and cash equivalents balance, beginning of period

8 unchanged sentences

Note 1—Basis of Presentation and Principles of Consolidation

The Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023, 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, 2024 and 2023, 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, 2024 and December 31, 2023, the related Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2024 and 2023, and the related Condensed Consolidated Statements of Cash Flow for the six months ended June 30, 2024 and 2023 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.

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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, 2024 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, 2024 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, 2023 (the “2023 Annual Report”).

On May 20, 2024, 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 May 31, 2024.

The additional shares were distributed on June 11, 2024, and the Common Stock began trading on a split-adjusted basis on June 12, 2024.

The shares of Common Stock retain a par value of $ 0.001 per share.

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

There was no change in the number of authorized common shares of the Company as a result of the stock split.

All current and prior year data presented in the accompanying Condensed Consolidated Financial Statements and notes thereto in this Form 10-Q, 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 adjusted to conform to the current period presentation in the Condensed Consolidated Financial Statements and the accompanying notes herein.

The impact to the Condensed Consolidated Balance Sheets, as well as the rollforward of consolidated changes in equity included in Note 7 herein, was an increase of $ 0.6 to Common stock, with an offsetting decrease in Additional paid-in capital, which has been retroactively adjusted for all periods presented.

Note 2—New Accounting Pronouncements

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The intent of ASU 2023-07 is to improve the disclosures around a public entity’s reportable segments and address requests from investors for additional, more detailed information about a reportable segment’s expenses by requiring entities to disclose on an annual and interim basis:

(i) significant segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of segment profit or loss and (ii) an amount for other segment items by reportable segment and a description of its composition, which represents the difference between segment revenue less segment expenses disclosed under the significant expense principle and each reported measure of segment profit or loss.

(i) significant segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of

segment profit or loss and (ii) an amount for other segment items by reportable segment and a description of its composition, which represents the difference between segment revenue less segment expenses disclosed under the significant expense principle and each reported measure of segment profit or loss.

Furthermore, entities will be required to:

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ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the potential impact of ASU 2023-07 on its consolidated financial statements and disclosures.

While it continues to evaluate ASU 2023-07, the Company does not currently believe that its adoption will have a material impact on its consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU No.

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The amendments under ASU 2023-09 should be applied on a prospective basis, although retrospective application is permitted.

Company is currently evaluating the potential impact of ASU 2023-09 on its consolidated financial statements and disclosures.

While it continues to evaluate ASU 2023-09, the Company does not currently believe that its adoption will have a material impact on its consolidated financial statements.

Note 3—Inventories

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

March 31, 2024

June 30, 2024

December 31, 2023

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0.750 % Euro Senior Notes due May 2026

5.050 % Senior Notes due April 2027

2.000 % Euro Senior Notes due October 2028

5.050 % Senior Notes due April 2029

4.350 % Senior Notes due June 2029

1 unchanged sentence

2.200 % Senior Notes due September 2031

5.250 % Senior Notes due April 2034

unamortized deferred debt issuance costs

5 unchanged sentences

dollar borrowings, are either the base rate or the adjusted term Secured Overnight Financing Rate (“SOFR”).

The Revolving Credit Facility was undrawn on the date of the amendment.

The Revolving Credit Facility was undrawn on the date it was amended and restated.

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

As of March 31, 2024 and December 31, 2023, there were no outstanding borrowings under the revolving credit facility then in effect.

As of June 30, 2024 and December 31, 2023, there were no outstanding borrowings under the revolving credit facility then in effect.

The carrying value of any borrowings under the Revolving Credit Facility would approximate their fair value, primarily due 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 Condensed 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.

On March 31, 2024, the Company was in compliance with the financial covenants under the Revolving Credit Facility .

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

On June 30, 2024, the Company was in compliance with the financial covenants under the Revolving Credit Facility .

Term Loan Credit Facility

On April 19, 2022, the Company entered into a two-year , $ 750.0 unsecured delayed draw term loan credit agreement (the “Term Loan”), which was scheduled to mature on April 19, 2024 .

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

The Term Loan could be repaid at any time without premium or penalty, and, once repaid, could not be reborrowed.

If drawn upon, the proceeds from the Term Loan were expected to be used for general corporate purposes.

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

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

As of March 31, 2024, the Company had not drawn upon the Term Loan, and, as such, there were no outstanding borrowings under the Term Loan.

The Term Loan required payment of certain commitment fees and required that the Company satisfy certain financial covenants.

On March 31, 2024, the Company was in compliance with the financial covenants under the Term Loan.

On April 19, 2022, the Company entered into a two-year , $ 750.0 unsecured delayed draw term loan credit agreement (the “Term Loan”).

The Term Loan matured on April 19, 2024 without the Company drawing upon it throughout its term.

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Commercial Paper Program by $ 500.0 .

As of March 31, 2024, the maximum aggregate principal amount outstanding of USCP Notes at any time is $ 3,000.0 .

As of June 30, 2024, the maximum aggregate principal amount outstanding of USCP Notes at any time is $ 3,000.0 .

The Company utilizes borrowings under the U.S.

1 unchanged sentence

The Company borrowed under the U.S.

