Diana G. Reardon – Chief Financial Officer R. Adam Norwitt – Chief Executive Officer.

Sherri A. Scribner – Deutsche Bank Securities Inc. Shawn M. Harrison – Longbow Research LLC. Steven B. Fox – Cross Research LLC Matt J. Sheerin – Stifel, Nicolaus & Co., Inc. Amit J. Daryanani – RBC Capital Markets, LLC Mike Wood – Macquarie Equity Research James D. Suva – Citigroup James M. Kisner – Jefferies & Company, Inc.

Amitabh Passi – UBS Mark Delaney – Goldman Sachs Inc. Wamsi Mohan – BofA Merrill Lynch.

Hello, and welcome to the Second Quarter Earnings Conference Call for Amphenol Corporation. Following today’s presentation, there will be formal question-and-answer session. Until then, all lines will remain in a listen-only mode. At the request of the company, the conference is being recorded.

If anyone has any objections, you may disconnect at this time. I would now like to introduce today’s conference for your host, Ms. Diana Reardon. Thank you, you may begin..

Thank you. My name is Diana Reardon, and I’m Amphenol's CFO. I’m here together with Adam Norwitt, our CEO, and we would like to welcome you all for our second quarter earnings call. Our Q2 results were released this morning. I’ll provide some financial commentary on the quarter, and Adam will give an overview of the business and current trends.

We’ll then have a question-and-answer session. The company closed the second quarter with sales of $1.314 million and EPS of $9, exceeding the high end of the company’s guidance and achieving new records of performance. Sales were up 16% in U.S. dollars and 15% in local currencies compared to Q2 of 2013.

From an organic standpoint, excluding those acquisitions and currency impacts, sales in Q2 were up 7%. Sequentially, sales were up 5% in U.S. dollars and 6% organically from Q1 of 2014. Breaking down sales into our two major components, our cable business which comprised 7% of our sales was up 2% from last year.

The interconnect business, which comprised 93% of our sales, was up 17% from last year reflecting the benefit of both good organic growth and the company’s acquisition program. Adam will comment further on trends by market in a few minutes. Operating income increased $256 million from $224 million last year.

Operating margin was 19.5% in the quarter compared to 19.7% last year and 18.8% last quarter. The decline in operating margin versus 2013 is primarily due to the lower profitability level of the advanced sensor business acquired in late 2013.

As previously discussed, the acquisition is accretive on an earnings-per-share basis, but reduces the company’s overall operating income percentage as the business currently operates at a lower level of profitability than the average of the company.

We continue to be very excited about the potential of the acquisition and expect their operating income margins to improve overtime, based on the combination of their excellent management team, leading technology and our strong operating discipline.

The sequential increase of 70 basis points in operating margins over the first quarter of 2014 represents a very good conversion margin on incremental sales of 32%. This strong performance resulted from an increase in operating margin in the interconnect business based on excellent operating execution and cost management on incremental sales volume.

From a segment perspective, in the cable segment margins were 12.7% up from 12.2% last quarter and down from 13.8% last year, primarily due to the impact of market pricing and some impact from product mix. In the interconnect segment, margins were 21%, up from 20.9% last quarter and down from 22% last year.

We are very pleased with the company’s operating margin achievement and we continue to believe that the company’s entrepreneurial operating structure and culture of cost control allows us to react in a fast and flexible manner, thereby constantly adjusting the business to maximize profitability in what continues to be a dynamic environment.

Through the deployment of these strategies, the management team has achieved industry leading operating margins and remains fully committed to driving enhanced performance. Interest expense for the quarter was $20.1 million compared to $15.6 million last year.

Due to higher average debt levels resulting from the company's acquisition and stock buyback programs. Other income was $4.3 million in the quarter, up from $3 million last year, primarily as a result of higher interest income on higher levels of cash and short-term cash investments.

The company's effective tax rate in the quarter was 26.5% compared to 26.8% last year and net income was approximately 13% of sales in the quarter. Earnings per share increased 15% to a record $1.09 in Q2, up from $0.95 last year a very strong performance.

Orders for the quarter were $1.320 billion resulting in a book-to-bill ratio of approximately 1-to-1. The company continues to be an excellent generator of cash and cash flow from operations in the quarter was $181 million or 102% of net income. For the six months ended June 30, operating cash flow was $383 million or 114% of net income.

The company continues to target cash flow from operations in excess of net income. The company had good working capital management during the quarter. Inventory with $805 million at the end of June up 4% from March. Inventory days were 81 days, consistent with March levels.

Accounts receivable at the end of June was just over $1 billion up 6% from March and day sales outstanding declined one day to 70 days. Accounts payable increased 11% to $534 million at the end of June and payable days were up four days to 54-days.

The cash flow from operations of a $181 million borrowing under the company’s revolving credit facility of $120 million and $60 million of proceeds from stock option exercise were used primarily to purchase approximately 1.4 million shares of the company's stock for $129 million to fund capital expenditures of $52 million and acquisition of payments of $10 million in the quarter and for dividend payments of $31 million.

This resulted in an increase in cash and cash investment of $144 million during the quarter. At the end of June, cash and cash equivalents and short term investments totaled $1.4 billion the majority of which is held outside the US. Total debt was $2.3 billon bring net debt at the end of the quarter to $900 million.

At quarter end, borrowings and availability under the company's $1.5 billion revolving credit facility were $290 million and $1.2 billion respectively. And EBITDA of Q2 was approximately $308 million.

At the end of the quarter, the company had 2.9 million shares remaining under its 10 million stock of purchase program, which expires in January of 2015.

And as mentioned in the earning release the company’s Board of Directors has approved an increases in the quarterly dividend on the company’s common stock from $0.20 to $0.25 per share increasing the yield to just over 1%. This increase is effective for payments beginning in October. From a financial perspective this was an excellent performance.

Adam will now provide an overview of the business and current trends..

Well, thank you very much, Diana and I would also like to add my welcome to everybody on the phone here today. As Diana mentioned, I'm going to highlight some of our second quarter achievements and in particular I’ve planned to discuss the trends and the progress across our various served markets.

Finally I will make a few comments on our outlook for the third quarter and as well as for the full-year of 2014, and we’ll certainly leave some time at the end for question. I’m just very proud that in the second quarter Amphenol has set again new records in sales and earnings per share and exceeded the high end of our guidance.

Diana mentioned sales increased 16% from prior year and 5% sequentially, establishing for the company a new record of $1,314 billion in sale. We are also very pleased that our order has reached also a new record of $1,320 billion with the book to bill up above one.

And profitability as Diana mentioned was very robust in the quarter and we generated strong sequential conversion margin, which led to an expansion of our industry leading operating margins to 19.5%.

And Finally, I would just like to note that with the Board of Directors approving the 25% increase in our company’s quarterly dividend from $0.20 to $0.25, this is yet another very clear indication of the sustained financial strength of Amphenol.

I’m just very proud of our global team these record results reconfirm the strength of entrepreneurial culture.

As the Amphenol management team has once again able to react quickly to the many, many opportunities that are being created by the electronics revolution all the electrocides in the consistent discipline and drive necessary to create outstanding operating performance.

The strength of our strategy of market diversification also was very evident in the second quarter. The Amphenol business remains extremely balanced and broad with no single end market representing more than 17% of our total sales in the quarter.

Turning to the trends and progress across those markets, the military market represent 11% of our sales in the quarter.

Sales were down slightly from prior year and up slightly from prior quarter as growth in military vehicle, airframe as well as communications applications was offset by overall reduced demand in other segments of the military market. There is no question that the overall military market remains uncertain.

But nevertheless we expect demand in the third quarter to grow slightly from these levels and we continue to expect this market to return to growth in the second half as volumes increased related to new programs on which we have higher content.

We’re very confident that our technology leadership and broad program participation positions us to benefit long-term from the expanding adoption of electronics and military hardware as well as from growth in military hardware spending in emerging geographies. The commercial aerospace market represented 6% of our sales in the quarter.

Sales in this market increased a very strong 26% from prior year and 4% sequentially, due essentially to increased jetliner production as well our expanded content on new airplane platforms. In addition we continue to benefit form the Ionix acquisition that we completed at the end of last year.

While we do expect some normal seasonal moderation in demand in the third quarter we continue to maintain a very positive outlook for the commercial air market in 2014 and beyond.

We simply have an excellent and expanding position in this exciting market and we continue to take advantage of the many new technology opportunities that are arising on new airplane platforms.

In particular as our new interconnect technologies are able to resolve an increasing variety of challenges based by our customers who are designing and building next generation planes. We’re confident that our position will continue to strengthen over time. The industrial market represented 17% of our sales in the quarter.

We had extremely strong sales growth of 52%, which was supported by the Advanced Sensors acquisition completed at the end of 2014. We had also very strong organic growth of 16%, which was driven by gains in the medical, instrumentation, rail mass transit, heavy equipment as well as oil and gas segments.

On a sequential basis sales increased 8% with growth in virtually all areas of the industrial market that we play in. We’re especially encouraged by the breadth and balance of our industrial growth, which is a clear validation of our long standing strategy of diversification across the broad array of segments within this important market.

In addition, I would like to note that we are very pleased to be seeing early in positive signs of the value of our newly acquired sensor portfolio to our industrial customers around the world. In the third quarter, we expect further growth despite what is a traditionally seasonally softer quarter.

As we continue to make excellent progress broadening our technology offering, while increasing our penetration of the many exciting growth areas of the industrial market. The automotive market represented 15% of our sales in the quarter. Sales in this market also increased a very strong 42% from prior year and 18% organically.

We continued to benefit from the diverse range of new sensor and infotainment automotive products that are provided by Advanced Sensors and Tecvox, the two acquisitions we made at the end of last year. And we also grew our sales organically with new products used in Telematics, in emissions management, as well drive train control application.

On a sequential basis, sales grew by 3% in the automotive market. Automakers continue to incorporate advanced interconnect and sensor products into a wide array of vehicle electronic system, which is really creating great opportunities for our company.

In addition, we’re beginning to see interesting opportunities to leverage our interconnect and sensor product range together to create new solutions for automotive customers. Ultimately, we’re confident that our broad high technology offering will enable us to continue to outperform the overall automotive market.

Looking towards the third quarter, we expect the slight increase in sales and what is also typically a more seasonally moderate quarter. And we look forward to an excellent 2014 and beyond for expanding automotive business. The mobile devices market represented 16% of our sales in the quarter.

Sales in this market increased stronger-than-expected 8% from prior year driven by higher demand for products used essentially in mobile computing devices including both tablets and laptops.

Well we had expected some sequential decline in sales coming into the quarter in fact we were able achieve 6% growth over the first quarter, as we’re able to quickly adjust our production resources in order to capitalize on higher levels of demand across the broad range of devices and customers.

Looking ahead to the second half, we now anticipate a somewhat faster ramp-up of sales in the mobile device market and thus expect overall sales to grow in the range of low-single-digits for the full-year.

This increase from our previous expectations of mid-to-high-single-digit decline relates to stronger than expected outlook on a range of existing programs together with some benefit from new product launches. The mobile device market remains no question extremely dynamic.

It is really only through our leading technology offering together with our outstanding and extremely agile team, that we are able to continue to react quickly to capitalize on any opportunities that arise to drive growth in this important market.

The mobile networks market represented 12% of our sales in the quarter and we executed very well and what is just simply an excellent quarter in the mobile networks market. Our sales increased a very strong 26% over prior year and 16% sequentially.

While this sales growth was strongest in Asia in fact our sales grew strongly in all our major geographies and was balanced across our wide range of both equipment manufacturers, as well as, our site materials sold direct to operators.

While we continue to anticipate in the second half a somewhat lower level of demand, we maintain a very positive view of the mobile networks market for the full-year 2014.

We’re very encouraged that our long-term technology investments across the broadest array of interconnect and antenna products has positioned us strongly to capitalize on accelerating next-generation mobile network deployments and we look forward to continuing to build on this position in the long-term.

The information technology and data communications market represented 16% of our sales in the quarter, as we’d expected sales decreased by roughly 6% from prior year on primarily lower sales of networking related products.

Sequentially sales did increase slightly as growth in servers and networks products were partially offset by a moderation of sales of products that are used in storage systems.

Based on our latest input from customers in the IT market, we did not expect any significant increase of demand in the third quarter and accordingly we continue to anticipate that our sales will be flat to slightly down for the full-year in this market.

There are clearly some market uncertainties in the IT market, but despite these uncertainties we remain very confident in our long-term position in the IT datacom market.

Due to our leading technology offering, our preferred supplier relationships with a very wide array of OEMs as well as our fast growing presence with direct with datacenter operators and web service providers.

The broadband market represented 7% of our sales in the quarter, sales declined slightly from prior year on a moderation of spending in particular from U.S. cable operators an increase as we had expected by around 4% from the first quarter.

While the market environment for traditional bulk cable continues to be challenged and while the competitive pricing environment remains difficult.

We are encouraged to see still emerging benefits of our products and customer diversification, which has enabled us bother to grow our range of broadband customers while also offering, what is the more complete interconnect product range.

Moving into the third quarter we expect sale in the broadband market to increase from these levels and we look forward to maintaining a strong position in the broadband market.

Well looking back on the second quarter I can just say again that we are just extremely proud of the entire Amphenol organization who has continued to execute well in what remain very challenging and dynamic market environment. Our superior performance is a direct reflection of Amphenol’s distinct competitive advantages.

Our leading technology, our increasing position with customer across the diverse range of markets, our worldwide presence and our lean and flexible cost structure, at end of the day the company’s greatest strength continues to be Amphenol’s high performance culture, which gets reinforced every single day by the company’s agile and entrepreneurial management team.

Turning towards our outlook for the third quarter and the full year, based on constant exchange rates as well as the assuming stable economic condition and in consideration of our strong second quarter performance, as well as current expectation for the reminder of the year we’re very pleased to be able to increase our guidance.

We now expect in the third quarter as well as in the full-year of 2014 the following result. We expect sale in the range of $1,320 billion to $1,350 billion and $5,210 billion to $5,270 billion respectively. And for EPS we expect for the quarter and the year in the range of $1.12 to $1.15 and $4.35 to $4.41 respectively.

For the full-year, this guidance now represents sales and EPS growth excluding one-time items of 13% to 14% and 13% 15% respectively a very strong guidance. We’re very encouraged by our strengthening outlook in sales and earnings. Especially, given the many continuing dynamics across the global economy.

Look, the ongoing revolution in electronics continues to create for us tremendous opportunities. And I remain extremely confident in the ability of our outstanding management team to continue to capitalize on these opportunities, both to grow our market position and to expand our profitability.

And thereby, to drive continued superior performance for Amphenol. Thank you very much. And at this time, operator we will be happy to take any questions that they maybe..

(Operator Instructions) Our first question comes from Sherri Scribner from Deutsche Bank. Your line is open..

Hi, thank you, Adam and Diana. I wanted to just ask about what is driving the upside to the guidance. When you look at it, just looking through the segments, it seems like maybe mobile devices is driving some of that; you raised your outlook for the second half.

I just wanted to get a sense of – is that the right way to think about it? Which areas are really driving the upside?.

Yes, Sherri, thank you very much.

I think you put your finger on it mobile devices it certainly of all the markets to won that have the biggest change in terms of our outlook I think the other markets there some small puts and takes, but as I mentioned we certainly are pleased that not only were we able to react quickly to what was essentially some unexpected degree of demand in the second quarter, but we continue to believe that will translate into some higher levels and we had expected in the coming third quarter as well as through the year.

And ultimately we go from having felt that market would have been it kind of a mid to high single-digit decline to low single-digit increased on the year-over-year basis. So that no doubt it all of them the most meaningful change in the guidance. .

Okay. And then, Adam, I was hoping to get your thoughts about the demand environment right now. I think in the press release you said there is still a lot of uncertainty, but just wanted to get the sense of – do you think that things have gotten better? Thank you..

Yes, well, thank you very much. I mean I’ve said many times before that I don’t fancy myself at all a macroeconomist.

We read the papers and there is no question that there remain still a lot of turbulence in the world no doubt about it some of our markets have a more fair wind behind them if you look at marketplace the automotive market and the industrial market, wireless infrastructure clearly these are markets commercial aerospace and other ones we’re outperforming significantly we believe the end market but the overall markets are performing well.

At the same time, you just have to look at a cross section of earnings releases from various OEMs in the electronics industry to know that not everything is going up into the right. There continues to be a lot of dynamics in the market from every corner and that’s not to mention any kind of geopolitical things that happened or don’t happen in time.

Is the overall economy growing at a different pace of GDP? That I have no idea, we are not commissioning studies about this and I actually don’t spend a lot of my time to look at what the GDP trends are that are half a point better or half a point worse.

But we see a lot of opportunities ourselves to capitalize on that change, because at the end of the day when there is dynamics, the agility of how we run the company and the agility of the culture of Amphenol has just so much power to take an advantage of that change.

Unexpected things that come from every corner of the electronics industry, these are the things that the Amphenol team is just so capable at taking advantage of and its not taking advantage up here at headquarters that Diana and I kind of directing traffic, it’s more having our general managers around the world, really sensing out in real-time when those dynamics are coming and taking advantage of them.

And I think this quarter was a great example of our ability to really find those areas of strength take advantage of them better than maybe others can do and thereby to drive the results that you have seen..

Thank you..

Thanks..

Thank you so much, Sherri. .

Shawn Harrison from Longbow Research your line is open. .

Hi, congrats on the quarter. Sorry to maybe take a negative tone toward the mobile devices business, but the past two years, as you had positive expectations heading into the back half of the year, some surprises came out.

I guess, what is different this year? Is there more content per device that you are seeing? It sounds like you picked up a little bit of share during the second quarter, but maybe just flesh out why this year will be different than prior years?.

Yes, no, Shawn it’s not a negative, we don’t take it negatively whatsoever. I think what we have always said is the mobile devices market is extremely dynamic.

Just to Sherri’s question, mentioned that we see a lot of dynamics around all the markets, but there is none that are more extreme than mobile devices and we certainly don’t feel that we are oracles in that market in terms of being able to always predict perfectly what happened. At the same time, our team is just very reactive.

And so in the second quarter it’s true, whether that’s picking up share I mean we were able to satisfy customers on a more expedient fashion than others were. And that can carryover going into the second half and we believe it will.

We are always prudent in how we look at this market; we are not going to give forecast to the penny in terms of what every rosy outlook that you may reason to media would, so we are always very prudent in this market.

I think when we look last year at the change there was a kind of a structural change in the technology of the products and that let us to have a second half that wasn’t what we expected to be. We don’t think that that’s going to repeated itself, as we talked about that was a one-time shift.

And I think, looking at the second half today in the mobile devices market, we feel that there we have strong position whether it’s a gaining share or not it’s already a very strong position. We’re able to satisfy customers on the ramps that they have around increased demand that they have and that’s serves as well going into the second half.

And we’ll see how it goes. Again we – we’re not perfect at picking where that market goes, but we’re excellent at capitalizing on it regardless..

Very fair. Then, Diana, there is a $600 million piece of debt coming due in the middle of November.

What are your expectations in terms of – will you refinance that? Will you pay it off with the credit facility? How should we think about that piece of debt coming due?.

Sure, I think we have options in that regard we did if you recall, do a debt offering in January of this year in anticipation of the fact that we had the maturity coming up in November and could take advantage of the rates at that time all the rates are still quite low now.

So I think we have options, one option certainly would be, it’s refinance it with another bond offering and another option is to use availability under our revolver and we certainly have plenty of room there and I think we’ll make that these vision as we go along here in the next few months..

But none of those accretive dynamics are included in guidance currently?.

I think the guidance would assume that we do some sort of refinancing sort of coincidence with the date of the maturity of the bonds offering, but I wouldn’t expect that whatever we do would have a very substantial impact..

Got you, thanks so much..

Sure..

Thank you..

Thank you. Steven Fox from Cross Research, your line is open..

Thanks. Good afternoon. A couple of questions just on some of the comments you've made so far, Adam.

First of all, in the mobile devices market, talking about satisfying your customers quicker than others, can you just expand on what you were referring to and what kind of capabilities you seem to have gained that are giving you that advantage? And then I have a follow-up..

Sure. No, I mean, look, it just comes down to – since it is such a volatile market Steve, that demand can go up and demand can go down very rapidly and dealing with that is not easy.

I mean that can mean you got a higher lot of people or you got to do the opposite that can mean you have to be, you have to work in a way that selectable from a capital standpoint from how you setup production lines, I mean there is just a whole host of things and I can tell that I’m not going to go into any detail here, because some of that what I would consider nice proprietary secret sauce about our success, but at the end of the day, it comes down to a mind set.

The culture of Amphenol and organization is probably better than anyone here having covered the company for so long.

We come down to general managers in the company, 85 of them are around the world who run these businesses in real-time and they have all the tool at their disposal to make changes without having to go through layers-upon-layers to say can I do this or I cannot do this? In that market in particular, the customer come to you at noon and they need an answer by 12.30 and if you have to go through some approval process to say “well I’m going to go hire another 150 people or 500 people or I’m going to buy this machine, I’m going to do this” you have already missed the opportunity, because someone else has given them that answer by 12.30 when they ask that question at noon.

And it’s that real-time ability to respond that is essentially in the DNA of our culture and how we are organized that serves us so well on that market.

On the flip side obviously when there are downturn as we've experience in times past, it also serves you well, because you can make quick adjustment to your resources to preserve the bottom line of the company and thereby it makes that business sustainable, because if you get into a mobile device business where you go through these kind of convulsive ups and down with restructuring and plant closing and other things, you are never going to be prepared for when that up side comes, because you are now recovering from that kind of massive change that had to undergo at the last downturn and so because we are able to do that in real-time with general managers who make real decisions everyday, it just makes it a much, much more successful and it makes us more able to deal with that dynamic market..

Great. Thanks for that. Then just as a quick follow-up, with regard to the Sensor acquisition, I know you're not going to provide details in terms of financials; but you did mention a couple of times, when you talked about industrial and auto in particular, that you are already seeing opportunities to leverage that portfolio.

I was hoping you can give us maybe some examples or just guide us in terms of what you mean and what kind of time frame that would be related to. Thanks..

Sure. Thank you very much, its great question.

I’m not going to give specific product examples for obvious competitive reason, but I can just tell you I have personally been over the course of the last quarter to a quite a number of customers, because I wanted to sit in front of those customers and hear it from them how they felt about this and what they saw for the future and I can tell you it’s really universal.

They are so pleased to have us coming in as a company with tremendous resources with a tremendous history in particular and high reliability harsh environment product.

I mean we invented most of these harsh environment high reliability products we have been the company for the better part of century who they recognized as that enterprise and then to come in and bringing together that core sensor technology become all the way from the sensor element to the ability to package it, that has been just such a wonderful story to tell and has received just a great reception these are customers in a wide variety of areas, in a wide variety of regions..

Great. Thank you very much. Congrats on the quarter..

Thanks Steve..

Matt Sheerin from Stifel. Your line is open..

Yes, thanks. Hi, Adam and Diana. Question, Adam, regarding the mobile networks business, mobile infrastructure business, where you have had strength and you're talking about a moderation.

Is that just based on what you are seeing in terms of programs? And there has been some semiconductor companies out there talking about some push-outs in orders because of a mismatch of components, where there are some component shortages which are gating production.

Are you seeing any of that? Or what are some of the things you are seeing in terms of visibility there?.

Sure, no, thank you very much for the question, I mean look mobile networks has been very positive market for this year and I think we’ve been speaking consistently through the course of the year that we felt that there was probably more first half spending and second half.

Now all that being said even with some moderation in our business in mobile networks in the second half that would still be up quite significantly on the year-over-year basis.

The shortages as that you’ve talked about these are directly impacting us I mean most of these shortages that are being talked about around the industry have to do more with semiconductor, but clearly they impact customers and their ability to procure all the components to make the sell-side equipment.

And that can have an impact on our business as well and I think if you would ask me at the very beginning of the year I probably would have told you that the second half have a more pronounced downturn than the type of moderation that we’re anticipating today.

So I think there has been some of that stretching out that you mentioned I think that maybe somewhat more magnified in Asia where they’ve just been a few very significant build out so it used a lot of components and some of those components aren’t – no one can make half of them.

None of those are our components we’re doing a fabulous job to satisfy the increase in demand and we have had really no issue to support what are very significant increases in this business I mean if you think about it on the sequential basis in the mobile networks market of 16% increased that’s pretty significant to deal with in a 90 day period and we’ve had no problem to deal with that.

We look forward and we feel very good about how that market is progressing this year. And one thing, I think I talked about it last quarter, but I just want to reemphasize. This was a very difficult market for the better part of two three years to mobile infrastructure market.

It would have been very easy to throw in the towel and just say that is a bad place to be. Let’s not invest, let’s not spend the time, let’s put our people elsewhere, let’s forget about those customers. we didn’t do that and we don’t do that. That’s not how we run our company.

We knew that there was a pent-up demand in that one day, who knows when that one day would be, but that one day there would be a requirement to upgrade the networks and we wanted to make sure that we are well positioned for that.

I think this year, we are really realizing the fruits of that confidence and that persistent that we had and continuing to work in that market, which for the better part of three years was not the most fun market to report upon..

Okay. That's very helpful and just as a follow-up, regarding the mobile devices where you are seeing strength and I know you have got basically three customer segments there, Adam, with mobile computing and smartphones and tablets. And I know that dynamic has changed somewhat for you in terms of the breakdown.

Could you give us an idea of where you are seeing the strength? Is it across all those three segments? And give us an idea of the breakdown within those segments of that business?.

Sure and I unfortunately not going to give you the breakdown strictly and that’s something that certainly we try to keep somewhat closer to our best, relative to customers and competitors, but I can tell you that the strength in the quarter as I mentioned in my earlier remarks, we saw more coming out of mobile computing devices on a year-over-year basis coming really from mobile computing devices, which is a range of things, tablets, laptops, eReaders, Ultrabooks, you name it.

On a sequential basis, we actually saw more strength coming out of smartphones and also some on laptops and maybe less out of things like tablet. And looking forward, I think we have a positive outlook really across the board for those on a sequential basis.

We look at kind of the second half to the first half where we certainly have a strong expectation for sales growth. I think we would see that growth really across all the areas..

Okay, thanks a lot Adam..

Thank you, Matt. I appreciated it..

Amit Daryanani from RBC Capital Markets. Your line is open..

Perfect, thanks a lot, good afternoon guys. Two questions for me maybe Adams just on the mobile devices side historically you’ve had volatility that’s typically been related to one customer.

Do you think with the strength you are seeing, the ramps you are seeing is more than just one OEM are there multiple customer that you are excited about or is just one customer driven ramp?.

Sure, thanks Amit for the question.

I think, we have never said that volatility in that market is related to one customer, I think what I have always said is there are always different leaders in this market over history and we’ve seen many companies cycle through the leadership position and we've dealt with that regardless of who and then we’ve grown our business consistently regardless of that.

As we look towards to strength in our business, I would tell you that it’s certainly not just one customer, we are working with a lot of customers in that market, there is a lot of companies who are establishing what I would call unique niches of strength in various regions and we have great position with all of them..

Fair enough. Then just as a follow-up, Diana, your conversion margins were not 30% I think this quarter on a sequential basis; you are guiding for better than that I think in September.

How much of that is being driven by maybe accretion or integration from the Sensors acquisition versus other tailwinds that you are seeing? And can you sustain this 30% conversion margin beyond June and September really?.

Sure, I think that we as you pointed out we did achieve good conversion margin in Q2, and I think just on a long-term basis the company has a very good track record of strong conversion margins and strong profitability achievement in a pretty diverse set of environments.

This particular conversion margin in Q2 was inline with what we expected for the quarter and the guidance in the second half for Q3 and Q4 is also actually consistent with the guidance that we had last quarter, it just on now a higher level of sales.

And the Q2 conversion margin, was largely attributable to just great operating execution in our interconnect business.

in the second half of the year, there is some small contribution from, some expected improvement and some of the acquisitions from last year, but I would say largely the improvement in ROS and the stronger conversion margin is just coming out a very strong operation execution on the base business.

And the drivers of that strong profitability are really an unrelenting focus on cost, the tension to the top line in terms of which new business we choose to participate in making sure we stay on the high end of technology and therefore can demand appropriate value from a pricing perspective.

So while there is some small contribution, I wouldn’t say that we’re expecting in the second half of the year to have the acquisition reach what we would consider as full potential to be that would dwell beyond 2014..

Got it. That’s really helpful and congrats on the good quarter guys..

Thank you..

Thanks, Amit..

Thank you [technical difficulty]..

Hi thanks for taking my question. I’m wondering if you can comment on the M&A environment today and the pipeline and maybe also comment a little bit about product category that you will be going after and you recently acquired center business from GE and I wonder if that’s going to be a particular focus going forward? Thank you..

Yes. No, thank you very much. Obviously M&A has always been for us a real core component of the company’s expansion strategy and we been doing M&A for a long, long time – certainly well north of decade and decade and half.

During that time period we acquired just so many fabulous company’s and last year and if you take the last two years, we acquired 10 companies in two years and we continue to have just a very vibrant and strong pipeline and we continue to look at M&A not as well we are only going to go in one direction or we going go after this pace in technology but rather we believe there great M&A opportunities across the various markets that we serve.

If you just look back over a two year period when we made those 10 acquisitions those 10 acquisitions were across that have been five or six of our end market. So there was not at all kind of doubling down on one or another one of our markets and one and other of our technologies.

At the end of the day what we look at from an acquisition as we look at, sort of three simple things number one, first and foremost is management. We look for company’s that have great leadership.

Leadership of people who want to continue with the business, and we want them to continue with the business who will operate in the Amphenol organization as the entrepreneurs just like our other 85 general managers do in such a effective passion.

Next we look at technology we want company’s that are really high technology providers people who solve problems for their customers and whatever space they maybe in. And then finally you obviously want company’s who have a complementary market position to our own.

And despite the size of Amphenol and the breadth that we operate and there is still just a wider ray of potential acquisition and potential company’s that can fit those kind of three litmus test that we have.

You notice what I didn’t talk about is hurdle rates and things like this because that’s not how we run our acquisition we pay fair prices for things.

We certainly look for acquisitions to be accretive in the first year, but ultimately we believe that if you have the right people, and you have right technology and you are doing that in a complementary fashion to our own that’s going to be very, very successful acquisition program.

It shown to be such over many, many years and we believe for many years to come and we will continue to be great asset for the company..

Thanks and congrats on the quarter..

Thanks so much..

Mike Wood, Macquarie Research. Your line is open..

Hi, thank you. Also to follow up on the M&A question.

How are you currently viewing making additional acquisitions in the sensor market? Do you need to first integrate Advance Sensors or do you have the capacity to make other acquisition in adjacent connect to a products and if you could also comment on the size of sensor opportunities out there in the market. .

Sure, thanks very much Mike.

Look we have capacities to make a lot of acquisitions, I think we showed it last Q4, we made four acquisitions in a short time period and we didn’t expand our little headquarters stuff here to do that so there is capacity to make the acquisitions is not a question, so we would not at all restrict ourselves from making another sensor acquisition given the fact that we just acquired GE business just over a half year ago.

So we will continue to look for a companies across the board and interconnect and sensors and antennas and other things that we do and we’re the confident that that will bear fruits overtime. The other thing you asked about size and I mentioned the various criteria that we use for acquisition, size is not one of those criteria.

So we have the capacity and we have to wherewithal to buy companies really of any size subject to the fact that they fit in our other criteria of having good people and great technology and I think that we have a wonderful financial capacity to do those acquisitions and to the extensive there are companies of a greater size we would not shy away from pursuing them if they were the appropriate companies to buy..

Okay.

Could you also comment on how much of your cable business is now the specialty growth that you were pursuing versus the more commoditized product and is that pricing pressure limited to certain areas of that cable business?.

We don’t break it down by product specifically, again competitive reasons are important to be sensitive to here, but what I can tell you is both with the Holland acquisition that we made a couple of years ago as well as our internal development efforts, we have a much broader array of products today beyond just cable and reels that we sold for so many years and one can imagine that the growth profile of the business would not be surprising for you to learn that those kind of products grow at somewhat faster rates than do the bulk cable product..

Okay, thank you. .

Thank you..

Thank you. Jim Suva from Citigroup. Your line is open. .

Thank you and congratulations to you and your team at Amphenol. I have one question for Adam and then one question for Diana.

So just taking them in that order, Adam, great results, but when we do look at the details underneath it, I think there is still a few little areas of potential improvement and want to see if you are aware of them, or if you are seeing that there is the potential to improve on it, or what your course is. Not specifically regarding the cable products.

I believe it is about 7% of your company, so not a big part. Most of the questions previously asked were on the other bigger parts. But on the cable parts, you are hitting multiyear high in sales levels, but your profitability is the opposite direction, not hitting multiyear highs.

So is that more excess industry capacity? Is that more pricing by competitors? Is it product misplacement? Or how come we are not seeing, with you hitting multiyear high in sales there, not better profitability? Then for Diana, on the dividend increase, I believe and I personally feel that M&A and organic growth, I guess organic growth first and M&A second is the best use of cash.

So to see your dividend increase, is that just simply you want to have a rule of thumb of a 1% dividend yield going forward? Or is that the M&A opportunities are less? Or how should we think about the increase in dividend?.

Yes, Jim, thank you for those obviously two excellent questions. Relative to cable, I mean I just talked about our strategy in cable, which is really to work to diversify our product types.

I have spoken many times about the fact the cable environment, the pricing environment has been a very challenging environment for a quite sometime it continues to be a very challenging environment. We continue to be a company that is very disciplined and we will remain disciplined in our cable pricing.

But when you have a market which is so concentrated, we are also not just going to let the market totally fall through our fingers. So, we will always let the leaders in that market set the price and we will follow that. As I have always said, by the time the sun has set we don’t let a price increase fall through our fingers.

But at the same time you mentioned it very well, it has become a much smaller portion of the business it’s important part of the business to be in the broadband market per say. Because, we have our cable product segment, but the broadband market remains one of the most important areas in terms of delivering high speed data to customers home.

And so we remain very committed to that market even if the cable products, margins are certainly lower than we would like and you can bet that our team will continue to work towards getting those margins up..

And in terms of the second question, Jim, I think that there certainly has been no change relative to the company strategy regarding capital deployment. And we had a very consistent strategy for many years now.

And from a prioritization perspective, certainly while we do prioritize the acquisition program in terms of using the financial strength, we also feel that a flexible and balanced approach is equally important.

And I think if you would look at the historical pattern for the company, whether you look at 2013 or you look at back over the last five years.

We’ve typically about half of our free cash flow and I think we just generated something along $2.6 billion, $2.7 billion over the last five years and free cash flow about half of that is going to fund the acquisition program, which has been a very successful program and added a lot of value for the company and about in the other of that about is gone back to shareholders.

And that return of capital to shareholders has been a balance of stock buyback and the dividend which really didn’t get 20 real amount until 2013. So the dividend is very much a part of the strategy of having flexible and balanced approach on increase that we announce, brings yield up to about a 1% yield.

In the context of the approach that we have for that balance, we think that that is an appropriate level for the company, but the prioritization of the capital deployment has not changed.

And certainly the acquisition program is still, from our perspective as a management team, the best source of long-term growth and profitability enhancement for the company..

Thank you. Congratulations again to you and your team at Amphenol..

Thank you..

Thank you very much Jim..

Thank you. James Kisner from Jefferies. Your line is open..

Hi, thanks for taking my questions. Just a quick clarification. Did you guys buy any companies in the quarter? I just saw on your cash flow statement you spent $10 million on an acquisition. I don't think I heard you say anything about that. Maybe that is a prior announced acquisition..

We had a couple of payments that related to some previous acquisitions and we had a very small acquisition – I call more of a vertical integration of a very small company that didn't rise to a level that we would be talking about..

Great. And separately, just on the military piece, I am not sure if I heard you guys right that you said you are seeing some growth on hardware spend in emerging geographies. I guess I had always thought of this business as pretty much a domestic and Western business.

I just want to understand your exposures there and what particular geographies you might be – you maybe exposed to in military, other than the U.S.. I guess I am just wondering longer-term, if there's conflicts around the world, could you potentially see some benefit from that? Thanks..

Well, thank you very much, look we’re not trying to capitalize on world instability, so let me say that very much at the frontend here, we certainly hope that our conflicts around the world and we do our little piece to make sure that’s not the case. But relative to emerging geographies, I have talked about this actually for quite some time.

When we go back to the military market as the various U.S. and European driven conflicts we are winding down. I have talked a lot about the fact that we continue to see an offset to that overall reduction in the military spending environment from two areas. One is the expansion of electronics in the military.

And we see that very much so, much more electronic content even if it’s among a lower pool of spending and then in the second is those are merging geographies who continue to invest and continue to spend money on upgrading their military.

Obviously as an American company, we are not going to do business with certain geographies they are places like China and Iran and obviously as the U.S.

company you don’t participate with those are all hand off, but there are a lot of countries around the world were you do work and you do work with them and we have worked with them for many, many, many years. I mean we have been in India for the better part of 43-years as the leader in the Indian military hardware.

We have been in Israel for around essentially the history of Israel and history of Amphenol, places like Brazil, places like Malaysia, Singapore you name it, there are many, many places around the world who are actually increasing their degree of military spending and at the same time increasing the electronic component of that through – in order to modernize their militaries and that’s something that we continue to see, we continue to have excellent presence in many of those place.

Many of those are also working through U.S. manufactures of equipment or European manufactures of equipment. So we get some benefit just through the traditional U.S. and European defense manufactures, but we also have a lot of presence direct with indigenous companies in all of those regions.

And I think the repetition that we have as really the world leader in this space. The technology trends that are in this space also serves us very, very well as we looked to capitalize on whatever growth opportunities there can be from these emerging geographies..

Great thank you go much..

Thank you.

[Technical difficult] Amitabh Passi from UBS. Your line is open..

are there other factors that play here? Maybe you are seeing a firmer pricing environment, maybe you are gaining share.

Or do you think we have hit an inflection on just the rate at which content is growing in automotives that continues to propel this segment at a pretty stable rate, particularly over the past few quarters?.

Yes. It’s a great question Amithab I mean we’re just very proud of the progress that we've made in the automotive market.

We just take historical perspective for Amphenol you may recall if we go back in a five, five and half years ago automotive was I think Q1 of 2009 it was like 6% of our sales and now here it is 15% of our sale and that growth has come really from two parallel initiatives.

One is to develop new products that can capitalize on the expansion of electronic functionality in the car.

And so we've done that just so well getting in front of exhaust management, drive a train, onboard electronics, Telematics, infotainment, you name it, where we work very carefully and very closely with customers at all tiers in the automotive world to really help them to enable new systems.

It wasn’t necessarily that were taking share out of someone else’s hand, it was that we were helping to enable new functionalities in the car with our existing capabilities to make strong interconnect products.

And sometimes these weren’t even just simple piece-part components, but they were complex interconnect systems and that something from organic standpoint that we just done an outstanding job of.

And then in parallel, we made some excellent acquisitions over that same time period, where we have really broadened the range of products that we sell into cars around the world.

And then, once we make those acquisitions but they don’t just joined the company and sort of stay in the static position forever, we work with them to cross sell into customers, to work with them to help to enable next-generation systems bringing together the technologies within our automotive group.

And I think those efforts all collectively have resulted in us achieving the results that you’ve seen for several years running and including this quarter I think 18% growth, no matter how you slice it, is outperforming the market organically by probably quite a wide margin. And we believe that we have just laid a great platform here.

We are clearly not the leader in this space, nor do we aspire to be the leader in this space. But we want to be a stronger participant who works very much in those high value, high technology in new electronics application..

And then just as a quick follow-up on your IT datacom segment. I think for the past couple of quarters, you had also started to talk about trying to diversify your customer base, maybe serving some of the cloud service providers directly.

Where are we in that process? When do you think it starts to move the needle and maybe serve as an offset to some of the pressure you are seeing with your existing OEM customer base?.

Sure. No, it’s an excellent question and certainly this has been a big initiative for us for a quite some time. I can tell you we have in our company a lot of operations who work with, what I would call service providers. And that is a really unique asset that we have in the company understanding how service providers work as opposed to how OEMs work.

They are extremely different in what they care about, what their priorities are, what the predictability of their spending patterns are.

But I think we have a great head start on that because of our kind of cultural awareness how to work with those companies and our ability to kind of tack differently and work with those customers when we have been so accustomed to working with the OEMs. The IT market is very dynamic space.

You just got to look at few of the earnings releases that have come out recently and then you compare that to some of the earnings releases of service providers and look at the capital that they are spending there is a massive disconnect that is happening in that market.

And so there is no question that the success in the future is going to be tied very much to our success in broadening the customer base. And I can tell you that we are doing a fabulous job of that so far. It’s early days because I think the market is in flux somewhat.

So is that transition happened how the service providers, to what degree do they take control of certain things? To what degree do they cede control to the traditional OEMs that whole lay of the land, if you will, is still very much in flux. But however it shakes out, we are going to be well positioned for the long-term. .

Okay, excellent. Thank you..

Thank you..

Thank you. Mark Delaney from Goldman Sachs. Your line is open..

Thanks very much. I appreciate the opportunity to ask a question.

On mobile devices, can you talk about to what extent you have been able to capitalize on strong growth of 4G handsets in emerging markets?.

Yes, that’s create an opportunity. Whether it is just 4G that I wouldn’t be so sure of. But if there are new devices with new functionality, then no doubt about it that can create for us an opportunity..

Understood. Thank you for that. For a follow-up question, I am hoping you can elaborate a little bit more on some of the order trends.

You were already discussing the mobile networks, and if you could discuss any differences you are seeing there between connectors and antennas, and then what some of the underlying drivers of the trends are between units, pricing, or increased content per system..

Sure.

No, I mean, I’m not going to get into specifics about the various products that we sell into that market, but I can tell you that we have a very broad offering, and I think, I mentioned in my early remarks that we’re very pleased with the growth across-the-board, whether that is our direct sales of interconnect products to OEMs, our sales to operators the both interconnect products as well as antennas.

We are very pleased with the contributions from all of those, and I think we have a very balanced business across both the products as well as the channel, the ultimate channel through which we sell our product and I think we have stronger order trends across-the-board.

The thing that is unique this year in the mobile infrastructure market, besides just that the overall capital spending seems to be more favorable than it has been in several years past, is that the fact that you are seeing growth and not insignificant growth on a global basis. Not just concentrated in one or another of the various geographies.

And I think that is something that is unique. I personally believe it is just because of consumer pressure, that they want those devices to have fast video with no latency.

Now that they have TVs sitting in their hands, they want to able to use this TVs that are in their hands; and that is putting a lot of pressure on operators on a global basis to be competitive.

And when you have one operator in one place just as well now I got the fastest LTE or 4G or whatever you call it, immediately the other ones got to react or else they are going to start to lose customers and its expenses for them when they lose this customers.

So, I think that has been a real tipping point with prevalence of the devices that now drives overall those investments.

And as it comes back to just our position, we have just an outstanding and very broad technology position on interconnect products, on antennas, on cable assemblies, on connectors, RF, fiber optics, high speed you name it, the full range of products that are used in these very advanced new system..

Thank you very much..

Thank you..

Our last question comes from Wamsi Mohan from Bank of America. Your line is open..

Yes, thank you. Good afternoon. Adam, you mentioned last quarter that you expected sequential ramps in the back half in mobile devices. Clearly that is proving out to be a lot stronger now.

So would you characterize that the upside is coming from upside demand forecasts from programs that you were prior expected to drive that sequential strength? Or would you say these are completely new wins in products that you did not expect 90 days ago? And I have a follow-up..

Sure. No, thank you very much for the question, Wamsi. I just very simply would say it comes from a combination of all of that I think that we have better demand on existing, and we have better expectations for some new product. And that’s I think a very simple answer to the question..

Okay, thanks, Adam. Can you remind us how much of your revenue goes through distribution now? And is there a plan to change your go-to-market for the sensor products? Are the system designers and buyers the same for the interconnect and sensor products or you need to built some infrastructure and change go-to-market for that? Thanks..

Sure. No, it’s an excellent question. First, relative to distribution, it is about 12% of our sales goes through distribution. We have no tops-down initiative to say. Well, now we got to change all of our channels relative to sensors or we got that take full advantage of whatever strength that we have.

Obviously, to the extent that we have some customers or distributors who are interested now in the sensor products that we can offer simply because they are now part of Amphenol. We are not going to led those opportunities go by the wayside. So we will take advantage of them.

Relative to your question about inside the customers, whether that is always the same person, as I mentioned earlier, I have gone to a number of customers since we have made the acquisition strong customers that we had previously as well as customers with whom the Advanced Sensors business is strong. And I would tell you that it depends.

I think there are some customers where it is not at all the same people. And I think in general the engineers are not the same people, but ultimately from a procurement and strategic procurement standpoint, it usually all ends up at one top of a pyramid.

The thing that I have seen and alluded to it earlier is even those engineers who, let’s say are just sensor engineer or conversely are just an interconnect engineer, it appears from my conversations with them that one of the greatest frustration those individual engineers have is the challenges that they face with the sort of corresponding technology.

So in other words you have an interconnect engineer who is having to design things for a system that incorporates a sensor, he doesn’t really understand that sensor.

Now that you can come in as a company like we now can and sell that together with our sensors engineer, our interconnect engineer, you can really solve the big problem for that person because interestingly, a lot of our customer are really big companies and they don’t necessarily communicate internally as well as we can necessarily communicate internally.

So you can help to actually bridge some of the gap in those challenges across the two portfolios. We have seen the same in years past. Antenna engineers don’t tend to be connector engineers and vice versa, and that has served us extremely well as we have gone to customers to be able to solve that the comprehensive system problem that they face..

Thanks a lot Adam..

Well, thank you very much, Wamsi, and I think we have no further questions. So I would like to just take this opportunity to thank you all again for spending your time with us here today and hope it is not too late to wish that you have at least some degree of rest this summer for all of you on the phone today.

And we look forward to talking to you again here in about 3 months. .

Thank you..

Thank you for attending today’s conference and have a nice day..