What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-11-07 compared with 2022-08-08 · 82 added, 71 removed, 185 unchanged (45% of the section changed)

27 unchanged sentences

dollar weakens against foreign currencies, our revenues and earnings are positively impacted.

Approximately 44% of our consolidated revenues during the quarter ended July 3, 2022 were to customers outside of the U.S.

Approximately 43% of our consolidated revenues during the quarter ended October 2, 2022 were to customers outside of the U.S.

In addition to the translation impact described above, currency rate fluctuations have an economic impact on our financial results.

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D uring periods of inflation, if we are unable to raise prices timely and sufficiently to recover our material costs, our earnings could decline.

Furthermore, inflation may impact labor and other costs.

Furthermore, inflation may impact labor, energy, and other costs.

We are mindful of ongoing inflationary pressures and as a result, proactively implement selling price increases and cost control measures.

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Tripwire Divestiture

On February 22, 2022, we sold Tripwire for gross cash consideration of $350 million and recognized a loss on disposal of discontinued operations, net of tax of $4.6 million during the six months ended July 3, 2022.

During the nine months ended October 2, 2022, we sold Tripwire for gross cash consideration of $350 million and recognized a loss on disposal of discontinued operations, net of tax of $5.4 million and $9.9 million during the three and nine months ended October 2, 2022.

Debt Repurchase

During the six months ended July 3, 2022, we repurchased all of the €200.0 million aggregate principal amount of 4.125% senior subordinated notes previously due 2026.

During the nine months ended October 2, 2022, we repurchased all of the €200.0 million aggregate principal amount of 4.125% senior subordinated notes previously due 2026.

We recognized a $6.4 million loss on debt extinguishment for the premiums paid to the bond holders to retire the 2026 Notes and for the unamortized debt issuance costs on the 2026 Notes that we were required to write-off.

During the six months ended July 3, 2022, we completed three acquisitions.

During the nine months ended October 2, 2022, we completed three acquisitions.

On January 17, 2022, we acquired Macmon for $41.9 million , net of cash acquired.

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Share Repurchase Program

During the three months ended July 3, 2022, we repurchased 0.3 million shares of our common stock for an aggregate cost of $16.6 million at an average price per share of $51.71.

During the six months ended July 3, 2022, we repurchased 1.2 million shares of our common stock for an aggregate cost of $66.6 million at an average price per share of $55.23.

During the three months ended October 2, 2022, we repurchased 1.2 million shares of our common stock for an aggregate cost of $69.8 million at an average price per share of $59.84.

During the nine months ended October 2, 2022, we repurchased 2.4 million shares of our common stock for an aggregate cost of $136.4 million at an average price per share of $57.50.

Gain on Sale of Asset

During the three and nine months ended October 2, 2022, we sold certain real estate in the United States for $42.2 million, net of transaction costs and recognized a $37.9 million pre-tax gain on sale.

This gain on sale was excluded from Segment EBITDA of our Industrial Automation Solutions segment.

Equity Method Investment

During the second quarter of 2022, we invested $20.0 million in Litmus for a noncontrolling ownership interest.

During the nine months ended October 2, 2022, we invested $20.0 million in Litmus for a noncontrolling ownership interest.

Litmus provides critical data connectivity needed to monitor, visualize, analyze, and integrate industrial data.

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Critical Accounting Policies

During the six months ended July 3, 2022:

During the nine months ended October 2, 2022:

• We did not change any of our existing critical accounting policies from those listed in our 2021 Annual Report on Form 10-K;

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Consolidated Income before Taxes

Three Months Ended % Change Six Months Ended % Change

July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

Three Months Ended % Change Nine Months Ended % Change

October 2, 2022 October 3, 2021 October 2, 2022 October 3, 2021

(In thousands, except percentages)

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Amortization of intangibles (10,105) (7,780) 29.9 % (28,099) (22,945) 22.5 %

