filings.toolsAmphenol (APH) 10-K risk factor changes: FY2019 vs FY2018
The 2019-12-31 10-K against the 2018-12-31 one, compared heading by heading and sentence by sentence. One of these filings carries no fiscal year tag, so its year is the calendar year of the period end.
Item 1A94 rewritten56 added13 removed96 unchanged
All filing items1,445 rewritten873 added313 removed717 unchanged
Summary
counted, not written
- Item 1A headings could not be compared: only 0 carried over between the two years, which usually means one filing was read wrongly, so none is reported as new or removed.
- Sentence by sentence, 873 added, 313 removed, 1,445 rewritten and 717 unchanged across 17 items that differ.
Sentences by item
22 items, with every count and a link to each item that changed
Underlined words on a shaded ground are new in FY2019; struck-through words were in FY2018. Sentences that are wholly new or wholly gone are labelled rather than marked.
Item 1A. Risk Factors
94 rewritten, 56 added, 13 removed, 96 unchanged
If actions taken by management to limit, monitor or control [removed: financial] enterprise risk exposures are not successful, the Company’s business and consolidated financial statements could be materially adversely affected.
In such case, the trading price of the Company’s common stock [added: and debt securities] could decline and investors may lose all or part of their investment.
[removed: Risks] [added: Risks] related to our global [removed: operations][added: operations]
[removed: Non-U.S.] [added: Non-U.S.] markets form a substantial portion of the Company’s business and as a result, the Company is more exposed to political, economic, military and other risks in countries outside the United [removed: States.][added: States.]
During [removed: 2018,] [added: 2019,] non-U.S. markets constituted approximately [removed: 73%] [added: 69%] of the Company’s net sales, with China constituting approximately [removed: 32%] [added: 28%] of the Company’s net sales.
| | [removed: · |] [added: ●] | instability in political or economic conditions, including but not limited to inflation, recession or slowing growth, changes in tariff and trade barriers and import and export licensing requirements, our ability to hire and maintain qualified staff in these regions, foreign currency exchange restrictions and devaluations, restrictive governmental controls on the movement and repatriation of earnings and capital, and actual or anticipated military or political conflicts, particularly in emerging markets; |
| | [removed: · |] [added: ●] | intergovernmental conflicts or actions, including but not limited to armed conflict, trade wars and acts of terrorism or war; and |
| | [removed: · |] [added: ●] | interruptions to the Company’s business with its largest customers, distributors and suppliers resulting from but not limited to, strikes, financial instabilities, computer malfunctions or cybersecurity incidents, inventory excesses, natural disasters or other disasters such as fires, floods, earthquakes, hurricanes or explosions. |
International trade disputes may result in increased tariffs, trade barriers and other protectionist measures that could increase our manufacturing costs, make our products less competitive, reduce consumer demand or impede or slow the [removed: movement of our goods across borders.]
[removed: Changes] [added: Changes] in general economic conditions, geopolitical conditions, U.S. trade policies and other factors beyond the Company’s control may adversely impact our business and operating [removed: results.][added: results.]
In recent years, there has been discussion and dialogue regarding potential significant changes to U.S. trade policies, legislation, treaties and tariffs, [removed: as well as] [added: in particular] trade policies and tariffs affecting China.
Changes to current policies by the U.S. [removed: government] [added: or other governments] could affect our business, including potentially through increased import tariffs and other influences on U.S. trade relations with China and other countries.
The imposition of [added: additional] tariffs or other trade barriers could increase our costs in certain markets, and may cause our customers to find alternative sourcing.
| | [removed: · |] [added: ●] | a global or regional economic slowdown in any of the Company’s market segments; |
| | [removed: · |] [added: ●] | postponement of spending, in response to tighter credit, financial market volatility and other factors; |
| | [removed: · |] [added: ●] | effects of significant changes in economic, monetary and fiscal policies in the United States and abroad including significant income tax changes, currency fluctuations and inflationary pressures; |
| | [removed: · |] [added: ●] | rapid material escalation of the cost of regulatory compliance and litigation; |
| | [removed: · |] [added: ●] | changes in government policies and regulations affecting the Company or its significant customers or suppliers; |
| | [removed: · |] [added: ●] | employment regulations and local labor conditions, including increases in employment costs, particularly in low-cost regions in which the Company currently operates; |
| | [removed: · |] [added: ●] | industrial policies in various countries that favor domestic industries over multinationals or that restrict foreign companies altogether; |
| | [removed: · |] [added: ●] | difficulties protecting intellectual property; |
| | [removed: · |] [added: ●] | longer payment cycles; |
| | [removed: · |] [added: ●] | credit risks and other challenges in collecting accounts receivable; |
| | [removed: · |] [added: ●] | changes in assumptions, such as discount rates, along with lower than expected investment returns and performance related to the Company’s benefit plans; |
| | [removed: · |] [added: ●] | the impact of each of the foregoing on outsourcing and procurement arrangements; and |
| | [removed: · |] [added: ●] | continuing uncertainty regarding social, political, immigration and tax and trade policies in the United States and abroad, including as a result of the United Kingdom’s vote to withdraw from the European [removed: Union.] [added: Union, otherwise known as “Brexit”.] |
[removed: Our] [added: Our] international operations require us to comply with anti-corruption laws and regulations of the U.S. government and various foreign jurisdictions and our business reputation and financial results may be impaired by improper conduct by any of our employees, customers, suppliers, distributors or any other business [removed: partners.][added: partners.]
[added: The FCPA prohibits U.S.] companies and their officers, directors, employees and agents acting on their behalf from corruptly offering, promising, authorizing or providing anything of value to foreign officials for the purposes of influencing official decisions or obtaining or retaining business or otherwise obtaining favorable treatment.
Violations of these legal requirements could subject us to criminal fines and imprisonment, civil penalties, disgorgement of profits, injunctions, debarment from government contracts [removed: as well as] [added: and] other remedial measures.
In [removed: addition] [added: addition,] any actual or alleged violations could disrupt our operations, cause reputational harm, involve significant management distraction and result in a material adverse effect on our competitive position, results of operations, cash flows or financial condition.
[removed: The] [added: The] Company’s results [removed: may be] [added: have at times been] negatively affected by foreign currency exchange [removed: rates.][added: rates.]
The Company manages currency exposure risk in a number of ways, including producing its products in the same country or region in which the products are sold (thereby generating revenues and incurring expenses in the same currency), cost reduction and pricing actions, [removed: and] working capital [removed: management.][added: management and hedging contracts.]
[removed: The] [added: The] Company [removed: may experience] [added: has at times experienced] difficulties in obtaining a consistent supply of materials at stable pricing [removed: levels.][added: levels.]
The Company uses basic materials like aluminum, steel, copper, titanium, metal alloys, gold, silver, [removed: certain rare earth metals] [added: palladium] and plastic resins in its manufacturing processes as well as a variety of components and relies on third party suppliers to secure these materials.
Delays in obtaining supplies may result from a number of factors affecting our suppliers, and any delay could impair our ability to deliver products to our customers and, accordingly, could have an adverse effect on our business, results of operations and financial [removed: position.][added: condition.]
[removed: Risks] [added: Risks] related to our end [removed: markets][added: markets]
[removed: The] [added: The] Company is dependent on the communications industry, including information technology and data communications, wireless communications and broadband [removed: communications.][added: communications.]
Approximately [removed: 49%] [added: 44%] of the Company’s [removed: 2018] [added: 2019] net sales came from sales to the communications industry, including information technology and data communication, wireless communications and broadband communications, with [removed: 17%] [added: 13%] of the Company’s [removed: 2018] [added: 2019] net sales coming from sales to the mobile devices market.
[removed: Demand for these products is subject to rapid technological change (see below—“The] [added: The] Company is dependent on the acceptance of new product introductions for continued revenue [removed: growth”).][added: growth.]
There can be no assurance that the Company will be able to meet these standards or maintain competitive pricing and therefore continue to compete [added: successfully in the communications industry.]
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movement of our goods across borders.
Some of these trade policies have been or are in the process of being renegotiated, including the U.S.’s trading relationship with China.
As a result of these dynamics, we cannot predict the impact to our business of any future changes to the U.S.’s trading relationships.
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We have significant international sales and operations and face risks related to health epidemics such as the coronavirus.
Any outbreaks of contagious diseases and other adverse public health developments in countries where we operate could have a material and adverse effect on our business, financial condition and results of operations.
For example, the recent outbreak of a novel strain of coronavirus first identified in Wuhan, Hubei Province, China, has resulted in significant governmental measures being implemented to control the spread of the virus, including restrictions on manufacturing and the movement of employees in many regions of the country.
This has affected our manufacturing facilities in China as well as the facilities of our suppliers, customers and our customers’ contract manufacturers.
The extent to which the coronavirus will impact our business and our financial results will depend on future developments, which are highly uncertain and cannot be predicted.
In addition, the coronavirus may result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn
that could affect demand for our end customers’ products.
As a result, at the time of this filing, it is impossible to predict the overall impact of the coronavirus on our business and financial results.
**
Demand for these products is subject to rapid technological change.
In some cases, the Company may pursue indemnification claims against the seller or sellers of an acquired business for pre-acquisition liabilities, breaches of representations, warranties or covenants or for other reasons provided for in the relevant acquisition agreement.
To the extent we pursue indemnification claims against the seller or sellers of any acquired business, such seller or sellers may successfully contest such claims, such seller or sellers may not have the financial capacity to compensate us for such claims or such claims may otherwise be difficult or impractical to enforce.
capital markets.
In 2017, the United Kingdom's Financial Conduct Authority, which regulates LIBOR, announced its intent to phase out LIBOR by the end of 2021.
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In the case of the North American Free Trade Agreement (“NAFTA”), on December 1, 2018, the United States, Mexico and Canada signed a new trade agreement called the United States-Mexico-Canada Agreement (“USMCA”), which would replace NAFTA but which, as of the date of this filing, must still be ratified by each country's legislature.
If the legislature in any one or more of the signatory countries fails to ratify the USMCA, then the future status of NAFTA is uncertain.
The FCPA prohibits U.S.
successfully in the communications industry.
The Company is dependent on the acceptance of new product introductions for continued revenue growth.
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| $ | 750.0 | | 2.55 | % | January 2019 |
In January 2019, the Company issued $500.0 million principal amount of 4.350% Senior Notes due June 1, 2029, the net proceeds of which were used, along with borrowings under the U.S. commercial paper program, to repay the $750.0 million of 2.55% Senior Notes due in January 2019.
On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (“Tax Act”).
The changes included in the Tax Act are broad and complex.
Although the Company finalized its accounting for the Tax Act in 2018, the final impacts of the Tax Act recorded in 2018 differed from the estimates provided in the Company’s 2017 Annual Report, due to, among other things, changes in interpretations of certain provisions of the Tax Act, additional guidance released in 2018 by the U.S. Treasury Department, and updates and changes to estimates the Company had originally utilized to calculate the transition impacts in 2017.
The Company’s financial condition, results of operations or cash flows could be materially impacted by any future changes in tax law or changes in accounting standards for income taxes.
An excerpt. Shown here: 40 of 94 rewritten, 40 of 56 added and all 13 removed. The counts are complete. For every sentence, read Item 1A. Risk Factors in the FY2019 filing and the FY2018 filing.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
246 rewritten, 172 added, 83 removed, 139 unchanged
[removed: (amounts] [added: _(amounts] in millions, except share and per share data, unless otherwise [removed: noted)][added: noted)_]
The following discussion and analysis of the results of operations [added: and financial condition] for the three years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016] [added: 2017] has been derived from and should be read in conjunction with the Consolidated Financial Statements included in Part II, Item 8, herein.
For purposes of the following discussion, the terms “constant currencies” and “organically” have the same [removed: meanings] [added: meanings, respectively,] as these aforementioned non-GAAP financial measures.
In addition to historical information, the following discussion and analysis also contains certain forward-looking statements that are subject to risks and uncertainties, including but not limited to the risk factors described in [added: Part I,] Item 1A herein, as well as the risks and uncertainties that exist with the use of forward-looking statements as described in the “Cautionary Note Regarding Forward-Looking Statements” section included herein at the beginning of this Annual Report on Form 10-K.
[removed: Overview][added: Overview]
[removed: General][added: _General_]
[removed: The Company] [added: Amphenol Corporation (together with its subsidiaries, “Amphenol”, the “Company”, “we”, “our”, or “us”)] is one of the world’s largest designers, manufacturers and marketers of electrical, electronic and fiber optic [removed: connectors,] [added: connectors and] interconnect systems, antennas, sensors and sensor-based products and coaxial and high-speed specialty cable.
In [removed: 2018,] [added: 2019,] approximately [removed: 73%] [added: 69%] of the Company’s sales were outside the United States.
| | [removed: · |] [added: ●] | information technology and communication devices and systems for the converging technologies of voice, video and data communications; |
| | [removed: · |] [added: ●] | a broad range of industrial applications and [removed: traditional] [added: traditional, hybrid] and [removed: hybrid-electric] [added: electric] automotive applications; and |
| | [removed: · |] [added: ●] | [added: military and] commercial aerospace [removed: and military] applications. |
The Company’s products are used in a wide variety of applications by numerous [removed: customers.][added: customers around the world.]
The Company competes primarily on the basis of technology innovation, product [removed: quality,] [added: quality and performance,] price, customer service and delivery time.
[removed: Strategy][added: _Strategy_]
| | [removed: · |] [added: ●] | Pursue broad diversification; |
| | [removed: · |] [added: ●] | Develop [added: high technology] performance-enhancing interconnect solutions; |
| | [removed: · |] [added: ●] | Expand global presence; |
| | [removed: · |] [added: ●] | Control costs; |
| | [removed: · |] [added: ●] | Pursue strategic acquisitions and investments; and |
| | [removed: · |] [added: ●] | Foster collaborative, entrepreneurial management. |
In [removed: 2018,] [added: 2019,] the Company reported net [removed: sales,] [added: sales of $8,225.4, which was flat compared to 2018, along with] operating income and net income attributable to Amphenol Corporation of [removed: $8,202.0, $1,686.9 and $1,205.0, respectively, up 17%, 18%] [added: $1,619.2] and [removed: 85%,] [added: $1,155.0,] respectively, [added: both representing a decrease of 4%] from [removed: 2017.][added: 2018.]
In 2018, the Company’s net income attributable to Amphenol Corporation was impacted by the recognition of an income tax benefit of $14.5 related to the completion of the accounting for the Tax Act Charge (defined below) in the fourth quarter of [removed: 2018 and the recognition of] [added: 2018, along with] excess tax benefits of $19.8 from stock option exercises, partially offset by acquisition-related expenses incurred during the year.
Excluding the effects of these items, Adjusted Operating Income and Adjusted Net Income attributable to Amphenol Corporation, as defined in the “Non-GAAP Financial Measures” section below and as reconciled in Part II, Item [removed: 6 and Item] 7 herein, [removed: increased] [added: decreased] by [removed: 18%] [added: 3%] and [removed: 19%,] [added: 2%,] respectively, in [removed: 2018.][added: 2019.]
[removed: Tax] [added: Tax] Cuts and Jobs Act of [removed: 2017][added: 2017]
On December 22, 2017, the United States federal government enacted the Tax Cuts and Jobs Act (“Tax Act”), marking a change from a worldwide tax system to a modified territorial tax system in the United [removed: States.][added: States and a reduction of the U.S. federal corporate income tax rate from 35% to 21%.]
[removed: SAB 118,] [added: In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”),] which [removed: is now] [added: was] codified under ASU 2018-05, [removed: Income Taxes (Topic 740): Amendments] to [removed: SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118, addresses] [added: address] the application of U.S. GAAP in situations where a registrant does not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting for certain income tax effects of the Tax Act.
[removed: As a result,] [added: The effects of these items were significantly lower in 2018, as] the Company recorded an income tax benefit of $14.5 in 2018 related to the completion of the accounting for the Tax Act [removed: Charge.][added: Charge, along with the excess tax benefits of $19.8 from stock option exercises.]
[removed: Results] [added: Results] of [removed: Operations][added: Operations]
| [added: ] | [added: ] | [removed: Year] [added: Year] Ended December [removed: 31,] [added: 31,] | | | | | | | | [added: ] |
| [added: ] | [added: ] | [removed: 2018] [added: 2018] | | | [removed: 2017] | | | [removed: 2016] | | | [added: | | | | 2017 | | | | | | | | | | | |]
| Net sales | | 100.0 | % | [added: ] | 100.0 | % | [added: ] | 100.0 | % | [added: ] |
| Cost of sales | | [removed: 67.6] [added: 68.2] | [added: ] | [added: ] | [removed: 67.1] [added: 67.6] | [added: ] | [added: ] | [removed: 67.5] [added: 67.1] | [added: ] | [added: ] |
| Acquisition-related expenses | | [removed: 0.1] [added: 0.3] | [added: ] | [added: ] | [removed: —] [added: 0.1] | [added: ] | [added: ] | [removed: 0.6] [added: —] | [added: ] | [added: ] |
| Selling, general and administrative expenses | | [removed: 11.7] [added: 11.8] | [added: ] | [added: ] | [removed: 12.5] [added: 11.7] | [added: ] | [added: ] | [removed: 12.7] [added: 12.5] | [added: ] | [added: ] |
| Operating income | | [removed: 20.6] [added: 19.7] | [added: ] | [added: ] | [removed: 20.4] [added: 20.6] | [added: ] | [added: ] | [removed: 19.2] [added: 20.4] | [added: ] | [added: ] |
| Interest expense | | [removed: (1.2)] [added: (1.4)] | [added: ] | [added: ] | [removed: (1.3)] [added: (1.2)] | [added: ] | [added: ] | [removed: (1.1)] [added: (1.3)] | [added: ] | [added: ] |
| Other income, net | | [removed: —] [added: 0.1] | [added: ] | [added: ] | [removed: 0.2] [added: —] | [added: ] | [added: ] | [removed: 0.1] [added: 0.2] | [added: ] | [added: ] |
| Income before income taxes | | [removed: 19.4] [added: 18.2] | [added: ] | [added: ] | [removed: 19.3] [added: 19.4] | [added: ] | [added: ] | [removed: 18.2] [added: 19.3] | [added: ] | [added: ] |
| Provision for income taxes | | [removed: (4.5)] [added: (4.1)] | [added: ] | [added: ] | [removed: (9.9)] [added: (4.5)] | [added: ] | [added: ] | [removed: (4.9)] [added: (9.9)] | [added: ] | [added: ] |
| Net income | | [removed: 14.9] [added: 14.1] | [added: ] | [added: ] | [removed: 9.4] [added: 14.9] | [added: ] | [added: ] | [removed: 13.3] [added: 9.4] | [added: ] | [added: ] |
**
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In 2019, the Company’s net income attributable to Amphenol Corporation was impacted by (a) excess tax benefits related to stock-based compensation of $38.1 resulting from stock option exercises, partially offset by (b) acquisition-related expenses of $25.4 ($21.0 after-tax) primarily from the amortization related to the value associated with acquired backlog as well as external transaction costs and (c) refinancing-related costs associated with the early extinguishment of debt of $14.3 ($12.5 after-tax), comprised primarily of the premiums and other fees incurred from the early extinguishment of redeemed amounts of our 3.125% Senior Notes and 4.00% Senior Notes resulting from the tender offers in September 2019 described herein under “_Liquidity and Capital Resources – Financing Activities_”.
In 2019, the Company generated operating cash flow of $1,502.3, which net of capital expenditures of $295.0, resulted in Free cash flow of $1,207.3.
Free cash flow, a non-GAAP financial measure, is defined in the “Non-GAAP Financial Measures” section below and reconciled within this Part II, Item 7 herein.
As a result of the Tax Act, in the fourth quarter of 2017, the Company recorded an income tax charge of $398.5 (“Tax Act Charge”).
The Tax Act Charge was a provisional amount recorded in accordance with SEC Staff Accounting Bulletin No. 118 (“SAB 118”), which was subsequently codified under ASU 2018-05, _Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118_.
Consistent with ASU 2018-05, the Company completed its accounting of the Tax Act Charge and recorded an income tax benefit of $14.5 in 2018, reflecting the interpretive guidance that was issued subsequent to our 2017 Form 10-K filing.
While the Company completed its accounting of the Tax Act in the fourth quarter of 2018 based on the regulatory guidance issued at that time, the Department of Treasury interpretive guidance initiatives are ongoing.
Refer to Note 6 of the Notes to the Consolidated Financial Statements for further discussion of the Tax Act.
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| Loss on early extinguishment of debt | | (0.2) | | | — | | | — | | |
2019 Compared to 2018
The sales growth was driven by strong growth in the military and commercial aerospace markets as well as contributions from the Company’s acquisition program.
This sales growth was largely offset by reductions in the communications-related markets, in particular the mobile devices market, along with the negative effect of currency translation.
Net sales to the automotive market increased (approximately $38.0), driven primarily by contributions from acquisitions, which were partially offset by moderations in demand due to the slowing of the worldwide automotive market.
Net sales to the mobile devices market decreased (approximately $277.5), driven by moderations in sales of products incorporated into smartphones.
Net sales to the mobile networks market decreased (approximately $10.2), due to reduced demand from both mobile networks equipment manufacturers and mobile operators, offset in part by contributions from acquisitions.
The decrease in the Cable Products and Solutions segment was primarily due to a reduction in demand from broadband service providers.
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| | | 2019 | | | 2018 | | | (GAAP) | | | (non-GAAP) | | | (non-GAAP) | | | (non-GAAP) | | | (non-GAAP) | | |
| Consolidated | | $ | 8,225.4 | | $ | 8,202.0 | | — | % | | (2) | % | | 2 | % | | 5 | % | | (3) | % | |
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Foreign sales in 2019 decreased approximately 4% in U.S. dollars ($5,700.7 in 2019 versus $5,960.6 in 2018), 2% in constant currencies and 6% organically, compared to 2018, driven by moderations in Asia.
The comparatively stronger U.S. dollar in 2019 had the effect of decreasing net sales by approximately $125.8 when compared to foreign currency translation rates in 2018.
Administrative expenses were flat in 2019 compared to 2018, and represented approximately 4.7% of net sales in both years.
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In 2017, the Company’s net income attributable to Amphenol Corporation was impacted by the enactment of the Tax Cuts and Jobs Act in 2017 which resulted in a provisional income tax charge of $398.5 as discussed in more detail below and in the Notes to the Consolidated Financial Statements within this Annual Report on Form 10-K, in addition to the impact of the acquisition-related expenses incurred during the year, partially offset by the excess tax benefits of $66.6 recognized from stock option exercises.
In 2018, the Company generated operating cash flow of $1,112.7.
As part of this change, the Tax Act, among other changes, provides for a transition tax on the accumulated unremitted foreign earnings and profits of the Company’s foreign subsidiaries (“Transition Tax”) and a reduction of the U.S. federal corporate income tax rate from 35% to 21%.
As a result, in the fourth quarter of 2017, the Company recorded an income tax charge of $398.5 (“Tax Act Charge”) that was comprised of (i) the Transition Tax of $259.4, (ii) a charge of $176.6 related to changes in the Company’s permanent reinvestment assertion with regards to prior accumulated unremitted earnings from certain foreign subsidiaries, partially offset by (iii) a tax benefit of $37.5 associated with the remeasurement of the Company’s U.S. net deferred tax liabilities due to the U.S. federal corporate tax rate reduction.
As discussed under Critical Accounting Policies and Estimates within this Item 7, the three components of the Tax Act Charge were provisional amounts recorded in accordance with SEC Staff Accounting Bulletin No. 118 (“SAB 118”).
Due to the timing of the Tax Act’s enactment and the complexity of its provisions, the Company had not completed its accounting for the impact of the Tax Act as of December 31, 2017.
The Company analyzed guidance and technical interpretations issued in 2018 related to the provisions of the Tax Act, and refined, analyzed and updated the underlying data, computations and assumptions used to prepare the Tax Act Charge.
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The increase in operating income margin was driven primarily by strong operating leverage on higher sales volumes.
The effects of these items were significantly lower in 2018, as the Company recorded an income tax benefit of $14.5 in 2018 related to the completion
of the accounting for the Tax Act Charge, along with the excess tax benefits of $19.8 from stock option exercises.
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2017 Compared to 2016
The sales growth was driven primarily by growth in the industrial, automotive, information technology and data communications, mobile devices, military and commercial aerospace markets, with contributions from both organic strength as well as from the Company’s acquisitions, partially offset by a slight decline in sales in the mobile networks market.
Net sales to the automotive market increased (approximately $177.0), driven by growth and expansion in all regions of the global automotive market, as well as contributions from acquisitions.
Net sales to the mobile devices market increased (approximately $101.1) primarily due to growth in sales of products incorporated into smartphones and related accessories, partially offset by declining sales of products incorporated into tablets.
jets and helicopters.
Net sales to the mobile networks market decreased (approximately $20.3), primarily due to reduced overall capital spending by mobile operators.
| | | 2017 | | | 2016 | | | (GAAP) | | | (non-GAAP) | | | (non-GAAP) | | | (non-GAAP) | | | (non-GAAP) | | |
| Consolidated | | $ | 7,011.3 | | $ | 6,286.4 | | 12 | % | | — | % | | 12 | % | | 4 | % | | 8 | % | |
Foreign sales in 2017 increased approximately 11% in U.S. dollars ($5,032.9 in 2017 versus $4,545.7 in 2016), 10% in constant currencies and 8% organically, compared to 2016 with strength in both Asia and Europe.
The comparatively weaker U.S. dollar in 2017 did not significantly impact net sales compared to 2016.
Administrative expenses increased approximately $28.9 in 2017 primarily related to increases in stock-based compensation expense, employee-related benefits and amortization of acquisition-related identified intangible assets, and represented approximately 4.8% of net sales in 2017 and 4.9% of net sales in 2016.
Selling and marketing expenses increased approximately $23.6 in 2017 primarily related to the increase in sales volume and represented approximately 4.9% of net sales in 2017 and 5.1% of net sales in 2016.
Operating income was $1,427.6 or 20.4% of net sales in 2017, compared to $1,205.2 or 19.2% of net sales in 2016.
Operating income for 2017 includes $4.0 of acquisition-related expenses, related to external transaction costs incurred in the second quarter of 2017.
Operating income for 2016 includes $36.6 of acquisition-related expenses, which includes external transaction costs, amortization related to the value associated with acquired backlog and post-closing restructuring charges related to the acquisition of FCI Asia Pte.
Ltd. (“FCI”), as well as transaction costs associated with other acquisitions.
The increase in Adjusted Operating Margin for 2017 compared to 2016, was driven primarily by an increase in operating margin for the Interconnect Products and Assemblies segment.
Interest expense was $92.3 in 2017 compared to $72.6 in 2016.
The increase is primarily due to higher average debt levels, which resulted from the Company’s dividend and stock buyback programs, as well as higher average interest rates partially driven by the senior note issuances in April 2017.
The increase in the effective tax rate in 2017 resulted primarily from the Tax Act Charge of $398.5, partially offset by the excess tax benefits of $66.6 related to stock-based compensation.
| | | 2017 | | | | | | | | | | | | | 2016 | | | | | | | | | | | |
| Reported (GAAP) | | $ | 1,427.6 | | 20.4 | % | $ | 650.5 | | 51.1 | % | $ | 2.06 | | $ | 1,205.2 | | 19.2 | % | $ | 822.9 | | 27.0 | % | $ | 2.61 |
| Acquisition-related expenses | | | 4.0 | | \- | | | 3.7 | | \- | | | 0.01 | | | 36.6 | | 0.6 | | | 33.1 | | (0.5) | | | 0.11 |
| Tax Act Charge | | | \- | | \- | | | 398.5 | | (29.5) | | | 1.26 | | | \- | | \- | | | \- | | \- | | | \- |
| Adjusted (non-GAAP) | | $ | 1,431.6 | | 20.4 | % | $ | 986.1 | | 26.5 | % | $ | 3.12 | | $ | 1,241.8 | | 19.8 | % | $ | 856.0 | | 26.5 | % | $ | 2.72 |
The Company used approximately $400, net of cash acquired, of its cash, cash equivalents and short-term investments as of December 31, 2018 to fund the acquisition of SSI Controls Technologies (“SSI”) in January 2019, as described below.