Commercial Paper Program throughout much of the first quarter of 2024, the proceeds of which were used for general corporate purposes.

Before the end of the first quarter of 2024, the Company repaid all of its USCP Notes then outstanding.

As of March 31, 2024 and December 31, 2023, there were no USCP Notes outstanding.

Commercial Paper Program throughout much of the first six months of 2024, the proceeds of which were used for general corporate purposes, including, but not limited to, partially funding the recent acquisition of the Carlisle Interconnect Technologies (“CIT”) business discussed further in Note 11 herein.

Before the end of the second quarter of 2024, the Company repaid all of its USCP Notes then outstanding.

As of June 30, 2024 and December 31, 2023, there were no USCP Notes outstanding.

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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The Company utilizes borrowings under the Euro Commercial Paper Program for general corporate purposes, which may include, for example, fully or partially funding acquisitions.

The Company did not borrow under the Euro Commercial Paper Program during the first quarter of 2024, and, as of March 31, 2024 and December 31, 2023, there were no ECP Notes outstanding.

The Company did not borrow under the Euro Commercial Paper Program during the first six months of 2024, and, as of June 30, 2024 and December 31, 2023, 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, 2024, the authorization from the Company’s Board of Directors (the “Board”) limits the maximum aggregate 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 $ 3,000.0 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.

In conjunction with the Revolving Credit Facility, as of June 30, 2024, the authorization from the Board limits the maximum aggregate 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 $ 3,000.0 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 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.

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The New Senior Notes are unsecured and rank equally in right of payment with all of the Company’s other senior unsecured and unsubordinated indebtedness, including the Company’s guarantee of the Euro Issuer’s obligations under the Euro Notes.

Interest on the New Senior Notes is payable semiannually on April 5 and October 5 of each year, commencing on October 5, 2024.

Interest on the

New Senior Notes is payable semiannually on April 5 and October 5 of each year, commencing on October 5, 2024.

Prior to March 5, 2027, the Company may redeem, from time to time, some or all of the 2027 Senior Notes at a redemption price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of redemption, plus a make-whole premium.

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On or after such dates, the Company may redeem, from time to time, some or all of the respective series of the New Senior Notes at a redemption price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of redemption.

If the Company’s pending acquisition of the Carlisle Interconnect Technologies (“CIT”) business is not consummated on or prior to an agreed upon date or if the Company notifies the trustee that the acquisition will not be pursued at all, under certain circumstances, each series of the New Senior Notes will be subject to a special mandatory redemption, at a price equal to 101 % of the principal amount thereof, plus accrued and unpaid interest from the date of initial issuance, or the most recent date to which interest has been paid or provided for, whichever is later, to, but not including, the special mandatory redemption date.

Absent a special mandatory redemption, the Company intends to use the net proceeds from the New Senior Notes, together with a combination of cash on hand and other debt financing (which could include borrowings under the Company’s Revolving Credit Facility and/or U.S.

Commercial Paper Program), to fund the cash consideration for the Company’s pending CIT acquisition, as discussed in further detail in Note 11 herein, along with the fees and expenses related thereto.

To the extent that the net proceeds from the New Senior Notes are not used for such purposes, such net proceeds shall be used for general corporate purposes.

The Company used net proceeds from the New Senior Notes, together with a combination of cash on hand and borrowings under the U.S.

Commercial Paper Program, to fund the cash consideration for the CIT acquisition in May 2024, as discussed in further detail in Note 11 herein, along with the fees and expenses related thereto.

During the three and six months ended June 30, 2024, the Company incurred $ 11.7 of debt financing costs associated with the issuance of the New Senior Notes.

On April 1, 2024, the Company used cash on hand to repay the $ 350.0 aggregate principal amount of unsecured 3.20 % Senior Notes due April 1, 2024 upon maturity.

12 unchanged sentences

Euro Senior Notes

The Euro Issuer has two outstanding unsecured senior notes issued in Europe (collectively, the “Euro Notes” and the Euro Notes, together with the U.S.

The Euro Issuer has two outstanding unsecured senior notes issued in Europe (collectively, the “Euro Notes” and, together with the U.S.

Senior Notes, the “Senior Notes”), each of which was issued with an aggregate principal amount of € 500.0 .

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

On March 31, 2024, the Company was in compliance with all requirements under its Senior Notes .

On June 30, 2024, the Company was in compliance with all requirements under its Senior Notes .

Note 5—Fair Value Measurements

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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, 2024 and December 31, 2023 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, 2024 and December 31, 2023 are as follows:

Fair Value Measurements

3 unchanged sentences

Assets (Level 1)

March 31, 2024:

June 30, 2024:

Short-term investments

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dollar equivalent of the net investments in certain foreign subsidiaries.

As of March 31, 2024 and December 31, 2023, the Company had no outstanding foreign exchange forward contracts accounted for as either net investment hedges or cash flow hedges .

As of March 31, 2024 and December 31, 2023, the fair value of such foreign exchange forward contracts in the table above consisted of various outstanding foreign exchange forward contracts that are not designated as hedging instruments.

