Amphenol Corporation (APH) 2006年年度報告「NYSE」.pdf

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1、2006 ANNUAL REPORTAmphenol was founded in 1932.The Company is one of the largest manufacturers of interconnectproducts in the world.The Company designs,manufactures and markets electrical,electronic and fiber-optic connectors,interconnect systems and coaxial and specialty cable.Amphenol has a divers

2、ified presence in high growth markets including:Information Technology andData Communications Equipment,Mobile Devices,Mobile Networks,Broadband Communication,Military and Commercial Aerospace,Industrial and Automotive.Amphenol is headquartered in Connecticut,USA and employs more than 25,000 worldwi

3、de.250%225%200%175%150%125%100%75%50%25%0%200120022003200420052006S&P 500CompositeAmphenolThe above graph compares the performance of Amphenol over a period of five years ending December 31,2006 with the performance of theStandard&Poors 500 Stock Index and the average performance of a composite grou

4、p consisting of peer corporations on a line-of-businessbasis.The Company is excluded from this group.The corporations comprising the composite group are CommScope,Inc.,Hubbell Incorporated,Methode Electronics,Inc.,Molex,Inc.and Thomas&Betts Corporation.Total Daily Compounded Return indices reflect r

5、einvested dividends andare weighted on a market capitalization basis at the time of each reported data point.Comparison of Total Daily Compounded Return AmongAmphenol Corporation,S&P 500 Index and Peer Group CompositeCumulative Total ReturnAnnually:12/31/2001 to 12/31/2006The data points for the gra

6、ph are as follows:12/31/200112/31/200212/31/200312/31/200412/31/200512/31/2006Amphenol 100%79%147%163%183%224%Composite 100%85%124%135%134%149%S&P 500 100%77%103%112%115%129%(1)Includes a one-time charge for expenses incurred in connection with a flood at the Companys Sidney,NY facility of$20,747,le

7、ss tax benefit of$6,535,or$.15 per share after taxes.AmphenolCorporationAmphenol Corporation Financial Highlights2006 ANNUAL REPORTYear Ended December 31,200620052004(dollars in thousands,except per share amounts)Revenues$2,471,430$1,808,147$1,530,446Operating income$424,592(1)$343,327$276,644Net in

8、come$255,691(1)$206,339$163,311Net income per common sharediluted$2.79(1)$2.28$1.82Average common shares outstanding91,673,66390,471,73789,736,656Current and long-term debt$680,414$781,000$449,053Free cash flow$207,176$172,503$163,910In 2006,the Company achievednew records of performance:Sales of$2.

9、5 billion up 37%fromlast year,EPS of$2.94*up 29%from lastyear,and Free cash flow of$207 million up20%from last yearThis excellent performance was achievedin a very challenging environment.TheCompany maintained industry-leadingprofitability by offsetting the most signifi-cant increases in commodity c

10、osts seen ina decade through a combination of costreductions,material substitutions and pric-ing actions.In addition,the Companyachieved these results while managingthrough a major flood at our largest facilityand the biggest acquisition in theCompanys historythe acquisition ofTCS(Teradyne Connectio

11、n Systems)inDecember of 2005.The record results in2006 are clearly a testament to thestrength of Amphenols diverse businessand high performance culture.We made significant progressin 2006 in the major marketswe serve,strengthening ourrelationships with the leadingmanufacturers,as well asbroadening o

12、ur geographicpresence and product portfolio.h The industrial market represented13%of our sales in 2006 andincreased a very strong 21%over theprior year.We continue to benefitfrom our strategic focus on highgrowth segments of the industrialmarket,such as the medical instru-mentation,heavy equipment a

13、nd railmass transit as well as oil and gasexploration markets.The industrialmarkets encompass a broad anddiverse range of applications withsignificant opportunity for growthresulting from the increased use ofsophisticated and complex electroniccomponents and significant demandsfor new power and data

14、 interconnectsolutions.We have done an excellentjob of increasing our presence withleading industrial equipment manu-facturers.We expect this market toretain momentum into 2007.h The military and commercial aero-space market represented 18%of oursales in 2006 and increased 4%overthe prior year.The s

15、ales were adverselyimpacted by the flood in our Sidneyfacility.However,we continue to seegood demand in the military marketdriven by upgrade and replacement ofmilitary hardware,homeland securityinvestments and the growing commer-cial aircraft market.In addition,weare excited about our significant pa

16、r-ticipation in several new military pro-grams that are in the early phases ofproduction and in the new commercialaircraft programs which will comple-ment our growth in 2007.We believethat this market will remain strong forthe Company through 2007.h The automotive market,which is thesmallest market

17、that we serve with 8%of our sales,declined 4%from theprior year as vehicle production ratesin both Europe and the United Statesdeclined.We are very pleased that wereturned to positive growth of 5%inthe fourth quarter,driven in part by thelaunch of our next generation inter-connect products for safet

18、y devicesand navigation systems.We believethat the main driver for continued pos-itive trends in this area will be the saleof our new products into new electronicapplications in the car.Overall,weexpect demand to remain moderate inthis market in the near term.AMPHENOL CORPORATIONAmphenol Corporation

19、 Letter to ShareholdersDear Fellow Shareholders:*Excluding the 2006 one-time flood related charges of$.15In the communications and infor-mation technology markets wegained significant position in 2006.h The broadband communication mar-ket represented 11%of our sales in2006,and we experienced verystr

20、ong growth of 25%over the prioryear.This was a result of our earlierprice increases and strong demanddue to the success of new broadbandservices offered by the cable televi-sion operators.We serve the broad-band market primarily with coaxialcable;in addition,we continue tobroaden our participation i

21、n this mar-ket with interconnect products fornew digital video services and highspeed internet access.h The information technology and datacommunication equipment marketrepresented 25%of our sales.Saleswere up 118%over last year;withoutTCS,sales were up a strong 14%.Weare very pleased with the growt

22、h ofour core business,as well as the con-tribution from TCS,which has signifi-cantly enhanced our position in thisimportant growth market.We haveexcellent penetration in the areas ofservers,storage systems and datacomequipment.New product develop-ment continues to drive our successin this market,as

23、demand expandsfor high-speed,miniaturized andincreased value-added products.Weare very encouraged with the designwins of new products in this area.We expect the positive trend in thismarket to continue in 2007.h The mobile network market repre-sented 13%of our sales.Sales wereup 48%over 2005 and 6%e

24、xcludingTCS.TCS contributed significantly tofurther strengthen our position in thismarket.We accelerated our partici-pation in interconnect and antennasfor the installation market.We haveexcellent positions with the leadinginfrastructure equipment manufacturersand are developing relationships withne

25、twork system operators.Overall,the mobile infrastructure market hasgood opportunities for us in thefuture as subscriber growth and con-tinued increase of data and multime-dia traffic drive both demand andtechnology forward.Next generationIP-based mobile networks are beingdesigned;our participation i

26、n thosedesigns supports a long-term positiveoutlook for this market.h The mobile device market represented12%of our sales in 2006.Salesincreased a strong 52%.We continueto benefit from our diversity in cus-tomers,phone models and products.Our continuous product innovation isfocused on demanding prod

27、uct areassuch as low profile connectors,hingesand antennas and is increasing thevalue of our content per device.Inaddition,these high performanceproducts are increasingly demandedin other mobile consumer devices andthis proliferation is increasing ouroverall market opportunity.We expectcontinued gro

28、wth in 2007.In 2006,we began to capitalizeon the significant opportunitycreated by the acquisition of TCS.We spoke last year about the uniqueopportunity created by the TCS acquisition,resulting from the strength of the combinedproduct portfolio,TCSs technologyleadership and the significant opportu-n

29、ity,over time,for operating incomeenhancement from TCSs historicalmid-single digit level to those of2006 ANNUAL REPORTAmphenol.The combined product offer-ing of the two companies has significantlyenhanced our position in the communi-cations and information technology mar-kets and created a real powe

30、rhouse interms of providing integrated intercon-nect system architecture solutionswehave only begun to tap the relatedgrowth opportunity.In addition,the rapidadoption of Amphenols operating disci-pline by the TCS management teamresulted in significant operating incomeimprovement in 2006 and they are

31、 work-ing hard to continue this trend into2007.We continue to be excited aboutthe future opportunity.We invested substantially tocapitalize on the opportunitiesthat we see.We continued our expansion in 2006,investing$82 million in new toolingand manufacturing and test equipment,ensuring sufficient c

32、apacity to meet theincreasing demands of our customers.In addition,we opened several newR&D and sales operations,and furtherexpanded our manufacturing capabilityin China,India and other developingmarkets,consistent with our strategy ofkeeping these critical resources close tothe growth opportunities

33、.Our workforceexpanded to over 25,000 worldwide withthe vast majority of this expansion inlow-cost regions.At the end of 2006,64%of the Companys workforce was inlow-cost regions.an excellent plat-form for profitable growth.We also con-tinue to pursue our acquisition strategyfocusing on complementary

34、 companieswith strong,entrepreneurial manage-ment,excellent technology,and opportu-nity to gain leverage from Amphenolsglobal resources.We completed twostrategic acquisitions in 2006,expandingthe Companys presence in the growingmarkets for high performance industrialand medical applications and in f

35、iber-optic technology.We continue to exploreadditional acquisitions that are accretiveto future performance.We continue to evolve ourorganization to meet thechanging needs of the market.As part of this ongoing organizationaldevelopment,we recently promotedR.Adam Norwitt to the newly createdposition

36、of President and ChiefOperating Officer.I am excited about his initial mission:to enhance our focus on expansionopportunities across all of our operat-ing divisions.He will more specificallydrive our geographic expansion in areaswhere we have significant potential forfurther growth.It will be his go

37、al to capi-talize on new,high-growth emergingmarkets like the medical market as wellas other targeted markets.Further,he willcontinue to strengthen and accelerateour successful acquisition program.I am very excited about this new phaseof profitable expansion for Amphenol.In 2007,Amphenol celebrates

38、its75th Anniversary.From the man-ufacturing of our first radio tubesocket in 1932,the Company hasevolved into a global leader inthe interconnect market.The Amphenol team,25,000 strong,canbe proud of a performance record thatleads the industry.Over the past decade,Amphenol has grown sales at twice th

39、eindustry average and has achieved EPSgrowth in excess of 20%.AMPHENOL CORPORATION2006 ANNUAL REPORTOur philosophy is a simple one:h Create growth and margin opportu-nity by providing industry-leadinginterconnect systems technology toour customersh Capitalize on the acquisitionopportunities created

40、by a frag-mented industryh Manage risk through diversificationand flexibilityh Manage the Companys money as ifit were our owninvest efficiently,control costsh Keep resources close to local marketsand customersh Maximize operating performancethrough a collaborative,entrepre-neurial management structu

41、re withclear accountability for resultsAs we look forward,we con-tinue to see a unique expan-sion opportunity for Amphenolin a fragmented industry and alarge$40 billion worldwideinterconnect market.Market trends play to the Companysstrengths:Globalization Emerging markets Customer and vendor consoli

42、dation Challenging technology Integrated solutions Electronics proliferationWe have capitalized on these trends.TheCompany has doubled its market shareto 6%in the last 10 years while deliver-ing average EPS growth in excess of20%.This out-performance is a directresult of the consistent application o

43、f theCompanys strategy by the local generalmanagers of each of our 60 operatingunits worldwide.Their drive to maximizethe performance of each of their busi-nesses in their particular market andregion is what sets Amphenol apart.We believe Amphenol is posi-tioned to continue to outperformthe industry

44、 as we leverage bothour technology and our culture.Our emphasis on technology and prod-uct innovation is vital to growth andprofitability.We will continue to leverageour strong technology capabilities tocreate new market opportunities byoffering our customers unique techno-logical advantages.In addi

45、tion,we willgear our new product developmenttoward higher margin opportunities bycreating value for our customers throughleading-edge developments thatenhance equipment performance.We will combine our drive for leadingtechnology with our culture of strongoperating discipline.We will drive contin-ued

46、 cost reductions because we know itis necessary in todays markets to stayahead.We will be fast to react to currentmarket conditions through the disciplinedapproach of our local management.Wewill maintain our financial discipline aswe grow and drive accountability andperformance down to the lowest le

47、vels ofthe organization because that has in thepast and will continue to enhance overallreturn.This is the Amphenol way.It is with the full commitment of everyemployee that we continue to moveAmphenol forward to produce superiorperformance for our customers,satisfac-tion for our employees,and excell

48、entreturns for our shareholders.Martin H.LoefflerChairman and Chief Executive OfficerAmphenols MarketsAMPHENOL CORPORATIONInformation Technology andData CommunicationAmphenol is a global-provider of interconnect solutions to thedesigners and manufacturers of internet enabling systems.Amphenols range

49、 of offerings in cable,cable assembly,connectorproducts and backplane interconnectsystems spans applications inPCs,servers,storage sys-tems,optical and coppernetworking equipment,modems,hubs,routers,switches,mediadisplay systems,andinternet appliances.With its design creativityand cost effectiveness

50、,Amphenol leads the wayin interconnect developmentfor internet equipment,infra-structure,enterprise networks andappliances.Whether industry standard or application-specificdesigns are required,Amphenol provides customers withproducts capable of performing at the leading edge of nextgeneration high-s

51、peed technology.Mobile DevicesAmphenol provides a broad range of components for morethan 50%of the worlds annual mobile phone production.Amphenol manufactures essentially all of the interconnectdevices found in mobile phones,PDAs and other mobile devices.The broad product offering includes antennas,

52、RF switches/plugs,navigation keys/side keys,microphone/speaker/vibra connectors,LCD connectors,board to board connectors,SIM/MMC/SDsockets,battery connectors,I/O systemconnectors,charger(plugand socket)connectors,hinges/plastic parts,andtest cables.Our capabilityfor high volume produc-tion of these

53、technicallydemanding,miniatur-ized products,combinedwith our speed of newproduct introduction,isa critical factor for oursuccess in this market.Mobile NetworksAmphenol is a leading global interconnect solutions provider tothe wireless infrastructure market including applications suchas cellular base

54、 stations,radio links,mobile switches,wirelessrouters,wireless local loop and cellsite antenna systems,combiners,transceivers,filters and amplifiers.Amphenol offers a wide productportfolio for every wirelessstandard and generationradio technology including2.5G,3G and future IPsolutions.The productra

55、nge includes RF,antenna,low frequencyand fiber-optic con-nectors and cableassemblies,backplaneinterconnect systems andpower distribution systems.Broadband CommunicationAmphenol is a world leader in broadband cable television com-munication products with industry leading engineering,designand manufac

56、turing expertise.Amphenol offers a broad range ofcoaxial cable products to service the growing broadband market,from customer premise cables and interconnect devices todistribution cable and fiber-optic components.Amphenol is alsoa world leader in radio frequency connectors,and has productsdeployed

57、on a wide range of broadband equipment fromsophisticated head end equipment todigital set-top smart-card systems,high-speed cable modemsand DBS interface devices.Amphenol leads theway in broadbandcommunications.Military and Commercial AerospaceAmphenol is the world leader in the design,manufacture,a

58、ndsupply of high performance interconnect systems for military andcommercial aerospace harshenvironment applications.Amphenol provides anunparalleled productbreadth,from militaryspec connectors toboard level intercon-nects;from flexible torigid printed circuitboards;from backplanesystems to complete

59、lyintegrated assemblies.Keymarkets supported are avionics,radar,communications,ordnance,missiles,engines,ground vehicles and tanks,space,and alllevels of aviation.Amphenol is a technology innovator thatdesigns to meet customers needs from program inception.From original designs to off-the-shelf deli

60、very,Amphenolleads the way.IndustrialAmphenol is a technologicalleader in the design,manu-facture,and supply of highperformance interconnectsystems for a broad rangeof industrial applications,including medical equip-ment,factory automation,heavy equipment,instru-mentation,motion control,rail mass tr

61、ansportation,andoil exploration.Amphenols core competencies includeapplication specific industrial interconnect solutions utilizingintegrated assemblies with flex print circuit and high powerinterconnects requiring a high degree of engineering and systemintegration with innovative solutions for the

62、increasing demandsof embedded computing and power distribution.AutomotiveAmphenol is a leading supplier of interconnect systems for auto-motive safety devices.As the inventor of airbag and seatbeltpretensioner interconnect systems,Amphenol has defined thestandards in this industry and continues itsi

63、nnovative leadership.In addition,Amphenol provides advancedinterconnect solutions for theexpanding electronics inautomobiles includingentertainment,communi-cation,navigation andtelematic modules.Forselected applications suchas engine control,sensors,and actuators,as well asauxiliary motors,Amphenolp

64、rovides wiring components,customovermolded devices,and harness assem-blies.Amphenols automotive core competencies includeapplication-specific automotive interconnect solutions requiringa high degree of engineering and system integration.2006 ANNUAL REPORTSales Percentageby Market Segment Information

65、 Technology&Data Communication Military&Commerical Aerospace Mobile Networks Industrial Mobile Devices Broadband Communication AutomotiveThe Company has a diversified presence in high growth markets.The Company seeks to expand the scopeand number of its preferred supplier des-ignations and applicati

66、on-specific prod-uct opportunities with OEM and originaldesign customers.The Company worksclosely with its customers at the designstage to create and manufacture innova-tive solutions to meet customers specificinterconnection needs.The application-specific products generally have highervalue-added c

67、ontent than other intercon-nect products and have been developedacross all of the Companys productlines.In addition to solidifying its rela-tionship with customers and providing asource of high value-added sales,thisproduct development strategy has anumber of important ancillary benefits.For example

68、,once an application-specificproduct has been developed for a partic-ular customer,the new product oftenbecomes widely accepted in the industryfor similar applications.Thereafter,thedemand for these new products growsas they become incorporated intoproducts manufactured by otherpotential customers,t

69、herebyproviding additional sourcesof revenue.The Companys product line strategy is toprovide a complete product offering in itsfocus markets.Management believes thatit is very important to continually developthe breadth and depth of Amphenolsproduct lines in order to maintain its des-ignation as a p

70、referred supplier withcustomers.By expanding its productlines,the Company is able to leverageits extensive customer relationships tocross-sell additional interconnect prod-ucts.Moreover,given that many customersare reducing the size of their supplier base,Amphenol believes that the expansion ofits p

71、roduct lines with new value-addedintegrated solutions helps to further solidifyits importance to existing customers andenables it to effectively market productsto new customers.The Company intends to further expandits global manufacturing,engineering,sales and service operations to betterserve its e

72、xisting customer base,penetratedeveloping markets and establish newcustomer relationships.As the Companysglobal customers expand their interna-tional operations to access developingworld markets and lower manufacturingand labor costs in certain regions,theCompany is continuing to expand its inter-na

73、tional capabilities in order to providejust-in-time facilities near these customers.The Company believes strongly in keepingresources close to local markets and cus-tomers.The majority of the Companysinternational operations have broad capa-bilities including new product development.The Company is a

74、lso able to take advan-tage of the lower manufacturing costs insome regions,and has established low-costmanufacturing and assembly facilities in thethree major geographical markets of theAmericas,Europe/Africa and Asia.In2006,approximately 64%of itsworkforce was located inlow-cost labor regions.Deve

75、lop Application-Specific InterconnectSolutions1Expand Product Lines2Expand Global Presence3AMPHENOL CORPORATIONAmphenol Business StrategyOur management system is designed toprovide clear P&L and balance sheetresponsibility in a flat organizationalstructure.Each general manager isincented to grow and

76、 develop his busi-ness and to think entrepreneurially inproviding innovative,timely and costeffective solutions to customer needs.In addition,the general managers haveaccess to the resources of the largerorganization and are encouraged throughinternal structure to work collaborativelywith other gene

77、ral managers to meet theneeds of the expanding marketplace andto achieve common goals.It is very important in todays globalmarketplace to have a competitive coststructure.Innovation,product quality andcomprehensive customer service are notmutually exclusive with controlling costs.Controlling costs i

78、s part of a mindsetitis having the discipline to invest in pro-grams that have a good return;it ismaintaining a cost structure as flexible aspossible to respond to changes in themarketplace;it is dealing with suppliersand vendors in a fair but prudent way toinsure a reasonable cost for materialsand

79、services;it is a mindset of managersto manage the Companys assets as ifthey were their own.The Company believes that the fragmentednature of the interconnect industry pro-vides significant opportunities for strategicacquisitions.Therefore,management con-tinues to pursue strategic acquisitions ofsmal

80、ler companies with significant growthpotential that complement the Companysexisting business and further expand itsproduct lines,technological capabilitiesand geographic presence.Furthermore,such acquisitions have the potential forimproving the profitability of acquiredcompanies by leveraging Amphen

81、olsaccess to world markets and lowermanufacturing costs resulting fromgreater economies of scale.The Companys strategic objective is to further enhanceits position as a global designer,manufacturer andmarketer of interconnect systems by leveraging itsindustry-leading technology andhigh performance c

82、ulture.Foster Collaborative,EntrepreneurialManagement4Control Costs5Pursue StrategicAcquisitions andInvestments62006 ANNUAL REPORTSales Percentageby Region North America Europe Asia Rest of WorldAMPHENOL CORPORATIONOperating MarginPercent(%)0216.40316.50418.10519.00618.0*Net Sales$Millions1,062021,2

83、40031,530041,808052,47106Free Cash Flow$Millions0212403140041640517306207Earnings Per ShareDiluted$Dollars020.93031.18041.82052.28062.94*Excluding flood-related losses of$20.7 million*Excluding flood-related losses of$.15 per shareAmphenol Key-Operating IndicesUNITED STATESSECURITIES AND EXCHANGE CO

84、MMISSIONWashington,D.C.20549FORM 10-K(Mark One)XANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACTOF 1934 For the Fiscal Year Ended December 31,2006or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGEACT OF 1934 For the transition period from_to_Com

85、mission file number 1-10879AMPHENOL CORPORATION(Exact Name of Registrant as Specified in its Charter)Delaware(State or Other Jurisdiction of Incorporation or Organization)22-2785165(IRS Employer Identification No.)358 Hall Avenue,Wallingford,Connecticut 06492203-265-8900(Address,Including Zip Code,a

86、nd TelephoneNumber,Including Area Code,of RegistrantsPrincipal Executive Offices)Securities registered pursuant to Section 12(b)of the Act:Class A Common Stock,$.001 par valueNew York Stock Exchange,Inc.(Title Of Each Class)(Name Of Each Exchange On Which Registered)Securities registered pursuant to

87、 Section 12(g)of the Act:None Indicate by check mark if the registrant is a well-known seasoned issuer(as defined in Rule 405 of the Securities Act).Yes X No_ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d)of the Act.Yes No _X_Indicate

88、 by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the SecuritiesExchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports)and(2)has been subject to such filing require

89、ments for the past 90 days.Yes X No_ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein,and will notbe contained,to the best of registrants knowledge,in definitive proxy or information statements incorporated by reference in Part

90、IIIof this Form 10-K or any amendment to this Form 10-K.XIndicate by check mark whether the registrant is a large accelerated filer,an accelerated filer or a non-accelerated filer.See definitionof“accelerated filer and large accelerated filer”in Rule 12b-2 of the Exchange Act(check one):Large accele

91、rated filer X ,Accelerated filer ,Non-accelerated filer .Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes _ No _X_The aggregate market value of Amphenol Corporation Class A Common Stock,$.001 par value,held by non-affiliates wasapprox

92、imately$4,998 million based on the reported last sale price of such stock on the New York Stock Exchange on June 30,2006.As of January 31,2007,the total number of shares outstanding of registrants Class A Common Stock was 89,027,518.DOCUMENTS INCORPORATED BY REFERENCEPortions of the Registrants Defi

93、nitive Proxy Statement,which is expected to be filed within 120 days following the end ofthe fiscal year covered by this report,are incorporated by reference into Part III hereof.2INDEXPagePART I3Item 1.Business3 General3 Business Segments5 International Operations6 Customers6 Manufacturing7 Researc

94、h and Development7 Trademarks and Patents7 Competition8 Backlog8 Employees8 Environmental Matters8 Other9 Cautionary Statements for Purposes of Forward Looking Information9Item 1A.Risk Factors9Item 1B.Unresolved Staff Comments12Item 2.Properties12Item 3.Legal Proceedings12Item 4.Submission of Matter

95、s to a Vote of Security Holders12PART II13Item 5.Market for the Registrants Common Equity,Related Stockholder Matters and IssuerPurchases of Equity Securities13Item 6.Selected Financial Data15Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations16Item 7A.Quantit

96、ative and Qualitative Disclosures About Market Risk28Item 8.Financial Statements and Supplementary Data29 Report of Independent Registered Public Accounting Firm29 Consolidated Statements of Income31 Consolidated Balance Sheets32 Consolidated Statements of Changes in Shareholders Equity and Other Co

97、mprehensive Income33 Consolidated Statements of Cash Flow34 Notes to Consolidated Financial Statements35Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure52Item 9A.Controls and Procedures52Item 9B.Other Information53PART III53Item 10.Directors,Executive Offic

98、ers and Corporate Governance53Item 11.Executive Compensation53Item 12.Security Ownership of Certain Beneficial Owners and Management and Related StockholderMatters53Item 13.Certain Relationships and Related Transactions,and Director Independence54Item 14.Principal Accountant Fees and Services54PART

99、IV54Item 15.Exhibits and Financial Statement Schedules54 Signature of the Registrant57 Signatures of the Directors573PART IItem 1.BusinessGeneralAmphenol Corporation(Amphenol or the Company)is one of the worlds largest designers,manufacturers andmarketers of electrical,electronic and fiber optic con

100、nectors,interconnect systems and coaxial and flat-ribbon cable.The Companywas incorporated in 1987.Certain predecessor businesses,which now constitute part of the Company,have been in business since1932.The primary end markets for the Companys products are:communication systems for the converging te

101、chnologies of voice,video and data communications;a broad range of industrial applications including factory automation and motion control systems,medical and industrialinstrumentation,mass transportation and natural resource exploration,and automotive applications;and commercial aerospace and milit

102、ary applications.The Companys strategy is to provide its customers with comprehensive design capabilities,a broad selection of productsand a high level of service on a worldwide basis while maintaining continuing programs of productivity improvement and costcontrol.For 2006,the Company reported net

103、sales,operating income and net income of$2,471.4 million,$424.6 million and$255.7million,respectively.The table below summarizes information regarding the Companys primary markets and end applications for theCompanys products:Information Technology&CommunicationsIndustrial/AutomotiveCommercial Aeros

104、paceand Military Percentage of Sales61%21%18%Primary End ApplicationsWireless Communication Systemswireless handsets and personal communication deviceswireless infrastructure equipmentbase stationscell sitesBroadband Networkscable television networksset top convertershighspeed data kitscable modemsF

105、actory automationInstrumentation Automobile safety systems and other on board electronicsMass transportationOil explorationOff-road constructionMedical equipmentSatellite radio systemsMilitary and CommercialAircraftavionicsengine controlsflight controlspassenger related systemsMissile systemsBattlef

106、ield communicationsSatellite and space programsRadar systemsMilitary vehiclesOrdnanceTelecommunications and Data Communicationsservers and storage systemscomputers,personal computers and related peripherals data networking equipmentrouters,switches4The Company designs and manufactures connectors and

107、 interconnect systems which are used primarily to conduct electricaland optical signals for a wide range of sophisticated electronic applications.The Company believes,based primarily on publishedmarket research,that it is the third largest connector manufacturer in the world.The Company has develope

108、d a broad range ofconnector and interconnect products for the information technology and communications equipment applications including theconverging voice,video and data communications markets.The Company offers a broad range of interconnect products for factoryautomation,machine tools,instrumenta

109、tion and medical systems,mass transportation applications and automotive applications,including airbags,pretensioner seatbelts and other on board automotive electronics.In addition,the Company is the leading supplierof high performance,military-specification,circular environmental connectors that re

110、quire superior reliability and performance underconditions of stress and in hostile environments.These conditions are frequently encountered in commercial and military aerospaceapplications and other demanding industrial applications such as oil exploration,medical instrumentation and off-road const

111、ruction.The Company is a global manufacturer employing advanced manufacturing processes.The Company designs,manufacturesand assembles its products at facilities in the Americas,Europe,Africa and Asia.The Company sells its products through its ownglobal sales force,independent manufacturers represent

112、atives and a global network of electronics distributors to thousands ofOEMs in approximately 60 countries throughout the world.The Company also sells certain products to electronic manufacturingservices(EMS)and original design manufacturing(ODM)companies,and to communication network operators.For th

113、e year 2006,approximately 47%of the Companys net sales were in North America,21%were in Europe and 32%were in Asia and othercountries.The Company generally implements its product development strategy through product design teams and collaborationarrangements with customers which result in the Compan

114、y obtaining approved vendor status for its customers new products andprograms.The Company seeks to have its products become widely accepted within the industry for similar applications and productsmanufactured by other potential customers,which the Company believes will provide additional sources of

115、 future revenue.Bydeveloping application specific products,the Company has decreased its exposure to standard products which generally experiencegreater pricing pressure.In addition to product design teams and customer collaboration arrangements,the Company uses keyaccount managers to manage custome

116、r relationships on a global basis such that it can bring to bear its total resources to meet theworldwide needs of its multinational customers.The Company and industry analysts estimate that the worldwide sales of interconnect products were approximately$40 billion in 2006.The Company believes that

117、the worldwide industry for interconnect products and systems is highly fragmentedwith over 2,000 producers of connectors and interconnect systems worldwide,of which the 10 largest,including Amphenol,accounted for a combined market share of approximately 53%in 2006.The Companys acquisition strategy i

118、s focused on the consolidation of this highly fragmented industry.The Companytargets acquisitions on a global basis in high growth segments that have complementary capabilities to the Company from a product,customer or geographic standpoint.The Company looks to add value to those smaller companies t

119、hrough its global capabilities andgenerally expects acquisitions to be accretive to performance in the first year.In the year 2006 the Company spent approximately$22 million on acquisitions,including payments for performance-based additional cash consideration.This represented two smallacquisitions

120、in target markets,including the data communications and industrial/medical markets,that broadened and enhanced itsproduct offering in these areas.In December 2005,the Company purchased the connection systems business(“TCS”)of TeradyneInc.for approximately$385 million.TCS had sales of approximately$3

121、73 million in 2005 and,the Company believes,is the leaderin high speed,high density,printed circuit board interconnect products.TCS sells its products primarily to the data communications,wireless infrastructure and storage and server markets.The TCS acquisition is almost entirely complementary to A

122、mphenol from aproduct standpoint and allows the Company to offer a complete and integrated interconnect solution for customers in thecommunications markets,significantly enhancing the Companys position.5Business SegmentsThe following table sets forth the dollar amounts of the Companys net trade sale

123、s for its business segments.For adiscussion of factors affecting changes in sales by business segment and additional segment financial data,see“ManagementsDiscussion and Analysis of Financial Condition and Results of Operations”and Note 9 in the Companys“Notes to ConsolidatedFinancial Statements.”20

124、0620052004(dollars in thousands)Net trade sales by business segment:Interconnect products and assemblies$2,207,508$1,592,439$1,333,838Cable products263,922215,708196,608$2,471,430$1,808,147$1,530,446Net trade sales by geographic area(1):United States operations$1,059,974$802,351$674,302International

125、 operations1,411,4561,005,796856,144$2,471,430$1,808,147$1,530,446(1)Based on customer location to which product is shipped._Interconnect Products and Assemblies.The Company produces a broad range of interconnect products and assembliesprimarily for voice,video and data communication systems,commerc

126、ial aerospace and military systems,automotive and masstransportation applications,and industrial and factory automation equipment.Interconnect products include connectors,which whenattached to an electronic or fiber optic cable,a printed circuit board or other device,facilitate electronic or fiber o

127、ptic transmission.Interconnect assemblies generally consist of a system of cable and connectors for linking electronic and fiber optic equipment.TheCompany designs and produces a broad range of connector and cable assembly products used in communication applications,suchas:engineered cable assemblie

128、s used in base stations for wireless communication systems and internet networking equipment;smartcard acceptor devices used in mobile telephones,set top boxes and other applications to facilitate reading data from smart cards;fiberoptic connectors used in fiber optic signal transmission;backplane a

129、nd input/output connectors and assemblies used for servers anddata storage devices and linking personal computers and peripheral equipment;sculptured flexible circuits used for integratingprinted circuit boards in communication applications and hinge products used in mobile phone and other mobile co

130、mmunicationdevices.The Company also designs and produces a broad range of radio frequency connector products and antennas used intelecommunications,computer and office equipment,instrumentation equipment,local area networks and automotive electronics.The Companys radio frequency interconnect product

131、s and assemblies are also used in base stations,mobile communication devicesand other components of cellular and personal communications networks.The Company believes that it is the largest supplier of high performance,military-specification,circular environmentalconnectors.Such connectors require s

132、uperior performance and reliability under conditions of stress and in hostile environments.Highperformance environmental connectors and interconnect systems are generally used to interconnect electronic and fiber optic systemsin sophisticated aerospace,military,commercial and industrial equipment.Th

133、ese applications present demanding technologicalrequirements in that the connectors are subject to rapid and severe temperature changes,vibration,humidity and nuclear radiation.Frequent applications of these connectors and interconnect systems include aircraft,guided missiles,radar,military vehicles

134、,equipment for spacecraft,energy,medical instrumentation,geophysical applications and off-road construction equipment.TheCompany also designs and produces industrial interconnect products used in a variety of applications such as factory automationequipment,mass transportation applications including

135、 railroads and marine transportation;and automotive safety products includinginterconnect devices and systems used in automotive airbags,pretensioner seatbelts,antilock braking systems and other on boardautomotive electronic systems.The Company also designs and produces highly-engineered cable and b

136、ackplane assemblies.Suchassemblies are specially designed by the Company in conjunction with OEM customers for specific applications,primarily forcomputer,wired and wireless communication systems,office equipment and aerospace applications.The cable assemblies utilize theCompanys connector and cable

137、 products as well as components purchased from others.6Cable Products.The Company designs,manufactures and markets coaxial cable primarily for use in the cable televisionindustry.The Companys Times Fiber Communications subsidiary is the worlds second largest producer of coaxial cable for thecable te

138、levision market.The Company believes that its Times Fiber Communications unit is one of the lowest cost producers ofcoaxial cable for cable television.The Companys coaxial cable and connector products are used in cable television systemsincluding full service cable television/telecommunication syste

139、ms being installed by cable operators and telecommunicationcompanies offering video,voice and data services.The Company is also a major supplier of coaxial cable to the international cabletelevision market.The Company manufactures two primary types of coaxial cable:semi-flexible,which has an aluminu

140、m tubularshield,and flexible,which has one or more braided metallic shields.Semi-flexible coaxial cable is used in the trunk and feederdistribution portion of cable television systems,and flexible cable(also known as drop cable)is used primarily for hookups from thefeeder cable to the cable televisi

141、on subscribers residence.Flexible cable is also used in other communication applications.TheCompany has also developed a broad line of radio frequency and fiber optic interconnect components for full service cable television/telecommunication networks.The rapid development in fiber optic technologie

142、s,digital compression(which allows multiple channels to be transmittedwithin the same bandwidth that a single analog channel requires)and other communication technologies,including the Companysdevelopment of higher capacity coaxial cable,have resulted in technologies that enable cable television sys

143、tems to provide channelcapacity in excess of 500 channels.Such expanded channel capacity,along with other component additions,permit cable operatorsto offer full service networks with a variety of capabilities including video-on-demand,pay-per-view special events,home shoppingnetworks,interactive en

144、tertainment and education services,telephone services and high-speed Internet access.With respect toexpanded channel capacity systems,cable operators have generally adopted,and the Company believes that for the foreseeable futurewill continue to adopt,network infrastructure using both fiber optic ca

145、ble and coaxial cable.Such systems combine the advantages offiber optic cable in transmitting clear signals over a long distance,with the advantages of coaxial cable in ease of installation,lowcost and compatibility with the receiving components of the customers communication devices.The Company bel

146、ieves that whilesystem operators are likely to increase their use of fiber optic cable for the trunk and feeder portions of the cable systems,there willbe an ongoing need for high capacity coaxial cable for the local distribution and street-to-the-home portions of the cable system.Inaddition,U.S.cab

147、le system designs are increasingly being employed in international markets where cable television penetration isgenerally lower than in the U.S.The Company believes the development of full service cable television systems for the convergingtechnologies of voice,video and data communications presents

148、 an opportunity to increase sales of its coaxial cable and relatedproducts.The Company is also a leading producer of high speed data cables and specialty cables including flat-ribbon cable,a cablemade of wires assembled side by side such that the finished cable is flat.Flat-ribbon cable is used to c

149、onnect internal components insystems with space and component configuration limitations.The product is used in computer and office equipment applications aswell as in a variety of telecommunication applications.International OperationsThe Company believes that its global presence is an important com

150、petitive advantage as it allows the Company to providequality products on a timely and worldwide basis to its multinational customers.Approximately 57%of the Companys sales for theyear ended December 31,2006 were outside the United States.Approximately 49%of such international sales were in Asia.The

151、Company has manufacturing and assembly facilities in China,Taiwan,Korea,India,Japan and Malaysia.The balance of theCompanys international manufacturing and assembly facilities are located in Europe,Canada,Latin America,Africa and Australia.European operations include manufacturing and assembly facil

152、ities in the United Kingdom,Germany,France,the Czech Republic,Slovakia and Estonia and sales offices in most European markets.The Companys international manufacturing and assemblyfacilities generally serve the respective local markets and coordinate product design and manufacturing responsibility wi

153、th theCompanys other operations around the world.The Company has low cost manufacturing and assembly facilities in China,Mexico,India,Eastern Europe and Africa to serve regional and world markets.CustomersThe Companys products are used in a wide variety of applications by numerous customers,the larg

154、est of which accountedfor approximately 7%of net sales for the year ended December 31,2006.The Company sells its products to over 10,000 customerlocations worldwide.The Companys products are sold both directly to OEMs,contract manufacturers,cable system operators,telecommunication companies and thro

155、ugh manufacturers representatives and distributors.There has been a trend on the part ofOEM customers to consolidate their lists of qualified suppliers to companies that have a global presence,can meet quality anddelivery standards,have a broad product portfolio and design capability,and have compet

156、itive prices.The Company has focused its7global resources to position itself to compete effectively in this environment.The Company has concentrated its efforts on service andproductivity improvements including advanced computer aided design and manufacturing systems,statistical process controls and

157、just-in-time inventory programs to increase product quality and shorten product delivery schedules.The Companys strategy is toprovide comprehensive design capabilities,a broad selection of products and a high level of service in the areas in which it competes.The Company has achieved a preferred sup

158、plier designation from many of its customers.The Companys sales to distributors represented approximately 15%of the Companys 2006 sales.The Companysrecognized brand names,including Amphenol,Times Fiber,Tuchel,Socapex,Sine,Spectra-Strip,Pyle-National,Matrix,Kai Jack and others,together with the Compa

159、nys strong connector design-in position(products that are specified incustomer drawings),enhance its ability to reach the secondary market through its network of distributors.ManufacturingThe Company employs advanced manufacturing processes including molding,stamping,plating,turning,extruding,diecas

160、ting and assembly operations as well as proprietary process technology for flat-ribbon and coaxial cable production.TheCompanys manufacturing facilities are generally vertically integrated operations from the initial design stage through final design andmanufacturing.Outsourcing of certain fabricati

161、on processes is used when cost-effective.Substantially all of the Companysmanufacturing facilities are certified to the ISO9000 series of quality standards.The Company employs a global manufacturing strategy to lower its production costs and to improve service to customers.The Company sources its pr

162、oducts on a worldwide basis with manufacturing and assembly operations in the Americas,Europe,Asia,Africa and Australia.To better serve high volume customers,the Company has established just-in-time facilities near majorcustomers.The Companys policy is to maintain strong cost controls in its manufac

163、turing and assembly operations.The Company iscontinually evaluating and adjusting its expense levels and workforce to reflect current business conditions and maximize the returnon capital investments.The Company purchases a wide variety of raw materials for the manufacture of its products,including

164、precious metals suchas gold and silver used in plating,aluminum,brass,steel,copper and bimetallic products used for cable,contacts and connectorshells;and plastic materials used for cable and connector bodies and inserts.Such raw materials are generally available throughoutthe world and are purchase

165、d locally from a variety of suppliers.The Company is generally not dependent upon any one source forraw materials,or if one source is used the Company attempts to protect itself through long-term supply agreements.Research and DevelopmentThe Companys research and development expense for the creation

166、 of new and improved products and processes was$53.7 million,$40.1 million and$32.5 million for 2006,2005 and 2004,respectively.The Companys research and developmentactivities focus on selected product areas and are performed by individual operating divisions.Generally,the operating divisionswork cl

167、osely with OEM customers to develop highly-engineered products and systems that meet specific customer needs.TheCompany focuses its research and development efforts primarily on those product areas that it believes have the potential for broadmarket applications and significant sales within a one-to

168、-three year period.Trademarks and PatentsThe Company owns a number of active patents worldwide.The Company also regards its trademarks Amphenol,TimesFiber,Tuchel,Socapex and Spectra-Strip to be of material value in its businesses.The Company has exclusive rights in all itsmajor markets to use these

169、registered trademarks.The Company has rights to other registered and unregistered trademarks which itbelieves to be of value to its businesses.While the Company considers its patents and trademarks to be valuable assets,the Companydoes not believe that its competitive position is dependent on patent

170、 or trademark protection or that its operations are dependent onany individual patent or trademark.8CompetitionThe Company encounters competition in substantially all areas of its business.The Company competes primarily on thebasis of engineering,product quality,price,customer service and delivery t

171、ime.Competitors include large,diversified companies,some of which have substantially greater assets and financial resources than the Company,as well as medium to small companies.Inthe area of coaxial cable for cable television,the Company believes that it and CommScope are the primary world provider

172、s of suchcable;however,CommScope is larger than the Company in this market.In addition,the Company faces competition from othercompanies that have concentrated their efforts in one or more areas of the coaxial cable market.BacklogThe Company estimates that its backlog of unfilled orders was$473 mill

173、ion and$397 million at December 31,2006 and2005,respectively.Orders typically fluctuate from quarter to quarter based on customer demand and general business conditions.Unfilled orders may be cancelled prior to shipment of goods.It is expected that all or a substantial portion of the backlog will be

174、filled within the next 12 months.Significant elements of the Companys business,such as sales to the communications related markets(including wireless communications,telecom&data communications and broadband communications)and sales to distributors,generally have short lead times.Therefore,backlog ma

175、y not be indicative of future demand.EmployeesAs of December 31,2006,the Company had approximately 25,600 full-time employees worldwide of which approximately16,400 were located in low cost regions.Of these employees,approximately 20,800 were hourly employees and the remainder weresalaried.The Compa

176、ny believes that it has a good relationship with its unionized and non-unionized employees.Environmental MattersCertain operations of the Company are subject to federal,state and local environmental laws and regulations which governthe discharge of pollutants into the air and water,as well as the ha

177、ndling and disposal of solid and hazardous wastes.The Companybelieves that its operations are currently in substantial compliance with all applicable environmental laws and regulations and that thecosts of continuing compliance will not have a material effect on the Companys financial condition or r

178、esults of operations.Subsequent to the acquisition of Amphenol from Allied Signal Corporation(“Allied Signal”)in 1987(Allied Signal mergedwith Honeywell International Inc.in December 1999(Honeywell),Amphenol and Honeywell have been named jointly andseverally liable as potentially responsible parties

179、 in relation to several environmental cleanup sites.Amphenol and Honeywell jointlyconsented to perform certain investigations and remedial and monitoring activities at two sites,the“Route 8”landfill and the“Sidney”landfill,and they were jointly ordered to perform work at another site,the“Richardson

180、Hill Road”landfill.The costsincurred relating to these three sites are currently 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 conditionsor circumstances o

181、ccurred or existed at the time of or prior to the acquisition,Honeywell is obligated to reimburse Amphenol 100%of such costs.Honeywell representatives continue to work closely with the Company in addressing the most significantenvironmental liabilities covered by the Honeywell Agreement.Management d

182、oes not believe that the costs associated withresolution of these or any other environmental matters will have a material adverse effect on the Companys financial condition orresults of operations.The environmental investigation,remedial and monitoring activities identified by the Company,including

183、thosereferred to above,are covered under the Honeywell Agreement.Owners and occupiers of sites containing hazardous substances,as well as generators of hazardous substances,are sub-ject to broad liability under various federal and state environmental laws and regulations,including expenditures for c

184、leanup andmonitoring costs and potential damages arising out of past disposal activities.Such liability in many cases may be imposed re-gardless of fault or the legality of the original disposal activity.The Company has performed remediation activities and is cur-rently performing operations and mai

185、ntenance and monitoring activities at three off-site disposal sites previously utilized by theCompanys Sidney facility and others,to wit the Richardson Hill Road landfill,the Route 8 landfill and the Sidney landfill.Ac-tions at the Richardson Hill Road and Sidney landfills were undertaken subsequent

186、 to designation as Superfund sites on theNational Priorities List under the Comprehensive Environmental Response,Compensation and Liability Act of 1980.The Route8 landfill was designated as a New York State Inactive Hazardous Waste Disposal Site,with remedial actions taken pursuant toChapter 6,Secti

187、on 375-1 of the New York Code of Rules and Regulations.In addition,the Company is currently performingmonitoring activities at,and in proximity to,its manufacturing site in Sidney,New York.The Company is also engaged in reme-diating or monitoring environmental conditions at certain of its other manu

188、facturing facilities and has been named as a potentially9responsible party for cleanup costs at other off-site disposal sites.All such environmental matters referred to in this paragraph arecovered by the Honeywell Agreement.Since 1987,the Company has not been identified nor has it been named as a p

189、otentially responsible party with respect to anyother significant on-site or off-site hazardous waste matters.In addition,the Company believes that all of its manufacturing activitiesand disposal practices since 1987 have been in material compliance with all applicable environmental laws and regulat

190、ions.Nonetheless,it is possible that the Company will be named as a potentially responsible party in the future with respect to additionalSuperfund or other sites.Although the Company is unable to predict with any reasonable certainty the extent of its ultimate liabilitywith respect to any pending o

191、r future environmental matters,the Company believes,based upon all information currently known bymanagement about the Companys manufacturing activities,disposal practices and estimates of liability with respect to all knownenvironmental matters,that any such liability will not be material to its fin

192、ancial condition or results of operations.OtherThe Companys annual report on Form 10-K,quarterly reports on Form 10-Q,current reports on Form 8-K,andamendments to those reports are available,without charge,on the Companys web site,as soon as reasonablypracticable after they are filed electronically

193、with the SEC.Copies are also available without charge,from Amphenol Corporation,Investor Relations,358 Hall Avenue,Wallingford,CT 06492.Cautionary Statements for Purposes of Forward Looking InformationStatements made by the Company in written or oral form to various persons,including statements made

194、 in filings with theSEC,that are not strictly historical facts are forward looking statements.Such statements should be considered as subject touncertainties that exist in the Companys operations and business environment.The following includes some,but not all,of thefactors or uncertainties that cou

195、ld cause the Company to fail to conform with expectations and predictions:Item 1A.Risk FactorsInvestors should carefully consider the risks described below and all other information in this Form 10-K.The risks anduncertainties described below are not the only ones facing the Company.Additional risks

196、 and uncertainties not presently knownto the Company or that it currently deems immaterial may also impair the Companys business and operations.If any of the following risks actually occur,the Companys business,financial condition or results of operations could bematerially adversely affected.In suc

197、h case,the trading price of the Companys common stock could decline and investors maylose all or part of their investment.The Company is dependent on the communications industry,including telecommunication and data communication,wireless communications and broadband communications.Approximately 61%o

198、f the Companys revenues for the year ended December 31,2006 came from sales to the commu-nications industry,including telecommunication and data communication,wireless communications and broadband communica-tions.Demand for these products is subject to rapid technological change(see below”The Compan

199、y is dependent on the ac-ceptance of new product introductions for continued revenue growth”).These markets are dominated by several large manufac-turers and operators who regularly exert significant price pressure on their suppliers,including the Company.While sales to theCompanys largest customer

200、accounted for approximately 7%of consolidated sales in 2006,the loss of one or more of the large communications customers could have a material adverse effect on the Companys business.There can be no assurance that the Company will be able to continue to compete successfully in the communications in

201、dustry,and the Companys failure to do so could impair the Companys results of operations.Approximately 11%of the Companys 2006 revenues came from sales to the broadband communications industry.De-mand for the Companys broadband communications products depends primarily on capital spending by cable t

202、elevision opera-tors for constructing,rebuilding or upgrading their systems.The amount of this capital spending,and,therefore,the Companyssales and profitability will be affected by a variety of factors,including general economic conditions,acquisitions of cable televi-sion operators by non-cable te

203、levision operators,cable system consolidation within the industry,the financial condition of do-mestic cable television operators and their access to financing,competition from satellite,telephone and television providers andtelephone companies,technological developments and new legislation and regu

204、lation of cable television operators.There can beno assurance that existing levels of cable television capital spending will continue or that cable television spending will not de-crease.10Changes in defense expenditures may reduce the Companys sales.Approximately 18%of the Companys 2006 revenues ca

205、me from sales to the commercial aerospace and military market.The Company participates in a broad spectrum of defense programs and believes that no one program accounted for more than1%of its 2006 revenues.The substantial majority of these sales are related to both U.S.and foreign military and defen

206、se pro-grams.However,the Companys sales are generally to contractors and subcontractors of the U.S.or foreign governments or todistributors that in turn sell to the contractors and subcontractors.Nevertheless,the Companys sales are affected by changes inthe defense budgets of the U.S.and foreign gov

207、ernments.The U.S.defense budget declined in real terms from 1986 to 1998.Be-ginning in 1999,the U.S.defense budget has been increasing and increased again in 2006.Nevertheless,a decline in U.S.defenseexpenditures and defense expenditures generally could adversely affect the Companys business.The Com

208、pany encounters competition in substantially all areas of its business.The Company competes primarily on the basis of engineering,product quality,price,customer service and deliverytime.Competitors include large,diversified companies,some of which have substantially greater assets and financial reso

209、urcesthan the Company,as well as medium to small companies.There can be no assurance that additional competitors will not enterthe Companys existing markets,nor can there be any assurance that the Company will be able to compete successfully againstexisting or new competition.The Company is dependen

210、t on the acceptance of new product introductions for continued revenue growth.The Company estimates that products introduced in the last two years accounted for approximately 21%of 2006 netsales.The Companys long-term results of operations depend substantially upon its ability to continue to conceiv

211、e,design,sourceand market new products and upon continuing market acceptance of its existing and future product lines.In the ordinary course ofbusiness,the Company continually develops or creates new product line concepts.If the Company fails or is significantly delayedin introducing new product lin

212、e concepts or if the Companys new products do not meet with market acceptance,our results ofoperations may be impaired.Covenants in the Companys credit agreements may adversely affect the Company.The Companys bank credit agreements contain financial and other covenants,such as a limit on the ratio o

213、f debt toearnings before interest,taxes,depreciation and amortization,minimum levels of net worth,and limits on incurrence of liens.Although the Company believes none of these covenants are presently restrictive to the Companys operations,the ability to meetthe financial covenants can be affected by

214、 events beyond the Companys control,and the Company cannot provide assurance thatthe Company will meet those tests.A breach of any of these covenants could result in a default under the Companys creditagreements.Upon the occurrence of an event of default under any of the Companys credit facilities,t

215、he lenders could elect todeclare all amounts outstanding thereunder to be immediately due and payable and terminate all commitments to extend furthercredit.If the lenders accelerate the repayment of borrowings,the Company cannot provide assurance that it will have sufficientassets to repay the Compa

216、nys credit facilities and other indebtedness.See“Liquidity and Capital Resources”.Downgrades of the Companys debt rating could adversely affect the Company.If the credit rating agencies that rate the Companys debt were to downgrade the Companys credit rating in conjunctionwith a deterioration of the

217、 Companys performance it may increase the Companys cost of capital and make it more difficult forthe Company to obtain new financing.The Companys results may be negatively affected by changing interest rates.The Company is subject to market risk from exposure to changes in interest rates based on th

218、e Companys financing ac-tivities.The Company utilizes interest rate swap agreements to manage and mitigate its exposure to changes in interest rates.AtDecember 31,2006,the Company had interest rate protection in the form of swaps that effectively fixed the Companys LIBORinterest rate on$150.0 millio

219、n,$250.0 million and$250.0 million of floating rate debt at 4.82%,4.24%and 4.85%,expiring inDecember 2007,July 2008 and December 2008,respectively.At December 31,2006,the Companys average LIBOR rate was4.6%.A 10%change in the LIBOR interest rate at December 31,2006 would not have materially increase

220、d or decreased interestexpense.The Company does not expect changes in interest rates to have a material effect on income or cash flows in 2007,al-though there can be no assurances that interest rates will not significantly change.11The Companys results may be negatively affected by foreign currency

221、exchange rates.The Company conducts business in several international currencies through its worldwide operations,and as a result issubject to foreign exchange exposure due to changes in exchange rates of the various currencies.Changes in exchange rates canpositively or negatively affect the Company

222、s sales,gross margins and retained earnings.The Company attempts to minimize cur-rency exposure risk by producing its products in the same country or region in which the products are sold,thereby generatingrevenues and incurring expenses in the same currency and by managing its working capital.There

223、 can be no assurance that thisapproach will be successful,especially in the event of a significant and sudden decline in the value of any of the international cur-rencies of the Companys worldwide operations.The Company does not engage in purchasing forward exchange contracts forspeculative purposes

224、.The Companys operating results may be adversely affected by foreign operations.International manufacturing and sales are subject to inherent risks,including changes in local economic or political con-ditions,the imposition of currency exchange restrictions,unexpected changes in regulatory environme

225、nts,potentially adverse taxconsequences and the exchange rate risk discussed above.There can be no assurance that these factors will not have a materialadverse impact on the Companys production capabilities or otherwise adversely affect the Companys business and operating re-sults.The Company may ex

226、perience difficulties and unanticipated expense,including the potential for the impairment of good-will,of assimilating newly acquired businesses.The Company has completed a number of acquisitions in the past few years.It is possible the Company may experiencedifficulty integrating such acquisitions

227、 and further that the acquisitions may not perform as expected.At December 31,2006,thetotal assets on the Companys balance sheet were$2,195.4 million,which included$926.2 million of goodwill.The goodwillarose as the excess of the purchase price over the fair value of net assets of businesses acquire

228、d dating over the period 1987-2006.The Company performs annual evaluations for the potential impairment of the carrying value of goodwill in accordancewith Statement of Financial Accounting Standards No.142.Such evaluations have not resulted in the need to recognize an im-pairment.However,if the fin

229、ancial performance of the Companys businesses were to decline significantly,the Company couldincur a non-cash charge to its income statement for the impairment of goodwill.The Company may experience difficulties in obtaining a consistent supply of materials at stable pricing levels.The Company uses

230、basic materials like steel,aluminum,copper,bi-metallic products,gold and plastic resins in its manu-facturing process.Volatility in the prices of such material and availability of supply may have a substantial impact on the pricethe Company pays for such products.In addition,to the extent such cost

231、increases cannot be recovered through sales price in-creases or productivity improvements,the Companys margin may decline.The Company may not be able to attract and retain key employees.The Companys continued success depends upon its continued ability to hire and retain key employees at its operatio

232、nsaround the world.Any difficulties in obtaining or retaining the management and other human resource competencies that theCompany needs to achieve its business objectives may have adverse affects on the Companys performance.Changes in general economic conditions and other factors beyond the Company

233、s control may adversely impact its busi-ness.The following factors could adversely impact the Companys business:A global economic slowdown in any one,or all,of the Companys market segments.The effects of significant changes in monetary and fiscal policies in the U.S.and abroad including significantc

234、urrency fluctuations and unforeseen inflationary pressures.Rapid material escalation of the cost of regulatory compliance and litigation.12Unexpected government policies and regulations affecting the Company or its significant customers.Unforeseen intergovernmental conflicts or actions,including but

235、 not limited to armed conflict and trade wars.Unforeseen interruptions to the Companys business with its largest customers,distributors and suppliers re-sulting from but not limited to,strikes,financial instabilities,computer malfunctions,inventory excesses ornatural disasters.Item 1B.Unresolved Sta

236、ff CommentsNot applicable.Item 2.PropertiesThe Companys fixed assets include certain plants and warehouses and a substantial quantity of machinery and equipment,most of which is general purpose machinery and equipment using tools and fixtures and in many instances having automatic controlfeatures an

237、d special adaptations.The Companys plants,warehouses,machinery and equipment are in good operating condition,arewell maintained,and substantially all of its facilities are in regular use.The Company considers the present level of fixed assets alongwith planned capital expenditures as suitable and ad

238、equate for operations in the current business environment.At December 31,2006,the Company operated a total of 180 plants and warehouses of which(a)the locations in the U.S.had approximately 2.6million square feet,of which 1.2 million square feet were leased;(b)the locations outside the U.S.had appro

239、ximately 4.7 millionsquare feet,of which 3.4 million square feet were leased;and(c)the square footage by segment was approximately 6.2 million squarefeet and 1.1 million square feet for interconnect products segment and cable products segment,respectively.The Company believes that its facilities are

240、 suitable and adequate for the business conducted therein and are beingappropriately utilized for their intended purposes.Utilization of the facilities varies based on demand for the products.The Companycontinuously reviews its anticipated requirements for facilities and,based on that review,may fro

241、m time to time acquire or leaseadditional facilities and/or dispose of existing facilities.Item 3.Legal Proceedings The Company and its subsidiaries have been named as defendants in several legal actions in which various amounts areclaimed arising from normal business activities.Although the amount

242、of any ultimate liability with respect to such matters cannot beprecisely determined,in the opinion of management,such matters are not expected to have a material effect on the Companysfinancial condition or results of operations.Item 4.Submission of Matters to a Vote of Security Holders No matters

243、were submitted to a vote of our shareholders during the last quarter of the year ended December 31,2006.13PART II Item 5.Market for the Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities On January 21,2004,the Company announced a 2-for-1 stock split that

244、was effective for stockholders of record as of March17,2004.The additional shares were distributed on March 29,2004.The share information included herein reflects the effect ofsuch stock split.On January 17,2007,the Company announced a 2-for-1 stock split that will be effective for stockholders of r

245、ecord as ofMarch 16,2007 and these additional shares are expected to be distributed on or about March 30,2007.The share informationincluded herein does not reflect the effect of such stock split.Had this stock split occurred at December 31,2006,total authorizedshares of Common Stock would have been

246、400,000,000,total shares outstanding would have been 178,265,978 and net income pershare on a diluted basis would have been$1.39.The Company effected the initial public offering of its Class A Common Stock in November 1991.The Companys commonstock has been listed on the New York Stock Exchange since

247、 that time under the symbol APH.The following table sets forth on aper share basis the high and low prices for the common stock for both 2006 and 2005 as reported on the New York Stock Exchange.20062005HighLowHighLowFirst Quarter$52.50$43.88$41.94$33.24Second Quarter61.6249.3343.2035.79Third Quarter

248、64.3950.3046.2036.57Fourth Quarter70.4960.8845.1238.38As of January 31,2007,there were 44 holders of record of the Companys common stock.A significant number ofoutstanding shares of common stock are registered in the name of only one holder,which is a nominee of The Depository TrustCompany,a securit

249、ies depository for banks and brokerage firms.The Company believes that there are a significant number ofbeneficial owners of its common stock.On January 19,2005,the Company announced that it would commence payment of a quarterly dividend on its commonstock of$.03 per share.Cumulative dividends decla

250、red during 2006 were$10.7 million of which$8.0 million were paid in 2006.Total dividends paid in 2006 were$10.7 million including those declared in 2005 and paid in 2006.The Company intends to retainthe remainder of its earnings not used for dividend payments to provide funds for the operation and e

251、xpansion of the Companysbusiness,repurchase shares of its common stock and to repay outstanding indebtedness.The following table summarizes the Companys equity compensation plan information as of December 31,2006:Equity Compensation Plan InformationPlan categoryNumber of securities tobe issued upon

252、exerciseof outstanding options,warrants and rightsWeighted averageexercise price ofoutstanding options,warrants and rightsNumber of securitiesremaining availablefor future issuanceEquity compensation plans approvedby security holders6,457,713$30.213,857,930Equity compensation plans notapproved by se

253、curity holdersTotal6,457,713$30.213,857,93014Purchases of Equity SecuritiesOn October 20,2004,the Company announced that its Board of Directors authorized an open-market stock repurchaseprogram(the“Program”)of up to 5.0 million shares(on a post-split basis)of its common stock during the period ended

254、 Septem-ber 30,2006 which was extended to December 31,2008 by an amendment on July 27,2006.At December 31,2006,approxi-mately 2.1 million shares of Common Stock remained available for repurchase under the Program.In September 2006,the Com-pany retired 2.3 million shares of its common stock purchased

255、 for$87.8 million under the Program by reducing retained earningsby this amount.Period(a)Total Number ofShares Purchased(b)Average PricePaid per Share(c)Total Numberof Shares Pur-chased as Part ofPublicly An-nounced Plans orPrograms(d)MaximumNumber of Sharesthat May Yet BePurchased Underthe Plans or

256、 Pro-gramsJanuary 1,to January31,2006-$-1,673,1003,326,900February 1,to February 28,2006-1,673,1003,326,900March 1,to March 31,2006-1,673,1003,326,900April 1,to April 30,2006-1,673,1003,326,900May 1,to May 31,2006187,40055.901,860,5003,139,500June 1,to June 30,2006181,10053.782,041,6002,958,400July

257、1,to July 31,2006-2,041,6002,958,400August 1,to August31,2006-2,041,6002,958,400September 1,to September 30,2006229,10057.732,270,7002,729,300October 1,2006 to October 31,2006-2,270,7002,729,300November 1,2006 toNovember 30,2006119,90065.022,390,6002,609,400December 1,2006 toDecember 31,2006483,0006

258、5.052,873,6002,126,400Total1,200,500$60.522,873,6002,126,40015Item 6.Selected Financial Data(dollars in thousands,except per share data)Year Ended December 31,20062005200420032002OperationsNet sales$2,471,430$1,808,147$1,530,446$1,239,504$1,062,002Net income255,691(2)206,339163,311103,990(1)80,344Ne

259、t income per common shareDiluted2.79(2)2.281.821.18(1)0.93Financial PositionWorking capital$486,946$373,884$253,443$233,707$153,250Total assets2,195,3971,932,5401,306,7111,181,3841,078,908Long-term debt,including current portion680,414781,000449,053542,959644,248Shareholders equity902,994689,235481,

260、604323,406166,982Weighted average shares outstandingDiluted91,673,66390,471,73789,736,65688,131,72086,891,200Cash dividends declared per share$0.12$0.12-(1)Includes a one-time charge for expenses incurred in the early extinguishment of debt of$10,367,less tax benefit of$3,525,or$0.08 per share after

261、 taxes.(2)Includes a one-time charge for expense incurred in connection with a flood at the Companys Sidney,NY facility of$20,747,less tax benefit of$6,535,or$0.15 per share after taxes.16Item 7.Managements Discussion and Analysis of Financial Condition and Results of OperationsThe following discuss

262、ion and analysis of the results of operations for the three fiscal years ended December 31,2006 hasbeen derived from and should be read in conjunction with the consolidated financial statements included elsewhere in this document.Executive OverviewThe Company is a global designer,manufacturer and ma

263、rketer of interconnect and cable products.In 2006approximately 57%of the Companys sales were outside the U.S.The primary end markets for our products are:?communication systems for the converging technologies of voice,video and data communications;?a broad range of industrial applications including

264、factory automation and motion control systems,medical andindustrial instrumentation,mass transportation,natural resource exploration and automotive applications;and?commercial aerospace and military applications.The Companys products are used in a wide variety of applications by numerous customers,t

265、he largest of whichaccounted for approximately 7%of net sales in 2006.The Company encounters competition in all of its markets and competesprimarily on the basis of engineering,product quality,price,customer service and delivery time.There has been a trend on thepart of OEM customers to consolidate

266、their lists of qualified suppliers to companies that have a global presence,can meet qualityand delivery standards,have a broad product portfolio and design capability,and have competitive prices.The Company hasfocused its global resources to position itself to compete effectively in this environmen

267、t.The Company believes that its globalpresence is an important competitive advantage as it allows the Company to provide quality products on a timely and worldwidebasis to its multinational customers.The Companys strategy is to provide comprehensive design capabilities,a broad selection of products

268、and a high levelof service in the areas in which it competes.The Company focuses its research and development efforts through closecollaboration with its OEM customers to develop highly-engineered products that meet customer needs and have the potential forbroad market applications and significant s

269、ales within a one-to-three year period.The Company is also focused on controllingcosts.The Company does this by investing in modern manufacturing technologies,controlling purchasing processes andexpanding into low cost areas.The Companys strategic objective is to further enhance its position in its

270、served markets by pursuing the followingsuccess factors:?Focus on customer needs?Design and develop application-specific interconnect solutions?Establish a strong global presence in resources and capabilities?Preserve and foster a collaborative,entrepreneurial management structure?Maintain a culture

271、 of controlling costs?Pursue strategic acquisitionsFor the year ended December 31,2006,the Company reported net sales,operating income and net income of$2,471.4million,$424.6 million and$255.7 million,respectively;up 37%,24%and 24%,respectively,from 2005.Sales of interconnectproducts and assemblies

272、and sales of cable products increased in the majority of the Companys related major markets and geographic regions.Sales and profitability trends are discussed in detail in“Results of Operations”below.In addition,a strengthof the Company is its ability to consistently generate cash.The Company uses

273、cash generated from operations to fund capitalexpenditures and acquisitions,repurchase shares of its common stock,pay dividends and reduce indebtedness.In 2006,theCompany generated operating cash flow of$289.6 million.17Results of OperationsThe following table sets forth the components of net income

274、 as a percentage of net sales for the periods indicated.Year Ended December 31,20062005 2004Net sales100.0%100.0%100.0%Cost of sales68.166.967.6Selling,general and administrative expense13.914.214.3Casualty loss related to flood.8-Operating income17.218.918.1Interest expense(1.6)(1.3)(1.5)Other expe

275、nses,net(.5)(.5)(.4)Expense for early extinguishment of debt-(.1)-Income before income taxes15.117.016.2Provision for income taxes(4.8)(5.6)(5.5)Net income10.3%11.4%10.7%182006 Compared to 2005Net sales were$2,471.4 million for the year ended December 31,2006 compared to$1,808.1 million for 2005,an

276、increase of37%in U.S.dollars and 36%in local currencies.The increase in sales over 2005 excluding acquisitions was 12%in U.S.dollars and11%in local currencies.Sales of interconnect products and assemblies(approximately 90%of net sales)increased 39%in U.S.dollars and 38%in local currencies compared t

277、o 2005($2,207.5 million in 2006 versus$1,592.4 million in 2005).Sales increased inthe Companys major end markets including telecommunications and data communications,mobile communications,industrial andmilitary/aerospace markets.Sales to the telecommunications and data communications related markets

278、 increased approximately$338.8 million reflecting the impact of the acquisition of TCS in December 2005(Note 7)and increased sales of new high speedinterconnect products for servers and other data center equipment applications.The increase in sales in the mobile communicationsmarkets(approximately$2

279、09.0 million)is attributable primarily to increased sales to the mobile device market relating to newproducts,the impact of the acquisition of TCS in December 2005 and to a lesser extent to increased demand in the wirelessinfrastructure market from cell site installation customers.The increase in sa

280、les in the industrial market(approximately$55.8million)reflects increased sales in North America and Europe relating to products for the factory automation,medical andoil/geophysical markets and the impact of acquisitions.The increase in military/aerospace sales(approximately$15.4 million)relatesto

281、increased demand on commercial aircraft and military programs.Sales in the military/aerospace market were adversely impactedby approximately$25.0 million in 2006 due to business interruption related to the flood at the Companys Sidney,New Yorkfacility further described below.Automotive sales decline

282、d approximately$8.1 million primarily as a result of a reduction invehicle production rates by European and U.S.vehicle manufacturers.Sales of cable products(approximately 10%of net sales)increased 22%compared to 2005($263.9 million in 2006 versus$215.7 million in 2005).Such increase is primarily du

283、e to increasedsales in broadband cable television markets and the impact of price increases.Geographically,sales in the U.S.in 2006 increased approximately 32%compared to 2005($1,060.0 million in 2006 versus$802.4 million in 2005);international sales for 2006 increased approximately 40%in U.S.dollar

284、s($1,411.5 million in 2006 versus$1,005.8 million in 2005)and increased approximately 39%in local currency compared to 2005.The comparatively weak U.S.dollar in 2006 had the effect of increasing net sales by approximately$16.5 million when compared to foreign currency translationrates in 2005.The gr

285、oss profit margin as a percentage of net sales decreased to 32%in 2006 compared to 33%in 2005 due primarily to adecrease in margins in the interconnect products and assemblies segment primarily as a result of the TCS acquisition(Note 7).Theoperating margin for interconnect products and assemblies de

286、creased approximately 1%compared to the prior year.TCS margins are lower than the average margin of the Company and its inclusion in the consolidated results lowered the margin percentage.Interconnect segment margins excluding the impact of TCS were consistent with the prior year margins as the cont

287、inuingdevelopment of new higher margin,application specific products,excellent operating leverage on incremental volume and aggressiveprograms of cost control,offset increases resulting primarily from higher material costs.In addition,cable operating marginsdecreased 0.3%reflecting higher material a

288、nd freight costs in 2006 driven by higher commodity and energy prices offset,in part,bythe impact of price increases.Selling,general and administrative expenses were$342.8 million and$257.1 million in 2006 and 2005,respectively,or ap-proximately 14%of sales in each year.The increase in expense in 20

289、06 is attributable to the impact of acquisitions and increasesin the major components of selling,general and administrative expenses as follows.Research and development expenditures in-creased approximately$13.6 million,reflecting increases in expenditures for new product development and represented

290、 approxi-mately 2%of sales for both 2006 and 2005.Selling and marketing expenses remained approximately 7%of sales.Shipping expense,which relates primarily to sales of cable products to the broadband market,increased proportionately with sales for those products.Administrative expenses increased by

291、approximately$34.2 million,due primarily to increases in costs as a result of the TCS acquisi-tion and stock-based compensation expense of$9.7 million,as a result of the adoption of Statement of Financial Accounting Stan-dard(“SFAS”)No.123(R)“Share-Based Payment,”which was effective on January 1,200

292、6,in addition to general cost increasesrelating to professional fees,pensions and employee-related benefits.The Company incurred damage at its Sidney,New York manufacturing facility as a result of severe and sudden floodingduring the second quarter of 2006.In 2006,the Company recorded charges of$20.

293、7 million,or$.15 per share,for recovery andclean up expenses and property related damage,net of insurance and grant recoveries.The Sidney facility had limited manufac-turing and sales activity for the period from June 28 to July 14.Production activity was substantially back to full production atthe

294、end of the third quarter.As a result,sales in 2006 were reduced by approximately$25.0 million.Interest expense was$38.8 million for 2006 compared to$24.1 million for 2005.The increase is primarily attributable to higherinterest rates and higher average debt levels related to the TCS acquisition(Note

295、 7).19Expenses for early extinguishment of debt totaling$2.4 million in 2005,relate to the refinancing of the Companys senior creditfacilities.Such one-time expenses included the write off of deferred debt issuance costs of$5.7 million partially offset by thesettlement of interest rate swap agreemen

296、ts of$3.2 million.No such expenses were incurred in 2006.Other expenses,net,for 2006 and 2005 were$12.5 million and$8.9 million,respectively.Other expenses,net,are comprisedprimarily of minority interests($6.0 million in 2006 and$4.1 million in 2005),program fees on the sale of accounts receivable($

297、5.0million in 2006 and$3.8 million in 2005),reflecting higher receivable fee rates in 2006 and agency and commitment fees on theCompanys credit facilities($2.1 million in 2006 and$1.5 million in 2005)primarily due to higher commitment fees offset by interestincome($0.7 million in 2006 and$0.4 millio

298、n in 2005).See Note 11 to the Companys Consolidated Financial Statements for detailsof the components of other expenses,net.In December 2004,the FASB issued SFAS No.123(R),“Share-Based Payment”.This pronouncement amends SFAS No.123,“Accounting for Stock-Based Compensation”,as amended by SFAS No.148,

299、“Accounting for Stock-Based Compensation-Transition and Disclosure,an Amendment of SFAS No.123”,and supersedes Accounting Principles Board(“APB”)Opinion No.25,“Accounting for Stock Issued to Employees”.SFAS No.123(R)requires that companies account for awards of equityinstruments under the fair value

300、 method of accounting and recognize such amounts in their statements of operations.TheCompany adopted SFAS No.123(R)on January 1,2006 using the modified prospective method and,in connection therewithcompensation expense is recognized in its consolidated statement of income for the year ended Decembe

301、r 31,2006 over theservice period that the awards are expected to vest.The Company recognizes expense for all stock-based compensation withgraded vesting on a straight-line basis over the vesting period of the entire award.Stock-based compensation expense includesthe estimated effects of forfeitures,

302、and estimates of forfeitures will be adjusted over the requisite service period to the extentactual forfeitures differ,or are expected to differ from such estimates.Changes in estimated forfeitures will be recognized in theperiod of change and will also impact the amount of expense to be recognized

303、in future periods.Prior to January 1,2006,theCompany recorded stock-based compensation in accordance with the provisions of APB Opinion No.25.The Companyestimated the fair value of stock option awards in accordance with SFAS No.123,“Accounting for Stock-Based Compensation”,and disclosed the resultin

304、g estimated compensation effect on net income on a pro forma basis.As a result of adopting SFAS No.123(R)on January 1,2006 the Companys income before income taxes and net income was reduced by$9.7 million and$6.7million,respectively,or$.07 per share,for the year ended December 31,2006.The provision

305、for income taxes was at an effective rate of 31.5%in 2006 and 33%in 2005.The lower effective tax rate resultsprimarily from an increase in income in lower tax jurisdictions and changes in the Companys income repatriation plans.The totaleffective rate reduction lowered tax expense in 2006 by approxim

306、ately$5.6 million or$.06 per share.2005 Compared to 2004Net sales were$1,808.1 million for the year ended December 31,2005 compared to$1,530.4 million for 2004 an increase of18%in both U.S.dollars and local currencies.The increase in sales over 2004 excluding acquisitions was 8%in both U.S.dollarsan

307、d local currencies.Sales of interconnect products and assemblies increased 19%in U.S.dollars and local currencies compared to2004($1,592.4 million in 2005 versus$1,333.8 million in 2004).Sales increased in all major geographic regions as a result of thecontinuing development of new application speci

308、fic and value added products,economic improvement in some of the Companysmajor end markets and the impact of acquisitions.Sales increased in the Companys major end markets including mobilecommunications,military/aerospace,industrial,automotive,and computer/data communications markets.The increase in

309、 sales in themobile communications markets(approximately$92.7 million)is attributable to increased demand for wireless infrastructureproducts for cell site installations in North America,increased demand on mobile handset products in Asia and the impact ofacquisitions.The increase in sales in the in

310、dustrial market(approximately$24.1 million)reflects increased sales in North Americaand Europe and the impact of acquisitions.Automotive sales increased approximately$33.7 million primarily in Europe,reflectingthe impact of an acquisition late 2004.The increase in military/aerospace sales(approximat

311、ely$57.8 million)relates to increaseddemand on military programs,avionics applications in North America and the impact of acquisitions.Sales to the computer and datacommunications related markets increased approximately$45.8 million reflecting the impact of acquisitions and increased sales inAsia fo

312、r disk drive and storage applications.Sales of cable products increased 10%compared to 2004($215.7 million in 2005versus$196.6 million in 2004).Such increase is primarily due to increased sales in broadband cable television markets and theimpact of price increases.Geographically,sales in the U.S.in

313、2005 increased approximately 19%compared to 2004($802.4 million in 2005 versus$674.3million in 2004);international sales for 2005 increased approximately 18%in U.S.dollars($1,005.8 million in 2005 versus20$856.1 million in 2004)and increased approximately 17%in local currency compared to 2004.The co

314、mparatively weak U.S.dollarin 2005 had the currency effect of increasing net sales by approximately$7.0 million when compared to foreign currency translationrates in 2004.The gross profit margin as a percentage of net sales(including depreciation in cost of sales)increased to 33%in 2005 comparedto 3

315、2%in 2004.An increase in margins in the interconnect products and assemblies segment was partially offset by a decline inmargins in the cable segment.The operating margin for interconnect products and assemblies increased approximately 1%comparedto the prior year.The increase is generally attributab

316、le to the continuing development of new higher margin application specificproducts,excellent operating leverage on incremental volume and aggressive programs of cost control.The decrease in cablemargins was due to the impact of a continued increase in material costs which was not fully offset by pri

317、ce increases implementedduring the year.Selling,general and administrative expenses were$257.1 million and$218.8 million in 2005 and 2004,respectively,approximately 14.0%of sales.Research and development expenditures increased approximately$7.6 million,commensurate withsales,reflecting increases in

318、expenditures for new product development and represented approximately 2%of sales for both 2005 and2004.Selling and marketing expenses remained approximately 7%of sales.Shipping expense,which relates primarily to sales ofcable products to the broadband market,increased commensurate with sales for th

319、ose products.Administrative expenses increased byapproximately$8.4 million,due primarily to increases in costs relating to insurance,pensions and medical benefits.Interest expense was$24.1 million for 2005 compared to$22.5 million for 2004.The increase is primarily attributable to higherinterest rat

320、es partially offset by the effect of the refinancing completed in the third quarter of 2005(see Liquidity and CapitalResources)and higher average debt levels.Expenses for early extinguishment of debt totaling$2.4 million in 2005,relate to the refinancing of the Companys senior creditfacilities.Such

321、one-time expenses include the write off of deferred debt issuance costs of$5.7 million partially offset by thesettlement of interest rate swap agreements of$3.2 million.Other expenses,net,for 2005 and 2004 were$8.9 million and$6.7 million,respectively.Other expenses,net,are comprisedprimarily of for

322、eign currency transaction gains(losses)($0.4 million in 2005 and$(0.6)million in 2004),reflecting the relativeweakness of the U.S.dollar in 2004,program fees on the sale of accounts receivable($3.8 million in 2005 and$2.3 million in 2004),reflecting higher receivable fee rates in 2005,minority inter

323、ests($4.1 million in 2005 and$3.0 million in 2004)and agency andcommitment fees on the Companys credit facilities($1.5 million in 2005 and$1.0 million in 2004)primarily due to highercommitment fees.See Note 10 to the Companys Consolidated Financial Statements for details of the components of other e

324、xpenses,net.The provision for income taxes was at an effective rate of 33.0%in 2005 and 34%in 2004.The reduction in the tax rate in 2005relates primarily to lower U.S.income taxes resulting from the impact of the provisions of the American Jobs Creation Act of 2004.21Liquidity and Capital ResourcesC

325、ash provided by operating activities totaled$289.6 million,$229.6 million and$208.3 million for 2006,2005 and 2004,respectively.Operating cash flow includes$nil,$5.0 million and$6.2 million in 2006,2005 and 2004,respectively,resulting froman increase in sale of receivables under the Companys receiva

326、ble securitization program.The increase in cash from operatingactivities in 2006 compared to 2005 is primarily attributable to an increase in net income and an increase in depreciation andamortization partially offset by a higher increase in the non-cash components of working capital compared to the

327、 increase in 2005.The increase in cash from operating activities in 2005 compared to 2004 is also primarily attributable to an increase in net incomeand an increase in depreciation and amortization partially offset by an increase in the non-cash components of working capitalcompared to a decrease in

328、 2004.The non-cash components of working capital increased$69.4 million in 2006 due primarily to increases in accounts receivableof$60.6 million,$81.9 million in inventory,$19.0 million in prepaid expenses and other assets and a decrease in accrued interest of$1.1 million partially offset by a$46.4

329、million increase in accounts payable and an increase of$46.8 million in accrued liabilities.The non-cash components of working capital increased$36.7 million in 2005 due primarily to an increase in accounts receivableof$45.2 million and$20.6 million in inventory partially offset by a$25.8 million in

330、crease in accounts payable,a decrease of$10.4million in accrued liabilities,an increase of$5.0 million of receivables sold,an increase in accrued interest of$3.0 million,and adecrease of$5.6 million in prepaid expenses and other assets.The non-cash components of working capital decreased$14.1 millio

331、n in 2004 due primarily to a$3.2 million increase inaccounts payable,an increase of$15.7 million in accrued liabilities,an increase of$6.2 million in receivables sold and an increase of$28.5 million related to accrued income taxes,partially offset by a$26.0 million increase in accounts receivable du

332、e to higher saleslevels and an operating addition of$14.5 million in inventory.In 2006,accounts receivable increased$81.0 million to$383.9 million,due to an increase in sales levels,$16.0 million due totranslation resulting from the comparatively weaker U.S.dollar at December 31,2006 compared to Dec

333、ember 31,2005(“translation”)and$4.1 million from acquired companies.Days sales outstanding increased to approximately 66 days from 65 daysin 2005.Inventory increased$90.6 million to$416.5 million,primarily due to an operating addition of$60.5 million,$13.3 milliondue to a new inventory hubbing arrangement with certain customers,$12.8 million due to translation and$4.0 million in inventoryfrom acq