AMPHENOL CORP /DE/ - Quarter Report: 2015 June (Form 10-Q)

Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

x      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2015

 

OR

 

o         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission file number 1-10879

 

 

AMPHENOL CORPORATION

 

 

358 Hall Avenue

Wallingford, Connecticut 06492

203-265-8900

 

 

Indicate by check mark whether the registrant: (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.  Yes x  No o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes x  No o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o  No x

 

As of July 31, 2015, the total number of shares outstanding of Class A Common Stock was 309,147,148.

 

 

Table of Contents

 

Amphenol Corporation

Index to Quarterly Report

on Form 10-Q

 

			Page
Part I		Financial Information
	Item 1.	Financial Statements (unaudited):
		Condensed Consolidated Balance Sheets as of June 30, 2015 and December 31, 2014	2
		Condensed Consolidated Statements of Income for the Three and Six Months Ended June 30, 2015 and 2014	3
		Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2015 and 2014	4
		Condensed Consolidated Statements of Cash Flow for the Six Months Ended June 30, 2015 and 2014	5
		Notes to Condensed Consolidated Financial Statements	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	19
	Item 4.	Controls and Procedures	19
Part II		Other Information
	Item 1.	Legal Proceedings	20
	Item 1A.	Risk Factors	20
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20
	Item 3.	Defaults Upon Senior Securities	20
	Item 4.	Mine Safety Disclosures	20
	Item 5.	Other Information	20
	Item 6.	Exhibits	21
Signature			23

 

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PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

AMPHENOL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(dollars in millions)

 

		June 30, 2015			December 31, 2014
Assets
Current Assets:
Cash and cash equivalents		$	1,242.8		$	968.9
Short-term investments		154.4			360.7
Total cash, cash equivalents and short-term investments		1,397.2			1,329.6
Accounts receivable, less allowance for doubtful accounts of $21.1 and $20.2, respectively		1,089.5			1,123.7
Inventories		893.0			865.6
Other current assets		213.1			185.2
Total current assets		3,592.8			3,504.1
Land and depreciable assets, less accumulated depreciation of $885.0 and $849.6, respectively		609.9			590.7
Goodwill		2,709.0			2,616.7
Intangibles and other long-term assets		317.0			315.5
		$	7,228.7		$	7,027.0
Liabilities & Equity
Current Liabilities:
Accounts payable		$	559.5		$	618.4
Accrued salaries, wages and employee benefits		106.0			109.9
Accrued income taxes		79.0			90.8
Accrued dividends		38.6			38.7
Other accrued expenses		201.2			186.2
Current portion of long-term debt		0.4			1.6
Total current liabilities		984.7			1,045.6
Long-term debt, less current portion		2,759.2			2,672.3
Accrued pension benefit obligations and other long-term liabilities		382.0			371.2
Equity:
Common stock		0.3			0.3
Additional paid-in capital		729.6			659.4
Retained earnings		2,591.3			2,453.5
Accumulated other comprehensive loss		(256.1		)	(205.8		)
Total shareholders’ equity attributable to Amphenol Corporation		3,065.1			2,907.4
Noncontrolling interests		37.7			30.5
Total equity		3,102.8			2,937.9
		$	7,228.7		$	7,027.0

 

See accompanying notes to condensed consolidated financial statements.

 

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AMPHENOL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(dollars in millions, except per share data)

 

		Three Months Ended June 30,						Six Months Ended June 30,
		2015			2014			2015			2014
Net sales		$	1,351.5		$	1,314.2		$	2,678.6		$	2,560.2
Cost of sales		919.0			897.4			1,821.6			1,754.6
Gross profit		432.5			416.8			857.0			805.6
Acquisition-related expenses		5.7			—			5.7			2.0
Selling, general and administrative expense		166.1			161.0			330.4			315.7
Operating income		260.7			255.8			520.9			487.9
Interest expense		(17.1		)	(20.1		)	(34.1		)	(39.2		)
Other income, net		4.2			4.3			8.3			8.4
Income before income taxes		247.8			240.0			495.1			457.1
Provision for income taxes		(67.2		)	(63.6		)	(132.7		)	(120.9		)
Net income		180.6			176.4			362.4			336.2
Less: Net income attributable to noncontrolling interests		(1.6		)	(1.5		)	(3.6		)	(2.8		)
Net income attributable to Amphenol Corporation		$	179.0		$	174.9		$	358.8		$	333.4
Net income per common share-Basic		$	0.58		$	0.56		$	1.16		$	1.06
Weighted average common shares outstanding- Basic		308,899,937			314,229,370			309,470,068			314,640,882
Net income per common share-Diluted		$	0.56		$	0.54		$	1.13		$	1.03
Weighted average common shares outstanding -Diluted		316,878,100			321,582,270			317,428,813			321,966,158
Dividends declared per common share		$	0.125		$	0.10		$	0.25		$	0.20

 

See accompanying notes to condensed consolidated financial statements.

 

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AMPHENOL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(dollars in millions)

 

		Three Months Ended June 30,						Six Months Ended June 30,
		2015			2014			2015			2014
Net income		$	180.6		$	176.4		$	362.4		$	336.2
Total other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		11.3			17.1			(56.6		)	1.8
Unrealized (loss) gain on cash flow hedges		(0.5		)	0.4			0.1			0.7
Defined benefit plan adjustment		4.6			—			6.2			—
Total other comprehensive income (loss), net of tax		15.4			17.5			(50.3		)	2.5
Total comprehensive income		196.0			193.9			312.1			338.7
Less: Comprehensive income attributable to noncontrolling interests		(1.7		)	(1.5		)	(3.6		)	(2.4		)
Comprehensive income attributable to Amphenol Corporation		$	194.3		$	192.4		$	308.5		$	336.3

 

See accompanying notes to condensed consolidated financial statements.

 

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AMPHENOL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(Unaudited)

(dollars in millions)

 

		Six Months Ended June 30,
		2015			2014
Cash from operating activities:
Net income		$	362.4		$	336.2
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		83.5			77.6
Stock-based compensation expense		20.2			19.2
Excess tax benefits from stock-based compensation payment arrangements		(9.1		)	(18.1		)
Net change in components of working capital		(44.3		)	(41.2		)
Net change in other long-term assets and liabilities		10.1			9.6
Net cash provided by operating activities		422.8			383.3
Cash from investing activities:
Purchases of land and depreciable assets		(85.2		)	(105.9		)
Proceeds from disposals of land and depreciable assets		2.3			1.4
Purchases of short-term investments		(113.6		)	(356.0		)
Sales and maturities of short-term investments		319.8			293.4
Acquisitions, net of cash acquired		(171.8		)	(19.5		)
Net cash used in investing activities		(48.5		)	(186.6		)
Cash from financing activities:
Proceeds from issuance of senior notes		—			748.8
Long-term borrowings under credit facilities		125.0			398.1
Repayments of long-term debt		(211.0		)	(936.6		)
Borrowings under commercial paper program, net		172.5			—
Payments of costs related to debt financing		—			(5.7		)
Proceeds from exercise of stock options		40.2			58.3
Excess tax benefits from stock-based compensation payment arrangements		9.1			18.1
Distributions to shareholders of noncontrolling interests		(4.4		)	(1.7		)
Purchase and retirement of treasury stock		(143.6		)	(250.2		)
Dividend payments		(77.5		)	(31.4		)
Net cash used in financing activities		(89.7		)	(2.3		)
Effect of exchange rate changes on cash and cash equivalents		(10.7		)	(1.1		)
Net change in cash and cash equivalents		273.9			193.3
Cash and cash equivalents balance, beginning of period		968.9			886.8
Cash and cash equivalents balance, end of period		$	1,242.8		$	1,080.1
Cash paid for:
Interest		$	32.0		$	29.7
Income taxes		128.7			119.3

 

See accompanying notes to condensed consolidated financial statements.

 

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AMPHENOL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(dollars in millions, except per share data)

 

Note 1—Basis of Presentation and Principles of Consolidation

 

The condensed consolidated balance sheets as of June 30, 2015 and December 31, 2014, the related condensed consolidated statements of income for the three and six months ended June 30, 2015 and 2014, the condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2015 and 2014 and the condensed consolidated statements of cash flow for the six months ended June 30, 2015 and 2014 include the accounts of Amphenol Corporation and its subsidiaries (the “Company”).  All material intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated financial statements included herein are unaudited.  In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation in conformity with accounting principles generally accepted in the United States of America have been included.  The results of operations for the three and six months ended June 30, 2015 are not necessarily indicative of the results to be expected for the full year.  These condensed consolidated financial statements and the related notes should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (the “2014 Annual Report”).

 

The Company effected a two-for-one stock split in the form of a stock dividend, payable to stockholders of record as of October 2, 2014, which was paid on October 9, 2014.  The share and per share information included herein has been retroactively restated to reflect the effect of the stock split for all periods presented.

 

During the second quarter of 2015, the Company changed the reporting for borrowings and repayments related to the Company’s commercial paper program from a gross basis to a net basis in the accompanying Condensed Consolidated Statements of Cash Flow, to the extent such borrowings under this program have maturities that are three months or less.  There were no borrowings or repayments under this program during the six month period ended June 30, 2014.

 

Note 2—New Accounting Pronouncements

 

In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which stipulates that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for such goods or services.  To achieve this core principle, an entity should apply the following steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract(s); (3) determine the transaction price(s); (4) allocate the transaction price(s) to the performance obligations in the contract(s); and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The guidance also requires advanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers.  ASU 2014-09 was originally effective for annual reporting periods beginning after December 15, 2016, with early adoption not permitted.  In July 2015, the Board agreed to extend the effective date one year, while permitting adoption as of the original proposed effective date.  The provisions of ASU 2014-09 may be applied retrospectively to each period presented or with the cumulative effect recognized as of the date of initial application.  The Company is currently evaluating ASU 2014-09 and does not anticipate a material impact on its consolidated financial statements.

 

In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”), amending FASB Accounting Standards Subtopic 205-40 to provide guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Specifically, the amendments (1) provide a definition of the term “substantial doubt,” (2) require an evaluation every reporting period, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that financial statements are issued. ASU 2014-15 is effective for fiscal years ending after December 15, 2016, and for annual periods and interim periods thereafter. The Company is currently evaluating ASU 2014-15 and does not anticipate a material impact on its consolidated financial statements.

 

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In April 2015, the FASB issued Accounting Standards Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”), which specifies that debt issuance costs related to a note shall be reported in the balance sheet as a direct deduction from the face amount of that note and that amortization of debt issuance costs shall be reported as interest expense.  ASU 2015-03 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 and should be applied retrospectively.  The Company has evaluated ASU 2015-03 and believes it will not have a material impact on its consolidated financial statements.

 

In May 2015, the FASB issued Accounting Standards Update No. 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) (Issue 14-B) (“ASU 2015-07”), which modifies the practical expedient that permits an entity to measure the fair value of certain investments using the net asset value per share of the investment.  ASU 2015-07 removes the requirement that investments measured using the practical expedient to measure fair value at net asset value be included in the fair value hierarchy.  Rather, an entity shall provide a reconciliation between the total fair value of investments included in the fair value hierarchy and such amounts presented on the balance sheet, including disclosures for such investments of which the net asset value practical expedient has been elected and used to determine fair value.  ASU 2015-07 is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years and should be applied retrospectively to all periods presented. The Company is currently evaluating ASU 2015-07 and does not anticipate a material impact on its consolidated financial statements.

 

In July 2015, the FASB issued Accounting Standards Update No. 2015-11, Simplifying the Measurement of Inventory (“ASU 2015-11”), which requires inventory to be measured at the lower of cost and net realizable value and thus, simplifies the current guidance of measuring inventory at the lower of cost or market.  ASU 2015-11 is effective prospectively for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016.  The Company is currently evaluating ASU 2015-11 and does not anticipate a material impact on its consolidated financial statements.

 

Note 3—Inventories

 

Inventories consist of:

 

		June 30, 2015			December 31, 2014
Raw materials and supplies		$	315.8		$	299.4
Work in process		297.2			282.8
Finished goods		280.0			283.4
		$	893.0		$	865.6

 

Note 4—Reportable Business Segments

 

The Company has two reportable business segments: (i) Interconnect Products and Assemblies and (ii) Cable Products and Solutions. The Company aggregates its operating segments into reportable segments based upon similar economic characteristics and business groupings of products, services and customers. The Interconnect Product and Assemblies segment primarily designs, manufactures and markets a broad range of connector and connector systems, value-added products and other products, including antennas and sensors, used in a broad range of applications in a diverse set of end markets.  The Cable Products and Solutions segment primarily designs, manufactures and markets cable, value-added products and components for use primarily in the broadband communications and information technology markets as well as certain applications in other markets.  The accounting policies of the segments are the same as those for the Company as a whole and are described in Note 1 of the notes to the consolidated financial statements in the Company’s 2014 Annual Report.  The Company evaluates the performance of business units on, among other things, profit or loss from operations before interest, headquarters’ expense allocations, stock-based compensation expense, income taxes, amortization related to certain intangible assets and nonrecurring gains and losses.

 

The segment results for the three months ended June 30, 2015 and 2014 are as follows:

 

		Interconnect Products and Assemblies						Cable Products and Solutions						Total
		Three months ended June 30,
		2015			2014			2015			2014			2015			2014
Net sales:
-External		$	1,268.7		$	1,222.3		$	82.8		$	91.9		$	1,351.5		$	1,314.2
-Intersegment		1.9			1.6			5.0			6.4			6.9			8.0
Segment operating income		277.9			264.3			9.7			11.7			287.6			276.0

 

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The segment results for the six months ended June 30, 2015 and 2014 are as follows:

 

		Interconnect Products and Assemblies						Cable Products and Solutions						Total
		Six months ended June 30,
		2015			2014			2015			2014			2015			2014
Net sales:
-External		$	2,511.3		$	2,381.4		$	167.3		$	178.8		$	2,678.6		$	2,560.2
-Intersegment		4.1			2.7			10.1			11.7			14.2			14.4
Segment operating income		548.8			507.0			20.0			22.3			568.8			529.3

 

A reconciliation of segment operating income to consolidated income before income taxes for the three and six months ended June 30, 2015 and 2014 is summarized as follows:

 

		Three months ended June 30,						Six months ended June 30,
		2015			2014			2015			2014
Segment operating income		$	287.6		$	276.0		$	568.8		$	529.3
Interest expense		(17.1		)	(20.1		)	(34.1		)	(39.2		)
Interest income		4.8			4.7			9.3			9.2
Stock-based compensation expense		(10.1		)	(10.0		)	(20.2		)	(19.2		)
Acquisition-related expenses		(5.7		)	—			(5.7		)	(2.0		)
Other costs, net		(11.7		)	(10.6		)	(23.0		)	(21.0		)
Income before income taxes		$	247.8		$	240.0		$	495.1		$	457.1

 

Note 5—Changes in Equity and Noncontrolling Interests

 

Net income attributable to noncontrolling interests is classified below net income.  Earnings per share is determined after the impact of the noncontrolling interests’ share in net income of the Company.  In addition, the equity attributable to noncontrolling interests is presented as a separate caption within equity.

 

A rollforward of consolidated changes in equity for the six months ended June 30, 2015 is as follows:

 

		Amphenol Corporation Shareholders
		Common Stock											Accum. Other
		Shares (in millions)		Amount			Additional Paid- In Capital			Retained Earnings			Comprehensive Loss			Treasury Stock			Noncontrolling Interests			Total Equity
Balance as of December 31, 2014		309.8		$	0.3		$	659.4		$	2,453.5		$	(205.8	)	$	—		$	30.5		$	2,937.9
Net income										358.8									3.6			362.4
Other comprehensive income													(50.3		)							(50.3		)
Distributions to shareholders of noncontrolling interests																			(4.4		)	(4.4		)
Acquisition resulting in noncontrolling interest																			8.0			8.0
Purchase of treasury stock																(143.6		)				(143.6		)
Retirement of treasury stock		(2.5	)							(143.6		)				143.6						—
Stock options exercised, including tax benefit		1.7					50.0															50.0
Dividends declared										(77.4		)										(77.4		)
Stock-based compensation expense							20.2															20.2
Balance as of June 30, 2015		309.0		$	0.3		$	729.6		$	2,591.3		$	(256.1	)	$	—		$	37.7		$	3,102.8

 

A rollforward of consolidated changes in equity for the six months ended June 30, 2014 is as follows:

 

		Amphenol Corporation Shareholders
		Common Stock											Accum. Other
		Shares (in millions)		Amount			Additional Paid- In Capital			Retained Earnings			Comprehensive Loss			Treasury Stock			Noncontrolling Interests			Total Equity
Balance as of December 31, 2013		316.4		$	0.3		$	489.8		$	2,424.4		$	(55.0	)	$	—		$	20.6		$	2,880.1
Net income										333.4									2.8			336.2
Other comprehensive income													2.9						(0.4		)	2.5
Distributions to shareholders of noncontrolling interests																			(1.7		)	(1.7		)
Purchase of treasury stock																(250.2		)				(250.2		)
Retirement of treasury stock		(5.5	)							(250.2		)				250.2						—
Stock options exercised, including tax benefit		2.9					75.3															75.3
Dividends declared										(62.8		)										(62.8		)
Stock-based compensation expense							19.2															19.2
Balance as of June 30, 2014		313.8		$	0.3		$	584.3		$	2,444.8		$	(52.1	)	$	—		$	21.3		$	2,998.6

 

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Note 6—Earnings Per Share

 

Basic earnings per share (“EPS”) is computed by dividing net income attributable to Amphenol Corporation by the weighted-average number of common shares outstanding.  Diluted EPS is computed by dividing net income attributable to Amphenol Corporation by the weighted-average number of common shares and dilutive common shares outstanding, which relates to stock options.  A reconciliation of the basic weighted average common shares outstanding to diluted weighted average common shares outstanding for the three and six months ended June 30, 2015 and 2014 is as follows:

 

		Three months ended June 30,						Six months ended June 30,
		2015			2014			2015			2014
Net income attributable to Amphenol Corporation shareholders		$	179.0		$	174.9		$	358.8		$	333.4
Basic weighted average common shares outstanding		308,899,937			314,229,370			309,470,068			314,640,882
Effect of dilutive stock options		7,978,163			7,352,900			7,958,745			7,325,276
Diluted weighted average common shares outstanding		316,878,100			321,582,270			317,428,813			321,966,158
Earnings per share attributable to Amphenol Corporation shareholders:
Basic		$	0.58		$	0.56		$	1.16		$	1.06
Diluted		$	0.56		$	0.54		$	1.13		$	1.03

 

Excluded from the computations above were anti-dilutive stock options of 1,671,550 and 2,951,100 for the three months ended June 30, 2015 and 2014, respectively, and 2,738,857 and 4,056,342 for the six months ended June 30, 2015 and 2014, respectively.

 

Note 7—Commitments and Contingencies

 

On July 17, 2015, the Company entered into a sale and purchase agreement, agreeing to acquire all of the issued share capital of FCI Asia Pte Ltd (“FCI”) for an aggregate purchase price of $1,275 in cash, subject to a closing adjustment.  The acquisition is expected to be completed by the end of 2015, subject to certain regulatory consents and approvals.  The Company expects to finance the acquisition through a combination of cash and debt.  FCI is headquartered in Singapore and is a global leader in interconnect solutions for the telecom, datacom, wireless communications and industrial markets.

 

The Company has been named as defendant 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, in the opinion of management, such matters are not expected to have a material effect on the Company’s financial condition, results of operations or cash flows.

 

Certain operations of the Company are subject to environmental laws and regulations which govern the discharge of pollutants into the air and water, as well as the handling and disposal of solid and hazardous wastes.  The Company believes that its operations are currently in substantial compliance with applicable environmental laws and regulations and that the costs of continuing compliance will not have a material effect on the Company’s financial condition, results of operations or cash flows.

 

Note 8—Stock-Based Compensation

 

Stock Options

 

In 2009, the Company adopted the 2009 Stock Purchase and Option Plan for Key Employees of Amphenol and its Subsidiaries (the “2009 Employee Option Plan”).  The Company also continues to maintain the 2000 Stock Purchase and Option Plan for Key Employees of Amphenol and Subsidiaries (the “2000 Employee Option Plan”).  No additional stock options can be granted under the 2000 Employee Option Plan.  The 2009 Employee Option Plan authorizes the granting of additional stock options by a committee of the Company’s Board of Directors and was amended in May 2014 to increase the number of shares of the Company’s Class A Common Stock (“Common Stock”) reserved for issuance thereunder from 32,000,000 shares to 58,000,000 shares.  As of June 30, 2015, there were 18,791,380 shares of Common Stock available for the granting of additional stock options under the 2009 Employee Option Plan.  Options granted under the 2000 Employee Option Plan and the 2009 Employee Option Plan generally vest ratably over a period of five years and are generally exercisable over a period of ten years from the date of grant.

 

In 2004, the Company adopted the 2004 Stock Option Plan for Directors of Amphenol Corporation (the “2004 Directors Option Plan”).  The 2004 Directors Option Plan is administered by the Company’s Board of Directors.  As of June 30, 2015, there were 140,000 shares of Common Stock available for the granting of additional stock options under the 2004 Directors Option Plan, although no additional stock options are expected to be granted under this plan.  Options granted under the 2004 Directors Option Plan generally vest ratably over a period of three years and are generally exercisable over a period of ten years from the date of grant.  Options were last granted under the 2004 Directors Option Plan in May 2011.

 

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Table of Contents

 

Stock option activity for the three and six months ended June 30, 2015 was as follows:

 

		Options		Weighted Average Exercise Price			Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Options outstanding at January 1, 2015		27,787,920		$	31.60		7.09		$	617.2
Options granted		92,000
Options exercised		(742,280	)
Options forfeited		(92,680	)
Options outstanding at March 31, 2015		27,044,960		31.95			6.91		729.7
Options granted		6,286,200
Options exercised		(1,006,630	)
Options forfeited		(98,320	)
Options outstanding at June 30, 2015		32,226,210		$	37.20		7.34		$	669.4
Vested and non-vested options expected to vest at June 30, 2015		29,356,675		$	36.63		7.25		$	626.5
Exercisable options at June 30, 2015		14,723,730		$	26.58		5.76		$	462.2

 

A summary of the status of the Company’s non-vested options as of June 30, 2015 and changes during the three and six months then ended is as follows:

 

		Options		Weighted Average Fair Value at Grant Date
Non-vested options at January 1, 2015		16,440,560		$	7.98
Options granted		92,000		10.30
Options vested		(27,000	)	9.51
Options forfeited		(92,680	)	7.94
Non-vested options at March 31, 2015		16,412,880		7.99
Options granted		6,286,200		8.49
Options vested		(5,098,280	)	7.69
Options forfeited		(98,320	)	8.09
Non-vested options at June 30, 2015		17,502,480		$	8.24

 

During the three and six months ended June 30, 2015 and 2014, the following activity occurred under the Company’s option plans:

 

		Three months ended June 30,						Six months ended June 30,
		2015			2014			2015			2014
Total intrinsic value of stock options exercised		$	32.0		$	62.9		$	57.9		$	78.5
Total fair value of stock options vested		39.1			36.9			39.4			37.1

 

As of June 30, 2015, the total compensation cost related to non-vested options not yet recognized is approximately $123.8 with a weighted average expected amortization period of 3.74 years.

 

Restricted Shares

 

In 2012, the Company adopted the 2012 Restricted Stock Plan for Directors of Amphenol Corporation (the “2012 Directors Restricted Stock Plan”). The 2012 Directors Restricted Stock Plan is administered by the Company’s Board of Directors.  As of June 30, 2015, the number of restricted shares available for grant under the 2012 Directors Restricted Stock Plan was 153,974.  Restricted shares granted under the 2012 Directors Restricted Stock Plan generally vest on the first anniversary of the grant date.  Grants under the 2012 Directors Restricted Stock Plan entitle the holder to receive shares of Common Stock without payment.

 

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