Asset impairments — — n/a — (6,995) (100.0) %

Asset impairments — (2,288) (100.0) % — (9,283) (100.0) %

Gain on sale of asset 37,891 — n/a 37,891 — n/a

Operating income 129,648 74,737 73.5 % 285,105 194,034 46.9 %

Interest expense, net (9,883) (16,251) (39.2) % (35,570) (46,632) (23.7) %

Loss on debt extinguishment — — n/a (6,392) — n/a

Loss on debt extinguishment — (5,715) (100.0) % (6,392) (5,715) 11.8 %

Non-operating pension benefit 26 992 (97.4) % 2,296 3,121 (26.4) %

Income from continuing operations before taxes 119,791 53,763 122.8 % 245,439 144,808 69.5 %

Revenues increased $90.7 million and $192.4 million in the three and six months ended July 3, 2022, respectively, from the comparable periods of 2021 due to the following factors:

Revenues increased $65.7 million and $258.1 million in the three and nine months ended October 2, 2022, respectively, from the comparable periods of 2021 due to the following factors:

• Higher sales volume and favorable pricing from industrial automation, smart buildings, and broadband & 5G products resulted in a $91.4 million and $292.5 million increase in revenues, respectively.

• Higher copper pass-through pricing had a $0.2 million and $14.1 million favorable impact on revenues, respectively.

• Acquisitions contributed an estimated $9.0 million and $20.2 million in revenues, respectively.

• Copper pass-through pricing had a $12.7 million unfavorable and $1.4 million favorable impact on revenues, respectively.

• The divestiture of our oil and gas cable business in 2021 had a $0.0 million and $10.3 million unfavorable impact on revenues.

• Currency translation had a $22.0 million and $45.7 million unfavorable impact on revenues.

Gross profit increased $31.0 million and $70.6 million in the three and six months ended July 3, 2022, respectively, from the comparable periods of 2021 due to the increases in revenues discussed above.

Selling, general and administrative expenses increased $11.6 million and $34.1 million in the three and six months ended July 3, 2022, respectively, from the comparable periods of 2021.

Gross profit increased $35.3 million and $105.9 million in the three and nine months ended October 2, 2022, respectively, from the comparable periods of 2021 due to the increases in revenues discussed above.

Accordingly, gross profit margins expanded 200 and 100 basis points, respectively, in the three and nine months ended October 2, 2022 from the comparable periods of 2021.

Selling, general and administrative expenses increased $15.1 million and $49.2 million in the three and nine months ended October 2, 2022, respectively, from the comparable periods of 2021.

The increase in selling, general and administrative expenses is primarily attributable to strategic investments to enhance our solution selling capabilities as well as increases from incentive compensation and acquisitions.

Research and development expenses increased $3.7 million and $4.6 million in the three and six months ended July 3, 2022, respectively, from the comparable periods of 2021 primarily due to increased investments in R&D projects as we continue our commitment to growth initiatives.

Amortization of intangibles increased $2.0 million and $2.8 million in the three and six months ended July 3, 2022, respectively, from the comparable periods of 2021 primarily due to acquisitions.

Asset impairments decreased $7.0 million in the six months ended July 3, 2022 from the comparable period of 2021 as a result of the impairments on assets held and used and assets held for sale of $3.6 million and $3.4 million, respectively, during the six months ended July 4, 2021.

Operating income increased $13.6 million and $36.2 million in the three and six months ended July 3, 2022, respectively, from the comparable periods of 2021 primarily as a result of the increase in gross profit discussed above.

Net interest expense decreased $3.6 million and $4.7 million in the three and six months ended July 3, 2022, respectively, from the comparable periods of 2021 primarily due to the repurchase of senior subordinated notes previously due 2026 and currency translation.

Loss on debt extinguishment increased $6.4 million in the six months ended July 3, 2022 from the comparable period of 2021 due to the redemption of the 2026 Notes during the first quarter of 2022.

