Amphenol Corporation (APH) 2004年年度報告「NYSE」.pdf

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1、2004 Annual ReportCorporationAmphenolTABLE OF CONTENTS Financial Highlights.1 Letter to Shareholders.4 Business Strategy.10 Key Operating Indices.12 Annual Report on Form 10-K.13 Additional Financial Data.60 Directors and Offi cers.61Amphenol connecting people and tech nol o gyAmphenol was founded i

2、n 1932.The company is one of the largest manufacturers of interconnect products in the world.The company designs,manufactures and markets electrical,electronic and fiber optic connectors,interconnect systems and coaxial and specialty cable.Its activities are geared towards 7 major markets:Aero space

3、/Military,Automotive,Broadband Communication,Industrial,Internet Equipment,Mobile Phones and Wireless Infrastructure.Amphenol is headquartered in Connecticut,USA and em ploys more than 16,000 people worldwide.A M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T1Financial Highlights(

4、dollars in thousands,except per share data)2004 2003 2002 Sales$1,530,446$1,239,504$1,062,002 Operating income 276,644 204,420 173,947 Net income 163,311 103,990(1)80,344 Net income per common share-diluted 1.82 1.18(1).93 Average common shares outstanding 89,736,656 88,131,720 86,891,200 Current an

5、d long-term debt$449,053$542,959$644,248 (1)Includes a one-time charge for expenses incurred in the early extinguishment of debt of$10,367,less tax benefi t of$3,525,or$0.08 per share after taxes.Worldwide Management MeetingShenzhen,China February 2005A M P H E N O L C O R P O R A T I O N 2 0 0 4 A

6、N N U A L R E P O R T2Where Is Amphenol?SophisticatedMilitaryEquipmentHigh-performance Cellular TowersHigh-speedMass TransitCommercialAviationA M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T3Amphenol is everywhere highperformance products are found.Safety Systemsfor CarsMobileTe

7、chnologySatelliteRadioSupercomputersHigh-speed Broadband NetworksA M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T4Dear Fellow Shareholders:2004 was a year of record performance.The Company achieved new records for sales,EPS and cash fl ow.Sales grew 23%to$1.5 billion and EPS gre

8、w 44%to$1.82(excluding the 2003 one-time expense for early extinguishment of debt).The fourth quarter of 2004 represented the twelfth consecutive increase in quarterly EPS.This performance was far ahead of the industry.Net income as a percentage of sales reached 11%;a level of profi tability,again,f

9、ar better than the industry.In addition,we maintained our strong fi scal discipline generating the highest level of free cash fl ow in the Companys history;a cash fl ow that is vital to insuring the fl exibility to reinvest in the many opportunities we see.In addition to the outstanding fi nancial p

10、erformance,the Company achieved a number of important milestones in 2004.These include:The achievement of an upgrade in credit rating refl ecting our strong fi nancial condition;The successful transition to a broader shareholder base as KKR phased out their investment;Inclusion in the S&P 400 Mid Ca

11、p Index;The second stock split in four years;Initiation of a 5 million share stock repurchase program;and The declaration,effective in 2005,of the fi rst cash dividends in the Companys history.A M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T5 With respect to the major markets we

12、 serve with interconnect and cable products and assemblies,we made signifi cant progress in 2004 in strengthening our relationship with the leading manufacturers in each of our markets as well as broadening our geographical presence and product portfolio.The following is an overview of last years ac

13、tivity:?The military/aerospace market comprised 24%of sales in 2004 and was up 21%over year 2003 levels.The Company is the acknowledged leader in high performance interconnect components for aerospace/harsh environment applications.The U.S.and certain other countries are continuing in a long term tr

14、end to upgrade military defense systems and increase homeland security programs.Several prominent military/aerospace programs in which the Company has signifi cant participation are in the early phases of production,and other major programs in which we have achieved design wins are still in the prot

15、otype stage.Such programs should provide very signifi cant future long-term revenues.The commercial aerospace market has gone through diffi cult times in the past few years but there are indications of an improving trend and the long-term future of commercial aviation transportation is good.We are e

16、xcited about our participation in the development of new aircraft models in Europe and North America.We are proud of the outstanding engineering capabilities represented by our leadership position in the military/aerospace market.?Sales to the wireless,telecom and data communications markets,which c

17、omprised 37%of sales in 2004,were up 26%from year 2003 levels.We have an excellent portfolio of interconnect products and integrated solutions for the mobile handset market,mobile network infrastructure market and the Internet equipment market.In the mobile handset market,we had components in more t

18、han half of the worldwide production of mobile phones last year,and we continue to strengthen our relationships with the leading mobile phone manufacturers worldwide.As mobile handsets increase in complexity and functionality,the outlook for growth in this market is excellent.Increased demand for gr

19、eater mobile communication and data services in developed countries and the continuing demand for communication services in developing countries is driving mobile network upgrades and expansion.In addition,deployment of 3G networks has begun and will continue to drive future demand.We continue to ga

20、in position with the leading infrastructure equipment manufacturers and increasingly are developing relationships with network system operators with a broad portfolio of value added interconnect solutions.With respect to the Internet equipment market,we have excellent penetration in the areas of ser

21、vers,storage systems and datacom equipment.Our value added interconnect products and systems serve an important role in the continuing demand for increased bandwidth,speed and miniaturization in this market.Our product offering to the communications markets is broad and deep,and our global resources

22、 have further strengthened our excellent relations with the major customers.A M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T6?The broadband market comprised 13%of our sales last year and was up 17%from year 2003 levels.We serve the broadband market primarily with coaxial cable;i

23、n addition we continue to broaden our participation in this market with installation related interconnect products.The growth in this market was fueled by expansion of broadband cable television systems in international markets and by the upgrade by cable operators in the U.S.to full service digital

24、 systems offering a variety of video,voice and data services.?The industrial/automotive markets comprised 26%of our sales last year and were up 26%from year 2003 levels.Our automotive market product offering is comprised of interconnect systems for automotive safety devices,communication and enterta

25、inment systems,and the increasing presence of automotive electronic features.Our growth in this market was driven by the increased utilization of sophisticated airbag and related safety devices as well as the increased use of satellite radio and other electronic devices in automobiles.Our sales to t

26、he industrial market which include factory automation,medical,test and measurement instrumentation equipment,heavy equipment and mass transportation were also up last year refl ecting the key role of factory automation in driving productivity improvements,the growing use of sophisticated electronic

27、equipment and instrumentation for medical applications,and the increasing importance of sophisticated intercity and intracity mass transportation equipment.The industrial markets encompass a broad and diverse range of applications with signifi cant opportunity for growth resulting from the increased

28、 use of sophisticated and complex electronic components with signifi cant demands for increased power.We have done an excellent job of increasing our presence with leading industrial manufacturers.2004 was a very rewarding year for all of us at Amphenol.It was a year where we continued to make signi

29、fi cant investments for growth.We continued our expansion,investing$44 million in new tooling manufacturing and test equipment,and opening eleven new manufacturing facilities,ensuring suffi cient capacity to meet the increasing demands of our customers.In addition,we opened several new R&D and sales

30、 operations,consistent with our strategy of keeping these critical resources close to our customers.Our workforce expanded to over 16,000 worldwide with the vast majority of this expansion in low cost regions.At the end of 2004,56%of the Companys workforce was in low cost regions.an excellent platfo

31、rm for profi table growth.We also continue to pursue our complementary acquisition strategy focusing on the opportunities presented by a fragmented industry that is continuing to consolidate.We completed one acquisition in 2004 expanding the Companys presence in the growing automotive electronics ma

32、rket.We continue to explore additional acquisitions that are complementary in nature and accretive to future performance.A M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T7 In the dynamics of the global marketplace,I would like to share with you what I view as current industry tre

33、nds and how Amphenol is positioned to take advantage of such trends:Industry TrendsAmphenol Strengths?Large$35 billion+interconnect market with renewed growth?Customers are reducing their vendor base?Increased sophistication and proliferation of electronic equipment?Customer migration to low cost ar

34、eas and new markets?Pricing pressure?Fragmented industry continuing to consolidateCompany has a diversifi ed presence in high growth segments of the market.Establish preferred supplier relationships with leading companies in our target markets worldwide.Strong engineering resources for developing ap

35、plication-specifi c,value added solutions to customer needs.Strong global presence with extensive operations in low cost areas(56%of our workforce is in low cost areas).Strong culture of cost control that is embedded in our operating philosophy.Pursuing complementary acquisitions on a global basis w

36、here we can add value and that are accretive to performance.Predicting the future in todays business environment is diffi cult.However,we are very confi dent that we are in excellent markets with a great organization,and we are very excited about the future.The excitement and confi dence in the futu

37、re also stems from the loyalty and trust of our excellent base of customers and suppliers;we thank them for their invaluable support.Looking back over the last 5 years,years that include the most signifi cant highs and lows in the history of the electronics industry,I believe the Amphenol management

38、 team has clearly demonstrated an ability to consistently perform at the highest levels in the industry.In closing,I would like to acknowledge the enormous contribution and entrepreneurial spirit from everyone in our organization.It is clearly this spirit that will drive the Company forward and cont

39、inue to produce excellent returns for our shareholders.Martin H.Loeffl erChairman,Chief Executive Offi cerand PresidentA M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T8Aerospace/MilitaryBroadband CommunicationAmphenolMarketsAutomotiveAmphenol is a leading supplier of interconnec

40、t systems for automotive safety devices.As the inventor of airbag and seatbelt pretensioner interconnect systems,Amphenol has defi ned the stan dards in this industry and continues its innovative leadership.In ad di tion,Amphenol provides innovative interconnect solutions for the expanding electroni

41、cs in automobiles including entertainment,communication,navigation and telematic modules.For selected applications such as engine control,sen sors,and ac tu a tors,as well as auxiliary motors,Amphenol provides wiring components,custom specific overmolded devices,and harness assemblies.Amphenol Autom

42、otives core competences include application-specifi c automotive in ter con nect solutions re quir ing a high degree of engineering and system integration.Amphenol is a world leader in broadband communication products with industry leading engineering,design and manufacturing expertise.Amphenol offe

43、rs a broad range of coaxial cable products to service the growing broadband market,from customer premise cables and interconnect devices to distribution cable and fi ber optic equipment.Amphenol is also a world leader in radio frequency connectors,and has products deployed on a wide range of broadba

44、nd equipment from digital set-top smart-card systems,to high-speed cable modems and DBS interface devices.Amphenol,leads the way in broadband communications.Amphenol is the world leader in the design,manufacture,and supply of high performance interconnect systems for military and aero space harsh en

45、vironment applications.Amphenol provides an unparalleled product breadth,from cable in ter con nects to backplane levels.Key markets supported are avionics,radar,communications,ord nance,mis siles,engines,ground vehicles and tanks,space,and all levels of avi a tion.Amphenol is a technology innovator

46、 that designs to meet cus tom ers needs from program inception.From original designs to off the shelf delivery,Amphenol leads the way.A M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T9Industrial Internet EquipmentWireless InfrastructureMobile Phones Amphenol is a global-provider

47、of interconnect solutions to the designers and manufacturers of world wide web devices and systems.Amphenols range of offerings in cable,cable assembly and connector products,spans applications in PCs,storage sys tems,optical and copper networks,modems,hubs,routers,switches,media display systems,and

48、 internet appliances.With its design creativity and cost effectiveness,Amphenol leads the way in interconnect development for internet equipment,infrastructure,enterprise networks and appliances.Whether industry standard or application-specifi c designs are required,Amphenol provides cus tom ers wit

49、h products capable of performing at the leading edge of todays high speed technology.Amphenol is a technological leader in the design,manufacture,and supply of high performance interconnect systems for a broad range of industrial ap pli ca tions,including factory au to ma tion,heavy equipment,in str

50、u men ta tion,motion control,medical equipment,mass transportation,and oil exploration.Amphenols core competences include application spe cifi c industrial interconnect solutions,requiring a high degree of en gi neer ing and system integration with innovative solutions for the increasing demands of

51、power distribution.Amphenol provides interconnect and antenna components for more than 50%of the worlds annual mobile phone production.Amphenol manufactures essentially all of the con nec tors found in mobile phones,PDAs and other mobile devices.The broad product offering includes antennas,RF switch

52、 es/plugs,navigation key/side key,microphone/speaker/vibra connectors,LCD connectors,board to board connectors,SIM/MMC/SD readers,battery connectors,I/O,system con nec tors,charg er(plug and socket)connectors,hinges/plastic parts,and test cables.Our capability for high volume production of these tec

53、hnically demanding,miniaturized products,combined with our speed of new product design,is a critical factor for our success in this market.Amphenol is the leading global solutions provider to the wire-less infrastructure market with applications such as cellular base stations,radio links,mobile swit

54、ches,wireless routers,wireless local loop and cellsite,antenna systems,combiners,transceivers,fi lters and tower amplifi ers.Amphenol offers a wide product portfolio for every wireless standard and generation radio technology including 2.5G,3G and future all-IP solutions.The products range from diff

55、erent RF,low frequency and FO cable assemblies to power interconnect systems.A M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T10Business Strategy The Companys strategic objective is to further enhance its position as a leading global designer,manufacturer and marketer of connecto

56、rs,interconnect systems and cable products.The Company seeks to achieve this objective by pursuing the following strategies:?Continue to Develop Application-Specifi c Interconnect Solutions for OEMs.The Company seeks to expand the scope and number of its preferred supplier designations and applicati

57、on-specifi c product opportunities with OEM and original design customers.The Company works closely with its network of such customers at the design stage to create and manufacture innovative solutions to meet customers specifi c interconnection needs.The application-specifi c products designed and

58、manufactured for OEMs and original design customers generally have higher value-added content than other interconnect products and have been developed across all of the Companys product lines.In addition to solidifying its relationship with OEMs and providing a source of high value added sales,this

59、product development strategy has a number of important ancillary benefi ts.For example,once an application-specifi c product has been developed for a particular OEM customer,the new product often becomes widely accepted in the industry for similar applications.Thereafter,the demand for these new pro

60、ducts grows as they become incorporated into products manufactured by other potential customers,thereby providing additional sources of revenue.?Expand Product Lines.The Companys product line strategy is to provide a complete product offering in its focus markets.Management believes that it is very

61、important to continually develop the breadth and depth of Amphenols product lines in order to maintain its designation as a preferred supplier with many OEM,original design and electronic manufacturing services customers.By expanding its product lines,the Company is able to leverage its extensive cu

62、stomer relationships to cross-sell additional interconnect products.Moreover,given that many OEMs and other customers are reducing the size of their supplier base,Amphenol believes that the expansion of its product lines with new value added integrated solutions helps to further solidify its importa

63、nce to existing customers and enables it to effectively market products to new customers.?Expand Global Presence.The Company intends to further expand its global manufacturing,engineering,sales and service operations to better serve its existing client base,penetrate developing markets and establish

64、 new customer relationships.As the Companys multinational OEM,original design and electronic manufacturing services customers expand their international operations to access developing world markets and lower manufacturing and labor costs in certain regions,the Company A M P H E N O L C O R P O R A

65、T I O N 2 0 0 4 A N N U A L R E P O R T11is continuing to expand its international capabilities in order to provide just-in-time facilities near these customers.The Company is also able to take advantage of the lower manufacturing costs in some regions,and has established low-cost manufacturing and

66、assembly facilities in the three major geographical markets of the Americas,Europe/Africa and Asia.In 2004,approximately 56%of its workforce was located in low-cost labor regions.?Foster Collaborative,Entrepreneurial Management.Our management system is designed to provide clear P&L and balance sheet

67、 responsibility in a fl at organizational structure.Each general manager is incented to grow and develop his business and to think entrepreneurially in providing timely and cost effective solutions to customer needs.In addition,the general managers have access to the resources of the larger organiza

68、tion and are encouraged through internal structure to work collaboratively with other general managers to meet the needs of the expanding marketplace and to achieve common goals.?Control Costs.It is very important in todays global marketplace to have a competitive cost structure.Product quality and

69、comprehensive customer service are not mutually exclusive with controlling costs.Controlling costs is part of a mindset-it is having the discipline to invest in programs that have a good return;it is maintaining a cost structure as fl exible as possible to respond to changes in the marketplace;it is

70、 dealing with suppliers and vendors in a fair but prudent way to insure a reasonable cost for materials and services;it is a mindset of managers to manage the Companys assets as if they were their own.?Pursue Strategic Acquisitions and Investments.The Company believes that the fragmented nature of t

71、he interconnect industry provides signifi cant opportunities for strategic acquisitions.Therefore,management continues to pursue strategic acquisitions of smaller companies with signifi cant growth potential that complement the Companys existing business and further expand its product lines,technolo

72、gical capabilities and geographic presence.Furthermore,such acquisitions have the potential for improving the profi tability of acquired companies by leveraging Amphenols access to world markets and lower manufacturing costs resulting from greater economies of scale.A M P H E N O L C O R P O R A T I

73、 O N 2 0 0 4 A N N U A L R E P O R T12KEY OPERATING INDICESEarnings Per Share-Diluted$DollarsNet Sales$MillionsOperating MarginPercent (%)Current and Long-Term Debt$Millions 13UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington,D.C.20549 FORM 10-K (Mark One)X ANNUAL REPORT PURSUANT TO SECTIO

74、N 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31,2004 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from_to_ Commission file number 1-10879 AMPHENOL CORPORATION (Exact name of Registrant a

75、s specified in its Charter)Delaware(State or other jurisdiction of incorporation or organization)22-2785165(I.R.S.Employer Identification No.)358 Hall Avenue,Wallingford,Connecticut 06492 203-265-8900(Address,including zip code,and telephone number,including area code,of Registrants principal execut

76、ive offices)Securities registered pursuant to Section 12(b)of the Act:Class A Common Stock,$.001 par value New York Stock Exchange,Inc.(Title of each Class)(Name of each Exchange on which Registered)Securities registered pursuant to Section 12(g)of the Act:None Indicate by check mark whether the Reg

77、istrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the Registrant was required to file such reports)and(2)has been subject to such filing requirements for the past 90 days.Ye

78、s 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 not be contained,to the best of Registrants knowledge,in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any

79、 amendment to this Form 10-K.X Indicate by check mark whether the registrant is an accelerated filer(as indicated in Rule 12b-2 of the Act).Yes X No _ The aggregate market value of Amphenol Corporation common stock,$.001 par value,held by non-affiliates was approximately$2,641 million based on the r

80、eported last sale price of such stock on the New York Stock Exchange on June 30,2004.As of December 31,2004 the total number of shares outstanding of registrants common stock was 87,891,533.DOCUMENTS INCORPORATED BY REFERENCE Portions of the Registrants Definitive Proxy Statement,which is expected t

81、o be filed within 120 days following the end of the fiscal year covered by this report,are incorporated by reference into Part III hereof.A M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T 14 INDEX Page PART I 15 Item 1.Business 15 General 15 Business Segments 17 International Ope

82、rations 18 Customers 18 Manufacturing 19 Research and Development 19 Trademarks and Patents 19 Competition 19 Backlog 20 Employees 20 Other 20 Cautionary Statements for Purposes of Forward Looking Information 20 Item 2.Properties 21 Item 3.Legal Proceedings 21 Item 4.Submission of Matters to a Vote

83、of Security Holders 22 PART II 22 Item 5.Market for the Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities 22 Item 6.Selected Financial Data 25 Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations 26 Item 7A.Quantita

84、tive and Qualitative Disclosures About Market Risk 34 Item 8.Financial Statements and Supplementary Data 35 Report of Independent Registered Public Accounting Firm 35 Consolidated Statements of Income 36 Consolidated Balance Sheets 37 Consolidated Statements of Changes in Shareholders Equity and Oth

85、er Comprehensive Income 38 Consolidated Statements of Cash Flow 39 Notes to Consolidated Financial Statements 40 Item 9.Changes in and Disagreements with Independent Accountants on Accounting and Financial Disclosure 54 Item 9A.Controls and Procedures 54 Item 9B.Other Information 55 PART III 55 Item

86、 10.Directors and Executive Officers of the Registrant 55 Item 11.Executive Compensation 55 Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 55 Item 13.Certain Relationships and Related Transactions 56 Item 14.Principal Accountant Fees and Servic

87、es 56 PART IV 56 Item 15.Exhibits and Financial Statement Schedules 56 Signature of the Registrant 59 Signatures of the Directors 59 A M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T 15PART I Item 1.Business General Amphenol Corporation(Amphenol or the Company)is one of the world

88、s largest designers,manufacturers and marketers of electrical,electronic and fiber optic connectors,interconnect systems and coaxial and flat-ribbon cable.The Company was incorporated in 1987.Certain predecessor businesses,which now constitute part of the Company,have been in business since 1932.The

89、 primary end markets for the Companys products are:communication systems for the converging technologies of voice,video and data communications;a broad range of industrial applications including factory automation and motion control systems,medical and industrial instrumentation,mass transportation

90、and natural resource exploration,and automotive applications;and commercial and military aerospace applications.The Companys strategy is to provide its customers with comprehensive design capabilities,a broad selection of products and a high level of service on a worldwide basis while maintaining co

91、ntinuing programs of productivity improvement and cost control.For 2004,the Company reported net sales,operating income and net income of$1,530.4 million,$276.6 million and$163.3 million,respectively.The table below summarizes information regarding the Companys primary markets and end applications f

92、or the Companys products:Communications Industrial/Automotive Commercial and Military Aerospace Percentage of Sales 50%26%24%Primary End Applications Voice wireless handsets and personal communication devices base stations and other wireless and telecommunications infrastructure broadband Video broa

93、dband cable television networks and set top converters Factory automation Instrumentation and medical systems Automobile safety systems and other on board electronics Mass transportation Oil exploration Off-road construction Military and Commercial Aircraft avionics engine controls flight controls p

94、assenger related systems Missile systems Battlefield communications Satellite and space programs Data cable modems servers and storage systems computers,personal computers and related peripherals data networking equipment A M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T 16 The C

95、ompany designs and manufactures connectors and interconnect systems which are used primarily to conduct electrical and optical signals for a wide range of sophisticated electronic applications.The Company believes,based primarily on published market research,that it is one of the largest connector m

96、anufacturers in the world.The Company has developed a broad range of connector and interconnect products for communications equipment applications including the converging voice,video and data communications markets.The Company is a leader in developing interconnect products for factory automation,m

97、achine tools,instrumentation 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 supplier of high performance,military-specification,circular environ

98、mental connectors that require superior performance and reliability under conditions of stress and in hostile environments.These conditions are frequently encountered in commercial and military aerospace applications and other demanding industrial applications such as oil exploration,medical instrum

99、entation and off-road construction.Industry analysts estimate that the worldwide market for interconnect products will grow approximately 5%in 2005.The Company believes that the worldwide industry for interconnect products and systems is highly fragmented with over 2,000 producers of connectors worl

100、dwide,of which the 10 largest,including Amphenol,accounted for a combined market share of approximately 50%in 2004.Industry analysts estimate that the total sales for the industry were approximately$35 billion in 2004.The Companys Times Fiber subsidiary is the worlds second largest producer of coaxi

101、al cable for the cable television market.The Company believes that its Times Fiber unit is one of the lowest cost producers of coaxial cable for cable television.The Companys coaxial cable and connector products are used in cable television systems including full service cable television/telecommuni

102、cation systems being installed by cable operators and telecommunication companies offering video,voice and data services.The Company is also a major supplier of coaxial cable to the developing international cable television market.The Company is a global manufacturer employing advanced manufacturing

103、 processes.The Company manufactures and assembles its products at facilities in the Americas,Europe,Africa and Asia.The Company sells its connector products through its own global sales force and independent manufacturers representatives to thousands of OEMs in approximately 60 countries throughout

104、the world as well as through a global network of electronics distributors.The Company sells its cable products primarily to cable television operators and to telecommunication companies who have entered the broadband communications market.For the year 2004,approximately 48%of the Companys net sales

105、were in North America,27%were in Europe and 25%were in Asia and other countries.The Company implements its product development strategy through product design teams and collaboration arrangements with customers which result in the Company obtaining approved vendor status for its customers new produc

106、ts and programs.The Company seeks to have its products become widely accepted within the industry for similar applications and products manufactured by other potential customers,which the Company believes will provide additional sources of future revenue.By developing application specific products,t

107、he Company has decreased its exposure to standard products which generally experience greater pricing pressure.In addition to product design teams and customer collaboration arrangements,the Company uses key account managers to manage customer relationships on a global basis such that it can bring t

108、o bear its total resources to meet the worldwide needs of its multinational customers.The Company is also focused on making strategic acquisitions in certain markets to further broaden and enhance its product offerings and expand its global capabilities.A M P H E N O L C O R P O R A T I O N 2 0 0 4

109、A N N U A L R E P O R T 17 Business Segments The following table sets forth the dollar amounts of the Companys net trade sales for its business segments.For a discussion of factors affecting changes in sales by business segment and additional segment financial data,see Managements Discussion and Ana

110、lysis of Financial Condition and Results of Operations and Note 7 in the Companys Notes to Consolidated Financial Statements.2004 20032002(dollars in thousands)Net trade sales by business segment:Interconnect products and assemblies$1,333,838$1,071,968$892,309 Cable products 196,608 167,536169,693$1

111、,530,446$1,239,504$1,062,002 Net trade sales by geographic area(1):United States operations$674,302$555,918$501,073 International operations 856,144 683,586560,929$1,530,446$1,239,504$1,062,002 (1)Based on customer location to which product is shipped._ Interconnect Products and Assemblies.The Compa

112、ny produces a broad range of interconnect products and assemblies primarily for voice,video and data communication systems,commercial and military aerospace systems,automotive and mass transportation applications,and industrial and factory automation equipment.Interconnect products include connector

113、s,which when attached to an electronic or fiber optic cable,a printed circuit board or other device,facilitate electronic or fiber optic transmission.Interconnect assemblies generally consist of a system of cable and connectors for linking electronic and fiber optic equipment.The Company designs and

114、 produces a broad range of connector and cable assembly products used in communication applications,such as:engineered cable assemblies used in base stations for wireless communication systems and internet networking equipment;smart card acceptor devices used in mobile GSM telephones,cable modems an

115、d other applications to facilitate reading data from smart cards;fiber optic couplers and connectors used in fiber optic signal transmission;input/output connectors and assemblies used for servers and data storage devices and linking personal computers and peripheral equipment;and sculptured flexibl

116、e circuits used for integrating printed circuit boards in communication applications.The Company also designs and produces a broad range of radio frequency connector products used in telecommunications,computer and office equipment,instrumentation equipment,local area networks and automotive electro

117、nics.The Companys radio frequency interconnect products and assemblies are also used in base stations,mobile communication devices and other components of cellular and personal communications networks.The Company believes that it is the largest supplier of high performance,military-specification,cir

118、cular environmental connectors.Such connectors require superior performance and reliability under conditions of stress and in hostile environments.High performance environmental connectors and interconnect systems are generally used to interconnect electronic and fiber optic systems in sophisticated

119、 aerospace,military,commercial and industrial equipment.These applications present demanding technological requirements in that the connectors are subject to rapid and severe temperature changes,vibration,humidity and nuclear radiation.Frequent applications of these connectors and interconnect syste

120、ms include aircraft,guided missiles,radar,military vehicles,equipment for spacecraft,energy,medical instrumentation,geophysical applications and off-road construction equipment.The Company also designs and produces industrial interconnect products used in a variety of applications such as factory au

121、tomation equipment,mass transportation applications including railroads and marine transportation;and automotive safety products including interconnect devices and systems used in automotive airbags,pretensioner seatbelts,antilock braking systems and other on board automotive electronic systems.The

122、Company also designs and produces highly-engineered cable and backplane assemblies.Such assemblies are specially designed by the Company in conjunction with OEM customers for specific applications,primarily for computer,wired and wireless communication systems,office equipment and aerospace applicat

123、ions.The cable assemblies utilize the Companys connector and cable products as well as components purchased from others.A M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T 18 Cable Products.The Company designs,manufactures and markets coaxial cable primarily for use in the cable te

124、levision industry.The Company manufactures two primary types of coaxial cable:semi-flexible,which has an aluminum tubular shield,and flexible,which has one or more braided metallic shields.Semi-flexible coaxial cable is used in the trunk and feeder distribution portion of cable television systems,an

125、d flexible cable(also known as drop cable)is used primarily for hookups from the feeder cable to the cable television subscribers residence.Flexible cable is also used in other communication applications.The Company has also developed a broad line of radio frequency connectors for coaxial cable and

126、fiber optic interconnect components for full service cable television/telecommunication networks.The rapid development in fiber optic technologies,digital compression(which allows several channels to be transmitted within the same bandwidth that a single analog channel requires)and other communicati

127、on technologies,including the Companys development of higher capacity coaxial cable,have resulted in technologies that enable cable television systems to provide channel capacity in excess of 500 channels.Such expanded channel capacity,along with other component additions,permit cable operators to o

128、ffer full service networks with a variety of capabilities including near video-on-demand,pay-per-view special events,home shopping networks,interactive entertainment and education services,telephone services and high-speed access to data resources such as the Internet.With respect to expanded channe

129、l capacity systems,cable operators have generally adopted,and the Company believes that for the foreseeable future will continue to adopt,a cable system using both fiber optic cable and coaxial cable.Such systems combine the advantages of fiber optic cable in transmitting clear signals over a long d

130、istance without amplification,with the advantages of coaxial cable in ease of installation,low cost and compatibility with the receiving components of the customers communication devices.The Company believes that while system operators are likely to increase their use of fiber optic cable for the tr

131、unk and feeder portions of the cable systems,there will be an ongoing need for high capacity coaxial cable for the local distribution and street-to-the-home portions of the cable system.In addition,U.S.cable system designs are increasingly being employed in international markets where cable televisi

132、on penetration is generally lower than in the U.S.The Company believes the development of cable television systems in international markets presents an opportunity to increase sales of its coaxial cable products.The Company is also a leading producer of flat-ribbon cable,a cable made of wires assemb

133、led side by side such that the finished cable is flat.Flat-ribbon cable is used to connect internal components in systems with space and component configuration limitations.The product is used in computer and office equipment components as well as in a variety of telecommunication applications.Inter

134、national Operations The Company believes that its global presence is an important competitive advantage as it allows the Company to provide quality products on a timely and worldwide basis to its multinational customers.Approximately 56%of the Companys sales for the year ended December 31,2004 were

135、outside the United States.Approximately 48%of such international sales were in Europe.The Company has manufacturing and assembly facilities in the United Kingdom,Germany,France,the Czech Republic,and Estonia and sales offices in most European markets.The balance of the Companys international activit

136、ies are located in Asia,Canada,Latin America,Africa and Australia.Asian operations include manufacturing facilities in Japan,Taiwan,China,Korea,India and Malaysia.The Companys international manufacturing and assembly facilities generally serve the respective local markets and coordinate product desi

137、gn and manufacturing responsibility with the Companys other operations around the world.The Company has low cost manufacturing and assembly facilities in Mexico,China,India,Africa and Eastern Europe to serve regional and world markets.Customers The Companys products are used in a wide variety of app

138、lications by numerous customers,the largest of which was less than 4%of net sales for the year ended December 31,2004.The Company sells its products to over 10,000 customer locations worldwide.The Companys products are sold both directly to OEMs,contract manufacturers,cable system operators,telecomm

139、unication companies and through manufacturers representatives and distributors.There has been a trend on the part of OEM customers to consolidate their lists of qualified suppliers to companies that have a global presence,can meet quality and delivery standards,have a broad product portfolio and des

140、ign capability,and have competitive prices.The Company has focused its global resources to position itself to compete effectively in this environment.The Company has concentrated its efforts on service and productivity improvements including advanced computer aided design and manufacturing systems,s

141、tatistical process controls and just-in-time inventory programs to increase product quality and shorten product delivery schedules.The Companys strategy is to provide comprehensive design capabilities,a broad selection of products and a high level of service in the areas in which it competes.The Com

142、pany has achieved a preferred supplier designation from many of its OEM customers.A M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T 19 The Companys sales to distributors represented approximately 21%of the Companys 2004 sales.The Companys recognized brand names,including Amphenol

143、,Times Fiber,Tuchel,Socapex,Sine,Spectra-Strip,Pyle-National,Matrix,Kai Jack and others,together with the Companys strong connector design-in position(products that are specified in customer drawings),enhance its ability to reach the secondary market through its network of distributors.Manufacturing

144、 The Company employs advanced manufacturing processes including molding,stamping,plating,turning,extruding,die casting and assembly operations as well as proprietary process technology for flat-ribbon and coaxial cable production.The Companys manufacturing facilities are generally vertically integra

145、ted operations from the initial design stage through final design and manufacturing.Outsourcing of certain fabrication processes is used when cost-effective.Substantially all of the Companys manufacturing facilities are certified to the ISO9000 series of quality standards.The Company employs a globa

146、l manufacturing strategy to lower its production costs and to improve service to customers.The Company sources its products on a worldwide basis with manufacturing and assembly operations in the Americas,Europe,Asia,Africa and Australia.To better serve high volume OEM customers,the Company has estab

147、lished just-in-time facilities near major customers.The Companys policy is to maintain strong cost controls in its manufacturing and assembly operations.The Company is continually evaluating and adjusting its expense levels and workforce to reflect current business conditions and maximize the return

148、 on capital investments.The Company purchases a wide variety of raw materials for the manufacture of its products,including precious metals such as gold and silver used in plating,aluminum,brass,steel,copper and bimetallic products used for cable,contacts and connector shells;and plastic materials u

149、sed for cable and connector bodies and inserts.Such raw materials are generally available throughout the world and are purchased locally from a variety of suppliers.The Company is not dependent upon any one source for raw materials,or if one source is used the Company attempts to protect itself thro

150、ugh long-term supply agreements.Research and Development The Companys research and development expense for the creation of new and improved products and processes was$32.5 million,$26.4 million and$24.2 million for 2004,2003 and 2002,respectively.The Companys research and development activities focu

151、s on selected product areas and are performed by individual operating divisions.Generally,the operating divisions work closely with OEM customers to develop highly-engineered products and systems that meet customer needs.The Company focuses its research and development efforts primarily on those pro

152、duct areas that it believes have the potential for broad market applications and significant sales within a one-to-three year period.Trademarks and Patents The Company owns a number of active patents worldwide.The Company also regards its trademarks Amphenol,Times Fiber,Tuchel,Socapex,Sine,Spectra-S

153、trip,Pyle-National,Matrix,Kai Jack and others to be of value in its businesses.The Company has exclusive rights in all its major markets to use these registered trademarks.While the Company considers its patents and trademarks to be valuable assets,the Company does not believe that its competitive p

154、osition is dependent on patent or trademark protection or that its operations are dependent on any individual patent or trademark.Competition The Company encounters competition in substantially all areas of its business.The Company competes primarily on the basis of engineering,product quality,price

155、,customer service and delivery time.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.In the area of coaxial cable for cable television,the Company believes that it and CommSco

156、pe are the primary world providers of such cable;however,CommScope is larger than the Company in this market.In addition,the Company faces competition from other companies that have concentrated their efforts in one or more areas of the coaxial cable market.A M P H E N O L C O R P O R A T I O N 2 0

157、0 4 A N N U A L R E P O R T 20 Backlog The Company estimates that its backlog of unfilled orders was$293 million and$262 million at December 31,2004 and 2003,respectively.Orders typically fluctuate from quarter to quarter based on customer demands and general business conditions.Unfilled orders may

158、be cancelled prior to shipment of goods.It is expected that all or a substantial portion of the backlog will be filled within the next 12 months.Significant elements of the Companys business,such as sales to the cable television industry,distributors,the computer industry,and other commercial custom

159、ers,generally have short lead times.Therefore,backlog may not be indicative of future demand.Employees As of December 31,2004,the Company had approximately 16,100 full-time employees worldwide.Of these employees,approximately 10,700 were hourly employees and the remainder were salaried.The Company h

160、ad a one week strike in October 1995 at its Sidney,New York facility relating to the renewal of the labor contract at that facility with the International Association of Machinists and Aerospace Workers.The Company has not had any other significant work stoppages in the past ten years.The Company be

161、lieves that it has a good relationship with its unionized and non-unionized employees.Other The Companys annual report on Form 10-K,quarterly reports on Form 10-Q,current reports on Form 8-K,and amendments to those reports are available,without charge,on the Companys web site,as soon as reasonably p

162、racticable after they are filed electronically 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 Information Statements made by the Company in written or oral f

163、orm to various persons,including statements made in filings with the SEC,that are not strictly historical facts are forward looking statements.Such statements should be considered as subject to uncertainties that exist in the Companys operations and business environment.The following includes some,b

164、ut not all,of the factors or uncertainties that could cause the Company to fail to conform with expectations and predictions:-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 includi

165、ng significant currency fluctuations and unforeseen inflationary pressures.-Substantial and unforeseen price pressure on the Companys products or significant cost increases that cannot be recovered through price increases or productivity improvements.-Increased difficulties in obtaining a consistent

166、 supply of basic materials like steel,aluminum,copper,bimetallic products,gold or plastic resins at stable pricing levels.-Unpredictable difficulties or delays in the development of new product programs.-Significant changes in interest rates or in the availability of financing for the Company or cer

167、tain of its customers.-Rapid material escalation of the cost of regulatory compliance and litigation.-Unexpected government policies and regulations affecting the Company or its significant customers.-Unforeseen intergovernmental conflicts or actions,including but not limited to armed conflict and t

168、rade wars.-Difficulties and unanticipated expense of assimilating newly-acquired businesses.A M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T 21-Any difficulties in obtaining or retaining the management and other human resource competencies that the Company needs to achieve its b

169、usiness objectives.-The risks associated with any technological shifts away from the Companys technologies and core competencies.For example,a technological shift away from the use of coaxial cable in cable television/telecommunication systems could have a substantial impact on the Companys coaxial

170、cable business.-Unforeseen interruptions to the Companys business with its largest customers,distributors and suppliers resulting from,but not limited to,strikes,financial instabilities,computer malfunctions or inventory excesses.Item 2.Properties The Companys fixed assets include certain plants and

171、 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 control features and special adaptations.The Companys plants,warehouses,machinery and equipment are in good opera

172、ting condition,are well maintained,and substantially all of its facilities are in regular use.The Company considers the present level of fixed assets along with planned capital expenditures as suitable and adequate for operations in the current business environment.At December 31,2004,the Company op

173、erated a total of 97 plants and warehouses of which(a)the locations in the U.S.had approximately 1.9 million square feet,of which 0.7 million square feet were leased;(b)the locations outside the U.S.had approximately 2.9 million square feet,of which 1.6 million square feet were leased;and(c)the squa

174、re footage by segment was approximately 3.9 million square feet and 0.9 million square feet for interconnect products segment and cable products segment,respectively.The Company believes that its facilities are suitable and adequate for the business conducted therein and are being appropriately util

175、ized for their intended purposes.Utilization of the facilities varies based on demand for the products.The Company continuously reviews its anticipated requirements for facilities and,based on that review,may from time to time acquire or lease additional facilities and/or dispose of existing facilit

176、ies.Item 3.Legal Proceedings The Company and its subsidiaries have been named as defendants in several legal actions in which various amounts are claimed arising from normal business activities.Although the amount of any ultimate liability with respect to such matters cannot be precisely determined,

177、in the opinion of management,such matters are not expected to have a material effect on the Companys financial condition or results of operations.Certain operations of the Company are subject to federal,state and local environmental laws and regulations which govern the discharge of pollutants into

178、the air and water,as well as the handling and disposal of solid and hazardous wastes.The Company believes that its operations are currently in substantial compliance with all applicable environmental laws and regulations and that the costs of continuing compliance will not have a material effect on

179、the Companys financial condition or results of operations.Subsequent to the acquisition of Amphenol from Allied Signal Corporation(“Allied Signal”)in 1987(Allied Signal merged with Honeywell International Inc.in December 1999(Honeywell),Amphenol and Honeywell have been named jointly and severally li

180、able as potentially responsible parties in relation to several environmental cleanup sites.Amphenol and Honeywell have jointly consented to perform certain investigations and remedial and monitoring activities at two sites and they have been jointly ordered to perform work at another site.The costs

181、incurred 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 conditions or circumstances occurred or existed at the t

182、ime 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 significant environmental liabilities covered by the Honeywell Agreement.Management does not believe that the c

183、osts associated with resolution of these or any other environmental matters will have a material adverse effect on the Companys financial condition or results of operations.The environmental investigation,remedial and monitoring activities identified by the Company,including those referred to above,

184、are covered under the Honeywell Agreement.Owners and occupiers of sites containing hazardous substances,as well as generators of hazardous substances,are subject to broad liability under various federal and state environmental laws and regulations,including expenditures for cleanup and monitoring co

185、sts and potential damages arising out of past disposal activities.Such liability in many cases may be imposed A M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T 22 regardless of fault or the legality of the original disposal activity.The Company is currently performing monitoring

186、activities at its manufacturing site in Sidney,New York.The Company is also performing design,cleanup,operations and maintenance and monitoring activities at three off-site disposal sites previously utilized by the Companys Sidney facility and others,the Richardson Hill landfill,the Route 8 landfill

187、 and the Sidney Center landfill.The Company and Honeywell have entered into an administrative consent order with the United States Environmental Protection Agency(the EPA)and are presently performing remedial measures for Richardson Hill,which has been designated a Superfund site on the National Pri

188、orities List under the Comprehensive Environmental Response,Compensation and Liability Act of 1980.The administrative consent order requires the Company to complete the approved remedial measures and to continue to monitor the site.With respect to the second site,the Route 8 landfill,the Company ini

189、tiated a remediation program pursuant to a Consent Order with the New York Department of Environmental Protection and is continuing to monitor the results of those remediation efforts.In December 1995,the Company and Honeywell received a letter from the EPA demanding that the Company and Honeywell a

190、ccept responsibility for the investigation and cleanup of the third site,Sidney Center landfill,another Superfund site.The Sidney Center landfill was a municipal landfill site utilized by the Companys Sidney facility and other local towns and businesses.In 1996,the Company and Honeywell received a u

191、nilateral order from the EPA directing the Company and Honeywell to perform certain investigation,design and cleanup activities at the Sidney Center landfill site.The Company and Honeywell responded to the unilateral order by agreeing to undertake certain remedial design activities.In 1997,the EPA f

192、iled a lawsuit against the Company and Honeywell seeking reimbursement of past costs expended by the EPA in connection with activities at the Sidney Center landfill site and seeking to affix liability upon the Company and Honeywell for all additional costs to be incurred in connection with all furth

193、er investigations,design and cleanup activities at the Sidney Center landfill site.The Company joined four local municipalities as co-defendants in the lawsuit.In 2001,the Company and Honeywell were ordered by the Court to pay the EPA approximately$3.5 million,net of contributions by the municipalit

194、ies who had been joined as co-defendants in the lawsuit.Pursuant to that decision the Company and Honeywell are implementing the approved remedial measures for the Sidney Center landfill site.The municipalities who were joined in the lawsuit have agreed to monitor and maintain the caps installed at

195、the Sidney Center landfill site as part of the approved remediation plan.The Company and Honeywell will be responsible for continuing groundwater monitoring at the site.The Company is also engaged in remediating or monitoring environmental conditions at certain of its other manufacturing facilities

196、and has been named as a potentially responsible party for cleanup costs at other off-site disposal sites.All such environmental matters referred to in this paragraph are covered by the Honeywell Agreement.Since 1987,the Company has not been identified nor has it been named as a potentially responsib

197、le party with respect to any other significant on-site or off-site hazardous waste matters.In addition,the Company believes that all of its manufacturing activities and disposal practices since 1987 have been in material compliance with all applicable environmental laws and regulations.Nonetheless,i

198、t is possible that the Company will be named as a potentially responsible party in the future with respect to additional Superfund or other sites.Although the Company is unable to predict with any reasonable certainty the extent of its ultimate liability with respect to any pending or future environ

199、mental matters,the Company believes,based upon all information currently known by management about the Companys manufacturing activities,disposal practices and estimates of liability with respect to all known environmental matters,that any such liability will not be material to its financial conditi

200、on or results of operations.Item 4.Submission of Matters to a Vote of Security Holders No matters were submitted to a vote of our shareholders during the last quarter of the year ended December 31,2004.PART II Item 5.Market for the Registrants Common Equity,Related Stockholder Matters and Issuer Pur

201、chases of Equity Securities On January 21,2004,the Company announced a 2-for-1 stock split that was effective for stockholders of record as of March 17,2004.The additional shares were distributed on March 29,2004.The share information included herein reflects the effect of such stock split.The Compa

202、ny affected the initial public offering of its Class A Common Stock in November 1991.The Companys common stock has been listed on the New York Stock Exchange since that time under the symbol APH.The following table sets forth on a per share basis the high and low prices for the common stock for both

203、 2004 and 2003 as reported on the New York Stock Exchange.A M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T 23 2004 2003 High Low High Low First Quarter$34.70$28.13$21.98$18.50 Second Quarter 34.49 29.75 24.70 19.38 Third Quarter 34.37 27.90 28.84 23.05 Fourth Quarter 37.52 32.23

204、 32.07 26.03 As of January 31,2005,there were 50 holders of record of the Companys common stock.A significant number of outstanding shares of common stock are registered in the name of only one holder,which is a nominee of The Depository Trust Company,a securities depository for banks and brokerage

205、firms.The Company believes that there are a significant number of beneficial owners of its common stock.Since its initial public offering in 1991,the Company has not paid any dividends;however,on January 19,2005,the Company announced that it will commence payment of a quarterly dividend on its commo

206、n stock of$.03 per share.The Company expects the first dividend payment to be made on or about April 6,2005 to shareholders of record as of March 15,2005.The Company intends to retain the remainder of its earnings to provide funds for the operation and expansion of the Companys business,repurchase s

207、hares of its common stock and to repay outstanding indebtedness.At December 31,2003,Kohlberg Kravis Roberts&Co.L.P.(KKR)owned 27.2%of the Companys Class A Common Stock.During the third quarter of 2004,partnerships affiliated with KKR sold all their Class A Common Stock and,as such,owned none of the

208、Companys Class A Common Stock as of December 31,2004.In 2004,2003 and 2002,the Company paid KKR fees of$0.5 million,$0.9 million,and$1.0 million,respectively for management and consulting services.The following table summarizes our equity compensation plan information as of December 31,2004:Equity C

209、ompensation Plan Information Plan category Number of securities to be issued upon exercise of outstanding options,warrants and rights Weighted average exercise price of outstanding options,warrants and rights Number of securities remaining available for future issuance Equity compensation plans appr

210、oved by security holders 7,012,208$21.22 1,788,370 Equity compensation plans not approved by security holders Total 7,012,208$21.22 1,788,370 A M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T 24 Purchases of Equity Securities On March 4,2004,the Company announced that its Board o

211、f Directors authorized an open-market stock repurchase program(the“Program”)of up to 2.0 million shares(on a post-split basis)of its common stock during the period ending December 31,2005.On October 20,2004 the Program was amended to increase the number of authorized shares to 5.0 million and to ext

212、end the expiration date until September 30,2006.Approximately 3.5 million shares of common stock remain available for repurchase under the Program.Period(a)Total Number of Shares Purchased(b)Average Price Paid per Share(c)Total Number of Shares Pur-chased as Part of Publicly An-nounced Plans or Prog

213、rams(d)Maximum Number of Shares that May Yet Be Purchased Under the Plans or Pro-grams January 1,2004 to January 31,2004-February 1,2004 to February 29,2004-March 1,2004 to March 31,2004 530,800$30.47 530,800 4,469,200 April 1,2004 to April 30,2004-May 1,2004 to May 31,2004-June 1,2004 to June 30,20

214、04-July 1,2004 to July 31,2004 206,700$29.39 737,500 4,262,500 August 1,2004 to August 31,2004 280,300$29.38 1,017,800 3,982,200 September 1,2004 to September 30,2004 80,000$29.93 1,097,800 3,902,200 October 1,2004 to October 31,2004 40,000$33.83 1,137,800 3,862,200 November 1,2004 to November 30,20

215、04 120,000$36.40 1,257,800 3,742,200 December 1,2004 to December 31,2004 197,700$35.62 1,455,500 3,544,500 Total 1,455,500$31.36 1,455,500 3,544,500 A M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T 25 Item 6.Selected Financial Data(dollars in thousands,except per share data)Year

216、 Ended December 31,200420032002 20012000 Operations Net sales$1,530,446$1,239,504$1,062,002$1,103,771$1,359,702Net income 163,311103,990(1)80,344 83,710107,904Net income per common shareDiluted 1.821.18(1)0.93 0.981.26Financial Position Working capital$253,443$233,707$153,250$166,857$170,131Total as

217、sets 1,306,7111,181,3841,078,908 1,026,7431,004,322Long-term debt,including current portion 449,053542,959644,248 720,319728,346Shareholders equity 481,604323,406166,982 103,93329,234Weighted average shares outstanding Diluted 89,736,65688,131,72086,891,200 85,994,24285,757,844 (1)Includes a one-tim

218、e 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 taxes.A M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T 26 Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations Th

219、e following discussion and analysis of the results of operations for the three fiscal years ended December 31,2004 has been derived from and should be read in conjunction with the consolidated financial statements included elsewhere in this document.Executive Overview The Company is a global designe

220、r,manufacturer and marketer of interconnect and cable products.In 2004,approximately 56%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 app

221、lications including factory automation and motion control systems,medical and industrial instrumentation,mass transportation,natural resource exploration and automotive applications;and commercial and military aerospace applications.The Companys products are used in a wide variety of applications by

222、 numerous customers,the largest of which was less than 4%of net sales in 2004.The Company encounters competition in all of its markets and competes primarily on the basis of engineering,product quality,price,customer service and delivery time.There has been a trend on the part of OEM customers to co

223、nsolidate their lists of qualified suppliers to companies that have a global presence,can meet quality and delivery standards,have a broad product portfolio and design capability,and have competitive prices.The Company has focused its global resources to position itself to compete effectively in thi

224、s environment.The Company believes that its global presence is an important competitive advantage as it allows the Company to provide quality products on a timely and worldwide basis to its multinational customers.The Companys strategy is to provide comprehensive design capabilities,a broad selectio

225、n of products and a high level of service in the areas in which it competes.The Company focuses its research and development efforts through close collaboration with its OEM customers to develop highly-engineered products that meet customer needs and have the potential for broad market applications

226、and significant sales within a one-to-three year period.The Company is also focused on controlling costs.The Company does this by investing in modern manufacturing technologies,controlling purchasing processes and expanding into low cost labor areas.The Companys strategic objective is to further enh

227、ance its position in its served markets by pursuing the following success 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 str

228、ucture Maintain a culture of controlling cost Pursue strategic acquisitions For the year ended December 31,2004,the Company reported net sales,operating income and net income of$1,530.4 million,$276.6 million and$163.3 million,respectively;up 23%,35%and 57%,respectively,from 2003.Sales of interconne

229、ct products and assemblies and sales of cable products increased in each of the Companys related major markets and geographic regions.Net income benefited from both the increase in operating income and reduced interest expense.Sales and profitability trends are discussed in detail in“Results of Oper

230、ations”below.In addition,one strength of the Company is its ability to consistently generate cash.The Company uses cash generated from operations to fund capital expenditures and acquisitions,repurchase shares of its common stock and to reduce indebtedness.In 2004,the Company generated operating cas

231、h flow of$208.3 million of which$100.3 million was used to reduce debt.A M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T 27Results of Operations The following table sets forth the components of net income as a percentage of net sales for the periods indicated.Year Ended December

232、31,2004 2003 2002 Net sales 100.0%100.0%100.0%Cost of sales,excluding depreciation and amortization 65.3 66.2 65.9 Depreciation and amortization expense 2.5 3.0 3.3 Selling,general and administrative expense 14.1 14.3 14.4 Operating income 18.1 16.5 16.4 Interest expense(1.5)(2.4)(4.3)Other expenses

233、,net(.4)(.6)(.5)Expense for early extinguishment of debt-(.8)-Income before income taxes 16.2 12.7 11.6 Provision for income taxes(5.5)(4.3)(4.0)Net income 10.7%8.4%7.6%A M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T 28 2004 Compared to 2003 Net sales were$1,530.4 million for t

234、he year ended December 31,2004 compared to$1,239.5 million for 2003 an increase of 23%in U.S.dollars and 20%in local currencies.Sales of interconnect products and assemblies increased 24%in U.S.dollars and 20%in local currencies compared to 2003($1,333.8 million in 2004 versus$1,072.0 million in 200

235、3).Sales increased in all major geographic regions as a result of the continuing development of new application specific and value added products,economic improvement in some of the Companys major end markets and the impact of acquisitions in 2004 and 2003($50.3 million).Sales increased in the Compa

236、nys major end markets including mobile communications,industrial,automotive,military/aerospace,and computer/data communications markets.The increase in sales in the mobile communications markets(approximately$105.7 million)is attributable primarily to increased demand on wireless infrastructure prod

237、ucts in all regions,increased demand on mobile handset products in Asia and the impact of acquisitions during 2003 of companies in North America and China serving the wireless installation market.The increase in sales in the industrial market(approximately$49 million)reflects increased sales in Nort

238、h America and Europe.Automotive sales increased approximately$34 million primarily in Europe and to a lesser extent in North America,reflecting the increased use of safety and telematic applications in cars and as a result of acquisitions.The increase in military/aerospace sales(approximately$63.9 m

239、illion)relates primarily to increased demand on military programs and avionics applications in North America and Europe.Sales to the computer and data communications related markets increased approximately$11.1 million reflecting increased sales in North America,Europe and Asia and the impact of acq

240、uisitions.Sales of cable products increased 17%compared to 2003($196.6 million in 2004 versus$167.5 million in 2003).Such increase is primarily due to increased sales in broadband cable television markets.Geographically,sales in the U.S.in 2004 increased approximately 21%compared to 2003($674.3 mill

241、ion in 2004 versus$555.9 million in 2003);international sales for 2004 increased approximately 25%in U.S.dollars($856.1 million in 2004 versus$683.6 million in 2003)and increased approximately 19%in local currency compared to 2003.The comparatively weak U.S.dollar in 2004 had the currency effect of

242、increasing net sales by approximately$46.6 million when compared to foreign currency translation rates in 2003.The gross profit margin as a percentage of net sales(including depreciation in cost of sales)increased to 32%in 2004 compared to 31%in 2003.An increase in margins was achieved in both the i

243、nterconnect products and assemblies segment and the cable segment although the cable segment increase was partially offset by a continued increase in material costs.The operating margin for interconnect products and assemblies increased approximately 2%compared to the prior year.The increase is gene

244、rally attributable to the continuing development of new higher margin application specific products,excellent operating leverage on incremental volume and aggressive programs of cost controls.Selling,general and administrative expenses were$215.0 million and$177.4 million in 2004 and 2003,respective

245、ly,and remained approximately 14.0%of sales in 2004 and 2003,respectively.Research and development expenditures increased approximately$6.1 million,commensurate with sales,reflecting increases in expenditures for new product development and represented approximately 2%of sales for both 2004 and 2003

246、.Selling and marketing expenses remained approximately 7%of sales.Shipping expense,which relates primarily to sales of cable products to the broadband market,increased commensurate with sales for those products.Administrative expenses increased by approximately$11.8 million,due primarily to increase

247、s in costs relating to insurance,pensions,medical benefits and professional fees.Interest expense was$22.5 million for 2004 compared to$29.5 million for 2003.The decrease is primarily attributable to lower interest rates including the effect of the refinancing completed in the second quarter of 2003

248、(see Liquidity and Capital Resources)and lower average debt levels.At current interest rates,interest expense for 2005 is expected to be approximately$19 million.Expenses for early extinguishment of debt totaling$10.4 million in 2003,relate to the refinancing of the Companys senior credit facilities

249、.Such one-time expenses include the call premium related to the redemption of the Companys Senior Subordinated Notes of$4.7 million,write-off of unamortized deferred debt issuance costs of$3.9 million and other related fees and expenses of$1.8 million.Other expenses,net,for 2004 and 2003 were$6.7 mi

250、llion and$7.0 million,respectively.Other expenses,net,are comprised primarily of foreign currency transaction losses($0.6 million in 2004 and$1.3 million in 2003),reflecting the relative weakness of the U.S.dollar in 2004 and 2003,program fees on sale of accounts receivable($2.3 million in 2004 and$

251、1.5 million in 2003),reflecting lower receivable fee rates in 2003,minority interests($3.0 million in 2004 and$2.4 million in 2003)and agency and commitment fees on the Companys credit facilities($1.0 million in 2004 and$0.8 million in 2003).In addition,in 2003 the Company incurred$1.0 million in ex

252、penses relating to a secondary stock offering(for which the Company did not receive any proceeds).See Note 8 to the Companys Consolidated Financial Statements for details of the components of other expenses,net.The provision for income taxes was at an effective rate of 34.0%in 2004 and 2003.2003 Com

253、pared to 2002 Net sales were$1,239.5 million for the year ended December 31,2003 A M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T 29compared to$1,062.0 million for 2002.Sales of interconnect products and assemblies increased 20%compared to 2002($1,072.0 million in 2003 versus$89

254、2.3 million in 2002).Sales increased in the Companys major end markets including military/aerospace,mobile communications,industrial,automotive and computer/data communications markets.The increases occurred in all major geographic regions,with approximately one third of the increase attributable to

255、 the effect of currency translation,as detailed below.The remaining increase was attributable to the continuing development of new application specific and value added products,economic improvement in some of the Companys major end markets and acquisitions in 2002 and 2003.The increase in military/a

256、erospace sales(approximately$47 million)relates primarily to increased demand on military programs and avionics applications in North America and Europe,and an acquisition($8 million).The increase in sales in the mobile communications markets(approximately$42 million)is attributable to the acquisiti

257、on of companies in North America and China serving the network infrastructure market(approximately$18 million)and increases in Asia in sales of handset products.The increase in sales in the industrial market(approximately$36 million)reflects increases resulting from acquisitions in North America(app

258、roximately$16 million)and increased sales in Europe.Automotive sales increased approximately$33 million primarily in Europe and to a lesser extent in North America reflecting increased use of safety and telematic applications in cars.Sales to the computer and data communications related markets incr

259、eased approximately$23 million;a cable assembly acquisition in North America contributed one-third of the increase and the remainder reflects increased sales in Europe and Asia.Sales of cable products decreased 1%compared to 2002($167.5 million in 2003 versus$169.7 million in 2002).Such decrease is

260、generally attributable to continuing low levels of capital spending by U.S.and international cable television operators for cable system upgrades and expansion.The lower levels of spending are not expected to change significantly in the near term.Geographically,sales in the U.S.in 2003 increased app

261、roximately 11%compared to 2002($555.9 million in 2003 versus$501.1 million in 2002);international sales for 2003 increased approximately 22%in U.S.dollars($683.6 million in 2003 versus$560.9 million in 2002)and increased approximately 12%in local currency compared to 2002.The comparatively weak U.S.

262、dollar in 2003 had the currency effect of increasing net sales by approximately$63.9 million when compared to foreign currency translation rates in 2002.The gross profit margin as a percentage of net sales(including depreciation in cost of sales)remained constant at 31%for 2003 and 2002.An increase

263、in margins in the interconnect products and assemblies segment was offset by a decline in margins in the cable products segment.The operating margin for interconnect products and assemblies increased approximately 2%compared to the prior year,the increase is generally attributable to the effects of

264、higher sales volume and cost reduction activities relating to purchased materials and increased activity in low cost labor areas.The increase was offset by a decline in operating profit margins for cable products of approximately 6%compared to the prior year due primarily to higher material costs an

265、d change in product mix.Selling,general and administrative expenses were$177.4 million and$152.9 million in 2003 and 2002,respectively,and remained constant at approximately 14%of sales.Research and development expenditures increased approximately$2.2 million,reflecting increases in expenditures for

266、 new product development.Selling and marketing expenses remained constant at approximately 7%of sales.Shipping expense,which relates primarily to sales of cable products to the broadband market,remained stable,commensurate with sales for those products.Administrative expenses increased by approximat

267、ely$6.9 million,due primarily to increases in costs relating to insurance,pensions and medical benefits.Interest expense was$29.5 million for 2003 compared to$45.9 million for 2002.The decrease is primarily attributable to lower interest rates including the effect of the refinancing completed in the

268、 second quarter of 2003(see Liquidity and Capital Resources)and lower average debt levels.Expenses for early extinguishment of debt totaling$10.4 million in 2003,relate to the refinancing of the Companys senior credit facilities.Such one-time expenses include the call premium related to the redempti

269、on of the Companys Senior Subordinated Notes of$4.7 million,write-off of unamortized deferred debt issuance costs of$3.9 million and other related fees and expenses of$1.8 million.Other expenses,net,for 2003 and 2002 was$7.0 million and$5.4 million,respectively.Other expenses,net,is comprised primar

270、ily of foreign currency transaction losses($1.3 million in 2003 and$2.7 million in 2002),reflecting the relative weakness of the U.S.dollar in 2003 and 2002,program fees on sale of accounts receivable($1.5 million in 2003 and$1.8 million in 2002),reflecting lower receivable fee rates in 2003,minorit

271、y interests($2.4 million in 2003 and$1.8 million in 2002)and agency and commitment fees on the Companys credit facilities($0.8 million in 2003 and$0.6 million in 2002).In addition,in 2003 the Company incurred$1.0 million in expenses relating to a secondary stock offering(for which the Company did no

272、t receive any proceeds),and in 2002 the Company realized$1.5 million of income relating to a license fee settlement.See Note 8 to the Companys Consolidated Financial Statements for details of the components of other expenses,net.The provision for income taxes for 2003 was at an effective rate of 34%

273、compared to 34.5%in 2002.Liquidity and Capital Resources Cash provided by operating activities totaled$208.3 million,$170.0 million and$120.6 million for 2004,A M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T 30 2003 and 2002,respectively.In 2004,the Company reclassified certain

274、amounts in its 2003 and 2002 Consolidated Statements of Cash Flow from financing activities to operating activities as a result of a determination that they had not been reported in accordance with Statement of Financial Accounting Standard No.95“Statement of Cash Flows”.The amounts reclassified of$

275、10.6 and($11.0)million in 2003 and 2002,respectively,reflect a change in classification of the net change in the accounts receivables sold under the Companys accounts receivable securitization agreement.As a result of these reclassifications,there was no impact on the Companys net change in cash and

276、 short-term cash investments in 2003 and 2002.The net change during 2004 in accounts receivables sold under the Companys accounts receivable securitization agreement which is included in operating activities is$6.2 million.The increase in cash from operating activities in 2004 compared to 2003 is pr

277、imarily attributable to an increase in net income in addition to a larger reduction in the non-cash components of working capital compared to 2003,partially offset by a larger decrease in long-term liabilities resulting from a$20 million contribution to the Companys pension plan in 2004(compared to

278、a$10 million contribution in 2003).The increase in cash from operating activities in 2003 compared to 2002 is primarily attributable to an increase in net income and a larger reduction in the 2003 period in non-cash components of working capital.The non-cash components of working capital decreased$1

279、4.1 million in 2004 due primarily to a$3.2 million increase in accounts 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 re

280、ceivable due to higher sales levels and an operating addition of$14.5 million in inventory.The non-cash components of working capital decreased$11.6 million in 2003 due primarily to a$20.8 million increase in accounts payable,an operating reduction of$4.6 million in inventory,an increase of$10.6 mil

281、lion in receivables sold,and an increase in accrued income taxes of$18.0 million,partially offset by a$28.8 million increase in accounts receivable due to higher sales levels and a decrease of$7.7 million in accrued liabilities.The non-cash components of working capital decreased$4.8 million in 2002

282、 due primarily to a$12.9 million decrease in inventory as inventory levels were reduced in response to lower sales levels,a$6.2 million increase in accrued income taxes and a$3.7 million increase in accounts payable,partially offset by an$11 million decrease in receivables sold and a$6.5 million red

283、uction in accrued liabilities.In 2004,accounts receivable increased$41.7 million to$214.2 million,due to an increase in sales levels,$12.6 million from an acquired company,and a$9.3 million increase due to translation resulting from the comparatively weaker U.S.dollar at December 31,2004 compared to

284、 December 31,2003,partially offset by a$6.2 million increase in sales of receivables(further discussed below).Days sales outstanding,computed before sales of receivables,decreased to approximately 64 days from 66 days in 2003.Inventory increased$25.9 million to$247.3 million,primarily due to an incr

285、ease of$6.7 million due to translation resulting from the comparatively weaker U.S.dollar at December 31,2004 compared to December 31,2003,and$4.7 million in inventory from an acquired company coupled with an operating addition of$14.5 million.Inventory turnover increased to 4.2x at December 31,2004

286、 from 3.9x at December 31,2003.Deferred taxes and other assets decreased$0.3 million to$28.1 million reflecting the decrease in deferred taxes,the details of which are included in Note 3 to the Companys Consolidated Financial Statements.Goodwill increased$29.1 million to$545.4 million primarily as a

287、 result of an acquisition completed in the third quarter of 2004 as well as additional contingent consideration paid in 2004 relating to a prior year acquisition.Land and depreciable assets,net,increased$19.5 million to$197.8 million reflecting capital expenditures of$44.3 million,assets from acquis

288、itions of approximately$6.8 million,an increase of$7.8 million due to translation resulting from the comparatively weaker U.S.dollar at December 31,2004 compared to December 31,2003,depreciation of$38.2 million and disposals of$1.2 million.Accounts payable and accrued salaries,wages and employee ben

289、efits increased$18.0 million and$7.4 million to$134.9 million and$38.5 million,respectively,due primarily to an increase in sales levels,liabilities assumed from acquired companies and a$0.8 million and$0.3 million increase,respectively,due to translation resulting from the comparatively weaker U.S.

290、dollar at December 31,2004 compared to December 31,2003.Accrued income taxes increased$23.7 million due primarily to increased profits.Other accrued liabilities increased$5.3 million to$37.1 million relating primarily to an increase in liabilities for the purchase of acquired companies and accruals

291、relating to higher sales volume.In 2004,cash from operating activities of$208.3 million(including additional sales of receivables of$6.2 million)and proceeds from exercise of stock options and related tax benefits of$30.3 million were used primarily to fund capital expenditures of$44.3 million,acqui

292、sitions of$41.8 million,the purchase of treasury stock of$45.6 million,an increase in cash on hand of$6.6 million and for a net debt reduction of$100.3 million.For 2003,cash from operating activities of$170.0 million(including additional sales of receivables of$10.6 million),proceeds from the refina

293、ncing of$27.0 million and proceeds from exercise of stock options and related tax benefits of$35.9 million were used primarily to fund capital expenditures of$30.2 million,acquisitions of$51.1 million,an increase in cash on hand of$2.9 million and for a net debt reduction of$148.8 million.During the

294、 second quarter 2003,the Company completed a refinancing of its senior credit facilities.During 2003 borrowings of$625.0 million under a A M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T 31new bank loan agreement(Bank Agreement),described below,were used to repay$439.5 million ou

295、tstanding under the Companys previous bank agreement,redeem all outstanding senior subordinated notes totaling$148.7 million(including the call premium of$4.7 million)and to pay other fees and expenses associated with the refinancing of$8.9 million.A prepayment of the new bank loan of$37.0 million w

296、as made in June with excess borrowing proceeds and cash flow from operations and additional prepayments of$89.0 million were made in the second half of 2003.The 2003 refinancing had the effect of extending the maturity of the Companys debt coming due in 2003 through 2007.In November 2004,the Company

297、 amended the credit agreement.The primary effects of the amendment were to lower interest cost,and reduce limitations relative to additional indebtedness and restricted payments including repurchase of the Companys common stock and dividends.The Companys new Bank Agreement includes a Term Loan,consi

298、sting of a Tranche A and B,and a$125.0 million revolving credit facility.At December 31,2004,the Tranche A had a balance of$13.0 million and matures in 2008,and the Tranche B had a balance of$400.0 million and matures over the period 2005 to 2010 with annual payments of$4 million and a balloon payme

299、nt due at maturity.The revolving credit facility expires in 2008;availability under the facility at December 31,2004 was$116.2 million,after a reduction of$8.8 million for outstanding letters of credit.The Companys interest rate on loans under the new Bank Agreement is LIBOR plus 150 basis points.Th

300、e Bank Agreement is secured by a first priority pledge of 100%of the capital stock of the Companys direct domestic subsidiaries and 65%of the capital stock of direct material foreign subsidiaries,as defined in the Bank Agreement.In addition,if the Companys credit rating as assigned by Standard&Poors

301、 or Moodys were to decline to BB-or Ba3,respectively,the Company would be required to perfect liens in favor of participants in the Bank Agreement in substantially all of the Companys U.S.-based assets.At December 31,2004,the Companys credit rating from Standard and Poors was BB+and from Moodys was

302、Ba1.The Bank Agreement requires that the Company satisfy certain financial covenants including an interest coverage ratio of higher than 3x(EBITDA divided by interest expense)and a leverage test(Debt divided by EBITDA)lower than 3.75x and 3.50 x based on total debt and senior debt,respectively.At De

303、cember 31,2004,such ratios as defined in the Bank Agreement,were 12.91x,1.65x and 1.65x,respectively.The Bank Agreement also includes limitations with respect to,among other things,indebtedness in excess of$50 million for capital leases,$450 million for general indebtedness and$200 million for acqui

304、sition indebtedness,of which approximately$6.9 million,$0 and$4.2,respectively,were outstanding at December 31,2004,and restricted payments,including dividends on the Companys common stock,in excess of 50%of consolidated cumulative net income plus$50 million,or approximately$170.6 million at Decembe

305、r 31,2004.In conjunction with entering into the new Bank Agreement the Company entered into interest rate swap agreements that fixed the Companys LIBOR interest rate on$250.0 million and$50.0 million of floating rate bank debt at 2.44%and 3.01%,expiring in May 2006 and June 2006,respectively.The Com

306、panys primary ongoing cash requirements will be for operating and capital expenditures,product development activities,repurchase of its common stock,dividends and debt service.The Companys debt service requirements consist primarily of principal and interest on bank borrowings.The Companys primary s

307、ources of liquidity are internally generated cash flow,the Companys revolving credit facility and the sale of receivables under the Companys accounts receivable securitization agreement.The Company expects that ongoing requirements for operating and capital expenditures,product development activitie

308、s,repurchase of its common stock,dividends and debt service requirements will be funded from these sources;however,the Companys sources of liquidity could be adversely affected by,among other things,a decrease in demand for the Companys products,a deterioration in certain of the Companys financial r

309、atios or a deterioration in the quality of the Companys accounts receivable.The Company expects that capital expenditures in 2005 will be approximately$50 million.The Companys required debt and capital lease amortization in 2005 is$16.9 million;the Companys required cash interest payments for 2005,a

310、t current interest rates,are estimated at approximately$19 million.The Company may also use cash to fund part or all of the cost of future acquisitions.Since its initial public offering in 1991,the Company has not paid any dividends.However,on January 19,2005,the Company announced that it will comme

311、nce payment of a quarterly dividend on its common stock of$.03 per share.The Company expects the first dividend payment to be made on or about April 6,2005 to shareholders of record as of March 15,2005.The Company intends to retain the remainder of its earnings to provide funds for the operation and

312、 expansion of the Companys business,repurchase of its common stock and to repay outstanding indebtedness.Management believes that the Companys working capital position,ability to generate strong cash flow from operations and access to credit markets will allow it to meet its obligations for the next

313、 twelve months and the foreseeable future.Off-Balance Sheet Arrangement-Accounts Receivable Securitization A subsidiary of the Company has an agreement with a financial institution whereby the subsidiary can sell an undivided interest of up to$85.0 million in a designated pool of qualified accounts

314、A M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T 32 receivable.The Company services,administers and collects the receivables on behalf of the purchaser.The agreement includes certain covenants and provides for various events of termination.The agreement expires in May 2007.At De

315、cember 31,2004,approximately$80.0 million($73.8 million at December 31,2003)of receivables were sold under the agreement and are therefore not reflected in the accounts receivable balance in the accompanying Consolidated Balance Sheets.Environmental Matters Subsequent to the acquisition of Amphenol

316、from Allied Signal Corporation in 1987(Allied Signal merged with Honeywell International Inc.(“Honeywell”)in December 1999,Amphenol and Honeywell have been named jointly and severally liable as potentially responsible parties in relation to several environmental cleanup sites.Amphenol and Honeywell

317、have jointly consented to perform certain investigations and remedial and monitoring activities at two sites and they have been jointly ordered to perform work at another site.The costs incurred relating to these three sites are currently reimbursed by Honeywell based on an agreement entered into in

318、 connection with the acquisition in 1987.For sites covered by this agreement,to the extent that conditions or circumstances occurred or existed at the time of or prior to the acquisition,Honeywell is obligated to reimburse Amphenol 100%of such costs.Honeywell representatives work closely with the Co

319、mpany in addressing the most significant environmental liabilities covered by the Agreement.Management does not believe that the costs associated with resolution of these or any other environmental matters will have a material adverse effect on the Companys financial condition or results of operatio

320、ns.The environmental investigation,remedial and monitoring activities identified by the Company,including those referred to above,are covered under the Honeywell Agreement.Inflation and Costs The cost of the Companys products is influenced by the cost of a wide variety of raw materials,including pre

321、cious met-als such as gold and silver used in plat-ing;aluminum,copper,brass and steel used for contacts,shells and cable;and plastic materials used in molding connec-tor bodies,inserts and cable.In general,increases in the cost of raw materials,la-bor and services have been offset by price increase

322、s,productivity improve-ments and cost saving programs.Risk Management The Company has to a significant degree mitigated its exposure to currency risk in its business operations by manu-facturing and procuring its products in the same country or region in which the products are sold so that costs ref

323、lect lo-cal economic conditions.In other cases involving U.S.export sales,raw materials are a significant component of product costs for the majority of such sales and raw material costs are generally dollar based on a worldwide scale,such as basic metals and petroleum-derived materials.Stock Split

324、On January 21,2004,the Company announced a 2-for-1 stock split that was effective for shareholders of record as of March 17,2004.The additional shares were distributed on March 29,2004.The share information included herein reflects the effect of such stock split.Recent Accounting Changes In December

325、 2004,the Financial Accounting Standards Board issued Statement of Financial Accounting Standard,No.123R(“FAS 123R”)“Share-based payment”.FAS 123R applies to all transactions involving the issuance,by a company,of its own equity(stock,stock options,or other equity instruments)in exchange for goods o

326、r services,including employee services.FAS 123R requires entities to recognize the cost of employee services received in exchange for the stock-based compensation using the fair value of those stocks on the grant-date(with limited exceptions).This statement is effective for the first interim reporti

327、ng period beginning after June 15,2005.The Company is currently assessing the impact that this statement will have on the Companys Consolidated Financial Statements,but does not anticipate the impact to be more than$2 million per quarter based on the options outstanding as of December 31,2004.In Dec

328、ember 2003,the Medicare Prescription Drug Improvement and Modernization Act of 2003(the“Act”)was enacted.The Act introduced a new prescription drug benefit under Medicare(“Medicare Part D”),as well as a federal subsidy to sponsors of retiree health care benefit plans that provide a prescription drug

329、 benefit that is at a minimum actuarially equivalent to Medicare Part D.FASB Staff Position(“FSP”),106-2,“Accounting and Disclosure Requirements Related to the Medicare Prescription Drug Improvement and Modernization Act of 2003,”was provided by the FASB to offer guidance on accounting and disclosur

330、e requirements for the Act.The Company does not believe the new Act will have a material impact on the Companys Consolidated Financial Statements.In November 2004,the Financial Accounting Standards Board issued Statement of Financial Accounting Standard,No.151(“FAS 151”),“Inventory Costs an amendmen

331、t of ARB No.43,Chapter 4,”in an effort to conform U.S.accounting standards for inventories to International Accounting Standards.FAS 151 requires idle facility expenses,freight,handling costs and wasted material(spoilage)costs to be recognized as current period charges.It also requires that the allo

332、cation of fixed production overheads to the costs of conversion be based on the normal capacity of the relevant production facilities.FAS 151 will be effective for inventory costs incurred during fiscal years beginning after June 15,2005.The Company is currently evaluating the A M P H E N O L C O R

333、P O R A T I O N 2 0 0 4 A N N U A L R E P O R T 33impact of this standard but does not believe that it will have a material impact on the Companys Consolidated Financial Statements.Pensions The Company and its domestic subsidiaries have a defined benefit pension plan(Plan)covering substantially all U.S.employees.Plan benefits are generally based on years of service and compensation and are genera