AMPHENOL CORPORATION

(APH)
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AMPHENOL CORP /DE/ MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

04/29/2022 | 04:41pm EDT

(amounts in millions, except share and per share data,

                             unless otherwise noted)


The following discussion and analysis of the results of operations and financial
condition for the three months ended March 31, 2022 and 2021 has been derived
from and should be read in conjunction with our unaudited Condensed Consolidated
Financial Statements and the accompanying notes thereto included in Part I, Item
1 herein for Amphenol Corporation (together with its subsidiaries, "Amphenol,"
the "Company," "we," "our" or "us"). The following discussion and analysis
should also be read in conjunction with the consolidated financial statements
and notes included in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2021 (the "2021 Annual Report"). The Condensed
Consolidated Financial Statements have been prepared in U.S. dollars, in
accordance with accounting principles generally accepted in the United States of
America ("U.S. GAAP" or "GAAP"). The following discussion and analysis also
includes references to certain non-GAAP financial measures, which are defined in
the "Non-GAAP Financial Measures" section below, including "Constant Currency
Net Sales Growth" and "Organic Net Sales Growth". For purposes of the following
discussion, the terms "constant currencies" and "organically" have the same
meaning, respectively, as these aforementioned non-GAAP financial measures.
Refer to "Non-GAAP Financial Measures" within this Item 2 for more information,
including our reasons for including non-GAAP financial measures and material
limitations with respect to the usefulness of the measures.

Cautionary Note Regarding Forward-Looking Statements


This Quarterly Report on Form 10-Q includes forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995, which
relate to future events and are subject to risks and uncertainties. All
statements that address events or developments that we expect or believe may or
will occur in the future are forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The
forward-looking statements, which address the Company's expected business and
financial performance and financial condition, among other matters, may contain
words and terms such as: "anticipate," "believe," "continue," "could,"
"estimate," "expect," "forecast," "guidance," "intend," "look ahead," "may,"
"ongoing," "optimistic," "plan," "potential," "predict," "project," "seek,"
"should," "target," "will" or "would" and other words and terms of similar
meaning.

Forward-looking statements by their nature address matters that are, to
different degrees, uncertain, such as statements about expected earnings,
revenues, growth, liquidity, effective tax rate or other matters, together with
any forward-looking statements related in any way to the COVID-19 pandemic,
including its future impact on the Company. Although the Company believes the
expectations reflected in all forward-looking statements, including those we may
make with regards to expected earnings, revenues, growth, liquidity, the
Company's effective tax rate, and other matters discussed herein, are based upon
reasonable assumptions, the expectations may not be attained or there may be
material deviation. Readers and investors are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date on
which they are made. There are risks and uncertainties that could cause actual
results to differ materially from these forward-looking statements, which
include, but are not limited to, the following: political, economic, military
and other risks related to operating in countries outside the United States, as
well as changes in general economic conditions, geopolitical conditions, U.S.
trade policies (including but not limited to sanctions) and other factors beyond
the Company's control; future risks and existing uncertainties associated with
adverse public health developments, including epidemics and pandemics such as
the COVID-19 pandemic, which continues to disrupt our operations including
government regulations that inhibit our ability to operate certain of our
facilities in the ordinary course, travel restrictions, supplier constraints,
supply chain interruptions, logistics challenges and limitations, labor
disruptions and reduced demand from certain customers; uncertainties associated
with a protracted economic slowdown that could negatively affect the financial
condition of our customers; risks associated with our inability to obtain
certain raw materials and components in the current challenging supply chain
environment, as well as the risk that the cost of most of the Company's raw
materials and components is increasing; negative impacts caused by extreme
weather conditions and natural catastrophic events, including those caused by
climate change and global warming; risks associated with the improper conduct by
any of our employees, customers, suppliers, distributors or any other business
partners which could impair our business reputation and financial results and
could result in our non-compliance with

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anti-corruption laws and regulations of the U.S. government and various foreign
jurisdictions; changes in exchange rates of the various currencies in which the
Company conducts business; risks associated with the Company's dependence on
attracting, recruiting, hiring and retaining skilled employees, including as
part of our various management teams; the Company's dependence on sales to the
communications industry, which markets are dominated by large manufacturers and
operators who regularly exert significant pressure on suppliers, including the
Company; changes in defense expenditures in the military market, including the
impact of reductions or changes in the defense budgets of U.S. and foreign
governments; risks and difficulties in trying to compete successfully on the
basis of technology innovation, product quality and performance, price, customer
service and delivery time; difficulties and unanticipated expenses in connection
with purchasing and integrating newly acquired businesses, including the
potential for the impairment of goodwill and other intangible assets; events
beyond the Company's control that could lead to an inability to meet its
financial and other covenants, which could result in a default under the
Company's revolving credit facility or unsecured term loan credit facility;
risks associated with the Company's inability to access the global capital
markets on favorable terms, including as a result of significant deterioration
of general economic or capital market conditions, or as a result of a downgrade
in the Company's credit rating; changes in interest rates; cybersecurity
threats, including but not limited to malware, phishing, credential harvesting,
ransomware and other increasingly sophisticated attacks, that could impair our
information technology systems and could disrupt business operations, result in
the loss of or inability to access confidential information and critical
business, financial or other data, and/or cause the release of highly sensitive
confidential information, any of which could adversely impact our reputation and
operating results and potentially lead to litigation and/or governmental
investigations and fines; government contracting risks that the Company may be
subject to, including laws and regulations governing performance of government
contracts and related risks associated with conducting business with the U.S.
and other foreign governments or their suppliers (both directly and indirectly);
governmental export and import controls that certain of our products may be
subject to, including export licensing, customs regulations, economic sanctions
and other laws; changes in fiscal and tax policies, audits and examinations by
taxing authorities, laws, regulations and guidance in the United States and
foreign jurisdictions; any difficulties in protecting the Company's intellectual
property rights; litigation, customer claims, product recalls, governmental
investigations, criminal liability or environmental matters including changes to
laws and regulations to which the Company may be subject; and incremental costs
and other risks that may arise in connection with regulatory efforts to combat
the negative effects of climate change.

A further description of these uncertainties and other risks can be found in the
2021 Annual Report, Quarterly Reports on Form 10-Q and the Company's other
reports filed with the Securities and Exchange Commission. These or other
uncertainties may cause the Company's actual future results to be materially
different from those expressed in any forward-looking statements. The Company
undertakes no obligation to update or revise any forward-looking statements
except as required by law.

Impact of COVID-19 on our Operations, Financial Condition, Liquidity and Results of Operations

The COVID-19 pandemic has affected our offices and manufacturing facilities
throughout the world, as well as the facilities of our suppliers, customers and
our customers' contract manufacturers. The COVID-19 pandemic caused widespread
disruptions to our Company during the first half of 2020, and to a lesser
extent, those disruptions continued throughout the remainder of 2020, all of
2021 and into 2022. As of March 31, 2022, we continue to experience some
disruptions, and at a minimum, we expect disruptions to continue for the
remainder of 2022 and potentially beyond. These disruptions have included and
may continue to include government regulations that inhibit our ability to
operate certain of our facilities in the ordinary course, travel restrictions,
supplier constraints, supply chain interruptions, logistics challenges and
limitations, labor disruptions and reduced demand from certain customers. More
recently, during the first quarter of 2022, COVID-19 outbreaks in China have
resulted in new government-imposed lockdowns in certain regions, which have
impacted the ability of several of our operations and manufacturing facilities
to operate in the ordinary course. The extent to which the COVID-19 pandemic
will continue to impact our business and financial results going forward will be
dependent on future developments such as the length and severity of the crisis,
the impact of any additional resurgences from known or new variants, current and
future government regulations and actions in response to the crisis, the timing,
availability, effectiveness and adoption rates of vaccines and treatments, and
the overall impact of the COVID-19 pandemic on the global economy and capital
markets, among many other factors, all of which remain highly uncertain and
unpredictable. In addition, the COVID-19 pandemic could impact the health of our
management team and other employees. There can be no assurance that the COVID-19
pandemic will not have a

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material and adverse effect on our business, operations, financial condition, liquidity and results of operations in the future.

New Reportable Business Segments

Effective January 1, 2022, the Company aligned its businesses into the following three newly formed reportable business segments, which have replaced our historic reportable business segments:


?Harsh Environment Solutions - the Harsh Environment Solutions segment designs,
manufactures and markets a broad range of ruggedized interconnect products,
including connectors and interconnect systems, printed circuits and printed
circuit assemblies and other products for use in the industrial, military,
commercial aerospace, automotive, mobile networks and information technology and
data communications end markets.

?Communications Solutions - the Communications Solutions segment designs,
manufactures and markets a broad range of connector and interconnect systems,
including high speed, radio frequency, power, fiber optic and other products,
together with antennas, for use in the information technology and data
communications, mobile devices, industrial, mobile networks, broadband
communications, automotive, commercial aerospace and military end markets.

?Interconnect and Sensor Systems - the Interconnect and Sensor Systems segment
designs, manufactures and markets a broad range of sensors, sensor-based
systems, connectors and value-add interconnect systems used in the automotive,
industrial, information technology and data communications, mobile networks,
military and commercial aerospace end markets.

This new alignment reinforces the Company's entrepreneurial culture and the
clear accountability of each of our business unit general managers, while
enhancing the scalability of Amphenol's business for the future. The Company has
begun reporting under its new reportable segments in connection with this
Quarterly Report on Form 10-Q, which also includes the recasting of relevant
prior year period segment information in order to enable year-over-year segment
comparisons. Refer to Note 13 of the Notes to Condensed Consolidated Financial
Statements, as well as the 2021 Annual Report, for further details related to
the Company's change in its reportable business segments effective January
1,
2022.

Results of Operations

Three months ended March 31, 2022 compared to the three months ended March 31, 2021


Net sales were $2,951.9 in the first quarter of 2022 compared to $2,377.1 in the
first quarter of 2021, which represented an increase of 24% in U.S. dollars, 25%
in constant currencies and 17% organically, over the respective prior year
period. The increase in net sales was driven by robust growth across all three
reportable business segments, as described below. From a market standpoint, the
increase in net sales was driven by strong organic growth across several
markets, including the information technology and data communications,
industrial, automotive, broadband communications, and commercial aerospace
markets, as well as moderate growth in the mobile networks and mobile devices
markets, along with contributions from the Company's acquisition program.

Net sales in the Harsh Environment Solutions segment (approximately 25% of net
sales) in the first quarter of 2022 increased 16% in U.S. dollars, 17% in
constant currencies and 16% organically, compared to the first quarter of 2021.
The increase in the first quarter of 2022 was driven primarily by strong organic
growth in the industrial, automotive and commercial aerospace markets.

Net sales in the Communications Solutions segment (approximately 45% of net
sales) in the first quarter of 2022 increased 28% in U.S. dollars, 29% in
constant currencies and 21% organically, compared to the first quarter of 2021.
The increase in the first quarter of 2022 was driven by strong organic growth
across several markets, including the information technology and data
communications, automotive, industrial, mobile networks and broadband
communications markets, as well as moderate growth in the mobile devices market,
along with contributions from the Company's acquisition program.

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Net sales in the Interconnect and Sensor Systems segment (approximately 30% of
net sales) in the first quarter of 2022 increased 25% in U.S. dollars, 28% in
constant currencies and 13% organically, compared to the first quarter of 2021.
The increase in the first quarter of 2022 was driven primarily by strong organic
growth in the industrial, automotive, and information technology and data
communications markets, along with contributions from the Company's acquisition
program.

The table below reconciles Constant Currency Net Sales Growth and Organic Net
Sales Growth to the most directly comparable U.S. GAAP financial measures, by
segment, geography and consolidated, for the three months ended March 31, 2022
compared to the three months ended March 31, 2021:

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

                                                                           Net sales                                              Foreign            Constant                               Organic
                                                                           growth in                                              currency         Currency Net          Acquisition       Net Sales
                                                                       U.S. Dollars (2)                                          impact (3)      Sales Growth (4)        impact (5)        Growth (4)
Three Months Ended March 31,                 2022          2021             (GAAP)                                               (non-GAAP)         (non-GAAP)           (non-GAAP)        (non-GAAP)
Net sales by:
Segment:
Harsh Environment Solutions               $    727.6    $    628.0            16 %                                                   (1) %               17 %                 1 %               16 %
Communications Solutions                     1,320.1       1,028.0            28 %                                                     - %               29 %                 8 %               21 %
Interconnect and Sensor Systems                904.2         721.1         
  25 %                                                   (2) %               28 %                15 %               13 %
Consolidated                              $  2,951.9    $  2,377.1            24 %                                                   (1) %               25 %                 8 %               17 %

Geography (6):
United States                             $    913.9    $    673.9            36 %                                                     - %               36 %                15 %               21 %
Foreign                                      2,038.0       1,703.2            20 %                                                   (2) %               21 %                 5 %               16 %
Consolidated                              $  2,951.9    $  2,377.1            24 %                                                   (1) %               25 %                 8 %               17 %

(1) Percentages in this table were calculated using actual, unrounded results;

therefore, the sum of the components may not add due to rounding.

Net sales growth in U.S. dollars is calculated based on Net sales as reported

in the Condensed Consolidated Statements of Income and Note 13 of the Notes

to Condensed Consolidated Financial Statements. While the term "net sales (2) growth in U.S. dollars" is not considered a U.S. GAAP financial measure, for

purposes of this table, we derive the reported (GAAP) measure based on GAAP

results, which serves as the basis for the reconciliation to its comparable

    non-GAAP financial measures.


    Foreign currency translation impact, a non-GAAP measure, represents the

percentage impact on net sales resulting from foreign currency exchange rate

changes in the current reporting period(s) compared to the same respective (3) period(s) in the prior year. Such amount is calculated by subtracting net

sales for the current reporting period(s) translated at average foreign

currency exchange rates for the respective prior year period(s) from net

    sales for the current reporting period(s), taken as a percentage of the
    respective prior year period(s) net sales.

Constant Currency Net Sales Growth and Organic Net Sales Growth are non-GAAP (4) financial measures as defined in the "Non-GAAP Financial Measures" section of

this Item 2.

Acquisition impact, a non-GAAP measure, represents the percentage impact on

net sales resulting from acquisitions that have not been included in the

Company's consolidated results for the full current period(s) and/or prior (5) comparable period(s) presented. Such net sales related to these acquisitions

do not reflect the underlying growth of the Company on a comparative basis.

Acquisition impact is calculated as a percentage of the respective prior year

period(s) net sales.

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

product is shipped.



The comparatively stronger U.S. dollar for the first quarter of 2022 had the
effect of decreasing sales by approximately $27.8, relative to the comparable
period in 2021.

Selling, general and administrative expenses increased to $336.8, or 11.4% of
net sales, for the first quarter of 2022, compared to $262.7, or 11.1% of net
sales, for the first quarter of 2021. The increase in selling, general and
administrative expenses as a percentage of net sales in the first quarter of
2022 is primarily driven by the impact of several of the 2021 acquisitions, and
in particular Halo and the MTS Sensors business, having higher selling, general
and administrative expenses as a percentage of net sales compared to the average
of the Company, partially offset by higher sales during the first three months
of 2022, relative to the comparable period of 2021. Administrative expenses
represented approximately 4.5% of net sales for the first quarter of 2022, and
represented approximately 4.3% of net sales for the first quarter of 2021.
Research and development expenses represented approximately 2.8% of net sales
for the first quarter of 2022, and represented approximately 3.1% of net sales
for the first quarter of 2021. Selling and marketing expenses represented
approximately 4.1% of net sales for the first quarter of 2022, and represented
approximately 3.7% of net sales for the first quarter of 2021.

Operating income was $589.8, or 20.0% of net sales, for the first quarter of
2022, compared to $464.8, or 19.6% of net sales, for the first quarter of 2021.
The increase in Operating income and operating margin for the first quarter
of

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2022 relative to the comparable period in 2021 was primarily driven by normal
operating leverage on the higher sales volumes combined with the benefit of
ongoing pricing and cost actions, which was partially offset by the continued
impact of the more challenging commodity, logistics and supply chain
environment.

Operating income for the Harsh Environment Solutions segment for the first
quarter of 2022 was $183.2, or 25.2% of net sales, compared to $158.3, or 25.2%
of net sales, for the first quarter of 2021. The operating margin for the Harsh
Environment Solutions segment for the first quarter of 2022 was flat relative to
the comparable period in 2021, as the normal operating leverage on the higher
sales volumes was offset by the continued impact of the more challenging
commodity, logistics and supply chain environment.

Operating income for the Communications Solutions segment for the first quarter
of 2022 was $282.5, or 21.4% of net sales, compared to $204.5, or 19.9% of net
sales, for the first quarter of 2021. The increase in operating margin for the
Communications Solutions segment for the first quarter of 2022 relative to the
comparable period in 2021 was primarily driven by normal operating leverage on
the higher sales volumes.

Operating income for the Interconnect and Sensor Systems segment for the first
quarter of 2022 was $160.0, or 17.7% of net sales, compared to $135.1, or 18.7%
of net sales, for the first quarter of 2021. The decrease in operating margin
for the Interconnect and Sensor Systems segment for the first quarter of 2022
relative to the comparable period in 2021 was primarily driven by the impact of
the Company's 2021 acquisitions, in particular the MTS Sensors business, which
currently operates at a lower operating margin compared to the average of the
Interconnect and Sensor Systems segment, which was partially offset by normal
operating leverage on the higher sales volumes.

Interest expense for the first quarter of 2022 was $28.1, compared to $28.6 for the first quarter of 2021. Refer to Note 4 of the Notes to Condensed Consolidated Financial Statements for further information related to the Company's debt.


Provision for income taxes for the first quarter of 2022 was at an effective tax
rate of 23.8%, compared to 23.9% for the first quarter of 2021. For the first
quarter of 2022 and 2021, the excess tax benefits resulting from stock option
exercise activity had the impact of decreasing the effective tax rate and
increasing earnings per share by the amounts noted in the table below. Excluding
the effect of these items, the Adjusted Effective Tax Rate, a non-GAAP financial
measure as defined in the "Non-GAAP Financial Measures" section below within
this Item 2, for the three months ended March 31, 2022 and 2021 was 24.5% for
both periods, as reconciled in the table below to the comparable effective tax
rate based on GAAP results. Refer to Note 6 of the Notes to Condensed
Consolidated Financial Statements for further information related to income
taxes.

Net income attributable to Amphenol Corporation and Net income per common share
attributable to Amphenol Corporation - Diluted ("Diluted EPS") were $425.7 and
$0.68, respectively, for the first quarter of 2022, compared to $329.6 and
$0.53, respectively, for the first quarter of 2021. Excluding the effect of the
aforementioned items discussed above, Adjusted Net Income attributable to
Amphenol Corporation and Adjusted Diluted EPS, non-GAAP financial measures as
defined in the "Non-GAAP Financial Measures" section below within this Item 2,
were $421.9 and $0.67, respectively, for the first quarter of 2022, compared to
$327.0 and $0.52, respectively, for the first quarter of 2021.

