What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2021-02-16 compared with 2020-02-11 · 482 added, 409 removed, 1138 unchanged (44% of the section changed)

24 unchanged sentences

Valuation of Goodwill for Certain Reporting Units

Description of the Matter

At December 31, 2019, the Company had goodwill on its balance sheet aggregating $1.2 billion.

Description of the Matter At December 31, 2020, the Company had goodwill on its balance sheet aggregating $1.3 billion.

As more fully described in Notes 2 and 12 to the Company’s consolidated financial statements, goodwill is tested for impairment at least annually at the reporting unit level.

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In particular, the fair value estimates are sensitive to significant assumptions such as discount rates, revenue growth rates, projected operating margins, and terminal growth rates, which are sensitive to and affected by expectations about future market or economic conditions and company-specific qualitative factors.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s preparation and review of the goodwill impairment tests, significant assumptions discussed above, as used in each of the models, and the completeness and accuracy of the data used in the models.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s preparation and review of the goodwill impairment tests, significant assumptions discussed above, as used in each of the models, and the completeness and accuracy of the data used in the models.

Our audit procedures included, among others, involving our specialists to assist us in assessing methodologies, and testing the significant assumptions discussed above and the underlying data used by the Company in its analyses, and reviewing the methodology and market support used to determine the discount rate.

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Revenue recognition - allocating consideration to performance obligations and estimating variable consideration

Description of the Matter

As described in Notes 2 and 3 to the consolidated financial statements, the Company has contractual arrangements that include software, support, and service revenues.

Description of the Matter As described in Notes 2 and 3 to the consolidated financial statements, the Company has contractual arrangements that include software, support, and service revenues.

The Company estimated the selling prices of those contractual arrangements to determine the allocation of consideration to each of the performance obligations.

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Estimates are based on a percentage of revenues and the average time period between the original sale and the issuance of the adjustments.

As of December 31, 2019, the Company recorded $29.5 million in unprocessed changes and $28.7 million in estimated pricing adjustments that were recognized as a reduction of revenues and accounts receivable, respectively.

As of December 31, 2020, the Company recorded $25.5 million in unprocessed changes that were recognized as a reduction of revenues and accounts receivable and $13.0 million in unprocessed changes recognized as accrued liabilities.

Auditing the Company’s allocation of consideration expected to be received under its contractual arrangements was complex and involved a high degree of subjective auditor judgment because of the management judgment required to develop the estimates of standalone selling prices for the highly variable pricing of software licenses.

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The estimates developed by the Company are also dependent on anticipated sales demand, trends in product pricing, and historical and anticipated adjustment patterns.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company's processes to determine the estimated standalone selling price of each of the performance obligations, the allocation of total consideration to be received over the contractual term to all performance obligations based on their relative standalone selling price and to calculate the variable consideration, including the process to determine and evaluate the underlying assumptions about estimates of expected unprocessed changes and pricing concessions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company's processes to determine the estimated standalone selling price of each of the performance obligations, the allocation of total consideration to be received over the contractual term to all performance obligations based on their relative standalone selling price and to calculate the variable consideration, including the process to determine and evaluate the underlying assumptions about estimates of expected unprocessed changes and pricing concessions.

We performed audit procedures related to the estimated standalone selling prices and allocation to the performance obligations over the term of the contractual arrangement, including the following, among others.

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In addition, we inspected the results of the Company's retrospective review of adjustments reserved compared to actual adjustments issued, evaluated the estimates made based on historical experience and performed sensitivity analyses to evaluate the changes in variable consideration that would result from changes in the Company's significant assumptions.

Fair Value Estimate and Impairment Loss of the Grass Valley Reporting Unit

Description of the Matter

As described in Note 5 to the consolidated financial statements, the Company announced the sale of its Grass Valley business in the fourth quarter of 2019, which is expected to close in early 2020.

The Company evaluated the carrying value of the Grass Valley reporting unit and its related indefinite-lived intangible assets and concluded the carrying value of those assets exceeded the associated fair value.

As a result, the Company recorded an impairment loss of $521.4 million.

Auditing the Company’s fair value of the reporting unit, including consideration of the fair value of the various forms of consideration expected to be received from the disposal, involved a high degree of subjectivity, as the fair value estimates developed by the Company, with the assistance of a third-party valuation specialist, were based on assumptions related to projected financial information and the associated terms of the disposal.

The fair value of the reporting unit was sensitive to significant assumptions such as discount rates, revenue growth rates, projected EBITDA margins, and terminal growth rates.

These assumptions are sensitive to and affected by expectations about future market or economic conditions and Grass Valley-specific qualitative factors.

The estimated fair value of the consideration expected to be received was calculated based on a combination of cash expected to be received at closing, as well as an interest-bearing note receivable from the buyer with a five-year maturity and additional consideration available to the Company.

The additional consideration is contingent on certain performance thresholds being met and certain assumptions underlying this contingent consideration, such as revenue growth rates, projected EBITDA margins, and terminal growth rates all used in projecting earnings, are subjective and sensitive to change.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s process to determine the fair value of the Grass Valley reporting unit.

This included controls over the Company's review of the significant assumptions underlying the fair value determination, including projected revenue and EBITDA assumptions, as well as the estimated discount rates.

Our testing of the Company’s fair value determination and subsequent impairment charge included, among other procedures, evaluation of the methods and significant assumptions used by the Company’s third-party valuation specialist, and evaluation of the operating data used in the estimated fair value.

For example, we compared the significant assumptions discussed above that were used to estimate future revenue and EBITDA of the business unit to current industry and economic trends in the Broadcast sector, obtained support to evaluate such data based on historical performance, performed a sensitivity analysis of the significant assumptions to evaluate the change in the fair value estimate that would result from changes in the assumptions and recalculated the Company's estimate.

We recalculated the impairment loss recorded.

We also involved our valuation specialists to assist in our evaluation of the discount rates used in the fair value estimate.

/s/ Ernst & Young LLP

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Operating lease right-of-use assets 54,787 62,251

Goodwill 1,251,938 1,243,669

Intangible assets, less accumulated amortization 287,071 339,505

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Other long-lived assets 49,384 12,446

Long-term assets of discontinued operations

$ 3,139,734 $ 3,406,759

LIABILITIES AND STOCKHOLDERS’ EQUITY

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Other long-term liabilities 42,998 38,308

Long-term liabilities of discontinued operations

Stockholders’ equity:

Preferred stock, par value $0.01 per share— 2,000 shares authorized;

0 shares and 52 shares outstanding at 2019 and 2018, respectively

Common stock, par value $ 0.01 per share— 200,000 shares authorized;

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Treasury stock, at cost— 5,692 and 4,877 shares at 2020 and 2019, respectively

( 332,552 ) ( 307,197 )

Total Belden stockholders’ equity 750,581 959,847

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Total stockholders’ equity 757,051 965,819

$ 3,139,734 $ 3,406,759

The accompanying notes are an integral part of these Consolidated Financial Statements.

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Years Ended December 31,

2020 2019 2018

(In thousands, except per share amounts)

Revenues $ 1,862,716 $ 2,131,278 $ 2,165,702

Cost of sales ( 1,199,427 ) ( 1,337,773 ) ( 1,335,791 )

Gross profit 663,289 793,505 829,911

Selling, general and administrative expenses ( 366,188 ) ( 417,329 ) ( 411,352 )

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Income from continuing operations before taxes 66,127 152,410 230,080

Income tax benefit (expense)

Income tax expense ( 11,724 ) ( 42,519 ) ( 62,936 )

Income from continuing operations 54,403 109,891 167,144

Loss from discontinued operations, net of tax ( 99,513 ) ( 486,667 ) ( 6,433 )

Loss from disposal of discontinued operations, net of tax ( 9,948 ) — —

Net income (loss) ( 55,058 ) ( 376,776 ) 160,711

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Weighted average number of common shares and equivalents:

Basic 44,778 42,203 40,675

Diluted 44,937 42,416 40,956

Basic income (loss) per share attributable to Belden common stockholders:

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Discontinued operations attributable to Belden common stockholders ( 2.22 ) ( 11.53 ) ( 0.16 )

Disposal of discontinued operations attributable to Belden common stockholders ( 0.22 ) — —

Net income (loss) attributable to Belden common stockholders $ ( 1.23 ) $ ( 9.37 ) $ 3.10

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Discontinued operations attributable to Belden common stockholders ( 2.22 ) ( 11.53 ) ( 0.16 )

Disposal of discontinued operations attributable to Belden common stockholders ( 0.22 ) — —

Net income (loss) attributable to Belden common stockholders $ ( 1.23 ) $ ( 9.37 ) $ 3.08

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Years Ended December 31,

2020 2019 2018

(In thousands)

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Foreign currency translation, net of tax of $ 1.0 million, $ 1.0 million, and $ 1.7 million, respectively

( 112,562 ) 24,121 27,802

Adjustments to pension and postretirement liability, net of tax of $ 1.7 million, $ 1.1 million, and $ 1.0 million, respectively

( 15,477 ) ( 12,168 ) ( 4,690 )

Other comprehensive income (loss), net of tax ( 128,039 ) 11,953 23,112

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Years Ended December 31,

2020 2019 2018

(In thousands)

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Share-based compensation 20,030 17,751 18,497

Loss on disposal of business 946 — —

Loss on debt extinguishment — — 22,990

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Changes in operating assets and liabilities, net of the effects of exchange rate changes, acquired businesses, and disposals:

Receivables 70,707 22,926 ( 21,748 )

Inventories ( 8,507 ) 44,477 ( 14,779 )

Accounts payable ( 43,567 ) ( 41,527 ) ( 29,401 )

Accrued liabilities 7,374 ( 17,654 ) 17,238

Income taxes ( 22,823 ) 5,497 ( 4,390 )

Other assets 2,018 ( 16,118 ) ( 18,748 )

Other liabilities ( 40 ) 1,157 ( 1,082 )

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Capital expenditures ( 90,215 ) ( 110,002 ) ( 97,847 )

Cash used to acquire businesses, net of cash acquired

Cash from (used for) business acquisitions, net of cash acquired 590 ( 74,392 ) ( 84,580 )

Proceeds from disposal of tangible assets 3,161 25 1,580

Proceeds from disposal of business

Proceeds from disposal of business, net of cash sold 54,821 — 40,171

Net cash used for investing activities ( 31,643 ) ( 184,369 ) ( 140,676 )

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Payments under share repurchase program ( 35,000 ) ( 50,000 ) ( 175,000 )

Payment of earnout consideration ( 29,300 ) — —

Cash dividends paid ( 9,029 ) ( 34,439 ) ( 43,169 )

Debt issuance costs paid

Withholding tax payments for share based-payment awards ( 1,388 ) ( 2,149 ) ( 2,094 )

Other ( 194 ) ( 360 ) —

Debt issuance costs paid — — ( 7,609 )

Redemption of stockholders' rights agreement — — ( 411 )

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Cash and cash equivalents, end of year $ 501,994 $ 425,885 $ 420,610

For all periods presented, the Consolidated Cash Flow Statement includes the results of the Grass Valley disposal group.

For all periods presented, the Consolidated Cash Flow Statement includes the results of the Grass Valley disposal group up to the disposal date, July 2, 2020.

The accompanying notes are an integral part of these Consolidated Financial Statements.

Consolidated Stockholders’ Equity Statements

Mandatory Convertible Preferred Stock

Retained Earnings

Treasury Stock

Mandatory Convertible Preferred Stock Common Stock Additional

Capital Retained Earnings Treasury Stock Accumulated

Comprehensive

Income (Loss)

Non-controlling

Income (Loss) Non-controlling

Interest Total

Shares Amount Shares Amount Shares Amount

(In thousands)

Balance at December 31, 2017 52 $ 1 50,335 $ 503 $ 1,123,832 $ 833,610 ( 8,316 ) $ ( 425,685 ) $ ( 98,026 ) $ 631 $ 1,434,866

Net income (loss)

Other comprehensive income, net of tax

Preferred stock issuance, net

Exercise of stock options, net of tax withholding forfeitures

Conversion of restricted stock units into common stock, net of tax withholding forfeitures

Share-based compensation related items

Preferred stock dividends

Common stock dividends ($0.20 per share)

Balance at December 31, 2017

Cumulative effect of change in accounting principles — — — — — ( 29,041 ) — — — — ( 29,041 )

Net income (loss) — — — — — 160,894 — — — ( 183 ) 160,711

Other comprehensive loss, net of tax

Other comprehensive income (loss), net of tax — — — — — — — — 23,119 ( 7 ) 23,112

Exercise of stock options, net of tax withholding forfeitures — — — — ( 883 ) — 20 118 — — ( 765 )

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Common stock dividends ($ 0.20 per share)

— — — — — ( 8,121 ) — — — — ( 8,121 )

Balance at December 31, 2018 52 $ 1 50,335 $ 503 $ 1,139,395 $ 922,000 ( 10,939 ) $ ( 599,845 ) $ ( 74,907 ) $ 441 $ 1,387,588

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Common stock dividends ($ 0.20 per share)

— — — — — ( 8,544 ) — — — — ( 8,544 )

Balance at December 31, 2019 — $ — 50,335 $ 503 $ 811,955 $ 518,004 ( 4,877 ) $ ( 307,197 ) $ ( 63,418 ) $ 5,972 $ 965,819

Cumulative effect of change in accounting principle — — — — — ( 2,916 ) — — — — ( 2,916 )

Net income (loss) — — — — — ( 55,162 ) — — — 104 ( 55,058 )

Other comprehensive income (loss), net of tax — — — — — — — — ( 128,433 ) 394 ( 128,039 )

Retirement Savings Plan stock contributions — — — — ( 1,622 ) — 76 4,276 — — 2,654

Exercise of stock options, net of tax withholding forfeitures — — — — ( 791 ) — 7 610 — — ( 181 )

Conversion of restricted stock units into common stock, net of tax withholding forfeitures — — — — ( 5,967 ) — 78 4,759 — — ( 1,208 )

Share repurchase program — — — — — — ( 976 ) ( 35,000 ) — — ( 35,000 )

Share-based compensation — — — — 20,030 — — — — — 20,030

Common stock dividends ($ 0.20 per share)

— — — — — ( 9,050 ) — — — — ( 9,050 )

Balance at December 31, 2020 $ — $ — 50,335 $ 503 $ 823,605 $ 450,876 ( 5,692 ) $ ( 332,552 ) $ ( 191,851 ) $ 6,470 $ 757,051

The accompanying notes are an integral part of these Consolidated Financial Statements.

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Reclassifications

We have made certain reclassifications to the 2018 and 2017 Condensed Consolidated Financial Statements, primarily in relation to the Grass Valley disposal group being included in discontinued operations.

We have made certain reclassifications to the 2019 and 2018 Consolidated Financial Statements, primarily as a result of the West Penn Wire business and multi-conductor product line transfer from the Enterprise Solutions segment to the Industrial Solutions segment in 2020.

Summary of Significant Accounting Policies

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• Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

During 2019 , 2018 , and 2017 we utilized Level 1 inputs to determine the fair value of cash equivalents, and Level 3 inputs to determine the fair value of net assets acquired in business combinations (see Note 4), for our annual impairment testing (see Note 12), and our impairment testing over our disposal group (see Note 5).

During 2020, 2019, and 2018 we utilized Level 1 inputs to determine the fair value of cash equivalents and Level 2 and Level 3 inputs to determine the fair value of net assets acquired in business combinations (see Note 4) and for impairment testing (see Notes 5 and 13).

We did not have any transfers between Level 1 and Level 2 fair value measurements during 2020.

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Future market conditions might require us to take actions to further reduce prices and increase customer return authorizations.

Unprocessed Changes recognized against our gross accounts receivable balance at December 31, 2019 and 2018 totaled $ 29.5 million and $ 25.5 million , respectively.

Unprocessed Changes recognized against our gross accounts receivable balance at December 31, 2020 and 2019 totale d $ 25.5 million and $ 29.5 million, respectively.

Unprocessed Changes recognized as accrued liabilities at December 31, 2020 and 2019 totaled $ 13.0 million and $ 11.0 million, respectively.

As of and for each of the three year periods ended December 31, 2019, we evaluated the collectability of accounts receivable based on the specific identification method.

A considerable amount of judgment is required in assessing the realizability of accounts receivable, including the current creditworthiness of each customer and related aging of past due balances.

We perform ongoing credit evaluations of our customers’ financial condition.

Through these evaluations, we may become aware of a situation where a customer may not be able to meet its financial obligations due to deterioration of its financial viability, credit ratings, or bankruptcy.

We record a specific reserve for bad debts against amounts due to reduce the receivable to its estimated collectible balance.

We recognized bad debt expense, net of recoveries, of $ 0.1 million , $ 0.2 million , and $ 0.4 million in 2019 , 2018 , and 2017 , respectively.

The allowance for doubtful accounts at December 31, 2019 and 2018 totaled $ 2.6 million and $ 3.1 million , respectively.

We are exposed to credit losses primarily through sales of products and services.

Our expected loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions and a review of the current status of customers' trade accounts receivables.

Due to the short-term nature of such receivables, the estimate of amount of accounts receivable that may not be collected is based on aging of the accounts receivable balances and the financial condition of customers.

Additionally, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default.

Our monitoring activities include timely account reconciliation, dispute resolution, payment confirmation, consideration of customers' financial condition and macroeconomic conditions.

Balances are written off when determined to be uncollectible.

As of December 31, 2020 and 2019, the allowance for doubtf ul accounts totaled $ 5.1 million and $ 2.6 million, respectively.

We also recognized bad debt expense, net of recoveries, of $ 2.4 million, $ 0.1 million, and $ 0.2 million in 2020, 2019, and 2018, respectively.

Inventories and Related Reserves

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Such an evaluation is made based on the weight of all available evidence and the significance of all identified events and circumstances that may influence the fair value of a reporting unit.

If it is more likely than not that the fair value is less than the carrying value, then a quantitative assessment is required for the reporting unit, as described in the paragraph below.

If it is more likely than not that the fair value is less than the carrying value, then a quantitative assessment is required for the reporting u nit, as described in the paragraph below.

In 2020, we did not perform a qualitative assessment over any of our reporting units.

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Consideration is given to the financial conditions and operating performance of the reporting unit being valued relative to those publicly-traded companies operating in the same or similar lines of business.

The fair values of all ten reporting units tested under a quantitative approach were in excess of the carrying values as of the impairment testing date, and as a result, the goodwill balances for our continuing operations reporting units were not impaired in 2019.

Furthermore, goodwill was not impaired in 2018 or 2017 .

Based on our annual goodwill impairment test, the excess of the fair values over the carrying values of our ten reporting units tested under a quantitative income approach ranged from 4% - 345%.

As a result, the goodwill balances for our continuing operations reporting units were no t impaired in 2020.

Furthermore, we did not recognize any goodwill impairment from continuing operations in 2019 or 2018.

See Note 13 for further discussion.

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If the carrying amount of the asset exceeds its fair value, we recognize an impairment loss in an amount equal to that excess.

We did not recognize impairment charges for our indefinite lived intangible assets in 2019 , 2018 , or 2017 .

We did no t recognize impairment charges for our indefinite lived intangible assets from continuing operations in 2020, 2019, or 2018.

See Note 13 for further discussion.

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We test intangible assets subject to amortization for impairment and estimate their fair values using the same assumptions and techniques we employ on property, plant and equipment.

We did not recognize any impairment charges for amortizable intangible assets in 2019 , 2018 , or 2017 .

Due to its overall financial performance during the year and discontinued operations classification, we performed interim impairment tests on the Grass Valley reporting unit, which resulted in a total asset impairment of $ 521.4 million for the year ended December 31, 2019.

We determined the estimated fair values of the assets and of the reporting unit by calculating the present values of their estimated future cash flows, which was based in part on the assumed proceeds from a divestiture of Grass Valley.

See Note 12 for further discussion.

We did not recognize any impairment charges for amortizable intangible assets from continuing operations in 2020, 2019, or 2018.

Due to its overall financial performance and discontinued operations classification, we performed impairment tests on the Grass Valley disposal group, which resulted in total asset impairments of $ 113.0 million and $ 521.4 million in 2020 and 2019, respectively.

The 2019 impairment charge consisted of impairments to goodwill, customer relationships, and trademarks of $ 326.1 million, $ 14.4 million, and $ 1.6 million, respectively, as well as an impairment of the disposal group of $ 179.3 million ($ 180.4 million translated at year-end exchange rates).

We determined the estimated fair values of the assets and of the reporting unit by calculating the present values of their estimated future cash flows.

During 2020, we sold a previously closed operating facility for net proceeds of $ 2.1 million and recognized a $ 0.4 million gain on the sale as well as completed the sale of Grass Valley to Black Dragon Capital - See Note 5.

During 2018, we sold a previously closed operating facility for net proceeds of $ 1.5 million and recognized a $ 0.6 million gain on the sale.

During 2017, we sold our MCS business and a 50 % ownership interest in Xuzhou Hirschmann Electronics Co.

Ltd (the Hirschmann JV) for a total purchase price of $ 40.2 million and recognized a loss on sale of the assets of $ 1.0 million , which was included in selling, general and administrative expenses.

This loss included $ 2.8 million of accumulated other comprehensive losses that were recognized as a result of the sale.

Ltd (the Hirschmann JV) for a total purchase price of $ 40.2 million.

The $ 40.2 million of proceeds from the sale was collected during 2018.

The MCS business was part of the Industrial Solutions segment and operated in Germany and the United States.

The Hirschmann JV was an equity method investment located in China that was not included in an operating segment.

Pension and Other Postretirement Benefits

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Gain from Patent Litigation

On July 5, 2011, the Company’s wholly-owned subsidiary, PPC, filed an action for patent infringement against Corning alleging that Corning infringed two of PPC’s patents.

In July 2015, a jury found that Corning willfully infringed both patents.

Following a series of appeals, we received a pre-tax amount of approximately $ 62.1 million from Corning on July 19, 2018.

In 2011, the Company’s wholly-owned subsidiary, PPC, filed an action for patent infringement against Corning alleging that Corning infringed two of PPC’s patents.

In 2015, a jury found that Corning willfully infringed both patents.

Following a series of appeals, we received a pre-tax amount of approximately $ 62.1 million from Corning in 2018.

We recorded the $ 62.1 million of cash received as a pre-tax gain from patent litigation during 2018.

Prior to 2018, we had not recognized any amounts in our consolidated financial statements related to this matter.

On September 27, 2018, Corning filed a petition for certiorari review by the U.S.

Supreme Court.

On December 10, 2018, Corning’s certiorari review by the Supreme Court was denied, thus exhausting their opportunities for further appellate relief.

Cost of Sales

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Advertising costs are expensed as incurred .

Advertising costs were $ 14.7 million , $ 17.0 million , and $ 18.0 million for 2019 , 2018 , and 2017 , respectively.

Advertising costs w ere $ 11.6 million , $ 14.7 million, and $ 17.0 million for 2020, 2019, and 2018, respectively.

Share-Based Compensation

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A deferred tax asset valuation allowance is required when some portion or all of the deferred tax assets may not be realized.

At December 31, 2019 the valuation allowance of $ 50.4 million was primarily related to net operating losses and foreign tax credits that we do not expect to realize.

At December 31, 2020 the valuation allowance of $ 84.3 million was primarily related to net operating losses, capital losses and foreign tax credits that we do not expect to realize.

Our effective tax rate is based on expected income, statutory tax rates, and tax planning opportunities available to us in the various jurisdictions in which we operate.

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We establish accruals for uncertain tax positions when we believe that the full amount of the associated tax benefit may not be realized.

To the extent we were to prevail in matters for which accruals have been established or would be required to pay

amounts in excess of reserves, there could be a material effect on our income tax provisions in the period in which such determination is made.

On December 22, 2017, the “Tax Cuts and Jobs Act” (the “Act”) was signed into law, making significant changes to the U.S.

Internal Revenue Code.

During 2019, the United States Treasury issued final and proposed regulations with respect to certain aspects related to the Act.

Additional guidance provided in these regulation resulted in a tax adjustment in the fourth quarter of 2019.

The total tax provision expense in 2019 included a $ 10.0 million tax expense associated with the increase to the valuation allowance against foreign tax credit carryovers that were no longer expect to be able to realize based upon the new proposed tax regulations.

To the extent we were to prevail in matters for which accruals have been established or would be required to pay amounts in excess of reserves, there could be a material effect on our income tax provisions in the period in which such determination is made.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes (“ASU 2019-12”) which removes certain exceptions for investments, intra-period allocations and interim tax calculations, and adds guidance to reduce the complexity in accounting for income taxes.

ASU 2019-12 is effective for annual periods beginning after December 15, 2020, with early adoption permitted.

The various amendments in ASU 2019-12 are applied on a retrospective basis, modified retrospective basis and prospective basis, depending upon the amendment.

The Company did not early adopt this pronouncement and is in the process of evaluating the impact of this amendment on our consolidated financial statements;

however, it is not anticipated to be material.

See Note 18, Income Taxes, in the accompanying notes to our consolidated financial statements.

Current-Year Adoption of Accounting Pronouncements

In February 2016, the FASB issued Accounting Standards Update No.

2016-02, Leases ("ASU 2016-02"), a leasing standard for both lessees and lessors that supersedes the lease requirements in Accounting Standards Codification (ASC) Topic 840, " Leases ." Under its core principle, a lessee will recognize a right-of-use (ROU) asset and lease liability on the balance sheet for nearly all leased assets, and additional disclosures are required to enable users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases.

We adopted ASU 2016-02 on January 1, 2019 using the permitted transition method issued in July 2018, under ASU No.

2018-11 (“ASU 2018-11”), Leases:

Targeted Improvements , which provides an additional (and optional) transition method for adopting the new lease standard.

Furthermore, we elected the following practical expedients and accounting policy elections upon adoption:

(i) the package of practical expedients as defined in ASU 2016-02, (ii) the short-term lease accounting policy election, (iii) the practical expedient to not separate non-lease components from lease components, and (iv) the easement practical expedient, which permits an entity to continue applying its current policy for accounting for land easements that existed as of the effective date of ASU 2016-02.

Excluding the impact of our Grass Valley disposal group, the adoption of ASU 2016-02 on January 1, 2019 resulted in the recognition of right-of-use assets of approximately $ 70.7 million and lease liabilities for operating leases of approximately $ 77.3 million on the Consolidated Balance Sheet, with no material impact to the Consolidated Statements of Operations or Consolidated Cash Flow Statements.

The difference between the initial lease liabilities and the ROU assets is related primarily to previously existing lease liabilities.

See Note 11 for further information regarding the impact of the adoption of ASU 2016-02 on the Company's financial statements.

In August 2017, the FASB issued Accounting Standards Update No.

ASU 2017-12, Derivatives and Hedging (Topic 815):

Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”).

The new guidance better aligns an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results.

The new guidance also makes certain targeted improvements to simplify the application of hedge accounting guidance and ease the administrative burden of hedge documentation requirements and assessing hedge effectiveness.

The standard is effective for fiscal years beginning after December 15, 2018.

We adopted ASU 2017-12 effective January 1, 2019.

The adoption had no impact on our results of operations.

In February 2018, the FASB issued ASU No.

2018-02 (“ASU 2018-02”), Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income .

ASU 2018-02 provides an option to allow reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017.

The new guidance is effective for annual and interim periods beginning after December 15, 2018.

We adopted ASU 2018-02 effective January 1, 2019, and elected to not reclassify the income tax effects of the Act from accumulated other comprehensive income to retained earnings.

The adoption had no impact on our results of operations.

In June 2018, the FASB issued ASU No.

2018-07 (“ASU 2018-07”), Improvements to Nonemployee Share-Based Payment Accounting .

The amendments in ASU 2018-07 expand the scope of Topic 718, Compensation - Stock Compensation, to include share-based payment transactions for acquiring goods and services from non-employees, and provide that non-employee share-based payment awards be measured at their grant-date fair value and the probability of satisfying performance conditions be taken into account when non-employee share-based payment awards contain such conditions.

The standard is effective for fiscal years beginning after December 15, 2018.

We adopted ASU 2018-07 effective January 1, 2019.

The adoption had no impact on our results of operations.

In August 2018, the Securities and Exchange Commission (“SEC”) adopted the final rule under SEC Release No.

33-10532, Disclosure Update and Simplification , amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded.

Additionally, the amendments expanded the disclosure requirements on the analysis of stockholders' equity for interim financial statements.

Under the amendments, an analysis of changes in each caption of stockholders' equity presented in the balance sheet must be provided in a note or separate statement.

The analysis should present a reconciliation of the beginning balance to the ending balance of each period presented.

This final rule was effective on November 5, 2018.

We implemented SEC Release No.

33-10532 effective January 1, 2019, which had no impact on our results of operations.

Pending Adoption of Recent Accounting Pronouncements

In June 2016, the FASB issued Accounting Standards Update No.

2016-13 (“ASU 2016-13”), Financial Instruments - Credit Losses .

The main provisions of ASU 2016-13 provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date, and require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected.

The new standard will be effective for us beginning January 1, 2020.

We expect the adoption will result in an increase to our allowance for doubtful accounts for continuing operations of approximately $ 1.0 million , and an increase for discontinued operations of approximately $ 2.0 million .

Under the new standard, we are required to recognize estimated credit losses expected to occur over the estimated life or remaining contractual life of an asset (which includes losses that may be incurred in future periods) using a broader range of information including past events, current conditions, and reasonable and supportable forecasts about future economic conditions.

We adopted ASU 2016-13 on January 1, 2020, which resulted in an increase to our allowance for doubtful accounts for continuing operations of $ 1.0 million, and an increase for discontinued operations of $ 1.9 million.

See further discussion as well as adjustments to the allowance for doubtful accounts under the new credit loss model in Note 9.

On January 1, 2018, we adopted Accounting Standards Update No.

2014-09, Revenue from Contracts with Customers (Topic 606) using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018.

Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the accounting standards in effect for those periods.

We recorded a net increase to retained earnings of $ 2.6 million as of January 1, 2018 due to the cumulative impact of adopting Topic 606, with the impact primarily related to sales commissions and software revenues within our Industrial Solutions segment.

2 unchanged sentences

We do not evaluate a contract for a significant financing component when the time between cash collection and performance is less than one year.

The following tables present our revenues disaggregated by major product category (in thousands).

Cable & Connectivity

Networking, Software & Security

Total Revenues

The following table presents our revenues disaggregated by major product category (in thousands).

Broadband and 5G Cyber-Security Industrial Automation Smart Buildings Total

Year Ended December 31, 2020

1 unchanged sentence

Industrial Solutions — 110,524 879,775 — 990,299

Total $ 432,262 $ 110,524 $ 879,775 $ 440,155 $ 1,862,716

Year Ended December 31, 2019

1 unchanged sentence

Industrial Solutions — 133,039 1,052,198 — 1,185,237

Total $ 401,415 $ 133,039 $ 1,052,198 $ 544,626 $ 2,131,278

Year Ended December 31, 2018

1 unchanged sentence

Industrial Solutions — 136,648 1,071,553 — 1,208,201

Total $ 389,246 $ 136,648 $ 1,071,553 $ 568,255 $ 2,165,702

The following tables present our revenues disaggregated by geography, based on the location of the customer purchasing the product (in thousands).

Total Revenues

Year Ended December 31, 2019

Enterprise Solutions

Industrial Solutions

Year Ended December 31, 2018

Enterprise Solutions

Industrial Solutions

Year Ended December 31, 2017

Enterprise Solutions

Industrial Solutions

The following tables present our revenues disaggregated by products, including software products, and support and services (in thousands).

Support & Services

Total Revenues

Americas EMEA APAC Total Revenues

Year Ended December 31, 2020

1 unchanged sentence

Industrial Solutions 577,929 256,673 155,697 990,299

Total $ 1,214,421 $ 387,655 $ 260,640 $ 1,862,716

Year Ended December 31, 2019

1 unchanged sentence

Industrial Solutions 742,563 274,030 168,644 1,185,237

Total $ 1,437,571 $ 409,762 $ 283,945 $ 2,131,278

Year Ended December 31, 2018

1 unchanged sentence

Industrial Solutions 758,165 290,562 159,474 1,208,201

Total $ 1,458,664 $ 425,779 $ 281,259 $ 2,165,702

We generate revenues primarily by selling products that provide secure and reliable transmission of data, sound, and video for mission critical applications.

5 unchanged sentences

Generally, we determine standalone selling price using the prices charged to customers on a standalone basis.

Typically, payments are due after control transfers, which is less than one year from satisfaction of the performance obligation.

The amount of consideration we receive and revenue we recognize varies due to rebates, returns, and price adjustments.

3 unchanged sentences

The following table presents estimated and accrued variable consideration:

December 31, 2019

December 31, 2018

December 31, 2020 December 31, 2019

(in thousands)

4 unchanged sentences

Consideration allocated to support services under a support and maintenance contract is typically paid in advance and recognized ratably over the term of the service.

The typical use of a time-elapsed unit of measure for support and maintenance contracts reflects the benefit and same pattern of transfer the customer receives from our services under this arrangement over the term of the contract.

Consideration allocated to professional services is recognized when or as the services are performed depending on the terms of the arrangement.

8 unchanged sentences

Balance at December 31, 2020 $ 77,648

Service-type warranties represent $ 10.4 million of the deferred revenue balance at December 31, 2020, and of this amount $ 3.6 million is expected to be recognized in the next twelve months, and the remaining $ 6.8 million is long-term and will be recognized over a period greater than twelve months.

We expense sales commissions as incurred when the duration of the related revenue arrangement is one year or less.

We capitalize sales commissions in other current and long-lived assets on our balance sheet when the duration of the related revenue arrangement is longer than one year, and we amortize it over the related revenue arrangement period.

Total capitalized sales commissions was $ 3.4 million as of December 31, 2019 and $ 2.9 million as of December 31, 2018 .

For the years ended December 31, 2019 and 2018, we recognized $ 4.9 million and $ 4.7 million of sales commissions expense in selling, general, and administrative expenses, respectively.

Total capitalized sales commissions were $ 5.8 million, $ 3.4 million, and $ 2.9 million as of December 31, 2020, 2019, and 2018, respectively.

For the years ended December 31, 2020, 2019 and 2018, we recogn ized $ 16.3 million, $ 19.0 million, and $ 20.3 million of sales commissions expense in selling, general, and administrative expenses, respectively.

Special Product Company

On December 6, 2019, we purchased and assumed substantially all the assets, and certain specified liabilities of Special Product Company (SPC) for a preliminary purchase price of $ 23.1 million .

On December 6, 2019, we purchased and assumed substantially all the assets, and certain specified liabilities of Special Product Company (SPC) for a purchase price of $ 22.5 million.

SPC, based in Kansas City, Kansas, is a leading designer, manufacturer, and seller of outdoor cabinet products for optical fiber cable installations.

The assets purchased and liabilities assumed from SPC have been included in our Consolidated Financial Statements as of December 6, 2019, and are reported within the Enterprise Solutions segment.

The results of SPC have been included in our Consolidated Financial Statements from December 6, 2019, and are reported within the Enterprise Solutions segment.

The acquisition of SPC was not material to our financial position or results of operations.

We acquired 100 % of the shares of Opterna International Corp.

(Opterna) on April 15, 2019 for a preliminary purchase price, net of cash acquired, of $ 51.7 million .

(Opterna) on April 15, 2019 for a purchase price, net of cash acquired, of $ 51.7 million.

Of the $ 51.7 million purchase price, $ 45.9 million was paid in 2019 with cash on hand.

The acquisition included a potential earnout, which is based upon future Opterna financial targets through April 15, 2021.

The maximum earnout consideration is $ 25.0 million , but based upon a third party valuation specialist using certain assumption in a discounted cash flow model, the estimated fair value of the earnout included in the purchase price is $ 5.8 million .

Opterna is an international fiber optics solution business based in Sterling, Virginia which designs and manufactures a range of complementary fiber connectivity, cabinet, and enclosure products used in optical networks.

The maximum earnout consideration is $ 25.0 million, but based upon a third party valuation specialist using certain assumptions in a discounted cash flow model, the estimated fair value of the earnout included in the purchase price is $ 5.8 million.

Opterna is an international fiber optics solution business formerly based in Sterling, Virginia which designs and manufactures a range of

complementary fiber connectivity, cabinet, and enclosure products used in optical networks.

The results of Opterna have been included in our Consolidated Financial Statements from April 15, 2019, and are reported within the Enterprise Solutions segment.

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An immaterial amount of Opterna's annual revenues are generated from transactions with the noncontrolling interests.

On October 25, 2019, we

purchased the noncontrolling interest of one subsidiary for a purchase price of $ 0.8 million ;

On October 25, 2019, we purchased the noncontrolling interest of one subsidiary for a purchase price of $ 0.8 million;

of which $ 0.4 million was paid at closing and the remaining $ 0.4 million is to be paid in 2021.

The following table summarizes the estimated, preliminary fair values of the assets acquired and the liabilities assumed as of April 15, 2019 (in thousands):

The following table summarizes the estimated fair values of the assets acquired and the liabilities assumed as of April 15, 2019 (in thousands):

Receivables $ 5,308

Inventory 7,359

Prepaid and other current assets 566

1 unchanged sentence

Intangible assets 28,000

Goodwill 35,057

Deferred income taxes 80

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Total liabilities assumed $ 25,036

Net assets $ 56,936

Noncontrolling interest 5,195

Net assets attributable to Belden $ 51,741

The above purchase price allocation is preliminary, and is subject to revision as additional information about the fair value of lease assets and liabilities as well as deferred taxes becomes available.

A change in the estimated fair value of the net assets acquired will change the amount of the purchase price allocable to goodwill.

During the fourth quarter 2019, we recorded measurement-period adjustments that decreased goodwill by approximately $ 0.6 million primarily for changes in the fair value of certain deferred tax liabilities.

The impact of these adjustments to the consolidated statement of operations was immaterial.

The fair value of acquired receivables is $ 5.3 million, which is equivalent to its gross contractual amount.

A single estimate of fair value results from a complex series of judgments about future events and uncertainties and relies heavily on estimates and assumptions.

The judgments we have used in estimating the preliminary fair value assigned to each class of acquired assets and assumed liabilities could materially affect the results of our operations.

The fair value of acquired receivables is $ 5.3 million , which is equivalent to its gross contractual amount.

We did not record any material measurement-period adjustments during 2020.

For the purpose of the above allocation, we based our estimate of fair value for the acquired inventory, intangible assets, and noncontrolling interests on valuation studies performed by a third party valuation firm.

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The intangible assets related to the acquisition consisted of the following:

Amortization Period

(In thousands)

Fair Value Amortization Period

(In thousands) (In years)

Intangible assets subject to amortization

2 unchanged sentences

Sales backlog 1,300 0.5

Trademarks 500 2.0

Total intangible assets subject to amortization $ 28,000

Intangible assets not subject to amortization:

Goodwill $ 35,057

Total intangible assets not subject to amortization $ 35,057

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The useful life for the trademarks was based on the period of time we expect to continue to go to market using the trademarks.

Our consolidated revenues and income from continuing operations before taxes for the year ended December 31, 2019 included $ 26.6 million and $ 2.0 million from Opterna, respectively.

For the year ended December 31, 2019, Opterna's income before taxes included $ 3.0 million of amortization of intangible assets, $ 5.6 million of acquisition integration costs, and $ 0.6 million of cost of sales related to the adjustment of acquired inventory to fair value.

Our consolidated income from continuing operations before taxes for the year ended December 31, 2019 included $ 0.1 million of net income attributable to noncontrolling interest of Opterna.

The following table illustrates the unaudited pro forma effect on operating results as if the Opterna acquisition had been completed January 1, 2018.

Years Ended December 31,

(In thousands, except per share data) (Unaudited)

(In thousands, except per share data)

Revenues $ 2,139,894 $ 2,213,781

Net income (loss) attributable to Belden common stockholders ( 389,957 ) 123,546

15 unchanged sentences

Furthermore, we determined a divestiture of Grass Valley represents a strategic shift that is expected to have a major impact on our operations and financial results.

As a result, the Grass Valley disposal group, which was included in our Enterprise Solutions segment, is now reported within discontinued operations.

The Grass Valley disposal group excludes certain Grass Valley pension liabilities that we expect to retain - see Note 28.

As a result, the Grass Valley disposal group, which was included in our Enterprise Solutions segment, is reported within discontinued operations.

The Grass Valley disposal group excludes certain Grass Valley pension liabilities that Belden retained.

We also ceased depreciating and amortizing the assets of the disposal group once they met the held for sale criteria in the fourth quarter of 2019.

We intend to complete the sale of the Grass Valley disposal group during 2020.

We wrote down the carrying value of Grass Valley and recognized asset impairments totaling $ 521.4 million in 2019.

We wrote down the carrying value of Grass Valley and recognized asset impairments totaling $ 113.0 million and $ 521.4 million in 2020 and 2019, respectively.

We determined the estimated fair values of the assets and of the reporting unit by calculating the present values of their estimated future cash flows.

The following table summarizes the operating results of the disposal group for the years ended December 31, 2019, 2018, and 2017:

We completed the sale of Grass Valley to Black Dragon Capital on July 2, 2020 and recognized a loss of $ 9.9 million, net of $ 7.5 million income tax expense.

The terms of the sale included gross cash consideration of $ 120.0 million, or approximately $ 56.2 million net of cash delivered with the business.

The sale also included deferred consideration consisting of a $ 175.0 million seller’s note that is expected to mature in 2025, up to $ 88 million in PIK (payment-in-kind) interest on the seller’s note, and $ 178.0 million in potential earnout payments.

Based upon a third party valuation specialist using certain assumptions in a Monte Carlo analysis, the estimated fair value of the seller’s note is $ 34.9 million, which we recorded in Other Long-Lived Assets.

We accounted for the earnout under a loss recovery approach and did not record an asset as of the disposal date.

Any subsequent recognition of an earnout will be based on the gain contingency guidance.

As part of the transaction, we also invested $ 3.0 million for a 9 % equity interest in Grass Valley with the right to put the equity back to Black Dragon Capital.

We exercised our right during the fourth quarter of 2020 and sold our 9 % equity interest in Grass Valley to Black Dragon Capital for $ 2.7 million.

We deconsolidated Grass Valley as of July 2, 2020 and accounted for our equity interest under the cost method for the period that we owned a 9 % interest in Grass Valley.

As of December 31, 2020, we do not own any interest in Grass Valley.

Grass Valley's operating results for periods after July 2, 2020 are not included in our Consolidated Financial Statements.

The seller’s note accrues PIK interest at an annual rate of 8.5 %.

During the year ended December 31, 2020, the seller’s note accrued interest of $ 7.8 million, which we reserved for based on our expected loss allowance methodology.

We are performing certain services for Grass Valley under a transition services agreement.

During 2020, the amount of transition services totaled $ 2.0 million, which we expect to collect in 2021.

The following table summarizes the operating results of the disposal group up to the July 2, 2020 disposal date for the years ended December 31, 2020, 2019 and 2018, respectively:

Years Ended December 31,

2020 2019 2018

(In thousands)

Revenues $ 109,195 $ 360,496 $ 419,666

Cost of sales ( 70,199 ) ( 208,173 ) ( 241,164 )

Gross profit 38,996 152,323 178,502

Selling, general and administrative expenses ( 39,947 ) ( 93,796 ) ( 114,567 )

4 unchanged sentences

Non-operating pension cost ( 169 ) ( 221 ) ( 243 )

Income (loss) before taxes

Loss before taxes $ ( 129,642 ) $ ( 513,908 ) $ ( 9,750 )

The disposal group recognized depreciation and amortization expense of approximately $ 0.0 million, $ 23.7 million, and $ 35.1 million during the years ended December 31, 2020, 2019, and 2018, respectively.

The disposal group also had capital expenditures of approximately $ 16.7 million, $ 29.4 million, and $ 22.6 million during the years ended December 31, 2020, 2019, and 2018, respectively.

Furthermore, the disposal group incurred stock-based compensation expense of $ 0.9 million , $ 1.4 million , and $ 1.5 million during the years ended December 31, 2019, 2018, and 2017, respectively.

Furthermore, the disposal group incurred stock-based compensation expense/(credits) of $( 0.9 ) million, $ 0.9 million, and $ 1.4 million during the years ended December 31, 2020, 2019, and 2018, respectively.

The disposal group did not have any significant non-cash charges for investing activities during the years ended December 31, 2020, 2019, and 2018.

The following table provides the major classes of assets and liabilities of the disposal group as of December 31, 2019 and 2018:

(In thousands)

The following table provides the major classes of assets and liabilities of the disposal group as of December 31, 2019 (in thousands):

Cash and cash equivalents $ 18,405

4 unchanged sentences

Operating lease right-of-use assets 16,902

Goodwill 26,707

Intangible assets, less accumulated amortization 143,459

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Each of the global business platforms represents a reportable segment.

Effective January 1, 2020, we transferred our West Penn Wire business and multi-conductor product lines from the Enterprise Solutions segment to the Industrial Solutions segment as a result of a shift in responsibilities among the segments.

We have recast the prior period segment information to conform to the change in the composition of reportable segments.

The segments design, manufacture, and market a portfolio of signal transmission solutions for mission critical applications used in a variety of end markets.

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All goodwill is allocated to reporting units of our segments for purposes of impairment testing.

The results of our former equity method investment in the Hirschmann JV, which we sold effective December 31, 2017, were not included in the corporate expense allocation.

Operating Segment Information

Enterprise Solutions

Years ended December 31,

Enterprise Solutions Years ended December 31,

2020 2019 2018

(In thousands)

9 unchanged sentences

Segment assets 462,615 487,125 430,128

Industrial Solutions

Years ended December 31,

Industrial Solutions Years ended December 31,

2020 2019 2018

(In thousands)

8 unchanged sentences

Segment assets 522,637 504,482 508,843

Total Segments

Years ended December 31,

Total Segments Years ended December 31,

2020 2019 2018

(In thousands)

11 unchanged sentences

Years Ended December 31,

2020 2019 2018

(In thousands)

11 unchanged sentences

Gain from patent litigation — — 62,141

Income from equity method investment

Eliminations ( 480 ) ( 3,149 ) ( 2,222 )

Consolidated operating income 125,410 207,207 314,008

4 unchanged sentences

(1) See Note 15, Severance, Restructuring, and Acquisition Integration Activities, for details .

In 2019, we collectively recognized $ 0.6 million of cost of sales related to purchase accounting adjustments of acquired inventory to fair value for both our SPC and Opterna acquisitions.

(2) In 2020 and 2019, we collectively recognized $ 0.1 million and $ 0.6 million, respectively, of cost of sales related to purchase accounting adjustments of acquired inventory to fair value for both our SPC and Opterna acquisitions.

In 2018, we made a $ 1.7 million adjustment to increase the earn-out liability associated with an acquisition.

In 2017, we recognized $ 6.1 million of cost of sales related to the adjustment of acquired inventory to fair value for our Thinklogical acquisition.

In 2018 and 2017, we recognized a $ 0.1 million and $ 1.0 million loss on sale of assets, respectively, for the sale of our MCS business and Hirschmann JV.

(3) In 2018, we recognized a $ 0.1 million loss on sale of assets for the sale of our MCS business and Hirschmann JV.

Below are reconciliations of other segment measures to the consolidated totals.

Years Ended December 31,

2020 2019 2018

(In thousands)

1 unchanged sentence

Cash and cash equivalents

501,994 407,480 407,454

1,251,938 1,243,669 1,206,877

Intangible assets, less accumulated amortization

287,071 339,505 359,931

Deferred income taxes

29,536 25,216 26,459

Corporate assets

83,943 24,147 16,786

Assets of discontinued operations

— 375,135 822,843

Total assets $ 3,139,734 $ 3,406,759 $ 3,779,321

Total segment acquisition of property, plant and equipment $ 69,898 $ 77,478 $ 72,153

Discontinued operations acquisition of property, plant and equipment 16,712 29,414 22,681

Corporate acquisition of property, plant and equipment 3,605 3,110 3,013

5 unchanged sentences

No other individual foreign country’s net sales or long-lived assets are material to the Company.

United States

States Canada China Germany All Other Total

(In thousands, except percentages)

Year ended December 31, 2020

Revenues $ 1,015,340 $ 119,700 $ 111,835 $ 91,187 $ 524,654 $ 1,862,716

Percent of total revenues 55 % 6 % 6 % 5 % 28 % 100 %

1 unchanged sentence

Year ended December 31, 2019

Revenues $ 1,167,033 $ 162,975 $ 109,522 $ 92,913 $ 598,835 $ 2,131,278

Percent of total revenues 55 % 8 % 5 % 4 % 28 % 100 %

1 unchanged sentence

Year ended December 31, 2018

Revenues $ 1,206,401 $ 166,669 $ 107,582 $ 100,691 $ 584,359 $ 2,165,702

Percent of total revenues 56 % 8 % 5 % 4 % 27 % 100 %

1 unchanged sentence

Major Customer

Revenues generated from sales to the distributor Anixter International Inc., in both the Enterprise Solutions and Industrial Solutions segments, were $ 285.0 million ( 13 % of revenues), $ 309.0 million ( 14 % of revenues), and $ 292.2 million ( 14 % of revenues) for 2019 , 2018 , and 2017 , respectively.

Revenues generated from sales to both Anixter and WESCO combined were approximately $ 328.2 million ( 15 % of revenues), $ 361.7 million ( 17 % of revenues), and $ 342.8 million ( 16 % of revenues) for 2019, 2018, and 2017, respectively.

At December 31, 2019 , we had $ 10.2 million in accounts receivable outstanding from Anixter International Inc.

This represented approximately 3 % of our total accounts receivable outstanding at December 31, 2019 .

Revenues generated in both the Enterprise Solutions and Industrial Solutions segments from sales to WESCO were approximately $ 271.6 million ( 15 % of revenues), $ 328.2 million ( 15 % of revenues), and $ 361.7 million ( 17 % of revenues) for 2020, 2019, and 2018, respectively.

At December 31, 2020, we had $ 17.5 million in accounts receivable outstanding from WESCO, which represented approximately 6 % of our total accounts receivable outstanding at December 31, 2020.

Noncontrolling Interest

12 unchanged sentences

The results of these subsidiaries were consolidated into our financial statements as of the acquisition date.

The results that are attributable to the noncontrolling interest holders are presented as net income attributable to noncontrolling interests in the Consolidated Statements of Operations.

The results that are attributable to the noncontrolling interest holders are presented as net income (loss) attributable to noncontrolling interests in the Consolidated Statements of Operations.

An immaterial amount of Opterna's annual revenues are generated from transactions with the noncontrolling interests.

3 unchanged sentences

Income Per Share

The following table presents the basis of the income per share computation:

The following table presents the basis of the income per share computations:

Years Ended December 31,

2020 2019 2018

(In thousands)

4 unchanged sentences

Loss from discontinued operations, net of tax ( 99,513 ) ( 486,667 ) ( 6,433 )

Loss on disposal of discontinued operations, net of tax ( 9,948 ) — —

Net income (loss) attributable to Belden common stockholders $ ( 55,162 ) $ ( 395,452 ) $ 125,963

3 unchanged sentences

Basic weighted average shares outstanding is used to calculate diluted loss per share when the numerator is a loss because using diluted weighted average shares outstanding would be anti-dilutive.

For the years ended December 31, 2019 , 2018 , and 2017 , diluted weighted average shares outstanding do not include outstanding equity awards of 1.2 million , 0.9 million , and 0.5 million , respectively, because to do so would have been anti-dilutive.

For the years ended December 31, 2020, 2019, and 2018, diluted weighted average shares outstanding exclude outstanding equity awards of 1.5 million, 1.2 million, and 0.9 million, respectively, which are anti-dilutive.

In addition, for the years ended December 31, 2020, 2019, and 2018, diluted weighted average shares outstanding do not include outstanding equity awards of 0.4 million, 0.3 million, and 0.3 million, respectively, because the related performance conditions have not been satisfied.

Furthermore, for the years ended December 31, 2019 , 2018 , and 2017 , diluted weighted average shares outstanding do not include the weighted average impact of preferred shares that are convertible into 3.7 million , 6.9 million , and 6.9 million common shares, respectively, because deducting the preferred stock dividends from net income was more dilutive.

Furthermore, for t he years ended December 31, 2019, and 2018, diluted weighted average shares outstanding do not include the weighted average impact of preferred shares that were convertible into 3.7 million and 6.9 million common shares, respectively, because deducting the preferred stock dividends from net income was more dilutive.

For purposes of calculating basic earnings per share, unvested restricted stock units are not included in the calculation of basic weighted average shares outstanding until all necessary conditions have been satisfied and issuance of the shares underlying the restricted stock units is no longer contingent.

3 unchanged sentences

Once a restricted stock unit has vested, it is included in the calculation of both basic and diluted weighted average shares outstanding.

Credit Losses

Effective January 1, 2020, we adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments prospectively.

This ASU replaces the incurred loss impairment model with an expected credit loss impairment model for financial instruments, including trade receivables.

The amendment requires entities to consider forward-looking information to estimate expected credit losses, resulting in earlier recognition of losses for receivables that are current or not yet due, which were not considered under the previous accounting guidance.

Upon adoption, we recorded a noncash cumulative effect adjustment to retained earnings of $ 2.9 million.

Of this amount, $ 1.0 million related to our continuing operations and $ 1.9 million related to our discontinued operations.

We are exposed to credit losses primarily through sales of products and services.

Due to the short-term nature of such receivables, the estimate of accounts receivable that may not be collected is based upon the aging of accounts receivable balances and the financial condition of customers.

Additionally, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default.

Our monitoring activities include timely account reconciliation, dispute resolution, payment confirmation, consideration of customers' financial condition and macroeconomic conditions.

Balances are written off when determined to be uncollectible.

Estimates are used to determine the allowance, which is based upon an assessment of anticipated payments as well as other historical, current and future information that is reasonably available.

The following table presents the activity in the allowance for doubtful accounts for our continuing operations for the year ended December 31, 2020 (in thousands).

Balance at December 31, 2019 $ 2,569

Adoption adjustment 1,011

Current period provision 2,282

Recoveries collected ( 637 )

Write-offs ( 114 )

Currency impact 39

Balance at December 31, 2020 $ 5,150

The major classes of inventories were as follows:

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We have entered into various short-term operating leases with an initial term of twelve months or less.

These leases are not recorded on our balance sheet as of December 31, 2019, and the rent expense for short-term leases was not material.

These leases are not recorded on our balance sheet as of December 31, 2020 or 2019, and the rent expense for short-term leases was not material.

We have certain property and equipment lease contracts that may contain lease and non-lease components, and we have elected to utilize the practical expedient to account for these components together as a single combined lease component.

1 unchanged sentence

The components of lease expense were as follows:

December 31, 2019

Years Ended December 31,

(In thousands)

5 unchanged sentences

Supplemental cash flow information related to leases was as follows:

December 31, 2019

Years Ended December 31,

(In thousands)

4 unchanged sentences

Supplemental balance sheet information related to leases was as follows:

December 31, 2019

(In thousands, except lease term and discount rate)

9 unchanged sentences

Weighted Average Remaining Lease Term

Operating leases

Finance leases

Operating leases 5 years 6 years

Finance leases 3 years 3 years

Weighted Average Discount Rate

2 unchanged sentences

The following table summarizes maturities of lease liabilities as of December 31, 2020 (in thousands):

2021 $ 19,250

Thereafter 8,901

Total $ 75,242

The following table summarizes maturities of lease liabilities as of December 31, 2019 (in thousands):

2020 $ 19,086

Thereafter 16,655

Total $ 87,487

Intangible Assets

The carrying values of intangible assets were as follows:

December 31, 2019

December 31, 2018

(In thousands)

December 31, 2020 December 31, 2019

Amount Accumulated

Amortization Net

Amount Accumulated

Amortization Net

(In thousands) (In thousands)

Goodwill $ 1,251,938 $ — $ 1,251,938 $ 1,243,669 $ — $ 1,243,669

Definite-lived intangible assets subject to amortization:

1 unchanged sentence

Customer relationships 295,382 ( 128,796 ) 166,586 297,595 ( 110,732 ) 186,863

Trademarks 65,861 ( 36,539 ) 29,322 56,393 ( 30,213 ) 26,180

In-service research and development 11,536 ( 9,774 ) 1,762 10,702 ( 7,160 ) 3,542

Backlog 11,421 ( 11,421 ) — 11,335 ( 10,935 ) 400

Total intangible assets subject to amortization 812,387 ( 556,379 ) 256,008 789,335 ( 490,736 ) 298,599

Indefinite-lived intangible assets not subject to amortization:

Trademarks 31,063 — 31,063 40,106 — 40,106

In-process research and development — — — 800 — 800

3 unchanged sentences

The changes in the carrying amount of goodwill assigned to reporting units in our reportable segments are as follows:

Enterprise Solutions

Industrial Solutions

Enterprise Solutions Industrial Solutions Consolidated

(In thousands)

1 unchanged sentence

Acquisitions and purchase accounting adjustments

38,209 — 38,209

Translation impact

( 260 ) ( 1,157 ) ( 1,417 )

Balance at December 31, 2019 $ 470,031 $ 773,638 $ 1,243,669

Acquisitions and purchase accounting adjustments

2,420 — 2,420

Translation impact

2,296 3,553 5,849

Balance at December 31, 2020 $ 474,747 $ 777,191 $ 1,251,938

The changes in the carrying amount of indefinite-lived trademarks are as follows:

Enterprise Solutions

Industrial Solutions

Enterprise Solutions Industrial Solutions Consolidated

(In thousands)

2 unchanged sentences

Balance at December 31, 2019 $ 27,000 $ 13,106 $ 40,106

Translation impact

Reclassify to definite-lived — ( 9,043 ) ( 9,043 )

Balance at December 31, 2020 $ 27,000 $ 4,063 $ 31,063

Annual Impairment Test

The annual measurement date for our goodwill and indefinite-lived intangible assets impairment test is our fiscal November month-end.

For our 2019 goodwill impairment test, we performed a quantitative assessment for all ten of our reporting units included in continuing operations and determined the estimated fair values of our reporting units by calculating the present values of their estimated future cash flows using Level 3 inputs.

For our 2020 goodwill impairment test, we performed a quantitative assessment for all ten of our reporting units and determined the estimated fair values of our reporting units by calculating the present values of their estimated future cash flows using Level 3 inputs.

We did not perform a qualitative assessment over our reporting units.

We determined that the fair values of the reporting units were in excess of the carrying values;

therefore, we did not record any goodwill impairment for the ten reporting units.

We also did not recognize any goodwill impairment in 2018 or 2017 based upon the results of our annual goodwill impairment testing.

therefore, we did no t record any goodwill impairment for the ten reporting units.

We also did no t recognize any goodwill impairment from continuing operations in 2019 or 2018 based upon the results of our annual goodwill impairment testing.

For our annual impairment test in 2020, the excess of the fair values over the carrying values of our ten reporting units tested under a quantitative income approach ranged from 4% - 345%.

The assumptions used to estimate fair values were based on the past performance of the reporting unit as well as the projections incorporated in our strategic plan.

Significant assumptions included sales growth, profitability, and related cash flows, along with cash flows associated with taxes and capital spending.

The discount rate used to estimate fair value was risk adjusted in consideration of the economic conditions in effect at the time of the impairment test.

We also considered assumptions that market participants may use.

In our quantitative assessments, the discount rates ranged from 10.0% to 12.2%, the 2021 to 2030 compounded annual revenue growth rates ranged from 2.5% to 5.8%, and the revenue growth rates beyond 2030 ranged from 2.0% to 3.0%.

By their nature, these assumptions involve risks and uncertainties.

Furthermore, uncertainties associated with current market conditions increase the inherent risk associated with using an income approach to estimate fair values.

While we have adjusted our key assumptions to reflect the current economic conditions, we have also assumed that economic conditions will improve.

If current conditions persist and actual results are different from our estimates or assumptions, we may have to recognize an impairment charge that could be material.

We test our indefinite-lived intangible assets, which consist pri marily of trademarks, for impairment on an annual basis during the fourth quarter.

The accounting guidance related to impairment testing for such intangible assets allows for the performance of an optional qualitative assessment, similar to that described above for goodwill.

We did not perform any qualitative assessments as part of our indefinite-lived intangible asset impairment testing for 2020.

Rather, we performed a quantitative assessment for each of our indefinite-lived trademarks in 2020.

Under the quantitative assessments, we determined the fair value of each trademark using a relief from royalty methodology and compared the fair value to the carrying value.

Significant assumptions to determine fair value included sales growth, royalty rates, and discount rates.

We did no t recognize any trademark impairment charges from continuing operations in 2020, 2019, or 2018.

Disposal Group Impairment

During the fourth quarter of 2019, we committed to a plan to sell Grass Valley, and at such time, met all of the criteria to classify the assets and liabilities of this business as held for sale.

Furthermore, we determined a divestiture of Grass Valley represents a strategic shift that is expected to have a major impact on our operations and financial results.

As a result, the Grass Valley disposal group, which was included in our Enterprise Solutions segment, is now reported within discontinued operations.

As a result, the Grass Valley disposal group, previously included in our Enterprise Solutions segment, was reported within discontinued operations.

We also ceased depreciating and amortizing the assets of the disposal group once they met the held for sale criteria in the fourth quarter of 2019.

During 2019, we wrote down the carrying value of Grass Valley and recognized asset impairments totaling $ 521.4 million, which consisted of impairments to goodwill, customer relationships, and trademarks of $ 326.1 million, $ 14.4 million, and $ 1.6 million, respectively, as well as an impairment of the disposal group of $ 179.3 million ($ 180.4 million translated at year-end exchange rates).

During 2020, we wrote down the carrying value of Grass Valley and recognized asset impairments totaling $ 113.0 million.

Similar to the quantitative goodwill impairment test, we determined the estimated fair values of our indefinite-lived trademarks by calculating the present values of the estimated cash flows (using Level 3 inputs) attributable to the respective trademarks.

We did not recognize any trademark impairment charges in 2019 , 2018 , or 2017 .

Amortization Expense

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We expect to recognize annual amortization expense of $ 35.6 million in 2021, $ 32.9 million in 2022, $ 31.2 million in 2023, $ 29.0 million in 2024, and $ 24.7 million in 2025 related to our intangible assets balance as of December 31, 2020.

The weighted-average amortization period for our customer relationships, trademarks, developed technology, and in-service research and development is 18.3 , 8.5 , 6.8 , and 5.0 years , respectively.

The weighted-average amortization period for our customer relationships, trademarks, developed technology, and in-service research and development is 18.2 years, 8.3 years, 6.8 years, and 5.0 years, respectively.

At the beginning of 2020, we re-evaluated the useful lives of certain trademarks in our Industrial Solutions segment and concluded that indefinite lives for these trademarks was no longer appropriate.

We have estimated a useful life of five years and will re-evaluate this estimate if and when our expected use of the trademarks changes.

We began amortizing the trademarks in the first quarter of 2020, which resulted in amortization expense of $ 1.8 million for the year ended December 31, 2020.

As of December 31, 2020, the net book value of these trademarks totaled $ 7.8 million.

Accrued Liabilities

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Accrued liabilities $ 276,641 $ 283,799

At December 31, 2019, our other accrued liabilities balance included earnout consideration of $ 31.4 million in accordance with the purchase agreement for SAM, which was acquired on February 8, 2018 and included in the Grass Valley disposal group.

During our fiscal first quarter of 2020, prior to the Grass Valley disposal, we paid the sellers of SAM the full earnout consideration .

The acquisition-date fair value of the earnout liability was $ 29.3 million and is reflected as a financing activity in the Consolidated Cash Flow Statement with the remaining $ 2.1 million reflected as an operating activity.

Severance, Restructuring, and Acquisition Integration Activities

Cost Reduction Program

During the fourth quarter of 2019, we began a cost reduction program to improve performance and enhance margins by streamlining the organizational structure and investing in technology to drive productivity.

We recognized approximately $ 19.6 million of severance costs for this program during 2019 .

The costs were incurred by both of our segments, as well as our corporate office.

The cost reduction program is expected to deliver an estimated $ 40.0 million reduction in selling, general, and administrative expenses on an annual basis, with some benefit in 2020, and the full benefit realized in 2021.

We expect to incur approximately $ 10.0 million for this program in 2020.

Opterna, FutureLink, and SPC Integration Program:

In 2019, we began a restructuring program to integrate Opterna, FutureLink, and SPC with our existing businesses.

During 2019, we began a cost reduction program to improve performance and enhance margins by streamlining the organizational structure and investing in technology to drive productivity.

We recognized $ 4.0 million and $ 19.6 million of severance and other restructuring costs for this program during 2020 and 2019, respectively.

These costs were incurred by both the Enterprise Solutions and Industrial Solutions segments.

The cost reduction program is expected to deliver an estimated $ 60 million reduction in selling, general, and administrative expenses on an annual basis;

approximately $ 40 million of which was realized in 2020, and the full benefit is expected to be materialized in 2021.

We also expect to incur incremental costs of approximately $ 8 million for this program in 2021.

FutureLink, Opterna, and SPC Integration Program

In 2019, we began a restructuring program to integrate FutureLink, Opterna, and SPC with our existing businesses.

The restructuring and integration activities were focused on achieving desired cost savings by consolidating existing and acquired facilities and other support functions.

We recognized $ 6.1 million of severance and other restructuring costs for this program during 2019.

The costs were incurred by the Enterprise Solutions segment.

We expect to incur an additional $ 5.0 million for this program in 2020.

We recognized $ 4.9 million and $ 6.1 million of severance and other restructuring costs for this program during 2020 and 2019, respectively.

These costs were incurred by the Enterprise Solutions segment.

We expect to incur incremental costs of approximately $ 1 million for this program in 2021.

Industrial Manufacturing Footprint Program

In 2016, we began a program to consolidate our manufacturing footprint.

The manufacturing consolidation is complete.

We recognized $ 17.7 million and $ 30.6 million of severance and other restructuring costs for this program during 2018 and 2017, respectively, and $ 66.1 million cumulatively.

In 2016, we began a program to consolidate our manufacturing footprint, which was later completed in 2018.

We recognized severance and other restructuring costs of $ 17.7 million and $ 66.1 million for this program during 2018 and cumulatively, respectively.

The costs were incurred by the Enterprise Solutions and Industrial Solutions segments, as the manufacturing locations involved in the program serve both platforms.

The following table summarizes the costs by segment of the programs described above as well as other immaterial programs and acquisition integration activities:

Other Restructuring

and Integration Costs

Severance Other Restructuring

and Integration Costs Total Costs

(In thousands)

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Industrial Solutions 1,706 2,833 4,539

Total $ 3,051 $ 9,207 $ 12,258

Year Ended December 31, 2019

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Industrial Solutions 15,736 — 15,736

Total $ 20,754 $ 5,790 $ 26,544

Year Ended December 31, 2018

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Industrial Solutions 240 7,522 7,762

Total $ 788 $ 21,837 $ 22,625

The other restructuring and integration costs primarily consisted of equipment transfers, costs to consolidate operating and support facilities, retention bonuses, relocation, travel, legal, and other costs.

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Years ended December 31,

2020 2019 2018

(In thousands)

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Research and development expenses — — 117

Total $ 12,258 $ 26,544 $ 22,625

Accrued Severance

Our accrued severance balance was $ 20.2 million , $ 1.7 million , and $ 3.4 million as of December 31, 2019, 2018 and 2017, respectively.

The $ 20.2 million accrued severance balance at December 31, 2019 relates to the new Cost Reduction program, for which no cash payments were made during 2019;

the majority of these amounts will be paid during 2020.

The table below sets forth severance activity that occurred for the Cost Reduction Program and SPC, Opterna and FutureLink Integration Program described above.

The balances below are included in accrued liabilities (in thousands).

Balance at December 31, 2019 $ 19,575

New charges 2,529

Cash payments ( 4,483 )

Foreign currency translation ( 89 )

Other adjustments ( 4,147 )

Balance at March 29, 2020 $ 13,385

New charges 4,660

Cash payments ( 4,795 )

Foreign currency translation ( 132 )

Other adjustments ( 1,420 )

Balance at June 28, 2020 $ 11,698

New charges 2,060

Cash payments ( 3,968 )

Foreign currency translation ( 156 )

Other adjustments ( 1,541 )

Balance at September 27, 2020 $ 8,093

New charges 992

Cash payments ( 1,823 )

Foreign currency translation ( 95 )

Other adjustments ( 82 )

Balance at December 31, 2020 $ 7,085

The other adjustments were the result of changes in estimates.

We experienced higher than expected voluntary turnover during 2020, and as a result, certain previously approved severance actions were not taken.

Long-Term Debt and Other Borrowing Arrangements

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3.875 % Senior subordinated notes due 2028

428,295 392,910

3.375 % Senior subordinated notes due 2027

550,665 505,170

4.125 % Senior subordinated notes due 2026

244,740 224,520

2.875 % Senior subordinated notes due 2025

367,110 336,780

Total senior subordinated notes 1,590,810 1,459,380

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In the event we borrow more than 90 % of our borrowing base, we are subject to a fixed charge coverage ratio covenant.

In 2017, we recognized a $ 0.8 million loss on debt extinguishment for unamortized debt issuance costs related to creditors no longer participating in the new Revolver.

In connection with executing the Revolver, we also paid $ 2.3 million of fees to creditors and third parties that we will amortize over the remaining term of the Revolver.

As of December 31, 2019 , we had no borrowings outstanding on the Revolver, and our available borrowing capacity, including the assets of the Grass Valley disposal group, was $ 310.6 million .

We paid approximately $ 2.3 million of fees when we amended the Revolver, which are being amortized over the remaining term of the Revolver.

Due to the initial uncertainties arising from the COVID-19 pandemic and out of an abundance of caution, in April 2020 we borrowed $ 190.0 million on our Revolver, which we fully repaid by December 31, 2020 as a result of improved and sufficient liquidity and cash flow.

As of December 31, 2020, we had no borrowings outstanding on the Revolver, and our available borrowing capacity was $ 230.2 million.

Senior Subordinated Notes

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We used the net proceeds from this offering and cash on hand to repurchase the 2023 and 2024 Notes - see further discussion below.

In July 2017, we completed an offering for € 450.0 million ( $ 509.5 million at issuance) aggregate principal amount of 3.375 % senior subordinated notes due 2027 (the 2027 Notes).

We have outstanding € 450.0 million aggregate principal amount of 3.375 % senior subordinated notes due 2027 (the 2027 Notes).

The carrying value of the 2027 Notes as of December 31, 2020 is $ 550.7 million.

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The 2027 Notes rank equal in right of payment with our senior subordinated notes due 2028, 2026, and 2025 and with any future subordinated debt, and they are subordinated to all of our senior debt and the senior debt of our subsidiary guarantors, including our Revolver.

Interest is payable semiannually on January 15 and July 15 of each year, which commenced on January 15, 2018.

We paid approximately $ 8.8 million of fees associated with the issuance of the 2027 Notes, which are being amortized over the life of the 2027 Notes using the effective interest method.

In October 2016, we completed an offering for € 200.0 million ( $ 222.2 million at issuance) aggregate principal amount of 4.125 % senior subordinated notes due 2026 (the 2026 Notes).

Interest is payable semiannually on January 15 and July 15 of each year.

We have outstanding € 200.0 million aggregate principal amount of 4.125 % senior subordinated notes due 2026 (the 2026 Notes).

The carrying value of the 2026 Notes as of December 31, 2020 is $ 244.7 million.

The 2026 Notes are guaranteed on a senior subordinated basis by our current and future domestic subsidiaries.

The notes rank equal in right of payment with our senior subordinated notes due 2028, 2027, and 2025 and with any future subordinated

debt, and they are subordinated to all of our senior debt and the senior debt of our subsidiary guarantors, including our Revolver.

Interest is payable semiannually on April 15 and October 15 of each year, which commenced on April 15, 2017.

We paid approximately $ 3.9 million of fees associated with the issuance of the 2026 Notes, which are being amortized over the life of the 2026 Notes using the effective interest method.

In September 2017, we completed an offering for € 300.0 million ( $ 357.2 million at issuance) aggregate principal amount of 2.875 % senior subordinated notes due 2025 (the 2025 Notes).

The notes rank equal in right of payment with our senior subordinated notes due 2028, 2027, and 2025 and with any future subordinated debt, and they are subordinated to all of our senior debt and the senior debt of our subsidiary guarantors, including our Revolver.

Interest is payable semiannually on April 15 and October 15 of each year.

We have outstanding € 300.0 million aggregate principal amount of 2.875 % senior subordinated notes due 2025 (the 2025 Notes).

The carrying value of the 2025 Notes as of December 31, 2020 is $ 367.1 million.

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The 2025 Notes rank equal in right of payment with our senior subordinated notes due 2028, 2027, and 2026 and with any future subordinated debt, and they are subordinated to all of our senior debt and the senior debt of our subsidiary guarantors, including our Revolver.

Interest is payable semiannually on March 15 and September 15 of each year, which commenced on March 15, 2018.

We paid approximately $ 6.2 million of fees associated with the issuance of the 2025 Notes, which are being amortized over the life of the 2025 Notes using the effective interest method.

Interest is payable semiannually on March 15 and September 15 of each year.

We had outstanding $ 200 million aggregate principal amount of 5.25 % senior subordinated notes due 2024 (the 2024 Notes).

In March 2018, we repurchased $ 188.7 million of the 2024 Notes outstanding for cash consideration of $ 199.8 million, including a prepayment penalty and recognized a $ 13.8 million loss on debt extinguishment including the write-off of unamortized debt issuance costs.

In April 2018, we repurchased the remaining 2024 Notes outstanding for cash consideration of $ 11.9 million, including a prepayment penalty, and recognized a $ 0.8 million loss on debt extinguishment including the write-off of unamortized debt issuance costs.

We had outstanding € 200.0 million aggregate principal amount of 5.5 % senior subordinated notes due 2023 (the 2023 Notes).

In March 2018, we repurchased € 143.1 million of the € 200.0 million 2023 Notes outstanding for cash consideration of € 147.8 million ($ 182.1 million), including a prepayment penalty and recognized a $ 6.2 million loss on debt extinguishment including the write-off of unamortized debt issuance costs.

In April 2018, we repurchased the remaining 2023 Notes outstanding for cash consideration of € 58.5 million ($ 71.6 million), including a prepayment penalty, and recognized a $ 2.2 million loss on debt extinguishment including the write-off of unamortized debt issuance costs.

The senior subordinated notes due 2025, 2026, 2027 and 2028 are redeemable after September 15, 2020, October 15, 2021, July 15, 2022, and March 15, 2023, respectively, at the following redemption prices as a percentage of the face amount of the notes:

Senior Subordinated Notes due

2022 and thereafter

2024 and thereafter

2025 and thereafter

2025 2026 2027 2028

Year Percentage Year Percentage Year Percentage Year Percentage

2020 101.438 % 2021 102.063 % 2022 101.688 % 2023 101.938 %

2021 100.719 % 2022 101.375 % 2023 101.125 % 2024 101.292 %

2022 and thereafter 100.000 % 2023 100.688 % 2024 100.563 % 2025 100.646 %

2024 and thereafter 100.000 % 2025 and thereafter 100.000 % 2026 and thereafter 100.000 %

Fair Value of Long-Term Debt

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Maturities on outstanding long-term debt and other borrowings during each of the five years subsequent to December 31, 2020 are as follows (in thousands):

Thereafter 1,223,700

Net Investment Hedge

All of our euro denominated notes were issued by Belden Inc., a USD functional currency entity.

As of December 31, 2019 , all of our outstanding foreign denominated debt is designated as a net investment hedge on the foreign currency risk of our net investment in our euro foreign operations.

The objective of the hedge is to protect the net investment in the foreign operations against adverse changes in the euro exchange rate.

The transaction gain or loss is reported in the translation adjustment section of other comprehensive income, which was a gain of $ 26.6 million , a gain of $ 87.5 million , and a loss of $ 56.2 million for the years ended December 31, 2019, 2018, and 2017, respectively.

As of December 31, 2020, € 767.8 million of our outstanding foreign denominated debt is designated as a net investment hedge on the foreign currency risk of our net investment in our euro foreign operations.

The objective of the hedge is to protect the net investment in the foreign operation against adverse changes in the euro exchange rate.

The transaction gain or loss is reported in the translation adjustment section of other comprehensive income.

For the years ended December 31, 2020, 2019 and 2018, the transaction gain/(loss) associated with the net investment hedge reported in other comprehensive income was $( 56.2 ) million, $ 26.6 million and $ 87.5 million, respectively.

During 2020, we de-designated € 532.2 million of our outstanding debt that was previously designated as a net investment hedge.

After the de-designation, transaction gains or losses associated with this € 532.2 million of debt are reported in income from continuing operations.

Years ended December 31,

2020 2019 2018

(in thousands)

Income before taxes:

Income (loss) before taxes:

United States operations $ ( 117,819 ) $ 42,833 $ 115,500

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United States state and local 91 3,090 3,912

Foreign 11,511 13,859 16,968

11,875 38,842 52,610

United States federal ( 1,754 ) 7,567 7,220

United States state and local ( 2,310 ) ( 1,205 ) ( 31 )

Income tax expense (benefit)

Foreign 3,913 ( 2,685 ) 3,137

( 151 ) 3,677 10,326

Income tax expense $ 11,724 $ 42,519 $ 62,936

In addition to the above income tax expense associated with continuing operations, we also recorded an income tax benefit associated with discontinued operations of $ 22.6 million, $ 27.2 million, an d $ 3.3 million in 2020, 2019, and 2018, respectively.

Years Ended December 31,

2020 2019 2018

Effective income tax rate reconciliation from continuing operations:

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Impact of change in deferred tax asset valuation allowance 3.1 % 9.2 % 0.3 %

Impact of non-taxable translation gain

Impact of non-taxable interest income

Domestic permanent differences and tax credits 33.9 % 5.1 % 1.9 %

Impact of tax reform — % — % 4.4 %

On December 22, 2017, the “Tax Cuts and Jobs Act” (the “Act”) was signed into law, making significant changes to the U.S.

Internal Revenue Code.

Changes include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S.

international taxation from a worldwide tax system to a territorial tax system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017.

In accordance with the Act, we recorded $ 24.5 million as an additional income tax expense in the fourth quarter of 2017, the period in which the legislation was enacted.

The total income tax expense included a $ 41.6 million tax benefit for the remeasurement of deferred tax assets and liabilities to the 21% rate at which they are expected to reverse, offset with a one-time tax expense on deemed repatriation of $ 30.8 million and a valuation allowance of $ 35.3 million recorded against foreign tax credit carryovers that we no longer expect to be able to realize based upon the new tax law.

Additionally, Staff Accounting Bulletin No.

118 (“SAB 118”) was issued to address the application of US GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act.

December 22, 2018 marked the end of the measurement period for purposes of SAB 118.

As such, we completed our analysis based on legislative updates relating to the Act which resulted in an additional SAB 118 tax expense of $ 2.9 million in the fourth quarter of 2018 and a total tax expense of $ 10.0 million for the year ended December 31, 2018.

The total tax provision expense included an $ 8.0 million tax expense associated with an increase

to the valuation allowance against foreign tax credit carryovers that we no longer expect to be able to realize based upon the new tax law, a $ 1.3 million tax expense adjustment to the transition tax on the deemed repatriation of cumulative foreign earnings, a $ 1.1 million tax expense resulting from a valuation allowance established on the deferred tax assets associated with stock options of covered employees, and a $ 0.4 million income tax benefit associated with an adjustment to the remeasurement of certain deferred tax assets and liabilities.

During 2019, the United States Treasury issued final and proposed regulations with respect to certain aspects related to the Tax Cuts and Jobs Acts of 2017.

Additional guidance provided in these regulations resulted in a tax adjustment in the fourth quarter of 2019.

The total tax provision expense in 2019 included $ 10.0 million tax expense associated with the increase to the valuation allowance against foreign tax credit carryovers that we no longer expect to be able to realize based upon the new proposed tax regulations.

Impact of CARES act ( 1.8 )% — % — %

17.7 % 27.9 % 27.4 %

In 2020, the most significant difference between the U.S.

federal statutory tax rate and our effective tax rate was the impact of foreign tax rate differences.

Foreign tax rate differences resulted in an income tax benefit of $ 25.3 million, $ 13.1 million, and $ 2.4 million in 2020, 2019, and 2018, respectively.

Additionally, in 2020, 2019 and 2018, our income tax expense was reduced by $ 4.0 million, $ 3.9 million, and $ 3.0 million, respectively, due to a tax holiday for our operations in St.

The tax holiday in St.

Kitts is scheduled to expire in 2022.

An additional significant difference between the U.S.

federal statutory tax rate and our effective tax rate was the impact of domestic permanent differences and tax credits.

We recognized a total income tax expense from domestic permanent differences and tax credits of $ 22.4 million in 2020, primarily associated with our foreign income inclusions.

In March 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law in the United States.

The Company generated a loss in the U.S.

which will be carried back to prior years, as permitted by the CARES Act.

The net impact to the tax provision as a result of the net operating loss carry back was a benefit of $ 1.2 million, primarily associated with the re-rate of the net operating loss carry back period.

If we were to repatriate foreign cash to the U.S., we may be required to accrue and pay U.S.

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tax rules and regulations as a result of the repatriation.

However, it is our assertion to permanently reinvest the earnings of our non-U.S.

However, it is our intent to permanently reinvest the earnings of our non-U.S.

subsidiaries in those operations and for continued non-U.S.

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or additional foreign withholding taxes.

Foreign tax rate differences resulted in an income tax expense (benefit) of $( 13.1 ) million , $( 2.4 ) million , and $ 14.7 million in 2019, 2018, and 2017, respectively.

Additionally, in 2019, 2018 and 2017, our income tax expense was reduced by $ 3.9 million , $ 3.0 million , and $ 3.5 million , respectively, due to a tax holiday for our operations in St.

The tax holiday in St.

Kitts is scheduled to expire in 2022 .

(In thousands)

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Plant, equipment, and intangibles $ ( 92,271 ) $ ( 96,254 )

Right of use asset ( 17,610 ) ( 16,906 )

( 109,881 ) ( 113,160 )

Deferred income tax assets:

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Reserves and accruals 24,388 15,395

Net operating loss and tax credit carryforwards

Net operating loss, capital loss, and tax credit carryforwards 107,028 76,456

Lease liability 18,515 17,882

Valuation allowances ( 84,308 ) ( 48,251 )

101,017 89,651

Net deferred income tax liability $ ( 8,864 ) $ ( 23,509 )

During 2019 , the United States Treasury issued final and proposed regulations with respect to certain aspects related to the Tax Cuts and Jobs Act of 2017.

Additional guidance provided in these regulations resulted in a change in our valuation allowance assessment in the fourth quarter of 2019.

The increase in deferred tax valuation allowances is primarily due to the valuation allowance against foreign tax credit carryovers that we no longer expect to be able to realize based upon the new proposed tax regulations.

On July 2, 2020, we completed the divestiture of Grass Valley to Black Dragon Capital.

The increase in pensions and reserves is primarily due to the divestiture of Grass Valley.

We derived $ 23.8 million of deferred tax assets in relation to a capital loss in the U.S.

for the divestiture of Grass Valley.

The increase in deferred tax valuation allowances is primarily due to the valuation allowance against the capital loss of $ 23.8 million that we do not expect to be able to realize prior to expiration and the valuation allowance against the seller’s note allowance.

As of December 31, 2020, we had $ 205.4 million of gross net operating loss carryforwards and $ 57.1 million of tax credit carryforwards.

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$ 0.9 million in 2020, $ 19.7 million between 2021 and 2024, and $ 126.8 million between 2025 and 2040.

Net operating losses with an indefinite carryforward period total $ 45.0 million .

Net operating loss with an indefinite carryforward period total $ 58.0 million.

Of the $ 205.4 million in net operating loss carryforwards, we have determined, based on the weight of all available evidence, both positive and negative, that we will utilize $ 137.1 million of these net operating loss carryforwards within their respective expiration periods.

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Unless otherwise utilized, tax credit carryforwards of $ 57.1 million will expire as follows:

$ 2.1 million between 2020 and 2024, $ 39.8 million between 2025 and 2039.

$ 2.1 million between 2020 and 2024 and $ 49.6 million between 2025 and 2040.

Tax credit carryforwards with an indefinite carryforward period total $ 5.4 million.

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A valuation allowance has been recorded on the remaining portion of the tax credit carryforwards.

The following tables summarize our net operating loss carryforwards and tax credit carryforwards as of December 31, 2019 by jurisdiction:

As of December 31, 2020, we had $ 100.5 million of gross capital loss carryforwards in the U.S.

with a full valuation allowance as we do not expect to be able to utilize the capital loss prior to expiration.

The following tables summarize our net operating losses carryforwards and tax credit carryforwards as of December 31, 2020 by jurisdiction:

Net Operating Loss Carryforwards

(In thousands)

Australia $ 10,546

Germany 15,852

Luxembourg 163

Netherlands 6,578

United Kingdom 10,720

United States - Federal and various states 140,117

Total $ 205,352

Tax Credit Carryforwards

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United States $ 56,617

Total $ 57,109

In 2020, we recognized a net $ 1.8 million increase to reserves for uncertain tax positions.

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Reductions for tax positions of prior years - Settlement ( 328 ) ( 300 )

Reduction for tax positions of prior years - Statute of limitations

Balance at end of year $ 8,573 $ 6,779

The balance of $ 8.6 million at December 31, 2020, reflects tax positions that, if recognized, would impact our effective tax rate.

As of December 31, 2019 , we believe it is reasonably possible that $ 0.4 million of unrecognized tax benefits will change within the next twelve months primarily attributable to the expected completion of tax audits in the U.S.

As of December 31, 2020, we believe it is reasonably possible that $ 1.7 million of unrecognized tax benefits will change within the next twelve months primarily attributable to the expected completion of tax audits in foreign jurisdictions.

Our practice is to recognize interest and penalties related to uncertain tax positions in interest expense and operating expenses, respectively.

We do not have any accrued amounts for the payment of interest and penalties as of December 31, 2019 and 2018 .

We have approximately $ 0.2 million and $ 0.0 million accrued for the payment of interest and penalties as of December 31, 2020 and 2019, respectively.

Our federal tax return for the tax years 2017 and later remain subject to examination by the Internal Revenue Service.

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Certain defined benefit plans in the United Kingdom are frozen and additional benefits are not being earned by the participants.

We closed the U.S.

defined benefit pension plan to new entrants effective January 1, 2010.

Employees who were not active participants in the U.S.

defined benefit pension plan on December 31, 2009, are not eligible to participate in the plan.

During 2017, we sold our MCS business and its associated pension

defined benefit pension plan is closed to new entrants.

Annual contributions to retirement plans equal or exceed the minimum funding requirements of applicable local regulations.

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The following tables provide a reconciliation of the changes in the plans’ benefit obligations and fair value of assets as well as a statement of the funded status and balance sheet reporting for these plans.

Pension Benefits

Other Benefits

Pension Benefits Other Benefits

Years Ended December 31, 2020 2019 2020 2019

2 unchanged sentences

Benefit obligation, beginning of year $ ( 461,352 ) $ ( 412,880 ) $ ( 29,470 ) $ ( 26,143 )

Service cost ( 3,930 ) ( 3,668 ) ( 33 ) ( 35 )

Interest cost ( 9,729 ) ( 12,261 ) ( 809 ) ( 960 )

Participant contributions ( 73 ) ( 86 ) ( 5 ) ( 4 )

Actuarial gain (loss)

Actuarial loss ( 42,284 ) ( 39,329 ) ( 110 ) ( 2,374 )

Divestitures and acquisitions ( 910 ) — — —

Settlements 26,970 49 — —

Curtailments 236 —

Plan amendments ( 226 ) — — —

2 unchanged sentences

Benefit obligation, end of year $ ( 492,925 ) $ ( 461,352 ) $ ( 29,498 ) $ ( 29,470 )

Pension Benefits

Other Benefits

Pension Benefits Other Benefits

Years Ended December 31, 2020 2019 2020 2019

5 unchanged sentences

Plan participant contributions 73 86 5 4

Settlements ( 26,945 ) — — —

Foreign currency exchange rate changes 7,803 9,275 — —

11 unchanged sentences

The following table provides the components of net periodic benefit costs for the plans.

Pension Benefits

Other Benefits

Pension Benefits Other Benefits

Years Ended December 31, 2020 2019 2018 2020 2019 2018

1 unchanged sentence

Components of net periodic benefit cost:

Service cost $ 3,930 $ 3,668 $ 4,579 $ 33 $ 35 $ 47

Interest cost 9,729 12,261 11,480 809 960 945

4 unchanged sentences

Net periodic benefit cost $ 3,575 $ 1,824 $ 3,745 $ 783 $ 862 $ 980

We recorded settlement losses totaling $ 1.3 million during 2018.

We recorded settlement losses totaling $ 3.2 million during 2020 and $ 1.3 million during 2018.

The settlement losses were the result of lump-sum payments to participants that exceeded the sum of the pension plan's respective annual service cost and interest cost amounts.

The following table presents the assumptions used in determining the benefit obligations and the net periodic benefit cost amounts.

Pension Benefits

Other Benefits

Years Ended December 31,

Pension Benefits Other Benefits

Years Ended December 31, Years Ended December 31,

2020 2019 2020 2019

Weighted average assumptions for benefit obligations at year end:

Discount rate 1.5 % 2.2 % 2.5 % 2.9 %

Salary increase

Cash balance interest credit rate

Salary increase 3.3 % 3.5 % N/A N/A

Cash balance interest credit rate 4.6 % 4.0 % N/A N/A

Weighted average assumptions for net periodic cost for the year:

Discount rate 2.2 % 3.1 % 2.9 % 3.7 %

Salary increase

Cash balance interest credit rate

Expected return on assets

Salary increase 3.5 % 3.6 % N/A N/A

Cash balance interest credit rate 4.0 % 4.7 % N/A N/A

Expected return on assets 4.9 % 5.0 % N/A N/A

Assumed health care cost trend rates:

Health care cost trend rate assumed for next year

Rate that the cost trend rate gradually declines to

Year that the rate reaches the rate it is assumed to remain at

Health care cost trend rate assumed for next year N/A N/A 5.5 % 5.6 %

Rate that the cost trend rate gradually declines to N/A N/A 5.0 % 5.0 %

Year that the rate reaches the rate it is assumed to remain at N/A N/A 2026 2023

Plan assets are invested using a total return investment approach whereby a mix of equity securities and fixed income securities are used to preserve asset values, diversify risk, and achieve our target investment return benchmark.

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The expected long-term rate of return on plan assets reflects the average rate of earnings expected on the invested assets and future assets to be invested to provide for the benefits included in the projected benefit obligation.

We use historic plan asset returns combined with current market conditions to estimate the rate of return.

We use historic plan asset returns co mbined with current market conditions to estimate the rate of return.

The expected rate of return on plan assets is a long-term assumption based on an analysis of historical and forward looking returns considering the plan’s actual and target asset mix.

The following table presents the fair values of the pension plan assets by asset category.

December 31, 2019

December 31, 2018

Fair Market Value at December 31, 2019

Quoted Prices

Fair Market Value at December 31, 2018

Quoted Prices

(In thousands)

December 31, 2020 December 31, 2019

Fair Market Value at December 31, 2020 Quoted Prices

(Level 1) Significant

(Level 2) Investments Measured at NAV Fair Market Value at December 31, 2019 Quoted Prices

(Level 1) Significant

(Level 2) Investments Measured at NAV

(In thousands) (In thousands)

Asset Category:

8 unchanged sentences

Cash & equivalents 8,574 3,230 — 5,344 9,151 167 — 8,984

This category includes investments in actively managed and indexed investment funds that invest in a diversified pool of equity securities of companies located in the U.S., Canada, Western Europe and other developed countries throughout the world.

Total $ 361,802 $ 11,844 $ 12,922 $ 337,036 $ 355,726 $ 8,909 $ 44,300 $ 302,517

(a) This category includes investments in actively managed and indexed investment funds that invest in a diversified pool of equity securities of companies located in the U.S., Canada, Western Europe and other developed countries throughout the world.

The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund.

1 unchanged sentence

Funds which are valued using the net asset value method are not included in the fair value hierarchy.

This category includes investments in investment funds that invest in U.S.

(b) This category includes investments in investment funds that invest in U.S.

other national, state and local government bonds;

2 unchanged sentences

Funds valued using the net asset value method are not included in the fair value hierarchy.

This category includes guaranteed insurance contracts and annuity policies.

This category includes investments in hedge funds that pursue multiple strategies in order to provide diversification and balance risk/return objectives, real estate funds, and private equity funds.

(d) This category includes investments in hedge funds that pursue multiple strategies in order to provide diversification and balance risk/return objectives, real estate funds, and private equity funds.

Funds valued using the net asset method are not included in the fair value hierarchy.

6 unchanged sentences

(In thousands)

We anticipate contributing $ 6.1 million and $ 1.4 million to our pension and other postretirement plans, respectively, during 2020.

2021 $ 19,497 $ 1,460

2022 19,044 1,457

2023 20,320 1,458

2024 21,247 1,463

2025 19,417 1,466

2026-2030 99,881 7,413

Total $ 199,406 $ 14,717

We anticipate c ontributing $ 11.4 million and $ 1.5 million to our pension and other postretirement plans, respectively, during 2021.

The pre-tax amounts in accumulated other comprehensive loss that have not yet been recognized as components of net periodic benefit cost at December 31, 2020 and the changes in these amounts during the year ended December 31, 2020 are as follows.

Benefits Other

(In thousands)

2 unchanged sentences

Net prior service cost 2,798 —

$ 83,469 $ ( 436 )

Benefits Other

(In thousands)

3 unchanged sentences

Actuarial loss 42,048 110

Settlement gain recognized

Asset gain ( 16,113 ) —

Settlement loss recognized ( 3,153 ) —

Divestitures and acquisitions 335 —

Currency impact 3,738 ( 5 )

2 unchanged sentences

Amortization of prior service cost ( 190 ) —

Prior service cost occurring during the year 226 —

Currency impact 101 —

3 unchanged sentences

Foreign Currency

Pension and Other

Component Pension and Other

Postretirement

Benefit Plans

Other Comprehensive

Income (Loss)

Benefit Plans Accumulated Other Comprehensive Income (Loss)

(In thousands)

Balance at December 31, 2018 $ ( 41,882 ) $ ( 33,025 ) $ ( 74,907 )

Other comprehensive gain (loss) loss attributable to Belden before reclassifications

Amounts reclassified from accumulated other comprehensive loss

Net current period other comprehensive gain (loss) attributable to Belden

Balance at December 31, 2018

Other comprehensive gain (loss) attributable to Belden before reclassifications 23,657 ( 13,281 ) 10,376

2 unchanged sentences

Balance at December 31, 2019 $ ( 18,225 ) $ ( 45,193 ) $ ( 63,418 )

Other comprehensive loss attributable to Belden before reclassifications ( 123,101 ) ( 20,800 ) ( 143,901 )

Amounts reclassified from accumulated other comprehensive income 10,145 5,323 15,468

Net current period other comprehensive loss attributable to Belden ( 112,956 ) ( 15,477 ) (128,433)

Balance at December 31, 2020 $ ( 131,181 ) $ ( 60,670 ) $ ( 191,851 )

The following table summarizes the effects of reclassifications from accumulated other comprehensive income (loss):

1 unchanged sentence

Accumulated Other

Comprehensive Income

Affected Line Item in the

Comprehensive Income (Loss) Affected Line Item in the

Consolidated Statements

of Operations and

Comprehensive Income

Comprehensive Income (Loss)

(In thousands)

Amortization of pension and other postretirement benefit plan items:

Settlement gain

Settlement loss $ 3,153 (1)

Accumulated losses of Grass Valley disposal group 771 (2)

Actuarial losses 2,871 (1)

1 unchanged sentence

Total before tax 6,985

Tax benefit ( 1,662 )

Total net of tax $ 5,323

(1) The amortization of these accumulated other comprehensive income (loss) components are included in the computation of net periodic benefit costs (see Note 19).

(2) In addition, we reclassified $ 10.1 million of accumulated foreign currency translation losses associated with the Grass Valley disposal group that are included in the calculation of the loss on disposal of discontinued operations.

Share-Based Compensation

1 unchanged sentence

Years Ended December 31,

2020 2019 2018

(In thousands)

15 unchanged sentences

Compensation costs for awards with performance conditions and graded vesting are amortized to expense using the graded attribution method.

During the year ended December 31, 2020, certain restricted stock units with performance vesting conditions were modified as a result of approved changes to the performance targets.

There were no other changes to the terms of the restricted stock units.

The modification was applicable to all employees who were previously granted the affected restricted stock units.

Prior to the modification, the performance targets were not expected to be achieved.

Therefore, we had not recognized any expense for these restricted stock units on a cumulative basis.

As of the modification date, we expect to recognize total incremental compensation expense as a result of the modification of $ 4.4 million, of which $ 1.4 million was recognized in 2020.

The remaining expense will be recognized over the applicable service periods, which extend to 2023.

Years Ended December 31,

2020 2019 2018

(In thousands, except weighted average fair

2 unchanged sentences

Total intrinsic value of SARs converted and options exercised 545 354 2,263

Tax benefit related to share-based compensation

Tax benefit (expense) related to share-based compensation ( 560 ) ( 101 ) 113

Weighted-average fair value of restricted stock shares and units granted 41.75 64.61 72.54

4 unchanged sentences

Dividend yield 0.39 % 0.32 % 0.27 %

SARs and Stock Options

Restricted Shares and Units

Contractual Term

Intrinsic Value

SARs and Stock Options Restricted Shares and Units

Number Weighted-

Price Weighted-

Contractual Term Aggregate

Intrinsic Value Number Weighted-

(In thousands, except exercise prices, fair values, and contractual terms)

Outstanding at January 1, 2019

Exercised or converted

Forfeited or expired

Outstanding at January 1, 2020 1,367 $ 65.04 n/a n/a 737 $ 68.31

Granted 149 51.14 n/a n/a 565 41.75

Exercised or converted ( 38 ) 38.24 n/a n/a ( 102 ) 64.56

Forfeited or expired ( 167 ) 66.42 n/a n/a ( 247 ) 75.07

Outstanding at December 31, 2020 1,311 $ 64.06 5.7 $ ( 29,054 ) 953 $ 52.50

1 unchanged sentence

Exercisable or convertible at December 31, 2020 1,021 $ 62.62 5.5 $ ( 24,060 )

At December 31, 2019 , the total unrecognized compensation cost related to all nonvested awards was $ 28.2 million .

At December 31, 2020, the total unrecognized compensat ion cost related to all nonvested awards was $ 25.0 million.

That cost is expected to be recognized over a weighted-average period of 1.6 years.

Historically, we have issued treasury shares, if available, to satisfy award conversions and exercises.

Historically, we have issued treasury shares, if available, to satisfy award c onversions and exercises.

Preferred Stock

12 unchanged sentences

During 2018, we repurchased 2.7 million shares of our common stock under the program for an aggregate cost of $ 175.0 million and an average price per share of $ 64.94 ;

During 2017, we repurchased 0.3 million shares of our common stock under the program for an aggregate cost of $ 25.0 million and an average price per share of $ 79.75 .

We utilized all $ 200.0 million authorized under this share repurchase program.

exhausting the $ 200.0 million authorized under this share repurchase program.

On November 29, 2018, our Board of Directors authorized another share repurchase program, which allows us to purchase up to $ 300.0 million of our common stock through open market repurchases, negotiated transactions, or other means, in accordance with applicable securities laws and other restrictions.

During 2018, we did not repurchase any shares of our common stock under this program.

During 2018, we did no t repurchase any shares of our common stock under this program.

During 2019, we repurchased 0.9 million shares of our common stock under the program for an aggregate cost of $ 50.0 million and an average price per share of $ 56.19 .

During 2020, we repurchased 1.0 million shares of our common stock under the share repurchase program for an aggregate cost of $ 35.0 million at an average price per share of $ 35.83 .

Market Concentrations and Risks

22 unchanged sentences

Years Ended December 31,

2020 2019 2018

(In thousands)

2 unchanged sentences

Interest paid ( 53,029 ) ( 51,160 ) ( 48,519 )

Quarterly Operating Results (Unaudited)

Our quarterly operating results summarized below are for continuing operations, and have been recast to exclude the results of our disposal group.

(In thousands, except days and per share amounts)

Number of days in quarter

Operating income

Income from continuing operations

Income (loss) from discontinued operations, net of tax

Net income (loss)

Net incomce (loss) attributable to noncontrolling interest

Net income (loss) attributable to Belden

Preferred stock dividends

Net income (loss) attributable to Belden common stockholders

Basic income (loss) per share attributable to Belden common stockholders:

Continuing operations attributable to Belden common stockholders

Discontinued operations attributable to Belden common stockholders

Net income (loss) attributable to Belden common stockholders

Diluted income (loss) per share attributable to Belden stockholders:

Continuing operations attributable to Belden common stockholders

Discontinued operations attributable to Belden common stockholders

Net income (loss) attributable to Belden common stockholders

Included in income from continuing operations in the first, second, third, and fourth quarters of 2019 are severance, restructuring, and integration costs of $ 0.0 million , $ 2.5 million , $ 3.0 million , and $ 21.0 million , respectively.

(In thousands, except days and per share amounts)

Number of days in quarter

Operating income

Income from continuing operations

Income (loss) from discontinued operations, net of tax

Net loss attributable to noncontrolling interest

Net income attributable to Belden