CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | ||
In Thousands | Sep. 30, 2009
| Dec. 31, 2008
|
Current Assets: | ||
Cash and cash equivalents | $307,569 | $214,987 |
Accounts receivable, less allowance for doubtful accounts of $17,940 and $14,982, respectively | 465,521 | 515,999 |
Inventories, net | 455,990 | 512,507 |
Other current assets | 108,670 | 92,371 |
Total current assets | 1,337,750 | 1,335,864 |
Land and depreciable assets, less accumulated depreciation of $573,671 and $510,764, respectively | 342,924 | 344,515 |
Goodwill | 1,365,176 | 1,232,335 |
Other long-term assets | 95,061 | 81,445 |
Total Assets | 3,140,911 | 2,994,159 |
Current Liabilities: | ||
Accounts payable | 283,088 | 305,950 |
Accrued salaries, wages and employee benefits | 64,469 | 59,644 |
Accrued income taxes | 53,682 | 65,846 |
Accrued acquisition-related obligations | 11,946 | 120,357 |
Other accrued expenses | 83,671 | 82,596 |
Current portion of long-term debt and capital lease obligations | 481 | 439 |
Total current liabilities | 497,337 | 634,832 |
Long-term debt and capital lease obligations | 792,011 | 786,020 |
Accrued pension and post-employment benefit obligations | 175,409 | 161,669 |
Other long-term liabilities | 32,957 | 43,069 |
Shareholders' Equity: | ||
Common stock | 172 | 171 |
Additional paid-in capital | 43,732 | 22,746 |
Accumulated earnings | 1,689,583 | 1,467,099 |
Accumulated other comprehensive loss | (107,221) | (140,591) |
Total shareholders' equity attributable to Amphenol Corporation | 1,626,266 | 1,349,425 |
Noncontrolling interests | 16,931 | 19,144 |
Total equity | 1,643,197 | 1,368,569 |
Total Liabilities & Shareholders' Equity | $3,140,911 | $2,994,159 |
1_CONDENSED CONSOLIDATED BALANC
CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) (USD $) | ||
In Thousands | Sep. 30, 2009
| Dec. 31, 2008
|
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Allowance for doubtful accounts | $17,940 | $14,982 |
Accumulated depreciation | $573,671 | $510,764 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (USD $) | ||||
In Thousands, except Share data | 3 Months Ended
Sep. 30, 2009 | 3 Months Ended
Sep. 30, 2008 | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||
Net sales | $716,573 | $863,658 | $2,061,769 | $2,481,189 |
Cost of sales | 492,180 | 582,407 | 1,416,847 | 1,672,442 |
Gross profit | 224,393 | 281,251 | 644,922 | 808,747 |
Selling, general and administrative expense | 100,103 | 109,931 | 294,469 | 318,908 |
Operating income | 124,290 | 171,320 | 350,453 | 489,839 |
Interest expense | (8,961) | (9,772) | (27,090) | (29,586) |
Other (expenses) income, net | (345) | 179 | (942) | (169) |
Income before income taxes | 114,984 | 161,727 | 322,421 | 460,084 |
Provision for income taxes | (31,620) | (45,245) | (85,182) | (132,051) |
Net income | 83,364 | 116,482 | 237,239 | 328,033 |
Less: Net income attributable to noncontrolling interests | (2,449) | (3,527) | (7,044) | (7,615) |
Net income attributable to Amphenol Corporation | $80,915 | $112,955 | $230,195 | $320,418 |
Net income per common share-Basic (in dollars per share) | 0.47 | 0.64 | 1.34 | 1.82 |
Average common shares outstanding-Basic (in shares) | 171,428,237 | 176,716,395 | 171,311,072 | 176,290,446 |
Net income per common share-Diluted (in dollars per share) | 0.47 | 0.63 | 1.33 | 1.78 |
Average common shares outstanding-Diluted (in shares) | 173,928,589 | 180,134,110 | 173,561,964 | 179,910,090 |
Dividends declared per common share (in dollars per share) | 0.015 | 0.015 | 0.045 | 0.045 |
2_CONDENSED CONSOLIDATED STATEM
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (USD $) | ||
In Thousands | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
Cash flow from operating activities: | ||
Net income | $237,239 | $328,033 |
Adjustments for cash from operations: | ||
Depreciation and amortization | 72,923 | 69,019 |
Stock-based compensation expense | 15,259 | 11,777 |
Net change in receivables sold | (9,000) | |
Net change in components of working capital | 108,879 | (91,365) |
Net change in other long-term assets and liabilities | 5,283 | (6,780) |
Cash flow provided by operating activities | 430,583 | 310,684 |
Cash flow from investing activities: | ||
Capital additions | (45,607) | (83,044) |
Change in short-term investments | (14,114) | (13,996) |
Investments in acquisitions | (272,693) | (100,373) |
Cash flow used in investing activities | (332,414) | (197,413) |
Cash flow from financing activities: | ||
Net change in borrowings under revolving credit facilities | 6,051 | 46,111 |
Purchase of treasury stock | (143,693) | |
Proceeds from exercise of stock options | 4,499 | 26,909 |
Excess tax benefits from stock-based payment arrangements | 867 | 21,267 |
Distributions to noncontrolling interests | (5,281) | |
Dividend payments | (7,706) | (10,617) |
