0001558370-16-009170.txt : 20161103 0001558370-16-009170.hdr.sgml : 20161103 20161103113438 ACCESSION NUMBER: 0001558370-16-009170 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 72 CONFORMED PERIOD OF REPORT: 20160930 FILED AS OF DATE: 20161103 DATE AS OF CHANGE: 20161103 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMPHENOL CORP /DE/ CENTRAL INDEX KEY: 0000820313 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC CONNECTORS [3678] IRS NUMBER: 222785165 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10879 FILM NUMBER: 161970681 BUSINESS ADDRESS: STREET 1: 358 HALL AVE CITY: WALLINGFORD STATE: CT ZIP: 06492 BUSINESS PHONE: 2032658900 10-Q 1 aph-20160930x10q.htm 10-Q aph_Current_Folio_10Q

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

For the quarterly period ended September 30, 2016

OR

 

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission file number 1-10879

 


 

Picture 1

AMPHENOL CORPORATION

 

 

 

Delaware

22-2785165

(State of Incorporation)

(IRS Employer

Identification No.)

 

358 Hall Avenue

Wallingford, Connecticut 06492

203-265-8900

 


 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒  No ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ☒  No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer ☒

Accelerated filer ☐

 

 

Non-accelerated filer ☐

Smaller reporting company ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐  No ☒

 

As of October 31, 2016, the total number of shares outstanding of Class A Common Stock was 308,478,390.

 

 

 

 


 

Amphenol Corporation

Index to Quarterly Report

on Form 10-Q

 

 

    

 

Page

 

 

 

 

Part I 

 

Financial Information

 

 

 

 

 

Item 1. 

 

Financial Statements (unaudited)

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015

2

 

 

 

 

 

 

Condensed Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2016 and 2015

3

 

 

 

 

 

 

Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2016 and 2015

4

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flow for the Nine Months Ended September 30, 2016 and 2015

5

 

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

6

 

 

 

 

Item 2. 

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

20

 

 

 

 

Item 3. 

 

Quantitative and Qualitative Disclosures About Market Risk

26

 

 

 

 

Item 4. 

 

Controls and Procedures

26

 

 

 

 

Part II 

 

Other Information

 

 

 

 

 

Item 1. 

 

Legal Proceedings

27

 

 

 

 

Item 1A. 

 

Risk Factors

27

 

 

 

 

Item 2. 

 

Unregistered Sales of Equity Securities and Use of Proceeds

27

 

 

 

 

Item 3. 

 

Defaults Upon Senior Securities

27

 

 

 

 

Item 4. 

 

Mine Safety Disclosures

27

 

 

 

 

Item 5. 

 

Other Information

27

 

 

 

 

Item 6. 

 

Exhibits

28

 

 

 

 

Signature 

 

 

30

 

 

1


 

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

AMPHENOL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(dollars in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 

 

December 31, 

 

 

    

2016

    

2015

 

Assets

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

853.6

 

$

1,737.2

 

Short-term investments

 

 

163.3

 

 

23.2

 

Total cash, cash equivalents and short-term investments

 

 

1,016.9

 

 

1,760.4

 

Accounts receivable, less allowance for doubtful accounts of
 $24.6 and $25.6, respectively

 

 

1,319.4

 

 

1,104.6

 

Inventories

 

 

926.6

 

 

851.8

 

Other current assets

 

 

142.3

 

 

133.2

 

 

 

 

 

 

 

 

 

Total current assets

 

 

3,405.2

 

 

3,850.0

 

 

 

 

 

 

 

 

 

Land and depreciable assets, less accumulated depreciation of
$1,003.7 and $900.9, respectively

 

 

717.6

 

 

609.5

 

Goodwill

 

 

3,707.8

 

 

2,692.9

 

Intangibles and other long-term assets

 

 

539.2

 

 

306.0

 

 

 

 

 

 

 

 

 

 

 

$

8,369.8

 

$

7,458.4

 

 

 

 

 

 

 

 

 

Liabilities & Equity

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

650.7

 