The $6.4 million loss on debt extinguishment represents the premium paid to the bond holders to retire the 2026 Notes and for the unamortized debt issuance costs on the 2026 Notes that we were required to write-off.

Income from continuing operations before taxes increased $16.8 million and $34.6 million in the three and six months ended July 3, 2022, respectively, from the comparable periods of 2021 primarily due to the increase in operating income discussed above.

Three Months Ended % Change Six Months Ended % Change

July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

Research and development expenses increased $3.1 million and $7.6 million in the three and nine months ended October 2, 2022, respectively, from the comparable periods of 2021 primarily due to increased investments as we further strengthen our product offering and continue our commitment to growth initiatives.

Amortization of intangibles increased $2.3 million and $5.2 million in the three and nine months ended October 2, 2022, respectively, from the comparable periods of 2021 primarily due to acquisitions.

Asset impairments decreased $2.3 million and $9.3 million in the three and nine months ended October 2, 2022, respectively, from the comparable periods of 2021 as a result of the impairments during 2021.

Gain on sale of asset increased $37.9 million in both the three and nine months ended October 2, 2022 from the comparable periods of 2021.

During the three and nine months ended October 2, 2022, we sold rea l estate in the United States for $42.2 million, net of transaction costs and recognized a $37.9 million pre-tax gain on sale.

Operating income increased $54.9 million and $91.1 million in the three and nine months ended October 2, 2022, respectively, from the comparable periods of 2021 primarily as a result of the increase in gross profit and gain on sale of asset discussed above.

Net interest expense decreased $6.4 million and $11.1 million in the three and nine months ended October 2, 2022, respectively, from the comparable periods of 2021 primarily due to the repurchase of senior subordinated notes previously due 2026 and currency translation.

Loss on debt extinguishment decreased $5.7 million and $0.7 million in the three and nine months ended October 2, 2022, respectively, from the comparable periods of 2021.

The loss on debt extinguishment in 2022 represents the premium paid to the bond holders to retire the 2026 Notes and for the unamortized debt issuance costs on the 2026 Notes that we were required to write-off.

The loss on debt extinguishment in 2021 represents the premium paid to the bond holders to retire the 2025 Notes and for the unamortized debt issuance costs on the 2025 Notes that we were required to write-off.

Income from continuing operations before taxes increased $66.0 million and $130.6 million in the three and nine months ended October 2, 2022, respectively, from the comparable periods of 2021 primarily due to the increase in operating income discussed above.

Three Months Ended % Change Nine Months Ended % Change

October 2, 2022 October 3, 2021 October 2, 2022 October 3, 2021

(In thousands, except percentages)

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Effective tax rate 13.4 % 18.2 % 15.9 % 18.3 %

For the three and six months ended July 3, 2022, we recognized income tax expense of $13.1 million and $22.9 million, respectively, representing an effective tax rate of 18.2%.

The effective tax rate was primarily impacted by the effect of our foreign operations, including statutory tax rates differences and foreign tax credits.

For the three and nine months ended October 2, 2022, we recognized income tax expense of $16.1 million and $39.0 million, respectively, representing an effective tax rate of 13.4% and 15.9%, respectively.

The effective tax rates were primarily impacted by the effect of our foreign operations, including statutory tax rates differences and foreign tax credits.

Consolidated Adjusted EBITDA

Three Months Ended % Change Six Months Ended % Change

July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

Three Months Ended % Change Nine Months Ended % Change

October 2, 2022 October 3, 2021 October 2, 2022 October 3, 2021

(In thousands, except percentages)

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as a percent of revenues 17.6 % 16.7 % 16.9 % 16.0 %

Adjusted revenues increased $89.8 million and $191.5 million in the three and six months ended July 3, 2022, respectively, from the comparable periods of 2021 due to the following factors:

Adjusted revenues increased $65.2 million and $256.8 million in the three and nine months ended October 2, 2022, respectively, from the comparable periods of 2021 due to the following factors:

• Higher sales volume and favorable pricing from industrial automation, smart buildings, and broadband & 5G products resulted in a $90.9 million and $291.2 million increase in revenues, respectively.

• Higher copper pass-through pricing had a $0.2 million and $14.1 million favorable impact on revenues, respectively.

• Acquisitions contributed an estimated $9.0 million and $20.2 million in revenues, respectively.

• Copper pass-through pricing had a $12.7 million unfavorable and $1.4 million favorable impact on revenues, respectively.

• The divestiture of our oil and gas cable business in 2021 had a $0.0 million and $10.3 million unfavorable impact on revenues.

• Currency translation had a $22.0 million and $45.7 million unfavorable impact on revenues.

Adjusted EBITDA increased $18.1 million and $41.0 million in the three and six months ended July 3, 2022, respectively, from the comparable periods of 2021 primarily due to leverage on higher sales volume, as discussed above.

Accordingly, Adjusted EBITDA margins in the three and six months ended July 3, 2022 expanded to 16.6% from 16.1% and to 16.5% from 15.6%, respectively, in the comparable periods of 2021.

Adjusted EBITDA increased $16.8 million and $57.8 million in the three and nine months ended October 2, 2022, respectively, from the comparable periods of 2021 primarily due to leverage on higher sales volume, as discussed above.

Accordingly, Adjusted EBITDA margins in the three and nine months ended October 2, 2022 expanded to 17.6% from 16.7% and to 16.9% from 16.0%, respectively, in the comparable periods of 2021.

Use of Non-GAAP Financial Information

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severance, restructuring, and acquisition integration costs;

gains (losses) recognized on the disposal of businesses and tangible assets;

gains (losses) recognized on the disposal of businesses and assets;

amortization of intangible assets;

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The following tables reconcile our GAAP results to our non-GAAP financial measures:

Three Months Ended Six Months Ended

July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

Three Months Ended Nine Months Ended

October 2, 2022 October 3, 2021 October 2, 2022 October 3, 2021

(In thousands, except percentages)

5 unchanged sentences

Depreciation expense 11,847 10,586 34,443 31,971

Interest expense, net 11,276 14,870 25,687 30,381

Amortization of intangible assets 10,105 7,780 28,099 22,945

Interest expense, net 9,883 16,251 35,570 46,632

Severance, restructuring, and acquisition integration costs (1) 4,560 4,328 14,140 12,539

Non-operating pension settlement loss 954 — 954 —

Amortization of software development intangible assets 868 434 2,856 1,165

Adjustments related to acquisitions and divestitures (2) 576 1,912 576 (4,462)

Loss on debt extinguishment — 5,715 6,392 5,715

Asset impairments (2) — 2,288 — 9,283

Adjustments related to acquisitions and divestitures (3) (2,023) 177 (1,447) (4,285)

Gain on sale of asset (37,891) — (37,891) —

Adjusted EBITDA $ 118,094 $ 101,322 $ 328,555 $ 270,773

1 unchanged sentence

Adjusted EBITDA margin 17.6 % 16.7 % 16.9 % 16.0 %

(1) Severance, restructuring, and acquisition integration costs for the three and six months ended July 3, 2022 primarily related to our Manufacturing Footprint and Acquisition Integration programs.

Costs for the three and six months ended July 4, 2021 primarily related to our Acquisition Integration and completed Cost Reduction programs.

(2) During the three and six months ended July 3, 2022, we recognized cost of sales of $1.1 million related to purchase accounting adjustments of acquired inventory to fair value and collected $0.5 million of previously written off receivables associated with the sale of Grass Valley.

During the three months ended July 4, 2021, we recognized cost of sales of $1.2 million related to purchase accounting adjustments of acquired inventory to fair value, recognized $0.8 million for the purchase accounting effect of recording deferred revenue at fair value, and collected $0.1 million of previously written off receivables associated with the sale of Grass Valley.

