A M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T  The Company designs and manufactures connectors and interconnect systems which are used primarily to conduct  electrical and optical signals for a wide range of sophisticated electronic applications. The Company believes, based primarily on  published market research, that it is one of the largest connector manufacturers in the world. The Company has developed a broad  range of connector and interconnect products for communications equipment applications including the converging voice, video and  data communications markets. The Company is a leader in developing interconnect products for factory automation, machine tools,  instrumentation and medical systems, mass transportation applications and automotive applications, including airbags, pretensioner  seatbelts and other on board automotive electronics. In addition, the Company is the leading supplier of high performance,  military-specification, circular environmental connectors that require superior performance and reliability under conditions of stress  and in hostile environments. These conditions are frequently encountered in commercial and military aerospace applications and  other demanding industrial applications such as oil exploration, medical instrumentation and off-road construction. Industry analysts estimate that the worldwide market for interconnect products will grow approximately 5% in 2005. The  Company believes that the worldwide industry for interconnect products and systems is highly fragmented with over 2,000  producers of connectors worldwide, of which the 10 largest, including Amphenol, accounted for a combined market share of  approximately 50% in 2004. Industry analysts estimate that the total sales for the industry were approximately $35 billion in 2004. The Company's Times Fiber subsidiary is the world's second largest producer of coaxial cable for the cable television  market. The Company believes that its Times Fiber unit is one of the lowest cost producers of coaxial cable for cable television. The  Company's coaxial cable and connector products are used in cable television systems including full service cable  television/telecommunication systems being installed by cable operators and telecommunication companies offering video, voice  and data services. The Company is also a major supplier of coaxial cable to the developing international cable television market. The Company is a global manufacturer employing advanced manufacturing processes. The Company manufactures and  assembles its products at facilities in the Americas, Europe, Africa and Asia. The Company sells its connector products through its  own global sales force and independent manufacturers' representatives to thousands of OEMs in approximately 60 countries  throughout the world as well as through a global network of electronics distributors. The Company sells its cable products primarily  to cable television operators and to telecommunication companies who have entered the broadband communications market. For the  year 2004, approximately 48% of the Company's net sales were in North America, 27% were in Europe and 25% were in Asia and  other countries. The Company implements its product development strategy through product design teams and collaboration arrangements  with customers which result in the Company obtaining approved vendor status for its customers' new products and programs. The  Company seeks to have its products become widely accepted within the industry for similar applications and products manufactured  by other potential customers, which the Company believes will provide additional sources of future revenue. By developing  application specific products, the Company has decreased its exposure to standard products which generally experience greater  pricing pressure. In addition to product design teams and customer collaboration arrangements, the Company uses key account  managers to manage customer relationships on a global basis such that it can bring to bear its total resources to meet the worldwide  needs of its multinational customers. The Company is also focused on making strategic acquisitions in certain markets to further  broaden and enhance its product offerings and expand its global capabilities. 16 