During the three months ended March 31, 2024 and 2023, the amounts recognized in Accumulated other comprehensive income (loss) 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 Condensed Consolidated Statements of Income, were not material.

As of June 30, 2024 and December 31, 2023, the Company had no outstanding foreign exchange forward contracts accounted for as either net investment hedges or cash flow hedges .

As of June 30, 2024 and December 31, 2023, the fair value of such foreign exchange forward contracts in the table above consisted of various outstanding foreign exchange forward contracts that are not designated as hedging instruments.

During the three and six months ended June 30, 2024 and 2023, the amounts recognized in Accumulated other comprehensive income (loss) 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 Condensed Consolidated Statements of Income, 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.

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The redeemable noncontrolling interests recorded on the accompanying Condensed Consolidated Balance Sheets relate to recent acquisitions, which, based on the terms of the respective acquisition agreements, will remain in temporary equity until the applicable put option is either fully exercised or expires.

During the three months ended June 30, 2024, in accordance with the terms of the agreement, the noncontrolling option holders exercised their put option, requiring the Company to acquire a portion of the redeemable noncontrolling interests then outstanding.

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

As such, the redemption value is classified as Level 3 in the fair value hierarchy and is recorded as Redeemable noncontrolling interests on the Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023.

Refer to Note 7 herein for a rollforward of the Redeemable noncontrolling interests for the three months ended March 31, 2024 and 2023.

December 31, 2023.

Refer to Note 7 herein for a rollforward of the Redeemable noncontrolling interests for the three and six months ended June 30, 2024 and 2023.

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.

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Three Months Ended

Six Months Ended

Provision for income taxes

Effective tax rate

For the three months ended March 31, 2024 and 2023, stock option exercise activity had the impact of decreasing our Provision for income taxes by $ 29.7 and $ 17.1 , respectively, and decreasing our effective tax rate by approximately 450 basis points and 310 basis points, respectively, due to the recognition of excess tax benefits within Provision for income taxes in the accompanying Condensed Consolidated Statements of Income.

In addition, for the three months ended March 31, 2024, a discrete tax benefit of $ 18.6 , related to the settlement of tax audits and associated lapses of statutes of limitation, along with a difference in a non-U.S.

For the three months ended June 30, 2024 and 2023, stock option exercise activity had the impact of decreasing our Provision for income taxes by $ 30.9 and $ 11.9 , respectively, and decreasing our effective tax rate by approximately 470 basis points and 200 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, 2024 and 2023, stock option exercise activity had the impact of decreasing our Provision for income taxes by $ 60.6 and $ 29.0 , respectively, and decreasing our effective tax rate by approximately 460 basis points and 250 basis points, respectively.

Acquisition-related expenses incurred during the three and six months ended June 30, 2024 had the impact of increasing our effective tax rate by approximately 100 basis points and 50 basis points, respectively.

For the six months ended June 30, 2024, a discrete tax benefit of $ 18.6 , related to the settlement of tax audits and associated lapses of statutes of limitation, along with a difference in a non-U.S.

tax filing position, had the effect of decreasing our effective tax rate by approximately 140 basis points.

Acquisition-related expenses incurred during the three months ended March 31, 2023 had an immaterial effect on our effective tax rate.

For the three and six months ended June 30, 2023, the gain associated with the bargain purchase acquisition that closed in the second quarter of 2023, as discussed in Note 11 herein, had the effect of decreasing our effective tax rate by approximately 20 basis points and 10 basis points, respectively, while acquisition-related expenses had the effect of increasing our effective tax rate by approximately 10 basis points in both periods.

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 expects to pay its seventh annual installment of the Transition Tax, net of applicable tax credits and deductions, in the second quarter of 2024, and will pay the balance of the Transition Tax, net of applicable tax credits and deductions, in 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, 2024 and December 31, 2023.

The Company paid its seventh annual installment of the Transition Tax, net of applicable tax credits and deductions, in the second quarter of 2024, and will pay the balance of the Transition Tax, net of applicable tax credits and deductions, in 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, 2024, the amount of unrecognized tax benefits, including penalties and interest, which if recognized would impact the effective tax rate, was approximately $ 201.5 .

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.

As of June 30, 2024, the amount of unrecognized tax benefits, including penalties and interest, which if recognized would impact the effective tax rate, was approximately $ 204.8 .

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

Based on information currently available, management anticipates that over the next 12-month period, audit activity could be completed and statutes of limitations may close relating to existing unrecognized tax benefits of approximately $ 22.3 .

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Companies are required to reassess their valuation allowances for certain affected deferred tax assets in the period of enactment but do not need to remeasure deferred tax balances for the related tax accounting implications of the CAMT.

The IRA provisions, which became effective for Amphenol beginning on January 1, 2023, did not have a material impact on the Company during the three months ended March 31, 2024 and 2023.

The IRA provisions, which became effective for Amphenol beginning on January 1, 2023, did not have a material impact on the Company during the three and six months ended June 30, 2024 and 2023.

While the full impact of these provisions in the future depends on several factors, including interpretive regulatory guidance, which has not yet been released, the Company does not currently believe that the provisions of the IRA, including several other non-tax related provisions, will have a material impact on its financial condition, results of operations, liquidity and cash flows.

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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 interests for the three months ended March 31, 2024 is as follows:

A rollforward of consolidated changes in equity and redeemable noncontrolling interests for the three months ended June 30, 2024 is as follows:

Stockholders’ equity attributable to Amphenol Corporation

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Interests (1)

Balance as of March 31, 2024

Other comprehensive income (loss)

Capital contributions from noncontrolling interests

Purchase of noncontrolling interests

Distributions to shareholders of noncontrolling interests

Purchase of treasury stock

Retirement of treasury stock

Stock options exercised

Dividends declared ($ 0.11 per common share)

Stock-based compensation expense

Balance as of June 30, 2024

(1) Excludes redeemable noncontrolling interests.

A rollforward of consolidated changes in equity and redeemable noncontrolling interests for the six months ended June 30, 2024 is as follows:

Stockholders’ equity attributable to Amphenol Corporation

Treasury Stock

Comprehensive

(in millions)

Interests (1)

Balance as of December 31, 2023

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Capital contributions from noncontrolling interests

Purchase of noncontrolling interests

Distributions to shareholders of noncontrolling interests

Purchase of treasury stock

3 unchanged sentences

Stock-based compensation expense

Balance as of June 30, 2024

(1) Excludes redeemable noncontrolling interests.

A rollforward of consolidated changes in equity and redeemable noncontrolling interests for the three months ended June 30, 2023 is as follows:

Stockholders’ equity attributable to Amphenol Corporation

Treasury Stock

Comprehensive

(in millions)

Interests (1)

Balance as of March 31, 2023

Other comprehensive income (loss)

Distributions to shareholders of noncontrolling interests

Purchase of treasury stock

Retirement of treasury stock

Stock options exercised

Dividends declared ($ 0.105 per common share)

Stock-based compensation expense

Balance as of June 30, 2023

(1) Excludes redeemable noncontrolling interests.

A rollforward of consolidated changes in equity and redeemable noncontrolling interests for the three months ended March 31, 2023 is as follows:

A rollforward of consolidated changes in equity and redeemable noncontrolling interests for the six months ended June 30, 2023 is as follows:

Stockholders’ equity attributable to Amphenol Corporation

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Stock-based compensation expense

Balance as of March 31, 2023

Balance as of June 30, 2023

(1) Excludes redeemable noncontrolling interests.

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”).

During the three months ended March 31, 2024, the Company repurchased 1.4 million shares of its Common Stock for $ 153.8 under the 2021 Stock Repurchase Program.

All of the repurchased shares during the first three months of 2024 were retired by the Company.

During the three months ended March 31, 2023, the Company repurchased 2.1 million shares of its Common Stock for $ 166.9 under the 2021 Stock Repurchase Program.

All of the repurchased shares during the first three months of 2023 were retired by the Company.

From April 1, 2024 to April 26, 2024, the Company repurchased 0.6 million additional shares of its Common Stock for $ 71.8 , which were the final repurchases under the 2021 Stock Repurchase Program.

On April 23, 2024, 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 on the close of business on April 28, 2027 (the “2024 Stock Repurchase Program”).

The 2024 Stock Repurchase Program becomes effective on April 29, 2024.

On April 23, 2024, the Board authorized a new stock repurchase program under which the Company may purchase up to $ 2,000.0 of its Common Stock during the three-year period ending on the close of business on April 28, 2027 (the “2024 Stock Repurchase Program”).

The 2024 Stock Repurchase Program became effective on April 29, 2024.

During the three months ended June 30, 2024, the Company repurchased 1.8 million shares of its Common Stock for $ 118.6 under the 2024 Stock Repurchase Program.

All of the repurchased shares under the 2024 Stock Repurchase Program during the three months ended June 30, 2024 have been retired by the Company.

From July 1, 2024 to July 23, 2024, the Company repurchased 0.6 million additional shares of its Common Stock for $ 39.9 , and, as of July 24, 2024, the Company has remaining authorization to purchase up to $ 1,841.6 of its Common Stock under the 2024 Stock Repurchase Program.

The timing and amount of any future repurchases will depend on a number of factors, such as the 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 Common Stock.

On April 27, 2021, the Board authorized a stock repurchase program under which the Company could purchase up to $ 2,000.0 of its Common Stock during the three-year period ending April 27, 2024 (the “2021 Stock Repurchase Program”).

During the three and six months ended June 30, 2024, the Company repurchased 1.3 million and 4.1 million shares of its Common Stock for $ 71.8 and $ 225.6 , respectively, under the 2021 Stock Repurchase Program, which were the final repurchases under the 2021 Stock Repurchase Program.

All of the repurchased shares under the 2021 Stock Repurchase Program during the first six months of 2024 have been retired by the Company.

During the three and six months ended June 30, 2023, the Company repurchased 4.0 million and 8.2 million shares of its Common Stock for $ 153.6 and $ 320.5 , respectively, under the 2021 Stock Repurchase Program.

All of the repurchased shares during the first six months of 2023 were retired by the Company.