An excerpt. Shown here: 40 of 246 rewritten, 40 of 172 added and 40 of 83 removed. The counts are complete. For every sentence, read Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in the FY2019 filing and the FY2018 filing.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
15 rewritten, 4 added, 4 removed, 13 unchanged
[removed: (amounts] [added: _(__amounts] in [removed: millions)][added: millions__)_]
[removed: Foreign] [added: Foreign] Currency Exchange Rate [removed: Risk][added: Risk]
The Company attempts to manage currency exposure risk in a number of ways including producing its products in the same country or region in which the products are sold (thereby generating revenues and incurring expenses in the same currency), cost reduction and pricing actions, [removed: and] working capital [removed: management.][added: management and hedging contracts.]
Refer to Note [removed: 2] [added: 4] of the Notes to the Consolidated Financial Statements for a discussion of debt.
A 10% change in foreign currency exchange rates would not have a material effect on the value of the hedges as of December 31, [removed: 2018] [added: 2019] and [removed: 2017.][added: 2018.]
Refer to Note [removed: 3] [added: 1 and Note 5] of the Notes to the Consolidated Financial Statements for a discussion of derivative financial instruments.
[removed: Interest] [added: Interest] Rate [removed: Risk][added: Risk]
The Company currently has outstanding various fixed rate series of senior notes over various maturity [removed: dates.][added: dates, two of which were issued in 2019.]
[removed: The] [added: In January 2019, the] Company [removed: used] [added: issued $500.0 of unsecured 4.350% Senior Notes due June 2029,] the net proceeds of [removed: the 4.350% Senior Notes,] [added: which,] along with borrowings under the U.S. Commercial Paper Program, [added: were used] to repay $750.0 of 2.55% Senior Notes due January 30, 2019.
While there were no such borrowings as of December 31, [removed: 2018,] [added: 2019,] any borrowings under the Revolving Credit Facility either bear interest at or trade at rates that fluctuate with a spread over LIBOR.
As of December 31, [removed: 2018,] [added: 2019,] approximately [removed: $639.9,] [added: $400,] or [removed: 18%] [added: 11%] of the Company’s outstanding borrowings, which related primarily to the Company’s Commercial Paper Programs, were subject to floating interest rates.
At December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] the Company’s average floating rate on borrowings under the U.S. Commercial Paper Program was [removed: 2.88%] [added: 1.85%] and [removed: 1.71%,] [added: 2.88%,] respectively.
At December 31, [added: 2019 and] 2018, the Company’s average floating rate on borrowings under the Euro Commercial Paper Program was [removed: (0.10)%.][added: (0.13)% and (0.10)%, respectively.]
A 10% change in the interest rate at December 31, [removed: 2018] [added: 2019] and [removed: 2017] [added: 2018] for either or both Commercial Paper Programs would not have a material effect on interest expense.
The Company does not expect changes in interest rates to have a material effect on income or cash flows in [removed: 2019,] [added: 2020,] although there can be no assurances that interest rates will not change significantly.
**
The Company utilizes foreign exchange forward contracts to hedge exposure to foreign currency exchange rate fluctuations for certain transactions denominated in foreign currencies.
As of December 31, 2019, the fair value of such contracts was not material.
In September 2019, the Company issued $900.0 of unsecured 2.80% Senior Notes due February 2030, the net proceeds of which were used to repay the cash consideration payable as a result of the tender offers associated with the 3.125% Senior Notes and 4.00% Senior Notes, with the remaining net proceeds being used for general corporate purposes, including to partially reduce outstanding borrowings related to the U.S. Commercial Paper Program.
As of December 31, 2018, the Company had two forward contracts of varying amounts that effectively fixed Great Britain Pound and Korean Won intercompany debt obligations into fixed Hong Kong dollar denominated obligations expiring at various times through 2019 concurrent with the underlying intercompany loans.
The fair value of the contracts at December 31, 2018 resulted in a net asset of $2.4.
In October 2018, the Euro Issuer issued the 2028 Euro Notes, and the Company used a portion of the net proceeds from the 2028 Euro Notes to repay a portion of the outstanding amounts under its U.S. Commercial Paper Program and Euro Commercial Paper Program (collectively, the “Commercial Paper Programs”), with the remainder of the net proceeds being used for general corporate purposes.
In January 2019, the Company issued $500.0 of unsecured 4.350% Senior Notes due June 2029.
Item 1. Business
130 rewritten, 101 added, 8 removed, 79 unchanged
[removed: General][added: General]
Amphenol Corporation (together with its subsidiaries, “Amphenol”, the “Company”, “we”, “our”, or “us”) is one of the world’s largest designers, manufacturers and marketers of electrical, electronic and fiber optic [removed: connectors,] [added: connectors and] interconnect systems, antennas, sensors and sensor-based products and coaxial and high-speed specialty cable.
The Company estimates, based on reports of industry analysts, that worldwide sales of interconnect and sensor-related products were approximately [removed: $170] [added: $175] billion in [removed: 2018.][added: 2019.]
[added: Value-add systems generally consist of a] system of cable, flexible circuits or printed circuit boards and connectors for linking electronic equipment.
The table below provides a summary of our reporting segments, the [removed: 2018] [added: 2019] net sales contribution of each segment, the primary industry and end markets that we service and our key products:
| [removed: Reporting Segment] [added: Reporting Segment] | | [removed: Interconnect] [added: Interconnect] Products and [removed: Assemblies] [added: Assemblies] | | [removed: Cable] [added: Cable] Products and [removed: Solutions] [added: Solutions] |
| [removed: %] [added: %] of [removed: 2018] [added: 2019] Net [removed: Sales:] [added: Sales:] | [added: ] | 95% | [added: ] | 5% |
| [removed: Primary] [added: Primary] End [removed: Markets] [added: Markets] | [added: ] | [removed: ] [added: ●] Automotive [removed: ] [added: ●] Broadband Communications [removed: ] [added: ●] Commercial Aerospace [removed: ] [added: ●] Industrial [removed: ] [added: ●] Information Technology and Data Communications [removed: ] [added: ●] Military [removed: ] [added: ●] Mobile Devices [removed: ] [added: ●] Mobile Networks | [added: ] | [removed: ] [added: ●] Automotive [removed: ] [added: ●] Broadband Communications [removed: ] [added: ●] Industrial [removed: ] [added: ●] Information Technology and Data Communications [removed: ] [added: ●] Mobile Networks |
| [removed: Key Products] [added: Key Products] | [added: ] | Connector and Connector Systems: [removed: ] [added: ●] fiber optic interconnect products [removed: ] [added: ●] harsh environment interconnect products [removed: ] [added: ●] high-speed interconnect products [removed: ] [added: ●] power interconnect products, busbars and distribution systems [removed: ] [added: ●] radio frequency interconnect products and antennas [removed: ] [added: ●] other connectors [added: ] Value-Add Products: [removed: ] [added: ●] backplane interconnect systems [removed: ] [added: ●] cable assemblies and harnesses [removed: ] [added: ●] cable management products [added: ] Other: [removed: ] [added: ●] antennas [removed: ] [added: ●] flexible and rigid printed circuit boards [removed: ] [added: ●] hinges [removed: ] [added: ●] molded parts [removed: ] [added: ●] production-related products [removed: ] [added: ●] sensors and sensor-based products [removed: ] [added: ●] switches | [added: ] | Cable: [removed: ] [added: ●] coaxial cable [removed: ] [added: ●] power cable [removed: ] [added: ●] specialty cable [added: ] Value-Add Products: [removed: ] [added: ●] cable assemblies [added: ] Components: [removed: ] [added: ●] combiner/splitter products [removed: ] [added: ●] connector and connector systems [removed: ] [added: ●] fiber optic components |
Information regarding the Company’s operations and assets by reporting segment, as well as the Company’s net sales and long-lived assets by geographic area, appears in Note [removed: 11] [added: 13] of the Notes to the Consolidated Financial Statements.
[removed: Our Strategy][added: Our Strategy]
| | [removed: · |] [added: ●] | [removed: Pursue] [added: _Pursue] broad [removed: diversification] [added: diversification_] - The Company constantly drives to increase the diversity of its markets, customers, applications and products. Due to the tremendous variety of opportunities in the electronics industry, management believes that it is important to ensure participation wherever significant growth opportunities are available. This diversification positions us to proliferate our technologies across the broadest array of opportunities and reduces our exposure to any particular market, thereby reducing the variability of our financial performance. An overview of the Company’s market and product participation is described under “Markets”. |
| | [removed: · |] [added: ●] | [removed: Develop] [added: _Develop high technology] performance-enhancing interconnect [removed: solutions] [added: solutions_] - The Company seeks to expand the scope and number of its preferred supplier relationships. The Company works closely with its customers at the design stage to create and manufacture innovative solutions. These products generally have higher value-added content than other interconnect products and have been developed across the Company’s markets. The Company is focused on technology leadership in the interconnect areas of radio frequency, power, harsh environment, high-speed and fiber optics, as well as sensors, as it views these technology areas to be of particular importance to our global customer base. |
| | [removed: · |] [added: ●] | [removed: Expand] [added: _Expand] global [removed: presence] [added: presence_] - The Company intends to further expand its global manufacturing, engineering, sales and service operations to better serve its existing customer base, penetrate developing markets and establish new customer relationships. As the Company’s global customers expand their international operations to access developing world markets and lower manufacturing costs in certain regions, the Company is continuing to expand its international footprint in order to provide real-time capabilities to these customers. The majority of the Company’s international operations have broad capabilities including new product development. The Company is also able to take advantage of the lower manufacturing costs in some regions, and has established low-cost manufacturing and assembly facilities in the Americas, Europe/Africa and Asia. |
| | [removed: · |] [added: ●] | [removed: Control costs] [added: _Control costs_] - The Company recognizes the importance in today’s global marketplace of maintaining a competitive cost structure. Innovation, product quality and [added: performance and] comprehensive customer service are not mutually exclusive with controlling costs. Controlling costs is part of a mindset. It is having the discipline to invest in programs that have a good return, maintaining a cost structure as flexible as possible to respond to changes in the marketplace, dealing with suppliers and vendors in a fair but prudent way to ensure a reasonable cost for materials and services and creating a mindset where managers manage the Company’s assets as if they were their own. |
| | [removed: · |] [added: ●] | [removed: Pursue] [added: _Pursue] strategic acquisitions and [removed: investments] [added: investments_] - The Company believes that the industry in which it operates is highly fragmented and continues to provide significant opportunities for strategic acquisitions. Accordingly, we continue to pursue acquisitions of high-growth potential companies with strong management teams that complement our existing business while further expanding our product lines, technological capabilities and geographic presence. Furthermore, we seek to enhance the performance of acquired companies by leveraging Amphenol’s [removed: business strategy] [added: position with customers across our diverse end markets, our leading technologies] and [added: our] access to low-cost manufacturing around the world. In [removed: 2018,] [added: 2019,] the Company invested approximately [removed: $159] [added: $937] million to fund [removed: three] [added: nine] acquisitions, while in [removed: 2017,] [added: 2018,] the Company invested approximately [removed: $266] [added: $159] million to fund [removed: five acquisitions comprising seven businesses.] [added: three acquisitions.] Our acquisitions in [removed: 2018] [added: 2019] and [removed: 2017] [added: 2018] have strengthened our customer base and product offerings in many of our end markets. [removed: In addition, in January 2019, the Company acquired SSI Controls Technologies (“SSI”), the sensor manufacturing division of SSI Technologies, Inc., for approximately $400 million, net of cash acquired (subject to customary post-closing adjustments) plus a performance-related contingent payment. The acquisition of SSI is expected to strengthen our customer base and product offerings in our automotive and industrial end markets.] |
| | [removed: · |] [added: ●] | [removed: Foster] [added: _Foster] collaborative, entrepreneurial [removed: management] [added: management_] - Amphenol’s management system is designed to provide clear income statement and balance sheet responsibility in a flat organizational structure. Each general manager is incented to grow and develop his or her business and to think entrepreneurially in providing innovative, timely and cost-effective solutions to customer needs. In addition, Amphenol’s general managers have access to the resources of the larger organization and are encouraged to work collaboratively with [removed: other general managers] [added: their peers throughout the Company] to meet the needs of the expanding marketplace and to achieve common goals. |
[removed: Markets][added: Markets]
[removed: Automotive] [added: _Automotive_] - Amphenol is a leading supplier of advanced interconnect systems, sensors and antennas for a growing array of automotive applications.
In addition, Amphenol has developed advanced technology solutions for [removed: hybrid-electric] [added: hybrid and electric] vehicles and is working with leading global customers to proliferate these advanced interconnect products into next-generation automobiles.
Sales into the automotive market represented approximately [removed: 18%] [added: 19%] of the Company’s net sales in [removed: 2018] [added: 2019] with sales into the following primary end applications:
| | [removed: · |] [added: ●] | antennas |
| | [removed: · |] [added: ●] | engine management and control |
| | [removed: · |] [added: ●] | exhaust monitoring and cleaning |
| | [removed: · |] [added: ●] | [removed: hybrid-electric] [added: hybrid and electric] vehicles |
| | [removed: · |] [added: ●] | infotainment and communications |
| | [removed: · |] [added: ●] | lighting |
| | [removed: · |] [added: ●] | power management |
| | [removed: · |] [added: ●] | safety and security systems |
| | [removed: · |] [added: ●] | sensing systems |
| | [removed: · |] [added: ●] | telematics systems |
[removed: Broadband Communications] [added: _Broadband Communications_] - Amphenol is a world leader in broadband communication products for cable, satellite and telco video and data networks, with industry-leading engineering, design and manufacturing expertise.
Sales into the broadband communications market represented approximately [removed: 5%] [added: 4%] of the Company’s net sales in [removed: 2018] [added: 2019] with sales into the following primary end applications:
| | [removed: · |] [added: ●] | cable, satellite and telco networks |
| | [removed: · |] [added: ●] | high-speed internet hardware |
| | [removed: · |] [added: ●] | network switching equipment |
| | [removed: · |] [added: ●] | satellite interface devices |
| | [removed: · |] [added: ●] | set top boxes |
[removed: Commercial Aerospace] [added: _Commercial Aerospace_] - Amphenol is a leading provider of high-performance interconnect systems and components to the commercial aerospace market.
[removed: All of Amphenol’s] [added: Our] products are specifically designed to operate in the harsh environments of commercial aerospace while also providing substantial weight reduction, simplified installation and minimal maintenance.
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For a discussion of certain risks related to the Company’s markets, refer to the subsection titled “Risks related to our end markets” included in Part I, Item 1A.
_Risk Factors_ herein.
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| | ● | customer premises equipment |
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| | ● | in-flight internet connectivity |
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| | ● | agriculture equipment |
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Value-add systems generally consist of a
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For a discussion of certain risks related to the Company’s markets, refer to the risk factor titled “Non-U.S. markets form a substantial portion of the Company’s business and as a result, the Company is more exposed to political, economic, military and other risks in countries outside the United States” in Part I, Item 1A herein.
| | · | | cable modems |
and flexible printed circuits, as well as high-power interconnects requiring advanced engineering and system integration.
For a discussion of certain risks related to the Company’s sales, refer to the risk factor titled “The Company is dependent on the communications industry, including information technology and data communications, wireless communications and broadband communications” in Part I, Item 1A herein.
For a discussion of certain risks attendant to the Company’s foreign operations, refer to the risk factor titled “Non-U.S. markets form a substantial portion of the Company’s business and as a result, the Company is more exposed to political, economic, military and other risks in countries outside the United States” in Part I, Item 1A herein.
An excerpt. Shown here: 40 of 130 rewritten, 40 of 101 added and all 8 removed. The counts are complete. For every sentence, read Item 1. Business in the FY2019 filing and the FY2018 filing.
Item 3. Legal Proceedings
2 rewritten, 1 added, 0 removed, 4 unchanged
[removed: The] [added: In August 2018, the] Company [removed: has also] received a subpoena from the U.S. Department of Defense, Office of the Inspector General, requesting documents pertaining to certain products manufactured by the Company’s Military and Aerospace Group that are purchased or used by the U.S. government.
The [removed: inquiry is in the early stages and the] Company is [added: currently] unable to estimate the timing or outcome of the matter.
Cover and table of contents
80 rewritten, 28 added, 10 removed, 19 unchanged
[removed: UNITED STATES][added: UNITED STATES]
[removed: SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]
[removed: Washington,] [added: Washington,] D.C. [removed: 20549][added: 20549]
[removed: FORM 10-K][added: FORM 10-K]
[removed: (Mark One)][added: (Mark One)]
[removed: ☒ANNUAL] [added: | | ☒ | ANNUAL] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934][added: 1934 |]
[removed: For] [added: For] the Fiscal Year [removed: Ended December 31, 2018][added: Ended December 31, 2019]
[removed: ☐TRANSITION] [added: | | ☐ | TRANSITION] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934][added: 1934 |]
[removed: For] [added: For] the transition period from [removed: to][added: to]
[removed: Commission] [added: Commission] file [removed: number: 1-10879][added: number: 1-10879]
[removed: ][added: ]
[removed: AMPHENOL CORPORATION][added: AMPHENOL CORPORATION]
| [removed: Delaware] [added: Delaware] (State of Incorporation) | [added: ] | [removed: 22-2785165] [added: 22-2785165] (I.R.S. Employer Identification No.) |
[removed: 358] [added: 358] Hall [removed: Avenue, Wallingford, Connecticut 06492][added: Avenue, Wallingford, Connecticut 06492]
[removed: 203-265-8900][added: 203\-265-8900]
| Class A Common Stock, $0.001 par value | [added: APH] | New York Stock Exchange |
| [removed: (Title] [added: Title] of each [removed: class)] [added: class] | [added: Trading Symbol(s)] | [removed: (Name] [added: Name] of each exchange on which [removed: registered)] [added: registered] |
Securities registered pursuant to Section 12(g) of the Act: [removed: None][added: None]
Yes [removed: ☒] [added: ⌧] No [removed: ☐][added: ◻]
Yes [removed: ☐] [added: ◻] No [removed: ☒][added: ⌧]
| Large [removed: accelerated filer ☒] [added: Accelerated Filer ⌧] | [added: ] | Accelerated [removed: filer ☐] [added: Filer ◻] |
| Non-accelerated [removed: filer ☐] [added: Filer ◻] | [added: ] | Smaller [removed: reporting company] [added: Reporting Company] ☐ Emerging [removed: growth company] [added: Growth Company] ☐ |
[removed: The] [added: As of June 30, 2019, the] aggregate market value of Amphenol Corporation Class A Common [removed: Stock, $0.001 par value, held by non-affiliates was approximately $19,931 million based on] [added: Stock (based upon] the [removed: reported last sale] [added: closing] price of such stock on the New York Stock [removed: Exchange on June 30, 2018.][added: Exchange) held by non-affiliates was approximately $21,238 million.]
As of January 31, [removed: 2019,] [added: 2020,] the total number of shares outstanding of Registrant’s Class A Common Stock was [removed: 298,087,210.][added: 298,101,155.]
| [removed: INDEX] [added: INDEX] | [added: ] | [added: ] | | [removed: Page] [added: Page] |
| [removed: [PART I](#PARTI_173970)] [added: [PART I](#PARTI_173970)] | [added: ] | [added: ] | [added: ] | [added: ] |
| [added: ] | [removed: [Item 1.](#Item1Business_912593)] [added: [Item 1.](#Item1Business_912593)] | [removed: [Business](#Item1Business_912593)] [added: [Business](#Item1Business_912593)] | [added: ] | 2 |
| [added: ] | [added: ] | [General](#General_260872) | [added: ] | 2 |
| [added: ] | [added: ] | [Our Strategy](#OurStrategy_740860) | [added: ] | 4 |
| [added: ] | [added: ] | [Markets](#Markets_762948) | [added: ] | 5 |
| [added: ] | [added: ] | [Customers and Geographies](#CustomersandGeographies_827254) | [added: ] | 7 |
| [added: ] | [added: ] | [Manufacturing](#Manufacturing_782103) | [added: ] | 8 |
| [added: ] | [added: ] | [Research and Development](#ResearchandDevelopment_193677) | [added: ] | 8 |
| [added: ] | [added: ] | [Intellectual Property](#IntellectualProperty_823167) | [added: ] | 8 |
| [added: ] | [added: ] | [Raw Materials](#RawMaterials_584402) | [added: ] | 9 |
| [added: ] | [added: ] | [Competition](#Competition_836450) | [added: ] | 9 |
| [added: ] | [added: ] | [Backlog](#Backlog_272017) | [added: ] | 9 |
| [added: ] | [added: ] | [Employees](#Employees_978101) | [added: ] | 9 |
| [added: ] | [added: ] | [Environmental Matters](#EnvironmentalMatters_915879) | [added: ] | 10 |
| [added: ] | [added: ] | [Available Information](#AvailableInformation_571865) | [added: ] | 10 |
or
| | | |
(Address of principal executive offices)
(Registrant’s telephone number, including area code)
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Yes ⌧ No ◻
Yes ⌧ No ◻
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Yes ☐ No ⌧
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**
While the Company completed its accounting of the Tax Act in the fourth quarter of 2018 based on the regulatory guidance issued at that time, the Department of Treasury interpretive guidance initiatives are ongoing.
**
10-K 1 aph-20181231x10k.htm 10-K
or
| | | |
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
| | | | | |
Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about expected earnings, revenues, growth, liquidity or other financial matters.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made.
More specifically, on December 22, 2017, the Tax Act was enacted and it significantly revised U.S. corporate income tax law by, among other things, reducing the U.S. corporate income tax rate to 21% and implementing a modified territorial tax system that included a one-time transition tax on deemed repatriated earnings of foreign subsidiaries.
The provisional income tax charge we recorded in the fourth quarter of 2017 incorporated assumptions made based on information then available.
The Company obtained, prepared and analyzed all of the information it believes necessary in order to complete its accounting of the Tax Act in the fourth quarter of 2018.
An excerpt. Shown here: 40 of 80 rewritten, all 28 added and all 10 removed. The counts are complete. For every sentence, read Cover and table of contents in the FY2019 filing and the FY2018 filing.
Item 2. Properties
1 rewritten, 0 added, 0 removed, 6 unchanged
At December 31, [removed: 2018,] [added: 2019,] the Company operated a total of approximately [removed: 430] [added: 475] plants, warehouses and offices of which (a) the locations in the U.S. had approximately [removed: 3.5] [added: 4.2] million square feet, of which approximately [removed: 1.7] [added: 1.9] million square feet were leased; (b) the locations outside the U.S. had approximately [removed: 16.7] [added: 17.5] million square feet, of which approximately [removed: 11.1] [added: 13.3] million square feet were leased; and (c) the square footage by segment was approximately [removed: 19.0] [added: 20.4] million square feet and approximately [removed: 1.2] [added: 1.3] million square feet for the Interconnect Products and Assemblies segment and the Cable Products and Solutions segment, respectively.
Item 4. Mine Safety Disclosures
1 rewritten, 0 added, 0 removed, 1 unchanged
[removed: PART II][added: PART II]
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
36 rewritten, 20 added, 18 removed, 13 unchanged
[removed: Market Information][added: Market Information]
As of January 31, [removed: 2019,] [added: 2020,] there were 35 holders of record of the Company’s Common Stock.
[removed: Dividends][added: Dividends]
The following table sets forth the dividends declared per common share for each quarter of [removed: 2018] [added: 2019] and [removed: 2017:][added: 2018:]
| First Quarter | [added: ] | $ | [removed: 0.19] [added: 0.23] | [added: ] | $ | [removed: 0.16] [added: 0.19] |
| Second Quarter | [added: ] | | 0.23 | [added: ] | | [removed: 0.16] [added: 0.23] |
| Third Quarter | [added: ] | | [removed: 0.23] [added: 0.25] | [added: ] | | [removed: 0.19] [added: 0.23] |
| Fourth Quarter | [added: ] | | [removed: 0.23] [added: 0.25] | [added: ] | | [removed: 0.19] [added: 0.23] |
| Total | [added: ] | $ | [removed: 0.88] [added: 0.96] | [added: ] | $ | [removed: 0.70] [added: 0.88] |
Dividends declared and paid for the years ended December 31, [removed: 2018] [added: 2019] and [removed: 2017 (in millions)] [added: 2018 _(in millions)_] were as follows:
| Dividends declared | | | | [added: ] | $ | [removed: 264.3] [added: 285.3] | [added: ] | $ | [removed: 213.7] [added: 264.3] |
| Dividends paid (including those declared in the prior year) | | | | [added: ] | | [removed: 253.7] [added: 279.5] | [added: ] | | [removed: 205.0] [added: 253.7] |
[removed: Stock] [added: Stock] Performance [removed: Graph][added: Graph]
The following graph compares the cumulative total shareholder return of Amphenol over a period of five years ending December 31, [removed: 2018] [added: 2019] with the performance of the Standard & Poor’s 500 (“S&P 500”) Stock Index and the Dow Jones U.S. Electrical Components & Equipment Index.
This graph assumes that $100 was invested in the Common Stock of Amphenol and each index on December 31, [removed: 2013,] [added: 2014,] reflects reinvested dividends and is weighted on a market capitalization basis at the time of each reported data point.
[removed: ][added: ]
[removed: Equity] [added: Equity] Compensation Plan [removed: Information][added: Information]
The following table summarizes the Company’s equity compensation plan information as of December 31, [removed: 2018:][added: 2019:]
| [added: ] | [added: ] | [removed: Equity] [added: Equity] Compensation Plan [removed: Information] [added: Information] | | | | | | [added: ] |
| [added: ] | | [removed: Number] [added: Number] of securities [removed: to] [added: to] | | [removed: Weighted average] [added: Weighted average] | | | [removed: Number of] [added: Number of] | [added: ] |
| [added: ] | | [removed: be] [added: be] issued upon [removed: exercise] [added: exercise] | [added: ] | [removed: exercise] [added: exercise] price [removed: of] [added: of] | | [added: ] | [removed: securities] [added: securities] | [added: ] |
| [added: ] | | [removed: of] [added: of] outstanding [removed: options,] [added: options,] | [added: ] | [removed: outstanding options,] [added: outstanding options,] | | [added: ] | [removed: remaining available] [added: remaining available] | [added: ] |
| [removed: Plan category] [added: Plan category] | | [removed: warrants] [added: warrants] and [removed: rights] [added: rights] | [added: ] | [removed: warrants] [added: warrants] and [removed: rights] [added: rights] | | [added: ] | [removed: for] [added: for] future [removed: issuance] [added: issuance] | [added: ] |
| Equity compensation plans [added: not] approved by security holders | | [removed: 35,565,541] [added: —] | [added: ] | [removed: $] | [removed: 59.78] [added: —] | | [removed: 29,664,820] [added: —] | [added: ] |
| Equity compensation plans [removed: not] approved by security holders | | [removed: —] [added: 35,687,722] | [added: ] | [added: $] | [removed: —] [added: 67.71] | | [removed: —] [added: 23,676,326] | [added: ] |
[removed: Repurchase] [added: Repurchase] of Equity [removed: Securities][added: Securities]
[removed: On] [added: In] April [removed: 24,] 2018, the Company’s Board of Directors authorized a [removed: new] stock repurchase program under which the Company may purchase up to $2.0 billion of the Company’s Common Stock during the three-year period ending April 24, 2021 [added: (the “2018 Stock Repurchase Program”)] in accordance with the requirements of Rule 10b-18 of the [added: Securities] Exchange Act [added: of 1934, as amended] (the [removed: “2018 Stock Repurchase Program”).][added: “Exchange Act”).]
During the year ended December 31, [removed: 2018,] [added: 2019,] the Company repurchased [removed: 6.4] [added: 6.5] million shares of its Common Stock for [removed: $553.2] [added: $601.7] million under the 2018 Stock Repurchase Program.
From January 1, [removed: 2019] [added: 2020] through January 31, [removed: 2019,] [added: 2020,] the Company repurchased [removed: approximately 0.6] [added: 0.3] million additional shares of Common Stock for [removed: $50.6] [added: $29.0] million, leaving [removed: approximately $1,396.2] [added: $816.1] million available to purchase under the 2018 Stock Repurchase Program.
The table below reflects the Company’s stock repurchases for the year ended December 31, [removed: 2018:][added: 2019:]
| [added: ] | | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [removed: Total] [added: Total] Number [removed: of] [added: of] | [added: ] | [removed: Maximum Dollar] [added: Maximum Dollar] | | [added: ] |
| [removed: (dollars] [added: (dollars] in millions, except price per [removed: share)] [added: share)] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [removed: Shares] [added: Shares] Purchased [removed: as] [added: as] | [added: ] | [removed: Value] [added: Value] of [removed: Shares] [added: Shares] | | [added: ] |
| [added: ] | [added: ] | [removed: Total Number] [added: Total Number] | [added: ] | [removed: Average] [added: Average] | | [added: ] | [removed: Part] [added: Part] of [removed: Publicly] [added: Publicly] | [added: ] | [removed: that] [added: that] May Yet [removed: be] [added: be] | | [added: ] |
| [added: ] | [added: ] | [removed: of Shares] [added: of Shares] | [added: ] | [removed: Price Paid] [added: Price Paid] | | [added: ] | [removed: Announced] [added: Announced] Plans [removed: or] [added: or] | [added: ] | [removed: Purchased] [added: Purchased] Under [removed: the] [added: the] | | [added: ] |
| [removed: Period] [added: Period] | [added: ] | [removed: Purchased] [added: Purchased] | | [removed: per Share] [added: per Share] | | | [removed: Programs] [added: Programs] | | [removed: Plans] [added: Plans] or [removed: Programs] [added: Programs] | | [added: ] |
| Fourth Quarter - [removed: 2018:] [added: 2019:] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] |
| | | | | | | |
| | | 2019 | | | 2018 | |
| | | | | | | | | | |
| | | | | | 2019 | | | 2018 | |
| | | | | | | | | |
| Total | | 35,687,722 | | $ | 67.71 | | 23,676,326 | |
Of the total repurchases in 2019, 5.5 million shares, or $514.1 million, have been retired by the Company; the remaining 1.0 million shares, or $87.6 million, were retained in Treasury stock at time of repurchase.
| | | | | | | | | | | | |
| First Quarter - 2019 | | 1,773,423 | | $ | 90.24 | | 1,773,423 | | $ | 1,286.7 | |
| Second Quarter - 2019 | | 2,642,694 | | | 94.09 | | 2,642,694 | | | 1,038.1 | |
| Third Quarter - 2019 | | 1,695,800 | | | 88.43 | | 1,695,800 | | | 888.1 | |
| | | | | | | | | | | | |
| October 1 to October 31, 2019 | | — | | | — | | — | | | 888.1 | |
| November 1 to November 30, 2019 | | 146,100 | | | 102.57 | | 146,100 | | | 873.1 | |
| December 1 to December 31, 2019 | | 272,269 | | | 103.04 | | 272,269 | | | 845.1 | |
| | | 418,369 | | | 102.88 | | 418,369 | | | 845.1 | |
| | | | | | | | | | | | |
| Total - 2019 | | 6,530,286 | | $ | 92.14 | | 6,530,286 | | $ | 845.1 | |
| | | | | | | |
| | | 2018 | | | 2017 | |
| | | | | | | | | | |
| | | | | | 2018 | | | 2017 | |
| | | | | | | | | |
| Total | | 35,565,541 | | $ | 59.78 | | 29,664,820 | |
Approximately 5.7 million shares, or $498.2 million, have been retired by the Company; the remaining 0.7 million shares, or $55.0 million, have been retained in Treasury stock.
On January 24, 2017, the Company’s Board of Directors authorized a stock repurchase program under which the Company could purchase up to $1.0 billion of the Company’s Common Stock during the two-year period ending January 24, 2019 in accordance with the requirements of Rule 10b-18 of the Exchange Act (the “2017 Stock Repurchase Program”).
During the three months ended March 31, 2018, the Company repurchased 4.2 million shares of its Common Stock for $382.0 million under the 2017 Stock Repurchase Program, bringing total repurchases under this program to approximately 12.6 million shares or $1.0 billion, thus completing the 2017 Stock Repurchase Program.
| | | | | | | | | | | | |
| First Quarter - 2018 | | 4,244,114 | | $ | 90.00 | | 4,244,114 | | $ | — | |
| Second Quarter - 2018 | | 3,073,645 | | | 85.70 | | 3,073,645 | | | 1,736.6 | |
| Third Quarter - 2018 | | 402,205 | | | 86.53 | | 402,205 | | | 1,701.8 | |
| October 1 to October 31, 2018 | | 807,800 | | | 85.80 | | 807,800 | | | 1,632.5 | |
| November 1 to November 30, 2018 | | 1,464,576 | | | 89.23 | | 1,464,576 | | | 1,501.8 | |
| December 1 to December 31, 2018 | | 654,677 | | | 84.00 | | 654,677 | | | 1,446.8 | |
| | | 2,927,053 | | | 87.12 | | 2,927,053 | | | 1,446.8 | |
| Total - 2018 | | 10,647,017 | | $ | 87.84 | | 10,647,017 | | $ | 1,446.8 | |
Item 6. Selected Financial Data
18 rewritten, 9 added, 3 removed, 4 unchanged
| [removed: (dollars] [added: (dollars] and [removed: shares] [added: shares] | | [added: ] | [added: ] | | [added: ] | [added: ] | | [added: ] | [added: ] | | [added: ] | [added: ] | | [added: ] | [added: ] | | [added: ] |
| [removed: in] [added: in] millions, except per share [removed: data)] [added: data)] | [added: ] | [removed: 2018] [added: 2019] | | [added: ] | [removed: 2017] [added: 2018] | | [added: ] | [removed: 2016] [added: 2017] | | [added: ] | [removed: 2015] [added: 2016] | | [added: ] | [removed: 2014] [added: 2015] | | | [added: ] |
| [removed: Operations] [added: Operations] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] |
| Net sales | [added: ] | $ | [removed: 8,202.0] [added: 8,225.4] | [added: ] | $ | [removed: 7,011.3] [added: 8,202.0] | [added: ] | $ | [removed: 6,286.4] [added: 7,011.3] | [added: ] | $ | [removed: 5,568.7] [added: 6,286.4] | [added: ] | $ | [removed: 5,345.5] [added: 5,568.7] | [added: ] | [added: ] |
| Net income attributable to Amphenol Corporation | [added: ] | | [removed: 1,205.0] [added: 1,155.0] | (1) | | [removed: 650.5] [added: 1,205.0] | (2) | | [removed: 822.9] [added: 650.5] | (3) | | [removed: 763.5] [added: 822.9] | (4) | | [removed: 709.1] [added: 763.5] | (5) | [added: ] |
| Net income per common share—Diluted | [added: ] | | [removed: 3.85] [added: 3.75] | (1) | | [removed: 2.06] [added: 3.85] | (2) | | [removed: 2.61] [added: 2.06] | (3) | | [removed: 2.41] [added: 2.61] | (4) | | [removed: 2.21] [added: 2.41] | (5) | [added: ] |
| [removed: Financial Condition] [added: Financial Condition] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] |
| Cash, cash equivalents and short-term investments | [added: ] | $ | [removed: 1,291.7] [added: 908.6] | [added: ] | $ | [removed: 1,753.7] [added: 1,291.7] | [added: ] | $ | [removed: 1,173.2] [added: 1,753.7] | [added: ] | $ | [removed: 1,760.4] [added: 1,173.2] | [added: ] | $ | [removed: 1,329.6] [added: 1,760.4] | [added: ] | [added: ] |
| Working capital | [added: ] | | [added: 2,078.5 | | |] 2,120.3 | [added: ] | | 3,076.6 | [added: ] | | 1,956.0 | [added: ] | | 2,841.6 | [removed: | | 2,406.6 |] [added: ] | [added: ] |
| Total assets | [added: ] | | [added: 10,815.5 | | |] 10,044.9 | [added: ] | | 10,003.9 | [added: ] | | 8,498.7 | [added: ] | | 7,458.4 | [removed: | | 6,985.9 |] [added: ] | [added: ] |
| Long-term debt, including current portion | [added: ] | | [added: 3,606.7 | | |] 3,570.7 | [added: ] | | 3,542.6 | [added: ] | | 3,010.7 | [added: ] | | 2,813.5 | [removed: | | 2,656.2 |] [added: ] | [added: ] |
| Shareholders’ equity attributable to Amphenol Corporation | [added: ] | | [added: 4,530.3 | | |] 4,017.0 | [added: ] | | 3,989.8 | [added: ] | | 3,674.9 | [added: ] | | 3,238.5 | [removed: | | 2,907.4 |] [added: ] | [added: ] |
| Weighted average shares outstanding—Diluted | [added: ] | | [added: 307.9 | | |] 312.6 | [added: ] | | 316.5 | [added: ] | | 315.2 | [added: ] | | 316.5 | [removed: | | 320.4 |] [added: ] | [added: ] |
| Cash dividends declared per share | [added: ] | $ | [removed: 0.88] [added: 0.96] | [added: ] | $ | [removed: 0.70] [added: 0.88] | [added: ] | $ | [removed: 0.58] [added: 0.70] | [added: ] | $ | [removed: 0.53] [added: 0.58] | [added: ] | $ | [removed: 0.45] [added: 0.53] | [added: ] | [added: ] |
| [removed: | (1) |] [added: (2)] | Includes (a) an income tax benefit of $14.5 recorded in 2018 related to the completion of the accounting associated with the provisional income tax charge recorded in 2017 related to the enactment of the Tax Cuts and Jobs Act and (b) excess tax benefits related to stock-based compensation of $19.8 resulting from stock option exercises, partially offset by (c) acquisition-related expenses of $8.5 ($7.2 after-tax) primarily relating to external transaction costs. These items had the aggregate effect of increasing Net income attributable to Amphenol Corporation and Net income per common share-Diluted by $27.1 and $0.08 per share, respectively. Excluding the effect of these items, Adjusted Net Income attributable to Amphenol Corporation and Adjusted Diluted [removed: EPS, both non-GAAP financial measures defined in Part II, Item 7 herein,] [added: EPS] were $1,177.9 and $3.77 per share, respectively, for the year ended December 31, 2018. |
| [removed: | (2) |] [added: (3)] | Includes (a) an income tax charge of $398.5 related to the enactment of the Tax Cuts and Jobs Act, which represented our estimate of taxes arising from the implementation of a modified territorial tax regime and the deemed and intended repatriation of prior unremitted earnings of foreign subsidiaries, partially offset by the tax benefit associated with the remeasurement of the Company’s U.S. net deferred tax liabilities due to the U.S. federal corporate tax rate reduction and (b) acquisition-related expenses of $4.0 ($3.7 after-tax) primarily relating to external transaction costs associated with 2017 acquisitions, partially offset by (c) excess tax benefits related to stock-based compensation of $66.6 resulting from stock option exercises. These items had the aggregate effect of decreasing Net income attributable to Amphenol Corporation and Net income per common share-Diluted by $335.6 and $1.06 per share, respectively. Excluding the effect of these items, Adjusted Net Income attributable to Amphenol Corporation and Adjusted Diluted EPS were $986.1 and $3.12 per share, respectively, for the year ended December 31, 2017. |
| [removed: | (3) |] [added: (4)] | Includes acquisition-related expenses of $36.6 ($33.1 after-tax) primarily relating to the FCI Asia Pte. Ltd. (“FCI”) and other 2016 acquisitions, including external transaction costs, amortization related to the value associated with acquired backlog and restructuring charges. These items had the aggregate effect of decreasing Net income attributable to Amphenol Corporation and Net income per common share-Diluted by $33.1 and $0.11 per share, respectively. Excluding the effect of these items, Adjusted Net Income attributable to Amphenol Corporation and Adjusted Diluted EPS were $856.0 and $2.72 per share, respectively, for the year ended December 31, 2016. |
| [removed: | (4) |] [added: (5)] | Includes acquisition-related expenses of $5.7 ($5.7 after-tax) relating to acquisitions closed and announced in 2015. These acquisition-related expenses had the effect of decreasing Net income attributable to Amphenol Corporation and Net income per common share-Diluted by $5.7 and $0.02 per share, respectively. Excluding the effect of this item, Adjusted Net Income attributable to Amphenol Corporation and Adjusted Diluted EPS were $769.2 and $2.43 per share, respectively, for the year ended December 31, 2015. |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| (1) | Includes (a) excess tax benefits related to stock-based compensation of $38.1 resulting from stock option exercises, partially offset by (b) acquisition-related expenses of $25.4 ($21.0 after-tax) comprised of the amortization related to the value associated with acquired backlog from two acquisitions, along with external transaction costs and (c) refinancing-related costs of $14.3 ($12.5 after-tax) associated with the early extinguishment of debt. These items had the aggregate effect of increasing Net income attributable to Amphenol Corporation and Net income per common share-Diluted by $4.6 and $0.01 per share, respectively. Excluding the effect of these items, Adjusted Net Income attributable to Amphenol Corporation and Adjusted Diluted EPS, both non-GAAP financial measures defined in Part II, Item 7 herein, were $1,150.4 and $3.74 per share, respectively, for the year ended December 31, 2019. |
| --- | --- |
| --- | --- |
| --- | --- |
| --- | --- |
| --- | --- |
| | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- |
| | (5) | | Includes acquisition-related expenses of (a) $4.3 ($4.1 after-tax) relating to 2014 acquisitions and (b) $9.8 ($6.2 after-tax) relating to amortization of the acquired backlogs of completed acquisitions. These items had the aggregate effect of decreasing Net income attributable to Amphenol Corporation and Net income per common share-Diluted by $10.3 and $0.04 per share, respectively. Excluding the effect of these items, Adjusted Net Income attributable to Amphenol Corporation and Adjusted Diluted EPS were $719.4 and $2.25 per share, respectively, for the year ended December 31, 2014. |
Item 8. Financial Statements and Supplementary Data
716 rewritten, 438 added, 159 removed, 297 unchanged
[removed: REPORT] [added: REPORT] OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING [removed: FIRM][added: FIRM]
To the [added: shareholders and the] Board of Directors [removed: and Shareholders] of [added: Amphenol Corporation]
[removed: Amphenol Corporation][added: AMPHENOL CORPORATION]
[removed: Opinions] [added: Opinions] on the Financial Statements and Internal Control over Financial [removed: Reporting][added: Reporting]
We have audited the accompanying consolidated balance sheets of Amphenol Corporation and subsidiaries (the “Company”) as of December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] the related consolidated statements of income, comprehensive income, changes in equity, and cash [removed: flow] [added: flow,] for each of the three years in the period ended December 31, [removed: 2018,] [added: 2019,] and the related notes and the [removed: financial statement] schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”).
We also have audited the Company’s internal control over financial reporting as of December 31, [removed: 2018,] [added: 2019,] based on criteria established in [removed: Internal] [added: _Internal] Control — Integrated Framework [removed: (2013)] [added: (2013)_] issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2018,] [added: 2019,] in conformity with accounting principles generally accepted in the United States of [removed: America.][added: America (generally accepted accounting principles).]
Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2018,] [added: 2019,] based on criteria established in [removed: Internal] [added: _Internal] Control — Integrated Framework [removed: (2013)] [added: (2013)_] issued by COSO.
[removed: Basis] [added: Basis] for [removed: Opinions][added: Opinions]
The Company’s management is responsible for these financial [removed: statements and financial statement schedule,] [added: statements,] for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management Report on Internal Control.
Our responsibility is to express an opinion on these financial statements and [removed: financial statement schedule and] an opinion on the Company’s internal control over financial reporting based on our audits.
[removed: Definition] [added: Definition] and Limitations of Internal Control over Financial [removed: Reporting][added: Reporting]
A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely [added: detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.]
[removed: Consolidated] [added: Consolidated] Statements of [removed: Income][added: Income]
[removed: (dollars] [added: _(dollars] and shares in millions, except per share [removed: data)][added: data)_]
| [added: ] | [added: ] | [removed: Year] [added: Year] Ended December [removed: 31,] [added: 31,] | | | | | | | | [added: ] |
| [added: ] | | [removed: 2018] [added: 2019] | | | [removed: 2017] [added: 2018] | | | [removed: 2016] [added: 2017] | | |
| Net sales | [added: ] | $ | [removed: 8,202.0] [added: 8,225.4] | [added: ] | $ | [removed: 7,011.3] [added: 8,202.0] | [added: ] | $ | [removed: 6,286.4] [added: 7,011.3] | [added: ] |
| Cost of sales | [added: ] | | [removed: 5,547.1] [added: 5,609.4] | [added: ] | | [removed: 4,701.4] [added: 5,547.1] | [added: ] | | [removed: 4,246.4] [added: 4,701.4] | [added: ] |
| Gross profit | [added: ] | | [removed: 2,654.9] [added: 2,616.0] | [added: ] | | [removed: 2,309.9] [added: 2,654.9] | [added: ] | | [removed: 2,040.0] [added: 2,309.9] | [added: ] |
| Acquisition-related expenses | [added: ] | | [removed: 8.5] [added: 25.4] | [added: ] | | [removed: 4.0] [added: 8.5] | [added: ] | | [removed: 36.6] [added: 4.0] | [added: ] |
| Selling, general and administrative expenses | [added: ] | | [removed: 959.5] [added: 971.4] | [added: ] | | [removed: 878.3] [added: 959.5] | [added: ] | | [removed: 798.2] [added: 878.3] | [added: ] |
| Operating income | [added: ] | | [removed: 1,686.9] [added: 1,619.2] | [added: ] | | [removed: 1,427.6] [added: 1,686.9] | [added: ] | | [removed: 1,205.2] [added: 1,427.6] | [added: ] |
| Interest expense | [added: ] | | [removed: (101.7)] [added: (117.6)] | [added: ] | | [removed: (92.3)] [added: (101.7)] | [added: ] | | [removed: (72.6)] [added: (92.3)] | [added: ] |
| Other income, net | [added: ] | | [removed: 3.2] [added: 8.6] | [added: ] | | [removed: 17.1] [added: 3.2] | [added: ] | | [removed: 8.5] [added: 17.1] | [added: ] |
| Income before income taxes | [added: ] | | [removed: 1,588.4] [added: 1,495.9] | [added: ] | | [removed: 1,352.4] [added: 1,588.4] | [added: ] | | [removed: 1,141.1] [added: 1,352.4] | [added: ] |
| Provision for income taxes | [added: ] | | [removed: (371.5)] [added: (331.9)] | [added: ] | | [removed: (691.7)] [added: (371.5)] | [added: ] | | [removed: (308.5)] [added: (691.7)] | [added: ] |
| Net income | [added: ] | | [removed: 1,216.9] [added: 1,164.0] | [added: ] | | [removed: 660.7] [added: 1,216.9] | [added: ] | | [removed: 832.6] [added: 660.7] | [added: ] |
| Less: Net income attributable to noncontrolling interests | [added: ] | | [removed: (11.9)] [added: (9.0)] | [added: ] | | [removed: (10.2)] [added: (11.9)] | [added: ] | | [removed: (9.7)] [added: (10.2)] | [added: ] |
| Net income attributable to Amphenol Corporation | [added: ] | $ | [removed: 1,205.0] [added: 1,155.0] | [added: ] | $ | [removed: 650.5] [added: 1,205.0] | [added: ] | $ | [removed: 822.9] [added: 650.5] | [added: ] |
| Net income per common share — Basic | [added: ] | $ | [removed: 4.00] [added: 3.88] | [added: ] | $ | [removed: 2.13] [added: 4.00] | [added: ] | $ | [removed: 2.67] [added: 2.13] | [added: ] |
| Weighted average common shares outstanding — Basic | [added: ] | | [removed: 301.2] [added: 297.5] | [added: ] | | [removed: 305.7] [added: 301.2] | [added: ] | | [removed: 308.3] [added: 305.7] | [added: ] |
| Net income per common share — Diluted | [added: ] | $ | [removed: 3.85] [added: 3.75] | [added: ] | $ | [removed: 2.06] [added: 3.85] | [added: ] | $ | [removed: 2.61] [added: 2.06] | [added: ] |
| Weighted average common shares outstanding — Diluted | [added: ] | | [removed: 312.6] [added: 307.9] | [added: ] | | [removed: 316.5] [added: 312.6] | [added: ] | | [removed: 315.2] [added: 316.5] | [added: ] |
| Dividends declared per common share | [added: ] | $ | [removed: 0.88] [added: 0.96] | [added: ] | $ | [removed: 0.70] [added: 0.88] | [added: ] | $ | [removed: 0.58] [added: 0.70] | [added: ] |
[removed: See] [added: _See] accompanying notes to consolidated financial [removed: statements.][added: statements._]
[removed: Consolidated] [added: Consolidated] Statements of Comprehensive [removed: Income][added: Income]
[removed: (dollars] [added: _(dollars] in [removed: millions)][added: millions)_]
| Net income | [added: ] | $ | [removed: 1,216.9] [added: 1,164.0] | [added: ] | $ | [removed: 660.7] [added: 1,216.9] | [added: ] | $ | [removed: 832.6] [added: 660.7] | [added: ] |
| Total other comprehensive (loss) income, net of tax: | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] |
Change in Accounting Principle
As discussed in Note 1 to the financial statements, the Company has changed its method of accounting for leases in 2019 due to the adoption of Accounting Standards Update No. 2016-02, _Leases (Topic 842)_, as amended, using the modified retrospective approach.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Income Taxes — Unrecognized Tax Benefits — Refer to Notes 1 and 6 to the financial statements
Critical Audit Matter Description
Management judgment is required to identify and evaluate each uncertain tax position to determine whether the more likely than not recognition thresholds have been met.
Further, the evaluation of each uncertain tax position requires management to apply specialized skill and knowledge related to the identified position.
The Company has unrecognized tax benefits of $201.3 million, including penalties and interest, as of December 31, 2019.
We identified the liabilities for uncertain tax positions as a critical audit matter because of the complexity created by the multiple jurisdictions in which the Company files its tax returns, each of which has differing and complex tax laws and regulations.
This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our income tax specialists, when performing audit procedures to evaluate management’s identification of uncertain tax positions, the estimates of the amounts to be realized and whether it is more likely than not that the tax position will be sustained.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to uncertain tax positions included the following, among others:
| | ● | We tested the effectiveness of controls over the uncertain tax positions for income taxes, including management’s controls over the identification and recording of uncertain tax positions as well as the determination of whether it is more likely than not that the tax position will be sustained. |
| --- | --- | --- |
| | ● | With the assistance of our income tax specialists, we evaluated management’s significant judgements regarding uncertain tax positions including: |
| --- | --- | --- |
| | o | Assessing the reasonableness of the methods and assumptions used by management to identify uncertain tax positions including but not limited to: |
| --- | --- | --- |
| | ◾ | Evaluating former, ongoing and anticipated tax audits by tax authorities |
| --- | --- | --- |
| | ◾ | Evaluating transactions for which third-party tax advice or tax opinions were received |
| --- | --- | --- |
| | ◾ | Determining if there’s any additional information available to us that was not identified and considered in management’s assessment. |
| --- | --- | --- |
| | o | Assessing the technical merits of a sample of positions identified and the reasonableness of the methodology used to determine the uncertain tax liability. |
| --- | --- | --- |
| | o | Evaluating management’s conclusion with respect to whether uncertain tax positions accounted for in prior periods have been effectively settled and/or whether the statute of limitations has expired and, if so, whether the resolution of the tax position has been appropriately accounted for in the financial statements. |
| --- | --- | --- |
| | o | Evaluating tax positions that have not yet settled or are within statute to determine whether any new information regarding the sustainability of these tax positions or measurement of tax benefit is present such that a previously unrecognized uncertain tax position is recognized. |
| --- | --- | --- |
February 12, 2020
**
Wallingford, Connecticut
detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
February 13, 2019
| | | | | | | | | | | |
| | | | | | | | |
| | | | 1,233.8 | | | 1,106.9 | |
| | | | 2,190.6 | | | 2,016.9 | |
| Intangibles, net and other long-term assets | | | 494.3 | | | 488.5 | |
| | | $ | 10,044.9 | | $ | 10,003.9 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance January 1, 2016 | | 308 | | $ | 0.3 | | — | | $ | — | | $ | 783.3 | | $ | 2,804.4 | | $ | (349.5) | | $ | 39.9 | | $ | 3,278.4 | |
| Net income | | | | | | | | | | | | | | | | 822.9 | | | | | | 9.7 | | | 832.6 | |
| Other comprehensive loss | | | | | | | | | | | | | | | | | | | (119.5) | | | (2.1) | | | (121.6) | |
| Stock options exercised, including tax benefit | | 6 | | | | | | | | | | | 190.0 | | | | | | | | | | | | 190.0 | |
| Excess tax benefits from stock-based compensation payment arrangements | | | — | | | — | | | 44.4 | |
| --- | --- | --- | --- |
significant changes in projected operating performance, anticipated future cash flows and significant negative economic trends.
In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”, and collectively with its related subsequent amendments, “Topic 606”).
The Company adopted Topic 606 as of January 1, 2018 using the modified retrospective transition method applied to those contracts which were not completed as of January 1, 2018.
The following is a summary of the Company’s revenue recognition and related accounting policies and disclosures resulting from the adoption of Topic 606.
administrative expenses in the accompanying Consolidated Statements of Income.
The Company adopted Topic 606 using the modified retrospective method and as such, comparative results for the years ended December 31, 2017 and 2016 were not retrospectively adjusted.
The amount of taxes that would
Due to the timing of the Tax Act’s enactment and the complexity of its provisions, the Company had not completed its accounting for the impact of the Tax Act in 2017.
The Company analyzed guidance and technical interpretations issued in 2018 related to the provisions of the Tax Act, and refined, analyzed and updated the underlying data, computations and assumptions used to prepare this provisional income tax charge.
As discussed above, the Company adopted Topic 606 as of January 1, 2018 using the modified retrospective transition method applied to those contracts which were not completed as of January 1, 2018.
In March 2017, the FASB issued ASU 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (“ASU 2017-07”), requiring employers to provide more details about the components of costs related to retirement benefits.
Specifically, ASU 2017-07 requires employers to report the service costs for providing pensions to employees in the same line item as other
employee compensation costs, while requiring other pension-related costs, such as interest costs, amortization of pension-related costs from prior periods, and the gains or losses on plan assets, to be reported separately and outside of the subtotal of operating income.
In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”), which provides guidance to determine which changes to the terms or conditions of share-based payment awards require an entity to apply modification accounting in Topic 718.
ASU 2017-09 was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, and required prospective application to changes in terms or conditions of awards occurring on or after the adoption date.
The Company adopted ASU 2017-09 in the first quarter of 2018, which did not have any impact on our consolidated financial statements.
In February 2018, the FASB issued ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“ASU 2018-02”), which amends the standard on comprehensive income by providing an option for an entity to reclassify stranded tax effects, resulting from the enactment of the Tax Cuts and Jobs Act (“Tax Act”) on December 22, 2017, from accumulated other comprehensive income directly to retained earnings.
The stranded tax effects result from the remeasurement of net deferred tax positions that were originally recorded in comprehensive income but whose remeasurement was reflected in the income statement in 2017.
ASU 2018-02 only applies to the effects of the Tax Act and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted.
ASU 2018-02 may be applied either at the beginning of the period of adoption or on a retrospective basis to any period in which the impacts of the Tax Act are recognized.
The Company early adopted ASU 2018-02 in the fourth quarter of 2018, as of October 1, 2018, which resulted in the reclassification of the stranded tax effects of the Tax Act of approximately $23.5 from Accumulated other comprehensive loss to Retained earnings on the Consolidated Balance Sheets, related to the change in the statutory tax rate.
The comparative prior periods were not restated and are reported under the accounting standards in effect for those periods.
In March 2018, the FASB issued ASU 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (“ASU 2018-05”), which addresses the application of U.S. GAAP when preparing the initial accounting for the income tax effects of a change in tax laws or rates.
SEC Staff Accounting Bulletin No. 118 (“SAB 118”) was issued in December 2017 to provide immediate accounting guidance resulting from the enactment of the Tax Act.
An excerpt. Shown here: 40 of 716 rewritten, 40 of 438 added and 40 of 159 removed. The counts are complete. For every sentence, read Item 8. Financial Statements and Supplementary Data in the FY2019 filing and the FY2018 filing.
Item 9A. Controls and Procedures
11 rewritten, 0 added, 0 removed, 5 unchanged
The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures, pursuant to Rules 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of December 31, [removed: 2018.][added: 2019.]
Based on their evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of December 31, [removed: 2018.][added: 2019.]
There has been no change in our internal control over financial reporting during the Company’s most recent fiscal quarter ended December 31, [removed: 2018] [added: 2019] that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Beginning January 1, [removed: 2018,] [added: 2019,] the Company adopted ASU [removed: 2014-09, Revenue from Contracts with Customers] [added: 2016-02, _Leases] (Topic [removed: 606)] [added: 842)_] and [removed: all of] its related subsequent [removed: amendments.][added: amendments (collectively, “Topic 842”).]
Although the [removed: new revenue recognition standard] [added: adoption of Topic 842] did not have a material impact on [removed: the] [added: our] Consolidated [removed: Financial Statements,] [added: Statements of Income and Consolidated Statements of Cash Flow for] the [added: year ended December 31, 2019, the] Company implemented changes to our processes related to [removed: revenue recognition] [added: our lease commitments] and the related control activities, including the implementation of [added: a new lease management system and] certain controls over financial reporting necessary for the required disclosures, as well as the implementation of new policies and any necessary changes to existing related policies.
Refer to [removed: Notes] [added: Note] 1 and [removed: 11] [added: Note 10] of the accompanying Consolidated Financial Statements for further discussion on the adoption of Topic [removed: 606.][added: 842.]
[removed: Management] [added: Management] Report on Internal [removed: Control][added: Control]
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the Company conducted an evaluation of the effectiveness of the internal control over financial reporting based on criteria established in the [removed: Internal] [added: _Internal] Control – Integrated Framework [removed: (2013)] [added: (2013)_] issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Based on that evaluation, management concluded that the Company’s internal control over financial reporting was effective as of December 31, [removed: 2018.][added: 2019.]
Deloitte & Touche LLP, an independent registered public accounting firm, has audited the Company’s internal control over financial reporting as of December 31, [removed: 2018] [added: 2019] in accordance with the standards of the Public Company Accounting Oversight Board (PCAOB).
Deloitte & Touche LLP has issued an attestation report on the Company’s internal control over financial reporting as of December 31, [removed: 2018,] [added: 2019,] which is included in Item 8 of this Annual Report on Form 10-K.
Item 9B. Other Information
2 rewritten, 1 added, 0 removed, 1 unchanged
[removed: PART III][added: PART III]
The Company intends to file a definitive proxy statement (the “Proxy Statement”) pursuant to Regulation 14A under the Securities Exchange Act within 120 days following the end of the fiscal year ended December 31, [removed: 2018,] [added: 2019,] and certain information included therein is incorporated herein by reference.
Item 10. Directors, Executive Officers and Corporate Governance
0 rewritten, 1 added, 0 removed, 9 unchanged
To the extent disclosure for delinquent reports is being made, it can be found under the caption “Delinquent Section 16(a) Reports” in the Proxy Statement and is incorporated herein by reference to the Proxy Statement.
Item 14. Principal Accounting Fees and Services
1 rewritten, 1 added, 0 removed, 1 unchanged
[removed: PART IV][added: PART IV]
Item 15. Exhibits, Financial Statement Schedules
52 rewritten, 19 added, 4 removed, 20 unchanged
[removed: (a)(1)] [added: (a)(1)] Consolidated Financial [removed: Statements][added: Statements]
| [added: ] | [removed: Page] [added: Page] |
| [Consolidated Statements of Income—Years Ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016](#ConsolidatedStatementsofIncome_247596)] [added: 2017](#ConsolidatedStatementsofIncome_247596)] | 43 |
| [Consolidated Statements of Comprehensive Income—Years Ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016](#ConsolidatedStatementsofComprehensiveInc)] [added: 2017](#ConsolidatedStatementsofComprehensiveInc)] | 44 |
| [Consolidated Balance Sheets—December 31, [removed: 2018] [added: 2019] and [removed: 2017](#ConsolidatedBalanceSheets_591973)] [added: 2018](#ConsolidatedBalanceSheets_591973)] | 45 |
| [Consolidated Statements of Changes in Equity—Years Ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016](#ConsolidatedStatementsofChangesinEquity_)] [added: 2017](#ConsolidatedStatementsofChangesinEquity_)] | 46 |
| [Consolidated Statements of Cash Flow—Years Ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016](#ConsolidatedStatementsofCashFlow_3394)] [added: 2017](#ConsolidatedStatementsofCashFlow_3394)] | 47 |
| [removed: (a)(2)] [added: (a)(2)] Financial Statement Schedules for the Three Years Ended December 31, [removed: 2018 Schedule] [added: 2019 Schedule] | [added: ] |
| [II—Valuation and Qualifying Accounts for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016](#SCHEDULEII_950693)] [added: 2017](#SCHEDULEII_950693)] | 83 |
[removed: (a)(3)] [added: (a)(3)] Listing of [removed: Exhibits][added: Exhibits]
| 4.4 | [removed: [Officers’] [added: [Officer’s] Certificate, dated [removed: January 30,] [added: September 12,] 2014, establishing [added: both] the [removed: 2.55%] [added: 1.550%] Senior Notes [added: due 2017 and the 3.125% Senior Notes due 2021] pursuant to the Indenture (filed as Exhibit 4.2 to the Form 8-K filed on [removed: January 30, 2014).*](http://www.sec.gov/Archives/edgar/data/820313/000110465914005191/a14-4401_1ex4d2.htm)] [added: September 12, 2014).*](http://www.sec.gov/Archives/edgar/data/820313/000110465914066145/a14-20818_1ex4d2.htm)] |
| 4.5 | [Officer’s Certificate, dated [removed: September 12, 2014,] [added: April 5, 2017,] establishing both the [removed: 1.550%] [added: 2.200%] Senior Notes due [removed: 2017] [added: 2020] and the [removed: 3.125%] [added: 3.200%] Senior Notes due [removed: 2021] [added: 2024] pursuant to the Indenture (filed as Exhibit 4.2 to the Form 8-K filed on [removed: September 12, 2014).*](http://www.sec.gov/Archives/edgar/data/820313/000110465914066145/a14-20818_1ex4d2.htm)] [added: April 5, 2017).*](http://www.sec.gov/Archives/edgar/data/820313/000110465917021585/a17-8427_5ex4d2.htm)] |
| 4.6 | [Officer’s Certificate, dated [removed: April 5, 2017,] [added: January 9, 2019,] establishing [removed: both] the [removed: 2.200% Senior Notes due 2020 and the 3.200%] [added: 4.350%] Senior Notes due [removed: 2024] [added: 2029] pursuant to the Indenture (filed as Exhibit 4.2 to the Form 8-K filed on [removed: April 5, 2017).*](http://www.sec.gov/Archives/edgar/data/820313/000110465917021585/a17-8427_5ex4d2.htm)] [added: January 10, 2019).*](http://www.sec.gov/Archives/edgar/data/820313/000110465919001473/a19-1304_5ex4d2.htm)] |
| 4.7 | [Officer’s Certificate, dated [removed: January 9,] [added: September 10,] 2019, establishing the [removed: 4.350%] [added: 2.800%] Senior Notes due [removed: 2029] [added: 2030] pursuant to the Indenture (filed as Exhibit 4.2 to the Form 8-K filed on [removed: January] [added: September] 10, [removed: 2019).*](http://www.sec.gov/Archives/edgar/data/820313/000110465919001473/a19-1304_5ex4d2.htm)] [added: 2019).*](http://www.sec.gov/Archives/edgar/data/820313/000141057819001153/tv529106_ex4-2.htm)] |
| 10.1 | [2017 Stock Purchase and Option Plan for Key Employees of Amphenol and Subsidiaries (filed as Annex A to the Company’s Definitive Proxy Statement on Schedule 14A for its 2017 Annual Meeting of Stockholders, filed on April 17, [removed: 2017).*](http://www.sec.gov/Archives/edgar/data/820313/000104746917002657/a2231734zdef14a.htm)] [added: 2017).†*](http://www.sec.gov/Archives/edgar/data/820313/000104746917002657/a2231734zdef14a.htm)] |
| 10.2 | [Form of 2017 Stock Option Agreement (filed as Exhibit 10.1 to the Form 8-K filed on May 19, [removed: 2017).*](http://www.sec.gov/Archives/edgar/data/820313/000110465917034005/a17-13874_1ex10d1.htm)] [added: 2017).†*](http://www.sec.gov/Archives/edgar/data/820313/000110465917034005/a17-13874_1ex10d1.htm)] |
| 10.3 | [2009 Stock Purchase and Option Plan for Key Employees of Amphenol and Subsidiaries (filed as Exhibit 10.7 to the June 30, 2009 [removed: 10-Q).*](http://www.sec.gov/Archives/edgar/data/820313/000110465909047605/a09-14428_1ex10d7.htm)] [added: 10-Q).†*](http://www.sec.gov/Archives/edgar/data/820313/000110465909047605/a09-14428_1ex10d7.htm)] |
| 10.4 | [The First Amendment to the 2009 Stock Purchase and Option Plan for Key Employees of Amphenol and Subsidiaries (filed as Exhibit 10.2 to the Form 8-K filed on May 23, [removed: 2014).*](http://www.sec.gov/Archives/edgar/data/820313/000110465914041219/a14-13413_1ex10d2.htm)] [added: 2014).†*](http://www.sec.gov/Archives/edgar/data/820313/000110465914041219/a14-13413_1ex10d2.htm)] |
| 10.5 | [Form of 2009 Non-Qualified Stock Option Grant Agreement dated as of May 20, 2009 (filed as Exhibit 10.8 to the June 30, 2009 [removed: 10-Q).*](http://www.sec.gov/Archives/edgar/data/820313/000110465909047605/a09-14428_1ex10d8.htm)] [added: 10-Q).†*](http://www.sec.gov/Archives/edgar/data/820313/000110465909047605/a09-14428_1ex10d8.htm)] |
| 10.6 | [Form of 2009 Management Stockholders’ Agreement dated as of May 20, 2009 (filed as Exhibit 10.9 to the June 30, 2009 [removed: 10-Q).*](http://www.sec.gov/Archives/edgar/data/820313/000110465909047605/a09-14428_1ex10d9.htm)] [added: 10-Q).†*](http://www.sec.gov/Archives/edgar/data/820313/000110465909047605/a09-14428_1ex10d9.htm)] |
| 10.7 | [Pension Plan for Employees of Amphenol Corporation as amended and restated effective January 1, 2016 (filed as Exhibit 10.6 to the December 31, 2016 [removed: 10-K).*](http://www.sec.gov/Archives/edgar/data/820313/000155837017000659/aph-20161231ex1061f1a38.htm)] [added: 10-K).†*](http://www.sec.gov/Archives/edgar/data/820313/000155837017000659/aph-20161231ex1061f1a38.htm)] |
| 10.8 | [First Amendment to Pension Plan for Employees of Amphenol Corporation as amended and restated effective January 1, 2016, dated November 10, 2016 (filed as Exhibit 10.7 to the December 31, 2016 [removed: 10-K).*](http://www.sec.gov/Archives/edgar/data/820313/000155837017000659/aph-20161231ex1073926e5.htm)] [added: 10-K).†*](http://www.sec.gov/Archives/edgar/data/820313/000155837017000659/aph-20161231ex1073926e5.htm)] |
| 10.9 | [Second Amendment to Pension Plan for Employees of Amphenol Corporation as amended and restated effective January 1, 2016, dated October 1, 2016 (filed as Exhibit 10.8 to the December 31, 2016 [removed: 10-K).*](http://www.sec.gov/Archives/edgar/data/820313/000155837017000659/aph-20161231ex1083d02fe.htm)] [added: 10-K).†*](http://www.sec.gov/Archives/edgar/data/820313/000155837017000659/aph-20161231ex1083d02fe.htm)] |
| 10.10 | [Third Amendment to Pension Plan for Employees of Amphenol Corporation as amended and restated effective January 1, 2016, dated December 13, 2016 (filed as Exhibit 10.9 to the December 31, 2016 [removed: 10-K).*](http://www.sec.gov/Archives/edgar/data/820313/000155837017000659/aph-20161231ex109384e74.htm)] [added: 10-K).†*](http://www.sec.gov/Archives/edgar/data/820313/000155837017000659/aph-20161231ex109384e74.htm)] |
| 10.11 | [Fourth Amendment to Pension Plan for Employees of Amphenol Corporation as amended and restated effective January 1, 2016, dated May 2, 2017 (filed as Exhibit 10.12 to the June 30, 2017 [removed: 10-Q).*](http://www.sec.gov/Archives/edgar/data/820313/000155837017005866/aph-20170630ex1012fac38.htm)] [added: 10-Q).†*](http://www.sec.gov/Archives/edgar/data/820313/000155837017005866/aph-20170630ex1012fac38.htm)] |
| 10.12 | [Fifth Amendment to Pension Plan for Employees of Amphenol Corporation as amended and restated effective January 1, 2016, dated October 29, 2018 (filed as Exhibit 10.12 to the December 31, 2018 [removed: 10-K).](https://www.sec.gov/Archives/edgar/data/820313/000155837019000636/aph-20181231ex1012d8851.htm)] [added: 10-K).†*](http://www.sec.gov/Archives/edgar/data/820313/000155837019000636/aph-20181231ex1012d8851.htm)] |
| [removed: 10.13] [added: 10.15] | [Amended and Restated Amphenol Corporation Supplemental Employee Retirement Plan (filed as Exhibit 10.24 to the December 31, 2008 [removed: 10-K).*](http://www.sec.gov/Archives/edgar/data/820313/000110465909011495/a09-1255_1ex10d24.htm)] [added: 10-K).†*](http://www.sec.gov/Archives/edgar/data/820313/000110465909011495/a09-1255_1ex10d24.htm)] |
| [removed: 10.14] [added: 10.16] | [First Amendment to the Amended and Restated Amphenol Corporation Supplemental Employee Retirement Plan, dated October 29, 2018 (filed as Exhibit 10.14 to the December 31, 2018 [removed: 10-K).](https://www.sec.gov/Archives/edgar/data/820313/000155837019000636/aph-20181231ex10148056b.htm)] [added: 10-K).†*](http://www.sec.gov/Archives/edgar/data/820313/000155837019000636/aph-20181231ex10148056b.htm)] |
| [removed: 10.15] [added: 10.17] | [Amphenol Corporation Directors’ Deferred Compensation Plan (filed as Exhibit 10.11 to the December 31, 1997 [removed: 10-K).*](http://www.sec.gov/Archives/edgar/data/820313/0001005477-98-000987-index.html)] [added: 10-K).†*](http://www.sec.gov/Archives/edgar/data/820313/0001005477-98-000987-index.html)] |
| [removed: 10.16] [added: 10.18] | [The 2004 Stock Option Plan for Directors of Amphenol Corporation (filed as Exhibit 10.44 to the June 30, 2004 [removed: 10-Q).*](http://www.sec.gov/Archives/edgar/data/820313/000110465904023311/a04-9054_1ex10d44.htm)] [added: 10-Q).†*](http://www.sec.gov/Archives/edgar/data/820313/000110465904023311/a04-9054_1ex10d44.htm)] |
| [removed: 10.17] [added: 10.19] | [The Amended 2004 Stock Option Plan for Directors of Amphenol Corporation (filed as Exhibit 10.29 to the June 30, 2008 [removed: 10-Q).*](http://www.sec.gov/Archives/edgar/data/820313/000110465908051275/a08-18814_1ex10d29.htm)] [added: 10-Q).†*](http://www.sec.gov/Archives/edgar/data/820313/000110465908051275/a08-18814_1ex10d29.htm)] |
| [removed: 10.18] [added: 10.20] | [The 2012 Restricted Stock Plan for Directors of Amphenol Corporation dated May 24, 2012 (filed as Exhibit 10.15 to the June 30, 2012 [removed: 10-Q).*](http://www.sec.gov/Archives/edgar/data/820313/000110465912054022/a12-13710_1ex10d15.htm)] [added: 10-Q).†*](http://www.sec.gov/Archives/edgar/data/820313/000110465912054022/a12-13710_1ex10d15.htm)] |
| [removed: 10.19] [added: 10.21] | [2012 Restricted Stock Plan for Directors of Amphenol Corporation Restricted Share Award Agreement dated May 24, 2012 (filed as Exhibit 10.16 to the June 30, 2012 [removed: 10-Q).*](http://www.sec.gov/Archives/edgar/data/820313/000110465912054022/a12-13710_1ex10d16.htm)] [added: 10-Q).†*](http://www.sec.gov/Archives/edgar/data/820313/000110465912054022/a12-13710_1ex10d16.htm)] |
| [removed: 10.20] [added: 10.22] | [removed: [2019] [added: [2020] Amphenol Corporation Management Incentive Plan (filed as Exhibit [removed: 10.20] [added: 10.22] to the December 31, [removed: 2018 10-K).](https://www.sec.gov/Archives/edgar/data/820313/000155837019000636/aph-20181231ex10208e6a4.htm)] [added: 2019 10-K).†](https://www.sec.gov/Archives/edgar/data/820313/000155837020000728/ex-10d22.htm)] |
| 10.25 | [The Amphenol Corporation Employee Savings/401(K) Plan Adoption Agreement as amended and restated effective January 1, 2019, dated December 21, 2018 (filed as Exhibit 10.25 to the December 31, 2018 [removed: 10-K).](https://www.sec.gov/Archives/edgar/data/820313/000155837019000636/aph-20181231ex10250a37b.htm)] [added: 10-K).†*](http://www.sec.gov/Archives/edgar/data/820313/000155837019000636/aph-20181231ex10250a37b.htm)] |
| [removed: 10.26] [added: 10.27] | [Amended and Restated Amphenol Corporation Supplemental Defined Contribution Plan (filed as Exhibit 10.30 to the September 30, 2011 [removed: 10-Q).*](http://www.sec.gov/Archives/edgar/data/820313/000110465911061028/a11-24710_1ex10d30.htm)] [added: 10-Q).†*](http://www.sec.gov/Archives/edgar/data/820313/000110465911061028/a11-24710_1ex10d30.htm)] |
| [removed: 10.27] [added: 10.28] | [Amphenol Corporation Supplemental Defined Contribution Plan as amended effective January 1, 2012 (filed as Exhibit 10.34 to the December 31, 2011 [removed: 10-K).*](http://www.sec.gov/Archives/edgar/data/820313/000110465912012448/a12-1044_1ex10d34.htm)] [added: 10-K).†*](http://www.sec.gov/Archives/edgar/data/820313/000110465912012448/a12-1044_1ex10d34.htm)] |
| [removed: 10.28] [added: 10.29] | [Amphenol Corporation Supplemental Defined Contribution Plan as amended effective January 1, 2019 (filed as Exhibit 10.28 to the December 31, 2018 [removed: 10-K).](https://www.sec.gov/Archives/edgar/data/820313/000155837019000636/aph-20181231ex1028b0ca5.htm)] [added: 10-K).†*](http://www.sec.gov/Archives/edgar/data/820313/000155837019000636/aph-20181231ex1028b0ca5.htm)] |
| [removed: 10.29] [added: 10.30] | [Commercial Paper Program form of Dealer Agreement dated as of August 29, 2014 between the Company, Citibank Global Markets and JP Morgan Securities LLC (filed as Exhibit 10.1 to the Form 8-K filed on September 5, 2014).*](http://www.sec.gov/Archives/edgar/data/820313/000110465914064847/a14-20531_1ex10d1.htm) |
| [removed: 10.30] [added: 10.31] | [Commercial Paper Program Dealer Agreement dated as of July 10, 2018 between Amphenol Technologies Holding GmbH (as issuer), Amphenol Corporation (as guarantor), Barclays Bank PLC (as Arranger), and Barclays Bank PLC and Commerzbank Aktiengesellschaft (as Original Dealers) (filed as Exhibit 10.1 to the Form 8-K filed on July 11, 2018).*](http://www.sec.gov/Archives/edgar/data/820313/000110465918044697/a18-17137_1ex10d1.htm) |
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| 4.8 | [Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (filed as Exhibit 4.8 to the December 31, 2019 10-K).](https://www.sec.gov/Archives/edgar/data/820313/000155837020000728/ex-4d8.htm) |
| 10.13 | [Sixth Amendment to Pension Plan for Employees of Amphenol Corporation as amended and restated effective January 1, 2016, dated October 4, 2019 (filed as Exhibit 10.13 to the December 31, 2019 10-K).†](https://www.sec.gov/Archives/edgar/data/820313/000155837020000728/ex-10d13.htm) |
| 10.14 | [Seventh Amendment to Pension Plan for Employees of Amphenol Corporation as amended and restated effective January 1, 2016, dated December 2, 2019 (filed as Exhibit 10.14 to the December 31, 2019 10-K).†](https://www.sec.gov/Archives/edgar/data/820313/000155837020000728/ex-10d14.htm) |
| 10.26 | [Amendment to The Amphenol Corporation Employee Savings/401(K) Plan Adoption Agreement, effective January 1, 2020, dated December 23, 2019 (filed as Exhibit 10.26 to the December 31, 2019 10-K).†](https://www.sec.gov/Archives/edgar/data/820313/000155837020000728/ex-10d26.htm) |
| 101.INS | Inline XBRL Instance Document – the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
| 104 | Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document (included in Exhibit 101). |
† Management contract or compensatory plan or arrangement.
* Furnished with this report.
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| 10.21 | [2014 Amphenol Corporation Executive Incentive Plan (filed as Exhibit 10.1 to the Form 8-K filed on May 23, 2014).*](http://www.sec.gov/Archives/edgar/data/820313/000110465914041219/a14-13413_1ex10d1.htm) |
| 10.22 | [Credit Agreement, dated as of March 1, 2016, among the Company, certain subsidiaries of the Company, a syndicate of financial institutions and JPMorgan Chase Bank, N.A. acting as the administrative agent (filed as Exhibit 10.1 to the Form 8-K filed on March 2, 2016).*](http://www.sec.gov/Archives/edgar/data/820313/000110465916101652/a16-5641_1ex10d1.htm) |
| 101.INS | XBRL Instance Document. |
An excerpt. Shown here: 40 of 52 rewritten, all 19 added and all 4 removed. The counts are complete. For every sentence, read Item 15. Exhibits, Financial Statement Schedules in the FY2019 filing and the FY2018 filing.
Item 16. Form 10-K Summary
40 rewritten, 22 added, 11 removed, 4 unchanged
[removed: SCHEDULE II][added: SCHEDULE II]
[removed: AMPHENOL] [added: AMPHENOL] CORPORATION AND [removed: SUBSIDIARIES][added: SUBSIDIARIES]
[removed: VALUATION] [added: VALUATION] AND QUALIFYING [removed: ACCOUNTS][added: ACCOUNTS]
[removed: For] [added: For] the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016][added: 2017]
[removed: (Dollars] [added: (Dollars] in [removed: millions)][added: millions)]
| [added: ] | | [removed: Balance at] [added: Balance at] | | | [removed: Charged to] [added: Charged to] | | | [added: ] | [added: ] | | [removed: Balance at] [added: Balance at] | | |
| [added: ] | [added: ] | [removed: beginning] [added: beginning] | | [added: ] | [removed: cost and] [added: cost and] | | [added: ] | [removed: Additions] [added: Additions] | | [added: ] | [removed: end of] [added: end of] | | |
| [added: ] | [added: ] | [removed: of period] [added: of period] | | [added: ] | [removed: expenses] [added: expenses] | | [added: ] | [removed: (Deductions)] [added: (Deductions)] | | [added: ] | [removed: period] [added: period] | | |
| Allowance for doubtful accounts: | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] |
| Year ended December 31, 2018 | [added: ] | [removed: $] | 23.0 | [added: ] | [removed: $] [added: ] | 13.0 | [added: ] | [removed: $] [added: ] | (2.5) | [added: ] | [removed: $] [added: ] | 33.5 | [added: ] |
| Year ended December 31, 2017 | [added: ] | | 23.6 | [added: ] | [added: ] | 1.8 | [added: ] | [added: ] | (2.4) | [added: ] | | 23.0 | [added: ] |
| Valuation allowance on deferred tax assets: | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] | [added: ] |
| Year ended December 31, 2018 | [added: ] | [removed: $] [added: ] | 39.6 | [added: ] | [removed: $] [added: ] | (3.8) | [added: ] | [removed: $] [added: ] | (1.1) | [added: ] | [removed: $] [added: ] | 34.7 | [added: ] |
| Year ended December 31, 2017 | [added: ] | | 37.2 | [added: ] | [added: ] | 2.5 | [added: ] | [added: ] | (0.1) | [added: ] | [added: ] | 39.6 | [added: ] |
[removed: Signatures][added: Signatures]
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized in the Town of Wallingford, State of Connecticut on the [removed: 13th] [added: 12th] day of February, [removed: 2019.][added: 2020.]
| [added: ] | [removed: AMPHENOL CORPORATION] [added: AMPHENOL CORPORATION] |
| [added: ] | /s/ R. Adam Norwitt |
| [added: ] | R. Adam Norwitt |
| [added: ] | President and Chief Executive Officer |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates [removed: indicated below.][added: indicated.]
| [removed: Signature] [added: Signature] | [added: ] | [removed: Title] [added: Title] | [added: ] | [removed: Date] [added: Date] |
| /s/ R. Adam Norwitt | [added: ] | President, Chief Executive Officer and Director | [added: ] | February [removed: 13, 2019] [added: 12, 2020] |
| R. Adam Norwitt | [added: ] | (Principal Executive Officer) | [added: ] | [added: ] |
| /s/ Craig A. Lampo | [added: ] | Senior Vice President and Chief Financial Officer | [added: ] | February [removed: 13, 2019] [added: 12, 2020] |
| Craig A. Lampo | [added: ] | (Principal Financial Officer and Principal Accounting Officer) | [added: ] | [added: ] |
| /s/ Martin H. Loeffler | [added: ] | Chairman of the Board of Directors | [added: ] | February [removed: 13, 2019] [added: 12, 2020] |
| Martin H. Loeffler | [added: ] | [added: ] | [added: ] | [added: ] |
| /s/ Stanley L. Clark | [added: ] | Director | [added: ] | February [removed: 13, 2019] [added: 12, 2020] |
| Stanley L. Clark | [added: ] | [added: ] | [added: ] | [added: ] |
| /s/ John D. Craig | [added: ] | Director | [added: ] | February [removed: 13, 2019] [added: 12, 2020] |
| John D. Craig | [added: ] | [added: ] | [added: ] | [added: ] |
| /s/ David P. Falck | [added: ] | Director | [added: ] | February [removed: 13, 2019] [added: 12, 2020] |
| David P. Falck | [added: ] | [added: ] | [added: ] | [added: ] |
| /s/ Edward G. Jepsen | [added: ] | Director | [added: ] | February [removed: 13, 2019] [added: 12, 2020] |
| Edward G. Jepsen | [added: ] | [added: ] | [added: ] | [added: ] |
| /s/ Robert A. Livingston | [added: ] | Director | [added: ] | February [removed: 13, 2019] [added: 12, 2020] |
| Robert A. Livingston | [added: ] | [added: ] | [added: ] | [added: ] |
| /s/ Anne Clarke Wolff | [added: ] | Director | [added: ] | February [removed: 13, 2019] [added: 12, 2020] |
| Anne Clarke Wolff | [added: ] | [added: ] | [added: ] | [added: ] |
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| Year ended December 31, 2019 | | $ | 33.5 | | $ | 1.2 | | $ | (1.1) | | $ | 33.6 | |
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| Year ended December 31, 2019 | | $ | 34.7 | | $ | 0.2 | | $ | 0.3 | | $ | 35.2 | |
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| Year ended December 31, 2016 | | | 25.6 | | | 6.0 | | | (8.0) | | | 23.6 | |
| Year ended December 31, 2016 | | | 18.5 | | | 4.8 | | | 13.9 | | | 37.2 | |
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| /s/ Ronald P. Badie | | Director | | February 13, 2019 |
| Ronald P. Badie | | | | |
| /s/ John R. Lord | | Director | | February 13, 2019 |
| John R. Lord | | | | |
| /s/ Diana G. Reardon | | Director | | February 13, 2019 |
| Diana G. Reardon | | | | |