$

587.8

 

Accrued salaries, wages and employee benefits

 

 

132.1

 

 

105.6

 

Accrued income taxes

 

 

79.5

 

 

81.8

 

Accrued dividends

 

 

43.3

 

 

43.2

 

Other accrued expenses

 

 

233.4

 

 

189.7

 

Current portion of long-term debt

 

 

374.5

 

 

0.3

 

 

 

 

 

 

 

 

 

Total current liabilities

 

 

1,513.5

 

 

1,008.4

 

 

 

 

 

 

 

 

 

Long-term debt, less current portion

 

 

2,598.0

 

 

2,813.2

 

Accrued pension benefit obligations and other long-term liabilities

 

 

503.6

 

 

358.4

 

Equity:

 

 

 

 

 

 

 

Common stock

 

 

0.3

 

 

0.3

 

Additional paid-in capital

 

 

972.2

 

 

783.3

 

Retained earnings

 

 

3,032.8

 

 

2,804.4

 

Accumulated other comprehensive loss

 

 

(297.3)

 

 

(349.5)

 

 

 

 

 

 

 

 

 

Total shareholders’ equity attributable to Amphenol Corporation

 

 

3,708.0

 

 

3,238.5

 

 

 

 

 

 

 

 

 

Noncontrolling interests

 

 

46.7

 

 

39.9

 

Total equity

 

 

3,754.7

 

 

3,278.4

 

 

 

 

 

 

 

 

 

 

 

$

8,369.8

 

$

7,458.4

 

 

See accompanying notes to condensed consolidated financial statements.

2


 

AMPHENOL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30, 

 

September 30, 

 

 

    

2016

    

2015

    

2016

    

2015

 

Net sales

 

$

1,635.9

 

$

1,459.6

 

$

4,635.3

 

$

4,138.2

 

Cost of sales

 

 

1,098.6

 

 

995.6

 

 

3,141.3

 

 

2,817.1

 

Gross profit

 

 

537.3

 

 

464.0

 

 

1,494.0

 

 

1,321.1

 

Acquisition-related expenses

 

 

6.3

 

 

 —

 

 

36.6

 

 

5.7

 

Selling, general and administrative expenses

 

 

204.7

 

 

169.2

 

 

591.3

 

 

499.7

 

Operating income

 

 

326.3

 

 

294.8

 

 

866.1

 

 

815.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(18.1)

 

 

(17.0)

 

 

(54.2)

 

 

(51.1)

 

Other income, net

 

 

2.3

 

 

4.2

 

 

5.0

 

 

12.5

 

Income before income taxes

 

 

310.5

 

 

282.0

 

 

816.9

 

 

777.1

 

Provision for income taxes

 

 

(83.4)

 

 

(74.7)

 

 

(222.6)

 

 

(207.4)

 

Net income

 

 

227.1

 

 

207.3

 

 

594.3

 

 

569.7

 

Less: Net income attributable to noncontrolling interests

 

 

(2.8)

 

 

(2.8)

 

 

(6.8)

 

 

(6.4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Amphenol Corporation

 

$

224.3

 

$

204.5

 

$

587.5

 

$

563.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share — Basic

 

$

0.73

 

$

0.66

 

$

1.91

 

$

1.82

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding — Basic

 

 

308.9

 

 

308.9

 

 

308.3

 

 

309.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share — Diluted

 

$

0.71

 

$

0.65

 

$

1.86

 

$

1.78

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding — Diluted

 

 

315.7

 

 

315.9

 

 

315.1

 

 

316.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

 

$

0.14

 

$

0.14

 

$

0.42

 

$

0.39

 

 

See accompanying notes to condensed consolidated financial statements.

3


 

AMPHENOL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(dollars in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30, 

 

September 30, 

 

 

    

2016

    

2015

    

2016

    

2015

 

Net income

 

$

227.1

 

$

207.3

 

$

594.3

 

$

569.7

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

26.0

 

 

(52.8)

 

 

37.3

 

 

(109.5)

 

Unrealized gain on cash flow hedges

 

 

1.3

 

 

0.1

 

 

2.3

 

 

0.3

 

Defined benefit plan adjustment, net of tax of ($2.2) and ($6.6) for 2016 and ($2.5) and ($5.8) for 2015, respectively

 

 

4.0

 

 

4.6

 

 

12.0

 

 

10.8

 

Total other comprehensive income (loss), net of tax

 

 

31.3

 

 

(48.1)

 

 

51.6

 

 

(98.4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive income

 

 

258.4

 

 

159.2

 

 

645.9

 

 

471.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: Comprehensive income attributable to noncontrolling interests

 

 

(2.7)

 

 

(2.2)

 

 

(6.2)

 

 

(5.8)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income attributable to Amphenol Corporation

 

$

255.7

 

$

157.0

 

$

639.7

 

$

465.5

 

 

See accompanying notes to condensed consolidated financial statements.

4


 

AMPHENOL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(Unaudited)

(dollars in millions)

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 

 

 

    

2016

    

2015

 

Cash from operating activities:

 

 

 

 

 

 

 

Net income

 

$

594.3

 

$

569.7

 

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

 

 

 

 

 

 

 

Depreciation and amortization

 

 

163.6

 

 

128.1

 

Stock-based compensation expense

 

 

35.5

 

 

32.1

 

Excess tax benefits from stock-based compensation payment arrangements

 

 

(33.2)

 

 

(9.4)

 

Net change in components of working capital

 

 

(27.4)

 

 

(7.0)

 

Net change in other long-term assets and liabilities

 

 

(4.1)

 

 

(5.3)

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

 

728.7

 

 

708.2

 

 

 

 

 

 

 

 

 

Cash from investing activities:

 

 

 

 

 

 

 

Purchases of land and depreciable assets

 

 

(136.3)

 

 

(130.8)

 

Proceeds from disposals of land and depreciable assets

 

 

4.0

 

 

6.7

 

Purchases of short-term investments

 

 

(173.3)

 

 

(121.9)

 

Sales and maturities of short-term investments

 

 

33.3

 

 

459.5

 

Acquisitions, net of cash acquired

 

 

(1,272.6)

 

 

(199.8)

 

 

 

 

 

 

 

 

 

Net cash (used in) provided by investing activities

 

 

(1,544.9)

 

 

13.7

 

 

 

 

 

 

 

 

 

Cash from financing activities:

 

 

 

 

 

 

 

Long-term borrowings under credit facilities

 

 

 —

 

 

125.0

 

Repayments of long-term debt

 

 

 —

 

 

(211.8)

 

Borrowings under commercial paper program, net

 

 

145.8

 

 

266.9

 

Payment of costs related to debt financing

 

 

(3.0)

 

 

 —

 

Proceeds from exercise of stock options

 

 

120.8

 

 

45.8

 

Excess tax benefits from stock-based compensation payment arrangements

 

 

33.2

 

 

9.4

 

Distributions to shareholders of noncontrolling interests

 

 

(5.8)

 

 

(6.1)

 

Purchase and retirement of treasury stock

 

 

(229.6)

 

 

(195.6)

 

Dividend payments

 

 

(129.4)

 

 

(116.1)

 

 

 

 

 

 

 

 

 

Net cash used in financing activities

 

 

(68.0)

 

 

(82.5)

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

 

0.6

 

 

(32.7)

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

(883.6)

 

 

606.7

 

Cash and cash equivalents balance, beginning of period

 

 

1,737.2

 

 

968.9

 

 

 

 

 

 

 

 

 

Cash and cash equivalents balance, end of period

 

$

853.6

 

$

1,575.6

 

 

 

 

 

 

 

 

 

Cash paid for:

 

 

 

 

 

 

 

Interest

 

$

65.2

 

$

62.1

 

Income taxes

 

 

192.4

 

 

182.9

 

 

 

See accompanying notes to condensed consolidated financial statements.

