UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Commission file number 1-10879

AMPHENOL CORPORATION

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 ý No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes ý No o

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

As of October 31, 2005, the total number of shares outstanding of Class A Common Stock was 88,877,855.

AMPHENOL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share data)

Note 1-Principles of Consolidation and Interim Financial Statements

The condensed consolidated balance sheets as of September 30, 2005 and December 31, 2004, the related condensed consolidated statements of income for the three and nine months ended September 30, 2005 and 2004 and the condensed consolidated statements of cash flow for the nine months ended September 30, 2005 and 2004 include the accounts of Amphenol Corporation and its subsidiaries (the “Company”). The interim financial statements included herein are unaudited. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of such interim financial statements have been included. The results of operations for the three and nine months ended September 30, 2005 are not necessarily indicative of the results to be expected for the full year. These financial statements and the related notes should be read in conjunction with the financial statements and notes included in the Company’s 2004 Annual Report on Form 10-K.

Note 2-Reclassifications

As discussed in the Company’s 2004 Annual Report on Form 10-K, certain reclassifications have been made to the prior year condensed consolidated financial statements to conform to the current year presentation.

Note 3-Inventories

Inventories consist of:

Note 4-Reportable Business Segments

The Company has two reportable business segments: (i) interconnect products and assemblies and (ii) cable products. The interconnect products and assemblies segment produces connectors and connector assemblies primarily for the communications, aerospace, industrial and automotive markets. The cable products segment produces coaxial and flat ribbon cable and related products primarily for communications markets, including cable television. The Company evaluates the performance of business units on, among other things, profit or loss from operations before interest expense, headquarters’ expense allocations, income taxes and nonrecurring gains and losses. The Company’s reportable segments are an aggregation of business units that have similar production processes and products.

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Compensation,” the Company’s net income and earnings per share for the three and nine months ended September 30, 2005 and 2004 would have been reduced to the pro forma amounts indicated below:

On January 21, 2004, the Company announced a two-for-one stock split that was effective for shareholders of record as of March 17, 2004.  The additional shares were distributed on March 29, 2004.  The information included herein reflects the effect of such stock split.

On March 4, 2004, the Company announced that its Board of 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 extend the expiration date until September 30, 2006.  At September 30, 2005, approximately 3.3 million shares of common stock remained available for repurchase under the Program.

On January 19, 2005, the Company announced that it would commence payment of a quarterly dividend on its common stock of $.03 per share. The Company paid its third quarterly dividend in the amount of $2,714 or $.03 per share on October 5, 2005 to shareholders of record as of September 14, 2005. Cumulative dividends paid during 2005, including the October 5, 2005 payment, were $8,109.

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related to the previous senior secured credit facility and the Company entered into new interest rate swap agreements that fixed the Company’s LIBOR interest rate on $250,000 of floating rate bank debt at 4.24% through July 2008. In addition, the Company incurred one-time expenses for the early extinguishment of debt totaling $2,398 or $.02 per share after tax.  Availability under the revolving credit facility at September 30, 2005 was $337,238, after a reduction of $401,300 outstanding under the revolving credit facility and $11,462 for outstanding letters of credit.

Note 11 – Income Taxes

On October 22, 2004, the American Jobs Creation Act of 2004 (the “Act”) was signed into law. Under Internal Revenue Code Section 965, the Act creates a temporary incentive for U.S. corporations to repatriate income earned abroad by providing an 85% dividends received deduction for certain dividends. The Company has decided to apply the provisions of the Act to a portion of its qualifying 2005 repatriations of current and prior year earnings. To date, the range of possible amounts of earnings that the Company is considering for repatriation under the provision is between $48,254 and $57,954.  The related potential range of income tax is between $5,288 and $5,646.

The Act also provides a deduction for income from qualified domestic production activities, which will be phased in from 2005 through 2010 and a two-year phase-out of the existing extra-territorial income exclusion (“ETI “) for foreign sales that was viewed to be inconsistent with trade protocols by the European Union.  FASB Staff Position 109-1 “Application of FASB Statement No. 109 to the Tax Deduction on Qualified Production Activities Provided by the American Jobs Creation Act of 2004” was provided by the FASB to offer guidance on accounting and disclosure requirements for the Act.  The Company does not believe that these provisions will have a material impact on its effective tax rate.

In the third quarter of 2005, the Company adjusted its effective tax rate from 34% to 33% to reflect the one-time net benefit of lower United States taxes on the repatriation of current and prior year foreign earnings. This lowered tax expense in the third quarter by approximately $2,247 or $.02 per share. The provision for income taxes for the third quarter and first nine months of 2005 and 2004 periods were at effective rates of 31% and 33% in 2005 and 34% for both periods in 2004, respectively. Excluding the one-time effect on the tax rate for the repatriation of earnings, the Company’s effective tax rate would have remained at 34%.

Note 12 – Subsequent Event

On October 10, 2005, the Company announced that it has reached an agreement to acquire the Connection Systems division of Teradyne, Inc. (NYSE-TER) for approximately $390,000 in cash (subject to a post closing working capital adjustment).  The sale is subject to regulatory approval and customary closing conditions and is expected to close in the fourth quarter of 2005.  The Company plans to finance the acquisition through an increase in its revolving credit facility. The Company will account for the acquisition as a purchase using the accounting standards established in Statement of Financial Accounting Standards No. (“FAS”) 141, “Business Combinations”, and accordingly, the excess purchase price over the fair market value of the underlying net assets acquired will be allocated to goodwill after considering any post-closing adjustments that may occur.

Teradyne Connection Systems (“TCS”), headquartered in Nashua, New Hampshire, is a leading supplier of high-speed, high-density, printed circuit board interconnects products.  TCS has annual sales of approximately $380,000 and sells its products primarily to the data communications, storage and server markets, wireless infrastructure markets and industrial markets. TCS has facilities in North America, Europe and Asia and employs approximately 2,250 people worldwide.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(dollars in millions, unless otherwise noted, except per share data)

Item 2.    Results of Operations

Quarter and nine months ended September 30, 2005 compared to the quarter and nine months ended September 30, 2004

Net sales increased approximately 16% and 15% to $447.0 and $1,300.0 in the third quarter and first nine months of 2005, respectively, compared to sales of $384.1 and $1,126.5, respectively, for the same periods in 2004. Excluding the impact of acquisitions completed subsequent to the third quarter of 2004, sales increased approximately 7% in both the third quarter and nine months of 2005 over the comparable periods in 2004.  Sales of interconnect products and assemblies increased 18% in U.S. dollars and 17% in local currencies in the third quarter of 2005 compared to 2004 ($391.9 in 2005 versus $333.5 in 2004) and 16% in U.S. dollars and 15% in local currencies in the first nine months of 2005 compared to the same period in 2004 ($1,142.2 in 2005 versus $980.5 in 2004).  Sales increased in the Company’s major end markets including the military/aerospace, mobile communications, industrial, automotive, and computer/data communications markets. Sales increases occurred in all major geographic regions and resulted from acquisitions, the continuing development of new application specific solutions and value added products and increased worldwide presence with the leading companies in target markets. Sales of cable products increased 9% and 8%, respectively, in the third quarter and first nine months of 2005 compared to the same periods in 2004 ($55.1 and $157.8 in 2005 versus $50.6 and $146.0 in 2004).  Such increase is primarily attributable to increased sales of coaxial cable products for the broadband communications market resulting from increased capital spending by both domestic and international cable operators for network upgrades and expansion.  Geographically, sales in the United States in the third quarter and first nine months of 2005 increased 13% and 14%, respectively, compared to the same periods in 2004 ($199.2 and $578.0 in 2005 versus $175.6 and $508.5 in 2004). International sales for the third quarter and first nine months of 2005 increased approximately 19% and 17%, respectively, in U.S. dollars ($247.8 and $722.1 in 2005 versus $208.5 and $618.0 in 2004) and increased approximately 18% and 14%, respectively, in local currency compared to 2004.  Currency translation had the effect of increasing sales in the third quarter and first nine months of 2005 by approximately $2.2 and $17.4 when compared to exchange rates for the same 2004 periods.

The gross profit margin as a percentage of net sales (including depreciation in cost of sales) was 33% for the third quarter and first nine months of 2005 compared to 33% and 32% for the third quarter and first nine months of 2004, respectively.  Gross margin in the quarter was impacted by an increase in interconnect margins offset by a decline in cable margins.  The increase in gross margin in the nine month period is generally attributable to an increase in margin for interconnect products and assemblies and stable cable margins. The operating margin for interconnect products and assemblies increased approximately 1.4% and 1.5%, respectively, in the third quarter and first nine months of 2005, respectively, compared to the same periods in 2004.  The increase in interconnect operating margin is generally attributable to the effects of higher sales volume, product mix and cost reduction activities including a shift in headcount to lower cost labor areas partially offset by the impact of higher material costs in 2005. The increase in interconnect margin was offset, in the quarter,  by a decrease in operating margin for cable products of approximately 1.7% compared to the same periods in 2004. The decline in margin for cable products in the quarter is due primarily to the impact of higher material and freight costs in 2005 offset in part by price increases implemented in 2004.

Selling, general and administrative expenses increased to $62.4 and $182.7, respectively, or 14% of net sales in the third quarter and first nine months of 2005 compared to $53.6 and $159.3, respectively, or 14% of

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2005. Additional financial covenants include a minimum interest coverage ratio of at least 3.0x and a maximum leverage ratio of no greater than 3.5x, with a step-down to 3.25x beginning with the quarter ending March 31, 2007. At September 30, 2005, such ratios as defined in the Credit Agreement, were 14.52x and 1.38x, respectively. The Credit Agreement also includes limitations with respect to, among other things, indebtedness in excess of $50 for capital leases, $450 for general indebtedness, $200 for acquisition indebtedness of which approximately $9.6, $0 and $0, respectively, were outstanding at September 30, 2005 and limitations on restricted payments including restrictions on dividends of the Company’s common stock and the repurchase of the Company’s common stock, in excess of 50% of cumulative consolidated net income plus $250, or approximately $273.4 at September 30, 2005. In conjunction with entering into the Credit Agreement the Company terminated the interest rate swap agreements related to the previous senior secured credit facility and the Company entered into new interest rate swap agreements that fixed the Company’s LIBOR interest rate on $250 of floating rate bank debt at 4.24% through July 2008. In addition, the Company incurred one-time expenses for the early extinguishment of debt totaling approximately $2.4 or $.02 per share after tax.  Availability under the revolving credit facility at September 30, 2005 was $337.2, after a reduction of $401.3 outstanding under the revolving credit facility and $11.5 for outstanding letters of credit.

On October 10, 2005, the Company announced that it has reached an agreement to acquire the Connection Systems division of Teradyne, Inc. (NYSE-TER) for approximately $390 in cash (subject to a post closing working capital adjustment).  The sale is subject to regulatory approval and customary closing conditions and is expected to close in the fourth quarter.  The Company plans to finance the acquisition through an increase in its revolving credit facility. The Company will account for the acquisition as a purchase using the accounting standards established in Statement of Financial Accounting Standards (“FAS”) No. 141, “Business Combinations”, and accordingly, the excess purchase price over the fair market value of the underlying net assets acquired will be allocated to goodwill after considering any post-closing adjustments that may occur. Teradyne Connection Systems (“TCS”), headquartered in Nashua, New Hampshire, is a leading supplier of high-speed, high-density, printed circuit board interconnects products.  TCS has annual sales of approximately $380 and sells its products primarily to the data communications, storage and server markets, wireless infrastructure markets and industrial markets. TCS has facilities in North America, Europe and Asia and employs approximately 2,250 people worldwide.

The Company’s primary ongoing cash requirements will be for operating and capital expenditures, product development and expansion activities (including acquisitions), repurchases of its common stock, payment of dividends and debt service requirements. The Company’s debt service requirements consist primarily of principal and interest on bank borrowings. The Company’s primary sources of liquidity are internally generated cash flow, the Company’s revolving credit facility and the sale of receivables under the Company’s accounts receivable securitization agreement.  The Company expects that ongoing requirements will be funded from these sources; however, the Company’s sources of liquidity could be adversely affected by, among other things, a decrease in demand for the Company’s products, a deterioration in certain of the Company’s financial ratios or a deterioration in the quality of the Company’s accounts receivable.

In March 2004, the Company announced that its Board of Directors had authorized an open market stock repurchase program (the “Program”) of up to two million shares of the Company’s common stock during the period ending December 31, 2005. In October 2004, the Program was amended to increase the number of authorized shares to five million and to extend the expiration date until September 30, 2006. The timing and price of any purchases under the Program will depend on market conditions.  During the first nine months of 2005, the Company purchased 217,600 shares of common stock for $8.7, or an average price of $39.96 per share.  At September 30, 2005, approximately 3.3 million shares remained available for purchase under the Program.

On January 19, 2005, the Company announced that it would commence payment of a quarterly dividend on

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its common stock of $.03 per share. The Company paid its third quarterly dividend in the amount of $2.7 or $.03 per share on October 5, 2005 to shareholders of record as of September 14, 2005. Cumulative dividends paid during 2005, including the October 5, 2005 payment, were $8.1.

The Company intends to retain the remainder of its earnings to provide funds for the operation and expansion of the Company’s business (including acquisitions), payment of dividends, repurchases of its common stock and repayment of outstanding indebtedness.  Management believes that the Company’s 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 twelve months and the foreseeable future.

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 in a designated pool of qualified accounts 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 September 30, 2005, approximately $85.0 ($80.0 at December 31, 2004) of receivables were sold under the agreement and are therefore not reflected in the accounts receivable balance in the accompanying Condensed Consolidated Balance Sheets.

Environmental Matters

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

The Company is currently involved in the environmental cleanup of several sites for conditions that existed at the time Amphenol Corporation was acquired from Allied Signal Corporation in 1987 (Allied Signal merged with and into Honeywell in December 1999). Amphenol Corporation and Honeywell were named jointly and severally liable as potentially responsible parties in relation to such sites.  Amphenol Corporation 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 incurred relating to these three sites are reimbursed by Honeywell based on the Honeywell Agreement entered into in connection with the acquisition in 1987.  For sites covered by the Honeywell Agreement, to the extent that conditions or circumstances occurred or existed at the time of or prior to the acquisition, Honeywell is obligated to reimburse Amphenol Corporation 100% of such costs.  Honeywell representatives continue to work closely with the Company in addressing the most significant environmental liabilities covered by the Honeywell Agreement.  Management does not believe that the costs associated with resolution of these or any other environmental matters will have a material adverse effect on the Company’s financial position or results of operations.  Substantially all of the environmental cleanup matters identified by the Company to date, including those referred to above, are covered under the Honeywell Agreement.

Stock Split

On January 21, 2004, the Company announced a two-for-one stock split that was effective for stockholders of record as of March 17, 2004.  The additional shares were distributed on March 29, 2004.  The information herein reflects the effect of such stock split.

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Safe Harbor Statement

Statements in this report that are not historical are “forward-looking” statements, which should be considered subject to the many uncertainties that exist in the Company’s operations and business environment.  These uncertainties, which include, among other things, economic and currency conditions, market demand and pricing and competitive and cost factors are set forth in the Company’s 2004 Annual Report on Form 10-K.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk

The Company, in the normal course of doing business, is exposed to the risks associated with foreign currency exchange rates and changes in interest rates.  There has been no material change in the Company’s assessment of its sensitivity to foreign currency exchange rate risk since its presentation set forth, in Item 7A  “Quantitative and Qualitative Disclosures About Market Risk” in its 2004 Annual Report on Form 10-K.  Relative to interest rate risk, as of September 30, 2005, the Company had interest rate swap agreements that fixed the Company’s LIBOR interest rate on $250.0 of floating rate debt at 4.24%, expiring in July 2008.  At September 30, 2005, the Company’s average LIBOR rate was 4.01%.  A 10% change in the LIBOR interest rate at September 30, 2005 would have had the effect of increasing or decreasing interest expense by approximately $.5.  The Company does not expect changes in interest rates to have a material effect on income or cash flows in 2005, although there can be no assurances that interest rates will not significantly change.

Item 4. Controls and Procedures

Under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, the Company has evaluated the effectiveness of the design and operation of its  ”disclosure controls and procedures ” (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)), and, based on their evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective as of the end of the period covered by this quarterly report. There were no significant changes in the Company’s internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the period covered by this quarterly report that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1.    Legal Proceedings

None

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

Repurchase of Equity Securities

On March 4, 2004, the Company announced that its Board of Directors authorized an open-market stock repurchase 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 extend the expiration date until September 30, 2006.  At September 30, 2005, approximately 3.3 million shares of Common Stock remained available for repurchase under the Program.

Item 3.            Defaults Upon Senior Securities

None

Item 4.            Submission of Matters to a Vote of Security Holders

None

Item 5.            Other Information

None

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Item 6.            Exhibits

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*      Incorporated herein by reference as stated.

**   Filed herewith

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