Cash flow used in financing activities | (1,570) | (60,023) |
Effect of exchange rate changes on cash and cash equivalents | (4,017) | (6,148) |
Net change in cash and cash equivalents | 92,582 | 47,100 |
Cash and cash equivalents balance, beginning of period | 214,987 | 183,641 |
Cash and cash equivalents balance, end of period | $307,569 | $230,741 |
Principles of Consolidation and
Principles of Consolidation and Interim Financial Statements | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |
Principles of Consolidation and Interim Financial Statements | Note 1-Principles of Consolidation and Interim Financial Statements The condensed consolidated balance sheets as of September 30, 2009 and December 31, 2008, the related condensed consolidated statements of income for the three and nine months ended September 30, 2009 and 2008 and the condensed consolidated statements of cash flow for the nine months ended September 30, 2009 and 2008 include the accounts of Amphenol Corporation and its subsidiaries (the Company). The financial statements included herein are unaudited. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of such interim financial statements have been included. The results of operations for the three and nine months ended September 30, 2009 are not necessarily indicative of the results to be expected for the full year. These financial statements and the related notes should be read in conjunction with the financial statements and notes included in the Companys 2008 Annual Report on Form 10-K. |
New Accounting Pronouncements
New Accounting Pronouncements | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |
New Accounting Pronouncements | Note 2- New Accounting Pronouncements In June 2009, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 168, The FASB Accounting Standards Codification (ASC) and the Hierarchy of Generally Accepted Accounting Principles, which is a significant restructuring of accounting and reporting standards designed to simplify user access to all authoritative U.S. generally accepted accounting principles by providing the authoritative literature in a topically organized structure. The Company has adopted the ASC, which became effective for interim and annual periods ending after September 15, 2009. The Subsequent Events topic of the ASC provides general standards of accounting for, and disclosure of, events that occur after the balance sheet date but before financial statements are issued or are available to be issued. In particular, these standards set forth: (1) the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (2) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements and (3) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. Certain standards within the Subsequent Events topic regarding disclosure became effective for interim or annual financial periods ending after June 15, 2009. The Company adopted such standards, which did not have a material impact on the Companys condensed consolidated financial statements. The Company evaluated subsequent events through the date the accompanying financial statements were issued, which was October 26, 2009. In June 2009, the FASB issued Statement of Financial Accounting Standards No. 166, Accounting for Transfers of Financial Assets- an amendment of FASB Statement No. 140 (SFAS 166) and Statement of Financial Accounting Standards No. 167 Amendments to FASB Interpretation No. 46(R) (Consolidation of Variable Interest Entities) (SFAS 167). Neither of these standards is currently defined in the FASB Accounting Standards Codification. SFAS 166 applies prospectively to financial asset transfers occurring in fiscal years beginning after November 15, 2009 and SFAS 167 applies prospectively to variable interest entities existing on or after November 15, 2009. The objective of SFAS 166 is to improve the relevance, representational faithfulness and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets; the effects of a transfer on its financial position; financial performance and cash flows; and a transferors continuing involvement, if any, in transferred financial assets. SFAS 166 eliminates the exemption from consolidation for qualifying special-purpose entities (QSPEs). As a result, a transferor must evaluate existing QSPEs to determine whether they must be consolidated in the reporting entitys financial statements. This statement limits the circumstances in which a financial asset or portion |
Inventories
Inventories | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |
Inventories | Note 3-Inventories Inventories, net, consist of: September 30, 2009 December 31, 2008 Raw materials and supplies $ 122,510 $ 130,572 Work in process 211,777 233,003 Finished goods 121,703 148,932 $ 455,990 $ 512,507 |
Reportable Business Segments
Reportable Business Segments | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |
Reportable Business Segments | Note 4-Reportable Business Segments The Company has two reportable business segments: (i) Interconnect Products and Assemblies and (ii) Cable Products. The Interconnect Products and Assemblies segment produces connectors and connector assemblies primarily for the communications, aerospace, industrial and automotive markets. The Cable Products segment produces coaxial and flat ribbon cable and related products primarily for the communications markets, including cable television. The accounting policies of the segments are the same as those for the Company as a whole. The Company evaluates the performance of its business segments 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. The segment results for the three months ended September 30, 2009 and 2008 are as follows: Interconnect Products and Assemblies Cable Products Total 2009 2008 2009 2008 2009 2008 Net sales -external $ 648,053 $ 786,177 $ 68,520 $ 77,481 $ 716,573 $ 863,658 -inter-segment 883 944 3,611 4,577 4,494 5,521 Segment operating income 126,720 175,525 11,058 8,532 137,778 184,057 The segment results for the nine months ended September 30, 2009 and 2008 are as follows: Interconnect Products and Assemblies Cable Products Total 2009 2008 2009 2008 2009 2008 Net sales -external $ 1,871,451 $ 2,257,914 $ 190,318 $ 223,275 $ 2,061,769 $ 2,481,189 -inter-segment 2,392 2,988 8,051 12,648 10,443 15,636 Segment operating income 362,906 500,686 28,953 25,531 391,859 526,217 A reconciliation of segment operating income to consolidated income before income taxes for the three and nine months ended September 30, 2009 and 2008 is summarized as follows: Three months endedSeptember 30, Nine months endedSeptember 30, 2009 2008 2009 2008 Segment operating income $ 137,778 $ 184,057 $ 391,859 $ 526,217 Interest expense (8,961 ) (9,772 ) (27,090 ) (29,586 ) Other expenses, net (8,602 ) (7,977 ) (27,089 ) (24,770 ) Stock-based compensation expense (5,231 ) (4,581 ) (15,259 ) (11,777 ) Income before income taxes $ 114,984 $ 161,727 $ 322,421 $ 460,084 |
Comprehensive Income
Comprehensive Income | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |
Comprehensive Income | Note 5-Comprehensive Income Total comprehensive income for the three and nine months ended September 30, 2009 and 2008 is summarized as follows: Three months ended September 30, Nine months ended September 30, 2009 2008 2009 2008 Net income $ 83,364 $ 116,482 $ 237,239 $ 328,033 Currency translation adjustments 28,220 (42,982 ) 23,976 (30,343 ) Revaluation of interest rate derivatives 3,498 415 8,409 (1,080 ) Defined benefit plan liability adjustment (2 ) (367 ) (294 ) (367 ) Total comprehensive income $ 115,080 $ 73,548 $ 269,330 $ 296,243 |
Noncontrolling Interests
Noncontrolling Interests | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |
Noncontrolling Interests | Note 6-Noncontrolling Interests Effective January 1, 2009, the Company adopted the standards set forth in the Consolidation Topic of the ASC. These standards require companies to classify expenses related to noncontrolling interests share in income below net income (earnings per share continues to be determined after the impact of the noncontrolling interests share in net income of the Company). In addition, these standards require the liability related to noncontrolling interests to be presented as a separate caption within equity. The presentation and disclosure requirements of these standards were retroactively applied. A reconciliation of consolidated changes in equity for the nine months ended September 30, 2009 is as follows: Amphenol Corporation Shareholders Common Additional Paid- Accumulated Accum. Other Comprehensive Noncontrolling Total Stock In Capital Earnings Loss Interests Equity Balance as of December 31, 2008 $ 171 $ 22,746 $ 1,467,099 $ (140,591 ) $ 19,144 $ 1,368,569 Comprehensive income: Net income 230,195 7,044 237,239 Translation adjustments 25,255 (1,279 ) 23,976 Revaluation of interest rate derivatives 8,409 8,409 Defined benefit plan liability adjustment (294 ) (294 ) Payments to shareholders of noncontrolling interests (7,978 ) (7,978 ) Stock options exercised, including tax benefit 1 5,596 5,597 Stock compensation 131 131 Dividends declared (7,711 ) (7,711 ) Stock-based compensation expense 15,259 15,259 Balance as of September 30, 2009 $ 172 $ 43,732 $ 1,689,583 $ (107,221 ) $ 16,931 $ 1,643,197 A reconciliation of consolidated changes in equity for the nine months ended September 30, 2008 is as follows: Amphenol Corporation Shareholders Common Additional Paid- In Capital Accumulated Accum. Other Comprehensive Treasury Noncontrolling Total Stock (Deficit) Earnings Loss Stock Interests Equity Balance as of December 31, 2007 $ 181 $ (43,647 ) $ 1,431,635 $ (43,644 ) $ (79,611 ) $ 14,834 $ 1,279,748 Comprehensive income: Net income 320,418 7,615 328,033 Translation adjustments (30,562 ) 219 (30,343 ) Revaluation of interest rate derivatives (1,080 ) (1,080 ) Defined benefit plan liability adjustment (367 ) (367 ) Purchase of treasury stock (143,693 ) (143,693 ) Retirement of treasury stock (5 ) (203,791 ) 203,796 Stock options exercised, including tax benefit 2 49,906 49,908 Stock compensation 159 159 Dividends declared (7,902 ) (7,902 ) Stock-based compensation expense 11,777 |
Earnings Per Share
Earnings Per Share | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |
Earnings Per Share | Note 7-Earnings Per Share Basic earnings per share (EPS) is computed by dividing net income by the weighted-average number of common shares outstanding. Diluted EPS is computed by dividing net income by the weighted-average number of common shares and dilutive common shares outstanding, which relates to stock options. A reconciliation of the basic average common shares outstanding to diluted average common shares outstanding for the three and nine months ended September 30, 2009 and 2008 is as follows (dollars in thousands, except per share amounts): Three months ended September30, Nine months ended September30, 2009 2008 2009 2008 Net income attributable to Amphenol Corporation $ 80,915 $ 112,955 $ 230,195 $ 320,418 Basic average common shares outstanding 171,428,237 176,716,395 171,311,072 176,290,446 Effect of dilutive stock options 2,500,352 3,417,715 2,250,892 3,619,644 Diluted average common shares outstanding 173,928,589 180,134,110 173,561,964 179,910,090 Earnings per share: Basic $ 0.47 $ 0.64 $ 1.34 $ 1.82 Diluted $ 0.47 $ 0.63 $ 1.33 $ 1.78 Excluded from the computations above were anti-dilutive shares of 7,671,930 and 2,146,000 for the nine months ended September30, 2009 and 2008, respectively. |
Commitments and Contingencies
Commitments and Contingencies | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |
Commitments and Contingencies | Note8-Commitments and Contingencies In the course of pursuing its normal business activities, the Company is involved in various legal proceedings and claims. Management does not expect that amounts, if any, which it may be required to pay by reason of such proceedings or claims will have a material effect on the Companys financial condition or results of operations. Certain operations of the Company are subject to environmental laws and regulations which govern the discharge of pollutants into the air and water, as well as the handling and disposal of solid and hazardous wastes. The Company believes that its operations are currently in substantial compliance with such applicable environmental laws and regulations and that the costs of continuing compliance will not have a material effect on the Companys financial condition or results of operations. Subsequent to the acquisition of Amphenol Corporation from Allied Signal Corporation (Allied Signal) in 1987 (Allied Signal merged with and into Honeywell International,Inc. in December1999 (Honeywell)), the Company and Honeywell were named jointly and severally liable as potentially responsible parties in connection with several environmental cleanup sites. The Company and Honeywell jointly consented to perform certain investigations and remediation and monitoring activities at two sites, and they have been jointly ordered to perform work at another site. The costs incurred relating to these three sites are reimbursed by Honeywell based on an agreement (the Honeywell Agreement) entered into in connection with the acquisition in 1987. For sites covered by the Honeywell Agreement, to the extent that conditions or circumstances occurred or existed at the time of or prior to the acquisition in 1987, Honeywell is obligated to reimburse the Company 100% of such costs. Honeywell representatives continue to work closely with the Company in addressing the most significant environmental liabilities covered by the Honeywell Agreement. Management does not believe that the costs associated with resolution of these or any other environmental matters will have a material effect on the Companys consolidated financial condition or results of operations. The environmental investigation, remediation and monitoring activities identified by the Company, including those referred to above, are covered under the Honeywell Agreement. |
Stock-Based Compensation
Stock-Based Compensation | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |
Stock-Based Compensation | Note 9-Stock-Based Compensation In May2009, the Company adopted the 2009 Stock Purchase and Option Plan (the 2009 Option Plan) for Key Employees of Amphenol Corporation and Subsidiaries. The Company previously maintained the 1997 Option Plan (the 1997 Option Plan) and maintains the 2000 Stock Purchase and Option Plan (the 2000 Option Plan). As of April2009, all previously awarded options under the 1997 Option Plan have been exercised or forfeited, and the 1997 Option Plan has been terminated per the terms of the 1997 Option Plan. The 2000 Option Plan and the 2009 Option Plan authorize the granting of additional stock options by a committee of the Companys Board of Directors, although the Board of Directors has indicated that it does not intend to make any additional option grants under the 2000 Option Plan. As of September30, 2009, there were no shares of common stock available for the granting of additional stock options under the 2000 Option Plan, and there were 12,336,000 shares of common stock available for the granting of additional stock options under the 2009 Option Plan. Options granted under the 2000 Option Plan and the 2009 Option Plan vest ratably over a period of five years and are exercisable over a period of ten years from the date of grant. In 2004, the Company adopted the 2004 Stock Option Plan for Directors of Amphenol Corporation (the Directors Option Plan). The Directors Option Plan is administered by the Companys Board of Directors. As of September30, 2009, the maximum number of shares of common stock available for the granting of additional stock options under the Directors Option Plan was 200,000. Options granted under the Directors Option Plan vest ratably over a period of three years and are exercisable over a period of ten years from the date of grant. The grant-date fair value of each option grant under the 2000 Option Plan, the 2009 Option Plan and the Directors Option Plan is estimated using the Black-Scholes option pricing model. The fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs. Expected share price volatility was calculated based on the historical volatility of the stock of Amphenol Corporation and implied volatility derived from related exchange traded options. The average expected life was based on the contractual term of the option and expected employee exercise and historical post-vesting employment termination behavior. The risk-free interest rate is based on U.S. Treasury zero-coupon issues with a remaining term equal to the expected life assumed at the date of grant. The expected annual dividend per share was based on Amphenol Corporations dividend rate. Stock-based compensation expense includes the estimated effects of forfeitures, which are adjusted over the requisite service period to the extent actual forfeitures differ or are expected to differ from such estimates. Changes in estimated forfeitures are recognized in the period of change and impact the amount of expense to be re |
Shareholders' Equity
Shareholders' Equity | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |
Shareholders' Equity | Note 10-Shareholders Equity The Company maintains an open-market stock repurchase program (the Program) expiring on January31, 2010 to repurchase up to 20,000,000 shares of its common stock. The Company did not purchase any shares of its common stock under the Program during the nine months ended September30, 2009. As of September30, 2009, approximately 1,850,000 shares of common stock may still be purchased under the Program. The Company pays a quarterly dividend on its common stock of $.015 per share. For the three and nine months ended September30, 2009, the Company paid dividends in the amount of nil and $7,706, respectively. For the three and nine months ended September30, 2009, the Company declared dividends in the amount of $2,572 and $7,711, respectively. |
Benefit Plans and Other Postret
Benefit Plans and Other Postretirement Benefits | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |
Benefit Plans and Other Postretirement Benefits | Note 11-Benefit Plans and Other Postretirement Benefits The Company and certain of its domestic subsidiaries have a defined benefit pension plan (the U.S. Plan) covering certain of its U.S. employees. Benefits under the U.S. Plan are generally based on years of service and compensation and are generally noncontributory. Certain foreign subsidiaries have defined benefit plans covering their employees. The following is a summary of the funded status of the Companys defined benefit plans as of the most recent actuarial valuations; for each year presented below, projected benefits exceed assets. Pension Benefits Other Postretirement Benefits Three months ended September30, 2009 2008 2009 2008 Service cost $ 1,709 $ 1,921 $ 40 $ 47 Interest cost 5,732 5,755 209 219 Expected return on plan assets (5,787 ) (6,585 ) Amortization of transition obligation (26 ) (27 ) 16 16 Amortization of prior service cost 516 519 Amortization of net actuarial losses 1,936 1,514 193 241 Net benefits expense $ 4,080 $ 3,097 $ 458 $ 523 Pension Benefits Other Postretirement Benefits Nine months ended September30, 2009 2008 2009 2008 Service cost $ 4,996 $ 5,826 $ 120 $ 141 Interest cost 16,953 17,369 627 658 Expected return on plan assets (17,237 ) (19,842 ) Amortization of transition obligation (72 ) (81 ) 48 47 Amortization of prior service cost 1,546 1,557 Amortization of net actuarial losses 5,773 4,552 580 723 Net benefits expense $ 11,959 $ 9,381 $ 1,375 $ 1,569 The Company makes cash contributions to the U.S. Plan in accordance with minimum funding requirements and may also make voluntary cash contributions. Due to minimum funding levels of the U.S. Plan being met, the Company is not required to, nor does it intend to, make any cash contributions in 2009. Voluntary cash contributions to the U.S. Plan in future years will depend on a number of factors including performance of the U.S. Plan assets. The Company offers various defined contribution plans for its U.S. and foreign employees. Participation in these plans is based on certain eligibility requirements. The Company matches the majority of employee contributions to the U.S. defined contribution plans with cash contributions up to a maximum of 5% of eligible compensation. During the nine months ended September30, 2009 and 2008, the total matching contributions to these U.S. defined contribution plans were approximately $1,481 and $1,396, respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |
Goodwill and Other Intangible Assets | Note 12-Goodwill and Other Intangible Assets As of September30, 2009, the Company has goodwill totaling $1,365,176, of which $1,291,627 is related to the Interconnect Products and Assemblies segment with the remainder related to the Cable Products segment. For the nine months ended September30, 2009, goodwill increased by $132,841, primarily as a result of two acquisitions in the Interconnect Products and Assemblies segment made during the period. The Company is in the process of completing its analysis of fair value attributes of the assets acquired related to its 2009 and certain of its 2008 acquisitions and anticipates that the final assessment of values will not differ materially from the preliminary assessment. The Company does not have any intangible assets not subject to amortization other than goodwill. A summary of the Companys amortizable intangible assets as of September30, 2009 and December31, 2008 is as follows: September30, 2009 December31, 2008 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Customer relationships $ 60,000 $ 15,600 $ 31,400 $ 9,800 Proprietary technology 39,800 8,600 36,700 6,600 License agreements 6,000 2,900 6,000 2,200 Trade names and other 9,400 7,200 7,500 6,400 Total $ 115,200 $ 34,300 $ 81,600 $ 25,000 Customer relationships, proprietary technology, license agreements and trade names and other amortizable intangible assets have weighted average useful lives of approximately 9 years, 15 years, 8 years and 15 years, respectively, for an aggregate weighted average useful life of approximately 11 years. Intangible assets are included in other long-term assets in the accompanying Condensed Consolidated Balance Sheets. The aggregate amortization expense for the three months ended September30, 2009 and 2008 was approximately $3,000 and $2,664, respectively. The aggregate amortization expense for the nine months ended September30, 2009 and 2008 was approximately $9,300 and $7,286, respectively. As of September30, 2009, amortization expense estimated for each of the next five fiscal years is approximately $12,300 in 2010, $10,300 each in 2011 and 2012, $7,100 in 2013 and $5,000 in 2014. |
Long-Term Debt
Long-Term Debt | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |
Long-Term Debt | Note 13Long-Term Debt The Company has a five-year $1,000,000 unsecured revolving credit facility (the Revolving Credit Facility) that is scheduled to expire in August2011, of which approximately $780,000 was drawn as of September30, 2009. As of September30, 2009, availability under the Revolving Credit Facility was $220,000. The Companys interest rate on borrowings under the Revolving Credit Facility is LIBOR plus 40 basis points. The Company also pays certain annual agency and facility fees. The Revolving Credit Facility requires that the Company satisfy certain financial covenants. As of September30, 2009, the Company was in compliance with all financial covenants under the Revolving Credit Facility, and the Companys credit rating from Standard Poors was BBB- and from Moodys was Baa3. In March2009, the Company entered into a $20,000 letter of credit facility, of which approximately $14,900 was outstanding as of September30, 2009. As of September30, 2009, the Company had interest rate swap agreements of $150,000, $250,000 and $250,000 that fix the Companys LIBOR interest rate at 4.40%, 4.65% and 4.73%, respectively, expiring in December2009, December2009 and July2010, respectively. The fair value of swaps indicated that termination of the agreements as of September30, 2009 would have resulted in a pre-tax loss of $11,811; such loss, net of tax of $4,370 is included in accumulated other comprehensive loss in the accompanying Condensed Consolidated Balance Sheets. The Company estimates that the book value of its long-term debt approximates fair value. |
Business Combinations
Business Combinations | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |
Business Combinations | Note 14- Business Combinations Effective January1, 2009, the Company adopted standards set forth in the Business Combinations topic of the ASC. Such standards are applicable to the Company for acquisitions completed on or after January1, 2009 and establish principles and requirements for how the acquirer: (1)recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; (2)recognizes and measures the goodwill acquired in the business combination; and (3)determines what information to disclose in the financial statements. The principles in the Business Combinations topic that are most applicable to the Company are: (1)companies are required to expense transaction costs as incurred; (2)any subsequent adjustments to a recorded performance-based liability after its recognition are adjusted through income as opposed to goodwill; and (3)any noncontrolling interests are recorded at fair value. During the nine months ended September30, 2009, goodwill of approximately $128,000 attributable to the Interconnect Products and Assemblies segment was recognized related to businesses acquired during the period, which was not material to the Company either individually or in the aggregate. |
Fair Value Measurements
Fair Value Measurements | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |
Fair Value Measurements | Note 15Fair Value Measurements Effective January1, 2008, the Company adopted standards set forth in the Fair Value Measurements and Disclosures topic of the ASC, which includes a new framework for measuring fair value of financial and non-financial instruments and expands related disclosures. The Company does not have any non-financial instruments accounted for at fair value on a recurring basis. Broadly, the framework within the Fair Value Measurements and Disclosures topic requires fair value to be determined based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. These standards establish market or observable inputs as the preferred source of values. Assumptions based on hypothetical transactions are used in the absence of market inputs. The valuation techniques required are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Companys market assumptions. These two types of inputs create the following fair value hierarchy: Level 1 Quoted prices for identical instruments in active markets. Level 2 Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3 Significant inputs to the valuation model are unobservable. The Company believes that the assets or liabilities subject to such standards with interim disclosure requirements are short-term investments that are independently valued using market observable Level 2 inputs and derivative instruments, which represent interest rate swaps that are independently valued using market observable Level 2 inputs including interest rate yield curves. As of September30, 2009 and December31, 2008, the fair values of short-term investments were $18,542 and $4,428, respectively, and were included in other current assets in the accompanying Condensed Consolidated Balance Sheets. As of September30, 2009 and December31, 2008, the fair values of derivative instruments were $11,811 and $24,957, respectively, and were included in other accrued expenses at September30, 2009 and in other accrued expenses and other long-term liabilities at December31, 2008 (Note 16) in the accompanying Condensed Consolidated Balance Sheets. The impact of the credit risk related to these financial assets is immaterial. The Company does not have any other significant financial or non-financial assets and liabilities that are measured at fair value on a non-recurring basis. |
Derivative Instruments
Derivative Instruments | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |
Derivative Instruments | Note 16- Derivative Instruments Effective January1, 2009, the Company adopted standards set forth in the Derivatives and Hedging topic of the ASC, which require disclosure of: (1)how and why an entity uses derivative instruments; (2)how derivative instruments and related hedged items are accounted for in accordance with the Derivatives and Hedging topic; and (3)how derivative instruments and related hedged items affect an entitys financial position, financial performance, and cash flows. The Company is exposed to certain risks related to its ongoing business operations. The primary risk managed by using derivative instruments is interest rate risk. Forward interest rate swap agreements are entered into to manage interest rate risk associated with the Companys variable-rate borrowings. Companies are required to recognize derivative instruments as either assets or liabilities at fair value in the Condensed Consolidated Balance Sheets. In accordance with the Derivatives and Hedging topic, the Company designates forward interest rate swap agreements on variable-rate borrowings as cash flow hedges. As of September30, 2009 and December31, 2008, the Company had the following derivative activity related to cash flow hedges: Fair Value Balance Sheet Location September30, 2009 December31, 2008 Derivatives designated as hedging instruments under the Derivatives and Hedging topic of the ASC: Interest rate contracts Other accrued expenses $ 11,811 $ 12,053 Interest rate contracts Other long-term liabilities 12,904 Total derivatives designated as hedging instruments $ 11,811 $ 24,957 For the three and nine months ended September30, 2009, a gain of $3,498 and $8,409, respectively, was recognized in accumulated other comprehensive loss associated with interest rate contracts. No gain or loss was reclassified from accumulated other comprehensive loss into net income during the period. The Company expects to reclassify approximately $11,800 from accumulated other comprehensive loss into net income in the next twelve months. As of September30, 2009, the derivatives of the Company were considered effective hedges as defined in the Derivatives and Hedging topic. |
Off-Balance Sheet Arrangement -
Off-Balance Sheet Arrangement - Accounts Receivable Securitization | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |
Off-Balance Sheet Arrangement - Accounts Receivable Securitization | Note 17 Off-Balance Sheet Arrangement Accounts Receivable Securitization A subsidiary of the Company has an agreement whereby the subsidiary can sell an undivided interest of up to $100,000 in a designated pool of qualified accounts receivable (the Agreement). The Company services, administers and collects the receivables on behalf of the purchaser. The Agreement includes certain covenants and provides for various events of termination and originally expired in July2009. The Agreement was amended and extended in May2009 and will expire in May2010. Due to the short-term nature of the accounts receivable, the fair value approximates the carrying value. Program fees payable to the purchaser under the Agreement are equivalent to rates afforded high quality commercial paper issuers plus certain fees and administrative expenses and are included in other expenses, net in the accompanying Consolidated Statements of Income. As of September30, 2009 and December31, 2008, approximately $76,000 and $85,000, respectively, of receivables were sold and are therefore not reflected in accounts receivable in the accompanying Condensed Consolidated Balance Sheets. |
Income Taxes
Income Taxes | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |
Income Taxes | Note 18- Income Taxes The provision for income taxes for the third quarter and the first nine months of 2009 was at an effective rate of 27.5% and 26.4%, respectively. The provision for income taxes for the third quarter and the first nine months of 2008 was at an effective rate of 28.0% and 28.7%, respectively. The effective tax rate for the full year 2008 was 27.5%. The effective tax rates for the third quarter and the first nine months of 2009 were lower primarily due to a more favorable mix of income in lower tax jurisdictions. In addition, the lower effective tax rate for the first nine months of 2009 reflects a reduction of income tax expense of approximately $3,600 in the first quarter of 2009 relating to the completion of certain audits of the Companys prior year tax returns. As of September30, 2009, the amount of the liability for unrecognized tax benefits, which if recognized would impact the effective tax rate, was approximately $36,624, the majority of which is included in other long-term liabilities in the accompanying Condensed Consolidated Balance Sheets. |
DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION (USD $) | ||
In Millions, except Share data | 9 Months Ended
Sep. 30, 2009 | Jun. 30, 2008
|
Document and Entity Information | ||
Entity Registrant Name | AMPHENOL CORP /DE/ | |
Entity Central Index Key | 0000820313 | |
Document Type | 10-Q | |
Document Period End Date | 2009-09-30 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Public Float | $7,874 | |
Entity Common Stock, Shares Outstanding | 171,497,123 |