5


 

AMPHENOL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(dollars in millions, except per share data)

 

Note 1—Basis of Presentation and Principles of Consolidation

 

The condensed consolidated balance sheets as of September 30, 2016 and December 31, 2015, the related condensed consolidated statements of income and condensed consolidated statements of comprehensive income for the three and nine months ended September 30, 2016 and 2015, and the related condensed consolidated statements of cash flow for the nine months ended September 30, 2016 and 2015 include the accounts of Amphenol Corporation and its subsidiaries (the “Company”).  All material intercompany balances and transactions have been eliminated in consolidation.  The condensed consolidated financial statements included herein are unaudited.  In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation in conformity with accounting principles generally accepted in the United States of America have been included.  The results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of the results to be expected for the full year.  These condensed consolidated financial statements and the related notes should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (the “2015 Annual Report”).

 

Note 2—New Accounting Pronouncements

 

In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which stipulates that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for such goods or services.  To achieve this core principle, an entity should apply the following steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract(s), (3) determine the transaction price(s), (4) allocate the transaction price(s) to the performance obligations in the contract(s), and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The guidance also requires advanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers.  In August 2015, the FASB issued Accounting Standards Update No. 2015-14, Revenue from Contracts with Customers (Topic 606):  Deferral of the Effective Date (“ASU 2015-14”), which defers the effective date of FASB’s revenue standard under ASU 2014-09 by one year for all entities and permits early adoption on a limited basis.  As a result of ASU 2015-14, the guidance under ASU 2014-09 shall apply for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that period.  Early adoption is permitted as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within those annual periods.  In March 2016, the FASB issued Accounting Standards Update No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarified the implementation guidance on principal versus agent considerations.  In April 2016, the FASB issued Accounting Standards Update No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which clarified the implementation guidance regarding performance obligations and licensing arrangements. The Company is currently evaluating ASU 2014-09 and does not anticipate a material impact on its consolidated financial statements.

 

In July 2015, the FASB issued Accounting Standards Update No. 2015-11, Simplifying the Measurement of Inventory (“ASU 2015-11”), which requires inventory to be measured at the lower of cost and net realizable value, thereby simplifying the current guidance of measuring inventory at the lower of cost or market.  ASU 2015-11 is effective prospectively for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016.  The Company has evaluated ASU 2015-11 and does not believe it will have a material impact on its consolidated financial statements.

 

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which amends, among other things, the existing guidance by requiring lessees to recognize lease assets (right-to-use) and liabilities (for reasonably certain lease payments) arising from operating leases on the balance sheet.  For leases

6


 

with a term of twelve months or less, ASU 2016-02 permits an entity to make an accounting policy election to recognize such leases as lease expense, generally on a straight-line basis over the lease term.  ASU 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018 using a modified retrospective approach, with early adoption permitted.  The Company is currently evaluating ASU 2016-02 and its impact on its consolidated financial statements.

 

In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), which simplifies certain provisions associated with the accounting for stock compensation.  Among other things, ASU 2016-09 requires companies to record excess tax benefits and tax deficiencies as income tax benefit or expense in the statement of income and eliminates the requirement to reclassify cash flows related to excess tax benefits from operating activities to financing activities in the statement of cash flows.  ASU 2016-09 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016, with early adoption permitted.  While the Company is currently evaluating ASU 2016-09, the impact of its adoption on our consolidated financial statements will be dependent on the timing and intrinsic value of future stock-based compensation award exercises.

 

In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which amends ASC 230 to add and clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows.  ASU 2016-15 was issued with the intent of reducing diversity in practice with respect to certain types of cash flows.  ASU 2016-15 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted.  The Company has evaluated ASU 2016-15 and does not believe it will have a material impact on its consolidated financial statements.

 

Note 3—Inventories

 

Inventories consist of:

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 

 

December 31, 

 

 

    

2016

    

2015

 

Raw materials and supplies

 

$

320.5

 

$

282.4

 

Work in process

 

 

316.7

 

 

290.5

 

Finished goods

 

 

289.4

 

 

278.9

 

 

 

$

926.6

 

$

851.8

 

 

 

Note 4—Reportable Business Segments

 

The Company has two reportable business segments: (i) Interconnect Products and Assemblies and (ii) Cable Products and Solutions. The Company aggregates its operating segments into reportable segments based upon similar economic characteristics and business groupings of products, services and customers. The Interconnect Product and Assemblies segment primarily designs, manufactures and markets a broad range of connector and connector systems, value-add products and other products, including antennas and sensors, used in a broad range of applications in a diverse set of end markets.  The Cable Products and Solutions segment primarily designs, manufactures and markets cable, value-add products and components for use primarily in the broadband communications and information technology markets as well as certain applications in other markets.  The accounting policies of the segments are the same as those for the Company as a whole and are described in Note 1 of the notes to the consolidated financial statements in the Company’s 2015 Annual Report.  The Company evaluates the performance of business units on, among other things, profit or loss from operations before interest, headquarters’ expense allocations, stock-based compensation expense, income taxes, amortization related to certain intangible assets and nonrecurring gains and losses.

 

7


 

The segment results for the three and nine months ended September 30, 2016 and 2015 are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interconnect Products

 

Cable Products

 

 

 

 

 

 

 

 

 

and Assemblies

 

and Solutions

 

Total

 

 

    

2016

    

2015

    

2016

    

2015

    

2016

    

2015

 

Three months ended September 30:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External

 

$

1,543.2

 

$

1,378.2

 

$

92.7

 

$

81.4

 

$

1,635.9

 

$

1,459.6

 

Intersegment

 

 

1.5

 

 

1.5

 

 

8.7

 

 

5.6

 

 

10.2

 

 

7.1

 

Segment operating income

 

 

342.0

 

 

307.4

 

 

13.8

 

 

10.2

 

 

355.8

 

 

317.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended September 30:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External

 

$

4,366.9

 

$

3,889.5

 

$

268.4

 

$

248.7

 

$

4,635.3

 

$

4,138.2

 

Intersegment

 

 

5.0

 

 

5.6

 

 

21.6

 

 

15.7

 

 

26.6

 

 

21.3

 

Segment operating income

 

 

932.2

 

 

856.3

 

 

38.6

 

 

30.2

 

 

970.8

 

 

886.5

 

 

A reconciliation of segment operating income to consolidated income before income taxes for the three and nine months ended September 30, 2016 and 2015 is summarized as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

 

 

 

 

 

 

 

 

Three months ended September 30, 

 

Nine months ended September 30, 

 

 

    

2016

    

2015

    

2016

    

2015

 

Segment operating income

 

$

355.8

 

$

317.6

 

$

970.8

 

$

886.5

 

Interest expense

 

 

(18.1)

 

 

(17.0)

 

 

(54.2)

 

 

(51.1)

 

Other income, net

 

 

2.3

 

 

4.2

 

 

5.0

 

 

12.5

 

Stock-based compensation expense

 

 

(12.2)

 

 

(11.8)

 

 

(35.5)

 

 

(32.1)

 

Acquisition-related expenses

 

 

(6.3)

 

 

 —

 

 

(36.6)

 

 

(5.7)

 

Other operating expenses

 

 

(11.0)

 

 

(11.0)

 

 

(32.6)

 

 

(33.0)

 

Income before income taxes

 

$

310.5

 

$

282.0

 

$

816.9

 

$

777.1

 

 

 

Note 5—Changes in Equity and Noncontrolling Interests

 

Net income attributable to noncontrolling interests is classified below net income.  Earnings per share is determined after the impact of the noncontrolling interests’ share in net income of the Company.  In addition, the equity attributable to noncontrolling interests is presented as a separate caption within equity.

 

A rollforward of consolidated changes in equity for the nine months ended September 30, 2016 is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amphenol Corporation Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

 

 

Additional Paid-

 

Retained

 

Comprehensive

 

Treasury

 

Noncontrolling

 

Total

 

 

    

(in millions)

    

Amount

    

In Capital

    

Earnings

    

Loss

    

Stock

    

Interests

    

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2015

 

308.0

 

$

0.3

 

$

783.3

 

$

2,804.4

 

$

(349.5)

 

$

 —

 

$

39.9

 

$

3,278.4

 

Net income

 

 

 

 

 

 

 

 

 

 

587.5

 

 

 

 

 

 

 

 

6.8

 

 

594.3

 

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

52.2

 

 

 

 

 

(0.6)

 

 

51.6

 

Acquisitions resulting in noncontrolling
interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6.4

 

 

6.4

 

Distributions to shareholders of noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5.8)

 

 

(5.8)

 

Purchase of treasury stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(229.6)

 

 

 

 

 

(229.6)

 

Retirement of treasury stock

 

(4.0)

 

 

 

 

 

 

 

 

(229.6)

 

 

 

 

 

229.6

 

 

 

 

 

 —

 

Stock options exercised, including tax benefit

 

4.7

 

 

 

 

 

153.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

153.4

 

Dividends declared

 

 

 

 

 

 

 

 

 

 

(129.5)

 

 

 

 

 

 

 

 

 

 

 

(129.5)

 

Stock-based compensation expense

 

 

 

 

 

 

 

35.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

35.5

 

Balance as of September 30, 2016

 

308.7

 

$

0.3

 

$

972.2

 

$

3,032.8

 

$

(297.3)

 

$

 —

 

$

46.7

 

$

3,754.7

 

 

8


 

A rollforward of consolidated changes in equity for the nine months ended September 30, 2015 is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amphenol Corporation Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

 

 

Additional Paid-

 

Retained

 

Comprehensive

 

Treasury

 

Noncontrolling

 

Total

 

 

    

(in millions)

    

Amount

    

In Capital

    

Earnings

    

Loss

    

Stock

    

Interests

    

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2014

 

309.8

 

$

0.3

 

$

659.4

 

$

2,453.5

 

$

(205.8)

 

$

 —

 

$

30.5

 

$

2,937.9

 

Net income

 

 

 

 

 

 

 

 

 

 

563.3

 

 

 

 

 

 

 

 

6.4

 

 

569.7

 

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

(97.8)

 

 

 

 

 

(0.6)

 

 

(98.4)

 

Acquisition resulting in noncontrolling
interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7.9

 

 

7.9

 

Distributions to shareholders of noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6.1)

 

 

(6.1)

 

Purchase of treasury stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(195.6)

 

 

 

 

 

(195.6)

 

Retirement of treasury stock

 

(3.5)

 

 

 

 

 

 

 

 

(195.6)

 

 

 

 

 

195.6

 

 

 

 

 

 —

 

Stock options exercised, including tax benefit

 

1.9

 

 

 

 

 

54.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

54.4

 

Dividends declared

 

 

 

 

 

 

 

 

 

 

(120.5)

 

 

 

 

 

 

 

 

 

 

 

(120.5)

 

Stock-based compensation expense

 

 

 

 

 

 

 

32.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

32.1

 

Balance as of September 30, 2015

 

308.2

 

$

0.3

 

$

745.9

 

$

2,700.7

 

$

(303.6)

 

$

 —

 

$

38.1

 

$

3,181.4

 

 

 

Note 6—Earnings Per Share

 

Basic earnings per share (“EPS”) is computed by dividing net income attributable to Amphenol Corporation by the weighted average number of common shares outstanding.  Diluted EPS is computed by dividing net income attributable to Amphenol Corporation by the weighted average number of common shares and dilutive common shares outstanding, which relates to stock options.  A reconciliation of the basic weighted average common shares outstanding to diluted weighted average common shares outstanding for the three and nine months ended September 30, 2016 and 2015 is as follows (dollars and shares in millions):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended September 30, 

 

Nine months ended September 30, 

 

 

    

2016

    

2015

    

2016

    

2015

 

Net income attributable to Amphenol Corporation shareholders

 

$

224.3

 

$

204.5

 

$

587.5