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The following table reconciles Adjusted Operating Income, Adjusted Operating
Margin, Adjusted Net Income attributable to Amphenol Corporation, Adjusted
Effective Tax Rate and Adjusted Diluted EPS, as defined in the "Non-GAAP
Financial Measures" section below) to the most directly comparable U.S. GAAP
financial measures for the three months ended March 31, 2022 and 2021:

                                                                                 Three Months Ended March 31,
                                                         2022                                                                    2021
                                                        Net Income                                                             Net Income
                                                       attributable     Effective                                             attributable     Effective
                           Operating     Operating      to Amphenol        Tax       Diluted      Operating     Operating      to Amphenol        Tax        Diluted
                            Income       Margin (1)     Corporation     Rate (1)       EPS         Income       Margin (1)     Corporation     Rate (1)        EPS
Reported (GAAP)           $     589.8          20.0 %  $       425.7         23.8 %  $   0.68    $     464.8          19.6 %  $       329.6         23.9 %  $    0.53
Excess tax benefits
related to stock-based
compensation                        -             -            (3.8)          0.7      (0.01)              -             -            (2.6)          0.6            -
Adjusted (non-GAAP) (2)   $     589.8          20.0 %  $       421.9         24.5 %  $   0.67    $     464.8          19.6 %  $       327.0         24.5 %  $    0.52


While the terms "operating margin" and "effective tax rate" are not (1) considered U.S. GAAP financial measures, for purposes of this table, we

derive the reported (GAAP) measures based on GAAP results, which serve as the

basis for the reconciliation to their comparable non-GAAP financial measures.

All percentages and per share amounts in this table were calculated using (2) actual, unrounded results; therefore, the sum of the components may not add

due to rounding.

Liquidity and Capital Resources

As of March 31, 2022 and December 31, 2021, the Company had cash, cash equivalents and short-term investments of $1,299.6 and $1,241.4, respectively, with the majority of the Company's cash, cash equivalents and short-term investments on hand located outside of the United States.


The Company's primary sources of liquidity are internally generated cash
provided by operating activities, our cash, cash equivalents and short-term
investments on hand, the U.S. Commercial Paper Program, the Euro Commercial
Paper Program, and the Revolving Credit Facility (each as defined and discussed
further below within this Item 2).  On April 19, 2022, the Company entered into
a two-year, $750.0 unsecured delayed draw loan credit agreement ("2022 Term
Loan"), any future proceeds of which are expected to be used for general
corporate purposes. The Company believes that its cash, cash equivalents and
short-term investment position on hand, ability to generate future cash from
operating activities, availability under each of its Revolving Credit Facility
and recent 2022 Term Loan, and access to capital markets, provide adequate
liquidity to meet both its short-term (next twelve months) and reasonably
foreseeable long-term requirements and obligations.

The Company's primary ongoing cash requirements will be for operating and
working capital needs, capital expenditures, product development activities,
repurchases of our Common Stock, dividends, debt service, payments associated
with the one-time tax on the deemed repatriation of all of the Company's
pre-2018 accumulated unremitted earnings and profits of foreign subsidiaries
("Transition Tax"), which is payable in annual installments until 2025, taxes
due upon the repatriation of foreign earnings (which will be payable upon the
repatriation of such earnings), funding of pension obligations, and other
contractual obligations and commitments included in Item 7 of the 2021 Annual
Report. The Company may also use cash to fund all or part of the cost of future
acquisitions. The Company's debt service requirements consist primarily of
principal and interest on the Company's Senior Notes, and to the extent of any
amounts outstanding, the Revolving Credit Facility and the Commercial Paper
Programs (all as defined below) as well as the recent 2022 Term Loan.

Following the enactment of the U.S. Tax Cuts and Jobs Act of 2017 (the "Tax
Act") in December 2017, the Company indicated an intention to repatriate most of
its pre-2022 accumulated earnings and has accrued the foreign and U.S. state and
local taxes, if applicable, on those earnings, as appropriate. The associated
tax payments are due as the repatriations are made. The Company intends to
indefinitely reinvest the remaining pre-2022 foreign earnings. As of March 31,
2022, the Company has accrued the foreign and U.S. state and local taxes
associated with the foreign earnings that we intend to repatriate. The Company
intends to evaluate future earnings for repatriation, and will accrue for those
distributions where appropriate, and to indefinitely reinvest all other foreign
earnings. In addition, the Transition Tax will be paid, net of applicable tax
credits and deductions, in annual installments until 2025, as permitted under
the Tax Act.

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Cash Flow Summary

The following table summarizes the Company's cash flows from operating, investing and financing activities for the three months ended March 31, 2022 and 2021, as reflected in the Condensed Consolidated Statements of Cash Flow:


                                                                   Three 

Months Ended March 31,

                                                                     2022                 2021
Net cash provided by operating activities                       $         350.8      $         321.0
Net cash used in investing activities                                   (144.1)              (263.2)
Net cash (used in) provided by financing activities                     (151.2)                586.2
Effect of exchange rate changes on cash and cash equivalents              (5.1)               (18.4)
Net increase in cash and cash equivalents                       $         
50.4      $         625.6


Operating Activities

The ability to generate cash from operating activities is one of the Company's
fundamental financial strengths. Net cash provided by operating activities
("Operating Cash Flow") was $350.8 in the first three months of 2022 compared to
$321.0 in the first three months of 2021.  The increase in Operating Cash Flow
for the first three months of 2022 compared to the first three months of 2021 is
primarily due to the increase in net income, partially offset by a higher usage
of cash related to the change in working capital.

In the first three months of 2022, the components of working capital as
presented on the accompanying Condensed Consolidated Statements of Cash Flow
increased $182.9, excluding the impact of acquisitions and foreign currency
translation, primarily due to increases in inventories of $113.8 and prepaid
expenses and other current assets of $30.4, along with decreases in accounts
payable of $36.3 and accrued liabilities, including income taxes, of $29.9,
partially offset by a decrease in accounts receivable of $27.5. In the first
three months of 2021, the components of working capital as presented on the
accompanying Condensed Consolidated Statements of Cash Flow increased $114.6,
excluding the impact of acquisitions and foreign currency translation, due to an
increase in inventories of $85.7 and decreases in accounts payable of $52.6 and
accrued liabilities, including income taxes, of $16.4, partially offset by
decreases in accounts receivable of $32.1 and prepaid expenses and other current
assets of $8.0.

The following describes the significant changes in the amounts as presented on
the accompanying Condensed Consolidated Balance Sheets at March 31, 2022 as
compared to December 31, 2021. Accounts receivable decreased $32.7 to $2,422.1,
primarily due to slightly lower sales in the first quarter of 2022 relative to
the fourth quarter of 2021, along with the effect of translation from exchange
rate changes ("Translation") at March 31, 2022 compared to December 31, 2021.
Days sales outstanding at March 31, 2022 and December 31, 2021 were 74 days and
71 days, respectively. Inventories increased $95.6 to $1,989.7, which was
primarily driven by the impact of the ongoing supply chain disruptions that we
continued to experience during the first three months of 2022, partially offset
by Translation. Inventory days at March 31, 2022 and December 31, 2021 were 88
days and 80 days, respectively. Prepaid expenses and other current assets
increased $29.4 to $397.3, primarily due to increases in various prepaid
expenses. Property, plant and equipment, net, decreased $0.3 to $1,175.0, as
depreciation of $71.7 and Translation were offset by capital expenditures of
$78.1. Goodwill decreased $27.7 to $6,349.1, primarily as a result of
Translation. Other intangible assets, net decreased $18.5 to $738.4, primarily
due to amortization associated with the Company's intangible assets. Other
long-term assets increased $91.2 to $502.4, primarily due to the purchase of
long-term certificates of deposit investments, along with an increase in
operating lease right-of-use assets resulting from new and renewed lease
agreements entered into during the first three months of 2022. Accounts payable
decreased $36.1 to $1,275.9, primarily due to decreased purchasing activity
related to lower sales levels in the first quarter of 2022 relative to the
fourth quarter of 2021. Payable days at March 31, 2022 and December 31, 2021
were 57 days and 56 days, respectively. Total accrued expenses, including
accrued income taxes, decreased $33.5 to $1,097.6, primarily as a result of a
decrease in accrued salaries, wages and employee benefits, which was partially
offset by increases in accrued income taxes and other accrued expenses.

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There is no current requirement for cash contributions to any of the Company's
defined benefit pension plans in the U.S., and the Company plans to evaluate
annually, based on actuarial calculations and the investment performance of the
pension plans' assets, the timing and amount of cash contributions in the
future, if any, as discussed in more detail in Note 10 of the Notes to Condensed
Consolidated Financial Statements.

In addition to Operating Cash Flow, the Company also considers Free Cash Flow, a
non-GAAP financial measure defined in the "Non-GAAP Financial Measures" section
below, as a key metric in measuring the Company's ability to generate cash. The
following table reconciles Free Cash Flow to its most directly comparable U.S.
GAAP financial measure for the three months ended March 31, 2022 and 2021. The
increase in Free Cash Flow was driven by an increase in Operating Cash Flow, as
described above.

                                                             Three Months Ended March 31,
                                                                2022                2021
Operating Cash Flow (GAAP)                                 $        350.8      $        321.0
Capital expenditures (GAAP)                                        (78.1)              (78.4)
Proceeds from disposals of property, plant and
equipment (GAAP)                                                      1.8                 0.9
Free Cash Flow (non-GAAP)                                  $        274.5      $        243.5


Investing Activities

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


Net cash used in investing activities was $144.1 in the first quarter of 2022,
compared to $263.2 in the first quarter of 2021. In the first quarter of 2022,
net cash used in investing activities was driven primarily by capital
expenditures (net of disposals) of $76.3, purchases of long-term investments of
$55.9, and net purchases of short-term investments of $8.6. In the first quarter
of 2021, net cash used in investing activities was driven primarily by the use
of $185.6 to fund acquisitions and capital expenditures (net of disposals) of
$77.5, partially offset by net sales and maturities of short-term investments of
$2.3.

Financing Activities

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


Net cash used in financing activities was $151.2 in the first quarter of 2022,
compared to net cash provided by financing activities of $586.2 in the first
quarter of 2021. For the first quarter of 2022, net cash used in financing
activities was driven primarily by (i) repurchases of the Company's Common Stock
of $204.0, (ii) dividend payments of $119.8, (iii) distributions to and
purchases of noncontrolling interests of $3.6, and (iv) repayments of $2.5
related to other long-term debt, partially offset by (a) net borrowings of
$138.4 primarily under the U.S. Commercial Paper Program, (b) proceeds of $20.3
primarily related to short-term borrowings, and (c) cash proceeds of $20.0 from
the exercise of stock options. For the first quarter of 2021, net cash provided
by financing activities was driven primarily by (i) net borrowings of $813.1
comprised primarily of borrowings under the U.S. Commercial Paper Program in
anticipation of the closing of the MTS acquisition and (ii) cash proceeds of
$21.1 from the exercise of stock options, partially offset by (a) repurchases of
the Company's Common Stock of $152.8, (b) dividend payments of $86.8, (c)
distributions to and purchases of noncontrolling interests of $7.6, and (d)
repayments of $0.8 related to other long-term debt.

The Company has significant flexibility to meet its financial commitments. The
Company uses debt financing to lower the overall cost of capital and increase
return on stockholders' equity. The Company's debt financing includes the use of
commercial paper programs, the Revolving Credit Facility, the 2022 Term Loan,
and senior notes as part of its overall cash management strategy.

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On November 30, 2021, the Company amended and restated its $2,500.0 unsecured
revolving credit facility (the "Revolving Credit Facility"). As a result, the
Revolving Credit Facility no longer references LIBOR for interest rate
determinations. The Revolving Credit Facility maintains the lenders' aggregate
commitments under the facility at $2,500.0. The Revolving Credit Facility
matures in November 2026 and gives the Company the ability to borrow, in various
currencies, at a spread that varies, based on the Company's debt rating, over
certain currency-specific benchmark rates, which benchmark rates in the case of
U.S. dollar borrowings are either the base rate or the adjusted term Secured
Overnight Financing Rate ("SOFR"). The Company may utilize the Revolving Credit
Facility for general corporate purposes. As of March 31, 2022 and December 31,
2021, there were no outstanding borrowings under the Revolving Credit Facility.
The Revolving Credit Facility requires payment of certain annual agency and
commitment fees and requires that the Company satisfy certain financial
covenants. On March 31, 2022, the Company was in compliance with the financial
covenants under the Revolving Credit Facility.

On April 19, 2022, the Company entered into a two-year, $750.0 unsecured delayed
draw term loan credit agreement (the "2022 Term Loan"), which is scheduled to
mature on April 19, 2024. The 2022 Term Loan was undrawn at closing and may be
drawn on up to five occasions over the life of the facility. The 2022 Term Loan
may be repaid at any time without premium or penalty, and, once prepaid, cannot
be reborrowed. The proceeds from the 2022 Term Loan are expected to be used for
general corporate purposes. Interest rates under the 2022 Term Loan are based on
a spread over either the base rate or the adjusted term SOFR, which spread
varies based on the Company's debt rating. The 2022 Term Loan requires payment
of certain commitment fees and requires that the Company satisfy certain
financial covenants, which financial covenants are the same as those under the
Revolving Credit Facility. As of April 26, 2022, there were no outstanding
borrowings under the 2022 Term Loan.

Pursuant to the terms of the U.S. commercial paper program, the Company may
issue short-term unsecured commercial paper notes (the "USCP Notes") in one or
more private placements in the United States (the "U.S. Commercial Paper
Program"). The maximum aggregate principal amount outstanding of USCP Notes at
any time is $2,500.0. The Company utilizes borrowings under the U.S. Commercial
Paper Program for general corporate purposes, which recently has included fully
or partially funding acquisitions, as well as to repay certain outstanding
senior notes. The amount of USCP Notes outstanding as of March 31, 2022 was
$933.5, with a weighted average interest rate of 0.95%. As of December 31, 2021,
the amount of USCP Notes outstanding was $795.2, with a weighted average
interest rate of 0.29%.

The Company and one of its wholly owned European subsidiaries (the "Euro
Issuer") also have a commercial paper program (the "Euro Commercial Paper
Program" and, together with the U.S. Commercial Paper Program, the "Commercial
Paper Programs"), pursuant to which the Euro Issuer may issue short-term
unsecured commercial paper notes (the "ECP Notes" and, together with the USCP
Notes, "Commercial Paper"), which are guaranteed by the Company and are to be
issued outside of the United States.  The ECP Notes may be issued in Euros,
Sterling, U.S. dollars or other currencies. The maximum aggregate principal
amount outstanding of ECP Notes at any time is $2,000.0. As of March 31, 2022
and December 31, 2021, there were no ECP Notes outstanding.

Amounts available under the Commercial Paper Programs may be borrowed, repaid
and re-borrowed from time to time. In conjunction with the Revolving Credit
Facility, the authorization from the Company's Board of Directors (the "Board")
limits the maximum principal amount outstanding of USCP Notes, ECP Notes, and
any other commercial paper or similar programs, along with outstanding amounts
under the Revolving Credit Facility, at any time to $2,500.0 in the aggregate.
The Commercial Paper Programs are rated A-2 by Standard & Poor's and P-2 by
Moody's and, based on the Board's authorization described above, are currently
backstopped by the Revolving Credit Facility, as amounts undrawn under the
Company's Revolving Credit Facility are available to repay Commercial Paper, if
necessary. Net proceeds of the issuances of Commercial Paper are expected to be
used for general corporate purposes. The Company reviews its optimal mix of
short-term and long-term debt regularly and may replace certain amounts of
Commercial Paper, short-term debt and current maturities of long-term debt with
new issuances of long-term debt in the future.

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Table of Contents


As of March 31, 2022, the Company has outstanding senior notes (the "Senior
Notes") as follows:

 Principal    Interest
  Amount        Rate              Maturity
$     350.0       3.20 %         April 2024
      400.0      2.050 %         March 2025
      500.0      4.350 %          June 2029
      900.0       2.80 %        February 2030
      750.0      2.200 %       September 2031

€     500.0      0.750 %    May 2026 (Euro Notes)
      500.0       2.00 %  October 2028 (Euro Notes)

On September 14, 2021, the Company issued $750.0 principal amount of unsecured 2.200% Senior Notes due September 15, 2031 (the "2031 Senior Notes"). The Company used the net proceeds from the 2031 Senior Notes to repay certain outstanding borrowings under the U.S. Commercial Paper Program.


All of the Company's outstanding senior notes in the United States (the "U.S.
Senior Notes") are unsecured and rank equally in right of payment with the
Company's and the Euro Issuer's other unsecured senior indebtedness. Interest on
each series of U.S. Senior Notes is payable semiannually. The Company may, at
its option, redeem some or all of any series of U.S. Senior Notes at any time,
subject to certain terms and conditions.

The Euro Issuer has two outstanding senior notes in Europe (collectively, the
"Euro Notes" and, together with the U.S. Senior Notes, the "Senior Notes"), each
of which were issued with a principal amount of €500.0, with one series of the
Euro Notes maturing in May 2026 and the other in October 2028. The Euro Notes
are unsecured and rank equally in right of payment with the Company's and the
Euro Issuer's other unsecured senior indebtedness, and are fully and
unconditionally guaranteed on a senior unsecured basis by the Company. Interest
on each series of Euro Notes is payable annually. The Company may, at its
option, redeem some or all of either series of Euro Notes at any time, subject
to certain terms and conditions.

The Company's Senior Notes impose certain obligations on the Company and
prohibit various actions by the Company unless it satisfies certain financial
requirements. On March 31, 2022, the Company was in compliance with all
requirements under its Senior Notes. Refer to Note 4 of the Notes to Condensed
Consolidated Financial Statements for further information related to the
Company's debt.

On April 27, 2021, the Board authorized a stock repurchase program under which
the Company may purchase up to $2,000.0 of the Company's Common Stock during the
three-year period ending April 27, 2024 (the "2021 Stock Repurchase Program") in
accordance with the requirements of Rule 10b-18 of the Exchange Act. During the
three months ended March 31, 2022, the Company repurchased 2.6 million shares of
its Common Stock for $204.0 under the 2021 Stock Repurchase Program. Of the
total repurchases made during the first three months of 2022, 0.3 million
shares, or $21.0, were retained in Treasury stock at the time of repurchase. The
remaining 2.3 million shares, or $183.0, have been retired by the Company. From
April 1, 2022 to April 26, 2022, the Company repurchased 0.7 million additional
shares of its Common Stock for $51.0 under the 2021 Stock Repurchase Program,
and, as of April 27, 2022, the Company has remaining authorization to purchase
up to $1,287.1 of its Common Stock under the 2021 Stock Repurchase Program. The
price and timing of any future purchases under the 2021 Stock Repurchase Program
will depend on a number of factors, such as levels of cash generation from
operations, the volume of stock options exercised by employees, cash
requirements for acquisitions, dividends paid, economic and market conditions
and the price of the Company's Common Stock.

On April 24, 2018, the Board authorized a stock repurchase program under which
the Company could purchase up to $2,000.0 of the Company's Common Stock during
the three-year period ending April 24, 2021 (the "2018 Stock Repurchase
Program") in accordance with the requirements of Rule 10b-18 of the Exchange
Act. During the three months ended March 31, 2021, the Company repurchased 2.4
million shares of its Common Stock for $152.8 under the 2018 Stock Repurchase
Program. Of the total repurchases made during the first three months of 2021,
0.3 million shares, or $19.8, were retained in Treasury stock at the time of
repurchase. The remaining 2.1 million shares, or $133.0,

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were retired by the Company. In April of 2021, the Company repurchased the remaining value of shares of its Common Stock authorized under the 2018 Stock Repurchase Program and, therefore, the 2018 Stock Repurchase Program was terminated.


Contingent upon declaration by the Board, the Company pays a quarterly dividend
on shares of its Common Stock. The following table summarizes the declared
quarterly dividends per share as well as the dividends declared and paid for the
three months ended March 31, 2022 and 2021:

                                                               Three Months Ended March 31,
                                                                     2022             2021
Dividends declared per share                                   $            0.20   $    0.145

Dividends declared                                             $           119.5   $     86.6
Dividends paid (including those declared in the prior year)               

119.8 86.8



On October 26, 2021, the Board approved an increase to its quarterly dividend
rate from $0.145 per share to $0.20 per share, effective with dividends declared
in the fourth quarter of 2021, contingent upon declaration by the Board.

LIBOR Transition

In July 2017, the United Kingdom's Financial Conduct Authority (the "FCA"),
which regulates the London Interbank Offered Rate ("LIBOR"), announced its
intent to phase out the use of LIBOR by the end of 2021. In December 2020, the
ICE Benchmark Administration published a consultation on its intention to extend
the publication of certain U.S. dollar LIBOR ("USD LIBOR") rates until June 30,
2023. Subsequently in March 2021, the FCA announced some USD LIBOR tenors
(overnight, 1-month, 3-month, 6-month and 12-month) will continue to be
published until June 30, 2023. The U.S. Federal Reserve, in conjunction with the
Alternative Reference Rates Committee, a steering committee comprised of large
U.S. financial institutions, identified the SOFR as its preferred benchmark
alternative to USD LIBOR. The SOFR represents a measure of the cost of borrowing
cash overnight, collateralized by U.S. Treasury securities, and is calculated
based on directly observable U.S. Treasury-backed repurchase transactions. In
March 2020, in response to this transition, the Financial Accounting Standards
Board ("FASB") issued accounting guidance providing certain optional expedients
and exceptions for applying U.S. GAAP to contracts, hedging relationships and
other transactions that reference LIBOR or another reference rate expected to be
discontinued by reference rate reform, and addresses operational issues likely
to arise in modifying contracts to replace discontinued reference rates with new
rates. In January 2021, the FASB issued further clarifying guidance surrounding
derivatives, as it relates to this transition. Effective November 30, 2021, the
Revolving Credit Facility no longer references LIBOR for interest rate
determinations. Due to our current limited reliance on borrowings tied to LIBOR,
the Company currently believes that the LIBOR transition will not have a
material impact on its financial condition, results of operations or cash flows.

Acquisitions and Divestitures

During 2021, the Company completed seven acquisitions for $2,225.4, net of cash
acquired, while also completing the divestiture of the Divested MTS business, as
defined and discussed below. One of the acquisitions was included in the Harsh
Environment Solutions segment, three acquisitions were included in the
Communications Solutions segment and three acquisitions were included in the
Interconnect and Sensor Systems segment. The 2021 acquisitions were not
material, either individually or in the aggregate, to the Company.

Acquisition of MTS


On April 7, 2021, pursuant to a definitive agreement dated December 9, 2020, by
and among the Company and MTS Systems Corporation ("MTS"), the Company completed
the acquisition of MTS for a total enterprise value of approximately $1,700, net
of cash acquired and including the repayment of all outstanding debt and certain
liabilities. The MTS acquisition was funded through a combination of borrowings
under the U.S. Commercial Paper Program and cash on hand. At closing, the
Company paid approximately $1,300, net of cash acquired, for 100% of the common
stock of MTS, including certain liabilities settled at closing, which was
reflected within Net cash used in investing activities

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Table of Contents

from continuing operations in the Consolidated Statements of Cash Flow for the
year ended December 31, 2021. In addition, the Company also assumed MTS's
then-outstanding $350.0 principal amount of senior notes due August 15, 2027,
which were repaid and settled, shortly after the closing, for approximately
$387.3, which included accrued interest and a make-whole premium incurred as a
result of the early extinguishment of the senior notes. MTS was historically
organized into two business segments: Sensors ("MTS Sensors") and Test &
Simulation ("MTS T&S"). The retained MTS Sensors business is reported within our
Interconnect and Sensor Systems segment. In the second quarter of 2021, the
Company incurred $55.4 ($44.6 after-tax, or $0.07 per diluted share) of
acquisition-related expenses, comprised primarily of transaction, severance,
restructuring and certain non-cash purchase accounting costs related to the MTS
acquisition.

Sale of the Divested MTS Business


On January 19, 2021 and prior to the closing of the MTS acquisition, the Company
entered into a definitive agreement to sell MTS (including the MTS T&S business,
but excluding the MTS Sensors business) to Illinois Tool Works Inc. ("ITW").
Throughout this Quarterly Report on Form 10-Q, we refer to MTS (including the
MTS T&S business, but excluding the MTS Sensors business) as the "Divested MTS
business". As a result of the agreement to sell the Divested MTS business to
ITW, the Divested MTS business met the "held for sale" criteria at its
acquisition date, and the Company accounted for the operating results and
related cash flows associated with the Divested MTS business as discontinued
operations in the Condensed Consolidated Statements of Income and Condensed
Consolidated Statements of Cash Flow, respectively, as of the MTS acquisition
date of April 7, 2021 through December 1, 2021, the date of the sale of the
Divested MTS business. Accordingly, the Company did not assign the Divested MTS
business to any of its reportable business segments. Income from discontinued
operations attributable to Amphenol Corporation, net of income taxes, was $21.4
for the year ended December 31, 2021. On December 1, 2021, the Company completed
the sale of the Divested MTS business for approximately $750, net of cash
divested and excluding related transaction fees and expenses. The proceeds from
the sale of the Divested MTS business were included in Net cash provided by
investing activities from discontinued operations in the Consolidated Statements
of Cash Flow for the year ended December 31, 2021. Amphenol has no continuing
involvement with the Divested MTS business now that its sale has been
consummated. After giving effect to the sale of the Divested MTS business as
well as the repayment of the aforementioned MTS senior notes as part of the MTS
acquisition, the Company paid approximately $950, net of cash acquired and
excluding related transaction fees and expenses, for the retained MTS Sensors
business.

Acquisition of Halo Technology Limited

On December 1, 2021, the Company completed the acquisition of approximately 97%
of the common stock of Halo Technology Limited ("Halo") for a purchase price of
approximately $694, net of cash acquired. The sellers retained a less than 3%
noncontrolling interest in Halo, which includes redeemable features that are
outside the control of the Company and therefore, has been classified as
temporary equity on the Condensed Consolidated Balance Sheets as of March 31,
2022 and December 31, 2021, as discussed in more detail in Note 5 in the
accompanying Condensed Consolidated Financial Statements, as well as Note 1 of
the Notes to Consolidated Financial Statements in the 2021 Annual Report. The
acquisition was funded with cash on hand. The operating results for Halo have
been included in the Company's Condensed Consolidated Statements of Income since
the acquisition date. Halo is reported within our Communications Solutions
segment. In the fourth quarter of 2021, the Company incurred $15.0 ($12.7
after-tax, or $0.02 per diluted share) of acquisition-related expenses,
comprised primarily of external transaction costs and certain non-cash purchase
accounting costs related to the Halo acquisition.

Refer to Note 11 of the Notes to Condensed Consolidated Financial Statements, as well as the 2021 Annual Report, for further discussion of the Company's acquisitions, as well as its discontinued operations and the completed divestiture of the Divested MTS business in 2021.

Environmental Matters


Certain operations of the Company are subject to environmental laws and
regulations that 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 adverse effect on the Company's financial
condition,

                                       35

  Table of Contents

results of operations or cash flows. For more information on certain environmental matters, refer to Note 15 of the Notes to Condensed Consolidated Financial Statements.


Non-GAAP Financial Measures

In addition to assessing the Company's financial condition, results of
operations, liquidity and cash flows in accordance with U.S. GAAP, management
utilizes certain non-GAAP financial measures, defined below, as part of its
internal reviews for purposes of monitoring, evaluating and forecasting the
Company's financial performance, communicating operating results to the Board
and assessing related employee compensation measures. Management believes that
these non-GAAP financial measures may be helpful to investors in assessing the
Company's overall financial performance, trends and period-over-period
comparative results, in addition to the reasons noted below. Non-GAAP financial
measures related to operating income, operating margin, net income attributable
to Amphenol Corporation, effective tax rate and diluted EPS exclude income and
expenses that are not directly related to the Company's operating performance
during the periods presented. Items excluded in the presentation of such
non-GAAP financial measures in any period may consist of, without limitation,
acquisition-related expenses, refinancing-related costs, and certain discrete
tax items including but not limited to (i) the excess tax benefits related to
stock-based compensation and (ii) the impact of significant changes in tax law.
Non-GAAP financial measures related to net sales exclude the impact of foreign
currency exchange rates and acquisitions. The non-GAAP financial information
contained herein is included for supplemental purposes only and should not be
considered in isolation, as a substitute for or superior to the related U.S.
GAAP financial measures. In addition, these non-GAAP financial measures are not
necessarily the same or comparable to similar measures presented by other
companies as such measures may be calculated differently or may exclude
different items.

The non-GAAP financial measures defined below should be read in conjunction with
the Company's financial statements presented in accordance with U.S. GAAP. The
reconciliations of these non-GAAP financial measures to the most directly
comparable U.S. GAAP financial measures for the three months ended March 31,
2022 and 2021 are included in "Results of Operations" and "Liquidity and Capital
Resources" within this Item 2:

Adjusted Diluted EPS is defined as diluted earnings per share (as reported in

accordance with U.S. GAAP), excluding income and expenses and their specific

tax effects that are not directly related to the Company's operating

? performance during the periods presented. Adjusted Diluted EPS is calculated as

Adjusted Net Income attributable to Amphenol Corporation, as defined below,

divided by the weighted average outstanding diluted shares as reported in the

   Condensed Consolidated Statements of Income.


   Adjusted Effective Tax Rate is defined as Provision for income taxes, as

reported in the Condensed Consolidated Statements of Income, expressed as a

? percentage of Income before income taxes, as reported in the Condensed

Consolidated Statements of Income, each excluding income and expenses and their

specific tax effects that are not directly related to the Company's operating

performance during the periods presented.

Adjusted Net Income attributable to Amphenol Corporation is defined as Net

income attributable to Amphenol Corporation, as reported in the Condensed

? Consolidated Statements of Income, excluding income and expenses and their

specific tax effects that are not directly related to the Company's operating

performance during the periods presented.

Adjusted Operating Income is defined as Operating income, as reported in the

? Condensed Consolidated Statements of Income, excluding income and expenses that

are not directly related to the Company's operating performance during the

periods presented.

Adjusted Operating Margin is defined as Adjusted Operating Income (as defined

? above) expressed as a percentage of Net sales (as reported in the Condensed

   Consolidated Statements of Income).


   Constant Currency Net Sales Growth is defined as the period-over-period

percentage change in net sales growth, excluding the impact of changes in

? foreign currency exchange rates. The Company's results are subject to

volatility related to foreign currency translation fluctuations. As such,

management evaluates the Company's sales performance based on actual sales

   growth in U.S. dollars, as well as Organic Net Sales Growth (defined


                                       36

  Table of Contents

  below) and Constant Currency Net Sales Growth, and believes that such
  information is useful to investors to assess the underlying sales trends.

Free Cash Flow is defined as (i) Net cash provided by operating activities

("Operating Cash Flow" - as reported in accordance with U.S. GAAP) less (ii)

capital expenditures (as reported in accordance with U.S. GAAP), net of

proceeds from disposals of property, plant and equipment (as reported in

? accordance with U.S. GAAP), all of which are derived from the Condensed

Consolidated Statements of Cash Flow. Free Cash Flow is an important liquidity

measure for the Company, as we believe it is useful for management and

investors to assess our ability to generate cash, as well as to assess how much

cash can be used to reinvest in the growth of the Company or to return to

stockholders through either stock repurchases or dividends.

Organic Net Sales Growth is defined as the period-over-period percentage change

in net sales growth resulting from operating volume and pricing changes, and

excludes the impact of (i) changes in foreign currency exchange rates

(described above), which is outside the control of the Company, and (ii)

acquisitions, both of which are taken as a percentage of the respective prior

period(s) net sales. The acquisition impact represents the percentage impact on

? net sales resulting from acquisitions that have not been included in the

Company's consolidated results for the full current period(s) and/or prior

comparable period(s) presented. Such net sales related to these acquisitions do

not reflect the underlying growth of the Company on a comparative basis.

Management evaluates the Company's sales performance based on actual sales

growth in U.S. dollars, as well as Constant Currency Net Sales Growth (defined

above) and Organic Net Sales Growth, and believes that such information is

useful to investors to assess the underlying sales trends.

Critical Accounting Policies and Estimates


The Company's disclosures of its critical accounting policies and estimates,
which are discussed in Part II, Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations of its 2021 Annual Report, have
not materially changed since that report was filed.

© Edgar Online, source Glimpses

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Financials (USD)
Sales 2022 12 109 M - -
Net income 2022 1 778 M - -
Net Debt 2022 3 357 M - -
P/E ratio 2022 22,7x
Yield 2022 1,26%
Capitalization 38 492 M 38 492 M -
EV / Sales 2022 3,46x
EV / Sales 2023 3,24x
Nbr of Employees 90 000
Free-Float 99,2%
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Managers and Directors
Richard Adam Norwitt President, Chief Executive Officer & Director
Craig Anthony Lampo Chief Financial Officer & Senior Vice President
Martin H. Loeffler Director
Linda Chan Vice President-Information Technology
Edward G. Jepsen Independent Director
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