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Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Amphenol Corp., economic profit calculation

US$ in thousands

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net operating profit after taxes (NOPAT)¹	2,010,042)	2,040,201)	1,644,807)	1,351,172)	1,277,245)
Cost of capital²	15.61%	15.34%	15.08%	15.07%	14.92%
Invested capital³	13,752,400)	12,775,400)	12,048,900)	10,035,300)	9,029,400)

Economic profit⁴	(136,765)	80,392)	(172,735)	(161,522)	(69,688)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2023 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 2,010,042 – 15.61% × 13,752,400 = -136,765

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Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	Amphenol Corp. economic profit increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.

Amphenol Corp., NOPAT calculation

US$ in thousands

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income attributable to Amphenol Corporation	1,928,000)	1,902,300)	1,590,800)	1,203,400)	1,155,000)
Deferred income tax expense (benefit)¹	(58,800)	(4,700)	(29,600)	30,800)	15,200)
Increase (decrease) in allowance for doubtful accounts²	4,500)	20,400)	(1,300)	11,200)	100)
Increase (decrease) in equity equivalents³	(54,300)	15,700)	(30,900)	42,000)	15,300)
Interest expense	139,500)	128,400)	115,500)	115,400)	117,600)
Interest expense, operating lease liability⁴	10,933)	7,930)	5,522)	5,957)	6,381)
Adjusted interest expense	150,433)	136,330)	121,022)	121,357)	123,981)
Tax benefit of interest expense⁵	(31,591)	(28,629)	(25,415)	(25,485)	(26,036)
Adjusted interest expense, after taxes⁶	118,842)	107,701)	95,607)	95,872)	97,945)
(Income) loss from discontinued operations, net of tax⁷	—)	—)	(21,400)	—)	—)
Net income (loss) attributable to noncontrolling interest	17,500)	14,500)	10,700)	9,900)	9,000)
Net operating profit after taxes (NOPAT)	2,010,042)	2,040,201)	1,644,807)	1,351,172)	1,277,245)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowance for doubtful accounts.

³ Addition of increase (decrease) in equity equivalents to net income attributable to Amphenol Corporation.

⁴ 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 303,700 × 3.60% = 10,933

⁵ 2023 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 150,433 × 21.00% = 31,591

⁶ Addition of after taxes interest expense to net income attributable to Amphenol Corporation.

⁷ Elimination of discontinued operations.

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Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	Amphenol Corp. NOPAT increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.

Amphenol Corp., cash operating taxes calculation

US$ in thousands

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Provision for income taxes	509,300)	550,600)	409,100)	313,300)	331,900)
Less: Deferred income tax expense (benefit)	(58,800)	(4,700)	(29,600)	30,800)	15,200)
Add: Tax savings from interest expense	31,591)	28,629)	25,415)	25,485)	26,036)
Cash operating taxes	599,691)	583,929)	464,115)	307,985)	342,736)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

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Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	Amphenol Corp. cash operating taxes increased from 2021 to 2022 and from 2022 to 2023.

Amphenol Corp., invested capital calculation (financing approach)

US$ in thousands

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Current portion of long-term debt	353,800)	2,700)	4,000)	230,300)	403,300)
Long-term debt, less current portion	3,983,500)	4,575,000)	4,795,900)	3,636,200)	3,203,400)
Operating lease liability¹	303,700)	293,700)	251,000)	229,100)	199,400)
Total reported debt & leases	4,641,000)	4,871,400)	5,050,900)	4,095,600)	3,806,100)
Stockholders’ equity attributable to Amphenol Corporation	8,346,500)	7,015,600)	6,302,000)	5,384,900)	4,530,300)
Net deferred tax (assets) liabilities²	268,500)	322,900)	333,200)	201,000)	180,000)
Allowance for doubtful accounts³	68,400)	63,900)	43,500)	44,800)	33,600)
Equity equivalents⁴	336,900)	386,800)	376,700)	245,800)	213,600)
Accumulated other comprehensive (income) loss, net of tax⁵	533,600)	535,000)	286,500)	278,100)	430,900)
Redeemable noncontrolling interests	30,700)	20,600)	19,000)	—)	—)
Noncontrolling interests	49,300)	57,900)	58,100)	67,000)	65,900)
Adjusted stockholders’ equity attributable to Amphenol Corporation	9,297,000)	8,015,900)	7,042,300)	5,975,800)	5,240,700)
Investments⁶	(185,600)	(111,900)	(44,300)	(36,100)	(17,400)
Invested capital	13,752,400)	12,775,400)	12,048,900)	10,035,300)	9,029,400)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of allowance for doubtful accounts receivable.

⁴ Addition of equity equivalents to stockholders’ equity attributable to Amphenol Corporation.

⁵ Removal of accumulated other comprehensive income.

⁶ Subtraction of investments.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Amphenol Corp. invested capital increased from 2021 to 2022 and from 2022 to 2023.

