Amphenol Corp. (NYSE:APH)

Current Tax Provision

The current tax provision demonstrates a general upward trend over the analyzed period. Starting at $316.7 million in 2019, it slightly decreased to $282.5 million in 2020. From 2020 onward, there is a consistent and significant increase, reaching $438.7 million in 2021, $555.3 million in 2022, and slightly higher at $568.1 million in 2023. This indicates growing current tax liabilities, possibly reflecting increased taxable income or changes in tax rates or regulations.

Deferred Tax Provision (Benefit)

The deferred tax provision shows more volatility and a shift in direction over the period. It starts as a positive provision of $15.2 million in 2019 and increases to $30.8 million in 2020, suggesting a deferred tax liability or recognized deferred tax expense. However, from 2021 onward, the figures turn negative, indicating deferred tax benefits: -$29.6 million in 2021, -$4.7 million in 2022, and more substantially -$58.8 million in 2023. This shift implies that the company recognized deferred tax assets or benefits in recent years, which could be due to deductions, credits, or timing differences reversing.

Provision for Income Taxes

The overall provision for income taxes mirrors the trends in current and deferred provisions. The total starts at $331.9 million in 2019 and slightly decreases to $313.3 million in 2020. It rises sharply to $409.1 million in 2021, then continues to increase substantially to $550.6 million in 2022. There is a moderate decline to $509.3 million in 2023. The pattern suggests increasing income tax expenses primarily driven by the rising current tax provision, partially offset by the fluctuating deferred tax benefits.

Summary of Trends and Insights

The data reveals that current tax liabilities have been rising steadily since 2020, reflecting possibly higher taxable income or tax rate changes. Deferred taxes have moved from a net expense to a net benefit, which may indicate recognition of deferred tax assets or tax planning strategies impacting timing differences. Overall, income tax expenses increased significantly from 2020 through 2022, peaking in 2022, before slightly decreasing in 2023, driven by the interplay of increasing current tax expense and fluctuating deferred tax benefits. The deferred tax benefit size in 2023 is notable, contributing to reducing the total tax provision despite the higher current tax expense.

The analysis of the annual financial tax data reveals several trends and fluctuations over the five-year period ending December 31, 2023.

U.S. statutory federal tax rate

The U.S. statutory federal tax rate remained constant at 21% throughout the entire period, indicating no legislative changes affecting this rate for the company.

State and local taxes, net

The state and local taxes exhibited minor fluctuations, slightly increasing from 0.7% in 2019 to 0.8% in 2020 and 2021, before declining back to 0.6% in 2022 and 2023. This suggests some variability in local tax obligations but generally stable levels over time.

Foreign earnings and dividends taxed at different rates

This category showed increased variability. Starting at 1.4% in 2019, it rose to 2.1% in 2020, then slightly decreased to 1.8% in 2021, before increasing again to 2.3% in 2022 and slightly retreating to 2.2% in 2023. These changes may reflect shifting geographic earnings mixes or changes in foreign tax regulations.

U.S. tax on foreign income

The tax on foreign income under U.S. rules demonstrated a declining trend from 1.2% in 2019 to 0.8% in 2020, then further to 0.6% in 2021 and 0.5% in 2022. No data was reported for 2023. This decline suggests a reduced U.S. tax impact on foreign earnings over the observed years.

Excess tax benefits related to stock-based compensation

The excess tax benefits associated with stock-based compensation showed negative values consistently, indicating a tax benefit rather than an expense. This impact increased in magnitude from -2.5% in 2019 to -3.2% in 2021, dipped to -2.3% in 2022, and then deepened again to -3.4% in 2023. The fluctuations here point to variability in stock-based compensation and related tax effects.

Settlements of uncertain tax positions in foreign jurisdictions including refund claims and related deferred taxes

This item was only reported in 2020 and 2021, with values of -1.3% and -0.7% respectively, before being absent in other years. The negative values indicate tax benefits arising from settlement of uncertain tax positions during those years, which did not recur later.

Other, net

The "Other, net" category exhibited minor variability, with a value of 0.4% in 2019, dipping slightly to -0.1% in 2020, then fluctuating mildly around 0.2% to 0.3% in subsequent years, indicating small but varied additional tax items affecting the overall tax rate.

Effective income tax rate

The effective income tax rate fluctuated between 20.5% and 22.3% over the period. It decreased from 22.2% in 2019 to 20.5% in 2020 and remained close to 20.6% in 2021. In 2022, the rate increased to 22.3%, before declining again to 20.7% in 2023. This pattern reflects the interplay of various tax components and benefits impacting the overall tax burden.

Overall, the tax-related financial data shows a steady statutory federal tax environment combined with moderate variability in state, local, and foreign taxes. Notably, stock-based compensation provides a recurring tax benefit, while the effective income tax rate remains relatively stable with modest fluctuations throughout the years. The presence of one-time tax benefits from settlement of uncertain tax positions in certain years also influences the overall tax profile.

Accrued liabilities and reserves

The balance has steadily increased from 41,800 thousand USD in 2019 to 78,000 thousand USD in 2023, indicating a consistent growth in estimated obligations or pending expenses over the period.

Operating lease liabilities

There is a clear upward trend from 45,700 thousand USD in 2019 to 70,700 thousand USD in 2023, reflecting an increase in lease-related commitments.

Operating loss, interest, and tax credit carryforwards

The values declined from 81,300 thousand USD in 2019 to 57,400 thousand USD in 2022, but rebounded notably to 76,900 thousand USD in 2023, suggesting oscillations in deferred tax advantages or credited losses available for offset against future income.

Pensions

The pension liabilities or assets showed a peak at 36,400 thousand USD in 2020, followed by a significant decrease to 15,000 thousand USD in 2022 and a slight increase to 16,700 thousand USD in 2023, indicating some volatility or reassessment in pension obligations or funding status.

Inventories

Inventories rose progressively from 39,300 thousand USD in 2019 to 86,000 thousand USD in 2023, more than doubling over five years, which may imply growing stock levels potentially tied to increased sales expectations or production scaling.

Employee benefits

The amount allocated to employee benefits remained relatively stable, with a slight increase from 36,000 thousand USD in 2019 to 45,100 thousand USD in 2023, suggesting steady growth aligned with workforce or benefit costs.

Deferred tax assets

The deferred tax assets increased substantially from 270,300 thousand USD in 2019 to 373,400 thousand USD in 2023, reflecting higher future tax benefits expected to be realized.

Valuation allowance

The valuation allowance figures, representing reductions in deferred tax assets, deepened from -35,200 thousand USD in 2019 to -46,600 thousand USD in 2023, signaling increased recognition of uncertainty regarding the realizability of some deferred tax assets.

Deferred tax assets, net of valuation allowances

The net deferred tax assets after valuation allowances increased steadily from 235,100 thousand USD in 2019 to 326,800 thousand USD in 2023, supporting the trend of rising future tax benefits net of associated risks.

Goodwill

Goodwill has continuously increased in negative amounts, from -179,500 thousand USD in 2019 to -270,500 thousand USD in 2023, indicating additional acquisitions or impairments recorded over the period, reflecting changes in intangible asset valuations.

Depreciation and amortization

Depreciation and amortization experienced a sharp increase from -74,100 thousand USD in 2019 to -176,000 thousand USD in 2021, followed by a decline to -130,900 thousand USD in 2023, suggesting significant capital asset adjustments or changes in amortization policies during these years.

Operating lease right-of-use assets

This account mirrors the operating lease liabilities and similarly increased in negative value from -45,700 thousand USD in 2019 to -70,700 thousand USD in 2023, consistent with the rise in leasing commitments.

Unremitted foreign earnings

Unremitted foreign earnings showed fluctuations, decreasing slightly from -115,800 thousand USD in 2019 to -119,100 thousand USD in 2021, then dropping substantially to -154,200 thousand USD in 2022, and partially recovering to -123,200 thousand USD in 2023. This pattern reflects changes in foreign earnings held overseas and associated tax considerations.

Deferred tax liabilities

Deferred tax liabilities grew considerably from -415,100 thousand USD in 2019 to -612,800 thousand USD in 2022, before decreasing moderately to -595,300 thousand USD in 2023. This suggests increased future tax obligations, potentially linked to temporary differences in asset valuations and income recognition.

Net deferred tax asset (liability)

The net deferred tax position deteriorated from -180,000 thousand USD in 2019 to a low of -333,200 thousand USD in 2021, followed by a gradual improvement to -268,500 thousand USD in 2023. This trend indicates an overall increase in net deferred tax liabilities, with some reduction in recent years.

Deferred Tax Assets

Deferred tax assets have shown a generally stable trend over the five-year period. The balance increased from $80,400 thousand in 2019 to $98,100 thousand in 2020, indicating an improvement during that year. Subsequently, a slight decline occurred over the next two years, reaching $86,900 thousand by the end of 2022. In 2023, the value rose again to $98,500 thousand, returning near the peak observed in 2020.

Deferred Tax Liabilities

Deferred tax liabilities exhibited a marked upward trend initially, rising significantly from $260,400 thousand in 2019 to a peak of $424,200 thousand in 2021. After this peak, the balance declined in the following years, falling to $409,800 thousand in 2022 and further to $367,000 thousand by the end of 2023. Despite the reduction from the peak, the liabilities in 2023 remain substantially higher than the 2019 level.

Overall Observations

The data suggests that deferred tax liabilities have experienced more volatility and overall growth compared to deferred tax assets during the period analyzed. While deferred tax assets fluctuated moderately and ended near its higher range, deferred tax liabilities increased sharply before a moderate decline. This dynamic may have implications for the company's future tax planning and financial obligations.

Total Assets

Total assets exhibited a consistent upward trend from 2019 to 2023. Reported total assets increased from approximately 10.8 billion USD in 2019 to 16.5 billion USD in 2023, representing an overall growth of about 53%. Adjusted total assets followed a very similar pattern, slightly lower but closely aligned with reported figures, increasing from around 10.7 billion USD to 16.4 billion USD in the same period. This steady increase indicates ongoing asset accumulation and growth in the company's asset base over the five-year span.

Total Liabilities

Total liabilities, both reported and adjusted, also showed a general upward trend from 2019 through 2021, rising from approximately 6.2 billion USD (reported) and 6.0 billion USD (adjusted) in 2019 to about 8.3 billion USD and 7.9 billion USD respectively in 2021. However, from 2021 onwards, a slight decline or stabilization became evident. Reported liabilities decreased marginally to around 8.1 billion USD by 2023, and adjusted liabilities similarly declined to approximately 7.7 billion USD. The reduction in liabilities after 2021 may suggest improved debt management or repayment strategies.

Stockholders’ Equity

Stockholders’ equity attributable to the company rose steadily throughout the period. Reported equity increased from about 4.5 billion USD in 2019 to 8.3 billion USD in 2023, marking an increase of approximately 84%. Adjusted equity was slightly higher than reported equity each year, following a comparable trajectory from 4.7 billion USD to 8.6 billion USD. This substantial growth in equity reflects enhanced net asset value and potentially strong retained earnings or capital infusions.

Net Income

Net income attributable to the company showed notable growth over the five-year period, particularly between 2020 and 2022. Reported net income rose from approximately 1.15 billion USD in 2019 to 1.93 billion USD in 2023, with the most significant increase occurring in 2021 and 2022. Adjusted net income figures mirrored this trend closely, increasing from about 1.17 billion USD to 1.87 billion USD. Despite a slight dip in adjusted net income between 2022 and 2023, reported net income remained relatively stable. These figures imply overall profitability improvements with minor fluctuations in the most recent year.

Summary Insights

The overall financial data indicates a company experiencing steady growth in assets and equity, with controlled liability levels. The consistent increase in stockholders’ equity alongside rising total assets suggests strengthening financial stability and shareholder value. The patterns in net income reveal expanding profitability, especially notable in the middle years, before stabilizing. The adjustments made for deferred income taxes appear to slightly elevate equity and assets but do not materially alter the underlying growth trends reflected in the reported data.

Net Profit Margin

The reported net profit margin shows a consistent upward trend from 14.04% in 2019 to 15.36% in 2023, indicating increasing profitability relative to sales over the period. The adjusted net profit margin remains relatively stable around 14.2%-14.35% from 2019 through 2021, then rises to 15.03% in 2022 before a slight decline to 14.89% in 2023, suggesting that adjustments mainly affect the later years and slightly reduce the margin compared to reported figures.

Total Asset Turnover

Reported total asset turnover decreases from 0.76 in 2019 to 0.7 in 2020, recovers to 0.74 in 2021, peaks at 0.82 in 2022, then declines to 0.76 in 2023. The adjusted total asset turnover follows a very similar pattern, indicating that asset efficiency fluctuated but generally improved in 2022 before retreating slightly in the most recent year.

Financial Leverage

There is a downward trend in both reported and adjusted financial leverage ratios across the five years. Reported leverage reduces from 2.39 in 2019 to 1.98 in 2023, while adjusted leverage declines from 2.28 to 1.91 over the same period. This trend indicates a steady decrease in reliance on debt or liabilities relative to equity, implying a strengthening equity position or deleveraging strategy.

Return on Equity (ROE)

Reported ROE experiences volatility, declining from 25.5% in 2019 to 22.35% in 2020, rebounding to 27.12% in 2022, then dropping again to 23.1% in 2023. Adjusted ROE follows a comparable pattern but remains slightly lower each year, declining overall from 24.84% to 21.7% from 2019 to 2023. This suggests variable profitability from shareholders’ perspective with a downward adjustment effect that lessens reported returns.

Return on Assets (ROA)

Reported ROA shows a dip from 10.68% in 2019 to 9.76% in 2020, then increases steadily to a peak of 12.41% in 2022 before a slight decrease to 11.67% in 2023. Adjusted ROA starts higher at 10.9% in 2019, drops modestly to 10.09% in 2020, rises to 12.45% in 2022, then decreases slightly to 11.38% in 2023. Both sets of figures display an improving asset profitability trend especially after 2020, with adjustments yielding slightly higher returns than reported figures.

Net Income Trends

The reported net income attributable to the corporation shows a consistent upward trend from 1,155,000 thousand US dollars in 2019 to 1,928,000 thousand US dollars in 2023. This represents a cumulative increase of approximately 67%, indicating strong profit growth over the five-year period.

The adjusted net income also follows a similar growth trajectory, rising from 1,170,200 thousand US dollars in 2019 to 1,869,200 thousand US dollars in 2023. Despite some fluctuations, the adjusted figures remain close to the reported net income, suggesting that adjustments had a moderate impact on reported profitability.

Net Profit Margin Trends

The reported net profit margin exhibits a steady increase from 14.04% in 2019 to 15.36% in 2023. This improvement of approximately 1.32 percentage points over five years signals enhanced operational efficiency or stronger pricing power, contributing positively to profitability.

In contrast, the adjusted net profit margin shows a slight upward trend initially but decreases slightly in 2023, moving from 14.23% in 2019 to 14.89% in 2023, with a peak of 15.03% in 2022. This indicates that while adjusted profitability improved at first, it experienced a minor contraction in the most recent year.

Comparison of Reported and Adjusted Figures

The adjusted net income consistently remains slightly below the reported net income in the later years, with a noticeable convergence in 2023 where adjusted income is marginally less than reported. This pattern suggests that deferred or non-recurring tax effects adjusting reported income may have become less favorable.

Regarding net profit margins, the reported margins exceed adjusted margins in the last two years, reflecting possibly beneficial tax-related reporting items inflating reported profitability metrics relative to adjusted values.

Overall Observations

The financial data portrays a robust growth narrative for the corporation’s income, with profitability measures improving steadily. The slight divergence between reported and adjusted figures towards the end of the period highlights the importance of tax-related accounting adjustments in evaluating true operational performance. Despite minor fluctuations in adjusted margins, the overall trend suggests sustained profitability enhancement over the analyzed timeframe.

The financial data exhibits a steady increase in both reported and adjusted total assets over the five-year period, reflecting growth in the company's asset base. Specifically, reported total assets rose from approximately $10.8 billion in 2019 to around $16.5 billion in 2023, while adjusted total assets followed a similar upward trajectory, increasing from about $10.7 billion to $16.4 billion during the same timeframe.

Examining the total asset turnover ratios, both reported and adjusted, reveals fluctuations rather than consistent growth or decline. The reported total asset turnover starts at 0.76 in 2019, decreases to 0.70 in 2020, recovers slightly to 0.74 in 2021, peaks at 0.82 in 2022, and then declines to 0.76 in 2023. The adjusted total asset turnover mirrors this pattern closely, beginning at 0.77 in 2019, dropping to 0.70 in 2020, increasing to 0.75 in 2021, reaching a high of 0.83 in 2022, and settling back to 0.76 in 2023.

This pattern indicates that while asset efficiency experienced some volatility, with a notable dip in 2020 possibly linked to external factors impacting operational performance, it saw improvement in 2021 and peaked in 2022 before normalizing in 2023. The close alignment between reported and adjusted figures suggests that adjustments for deferred income tax do not significantly alter the assessment of asset utilization over the periods analyzed.

Overall, the data suggests that the company has been successful in expanding its asset base, with varying efficiency in utilizing those assets to generate revenue. The peak in total asset turnover ratios in 2022 indicates a period of heightened operational efficiency, although this was not fully sustained into 2023.

The financial data reveals a consistent upward trend in both total assets and stockholders’ equity over the five-year period from 2019 to 2023. Specifically, reported total assets increased from approximately 10.8 billion to 16.5 billion US dollars, while adjusted total assets showed a similar growth trajectory, rising from about 10.7 billion to 16.4 billion US dollars. This steady increase highlights ongoing asset accumulation and possible expansion of the company's operational base.

Stockholders’ equity attributable to the corporation also demonstrated significant growth. The reported equity rose from roughly 4.53 billion to 8.35 billion US dollars, and the adjusted equity followed a parallel pattern, climbing from 4.71 billion to 8.62 billion US dollars. The upward trend in equity suggests sustained profitability and retention of earnings, contributing positively to the company’s net worth.

Regarding financial leverage ratios, both reported and adjusted figures show a gradual decline over the period. The reported financial leverage ratio decreased from 2.39 to 1.98, while the adjusted ratio fell from 2.28 to 1.91. This downward trend indicates a reduction in reliance on debt financing relative to equity, suggesting an improvement in the company’s financial stability and potentially lower financial risk.

Overall, the data illustrates a healthy financial progression characterized by asset growth, an expanding equity base, and decreasing financial leverage. These patterns are indicative of strengthening financial structure and enhanced capacity to meet obligations through equity rather than debt.

Net Income Trends

Both reported and adjusted net income attributable to the corporation increased steadily from 2019 through 2022, indicating consistent profitability growth during this period. Reported net income rose from approximately $1.15 billion in 2019 to about $1.90 billion in 2022, while the adjusted net income followed a similar trend, increasing from roughly $1.17 billion to $1.90 billion. However, in 2023, reported net income showed a marginal increase to $1.93 billion, whereas adjusted net income slightly declined to approximately $1.87 billion, suggesting possible impacts from deferred tax adjustments or other financial factors.

Stockholders’ Equity Movements

The stockholders’ equity exhibited a consistent upward trajectory throughout the five-year period under both reported and adjusted figures. Reported equity grew from about $4.53 billion in 2019 to $8.35 billion in 2023, representing a substantial increase. Adjusted equity followed a similar pattern, rising from roughly $4.71 billion to $8.62 billion. The gap between reported and adjusted equity widened slightly over time, which may reflect accumulating deferred tax items or other accounting adjustments influencing equity valuation.

Return on Equity (ROE) Patterns

Reported ROE fluctuated moderately, starting at 25.5% in 2019, decreasing to 22.35% in 2020, then increasing to a peak of 27.12% in 2022 before declining to 23.1% in 2023. Adjusted ROE exhibited a generally similar trend but at slightly lower levels, beginning at 24.84% in 2019, dipping to 22.09% in 2020, peaking at 25.86% in 2022, and dropping further to 21.7% in 2023. The decline in ROE in the latest period, particularly in the adjusted measure, may be attributable to the reduced growth in net income coupled with steadily increasing equity base.

Overall Insights

The data reflect strong growth in both income and equity from 2019 through 2022, with signs of deceleration or stabilization in 2023. The adjustment for deferred income tax impacts narrows net income figures in 2023 and slightly reduces ROE measurements compared to reported figures. The continued equity expansion suggests ongoing capital accumulation or retained earnings growth. Meanwhile, the ROE trends imply that despite increased net income, the rate of return relative to equity has moderated, indicating either a larger capital base diluting returns or less efficient profit generation in the most recent period.

Net Income Trends

The reported net income attributable to Amphenol Corporation has shown a consistent increase over the five-year period from 2019 to 2023. Starting at 1,155,000 thousand USD in 2019, it rose steadily to reach 1,928,000 thousand USD in 2023. Similarly, the adjusted net income also increased from 1,170,200 thousand USD in 2019 to a peak in 2022 at 1,897,600 thousand USD, before experiencing a slight decrease to 1,869,200 thousand USD in 2023. This small decline in adjusted net income in 2023 contrasts with the continued growth in reported net income for the same year.

Total Assets Development

Both reported and adjusted total assets demonstrated a clear upward trajectory throughout the examined period. Reported total assets started at 10,815,500 thousand USD in 2019 and increased steadily each year to reach 16,526,400 thousand USD in 2023. Adjusted total assets followed a similar pattern, beginning at 10,735,100 thousand USD in 2019 and rising consistently to 16,427,900 thousand USD in 2023. The resemblance in values between reported and adjusted total assets indicates only minor differences due to adjustments.

Return on Assets (ROA) Patterns

The reported Return on Assets (ROA) showed an initial decline from 10.68% in 2019 to 9.76% in 2020, followed by a recovery and increase to a peak of 12.41% in 2022, before slightly declining to 11.67% in 2023. Adjusted ROA displayed a similar pattern, beginning at 10.9% in 2019, dipping to 10.09% in 2020, then rising to 12.45% in 2022, and decreasing to 11.38% in 2023. Both measures highlight a noteworthy recovery in profitability after 2020, with a minor reduction in efficiency observed in the final year.

Comparative Insights Between Reported and Adjusted Figures

The adjusted financial data closely mirrors the reported figures, with slight variations reflecting the impact of deferred income tax adjustments. While net income adjustments show a slight divergence in 2023 with a modest decrease in adjusted net income compared to a continued increase in reported net income, the total assets and ROA figures remain largely consistent between the two sets of data. This suggests that adjustments related to deferred income taxes have limited influence on the overall asset base and profitability ratios.

Overall Financial Performance

The overall trend indicates a solid growth in both profitability and asset size over the five-year horizon. Despite a dip in ROA and adjusted net income in 2023, the company maintains a robust financial position characterized by increasing asset accumulation and relatively strong returns. The fluctuations in profitability ratios reflect operational resilience and adaptive financial management through varying economic conditions during the timeframe.