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 during the three months ended March 31, 2024 and 2023:

Three Months Ended March 31,

The following table summarizes the dividends declared and paid during the three and six months ended June 30, 2024 and 2023:

Three Months Ended June 30,

Six Months Ended June 30,

Dividends declared

Dividends paid (including those declared in the prior year)

On October 24, 2023, the Board approved an increase to the Company’s quarterly dividend rate from $ 0.21 per share to $ 0.22 per share, effective with dividends declared in the fourth quarter of 2023, contingent upon declaration by the Board.

On October 24, 2023, the Board approved an increase to the Company’s quarterly dividend rate from $ 0.105 per share to $ 0.11 per share, effective with dividends declared in the fourth quarter of 2023, and on July 23, 2024, the Board approved an additional increase to the Company’s quarterly dividend rate from $ 0.11 per share to $ 0.165 per share, effective with dividends declared in the third quarter of 2024, contingent upon declaration by the Board.

Note 8—Stock-Based Compensation

For the three months ended March 31, 2024 and 2023, the Company’s Income before income taxes was reduced for stock-based compensation expense of $ 23.8 and $ 21.7 , respectively.

In addition, for the three months ended March 31, 2024 and 2023, the Company recognized aggregate income tax benefits (associated with stock-based compensation) of $ 32.2 and $ 19.3 , 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, 2024 and 2023 include excess tax benefits of $ 29.7 and $ 17.1 , respectively, from option exercises.

For the three months ended June 30, 2024 and 2023, the Company’s Income before income taxes was reduced by stock-based compensation expense of $ 26.6 and $ 23.8 , respectively.

In addition, for the three months ended June 30, 2024 and 2023, the Company recognized aggregate income tax benefits (associated with stock-based compensation) of $ 33.7 and $ 14.2 , 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, 2024 and 2023 include excess tax benefits of $ 30.9 and $ 11.9 , respectively, from option exercises.

For the six months ended June 30, 2024 and 2023, the Company’s Income before income taxes was reduced by stock-based compensation expense of $ 50.4 and $ 45.5 , respectively.

In addition, for the six months ended June 30, 2024 and 2023, the Company recognized aggregate income tax benefits (associated with stock-based compensation) of $ 65.8 and $ 33.5 , 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, 2024 and 2023 include excess tax benefits of $ 60.6 and $ 29.0 , 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.

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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, 2024, there were 31,265,713 shares of Common Stock available for the granting of additional stock options under the 2017 Option Plan.

As of June 30, 2024, there were 55,119,737 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”).

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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 10 years from the date of grant.

Stock option activity for the three months ended March 31, 2024 was as follows:

Stock option activity for the three and six months ended June 30, 2024 was as follows:

Exercise Price

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Options outstanding at March 31, 2024

Vested and non-vested options expected to vest at March 31, 2024

Exercisable options at March 31, 2024

A summary of the status of the Company’s non-vested options as of March 31, 2024 and changes during the three months then ended is as follows:

Options granted

Options exercised

( 5,567,231 )

Options forfeited

Options outstanding at June 30, 2024

Vested and non-vested options expected to vest at June 30, 2024

Exercisable options at June 30, 2024

A summary of the status of the Company’s non-vested options as of June 30, 2024 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, 2024

During the three months ended March 31, 2024 and 2023, the following activity occurred under the Company’s option plans:

Options granted

Options vested

( 16,481,658 )

Options forfeited

Non-vested options at June 30, 2024

During the three and six months ended June 30, 2024 and 2023, 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, 2024, the total compensation cost related to non-vested options not yet recognized was approximately $ 228.1 with a weighted average expected amortization period of 3.19 years.

As of June 30, 2024, the total compensation cost related to non-vested options not yet recognized was approximately $ 338.4 with a weighted average expected amortization period of 3.75 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 expected annual dividend per share is based on the Company’s dividend rate.

Restricted Stock

On May 16, 2024, the Company’s stockholders approved the 2024 Restricted Stock Plan for Directors of Amphenol Corporation (the “2024 Directors Restricted Stock Plan”), which is administered by the Compensation Committee of the Board and reserves 500,000 shares of the Company’s Common Stock for future issuance pursuant to the plan.

As of June 30, 2024, the number of restricted shares available for grant under the 2024 Directors Restricted Stock Plan was 478,160 .

Restricted shares granted under the 2024 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 2024 Directors Restricted Stock Plan entitle the holder to receive shares of the Company’s Common Stock without payment.

Restricted share activity for the three and six months ended June 30, 2024 was as follows:

Weighted Average

Fair Value at

Term (in years)

Restricted shares outstanding at January 1, 2024

Restricted shares granted

Restricted shares outstanding at March 31, 2024

Restricted shares granted

Restricted shares outstanding at June 30, 2024

As of June 30, 2024, 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 0.87 years).

Phantom Stock

On June 5, 2023, the Company granted 2,375 shares of phantom stock to each then-current non-employee director ( 19,000 shares in the aggregate), which will vest and, pursuant to written elections made by each non-employee director, convert into unrestricted shares of the Company’s Common Stock on the earlier of May 19, 2024 or the day immediately prior to the date of the 2024 annual meeting of the Company’s stockholders.

As of March 31, 2024, the total compensation cost related to non-vested shares of phantom stock not yet recognized was approximately $ 0.2 (with a weighted average expected amortization period of 0.12 years).

On June 5, 2023, the Company granted 4,750 shares of phantom stock to each then-current non-employee director ( 38,000 shares in the aggregate).

On May 15, 2024, these previously granted shares of phantom stock vested in accordance with their terms, and, pursuant to written elections made by each non-employee director, converted into unrestricted shares of the Company’s Common Stock.

The total compensation cost associated with these vested shares of phantom stock was $ 1.5 .

As of June 30, 2024, no additional shares of phantom stock are outstanding and the Company does no t expect to grant any additional shares of phantom stock.

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 outs tanding 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, 2024 and 2023:

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, 2024 and 2023:

Three Months Ended

Six Months Ended

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

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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 0.1 million and 7.1 million for the three months ended March 31, 2024 and 2023, respectively.

Excluded from the computations above were anti-dilutive common shares (primarily related to outstanding stock options) of 3.9 million and 20.1 million for the three months ended June 30, 2024 and 2023, respectively.

Excluded from the computations above were anti-dilutive common shares (primarily related to outstanding stock options) of 2.3 million and 17.5 million for the six months ended June 30, 2024 and 2023, respectively.

Note 10—Benefit Plans and Other Postretirement Benefits

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Plans and SERP, 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, 2024 and 2023:

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, 2024 and 2023:

Three Months Ended June 30,

Six Months Ended June 30,

Interest cost

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defined contribution plans up to a maximum of 7 % of eligible compensation.

During the three months ended March 31, 2024 and 2023, the Company provided matching contributions to the U.S.

defined contribution plans of approximately $ 7.0 and $ 7.5 , respectively.

During both the six months ended June 30, 2024 and 2023, the Company provided matching contributions to the U.S.

defined contribution plans of approximately $ 13.1 .

Note 11—Acquisitions

On January 30, 2024 , the Company entered into a definitive stock purchase agreement by and between the Company and Carlisle Companies Incorporated (“Carlisle”), agreeing to acquire the CIT business of Carlisle for an aggregate purchase price of $ 2,025 in cash, subject to customary post-closing adjustments.

The acquisition is expected to be completed by the end of the second quarter of 2024 and is subject to certain regulatory approvals and other customary closing conditions.

The Company expects to finance the CIT acquisition through a combination of the net proceeds from the New Senior Notes, as discussed in Note 4 herein, together with a combination of cash on hand and other debt financing, which could include borrowings under the Company’s Revolving Credit Facility and/or U.S.

Commercial Paper Program.

2024 Acquisitions

During the three and six months ended June 30, 2024, the Company completed two acquisitions, including the acquisition of CIT (collectively, the “2024 Acquisitions”), for approximately $ 2,099.8 , net of cash acquired.

Both acquisitions have been included in the Harsh Environment Solutions segment.

The 2024 Acquisitions were each funded using cash on hand, proceeds from the New Senior Notes or borrowings under the U.S.

Commercial Paper Program, or a combination thereof.

The Company is in the process of analyzing and completing the allocation of the fair value of assets acquired and liabilities assumed for each of the 2024 Acquisitions.

Since the current purchase price allocations for such acquisitions are based on preliminary assessments made by management as of June 30, 2024, the acquisition accounting is subject to final adjustments, and it is possible that the final assessments of values may differ from the Company’s preliminary assessments.

The operating results of the 2024 Acquisitions were included in the Condensed Consolidated Statements of Income since their respective dates of acquisition.

Pro forma financial information, as well as further details regarding the purchase price allocations related to these acquisitions, have not been presented, since the 2024 Acquisitions were not material, either individually or in the aggregate, to the Company’s financial results.

Acquisition of Carlisle Interconnect Technologies (“CIT”)

On May 21, 2024, the Company completed the acquisition of CIT for approximately $ 1,995.3 , net of cash acquired and subject to customary post-closing adjustments.

The Company funded the CIT acquisition through a combination of net proceeds from the New Senior Notes, as discussed in Note 4 herein, together with borrowings under the U.S.

Commercial Paper Program and cash on hand.

CIT, headquartered in St.

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CIT’s wide range of products include wire and cable, cable assemblies, contacts, connectors and sensors, which management believes are highly complementary to Amphenol’s existing interconnect and sensor solutions.

If and when the acquisition is consummated, the Company expects to report the CIT business within its Harsh Environment Solutions segment.

CIT has been included in the Harsh Environment Solutions segment.

As of June 30, 2024, the CIT acquisition resulted in the recognition of $ 1,111.6 of goodwill and $ 540.1 of definite-lived intangible assets, with the remainder of the purchase price being allocated to other identifiable assets acquired and liabilities assumed.

Of the acquired definite-lived intangible assets, approximately $ 486.2 and $ 53.9 were assigned to customer relationships and acquired backlog, respectively.

The acquired customer relationships and acquired backlog have a weighted average useful life of approximately 15 years and 0.4 years, respectively.

These definite-lived intangible assets are being amortized based upon the underlying pattern of economic benefit as reflected by the future net cash inflows.

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

The Company expects that none of the goodwill recognized from the CIT acquisition will be deductible for tax purposes.

During the three and six months ended June 30, 2024, the Company incurred $ 70.0 ($ 59.9 after-tax) of acquisition-related expenses, comprised primarily of external transaction costs associated with the 2024 Acquisitions, as well as the amortization related to the value associated with acquired backlog and certain non-cash purchase accounting costs resulting from the CIT acquisition.

2023 Acquisitions

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One of the 2023 Acquisitions, which closed in the second quarter of 2023, represented a bargain purchase, where the estimated fair value of assets acquired, net of liabilities assumed, exceeded the purchase price.

The Company recognized a non-cash gain of $ 5.4 on the bargain purchase acquisition during the year ended December 31, 2023, which was recorded separately in the Company’s Consolidated Statements of Income.

As of March 31, 2024, the 2023 Acquisitions resulted in the recognition of $ 658.8 of goodwill and $ 153.2 of definite-lived intangible assets, comprised of customer relationships, proprietary technology and acquired backlog, with the remainder of the purchase price being allocated to other identifiable assets acquired and liabilities and noncontrolling interests assumed.

The Company recognized a non-cash gain of $ 5.4 on the bargain purchase acquisition during the three and six months ended June 30, 2023, which was recorded separately in the Company’s Condensed Consolidated Statements of Income.

As of June 30, 2024, the 2023 Acquisitions resulted in the recognition of $ 664.9 of goodwill and $ 153.2 of definite-lived intangible assets, comprised of customer relationships, proprietary technology and acquired backlog, with the remainder of the purchase price being allocated to other identifiable assets acquired and liabilities and noncontrolling interests assumed.

These definite-lived intangible assets are being amortized based upon the underlying pattern of economic benefit as reflected by the future net cash inflows, with the acquired customer relationships and proprietary technology having useful lives ranging from 6 to 12 years and the acquired backlog having a useful life of approximately 0.25 years.

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The Company expects that approximately $ 165 of the goodwill recognized from the 2023 Acquisitions will be deductible for tax purposes.

The Company completed the acquisition accounting, including the analyses of the fair value of assets acquired and liabilities assumed, for one of the 2023 Acquisitions, and its final assessment of values did not differ materially from its previous preliminary assessment.

The Company completed the acquisition accounting, including the analyses of the fair value of assets acquired and liabilities assumed, for two of the 2023 Acquisitions, and their final assessments of values did not differ materially from their previous preliminary assessments.

The Company is in the process of analyzing and completing the allocation of the fair value of assets acquired and liabilities assumed for each of the other 2023 Acquisitions.

Since the current purchase price allocations for such other acquisitions are based on preliminary assessments made by management as of March 31, 2024, the acquisition accounting is subject to final adjustments, and it is possible that the final assessments of values may differ from our preliminary assessments.

Since the current purchase price allocations for such other acquisitions are based on preliminary assessments made by management as of June 30, 2024, the acquisition accounting is subject to final adjustments, and it is possible that the final assessments of values may differ from our preliminary assessments.

The operating results of the 2023 Acquisitions were included in the Condensed Consolidated Statements of Income since their respective dates of acquisition.

Pro forma financial information, as well as further details regarding the purchase price allocations related to these acquisitions, were not presented, since the 2023 Acquisitions were not material, either individually or in the aggregate, to the Company’s financial results.

During the three months ended March 31, 2023, the Company incurred $ 5.4 ($ 4.0 after-tax) of acquisition-related expenses, comprised of the amortization related to the value associated with acquired backlog resulting from an

acquisition that closed in the first quarter of 2023.

During the three months ended June 30, 2023, the Company incurred $ 4.0 ($ 3.8 after-tax) of acquisition-related expenses, comprised of external transaction costs related to acquisitions.

During the six months ended June 30, 2023, the Company incurred $ 9.4 ($ 7.8 after-tax) of acquisition-related expenses, comprised of the amortization related to the value associated with acquired backlog resulting from an acquisition that closed in the first quarter of 2023, as well as the external transaction costs incurred in the second quarter of 2023.

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

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Foreign currency translation

Goodwill at March 31, 2024

Other than goodwill noted above, the Company’s intangible assets as of March 31, 2024 and December 31, 2023 were as follows:

March 31, 2024

Goodwill at June 30, 2024

The increase in goodwill during the first six months of 2024 was primarily driven by goodwill recognized from the 2024 Acquisitions, in particular, the CIT acquisition, which was partially offset by foreign currency translation.

Other than goodwill noted above, the Company’s intangible assets as of June 30, 2024 and December 31, 2023 were as follows:

June 30, 2024

December 31, 2023

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Trade names (indefinite-lived)

The decrease in the gross carrying amount of intangible assets in the first three months of 2024 was primarily driven by measurement period adjustments related to certain intangible assets associated with acquisitions that closed late in 2023.

Amortization expense for the three months ended March 31, 2024 and 2023 was approximately $ 20.4 and $ 23.2 , respectively.

Amortization expense for the three months ended March 31, 2023 included $ 5.4 related to the amortization of acquired backlog resulting from an acquisition that closed in the first quarter of 2023.

As of March 31, 2024, amortization expense relating to the Company’s current intangible assets estimated for the remainder of 2024 is approximately $ 57.6 and for each of the next five fiscal years is approximately $ 68.2 in 2025, $ 66.6 in 2026, $ 59.9 in 2027, $ 52.5 in 2028 and $ 41.9 in 2029.

The increase in the gross carrying amount of intangible assets in the first six months of 2024 was primarily driven by certain customer relationships and acquired backlog recognized as a result of the acquisition accounting associated with the 2024 Acquisitions, in particular, the CIT acquisition, partially offset by measurement period adjustments related to certain intangible assets associated with acquisitions that closed late in 2023.

Amortization expense for the three months ended June 30, 2024 and 2023 was approximately $ 40.4 and $ 18.1 , respectively.

Amortization expense for the six months ended June 30, 2024 and 2023 was approximately $ 60.8 and $ 41.2 , respectively.

Amortization expense for the three and six months ended June 30, 2024 includes $ 16.6 related to the amortization of acquired backlog resulting from the CIT acquisition.

Amortization expense for the six months ended June 30, 2023 included $ 5.4 related to the amortization of acquired backlog resulting from an acquisition that closed in the first quarter of 2023.

As of June 30, 2024, amortization expense relating to the Company’s current intangible assets estimated for the remainder of 2024 is approximately $ 92.5 (which includes the currently expected remaining amortization of acquired backlog resulting from the CIT acquisition) and for each of the next five fiscal years is approximately $ 103.0 in 2025, $ 101.4 in 2026, $ 94.7 in 2027, $ 87.3 in 2028 and $ 76.7 in 2029.

Note 13—Reportable Business Segments

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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, 2024 and 2023 are as follows:

Three Months Ended March 31,

Net sales by segment for the three and six months ended June 30, 2024 and 2023 are as follows:

Three Months Ended June 30,

Harsh Environment Solutions

2 unchanged sentences

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, 2024 and 2023 are as follows:

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 before income taxes for the three and six months ended June 30, 2024 and 2023 are as follows:

Three Months Ended June 30,

Six Months Ended June 30,

Segment operating income:

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Interest expense

Gain on bargain purchase acquisition

Other income (expense), net

Income before income taxes

Depreciation and amortization expense by segment for the three months ended March 31, 2024 and 2023 is as follows:

Three Months Ended March 31,

Depreciation and amortization expense by segment for the three and six months ended June 30, 2024 and 2023 is as follows:

Three Months Ended June 30,

Six Months Ended June 30,

Harsh Environment Solutions

2 unchanged sentences

Corporate / Other

For the three and six months ended June 30, 2024, depreciation and amortization expense for the Harsh Environment Solutions segment includes $ 16.6 related to the amortization of acquired backlog resulting from the CIT acquisition, while for the six months ended June 30, 2023, depreciation and amortization expense for the Harsh Environment Solutions segment included $ 5.4 related to the amortization of acquired backlog resulting from an acquisition that closed in the first quarter of 2023.

Note 14—Revenue Recognition

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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, 2024 and 2023, 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, 2024 and December 31, 2023.

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, 2024 and December 31, 2023.

For the three and six months ended June 30, 2024 and 2023, 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, 2024 and December 31, 2023.

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

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

Since our performance obligations are part of contracts that generally have original durations of one year or less, we have not disclosed the aggregate amount of transaction prices associated with unsatisfied or partially unsatisfied performance obligations as of March 31, 2024.

While the Company typically offers standard product warranty coverage that 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, 2024 and December 31, 2023, and related warranty expense for the three months ended March 31, 2024 and 2023, have not been and were not material in the accompanying Condensed Consolidated Financial Statements.

While the Company typically offers standard product warranty coverage that 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, 2024 and December 31, 2023, and related warranty expense for the three and six months ended June 30, 2024 and 2023, 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, 2024 and 2023:

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, 2024 and 2023:

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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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.

Note 16—Subsequent Events

On July 18, 2024, the Company entered into a Purchase Agreement by and between the Company and CommScope Holding Company, Inc.

(“CommScope”), to acquire CommScope’s mobile networks-related businesses, specifically the Outdoor Wireless Networks segment and the Distributed Antenna Systems business (collectively, the “Mobile Networks Business”), for an aggregate purchase price of approximately $ 2,100 in cash, subject to customary post-closing adjustments.

The acquisition is expected to be completed in the first half of 2025, subject to the receipt of certain regulatory approvals and satisfaction of other customary closing conditions.

The Company expects to finance this acquisition through a combination of cash on hand and debt.

The Mobile Networks Business provides mobile networks solutions, with advanced technologies in the areas of base station antennas and related interconnect solutions, as well as distributed antenna systems.

The Mobile Networks Business’s wide range of products add advanced antenna and associated interconnect products, technologies and capabilities, which management believes are highly complementary to Amphenol’s existing product portfolio for next-generation wireless networks.

If and when the acquisition is consummated, the Company expects to report the Mobile Networks Business within its Communications Solutions segment .

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