Amphenol Corp., cost of capital calculations

Dec 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	62,540,867)	62,540,867)	÷	66,939,367)	=	0.93	0.93	×	16.56%	=	15.47%
Debt³	4,094,800)	4,094,800)	÷	66,939,367)	=	0.06	0.06	×	2.66% × (1 – 21.00%)	=	0.13%
Operating lease liability⁴	303,700)	303,700)	÷	66,939,367)	=	0.00	0.00	×	3.60% × (1 – 21.00%)	=	0.01%
Total:	66,939,367)					1.00					15.61%

Based on: 10-K (reporting date: 2023-12-31).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	48,329,455)	48,329,455)	÷	52,808,155)	=	0.92	0.92	×	16.56%	=	15.15%
Debt³	4,185,000)	4,185,000)	÷	52,808,155)	=	0.08	0.08	×	2.81% × (1 – 21.00%)	=	0.18%
Operating lease liability⁴	293,700)	293,700)	÷	52,808,155)	=	0.01	0.01	×	2.70% × (1 – 21.00%)	=	0.01%
Total:	52,808,155)					1.00					15.34%

Based on: 10-K (reporting date: 2022-12-31).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	47,909,192)	47,909,192)	÷	53,169,992)	=	0.90	0.90	×	16.56%	=	14.92%
Debt³	5,009,800)	5,009,800)	÷	53,169,992)	=	0.09	0.09	×	2.12% × (1 – 21.00%)	=	0.16%
Operating lease liability⁴	251,000)	251,000)	÷	53,169,992)	=	0.00	0.00	×	2.20% × (1 – 21.00%)	=	0.01%
Total:	53,169,992)					1.00					15.08%

Based on: 10-K (reporting date: 2021-12-31).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	39,340,414)	39,340,414)	÷	43,834,914)	=	0.90	0.90	×	16.56%	=	14.86%
Debt³	4,265,400)	4,265,400)	÷	43,834,914)	=	0.10	0.10	×	2.65% × (1 – 21.00%)	=	0.20%
Operating lease liability⁴	229,100)	229,100)	÷	43,834,914)	=	0.01	0.01	×	2.60% × (1 – 21.00%)	=	0.01%
Total:	43,834,914)					1.00					15.07%

Based on: 10-K (reporting date: 2020-12-31).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	30,871,356)	30,871,356)	÷	34,853,456)	=	0.89	0.89	×	16.56%	=	14.67%
Debt³	3,782,700)	3,782,700)	÷	34,853,456)	=	0.11	0.11	×	2.77% × (1 – 21.00%)	=	0.24%
Operating lease liability⁴	199,400)	199,400)	÷	34,853,456)	=	0.01	0.01	×	3.20% × (1 – 21.00%)	=	0.01%
Total:	34,853,456)					1.00					14.92%

Based on: 10-K (reporting date: 2019-12-31).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Amphenol Corp., economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in thousands)
Economic profit¹	(136,765)	80,392)	(172,735)	(161,522)	(69,688)
Invested capital²	13,752,400)	12,775,400)	12,048,900)	10,035,300)	9,029,400)
Performance Ratio
Economic spread ratio³	-0.99%	0.63%	-1.43%	-1.61%	-0.77%
Benchmarks
Economic Spread Ratio, Competitors⁴
Apple Inc.	140.81%	202.30%	198.63%	146.56%	90.62%
Arista Networks Inc.	28.32%	23.78%	38.77%	21.11%	26.61%
Cisco Systems Inc.	9.14%	9.02%	8.26%	12.46%	6.66%
Super Micro Computer Inc.	9.99%	0.35%	-7.12%	-9.91%	-4.82%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2023 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -136,765 ÷ 13,752,400 = -0.99%

⁴ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	Amphenol Corp. economic spread ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

Amphenol Corp., economic profit margin calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in thousands)
Economic profit¹	(136,765)	80,392)	(172,735)	(161,522)	(69,688)
Net sales	12,554,700)	12,623,000)	10,876,300)	8,598,900)	8,225,400)
Performance Ratio
Economic profit margin²	-1.09%	0.64%	-1.59%	-1.88%	-0.85%
Benchmarks
Economic Profit Margin, Competitors³
Apple Inc.	22.15%	23.91%	23.08%	19.21%	17.69%
Arista Networks Inc.	21.42%	16.41%	22.77%	16.50%	19.57%
Cisco Systems Inc.	9.09%	10.11%	9.21%	13.00%	7.02%
Super Micro Computer Inc.	3.38%	0.15%	-2.57%	-3.68%	-1.56%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Economic profit. See details »

² 2023 Calculation
Economic profit margin = 100 × Economic profit ÷ Net sales
= 100 × -136,765 ÷ 12,554,700 = -1.09%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	Amphenol Corp. economic profit margin improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

Amphenol Corp. (NYSE:APH)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin