Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
In accordance with Securities Exchange Act Rules 13a-15(e) and 15d-15(e), our management, under the supervision of our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10-K. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2020.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal controls over financial reporting for the Company. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Securities Exchange Act of 1934, as amended, as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
• Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;
• Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting can also be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.
The Company’s management assessed the effectiveness of the Company’s internal controls over financial reporting as of December 31, 2020. In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (COSO) in Internal Control-Integrated Framework.
Based on that assessment, the Chief Executive Officer and Chief Financial Officer concluded as of December 31, 2020, the Company’s internal control over financial reporting was effective.
Our internal controls over financial reporting as of December 31, 2020 have been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report that follows.
Changes to Internal Control over Financial Reporting
There were no changes to our internal control over financial reporting that occurred during the year ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Belden Inc.
Opinion on Internal Control over Financial Reporting
We have audited Belden Inc.’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control— Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission 2013 framework (the COSO criteria). In our opinion, Belden Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of Belden Inc. as of December 31, 2020 and 2019, and the related consolidated statements of operations, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and the financial statement schedule listed in the Index at Item 15(a) and our report dated February 16, 2021 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
St. Louis, Missouri
February 16, 2021
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Item 9B. Other Information
None.
PART III
Item 10. Directors, Executive Officers and Corporate Governance
Information regarding directors is incorporated herein by reference to “Item I-Election of Directors,” as described in the Proxy Statement. Information regarding executive officers is set forth in Part I herein under the heading “Executive Officers.” The additional information required by this Item is incorporated herein by reference to “Corporate Governance” (opening paragraph and table), “Corporate Governance-Audit Committee,” “Ownership Information-Delinquent Section 16(a) Reports,” “Corporate Governance-Corporate Governance Documents” and “Other Matters-Stockholder Proposals for the 2022 Annual Meeting,” as described in the Proxy Statement.
Item 11. Executive Compensation
Incorporated herein by reference to “Executive Compensation,” “Corporate Governance-Director Compensation,” “Corporate Governance-Related Party Transactions and Compensation Committee Interlocks” and “Corporate Governance-Board Leadership Structure and Role in Risk Oversight” as described in the Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
Incorporated herein by reference to “Ownership Information-Equity Compensation Plan Information on December 31, 2020” and “Ownership Information-Stock Ownership of Certain Beneficial Owners and Management” as described in the Proxy Statement.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Incorporated herein by reference to “Corporate Governance-Related Party Transactions and Compensation Committee Interlocks” and “Corporate Governance” (paragraph following the table) as described in the Proxy Statement.
Item 14. Principal Accountant Fees and Services
Incorporated herein by reference to “Public Accounting Firm Information-Fees to Independent Registered Public Accountants for 2020 and 2019” and “Public Accounting Firm Information-Audit Committee’s Pre-Approval Policies and Procedures” as described in the Proxy Statement.
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PART IV
Item 15. Exhibits and Financial Statement Schedules
(a) Documents filed as part of this Report:
1. Financial Statements
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of December 31, 2020 and December 31, 2019
Consolidated Statements of Operations for Each of the Three Years in the Period Ended December 31, 2020
Consolidated Statement s of Comprehensive Income for Each of the Three Years in the Period Ended December 31, 2020
Consolidated Cash Flow Statements for Each of the Three Years in the Period Ended December 31, 2020
Consolidated Stockholders’ Equity Statements for Each of the Three Years in the Period Ended December 31, 2020
Notes to Consolidated Financial Statements
2. Financial Statement Schedule
Schedule II – Valuation and Qualifying Accounts
Beginning
Balance ASU 2016-13 Adoption Adjustment Charged to
Costs and
Expenses Divestitures/
Acquisitions Charge
Offs Recoveries Currency
Movement Ending
Balance
(In thousands)
Accounts Receivable —
Allowance for Doubtful Accounts:
2020 $ 2,569 $ 1,011 $ 2,282 $ — $ (114) $ ( 637 ) $ 39 $ 5,150
2019 3,137 — 159 368 ( 969 ) ( 86 ) ( 40 ) 2,569
2018 3,709 — 353 — ( 567 ) ( 176 ) ( 182 ) 3,137
Inventories —
Excess and Obsolete Allowances:
2020 $ 21,245 $ — $ 15,915 $ — $ ( 4,540 ) $ ( 597 ) $ 246 $ 32,269
2019 17,364 — 6,403 452 ( 2,333 ) ( 606 ) ( 35 ) 21,245
2018 19,887 — 2,801 — ( 2,464 ) ( 2,675 ) ( 185 ) 17,364
Deferred Income Tax Asset —
Valuation Allowance:
2020 $ 48,251 $ — $ 3,142 $ 33,003 $ ( 303 ) $ ( 114 ) $ 329 $ 84,308
2019 37,235 — 12,356 330 — ( 1,629 ) ( 41 ) 48,251
2018 47,636 — 13,459 ( 2 ) ( 22,577 ) ( 928 ) ( 353 ) 37,235
All other financial statement schedules not included in this Annual Report on Form 10-K are omitted because they are not applicable.
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3. Exhibits
The following exhibits are filed herewith or incorporated herein by reference, as indicated. Documents indicated by an asterisk (*) identify each management contract or compensatory plan.
Exhibit
Number Description of Exhibit The filings referenced for incorporation by
reference are Company (Belden Inc.) filings unless
noted to be those of Belden 1993 Inc.
3.1 Certificate of Incorporation, as amended
February 29, 2008 Form 10-K, Exhibit 3.1
3.2 Amended and Restated Bylaws
May 31, 2016 Form 8-K, Exhibit 3.1
4.1 Indenture relating to 4.125% Senior Subordinated Notes due 2026
October 11, 2016 Form 8-K, Exhibit 4.1
4.2 First Supplemental Indenture relating to 4.125% Senior Subordinated Notes due 2026
June 26, 2017 Form 8-K, Exhibit 4.22
4.3 Indenture relating to 3.375% Senior Subordinated Notes due 2027
July 10, 2017 Form 8-K, Exhibit 4.1
4.4 Indenture relating to 2.875% Senior Subordinated Notes due 2025
September 22, 2017 Form 8-K, Exhibit 4.1
4.5 Indenture relating to 3.875% Senior Subordinated Notes due 2028
March 16, 2018 Form 8-K, Exhibit 4.1
4.6 Description of the Registrant's Securities Registered Under Section 12 of the Securities Exchange Act of 1934
August 3, 2020 Form 10-Q, Exhibit 4.1
10.1 Trademark License Agreement November 15, 1993 Form 10-Q of Belden 1993 Inc., Exhibit 10.2
10.2* CDT 2001 Long-Term Performance Incentive Plan, as amended
April 6, 2009 Proxy Statement, Appendix I
10.3* Belden Inc. 2011 Long Term Incentive Plan, as amended
April 6,2016 Proxy Statement, Appendix II
10.4* Form of Stock Appreciation Rights Award
August 3, 2016 Form 10-Q, Exhibit 10.1
10.5* Form of Performance Stock Units Award
August 3, 2016 Form 10-Q, Exhibit 10.2
10.6* Form of Restricted Stock Units Award
May 6, 2014 Form 10-Q, Exhibit 10.3
10.7* Belden Inc. Annual Cash Incentive Plan, as amended and restated
Filed herewith
10.8* 2004 Belden CDT Inc. Non-Employee Director Deferred Compensation Plan
December 21, 2004 Form 8-K, Exhibit 10.1
10.9* Belden Supplemental Excess Defined Benefit Plan
Filed herewith
10.10* Belden Supplemental Excess Defined Contribution Plan
Filed herewith
10.11* Executive Employment Agreement with John Stroup
May 22, 2020 Form 8-K, Exhibit 10.1
10.12* Executive Severance Plan
July 31, 2020 Form 8-K, Exhibit 10.1
10.13* Form of Business Protection Agreement with each of Brian Anderson, Ashish Chand, Henk Derksen, Dean McKenna, Anshuman Mehrotra, Roel Vestjens and Doug Zink
July 31, 2020 Form 8-K, Exhibit 10.3
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Exhibit
Number Description of Exhibit The filings referenced for incorporation by
reference are Company (Belden Inc.) filings unless
noted to be those of Belden 1993 Inc.
10.14* Form of Indemnification Agreement with each of the Directors and Brian Anderson, Ashish Chand, Henk Derksen, Dean McKenna, Anshuman Mehrotra, John Stroup, Roel Vestjens and Doug Zink
March 1, 2007 Form 10-K, Exhibit 10.39
10.15 Amended and Restated Credit Agreement
May 22, 2017, Form 8-K, Exhibit 10.1
14.1 Code of Ethics
August 25, 2020 Form 8-K, Exhibit 14.1
21.1 List of Subsidiaries of Belden Inc.
Filed herewith
23.1 Consent of Independent Registered Accounting Firm
Filed herewith
24.1 Powers of Attorney from Members of the Board of Directors
Filed herewith
31.1 Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer
Filed herewith
31.2 Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer
Filed herewith
32.1 Section 1350 Certification of the Chief Executive Officer
Filed herewith
32.2 Section 1350 Certification of the Chief Financial Officer
Filed herewith
101 The following financial statements from the Company's Annual Report on Form 10-K for the year ended December 31, 2020, formatted in Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Cash Flow Statements, (v) Consolidated Statements of Stockholders' Equity and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed
104 The cover page from the Company's Annual Report on Form 10-K for the year ended December 31, 2020, formatted in Inline XBRL
* Management contract or compensatory plan
Copies of the above Exhibits are available to shareholders at a charge of $0.25 per page, minimum order of $10.00. Direct requests to:
Belden Inc., Attention: Corporate Secretary
1 North Brentwood Boulevard, 15th Floor
St. Louis, Missouri 63105
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Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BELDEN INC.
By /s/ ROEL VESTJENS
Roel Vestjens
Date: February 16, 2021 President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.
/s/ ROEL VESTJENS President and Chief Executive Officer February 16, 2021
Roel Vestjens
/s/ HENK DERKSEN Senior Vice President, Finance, and Chief Financial Officer February 16, 2021
Henk Derksen
/s/ DOUGLAS R. ZINK Vice President and Chief Accounting Officer February 16, 2021
Douglas R. Zink
/s/ JOHN S. STROUP* Executive Chairman February 16, 2021
John S. Stroup
/s/ DAVID ALDRICH* Lead Independent Director February 16, 2021
David Aldrich
/s/ LANCE C. BALK* Director February 16, 2021
Lance C. Balk
/s/ DIANE D. BRINK* Director February 16, 2021
Diane D. Brink
/s/ JUDY L. BROWN* Director February 16, 2021
Judy L. Brown
/s/ NANCY CALDERON* Director February 16, 2021
Nancy Calderon
/s/ BRYAN C. CRESSEY* Director February 16, 2021
Bryan C. Cressey
/s/ JONATHAN KLEIN* Director February 16, 2021
Jonathan Klein
/s/ GEORGE MINNICH* Director February 16, 2021
George Minnich
/s/ ROEL VESTJENS
*By Roel Vestjens, Attorney-in-fact
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