During the six months ended July 4, 2021, we reduced the Opterna earn-out liability by $5.8 million , recognized cost of sales of $2.0 million related to purchase accounting adjustments of acquired inventory to fair value, collected $1.4 million of previously written off receivables associated with the sale of Grass Valley, and recognized $0.8 million for the purchase accounting effect of recording deferred revenue at fair value.

(3) During the six months ended July 4, 2021, we recognized a $3.6 million impairment on assets held and used and a $3.4 million impairment on assets held for sale .

(1) Severance, restructuring, and acquisition integration costs for the three and nine months ended October 2, 2022 primarily related to our Manufacturing Footprint and Acquisition Integration programs.

Costs for the three and nine months ended October 3, 2021 primarily related to our Acquisition Integration and completed Cost Reduction programs.

(2) During the three months ended October 3, 2021, we recognized a $2.3 million impairment on assets held for sale.

During the nine months ended October 3, 2021, we recognized a $3.6 million impairment on assets held and used and a $5.7 million impairment on assets held for sale .

(3) During the three and nine months ended October 2, 2022, we recognized cost of sales of $0.5 million and $1.6 million related to purchase accounting adjustments of acquired inventory to fair value and recognized gains of $2.5 million and $3.0 million on collections from previously written off receivables associated with the sale of Grass Valley.

During the three months ended October 3, 2021, we recognized cost of sales of $0.4 million related to purchase accounting adjustments of acquired inventory to fair value, recognized $0.5 million for the purchase accounting effect of recording deferred revenue at fair value, and collected $0.7 million of receivables associated with the sale of Grass Valley and acquisition of SPC that were previously written off.

During the nine months ended October 3, 2021, we reduced the Opterna earn-out liability by $5.8 million , recognized cost of sales of $2.4 million related to purchase accounting adjustments of acquired inventory to fair value, collected $2.1 million of receivables associated with the sale of Grass Valley and acquisition of SPC that were previously written off, and recognized $1.3 million for the purchase accounting effect of recording deferred revenue at fair value.

Segment Results of Operations

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Enterprise Solutions

Three Months Ended % Change Six Months Ended % Change

July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

Three Months Ended % Change Nine Months Ended % Change

October 2, 2022 October 3, 2021 October 2, 2022 October 3, 2021

(In thousands, except percentages)

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as a percent of segment revenues 14.4 % 14.1 % 13.3 % 13.4 %

Enterprise Solutions revenues increased $39.9 million and $82.0 million in the three and six months ended July 3, 2022 from the comparable periods of 2021.

The increase in revenues in the three months ended July 3, 2022 was primarily due to increases in volume and favorable pricing, acquisitions, and higher copper pass-through pricing of $40.6 million, $1.4 million, and $1.0 million, respectively, partially offset by unfavorable currency translation of $3.1 million.

The increase in revenues in the six months ended July 3, 2022 was primarily due to increases in volume and favorable pricing, higher copper pass-through pricing, and acquisitions of $78.1 million, $6.4 million, and $1.4 million, respectively, partially offset by unfavorable currency translation of $3.9 million.

Enterprise Solutions EBITDA increased $5.9 million and $8.4 million in the three and six months ended July 3, 2022, respectively, compared to the year ago periods primarily as a result of the increase in revenues discussed above.

Enterprise Solutions revenues increased $33.0 million and $115.0 million in the three and nine months ended October 2, 2022 from the comparable periods of 2021.

The increase in revenues in the three months ended October 2, 2022 was primarily due to increases in volume and favorable pricing of $39.1 million and acquisitions of $1.7 million, partially offset by unfavorable currency translation and lower copper pass-through pricing of $4.1 million and $3.7 million, respectively.

