What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-10-25 compared with 2024-07-26 · 147 added, 145 removed, 286 unchanged (51% of the section changed)

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(amounts in millions, except share and per share data, unless otherwise noted)

The following discussion and analysis of the financial condition and results of operations for the three and six months ended June 30, 2024 and 2023 has been derived from and should be read in conjunction with our unaudited Condensed Consolidated Financial Statements and the accompanying notes thereto included in Part I, Item 1 herein for Amphenol Corporation (together with its subsidiaries, “Amphenol,” the “Company,” “we,” “our” or “us”).

The following discussion and analysis of the financial condition and results of operations for the three and nine months ended September 30, 2024 and 2023 has been derived from and should be read in conjunction with our unaudited Condensed Consolidated Financial Statements and the accompanying notes thereto included in Part I, Item 1 herein for Amphenol Corporation (together with its subsidiaries, “Amphenol,” the “Company,” “we,” “our” or “us”).

The following discussion and analysis should also 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”).

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Although the Company believes the expectations reflected in all forward-looking statements are based upon reasonable assumptions, the expectations may not be attained or there may be material deviation.

Readers and investors are cautioned not to place undue reliance on these forward-looking

statements, which speak only as of the date on which they are made.

Readers and investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made.

There are risks and uncertainties that could cause actual results to differ materially from these forward-looking statements, which include, but are not limited to, the following:

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A further description of these uncertainties and other risks can be found in the 2023 Annual Report, Quarterly Reports on Form 10-Q and the Company’s other reports filed with the Securities and Exchange Commission.

These or other uncertainties not identified in these documents (that we either currently do not expect to have an adverse effect on

our business or that we are unable to predict or identify at this time) may cause the Company’s actual future results to be materially different from those expressed in any forward-looking statements.

These or other uncertainties not identified in these documents (that we either currently do not expect to have an adverse effect on our business or that we are unable to predict or identify at this time) may cause the Company’s actual future results to be materially different from those expressed in any forward-looking statements.

Our forward-looking statements may also be impacted by, among other things, future tax, regulatory and other legal changes that may arise in any of the jurisdictions in which we operate.

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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 and six months ended June 30, 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 nine months ended September 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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The Company has done a preliminary review of currently enacted legislation.

The initial implementation did not have a material impact on the Company’s condensed consolidated financial statements during the three and six months ended June 30, 2024, and it is not currently expected to have a material impact on the Company’s operations, financial condition or cash flows in the future.

The initial implementation did not have a material impact on the Company’s condensed consolidated financial statements during the three and nine months ended September 30, 2024, and it is not currently expected to have a material impact on the Company’s operations, financial condition or cash flows in the future.

However, the Company will continue to evaluate the potential impact of Pillar Two on the Company and its results as additional countries adopt legislation and issue individual guidance on their enacted legislation.

Results of Operations

Three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023

Net sales were $3,609.7 in the second quarter of 2024 compared to $3,053.9 in the second quarter of 2023, which represented an increase of 18% in U.S.

Three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023

Net sales were $4,038.8 in the third quarter of 2024 compared to $3,199.2 in the third quarter of 2023, representing an increase of 26% in U.S.

dollars, 26% in constant currencies and 15% organically (excluding both currency and acquisition impacts), compared to the prior year period.

The increase in net sales in the second quarter of 2024 was primarily driven by strong organic growth in the Communications Solutions segment and moderate organic growth in the Interconnect and Sensor Systems segment, along with contributions from the Company’s acquisition program, as described below.

From an end market standpoint, the increase in net sales in the second quarter of 2024 relative to the prior year period was driven by strong organic growth in the information technology and data communications (“IT datacom”) and defense markets and moderate growth in the commercial aerospace, mobile devices, mobile networks and automotive markets, along with contributions from the Company’s acquisition program, partially offset by organic declines in the broadband communications and industrial markets.

Net sales were $6,866.0 in the first six months of 2024 compared to $6,028.0 in the first six months of 2023, which represented an increase of 14% in U.S.

The increase in net sales in the third quarter of 2024 was primarily driven by strong organic growth in the Communications Solutions segment and moderate organic growth in the Interconnect and Sensor Systems segment and Harsh Environment Solutions segment, along with contributions from the Company’s acquisition program, as described below.

From an end market standpoint, the increase in net sales in the third quarter of 2024 relative to the prior year period was driven by strong organic growth in the information technology and data communications (“IT datacom”), mobile devices, mobile networks and commercial aerospace markets and moderate growth in the defense market, along with contributions from the Company’s acquisition program, partially offset by an organic decline in the broadband communications market.

Net sales were $10,904.9 in the first nine months of 2024 compared to $9,227.2 in the first nine months of 2023, representing an increase of 18% in U.S.

dollars, 19% in constant currencies and 11% organically (excluding both currency and acquisition impacts), compared to the prior year period.

The increase in net sales in the first six months of 2024 was primarily driven by strong organic growth in the Communications Solutions segment and moderate organic growth in the Interconnect and Sensor Systems segment, along with contributions from the Company’s acquisition program, as described below.

From an end market standpoint, the increase in net sales in the first six months of 2024 relative to the prior year period was driven by strong organic growth in the IT datacom, commercial aerospace, automotive and defense markets and moderate growth in the mobile devices market, along with contributions from the Company’s acquisition program, partially offset by organic declines in the broadband communications, mobile networks and industrial markets.

Net sales in the Harsh Environment Solutions segment (approximately 29% of net sales) in the second quarter of 2024 increased 18% in U.S.

dollars, 18% in constant currencies and 1% organically, compared to the second quarter of 2023.

The increase in the second quarter of 2024 was primarily driven by contributions from the Company’s acquisition program, along with strong organic growth in the defense and IT datacom markets and moderate growth in the commercial aerospace market, partially offset by organic declines in the industrial, automotive and mobile networks markets.

Net sales in the Harsh Environment Solutions segment (approximately 29% of net sales) in the first six months of 2024 increased 13% in U.S.

The increase in net sales in the first nine months of 2024 was primarily driven by strong organic growth in the Communications Solutions segment and moderate organic growth in the Interconnect and Sensor Systems segment and Harsh Environment Solutions segment, along with contributions from the Company’s acquisition program, as described below.

From an end market standpoint, the increase in net sales in the first nine months of 2024 relative to the prior year period was driven by strong organic growth in the IT datacom, defense and commercial aerospace markets and moderate growth in the automotive and mobile devices markets, along with contributions from the Company’s acquisition program, partially offset by organic declines in the industrial and broadband communications markets.

Net sales in the Harsh Environment Solutions segment (approximately 29% of net sales) in the third quarter of 2024 increased 35% in U.S.

dollars, 34% in constant currencies and 3% organically, compared to the third quarter of 2023.

The increase in the third quarter of 2024 was primarily driven by contributions from the Company’s acquisition program, along with strong organic growth in the IT datacom, commercial aerospace and mobile networks markets and moderate growth in the defense market, partially offset by organic declines in the automotive and industrial markets.

Net sales in the Harsh Environment Solutions segment (approximately 29% of net sales) in the first nine months of 2024 increased 20% in U.S.

dollars, 20% in constant currencies and 2% organically, compared to the prior year period.

The increase in the first six months of 2024 was primarily driven by contributions from the Company’s

acquisition program, along with strong organic growth in the defense, commercial aerospace and IT datacom markets, partially offset by organic declines in the industrial, automotive and mobile networks markets.

Net sales in the Communications Solutions segment (approximately 40% of net sales) in the second quarter of 2024 increased 24% in U.S.

dollars, 25% in constant currencies and 23% organically, compared to the second quarter of 2023.

The increase in the second quarter of 2024 was primarily driven by strong organic growth in the IT datacom, automotive, and mobile networks markets and moderate growth in the mobile devices and industrial markets, along with contributions from the Company’s acquisition program, partially offset by an organic decline in the broadband communications market.

Net sales in the Communications Solutions segment (approximately 39% of net sales) in the first six months of 2024 increased 18% in U.S.

dollars, 19% in constant currencies and 17% organically, compared to the first six months of 2023.

The increase in the first six months of 2024 was primarily driven by strong organic growth in the IT datacom and automotive markets and moderate growth in the mobile devices market, along with contributions from the Company’s acquisition program, partially offset by organic declines in the broadband communications, mobile networks, and industrial markets.

Net sales in the Interconnect and Sensor Systems segment (approximately 31% of net sales) in the second quarter of 2024 increased 12% in U.S.

dollars, 13% in constant currencies and 7% organically, compared to the second quarter of 2023.

T he increase in the second quarter of 2024 was primarily driven by strong organic growth in the IT datacom market and moderate growth in the automotive market, along with contributions from the Company’s acquisition program, partially offset by organic declines in the industrial, defense and mobile networks markets.

Net sales in the Interconnect and Sensor Systems segment (approximately 32% of net sales) in the first six months of 2024 increased 10% in U.S.

dollars, 11% in constant currencies and 5% organically, compared to the first six months of 2023.

T he increase in the first six months of 2024 was primarily driven by contributions from the Company’s acquisition program, along with strong organic growth in the IT datacom market and moderate growth in the automotive market, partially offset by organic declines in the industrial, defense, and mobile networks markets.

The increase in the first nine months of 2024 was primarily driven by contributions from the Company’s acquisition program, along with strong organic growth in the defense, commercial aerospace and IT datacom markets, partially offset by organic declines in the industrial, automotive and mobile networks markets.

Net sales in the Communications Solutions segment (approximately 42% of net sales) in the third quarter of 2024 increased 32% in U.S.

dollars, 32% in constant currencies and 30% organically, compared to the third quarter of 2023.

The increase in the third quarter of 2024 was primarily driven by strong organic growth in the IT datacom, mobile devices, automotive, industrial and mobile networks markets, along with modest contributions from the Company’s acquisition program, partially offset by an organic decline in the broadband communications market.

Net sales in the Communications Solutions segment (approximately 40% of net sales) in the first nine months of 2024 increased 23% in U.S.

dollars, 24% in constant currencies and 22% organically, compared to the prior year period.

The increase in the first nine months of 2024 was primarily driven by strong organic growth in the IT datacom, automotive and mobile devices markets and moderate growth in the industrial and mobile networks markets, along with modest contributions from the Company’s acquisition program, partially offset by an organic decline in the broadband communications market.

Net sales in the Interconnect and Sensor Systems segment (approximately 29% of net sales) in the third quarter of 2024 increased 12% in U.S.

dollars, 12% in constant currencies and 6% organically, compared to the third quarter of 2023.

T he increase in the third quarter of 2024 was primarily driven by contributions from the Company’s acquisition program, along with strong organic growth in the IT datacom market and moderate growth in the mobile networks market, partially offset by organic declines in the industrial and defense markets.

Net sales in the Interconnect and Sensor Systems segment (approximately 31% of net sales) in the first nine months of 2024 increased 11% in U.S.

dollars, 11% in constant currencies and 5% organically, compared to the prior year period.

T he increase in the first nine months of 2024 was primarily driven by contributions from the Company’s acquisition program, along with strong organic growth in the IT datacom market and moderate growth in the automotive market, partially offset by organic declines in the industrial, defense and mobile networks markets.

The table below reconciles Constant Currency Net Sales Growth and Organic Net Sales Growth to the most directly comparable U.S.

GAAP financial measures, by segment, geography and consolidated, for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023:

GAAP financial measures, by segment, geography and consolidated, for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023:

Percentage Growth (relative to same prior year period) (1)

Sales Growth (4)

Three Months Ended June 30,

Three Months Ended September 30,

Net sales by:

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United States

Six Months Ended June 30,

Nine Months Ended September 30,

Net sales by:

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

The comparatively weaker U.S.

dollar for the third quarter of 2024 had the effect of increasing sales by approximately $9.2 for such period, relative to the comparable period in 2023.

The comparatively stronger U.S.

dollar for the second quarter and first six months of 2024 had the effect of decreasing sales by approximately $26.7 and $44.1, respectively, relative to the comparable periods in 2023.

Selling, general and administrative expenses were $444.3, or 12.3% of net sales, and $848.4, or 12.4% of net sales, for the second quarter and first six months of 2024, respectively, compared to $367.8, or 12.0% of net sales, and $714.1, or 11.8% of net sales, for the second quarter and first six months of 2023, respectively.

The increases in selling, general and administrative expenses as a percentage of net sales in the second quarter and first six months of 2024 were primarily driven by the effect of acquisitions, which currently have higher selling, general and administrative expenses as a percentage of net sales compared to the Company average.

Administrative expenses represented approximately 4.9% of net sales for both the second quarter and first six months of 2024, and represented approximately 4.9% and 4.8% of net sales for the second quarter and first six months of 2023, respectively.

Research and development expenses represented approximately 3.0% of net sales for both the second quarter and first six months of 2024, and represented

approximately 2.8% of net sales for both the second quarter and first six months of 2023.

Selling and marketing expenses represented approximately 4.3% and 4.5% of net sales for the second quarter and first six months of 2024, respectively, and represented approximately 4.4% and 4.3% of net sales for the second quarter and first six months of 2023, respectively.

Operating income was $698.8, or 19.4% of net sales, and $1,383.7, or 20.2% of net sales, for the second quarter and first six months of 2024, respectively, compared to $619.9, or 20.3% of net sales, and $1,211.6, or 20.1% of net sales, for the second quarter and first six months of 2023, respectively.

Operating income for the second quarter and first six months of 2024 includes $70.0 of acquisition-related expenses (presented separately in the Condensed Consolidated Statements of Income), 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 Carlisle Interconnect Technologies (“CIT”) acquisition .

Operating income for the second quarter of 2023 included $4.0 of acquisition-related expenses (presented separately in the Condensed Consolidated Statements of Income) comprised of external transaction costs related to acquisitions.

Operating income for the first six months of 2023 included $9.4 of acquisition-related expenses (presented separately in the Condensed Consolidated Statements of Income) 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.

For the three and six months ended June 30, 2024, the acquisition-related expenses had the effect of decreasing net income by $59.9 in both periods, while for the three and six months ended June 30, 2023, the acquisition-related expenses had the effect of decreasing net income by $3.8 and $7.8, respectively, as shown in the tables below.

Excluding the effect of these acquisition-related expenses, Adjusted Operating Income and Adjusted Operating Margin, each as defined in the “Non-GAAP Financial Measures” section below, were $768.8, or 21.3% of net sales, and $623.9, or 20.4% of net sales, for the three months ended June 30, 2024 and 2023, respectively.

Excluding the effect of these acquisition-related expenses, Adjusted Operating Income and Adjusted Operating Margin were $1,453.7, or 21.2% of net sales, and $1,221.0, or 20.3% of net sales, for the six months ended June 30, 2024 and 2023, respectively.

The increases in Adjusted Operating Income and Adjusted Operating Margin for both the second quarter and first six months of 2024 relative to the comparable periods in 2023 was primarily driven by strong operating performance on the higher sales volumes, partially offset by the negative impact on operating margin related to acquisitions completed within the prior twelve months that are currently operating below the average operating margin of the Company.

Operating income for the Harsh Environment Solutions segment for the second quarter and first six months of 2024 was $259.6, or 24.8% of net sales, and $504.1, or 25.7% of net sales, respectively, compared to $240.3, or 27.0% of net sales, and $466.6, or 26.8% of net sales, for the second quarter and first six months of 2023, respectively.

The decreases in operating margin for the Harsh Environment Solutions segment for both the second quarter and first six months of 2024 relative to the comparable periods in 2023 were primarily driven by the negative impact on operating margin related to acquisitions completed within the prior twelve months, particularly CIT, that are currently operating below the average operating margin of the Company.

Operating income for the Communications Solutions segment for the second quarter and first six months of 2024 was $350.6, or 24.3% of net sales, and $636.8, or 23.5% of net sales, respectively, compared to $238.5, or 20.5% of net sales, and $469.1, or 20.5% of net sales, for the second quarter and first six months of 2023, respectively.

The increases in operating margin for the Communications Solutions segment for both the second quarter and first six months of 2024 relative to the comparable periods in 2023 were primarily driven by strong operating performance on the higher sales volumes.

Operating income for the Interconnect and Sensor Systems segment for the second quarter and first six months of 2024 was $203.3, or 18.2% of net sales, and $398.7, or 18.2% of net sales, respectively, compared to $185.9, or 18.5% of net sales, and $364.7, or 18.3% of net sales, for the second quarter and first six months of 2023, respectively.

The decreases in operating margin for the Interconnect and Sensor Systems segment for both the second quarter and first six months of 2024 relative to the comparable periods in 2023 were primarily driven by the negative impact on operating margin related to acquisitions completed within the prior twelve months that are currently operating below the average operating margin of the Company.

Interest expense for the second quarter and first six months of 2024 was $56.3 and $94.4, respectively, compared to $35.0 and $71.0 for the second quarter and first six months of 2023, respectively.

The increases in interest expense for both the second quarter and first six months of 2024 were driven by higher average borrowing levels, primarily intended to fully or partially fund acquisitions, including the CIT acquisition, along with the higher interest rate environment.

Provision for income taxes for the second quarter and first six months of 2024 was at an effective tax rate of 20.4% and 18.5%, respectively.

Provision for income taxes for the second quarter and first six months of 2023 was at an effective tax rate of 21.9% and 21.4%, respectively.

For the second quarter and first six months of 2024 and 2023, the excess tax benefits resulting from stock option exercise activity, along with the tax effect of acquisition-related expenses incurred during each period, impacted the effective tax rate and earnings per share by the amounts noted in the tables below.

For the first six months of 2024, the effective tax rate was further impacted by a discrete tax benefit related to the settlement of tax audits and associated lapses of statutes of limitation, along with a difference in a non-U.S.

dollar for the first nine months of 2024 had the effect of decreasing sales by approximately $34.9 for such period, relative to the comparable period in 2023.

Selling, general and administrative expenses were $492.0, or 12.2% of net sales, and $1,340.4, or 12.3% of net sales, for the third quarter and first nine months of 2024, respectively, compared to $381.6, or 11.9% of net sales, and $1,095.7, or 11.9% of net sales, for the third quarter and first nine months of 2023, respectively.

The increases in selling, general and administrative expenses as a percentage of net sales in the third quarter and first nine months of 2024 were primarily driven by the effect of acquisitions, which currently have higher selling, general and administrative expenses as a percentage of net sales compared to the Company average.

Administrative expenses represented approximately 5.0% and 4.9% of net sales for the third quarter and first nine months of 2024, respectively, and represented approximately 4.9% and 4.8% of net sales for the third quarter and first nine months of 2023, respectively.

Research and development expenses represented approximately 3.1% and 3.0% of net sales for the third quarter and first nine months of 2024, respectively, and represented approximately 2.7% of net sales for both the third quarter and first nine months of 2023.

Selling and marketing expenses represented approximately 4.1% and 4.3% of net sales for the third quarter and first nine months of 2024, respectively, and represented approximately 4.3% of net sales for both the third quarter and first nine months of 2023.

Operating income was $819.5, or 20.3% of net sales, and $2,203.2, or 20.2% of net sales, for the third quarter and first nine months of 2024, respectively, compared to $657.9, or 20.6% of net sales, and $1,869.6, or 20.3% of net sales, for the third quarter and first nine months of 2023, respectively.

Operating income for the third quarter and the first nine months of 2024 includes $63.6 and $133.6, respectively, of acquisition-related expenses, comprised primarily of (i) the amortization related to the value associated with acquired backlog resulting from the Carlisle Interconnect Technologies (“CIT”) acquisition and external transaction costs associated with acquisitions (such acquisition-related expenses aggregating $45.4 and $115.4, respectively, are presented separately in the Condensed Consolidated Statements of Income) and (ii) the amortization of acquisition-related inventory step-up costs in the third quarter of 2024 of $18.2 associated with the CIT acquisition (such costs are recorded in Cost of sales in the Condensed Consolidated Statements of Income) .

Operating income for the third quarter of 2023 included $9.0 of acquisition-related expenses, comprised of external transaction costs related to acquisitions.

Operating income for the first nine months of 2023 included $18.4 of acquisition-related expenses, comprised of external transaction costs incurred in the second and third quarters of 2023, as well as the amortization related to the value associated with acquired backlog resulting from an acquisition that closed in the first quarter of 2023.

Acquisition-related expenses during the three and nine months ended September 30, 2023 are presented separately in the Condensed Consolidated Statements of Income.

For the three and nine months ended September 30, 2024, the acquisition-related expenses had the effect of decreasing net income by $49.8, or $0.04 per share, and $109.7, or $0.09 per share, respectively, while for the three and nine months ended September 30, 2023, the acquisition-related expenses had the effect of decreasing net income by $8.4, or $0.01 per share, and $16.2, or $0.01 per share, respectively, as shown in the tables below.

Excluding the effect of these acquisition-related expenses, Adjusted Operating Income and Adjusted Operating Margin, each as defined in the “Non-GAAP Financial Measures” section below, were $883.1, or 21.9% of net sales, and $666.9, or 20.8% of net sales, for the three months ended September 30, 2024 and 2023, respectively.

Excluding the effect of these acquisition-related expenses, Adjusted Operating Income and Adjusted Operating Margin were $2,336.8, or 21.4% of net sales, and $1,888.0, or 20.5% of net sales, for the nine months ended September 30, 2024 and 2023, respectively.

The increases in Adjusted Operating Income and Adjusted Operating Margin for both the third quarter and first nine months of 2024 relative to the comparable periods in 2023 were primarily driven by strong operating performance on the higher sales volumes, partially offset by the negative impact on operating margin related to acquisitions completed within the prior twelve months that are currently operating below the average operating margin of the Company.

Operating income for the Harsh Environment Solutions segment for the third quarter and first nine months of 2024 was $283.7, or 23.8% of net sales, and $787.8, or 25.0% of net sales, respectively, compared to $239.1, or 26.9% of net sales, and $705.7, or 26.8% of net sales, for the third quarter and first nine months of 2023, respectively.

The decreases in operating margin for the Harsh Environment Solutions segment for both the third quarter and first nine months of 2024 relative to the comparable periods in 2023 were primarily driven by the negative impact on operating margin related to acquisitions completed within the prior twelve months, particularly the CIT acquisition, that are currently operating below the average operating margin of the Company.

Operating income for the Communications Solutions segment for the third quarter and first nine months of 2024 was $431.0, or 25.6% of net sales, and $1,067.7, or 24.3% of net sales, respectively, compared to $283.3, or 22.1% of net sales, and $752.4, or 21.1% of net sales, for the third quarter and first nine months of 2023, respectively.

The increases in operating margin for the Communications Solutions segment for both the third quarter and first nine months of 2024 relative to the comparable periods in 2023 were primarily driven by strong operating performance on the higher sales volumes.

Operating income for the Interconnect and Sensor Systems segment for the third quarter and first nine months of 2024 was $217.6, or 18.8% of net sales, and $616.3, or 18.4% of net sales, respectively, compared to $188.9, or 18.3% of net sales, and $553.6, or 18.3% of net sales, for the third quarter and first nine months of 2023, respectively.

The modest increases in operating margin for the Interconnect and Sensor Systems segment for both the third quarter and first nine months of 2024 relative to the comparable periods in 2023 were primarily driven by strong operating performance on the higher sales volumes, partially offset by the negative impact on operating margin related to acquisitions completed within the prior twelve months that are currently operating below the average operating margin of the Company.

Interest expense for the third quarter and first nine months of 2024 was $55.7 and $150.1, respectively, compared to $33.6 and $104.5 for the third quarter and first nine months of 2023, respectively.

The increases in interest expense for both the third quarter and first nine months of 2024 were driven by higher average borrowing levels, primarily intended to fully or partially fund acquisitions, including the CIT acquisition, along with the higher interest rate environment.

Provision for income taxes for the third quarter and first nine months of 2024 was at an effective tax rate of 21.4% and 19.6%, respectively.

Provision for income taxes for the third quarter and first nine months of 2023 was at an effective tax rate of 18.2% and 20.3%, respectively.

Various items incurred in the third quarter and first nine months of 2024 and 2023 had an impact on the Company’s effective tax rate and earnings per share , which impacted the effective tax rate and earnings per share by the amounts noted in the tables below.

For the third quarter and first nine months of 2024 and 2023, these items included excess tax benefits resulting from stock option exercise activity, along with the tax effect of the aforementioned acquisition-related expenses incurred during each period.

In addition, for the first nine months of 2024, the effective tax rate was further impacted by a discrete tax benefit 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.

For the second quarter and first six months of 2023, the effective tax rate was further impacted by the gain from the bargain purchase acquisition that closed in the second quarter of 2023, which impacted the effective tax rate and earnings per share by the amounts noted in the tables below.

Excluding the effect of these items, the Adjusted Effective Tax Rate, a non-GAAP financial measure as defined in the “Non-GAAP Financial Measures” section below within this Item 2, for both the three and six months ended June 30, 2024 and 2023 was 24.0%, as reconciled in the tables below to the comparable effective tax rate based on GAAP results.

For the first nine months of 2023, the effective tax rate was further impacted by the gain from the bargain purchase acquisition that closed in the second quarter of 2023 .

Excluding the effect of these items, the Adjusted Effective Tax Rate, a non-GAAP financial measure as defined in the “Non-GAAP Financial Measures” section below within this Item 2, for both the three and nine months ended September 30, 2024 and 2023 was 24.0%, as reconciled in the tables below to the comparable effective tax rate based on GAAP results.

Refer to Note 6 of the Notes to Condensed Consolidated Financial Statements for further information related to income taxes.

Net income attributable to Amphenol Corporation and Net income attributable to Amphenol Corporation per common share - Diluted (“Diluted EPS”) were $524.8 and $0.41, respectively, for the second quarter of 2024, compared to $460.5 and $0.37, respectively, for the second quarter of 2023.

Excluding the effect of the items listed in the tables below, Adjusted Net Income attributable to Amphenol Corporation and Adjusted Diluted EPS, non-GAAP financial measures as defined in the “Non-GAAP Financial Measures” section below within this Item 2, were $553.8 and $0.44, respectively, for the second quarter of 2024, compared to $447.0 and $0.36, respectively, for the second quarter of 2023.

Net income attributable to Amphenol Corporation and Diluted EPS were $1,073.5 and $0.85, respectively, for the first six months of 2024, compared to $899.7 and $0.73, respectively, for the first six months of 2023.

Excluding the effect of the items listed in the tables below, Adjusted Net Income attributable to Amphenol Corporation and Adjusted Diluted EPS were $1,054.2 and $0.84, respectively, for the first six months of 2024, compared to $873.1 and $0.71, respectively, for the first six months of 2023.

Net income attributable to Amphenol Corporation and Net income attributable to Amphenol Corporation per common share - Diluted (“Diluted EPS”) were $604.4 and $0.48, respectively, for the third quarter of 2024, compared to $513.9 and $0.41, respectively, for the third quarter of 2023.

Excluding the effect of the items listed in the tables below, Adjusted Net Income attributable to Amphenol Corporation and Adjusted Diluted EPS, non-GAAP financial measures as defined in the “Non-GAAP Financial Measures” section below within this Item 2, were $632.8 and $0.50, respectively, for the third quarter of 2024, compared to $484.0 and $0.39, respectively, for the third quarter of 2023.

Net income attributable to Amphenol Corporation and Diluted EPS were $1,677.8 and $1.33, respectively, for the first nine months of 2024, compared to $1,413.6 and $1.14, respectively, for the first nine months of 2023.

Excluding the effect of the items listed in the tables below, Adjusted Net Income attributable to Amphenol Corporation and Adjusted Diluted EPS were $1,686.9 and $1.34, respectively, for the first nine months of 2024, compared to $1,357.1 and $1.09, respectively, for the first nine months of 2023.

The following tables reconcile Adjusted Operating Income, Adjusted Operating Margin, Adjusted Net Income attributable to Amphenol Corporation, Adjusted Effective Tax Rate and Adjusted Diluted EPS (each as defined in the “Non-GAAP Financial Measures” section below) to the most directly comparable U.S.

GAAP financial measures for the three and six months ended June 30, 2024 and 2023:

Three Months Ended June 30,

GAAP financial measures for the three and nine months ended September 30, 2024 and 2023:

Three Months Ended September 30,

Reported (GAAP)

Amortization of acquisition-related inventory step-up costs

Acquisition-related expenses

Gain on bargain purchase acquisition

Excess tax benefits related to stock-based compensation

Adjusted (non-GAAP) (2)

Six Months Ended June 30,

Nine Months Ended September 30,

Reported (GAAP)

Amortization of acquisition-related inventory step-up costs

Acquisition-related expenses

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Liquidity and Cash Requirements

As of June 30, 2024 and December 31, 2023, the Company had cash, cash equivalents and short-term investments of $1,302.2 and $1,660.2, respectively, with the majority of the Company’s cash, cash equivalents and short-term investments on hand located outside of the United States.

As of September 30, 2024 and December 31, 2023, the Company had cash, cash equivalents and short-term investments of $1,583.3 and $1,660.2, respectively, with the majority of the Company’s cash, cash equivalents and short-term investments on hand located outside of the United States.

The Company’s primary sources of liquidity are internally generated cash provided by operating activities, our cash, cash equivalents and short-term investments on hand, as well as availability under the U.S.

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The Company’s primary ongoing cash requirements will be for operating and working capital needs, capital expenditures, product development activities, repurchases of our Common Stock, dividends, debt service, payments associated with the one-time tax on the deemed repatriation of all of the Company’s pre-2018 accumulated unremitted earnings and profits of foreign subsidiaries (“Transition Tax”), which is payable in annual installments until 2025, taxes due upon the repatriation of foreign earnings (which will be payable upon the repatriation of such earnings), funding of pension obligations, and other contractual obligations and commitments included in Item 7 of the 2023 Annual Report.

The Company may also use cash to fund all or part of the cost of future acquisitions, as has been the case in recent years with the Company’s various acquisitions, including the recent acquisition of CIT in May 2024.

The Company may also use cash to fund all or part of the cost of future acquisitions, as has been the case in recent years with the Company’s various acquisitions, including the acquisition of CIT in May 2024.

The Company’s debt service requirements primarily consist of principal and interest on the Company’s Senior Notes, and to the extent of any amounts outstanding, the Revolving Credit Facility and Commercial Paper Programs (all as defined below).

As of June 30, 2024 and December 31, 2023, the Company had no borrowings outstanding under the Revolving Credit Facility, U.S.

As of September 30, 2024 and December 31, 2023, the Company had no borrowings outstanding under the Revolving Credit Facility, U.S.

Commercial Paper Program and Euro Commercial Paper Program.

However, the Company borrowed under the U.S.

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 CIT discussed later within this Item 2.

Although all such borrowings were repaid before the end of the second quarter of 2024, the Company may make additional borrowings under any of its debt instruments in the future.

As a result of increases in the federal funds rate by the U.S.

Federal Reserve in recent years, the floating interest rates related to our U.S.

Commercial Paper Program (as well as our Revolving Credit Facility, to the extent drawn upon in the future) have increased substantially, a trend that could continue through the remainder of 2024 and potentially beyond.

To the extent that interest rates related to this floating rate debt increase further and the Company borrows under any of these floating interest rate instruments in the future, interest expense and interest payments would increase.

Commercial Paper Program throughout much of the first nine months of 2024, the proceeds of which were used for general corporate purposes, including, but not limited to, partially funding the acquisition of CIT in May 2024, as discussed later within this Item 2.

Although all such borrowings were repaid before the end of the third quarter of 2024, the Company may make additional borrowings under any of its debt instruments in the future.

Although the federal funds rate has increased in recent years, causing the floating interest rates related to our U.S.

Commercial Paper Program (as well as our Revolving Credit Facility, to the extent drawn upon in the future) to also increase substantially, the U.S.

Federal Reserve recently lowered the federal funds rate modestly in September of 2024.

To the extent that interest rates related to this floating rate debt decrease further and the Company borrows under any of these floating interest rate instruments in the future (and consistent with current year levels), interest expense and interest payments would decrease.

Although the Company does not expect changes in interest rates to have a material effect on income or cash flows for the remainder of 2024, there can be no assurance that interest rates will not change significantly from current levels.

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The Company intends to indefinitely reinvest the remaining pre-2024 foreign earnings.

As of June 30, 2024, the Company has accrued the foreign and U.S.

As of September 30, 2024, the Company has accrued the foreign and U.S.

state and local taxes associated with the foreign earnings that it intends to repatriate.

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Cash Flow Summary

The following table summarizes the Company’s cash flows from operating, investing and financing activities for the six months ended June 30, 2024 and 2023, as reflected in the Condensed Consolidated Statements of Cash Flow:

Six Months Ended June 30,

The following table summarizes the Company’s cash flows from operating, investing and financing activities for the nine months ended September 30, 2024 and 2023, as reflected in the Condensed Consolidated Statements of Cash Flow:

Nine Months Ended September 30,

Net cash provided by operating activities

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Effect of exchange rate changes on cash and cash equivalents

Net decrease in cash and cash equivalents

Net increase in cash and cash equivalents

Operating Activities

The ability to generate cash from operating activities is one of the Company’s fundamental financial strengths.

Net cash provided by operating activities (“Operating Cash Flow”) was $1,263.6 in the first six months of 2024 compared to

$1,068.8 in the first six months of 2023.

The increase in Operating Cash Flow for the first six months of 2024 compared to the first six months of 2023 is primarily due to the increase in net income.

In the first six months of 2024, the components of working capital as presented on the accompanying Condensed Consolidated Statements of Cash Flow increased $69.8, excluding the impact of acquisitions and foreign currency translation, primarily due to increases in accounts receivable of $141.9 and inventories of $23.5, and a decrease in accrued liabilities, including income taxes, of $14.9 , partially offset by an increase in accounts payable of $115.5.

In the first six months of 2023, the components of working capital as presented on the accompanying Condensed Consolidated Statements of Cash Flow increased $57.7, excluding the impact of acquisitions and foreign currency translation, primarily due to decreases in accounts payable of $203.2 and accrued liabilities, including income taxes, of $156.6, and an increase in prepaid expenses and other current assets of $19.3, partially offset by decreases in accounts receivable of $199.9 and inventories of $121.5.

The following describes the significant changes in the amounts as presented on the accompanying Condensed Consolidated Balance Sheets at June 30, 2024 as compared to December 31, 2023.

Accounts receivable increased $237.1 to $2,855.5, primarily due to the impact of the two acquisitions (the “2024 Acquisitions”) that closed during the second quarter of 2024, along with the higher sales in the second quarter of 2024 relative to the fourth quarter of 2023, partially offset by the effect of translation from exchange rate changes (“Translation”) at June 30, 2024 compared to December 31, 2023.

Days sales outstanding at June 30, 2024 and December 31, 2023 were 69 days and 70 days, respectively.

Inventories increased $231.7 to $2,398.8, primarily due to the impact of the 2024 Acquisitions, partially offset by Translation .

Inventory days at June 30, 2024 and December 31, 2023 were 84 days and 85 days, respectively.

Prepaid expenses and other current assets increased $25.7 to $415.3, primarily due to the impact of the 2024 Acquisitions .

Property, plant and equipment, net, increased $219.3 to $1,534.0, primarily due to capital expenditures of $235.6 and the impact of the 2024 Acquisitions, partially offset by depreciation of $162.4 and Translation.

Goodwill increased $1,169.4 to $8,261.8, primarily driven by goodwill recognized associated with the 2024 Acquisitions, in particular the CIT acquisition, partially offset by Translation .

Other intangible assets, net, increased $473.9 to $1,308.7, primarily due to the recognition of certain intangible assets related to the 2024 Acquisitions, partially offset by the amortization associated with the Company’s current intangible assets as well as measurement period adjustments related to certain intangible assets associated with acquisitions that closed late in 2023.

Other long-term assets increased $61.3 to $510.5, primarily due to an increase in operating lease right-of-use assets resulting from new and renewed lease agreements entered into during the first six months of 2024 as well as acquired leases resulting from acquisitions.

Accounts payable increased $170.5 to $1,521.4, primarily due to incr eased purchasing activity related to the higher sales levels in the second quarter of 2024 relative to the fourth quarter of 2023, along with the impact of the 2024 Acquisitions, partially offset by Translation.

Payable days at June 30, 2024 and December 31, 2023 were 56 days and 55 days, respectively.

Total accrued expenses, including accrued income taxes, increased $82.3 to $1,530.3, primarily as a result of the impact of the 2024 Acquisitions and an increase in various other accrued expenses, partially offset by a decrease in accrued income taxes and Translation.

Other long-term liabilities, including deferred tax liabilities, increased $83.1 to $903.8, primarily as a result of an increase in deferred tax liabilities resulting from the 2024 Acquisitions.

Net cash provided by operating activities (“Operating Cash Flow”) was $1,967.6 in the first nine months of 2024 compared to $1,686.9 in the first nine months of 2023.

The increase in Operating Cash Flow for the first nine months of 2024 compared to the first nine months of 2023 is primarily due to the increase in net income, partially offset by a higher usage of cash related to the change in working capital.

In the first nine months of 2024, the components of working capital as presented on the accompanying Condensed Consolidated Statements of Cash Flow increased $197.6, excluding the impact of acquisitions and foreign currency translation, primarily due to increases in accounts receivable of $358.9, inventories of $186.0 and prepaid expenses and other current assets of $83.2 , partially offset by increases in accounts payable of $319.2 and accrued liabilities, including income taxes, of $111.3.

In the first nine months of 2023, the components of working capital as presented on the accompanying Condensed Consolidated Statements of Cash Flow increased $81.2, excluding the impact of acquisitions and foreign currency translation, primarily due to decreases in accrued liabilities, including income taxes, of $90.3 and accounts payable of $88.1, and an increase in prepaid expenses and other current assets of $17.2, partially offset by decreases in accounts receivable of $83.8 and inventories of $30.6.

The following describes the significant changes in the amounts as presented on the accompanying Condensed Consolidated Balance Sheets at September 30, 2024 as compared to December 31, 2023.

Accounts receivable increased $511.9 to $3,130.3, primarily due to the higher sales in the third quarter of 2024 relative to the fourth quarter of 2023, along with the impact of the two acquisitions (the “2024 Acquisitions”) that closed during the first nine months of 2024 and the effect of translation from exchange rate changes (“Translation”) at September 30, 2024 compared to December 31, 2023.

Days sales outstanding at September 30, 2024 and December 31, 2023 were 69 days and 70 days, respectively.

Inventories increased $411.7 to $2,578.8, primarily due to the impact of the 2024 Acquisitions, along with the impact of higher sales in the third quarter of 2024 relative to the fourth quarter of 2023 and Translation .

Inventory days at September 30, 2024 and December 31, 2023 were 87 days and 85 days, respectively.

Prepaid expenses and other current assets increased $90.8 to $480.4, primarily due to increases in various prepaid expenses and other current receivables, along with the impact of the 2024 Acquisitions .

Property, plant and equipment, net, increased $356.2 to $1,670.9, primarily due to capital expenditures of $465.6 and the impact of the 2024 Acquisitions, partially offset by depreciation of $276.9.

Goodwill increased $1,259.7 to $8,352.1, primarily driven by goodwill recognized from the 2024 Acquisitions, in particular the CIT acquisition .

Other intangible assets, net, increased $412.2 to $1,247.0, primarily due to the recognition of certain intangible assets related to the 2024 Acquisitions, in particular the CIT acquisition, partially offset by the amortization associated with the Company’s current intangible assets as well as measurement period adjustments related to certain intangible assets associated with acquisitions that closed late in 2023.

Other long-term assets increased $93.6 to $542.8, primarily due to an increase in operating lease right-of-use assets resulting from new and renewed lease agreements entered into during the first nine months of 2024 as well as acquired leases resulting from acquisitions.

Accounts payable increased $412.1 to $1,763.0, primarily due to incr eased purchasing activity related to the higher sales levels in the third quarter of 2024 relative to the fourth quarter of 2023, along with the impact of the 2024 Acquisitions and Translation.

Payable days at September 30, 2024 and December 31, 2023 were 59 days and 55 days, respectively.

Total accrued expenses, including accrued income taxes, increased $287.6 to $1,735.6, primarily as a result of increases in accrued salaries, wages and employee benefits and various other accrued expenses, along with the impact of the 2024 Acquisitions, partially offset by a decrease in accrued income taxes.

Other long-term liabilities, including deferred tax liabilities, increased $108.0 to $928.7, primarily as a result of an increase in deferred tax liabilities resulting from the 2024 Acquisitions, along with an increase in long-term lease liabilities resulting from new and renewed lease agreements entered into during the first nine months of 2024 as well as acquired leases resulting from acquisitions.

In addition to Operating Cash Flow, the Company also considers Free Cash Flow, a non-GAAP financial measure defined in the “Non-GAAP Financial Measures” section below, as a key metric in measuring the Company’s ability to generate cash.

The following table reconciles Free Cash Flow to its most directly comparable U.S.

GAAP financial

measure for the six months ended June 30, 2024 and 2023.

GAAP financial measure for the nine months ended September 30, 2024 and 2023.

The increase in Free Cash Flow was driven by an increase in Operating Cash Flow, as described above, partially offset by an increase in capital expenditures:

Six Months Ended June 30,

Nine Months Ended September 30,

Operating Cash Flow (GAAP)

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Cash flows from investing activities primarily consist of cash flows associated with capital expenditures, proceeds from disposals of property, plant and equipment, net purchases (sales and maturities) of short- and long-term investments, and acquisitions.

Net cash used in investing activities was $2,195.7 in the first six months of 2024, compared to $375.1 in the first six months of 2023.

In the first six months of 2024, net cash used in investing activities was primarily driven by the use of $2,099.8 to fund acquisitions and capital expenditures (net of disposals) of $230.2, partially offset by net sales and maturities of short-term investments of $132.4.

In the first six months of 2023, net cash used in investing activities was primarily driven by capital expenditures (net of disposals) of $191.5, the use of $113.2 to fund acquisitions, and net purchases of short- and long-term investments of $75.4.

Net cash used in investing activities was $2,398.2 in the first nine months of 2024, compared to $704.4 in the first nine months of 2023.

In the first nine months of 2024, net cash used in investing activities was primarily driven by the use of $2,099.8 to fund acquisitions and capital expenditures (net of disposals) of $458.5, partially offset by net sales and maturities of short-term investments of $161.0.

In the first nine months of 2023, net cash used in investing activities was primarily driven by the use of $292.6 to fund acquisitions, capital expenditures (net of disposals) of $265.7, and net purchases of short-term and long-term investments of $151.0.

The elevated capital expenditures for the third quarter and first nine months of 2024 were driven by investments primarily in support of the growth in our IT datacom and defense markets.

We expect this elevated level of capital spending to continue for the fourth quarter of 2024.

Financing Activities

Cash flows from financing activities primarily consist of cash flows associated with borrowings and repayments of the Company’s credit facilities and other long-term debt, repurchases of Common Stock, proceeds from stock option exercises, dividend payments, and distributions to and purchases of noncontrolling interests.

Net cash provided by financing activities was $743.4 in the first six months of 2024, compared to net cash used in financing activities of $704.0 in the first six months of 2023.

In the first six months of 2024, net cash provided by financing activities was primarily driven by (i) net cash proceeds from borrowings of $1,500.1, primarily related to the issuance of the New Senior Notes (as defined below), and (ii) cash proceeds of $234.7 from the exercise of stock options, partially offset by (a) debt repayments of $351.8, primarily related to the redemption of the 3.20% Senior Notes in the second quarter of 2024, (b) repurchases of the Company’s Common Stock of $344.2, (c) dividend payments of $263.8, (d) distributions to and purchases of noncontrolling interests of $17.5, and (e) payments of $14.7 related to debt financing costs associated with the Company’s amended and restated revolving credit facility in March 2024 as well as the issuances of the New Senior Notes in April 2024, as discussed further below.

In the first six months of 2023, net cash used in financing activities was primarily driven by (i) net repayments of $632.6 related to the Company’s commercial paper programs, primarily the U.S.

Commercial Paper Program, (ii) repurchases of the Company’s Common Stock of $320.5, (iii) dividend payments of $249.9, (iv) other debt repayments of $7.1 related to other long-term debt, (v) distributions to and purchases of noncontrolling interests of $6.5, and (vi) payments of $2.3 related to debt financing costs associated with the March 2023 issuance of the 2026 Senior Notes (as defined below), partially offset by (a) net cash proceeds from borrowings of $351.8, primarily related to the issuance of the 2026 Senior Notes, and (b) cash proceeds of $163.1 from the exercise of stock options .

Net cash provided by financing activities was $515.8 in the first nine months of 2024, compared to net cash used in financing activities of $822.4 in the first nine months of 2023.

In the first nine months of 2024, net cash provided by financing activities was primarily driven by (i) net cash proceeds from borrowings of $1,500.1, primarily related to the issuance of the New Senior Notes (as defined below), and (ii) cash proceeds of $320.3 from the exercise of stock options, partially offset by (a) repurchases of the Company’s Common Stock of $520.4, (b) dividend payments of $396.2, (c) debt repayments of $353.7, primarily related to the redemption of the 3.20% Senior Notes in the second quarter of 2024, (d) distributions to and purchases of noncontrolling interests of $20.8, and (e) payments of $14.7 related to debt financing costs associated with the Company’s amended and restated revolving credit facility in March 2024 as well as the issuances of the New Senior Notes in April 2024, as discussed further below.

In the first nine months of 2023, net cash used in financing activities was primarily driven by (i) net repayments of $632.6 related to the Company’s commercial paper programs, primarily the U.S.

Commercial Paper Program, (ii) repurchases of the Company’s Common Stock of $469.8, (iii) dividend payments of $375.0, (iv) other debt repayments of $10.3, (v) distributions to and purchases of noncontrolling interests of $8.0, (vi) payments of $2.3 related to debt financing costs associated with the March 2023 issuance of the 2026 Senior Notes (as defined below), and (vii) a payment of $1.5 associated with the deferred purchase price related to an acquisition, partially offset by (a) net cash proceeds from borrowings of $354.0, primarily related to the issuance of the 2026 Senior Notes, and (b) cash proceeds of $323.1 from the exercise of stock options .

The Company has significant flexibility to meet its financial commitments.

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

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

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

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.

On September 30, 2024, the Company was in compliance with the financial covenants under the Revolving 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”).

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Commercial Paper Program by $500.0.

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

As of September 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.

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The Company borrowed under the U.S.

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.

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

As of September 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 six months of 2024, and, as of June 30, 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 nine months of 2024, and, as of September 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 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.

In conjunction with the Revolving Credit Facility, as of September 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.

The Company reviews its optimal mix of short-term and long-term debt regularly and may replace certain amounts of Commercial Paper, short-term debt and current maturities of long-term debt with new issuances of long-term debt in the future.

As of June 30, 2024, the Company has outstanding senior notes (the “Senior Notes”) as follows:

As of September 30, 2024, the Company has outstanding senior notes (the “Senior Notes”) as follows:

February 2030

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

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

Refer to Note 4 of the Notes to Condensed Consolidated Financial Statements for further information related to the Company’s debt.

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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.

During the three and nine months ended September 30, 2024, the Company repurchased 2.7 million and 4.5 million shares of its Common Stock for $176.2 and $294.8, respectively, under the 2024 Stock Repurchase Program.

Of the total repurchases made during the nine months ended September 30, 2024 under the 2024 Stock Repurchase Program , 1.8 million shares, or $118.6, have been retired by the Company, with the remainder of the repurchased shares retained in Treasury stock at the time of repurchase.

From October 1, 2024 to October 22, 2024, the Company repurchased 0.6 million additional shares of its Common Stock for $35.8, and, as of October 23, 2024, the Company has remaining authorization to purchase up to $1,669.4 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.

During the nine months ended September 30, 2024, the Company repurchased 4.1 million shares of its Common Stock for $225.6 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 nine months of 2024 have been retired by the Company.

During the three and nine months ended September 30, 2023, the Company repurchased 3.5 million and 11.7 million shares of its Common Stock for $149.3 and $469.8, respectively, under th e 2021 Stock Repurchase Program.

Of the total repurchases made during the nine months ended September 30, 2023 under the 2021 Stock Repurchase Program, 8.2 million shares, or $320.5, were retired by the Company, with the remainder of the repurchased shares retained in Treasury stock at the time of repurchase.

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

The following table summarizes the declared quarterly dividends per share as well as 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,

The following table summarizes the declared quarterly dividends per share as well as the dividends declared and paid during the three and nine months ended September 30, 2024 and 2023:

Three Months Ended September 30,

Nine Months Ended September 30,

Dividends declared per share

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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.

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.

During the nine months ended September 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.

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CIT, headquartered in St.

Augustine, FL, is a leading global supplier of

harsh environment interconnect solutions, primarily to the commercial aerospace, defense and industrial end markets.

Augustine, FL, is a leading global supplier of harsh environment interconnect solutions, primarily to the commercial aerospace, defense and industrial end markets.

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.

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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 three and six months ended June 30, 2023, which was recorded separately in the Company’s Consolidated Statements of Income.

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

The 2023 Acquisitions were not material, either individually or in the aggregate, to the Company’s financial results.

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.

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.

Acquisition-related expenses

During the three and nine months ended September 30, 2024, the Company incurred $63.6 ($49.8 after-tax) and $133.6 ($109.7 after-tax), respectively, of acquisition-related expenses, comprised primarily of (i) the amortization related to the value associated with acquired backlog resulting from the CIT acquisition and external transaction costs associated with acquisitions (such acquisition-related expenses aggregating $45.4 and $115.4, respectively, are presented separately in the Condensed Consolidated Statements of Income) and (ii) the amortization of acquisition-related inventory step-up costs in the third quarter of 2024 of $18.2 associated with the CIT acquisition (such costs are recorded in Cost of sales in the Condensed Consolidated Statements of Income) .

During the three months ended September 30, 2023, the Company incurred $9.0 ($8.4 after-tax) of acquisition-related expenses, comprised of external transaction costs related to acquisitions.

During the nine months ended September 30, 2023, the Company incurred $18.4 ($16.2 after-tax) of acquisition-related expenses, comprised of external transaction costs incurred in the second and third quarters of 2023, as well as the amortization related to the value associated with acquired backlog resulting from an acquisition that closed in the first quarter of 2023.

During the year ended December 31, 2023, the Company incurred $34.6 ($30.2 after-tax) of acquisition-related expenses, comprised primarily of external transaction costs associated with the 2023 Acquisitions, as well as the amortization related to the value associated with acquired backlog resulting from three of the 2023 Acquisitions.

Subsequent Events

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

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

Purchase Agreement to Acquire CommScope’s Mobile Networks-related Businesses

On July 18, 2024, the Company entered into a Purchase Agreement with 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.

Subject to the receipt of certain regulatory approvals and satisfaction of other customary closing conditions, the acquisition is now expected to be completed in the first quarter of 2025.

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

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The reconciliations of these non-GAAP financial measures to the most directly comparable U.S.

GAAP financial measures for the three and six months ended June 30, 2024 and 2023 are included in “Results of Operations” and “Liquidity and Capital Resources” within this Item 2:

GAAP financial measures for the three and nine months ended September 30, 2024 and 2023 are included in “Results of Operations” and “Liquidity and Capital Resources” within this Item 2:

● Adjusted Diluted EPS is defined as diluted earnings per share (as reported in accordance with U.S.

23 unchanged sentences

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 2. Management’s Discussion and Analysis