CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | ||
In Thousands | Mar. 31, 2010
| Dec. 31, 2009
|
Current Assets: | ||
Cash and cash equivalents | $431,719 | $384,613 |
Accounts receivable, less allowance for doubtful accounts of $18,022 and $18,785, respectively (Note 2) | 572,616 | 449,591 |
Inventories | 476,097 | 461,750 |
Other current assets | 135,913 | 124,441 |
Total current assets | 1,616,345 | 1,420,395 |
Land and depreciable assets, less accumulated depreciation of $572,922 and $575,187, respectively | 327,211 | 332,875 |
Goodwill | 1,371,800 | 1,368,672 |
Other long-term assets | 95,160 | 97,242 |
Total Assets | 3,410,516 | 3,219,184 |
Current Liabilities: | ||
Accounts payable | 319,820 | 292,122 |
Accrued salaries, wages and employee benefits | 64,045 | 64,143 |
Accrued income taxes | 70,117 | 57,272 |
Accrued acquisition-related obligations | 5,744 | 7,244 |
Other accrued expenses | 83,715 | 81,979 |
Short-term debt (Note 2) | 49,440 | 399 |
Total current liabilities | 592,881 | 503,159 |
Long-term debt | 752,543 | 753,050 |
Accrued pension and post-employment benefit obligations | 171,082 | 172,235 |
Other long-term liabilities | 26,569 | 27,922 |
Shareholders' Equity: | ||
Common stock | 174 | 174 |
Additional paid-in capital | 80,398 | 71,368 |
Accumulated earnings | 1,870,378 | 1,774,625 |
Accumulated other comprehensive loss | (100,989) | (100,090) |
Total shareholders' equity attributable to Amphenol Corporation | 1,849,961 | 1,746,077 |
Noncontrolling interests | 17,480 | 16,741 |
Total equity | 1,867,441 | 1,762,818 |
Total Liabilities & Shareholders' Equity | $3,410,516 | $3,219,184 |
1_CONDENSED CONSOLIDATED BALANC
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | ||
In Thousands | Mar. 31, 2010
| Dec. 31, 2009
|
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowance for doubtful accounts | $18,022 | $18,785 |
Land and depreciable assets, accumulated depreciation | $572,922 | $575,187 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (USD $) | ||
In Thousands, except Share data | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||
Net sales | $770,954 | $660,012 |
Cost of sales | 521,762 | 453,633 |
Gross profit | 249,192 | 206,379 |
Selling, general and administrative expense | 104,148 | 95,694 |
Operating income | 145,044 | 110,685 |
Interest expense | (10,013) | (8,998) |
Other income (expenses), net | 459 | (215) |
Income before income taxes | 135,490 | 101,472 |
Provision for income taxes | (35,352) | (24,422) |
Net income | 100,138 | 77,050 |
Less: Net income attributable to noncontrolling interests | (1,785) | (2,640) |
Net income attributable to Amphenol Corporation shareholders | $98,353 | $74,410 |
Net income per common share attributable to Amphenol Corporation shareholders-Basic (in dollars per share) | 0.57 | 0.43 |
Weighted average common shares outstanding-Basic (in shares) | 173,266,113 | 171,185,198 |
Net income per common share attributable to Amphenol Corporation shareholders-Diluted (in dollars per share) | 0.56 | 0.43 |
Weighted average common shares outstanding-Diluted (in shares) | 175,575,002 | 173,098,475 |
Dividends declared per common share (in dollars per share) | 0.015 | 0.015 |
2_CONDENSED CONSOLIDATED STATEM
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (USD $) | ||
In Thousands | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
Cash flow from operating activities: | ||
Net income | $100,138 | $77,050 |
Adjustments for cash from operating activities: | ||
Depreciation and amortization | 24,344 | 22,991 |
Net change in receivables sold under Receivables Securitization Facility (Note 2) | (82,000) | 6,000 |
Stock-based compensation expense | 5,443 | 4,784 |
Net change in components of working capital | (15,286) | 34,255 |
Net change in other long-term assets and liabilities | (796) | (2,315) |
Cash flow provided by operating activities | 31,843 | 142,765 |
Cash flow from investing activities: | ||
Additions to property, plant and equipment, net | (18,353) | (16,871) |
(Purchase) sale of short-term investments | (8,353) | 1,420 |
Acquisitions, net of cash acquired | (3,000) | (261,464) |
Cash flow used in investing activities | (29,706) | (276,915) |
Cash flow from financing activities: | ||
Borrowings under revolving credit facilities | 19,600 | 268,587 |
Payments under revolving credit facilities | (19,994) | (182,700) |
Net change in borrowings under Receivables Securitization Facility (Note 2) | 49,000 | |
Proceeds from exercise of stock options | 3,173 | 224 |
Excess tax benefits from stock-based payment arrangements | 582 | 107 |
Payments to shareholders of noncontrolling interests | (1,046) | |
Dividend payments | (2,595) | (5,135) |
Cash flow provided by financing activities | 48,720 | 81,083 |
Effect of exchange rate changes on cash and cash equivalents | (3,751) | (11,401) |
Net change in cash and cash equivalents | 47,106 | (64,468) |
Cash and cash equivalents balance, beginning of period | 384,613 | 214,987 |
Cash and cash equivalents balance, end of period | $431,719 | $150,519 |
Basis of Presentation and Princ
Basis of Presentation and Principles of Consolidation | |
3 Months Ended
Mar. 31, 2010 | |
Basis of Presentation and Principles of Consolidation | |
Basis of Presentation and Principles of Consolidation | Note1-Basis of Presentation and Principles of Consolidation The condensed consolidated balance sheets as of March31, 2010 and December31, 2009, the related condensed consolidated statements of income and cash flow for the three months ended March31, 2010 and 2009 include the accounts of Amphenol Corporation and its subsidiaries (the Company). All material intercompany balances and transactions have been eliminated in consolidation. The 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 months ended March31, 2010 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 2009 Annual Report on Form10-K. |
Adoption of New Accounting Pron
Adoption of New Accounting Pronouncements | |
3 Months Ended
Mar. 31, 2010 | |
Adoption of New Accounting Pronouncements | |
Adoption of New Accounting Pronouncements | Note 2-Adoption of New Accounting Pronouncements In June2009, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No.2009-16, Accounting for Transfers of Financial Assets (ASU 2009-16). ASU 2009-16 limits the circumstances in which transferred financial assets can be derecognized and requires enhanced disclosures regarding transfers of financial assets and a transferors continuing involvement with transferred financial assets. The Company adopted the authoritative accounting guidance on January1, 2010. As a result, the Company no longer accounts for the value of the outstanding undivided interest held by investors under the Companys Receivables Securitization Facility as a sale. In addition, transfers of receivables occurring on or after January1, 2010 are reflected as debt issued in the Companys Condensed Consolidated Statements of Cash Flow (resulting in a reduction of cash flow provided by operating activities of $82,000 for the quarter ended March31, 2010) and recognized as short-term debt in the Companys Condensed Consolidated Balance Sheets. Refer to the discussion of the Companys Receivables Securitization Facility in Note 14. In January2010, the FASB issued new guidance to enhance disclosure requirements related to fair value measurements by requiring certain new disclosures and clarifying certain existing disclosures. This new guidance requires disclosure of the amounts of significant transfers in and out of Level 1 and Level 2 recurring fair value measurements and the reasons for the transfers. In addition, the new guidance requires additional information related to activities in the reconciliation of Level 3 fair value measurements. The new guidance also expands the disclosures related to the disaggregation of assets and liabilities and information about inputs and valuation techniques. The new guidance related to Level 1 and Level 2 fair value measurements is effective for interim and annual reporting periods beginning after December15, 2009 and the new guidance related to Level 3 fair value measurements is effective for fiscal years beginning after December15, 2010 and interim periods during those fiscal years. Effective January1, 2010, the Company adopted the new guidance related to Level 1 and Level 2 fair value measurements. The Companys adoption of the new guidance did not have a material impact on its condensed consolidated financial statements and related notes. Refer to the Fair Value Measurements disclosure in Note 15. |
Reclassifications
Reclassifications | |
3 Months Ended
Mar. 31, 2010 | |
Reclassifications | |
Reclassifications | Note 3-Reclassifications The Company has reclassified certain items in the accompanying Condensed Consolidated Financial Statements for 2009 to be comparable with the classification for the period ended March31, 2010. |
Inventories
Inventories | |
3 Months Ended
Mar. 31, 2010 | |
Inventories | |
Inventories | Note 4-Inventories Inventories consist of: March31, 2010 December31, 2009 Raw materials and supplies $ 128,073 $ 124,192 Work in process 224,218 215,883 Finished goods 123,806 121,675 $ 476,097 $ 461,750 |
Reportable Business Segments
Reportable Business Segments | |
3 Months Ended
Mar. 31, 2010 | |
Reportable Business Segments | |
Reportable Business Segments | Note5-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 March31, 2010 and 2009 are as follows: Interconnect Products and Assemblies Cable Products Total 2010 2009 2010 2009 2010 2009 Net sales -external $ 703,598 $ 601,958 $ 67,356 $ 58,054 $ 770,954 $ 660,012 -inter-segment 651 642 4,956 2,105 5,607 2,747 Segment operating income 148,662 116,443 10,043 7,836 158,705 124,279 A reconciliation of segment operating income to consolidated income before income taxes for the three months ended March31, 2010 and 2009 is summarized as follows: Three months endedMarch31, 2010 2009 Segment operating income $ 158,705 $ 124,279 Interest expense (10,013 ) (8,998 ) Other expenses, net (7,759 ) (9,025 ) Stock-based compensation expense (5,443 ) (4,784 ) Income before income taxes $ 135,490 $ 101,472 |
Comprehensive Income
Comprehensive Income | |
3 Months Ended
Mar. 31, 2010 | |
Comprehensive Income | |
Comprehensive Income | Note 6-Comprehensive Income Total comprehensive income for the three months ended March31, 2010 and 2009 is summarized as follows: Threemonthsended March31, 2010 2009 Net income $ 100,138 $ 77,050 Currency translation adjustments (2,878 ) (30,032 ) Revaluation of interest rate derivatives 1,012 2,460 Defined benefit plan liability adjustment 967 (276 ) Total comprehensive income $ 99,239 $ 49,202 |
Changes in Equity and Noncontro
Changes in Equity and Noncontrolling Interests | |
3 Months Ended
Mar. 31, 2010 | |
Changes in Equity and Noncontrolling Interests | |
Changes in Equity and Noncontrolling Interests | Note 7-Changes in Equity and Noncontrolling Interests Expenses related to noncontrolling interests share in income are classified 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, the liability related to noncontrolling interests is presented as a separate caption within equity. A reconciliation of consolidated changes in equity for the three months ended March31, 2010 is as follows: Amphenol Corporation Shareholders Common Stock Additional Paid- Accumulated Accum. Other Comprehensive Noncontrolling Total Shares Amount In Capital Earnings Loss Interests Equity Balance as of December31, 2009 173 $ 174 $ 71,368 $ 1,774,625 $ (100,090 ) $ 16,741 $ 1,762,818 Net income 98,353 1,785 100,138 Translation adjustments (2,878 ) (2,878 ) Revaluation of interest rate derivatives 1,012 1,012 Defined benefit plan liability adjustment, net of tax 967 967 Payments to shareholders of noncontrolling interests (1,046 ) (1,046 ) Stock options exercised, including tax benefit 1 3,587 3,587 Dividends declared (2,600 ) (2,600 ) Stock-based compensation expense 5,443 5,443 Balance as of March31, 2010 174 $ 174 $ 80,398 $ 1,870,378 $ (100,989 ) $ 17,480 $ 1,867,441 A reconciliation of consolidated changes in equity for the three months ended March31, 2009 is as follows: Amphenol Corporation Shareholders Common Stock Additional Paid- Accumulated Accum. Other Comprehensive Noncontrolling Total Shares Amount In Capital Earnings Loss Interests Equity Balance as of December31, 2008 171 $ 171 $ 22,746 $ 1,467,099 $ (140,591 ) $ 19,144 $ 1,368,569 Net income 74,410 2,640 77,050 Translation adjustments (28,565 ) (1,467 ) (30,032 ) Revaluation of interest rate derivatives 2,460 2,460 Defined benefit plan liability adjustment, net of tax (276 ) (276 ) Payments to shareholders of noncontrolling interests (1,254 ) (1,254 ) Stock options exercised, including tax benefit 1 1 340 341 Stock compensation 39 39 Dividends declared (2,568 ) (2,568 ) Stock-based compensation expense 4,784 4,784 Balance as of March31, 2009 172 $ 172 $ 27,909 $ 1,538,941 $ (166,972 ) $ 19,063 $ 1,419,113 |
Earnings Per Share
Earnings Per Share | |
3 Months Ended
Mar. 31, 2010 | |
Earnings Per Share | |
Earnings Per Share | Note 8-Earnings Per Share Basic earnings per share (EPS) is computed by dividing net income attributable to Amphenol Corporation shareholders by the weighted-average number of common shares outstanding. Diluted EPS is computed by dividing net income attributable to Amphenol Corporation shareholders by the weighted-average number of common shares and dilutive common shares outstanding. A reconciliation of the basic weighted average common shares outstanding to diluted weighted average common shares outstanding for the three months ended March31, 2010 and 2009 is as follows (dollars in thousands, except per share amounts): Three months ended March31, 2010 2009 Net income attributable to Amphenol Corporation shareholders $ 98,353 $ 74,410 Basic weighted average common shares outstanding 173,266,113 171,185,198 Effect of dilutive stock options 2,308,889 1,913,277 Diluted weighted average common shares outstanding 175,575,002 173,098,475 Earnings per share attributable to Amphenol Corporation shareholders: Basic $ 0.57 $ 0.43 Diluted $ 0.56 $ 0.43 Excluded from the computations above were anti-dilutive common shares of 2,042,300 and 5,892,250 for the three months ended March31, 2010 and 2009, respectively. |
Commitments and Contingencies
Commitments and Contingencies | |
3 Months Ended
Mar. 31, 2010 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note9-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 the Company may be required to pay by reason of such proceedings or claims will have a material effect on the Companys consolidated 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 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. (Honeywell) in December1999), 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 adverse 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 | |
3 Months Ended
Mar. 31, 2010 | |
Stock-Based Compensation | |
Stock-Based Compensation | Note 10-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, and the Company also maintains the 2000 Stock Purchase and Option Plan (the 2000 Option Plan). The 2009 Option Plan authorizes the granting of additional stock options by a committee of the Companys Board of Directors. As of March31, 2010, there were no shares of common stock available for the granting of additional stock options under the 2000 Option Plan, and there were 12,431,500 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 March31, 2010, 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 stock 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 recognized in future periods.For the three months ended March31, 2010, the Companys income before income taxes and net income were reduced for stock-based compensation expense by $5,443 and $4,022, respectively. For the three months ended March31, 2009, the Companys income before income taxes and net income were reduced for stock-based compensation expense by $4,784 and $3,631, respectively. The expense incurred for |
Shareholders' Equity
Shareholders' Equity | |
3 Months Ended
Mar. 31, 2010 | |
Shareholders' Equity | |
Shareholders' Equity | Note 11-Shareholders Equity The Company had an open-market stock repurchase program (the Program) to repurchase up to 20,000,000 shares of its common stock, which expired on January31, 2010. In 2010, the Company did not purchase any shares of its common stock under the Program prior to its expiration. The Company pays a quarterly dividend on its common stock of $.015 per share. The Company paid its first quarter dividend in the amount of $2,600 or $.015 per share on April6, 2010 to shareholders of record as of March17, 2010. Dividends paid during the three months ended March31, 2010 were $2,595, which represented those declared in December2009. |
Benefit Plans and Other Postret
Benefit Plans and Other Postretirement Benefits | |
3 Months Ended
Mar. 31, 2010 | |
Benefit Plans and Other Postretirement Benefits | |
Benefit Plans and Other Postretirement Benefits | Note 12-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. Certain U.S. employees not covered by the U.S. Plan are covered by defined contribution plans. The following is a summary, based on the most recent actuarial valuations of the Companys net cost for pension benefits and other postretirement benefits for the three months ended March31, 2010 and 2009. Pension Benefits Other Postretirement Benefits Three months ended March 31, 2010 2009 2010 2009 Service cost $ 1,459 $ 1,621 $ 41 $ 40 Interest cost 5,710 5,568 197 209 Expected return on plan assets (5,646 ) (5,701 ) Amortization of transition obligation (27 ) (22 ) 16 16 Amortization of prior service cost 888 514 Amortization of net actuarial losses 2,633 1,912 221 193 Net pension expense $ 5,017 $ 3,892 $ 475 $ 458 The Company makes cash contributions to the U.S. Plan in accordance with minimum funding requirements and may also make voluntary cash contributions. The Company estimates, based on current actuarial calculations, that it may make a voluntary cash contribution to the U.S. Plan in 2010 of approximately $15,000 to $20,000. Voluntary cash contributions to the U.S. Plan in future years will depend on a number of factors, including the investment 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 three months ended March31, 2010 and 2009, the total matching contributions to these U.S. defined contribution plans were approximately $500 and $528, respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | |
3 Months Ended
Mar. 31, 2010 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | Note 13-Goodwill and Other Intangible Assets As of March31, 2010, the Company has goodwill totaling $1,371,800, of which $1,298,251 is related to the Interconnect Products and Assemblies segment with the remainder related to the Cable Products segment. For the three months ended March31, 2010, goodwill increased by $3,128, primarily as a result of currency translation. The Company is in the process of completing its analysis of fair value attributes of the assets acquired related to certain of its 2009 acquisitions and anticipates that the final assessment of values will not differ materially from the preliminary assessment. The Company has no intangible assets not subject to amortization other than goodwill. A summary of the Companys amortizable intangible assets as of March31, 2010 and December31, 2009 is as follows: March31, 2010 December31, 2009 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Customer relationships $ 60,000 $ 19,700 $ 60,000 $ 17,700 Proprietary technology 39,800 10,000 39,800 9,300 License agreements 6,000 3,300 6,000 3,100 Trade names and other 9,400 7,600 9,400 7,400 Total $ 115,200 $ 40,600 $ 115,200 $ 37,500 Customer relationships, proprietary technology, license agreements and trade names and other amortizable intangible assets have weighted average useful lives of approximately 9 years, 14 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 March31, 2010 and 2009 was approximately $3,100 and $2,900, respectively. Amortization expense estimated for each of the next five fiscal years is approximately $10,600 in 2011, $10,300 in 2012, $7,100 in 2013, and $5,000 in each of 2014 and 2015. |
Debt
Debt | |
3 Months Ended
Mar. 31, 2010 | |
Debt | |
Debt | Note 14Debt Senior Notes In November2009, the Company issued $600,000 of unsecured 4.75% Senior Notes due in November, 2014 at a discount to the public of 99.813%. Net proceeds from the sale of the Senior Notes were used to repay borrowings under the Companys Revolving Credit Facility. In addition, the Company incurred fees and expenses related to the Senior Notes of $4,650, which were capitalized and will be amortized over the term of the Senior Notes. Interest on the Senior Notes is payable semi-annually on May15 and November15 of each year, beginning on May15, 2010. The Company will make each interest payment to the holders of record on the immediately preceding May1 and November1. The Company may, at its option, redeem some or all of the Senior Notes at any time by paying a make-whole premium, plus accrued and unpaid interest, if any, to the date of repurchase. The Senior Notes are unsecured and rank equally in right of payment with all of the Companys other unsecured senior indebtedness. The carrying value of the Senior Notes approximated their fair value at March31, 2010 based on recent bid prices. Revolving Credit Facility In conjunction with the note issuance, the Companys existing five-year senior unsecured Revolving Credit Facility, which matures in August2011, was amended to reduce the commitment from $1,000,000 to $752,000. At March31, 2010, borrowings and availability under the facility were $150,000 and $602,000, respectively. 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. At March31, 2010, the Company was in compliance with the financial covenants under the Revolving Credit Facility, and the Companys credit rating from Standard Poors was BBB- and from Moodys was Baa3. As of March31, 2010, the Company had interest rate swap agreements of $150,000 that fix the Companys LIBOR interest rate at 4.73%, expiring in July2010. The fair value of such agreements represents the amounts that the Company would receive or pay if the agreements were terminated. The fair value of swaps indicated that termination of the agreements at March31, 2010 would have resulted in a pre-tax loss of $2,057; such loss, net of tax of $761, was recorded in accumulated other comprehensive loss. Receivables Securitization Facility A subsidiary of the Company has an agreement with a financial institution whereby the subsidiary can sell an undivided interest of up to $100,000 in a designated pool of qualified accounts receivable (the Receivables Securitization Facility). The Company services, administers and collects the receivables on behalf of the purchaser. The Receivables Securitization Facility includes certain covenants and provides for various events of termination and expires in May2010. Upon expiration of the term, the Company intends to replace the Receivables Securitization Facility with a similar program. In accordance with previous accounting guidance, the receivables sold under the Receivables Securitization Faci |
Fair Value Measurements
Fair Value Measurements | |
3 Months Ended
Mar. 31, 2010 | |
Fair Value Measurements | |
Fair Value Measurements | Note 15Fair Value Measurements The Company follows the framework within the Fair Value Measurements and Disclosures topic of the ASC, which 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 Company does not have any non-financial instruments accounted for at fair value on a recurring basis. 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 fair value 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. The Companys Level 2 short-term investments consist primarily of certificates of deposit with original maturities of twelve months or less. As of March31, 2010 and December31, 2009, the fair values of short-term investments were $46,123 and $37,770, respectively, and were included in other current assets in the accompanying Condensed Consolidated Balance Sheets. As of March31, 2010 and December31, 2009, the fair values of derivative instruments were $2,057 and $3,664, respectively, which were included in other accrued expenses (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 | |
3 Months Ended
Mar. 31, 2010 | |
Derivative Instruments | |
Derivative Instruments | Note 16- Derivative Instruments The Company accounts for its derivative instruments in accordance with the Derivatives and Hedging topic of the ASC, which requires 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. Derivative instruments are required to be recognized 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 March31, 2010 and December31, 2009, the Company had the following derivative activity related to cash flow hedges: Fair Value Balance Sheet Location March31, 2010 December31, 2009 Derivatives designated as hedging instruments under the Derivatives and Hedging topic of the ASC: Interest rate contracts Other accrued expenses $ 2,057 $ 3,664 Total derivatives designated as hedging instruments $ 2,057 $ 3,664 For the three months ended March31, 2010, a gain of $1,012 was recognized in accumulated other comprehensive loss associated with interest rate contracts. Approximately $1,700 was reclassified from accumulated other comprehensive loss into net income during the period. The Company expects to reclassify approximately $2,000 from accumulated other comprehensive loss into net income in the next twelve months. As of March31, 2010, the derivatives of the Company were considered effective hedges as defined in the Derivatives and Hedging topic. |
Income Taxes
Income Taxes | |
3 Months Ended
Mar. 31, 2010 | |
Income Taxes | |
Income Taxes | Note 17- Income Taxes The provision for income taxes for the first quarter of 2010 and 2009 was at an effective rate of 26.1% and 24.1%, respectively. The rate increase is due primarily to a smaller reduction of income tax expense in 2010 as compared to 2009 of $1,900 and $3,600, respectively, relating primarily to a reduction in tax liabilities for unrecognized tax benefits due to the expiration of various statutes and completion of certain audits of the Companys prior year tax returns. The Company is present in over fifty taxable jurisdictions, and at any point in time has numerous audits underway at various stages of completion. With few exceptions, the Company is subject to income tax examinations by tax authorities for the years 2006 and after. The Company is generally not able to precisely estimate the ultimate settlement amounts or timing until the close of an audit. The Company evaluates its tax positions and establishes liabilities for uncertain tax positions that may be challenged by local authorities and may not be fully sustained, despite the Companys belief that the underlying tax positions are fully supportable. As of March31, 2010, the amount of the liability for unrecognized tax benefits, which if recognized would impact the effective tax rate, was approximately $39,385. Unrecognized tax benefits are reviewed on an ongoing basis and are adjusted for changing facts and circumstances, including progress of tax audits and closing of statute of limitations. Based on information currently available, management anticipates that over the next twelve month period, audit activity could be completed and statutes of limitations may close relating to existing unrecognized tax benefits of approximately $19,000. |
Document and Entity Information
Document and Entity Information | ||
3 Months Ended
Mar. 31, 2010 | Apr. 30, 2010
| |
Document and Entity Information | ||
Entity Registrant Name | AMPHENOL CORP /DE/ | |
Entity Central Index Key | 0000820313 | |
Document Type | 10-Q | |
Document Period End Date | 2010-03-31 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 173,552,423 | |
Document Fiscal Year Focus | 2,010 | |
Document Fiscal Period Focus | Q1 |