The increase in revenues in the nine months ended October 2, 2022 was primarily due to increases in volume and favorable pricing, acquisitions, and higher copper pass-through pricing of $117.2 million, $3.1 million, and $2.7 million, respectively, partially offset by unfavorable currency translation of $8.0 million.

Enterprise Solutions EBITDA increased $5.7 million and $14.1 million in the three and nine months ended October 2, 2022, respectively, compared to the year ago periods primarily as a result of the increase in revenues discussed above.

Industrial Automation Solutions

Three Months Ended % Change Six Months Ended % Change

July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

Three Months Ended % Change Nine Months Ended % Change

October 2, 2022 October 3, 2021 October 2, 2022 October 3, 2021

(In thousands, except percentages)

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as a percent of segment revenues 20.2 % 18.8 % 19.6 % 17.9 %

Industrial Automation Solutions revenues increased $49.9 million and $109.5 million in the three and six months ended July 3, 2022, respectively, from the comparable periods of 2021.

The increase in revenues in the three months ended July 3, 2022 was primarily due to increases in volume and favorable pricing of $62.2 million and acquisitions of $6.6 million, partially offset by unfavorable currency translation, a divestiture, and lower copper pass-through pricing of $13.3 million, $4.8 million, and $0.8 million, respectively.

The increase in revenues in the six months ended July 3, 2022 was primarily due to increases in volume and favorable pricing, higher copper pass-through pricing, and acquisitions of $122.1 million, $7.7 million, and $9.8 million, respectively, partially offset by unfavorable currency translation and a divestiture of $19.8 million and $10.3 million, respectively.

Industrial Automation Solutions EBITDA increased $12.6 million and $32.5 million in the three and six months ended July 3, 2022 from the comparable periods of 2021 primarily due to leverage on higher sales volume, as discussed above.

Accordingly, for the three and six months ended July 3, 2022, Adjusted EBITDA margins expanded from 17.9% to 19.0% and from 17.4% to 19.3%, respectively, over the year ago periods.

Industrial Automation Solutions revenues increased $32.3 million and $141.8 million in the three and nine months ended October 2, 2022, respectively, from the comparable periods of 2021.

The increase in revenues in the three months ended October 2, 2022 was primarily due to increases in volume and favorable pricing of $52.0 million and acquisitions of $7.2 million, partially offset by unfavorable currency translation and lower copper pass-through pricing of $17.9 million and $9.0 million, respectively.

The increase in revenues in the nine months ended October 2, 2022 was primarily due to increases in volume and favorable pricing of $174.1 million and acquisitions of $17.0 million, partially offset by unfavorable currency translation, a divestiture, and lower copper pass-through pricing of $37.7 million, $10.3 million, and $1.3 million, respectively.

Industrial Automation Solutions EBITDA increased $11.1 million and $43.6 million in the three and nine months ended October 2, 2022 from the comparable periods of 2021 primarily due to leverage on higher sales volume, as discussed above.

Accordingly, for the three and nine months ended October 2, 2022, Adjusted EBITDA margins expanded from 18.8% to 20.2% and from 17.9% to 19.6%, respectively, over the year ago periods.

Liquidity and Capital Resources

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The following table is derived from our Condensed Consolidated Cash Flow Statements and includes the results and cash flow activity of discontinued operations up to the February 22, 2022 disposal date:

Six Months Ended

July 3, 2022 July 4, 2021

Nine Months Ended

October 2, 2022 October 3, 2021

(In thousands)

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Cash and cash equivalents, end of period $ 547,466 $ 457,753

Operating cash flows were a use of cash of $8.6 million in the six months ended July 3, 2022 compared to a source of cash of $26.7 million in the prior year.

Operating cash flows declined $35.2 million compared to the prior year primarily due to unfavorable changes in accounts payable and accrued liabilities partially offset by a favorable change in receivables.

Net cash provided by operating activities totaled $78.8 million in the nine months ended October 2, 2022, compared to $101.9 million in the prior year.

Operating cash flows declined $23.1 million compared to the prior year primarily due to unfavorable changes in accounts payable and accrued liabilities.

The use of cash for accounts payable was due to the timing of payments primarily for purchases of raw materials and the use of cash for accrued liabilities was primarily attributable to higher incentive compensation payments and channel partner rebates, all of which were the direct result of improved company performance and increased demand.

Net cash from investing activities was a source of cash of $205.0 million in the six months ended July 3, 2022, compared to a use of cash of $94.2 million in the prior year.

Investing activities for the six months ended July 3, 2022 included cash receipts of $338.7 million for the Tripwire disposal partially offset by payments of $104.1 million for the investment in Litmus as well as the acquisitions of Macmon, NetModule and CAI and capital expenditures of $31.0 million.

Investing activities for the six months ended July 4, 2021 included cash payments of $73.7 million for the acquisition of OTN Systems and capital expenditures of $30.9 million, partially offset by cash receipts of $10.8 million primarily for the sale of our oil and gas cable business in Brazil.

Net cash used for financing activities totaled $303.3 million for the six months ended July 3, 2022, compared to $10.1 million in the prior year.

Financing activities for the six months ended July 3, 2022 included payments under borrowing arrangements of $230.6 million, payments under our share repurchase program of $66.6 million, net payments related to share based compensation activities of $5.2 million, cash dividend payments of $4.5 million, and proceeds from the issuance of common stock of $3.7 million.

Financing activities for the six months ended July 4, 2021 included cash dividend payments of $4.5 million, net payments related to share based compensation activities of $2.0 million, repayments of debt obligations of $1.8 million assumed as part of the OTN Systems acquisition, and debt issuance costs of $1.7 million.

Our cash and cash equivalents balance was $527.7 million as of July 3, 2022.

Net cash from investing activities was a source of cash of $223.4 million in the nine months ended October 2, 2022, compared to a use of cash of $118.9 million in the prior year.

Investing activities for the nine months ended October 2, 2022 included cash receipts of $334.6 million primarily for the Tripwire disposal and $43.5 million for asset sales, partially offset by payments of $104.5 million for the investment in Litmus and acquisitions of Macmon, NetModule and CAI as well as capital expenditures of $50.3 million.

Investing activities for the nine months ended October 3, 2021 included cash payments of $73.7 million for the acquisition of OTN Systems and capital expenditures of $55.6 million, partially offset by cash receipts of $10.8 million primarily for the sale of our oil and gas cable business in Brazil.

Net cash used for financing activities totaled $376.7 million for the nine months ended October 2, 2022, compared to $24.0 million in the prior year.

Financing activities for the nine months ended October 2, 2022 included payments under borrowing arrangements of $230.6 million, payments under our share repurchase program of $136.3 million, cash dividend payments of $6.8 million, net payments related to share based compensation activities of $6.5 million, and proceeds from the issuance of common stock of $3.7 million.

Financing activities for the nine months ended October 3, 2021 included payments under borrowing arrangements of $360.3 million, debt issuance costs of $7.8 million, cash dividend payments of $6.7 million, finance lease payments of $3.1 million, and net payments related to share based compensation activities of $2.1 million, partially offset by borrowings under credit arrangements $356.0 million.

Our cash and cash equivalents balance was $547.5 million as of October 2, 2022.

Of this amount, $182.3 million was held outside of the U.S.

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Upon distribution of those earnings in the form of dividends or otherwise, we may be subject to withholding taxes payable to the respective foreign countries.

Our outstanding debt obligations as of July 3, 2022 consisted of $1,151.9 million of senior subordinated notes.

Our outstanding debt obligations as of October 2, 2022 consisted of $1,058.9 million of senior subordinated notes.

Additional discussion regarding our various borrowing arrangements is included in Note 13 to the Condensed Consolidated Financial Statements.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis