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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2014

OR

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

Commission file number 1-10879

AMPHENOL CORPORATION

358 Hall Avenue

Wallingford, Connecticut 06492

203-265-8900

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x  No o

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

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

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

As of April 30, 2014, the total number of shares outstanding of Class A Common Stock was 157,138,216.

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Amphenol Corporation

Index to Quarterly Report

on Form 10-Q

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PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

AMPHENOL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(dollars in thousands)

See accompanying notes to condensed consolidated financial statements.

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AMPHENOL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(dollars in thousands, except per share data)

See accompanying notes to condensed consolidated financial statements.

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AMPHENOL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(dollars in thousands)

See accompanying notes to condensed consolidated financial statements.

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AMPHENOL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(Unaudited)

(dollars in thousands)

See accompanying notes to condensed consolidated financial statements.

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AMPHENOL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(dollars in thousands, except per share data)

Note 1—Basis of Presentation and Principles of Consolidation

The condensed consolidated balance sheets as of March 31, 2014 and December 31, 2013 and the related condensed consolidated statements of income, comprehensive income and cash flow for the three months ended March 31, 2014 and 2013 include the accounts of Amphenol Corporation and its subsidiaries (the “Company”).  All material intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated financial statements included herein are unaudited.  In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation in conformity with accounting principles generally accepted in the United States of America have been included.  The results of operations for the three months ended March 31, 2014 are not necessarily indicative of the results to be expected for the full year.  These condensed consolidated financial statements and the related notes should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 (the “2013 Annual Report”).

Note 2—New Accounting Pronouncements

There are no accounting standards that were recently issued that materially impact the Company as of March 31, 2014.  The Company will continue to evaluate all new accounting standards as they are issued to determine if they impact the Company’s financial condition, results of operations and cash flows.

Note 3—Inventories

Inventories consist of:

Note 4—Reportable Business Segments

The Company has two reportable business segments: (i) Interconnect Products and Assemblies and (ii) Cable Products and Solutions. We aggregate our operating segments into reportable segments based upon similar economic characteristics and business groupings of products, services and customers. The Interconnect Product and Assemblies segment designs, manufactures and markets a broad range of connector and connector systems, value-added products and other products, including antennas and sensors, used in a broad range of applications in a diverse set of end markets.  The Cable Products and Solutions segment designs, manufactures and markets cable, value-added products and components for use primarily in the broadband communications and information technology markets as well as certain applications in other markets.  The accounting policies of the segments are the same as those for the Company as a whole and are described in Note 1 of the notes to the consolidated financial statements in the Company’s 2013 Annual Report. The Company evaluates the performance of business units on, among other things, profit or loss from operations before interest, headquarters’ expense allocations, stock-based compensation expense, income taxes, amortization related to certain intangible assets and nonrecurring gains and losses.

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The segment results for the three months ended March 31, 2014 and 2013 are as follows:

A reconciliation of segment operating income to consolidated income before income taxes for the three months ended March 31, 2014 and 2013 is summarized as follows:

Note 5—Changes in Equity and Noncontrolling Interests

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

A rollforward of consolidated changes in equity for the three months ended March 31, 2014 is as follows:

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A rollforward of consolidated changes in equity for the three months ended March 31, 2013 is as follows:

Note 6—Earnings Per Share

Basic earnings per share (“EPS”) is computed by dividing net income attributable to Amphenol Corporation by the weighted-average number of common shares outstanding. Diluted EPS is computed by dividing net income attributable to Amphenol Corporation by the weighted-average number of common shares and dilutive common shares issuable upon the exercise of outstanding stock options. A reconciliation of the basic weighted average common shares outstanding to diluted weighted average common shares outstanding for the three months ended March 31, 2014 and 2013 is as follows (dollars in thousands, except per share amounts):

Excluded from the computations above were anti-dilutive stock options of 2,764,633 and 1,263,518 for the three months ended March 31, 2014 and 2013, respectively.

Note 7—Commitments and Contingencies

The Company has been named as a defendant in several legal actions in which various amounts are claimed arising from normal business activities.  Although the amount of any ultimate liability with respect to such matters cannot be precisely determined, in the opinion of management, such matters are not expected to have a material effect on the Company’s financial condition, results of operations or cash flows.

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

Subsequent to the acquisition of Amphenol from Allied Signal Corporation (“Allied Signal”) in 1987 (Allied Signal merged with Honeywell International Inc. in December 1999 (“Honeywell”)), the Company and Honeywell were named jointly and severally liable as potentially responsible parties in connection with several environmental cleanup sites. The Company and Honeywell jointly consented to perform certain investigations and remediation and monitoring activities at two sites, the “Route 8” landfill and the “Richardson Hill Road” landfill, and they were jointly ordered to perform work at another site, the “Sidney” landfill. The costs incurred relating to these three sites are currently reimbursed by Honeywell based on an agreement (the “Honeywell Agreement”) entered into in connection with the acquisition in 1987. The environmental investigation, remediation and monitoring activities identified by the Company, including those referred to above, are covered under the Honeywell Agreement.  Management does not

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believe that the costs associated with resolution of these or any other environmental matters will have a material effect on the Company’s consolidated financial condition, results of operations or cash flows.

Note 8—Stock-Based Compensation

In May 2009, the Company adopted the 2009 Stock Purchase and Option Plan for Key Employees of Amphenol and its Subsidiaries (the “2009 Employee Option Plan”).  The Company continues to maintain the 2000 Stock Purchase and Option Plan for Key Employees of Amphenol and Subsidiaries (the “2000 Employee Option Plan”).  No additional stock options can be granted under the 2000 Employee Option Plan.  The 2009 Employee Option Plan authorizes the granting of additional stock options by a committee of the Company’s Board of Directors. As of March 31, 2014, there were 2,375,110 shares of common stock available for the granting of additional stock options under the 2009 Employee Option Plan. Options granted under the 2000 Employee Option Plan and the 2009 Employee Option Plan generally vest ratably over a period of five years and are generally exercisable over a period of ten years from the date of grant.

In 2004, the Company adopted the 2004 Stock Option Plan for Directors of Amphenol Corporation (the “2004 Directors Option Plan”).  The 2004 Directors Option Plan is administered by the Company’s Board of Directors.  As of March 31, 2014, there were 70,000 shares of common stock available for the granting of additional stock options under the 2004 Directors Option Plan, although no additional stock options are expected to be granted under this plan.  Options granted under the 2004 Directors Option Plan generally vest ratably over a period of three years and are generally exercisable over a period of ten years from the date of grant.

In May 2012, the Company adopted the 2012 Restricted Stock Plan for Directors of Amphenol Corporation (the “2012 Directors Restricted Stock Plan”). The 2012 Directors Restricted Stock Plan is administered by the Company’s Board of Directors.  As of March 31, 2014, the number of restricted shares available for grant under the 2012 Directors Restricted Stock Plan was 95,131.  Restricted shares granted under the 2012 Directors Restricted Stock Plan generally vest on the first anniversary of the grant date.  Grants under the 2012 Directors Restricted Stock Plan entitle the holder to receive shares of the Company’s common stock without payment.

The grant-date fair value of each option grant under the 2000 Employee Option Plan, the 2009 Employee Option Plan and the 2004 Directors Option Plan is estimated using the Black-Scholes option pricing model. The grant-date fair value of each restricted share grant is determined based on the closing share price of the Company’s stock on the date of the grant. The fair value is then amortized on a straight-line basis over the requisite service period of the awards, which is generally the vesting period. Use of a valuation model for option grants requires management to make certain assumptions with respect to selected model inputs. Expected share price volatility is calculated based on the historical volatility of the stock of the Company and implied volatility derived from related exchange traded options. The average expected life is based on the contractual term of the option and expected exercise and historical post-vesting termination experience. The risk-free interest rate is based on U.S. Treasury zero-coupon issues with a remaining term equal to the expected life assumed at the date of grant. The expected annual dividend per share is based on the Company’s dividend rate.

Stock-based compensation expense includes the estimated effects of forfeitures, which are adjusted over the requisite service period to the extent actual forfeitures differ or are expected to differ from such estimates.  Changes in estimated forfeitures are recognized in the period of change and impact the amount of expense to be recognized in future periods.  For the three months ended March 31, 2014, the Company’s income before income taxes and net income were reduced for stock-based compensation expense by $9,276 and $6,804, respectively.  For the three months ended March 31, 2013, the Company’s income before income taxes and net income were reduced for stock-based compensation expense by $8,283 and $6,031, respectively. The expense incurred for stock-based compensation is included in selling, general and administrative expense in the accompanying Condensed Consolidated Statements of Income.

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Stock Options

Stock option activity for the three months ended March 31, 2014 was as follows:

A summary of the status of the Company’s non-vested options as of March 31, 2014 and changes during the three months then ended is as follows:

During the three months ended March 31, 2014 and 2013, the following activity occurred under the Company’s option plans:

As of March 31, 2014, the total compensation cost related to non-vested options not yet recognized is approximately $76,647 with a weighted average expected amortization period of 3.22 years.

Restricted Shares

Prior to the third quarter of 2013, the Company issued 17,045 restricted shares with a weighted-average fair value at grant date of $53.78 per share, all of which became fully vested in 2013.  Additionally, in the second quarter of 2013, the Company issued 12,824 restricted shares with a weighted average fair value at grant date of $78.00.   As of March 31, 2014, the total compensation cost related to non-vested restricted shares not yet recognized was approximately $155 with a weighted average expected amortization period of 0.15 years.

Note 9—Shareholders’ Equity

In January 2013, the Board of Directors authorized a stock repurchase program under which the Company may repurchase up to 10,000,000 shares of its common stock during the two year period ending January 31, 2015 (the “2013 Stock Repurchase Program”). The price and timing of any such purchases under the 2013 Stock Repurchase Program after March 31, 2014 will depend on factors such as levels of cash generation from operations, the volume of stock option exercises by employees, cash requirements for acquisitions, economic and market conditions and stock price.  During the three months ended March 31, 2014, the Company repurchased 1,410,983 shares of its common stock for $121,130.  These treasury shares have been retired by the Company and common stock and retained earnings were reduced accordingly.  Through April 30, 2014, the Company has repurchased an additional 167,592 shares of its common stock for $15,891.   At April 30, 2014, approximately 4.1 million additional shares of common stock may be repurchased under the 2013 Stock Repurchase Program.

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Contingent upon declaration by the Board of Directors, the Company generally pays a quarterly dividend on its common stock.  In July 2013, the Board of Directors approved an increase in the quarterly dividend rate from $0.105 to $0.20 per share effective with the third quarter 2013 dividend.  For the three months ended March 31, 2014, the Company did not pay any dividends and declared dividends in the amount of $31,416 which were paid in April 2014.  For the three months ended March 31, 2013, the Company did not pay any dividends and declared dividends in the amount of $16,755.

Note 10—Benefit Plans and Other Postretirement Benefits

The Company and certain of its domestic subsidiaries have defined benefit pension plans (the “U.S. Plans”), which cover certain U.S. employees and which represent the majority of the assets and benefit obligations of the aggregate defined benefit plans of the Company. The U.S. Plans’ benefits are generally based on years of service and compensation and are generally noncontributory.  Certain U.S. employees not covered by the U.S. Plans are covered by defined contribution plans.  Certain foreign subsidiaries have defined benefit plans covering their employees (the “International Plans” and, together with the U.S. Plans, the “Plans”). The following is a summary, based on the most recent actuarial valuations of the Company’s net cost for pension benefits, of the Plans and other postretirement benefits for the three months ended March 31, 2014 and 2013.

For the three months ended March 31, 2014, the Company did not make a cash contribution to the U.S. Plans and estimates that, based on current actuarial calculations, it will make aggregate cash contributions to the Plans in 2014 of approximately $20,000, the majority of which will be to the U.S. Plans.  The timing and amount of cash contributions in subsequent years will depend on a number of factors, including the investment performance of the Plan assets.

The Company offers various defined contribution plans for certain U.S. and foreign employees. Participation in these plans is based on certain eligibility requirements. The Company matches the majority of employee contributions to U.S. defined contribution plans with cash contributions up to a maximum of 5% of eligible compensation.  During the three months ended March 31, 2014 and 2013, the total matching contributions to these U.S. defined contribution plans were approximately $941 and $830, respectively.

Note 11—Goodwill and Other Intangible Assets

As of March 31, 2014, the Company has goodwill totaling $2,302,359, of which $2,186,945 is related to the Interconnect Products and Assemblies segment with the remainder related to the Cable Products and Solutions segment.  For the three months ended March 31, 2014, goodwill increased by $13,274, primarily as a result of fair value adjustments made from the Company’s evaluation of the fair value attributes of the assets acquired related to recent acquisitions.  The Company anticipates that the final assessment of values of those assets will not differ materially from the preliminary assessment.

Other than goodwill and an indefinite-lived trade name intangible asset with a value of approximately $4,300, the Company’s intangible assets are subject to amortization.   A summary of the Company’s amortizable intangible assets as of March 31, 2014 and December 31, 2013 is as follows:

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Customer relationships, proprietary technology, license agreements and trade names and other amortizable intangible assets have weighted average useful lives of approximately 9 years, 14 years, 8 years and 15 years, respectively, for an aggregate weighted average useful life of approximately 10 years.

Intangible assets are included in Goodwill and other long-term assets in the accompanying Condensed Consolidated Balance Sheets.  The amortization expense for the three months ended March 31, 2014 and 2013 was approximately $8,300 and $5,000, respectively.  As of March 31, 2014, amortization expense estimated for each of the next five fiscal years is approximately $27,000 in 2014, $24,500 in 2015, $23,700 in 2016, $23,500 in 2017, and $19,400 in 2018.

Note 12—Debt

Revolving Credit Facility

The Company has a $1,500,000 unsecured credit facility (the “Revolving Credit Facility”) with a maturity date of July 2018.  At March 31, 2014, borrowings and availability under the Revolving Credit Facility were $270,000 and $1,230,000, respectively.  As of March 31, 2014, the interest rate on borrowings under the Revolving Credit Facility was at a spread over LIBOR. The Revolving Credit Facility requires payment of certain annual agency and commitment fees and requires that the Company satisfy certain financial covenants.

Senior Notes

In November 2009, the Company issued $600,000 principal amount of unsecured 4.75% Senior Notes due November 2014 (the “4.75% Senior Notes”) at 99.813% of their face value.  Interest on the 4.75% Senior Notes is payable semi-annually on May 15 and November 15 of each year to the holders of record as of the immediately preceding May 1 and November 1. The Company may, at its option, redeem some or all of the 4.75% Senior Notes at any time by paying a make-whole premium, plus accrued and unpaid interest, if any, to the date of repurchase.  The 4.75% Senior Notes are unsecured and rank equally in right of payment with the Company’s other unsecured senior indebtedness. The fair value of the 4.75% Senior Notes at March 31, 2014 was approximately $615,900 based on recent bid prices in an active market and are therefore classified as Level 1 in the fair value hierarchy.

In January 2012, the Company issued $500,000 principal amount of unsecured 4.00% Senior Notes due February 2022 (the “4.00% Senior Notes”) at 99.746% of their face value.  Interest on the 4.00% Senior Notes is payable semi-annually on February 1 and August 1 of each year, to the holders of record as of the immediately preceding January 15 and July 15.  The Company may, at its option, redeem some or all of the 4.00% Senior Notes at any time by paying 100% of the principal amount, plus accrued and unpaid interest, if any, to the date of repurchase, and if redeemed prior to November 1, 2021, a make-whole premium. The 4.00% Senior Notes are unsecured and rank equally in right of payment with the Company’s other unsecured senior indebtedness.  The fair value of the 4.00% Senior Notes at March 31, 2014 was approximately $503,200 based on recent bid prices in an active market and are therefore classified as Level 1 in the fair value hierarchy.

In January 2014, the Company issued $750,000 principal amount of unsecured 2.55% Senior Notes due January 2019 (the “2.55% Senior Notes”) at 99.846% of their face value.  Interest on the 2.55%  Senior Notes is payable semi-annually on January 30 and July 30 of each year, commencing July 30, 2014, to the holders of record as of the immediately preceding January 15 and July 15.  The Company may, at its option, redeem some or all of the 2.55% Senior Notes at any time by paying 100% of the principal amount, plus accrued and unpaid interest, if any, to the date of redemption, and if redeemed prior to December 30, 2018, a make-whole premium. The 2.55% Senior Notes are unsecured and rank equally in right of payment with the Company’s other unsecured senior indebtedness.  The fair value of the 2.55% Senior Notes at March 31, 2014 was approximately $750,375 based on recent bid prices in an active market and are therefore classified as Level 1 in the fair value hierarchy.

Credit Agreement

The Company has a $100,000 uncommitted and unsecured credit facility with the ability to borrow at a spread over LIBOR, which is renewable annually (the “Credit Agreement”).  At March 31, 2014, borrowings and availability under the Credit Agreement were $100,000 and nil, respectively.

The carrying value of borrowings under the Company’s Revolving Credit Facility and Credit Agreement approximated their fair value at March 31, 2014 due to their relative short-term maturities and market interest rates and are therefore classified as Level 2 in the fair value hierarchy.

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Note 13—Fair Value Measurements

The Company follows the framework within the Fair Value Measurements and Disclosures topic of the Accounting Standards Codification, which requires fair value to be determined based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. These requirements establish market or observable inputs as the preferred source of values. Assumptions based on hypothetical transactions are used in the absence of market inputs. The Company does not have any non-financial instruments accounted for at fair value on a recurring basis.

The valuation techniques required are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs create the following fair value hierarchy:

Level 1                                Quoted prices for identical instruments in active markets.

Level 2                                Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3                                Significant inputs to the valuation model are unobservable.

The Company believes that the assets or liabilities subject to such standards with fair value disclosure requirements are derivative instruments.  The Company’s derivative instruments represent forward contracts, which are valued using bank quotations based on market observable inputs such as forward and spot rates and are therefore classified as Level 2 in the fair value hierarchy. The impact of the credit risk related to these financial assets is immaterial.  The fair values of the Company’s financial and non-financial assets and liabilities subject to such standards at March 31, 2014 and December 31, 2013 are as follows:

The Company does not have any significant financial or non-financial assets and liabilities that are measured at fair value on a non-recurring basis.

Note 14—Derivative Instruments

The Company is exposed to certain risks related to its ongoing business operations.  The primary risks managed by using derivative instruments are foreign exchange rate risk and interest rate risk. Foreign exchange rate forward contacts were entered into in 2013 to manage the currency exposures on intercompany loans used to fund recent acquisitions. The hedges will terminate in 2014 upon maturity of the respective intercompany loans.

Derivative instruments are required to be recognized as either assets or liabilities at fair value in the Consolidated Balance Sheets. The Company designates foreign exchange rate forward contacts as cash flow hedges.

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As of March 31, 2014 and December 31, 2013, the Company had the following derivative activity related to cash flow hedges:

The amount recognized in accumulated other comprehensive income (loss) associated with foreign exchange rate forward contracts and the amount reclassified from accumulated other comprehensive income (loss) to foreign exchange gain (loss) in the accompanying Condensed Consolidated Statements of Income during the three month periods ended March 31, 2014 and 2013 was not material.

Note 15—Income Taxes

The provision for income taxes for the first quarter of 2014 and 2013 was at an effective rate of 26.4% and 20.9%, respectively.  In the first quarter of 2013, the Company recorded a benefit of $11,300, or $0.07 per diluted common share, resulting from the delay, by the U.S. government, in the reinstatement of certain federal income tax provisions for the year 2012 relating primarily to research and development credits and certain U.S. taxes on foreign income that are part of the tax provisions within the American Taxpayer Relief Act. Such tax provisions were reinstated on January 2, 2013 with retroactive effect to 2012.  Under U.S. GAAP, the related benefit to the Company of $11,300 relating to the 2012 tax year was recorded as a benefit in the first quarter of 2013 at the date of reinstatement; as such, between the fourth quarter of 2012 and the first quarter of 2013, there was no net impact on the Company from an income statement perspective.  Excluding this impact as well as the net impact of the acquisition-related expenses, the Company’s effective tax rate for the first quarter of 2014 and 2013 was 26.5% and 26.8%, respectively.

The Company is present in the U.S. and numerous foreign taxable jurisdictions, and at any point in time has numerous audits underway at various stages of completion. With few exceptions, the Company is subject to income tax examinations by tax authorities for the years 2010 and after.  The Company is generally not able to precisely estimate the ultimate settlement amounts or timing until the close of an audit.  The Company evaluates its tax positions and establishes liabilities for uncertain tax positions that may be challenged by local authorities and may not be fully sustained, despite the Company’s belief that the underlying tax positions are fully supportable. As of March 31, 2014, the amount of the liability for unrecognized tax benefits, which if recognized would impact the effective tax rate, was approximately $15,628, the majority of which is included in other long-term liabilities in the accompanying Condensed Consolidated Balance Sheets.  Unrecognized tax benefits are reviewed on an ongoing basis and are adjusted for changing facts and circumstances, including progress of tax audits and closing of statutes of limitations. Based on information currently available, management anticipates that over the next twelve month period, audit activity could be completed and statutes of limitations may close relating to existing unrecognized tax benefits of approximately $2,732.

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Results of Operations

Three months ended March 31, 2014 compared to the three months ended March 31, 2013

Net sales were $1,246.1 in the first quarter of 2014 compared to $1,079.8 in the prior year quarter, an increase of 15% in both U.S. dollars and in local currencies and 7% organically (excluding the impact of foreign exchange and acquisitions) over the prior year quarter.  Sales in the Interconnect Products and Assemblies segment in the first quarter of 2014 (approximately 93% of sales) increased 16% in both U.S. dollars and in local currencies compared to the same period in 2013 ($1,159.1 in 2014 versus $995.9 in 2013).  The sales growth was driven by increases in the industrial, automotive, mobile networks, commercial aerospace, information technology and data communications equipment markets with contributions from both organic growth and the Company’s acquisition program, partially offset by decreases in sales to the mobile device and military aerospace markets.  Sales in the Cable Products and Solutions segment in the first quarter of 2014 (approximately 7% of sales) increased 4% in U.S. dollars and 5% in local currencies compared to the same period in 2013 ($87.0 in 2014 versus $83.9 in 2013).  Cable Products and Solutions sales are primarily in the broadband communications market.

Geographically, sales in the United States in the first quarter of 2014 increased approximately 10%, compared to the same period in 2013 ($385.5 in 2014 versus $349.4 in 2013).  International sales in the first quarter of 2014 increased approximately 18% in U.S. dollars and 17% in local currencies compared to the same period in 2013 ($860.6 in 2014 versus $730.4 in 2013). The comparatively weaker U.S. dollar for the first quarter of 2014 had the effect of increasing sales by approximately $7.0 when compared to foreign currency translation rates for the same period in 2013.

Operating income in the first quarter of 2014 was $232.1 or 18.6% of sales. Operating income in the first quarter of 2014 is net of $2.0 of acquisition-related expenses (separately presented in the Consolidated Statements of Income) related to the amortization of the value associated with acquired backlog relating to a 2013 acquisition.  For the three months ended March 31, 2014, these expenses had an impact on net income of $1.3, or $0.01 per share.  Excluding these expenses, operating income was $234.1 million or 18.8% of sales in the first quarter of 2014, down approximately 40 basis points from operating income of $207.0 or 19.2% of sales in the first quarter of 2013. The decline in operating income as a percentage of sales relates primarily to a decrease in operating income margins in the Interconnect Products and Assemblies segment of 40 basis points compared to the prior year quarter ($242.8 or 21.0% of sales in 2014 versus $213.3 or 21.4% of sales in 2013).  This decrease in operating income margin relates to the impact of the inclusion, for the full quarter in 2014, of an acquisition completed in late 2013 that has lower operating income margins than the average of the Company; as such its inclusion in the consolidated results of the Company lowered the consolidated operating income margin percentage. In addition, the operating income for the Cable Products and Solutions segment for the first quarter of 2014 decreased by approximately $3.2 and 160 basis points compared to the prior year quarter ($10.6 or 12.2% of sales in 2014 versus $11.6 or 13.8% of sales in 2013), due primarily to the impact of market pricing and product mix compared to the prior year quarter.

The gross profit margin as a percentage of sales was comparable at approximately 31% in both the first quarter of 2014 and 2013.

Selling, general and administrative expenses increased to $154.7 or 12.4% of net sales for the first quarter of 2014, compared to $130.9, or 12.1% of net sales for the same period in 2013.  The percent of net sales increase in the first quarter of 2014 compared to the first quarter of 2013 is primarily due to higher selling, general and administrative expenses on a percent of net sales basis arising from the inclusion of the acquisition referred to above as compared to the average of the Company.  Administrative expenses increased approximately $11.1 for the first quarter of 2014 compared to the same period in 2013, related to the impact of acquisitions as well as increases in stock-based compensation expense and employee-related benefits and represented approximately 4.8% and 4.4% of net sales for the first quarter of 2014 and 2013, respectively.  Research and development expenses increased approximately $5.5 for the first quarter of 2014 compared to the same period in 2013, related to the impact of acquisitions as well as increases in expenses for new product development and represented approximately 2.4% and 2.3% of net sales for the first quarter of 2014 and 2013.  Selling and marketing expenses increased approximately $7.1 for the first quarter of 2014 compared to the same period in 2013, related to the impact of acquisitions and an increase in sales volume and represented 5.2% and 5.4% of net sales for the first quarter of 2014 and 2013, respectively.

Interest expense for the first quarter of 2014 was $19.1, compared to $15.5 for the same period in 2013.  The increase is primarily attributable to higher average debt levels related to the Company’s stock repurchase program as well as acquisition activity.