What changed in this filing

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Item 1. Financial Statements

2023-05-08 compared with 2022-11-07 · 161 added, 394 removed, 450 unchanged (55% of the section changed)

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEETS

October 2, 2022 December 31, 2021

April 2, 2023 December 31, 2022

(In thousands)

4 unchanged sentences

Other current assets 63,431 66,866

Current assets of discontinued operations — 449,402

Total current assets 1,441,073 1,536,207

10 unchanged sentences

Accrued liabilities 239,436 289,861

Current liabilities of discontinued operations — 99,079

Total current liabilities 534,485 639,919

8 unchanged sentences

Retained earnings 812,564 751,522

Accumulated other comprehensive income (loss) 37,126 ( 70,566 )

Accumulated other comprehensive loss ( 23,171 ) ( 5,871 )

Treasury stock ( 465,969 ) ( 428,812 )

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

Three Months Ended Nine Months Ended

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

Three Months Ended

April 2, 2023 April 3, 2022

(In thousands, except per share data)

5 unchanged sentences

Amortization of intangibles ( 9,610 ) ( 8,817 )

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

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

Operating income 85,537 73,521

Interest expense, net ( 8,201 ) ( 14,411 )

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

Non-operating pension benefit 488 1,200

Loss on debt extinguishment — ( 6,392 )

Income from continuing operations before taxes 77,824 53,918

4 unchanged sentences

Net income 62,945 35,844

Net income attributable to noncontrolling interest 27 53 111 336

Net income (loss) attributable to noncontrolling interest ( 247 ) 3

Net income attributable to Belden stockholders $ 63,192 $ 35,841

16 unchanged sentences

CONDENSED CONSOLIDATED CASH FLOW STATEMENTS

Nine Months Ended

October 2, 2022 October 3, 2021

Three Months Ended

April 2, 2023 April 3, 2022

(In thousands)

4 unchanged sentences

Share-based compensation 6,253 5,224

Loss on disposal of discontinued operations 9,933 —

Loss on debt extinguishment — 6,392

Asset impairments — 9,283

Gain on sale of asset ( 37,891 ) —

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

6 unchanged sentences

Other liabilities 1,755 ( 11,550 )

Net cash provided by operating activities 78,800 101,919

Net cash used for operating activities ( 31,872 ) ( 57,955 )

Cash flows from investing activities:

Proceeds from disposal of businesses, net of cash sold 334,574 10,798

Proceeds from disposal of assets 43,534 3,249

Purchase of intangible assets — ( 3,650 )

Capital expenditures ( 13,844 ) ( 10,963 )

Cash used for acquisitions and investments, net of cash acquired ( 104,481 ) ( 73,749 )

Cash used for business acquisitions, net of cash acquired — ( 65,990 )

Proceeds from disposal of tangible assets 1 56

Proceeds from disposal of businesses, net of cash sold 10,000 338,686

Net cash provided by (used for) investing activities ( 3,843 ) 261,789

Cash flows from financing activities:

Payments under borrowing arrangements ( 230,639 ) ( 360,304 )

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

Cash dividends paid ( 6,762 ) ( 6,740 )

Withholding tax payments for share-based payment awards ( 13,292 ) ( 3,700 )

Cash dividends paid ( 2,146 ) ( 2,276 )

Payments under financing lease obligations ( 38 ) ( 45 )

Debt issuance costs paid — ( 7,785 )

Payments under borrowing arrangements — ( 230,639 )

Proceeds from issuance of common stock 1,679 —

Borrowings under credit arrangements — 356,010

Net cash used for financing activities ( 63,797 ) ( 286,660 )

3 unchanged sentences

Cash and cash equivalents, end of period $ 589,045 $ 559,582

The Condensed Consolidated Cash Flow Statement includes the results of discontinued operations up to the disposal date, February 22, 2022.

The Condensed Consolidated Cash Flow Statement for the three months ended April 3, 2022 includes the results of discontinued operations up to the February 22, 2022 disposal date.

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

6 unchanged sentences

Balance at December 31, 2022 50,335 $ 503 $ 825,669 $ 751,522 ( 7,502 ) $ ( 428,812 ) $ ( 5,871 ) $ 939 $ 1,143,950

Net income — — — 35,841 — — — 3 35,844

Other comprehensive income, net of tax — — — — — — 3,928 27 3,955

Retirement Savings Plan stock contributions — — ( 356 ) — 43 2,809 — — 2,453

Exercise of stock options, net of tax withholding forfeitures — — ( 526 ) — 6 375 — — ( 151 )

Conversion of restricted stock units into common stock, net of tax withholding forfeitures — — ( 11,287 ) — 103 7,739 — — ( 3,548 )

Share repurchase program — — — — ( 885 ) ( 50,000 ) — — ( 50,000 )

Share-based compensation — — 5,224 — — — — — 5,224

Common stock dividends ($ 0.05 per share)

— — — ( 2,264 ) — — — — ( 2,264 )

Balance at April 3, 2022 50,335 $ 503 $ 826,682 $ 539,294 ( 6,093 ) $ ( 353,071 ) $ ( 66,638 ) $ 825 $ 947,595

Net income — — — 58,561 — — — 81 58,642

Net income (loss) — — — 63,192 — — — ( 247 ) 62,945

Other comprehensive income (loss), net of tax — — — — — — ( 17,300 ) 2 ( 17,298 )

3 unchanged sentences

Conversion of restricted stock units into common stock, net of tax withholding forfeitures — — ( 17,997 ) — 196 7,301 — — ( 10,696 )

Share repurchase program — — — — ( 320 ) ( 16,559 ) — — ( 16,559 )

Share-based compensation — — 5,646 — — — — — 5,646

Common stock dividends ($ 0.05 per share)

— — — ( 2,242 ) — — — — ( 2,242 )

Balance at July 3, 2022 50,335 $ 503 $ 820,602 $ 595,613 ( 6,224 ) $ ( 354,029 ) $ ( 14,487 ) $ 881 $ 1,049,083

Net income — — — 98,294 — — — 27 98,321

Other comprehensive income (loss), net of tax — — — — — — 51,613 ( 44 ) 51,569

Retirement Savings Plan stock contributions — — ( 339 ) — 23 1,802 — — 1,463

Exercise of stock options, net of tax withholding forfeitures — — ( 2,492 ) — 19 1,649 — — ( 843 )

Conversion of restricted stock units into common stock, net of tax withholding forfeitures — — ( 2,851 ) — 28 2,326 — — ( 525 )

Share repurchase program — — — — ( 1,166 ) ( 69,777 ) — — ( 69,777 )

Share repurchase program, net of excise tax — — — — ( 594 ) ( 50,266 ) — — ( 50,266 )

Share-based compensation — — 6,253 — — — — — 6,253

1 unchanged sentence

— — — ( 2,150 ) — — — — ( 2,150 )

Balance at October 2, 2022 50,335 $ 503 $ 822,488 $ 691,722 ( 7,320 ) $ ( 418,029 ) $ 37,126 $ 864 $ 1,134,674

Balance at April 2, 2023 50,335 $ 503 $ 809,596 $ 812,564 ( 7,788 ) $ ( 465,969 ) $ ( 23,171 ) $ 694 $ 1,134,217

Additional Accumulated

5 unchanged sentences

Net income — — — 35,841 — — — 3 35,844

Other comprehensive income (loss), net of tax — — — — — — 53,725 ( 197 ) 53,528

Acquisition of business with noncontrolling interests — — — — — — — 20 20

Other comprehensive income, net of tax — — — — — — 3,928 27 3,955

Retirement Savings Plan stock contributions — — ( 356 ) — 43 2,809 — — 2,453

1 unchanged sentence

Conversion of restricted stock units into common stock, net of tax withholding forfeitures — — ( 11,287 ) — 103 7,739 — — ( 3,548 )

Share repurchase program — — — — ( 885 ) ( 50,000 ) — — ( 50,000 )

Share-based compensation — — 5,224 — — — — — 5,224

2 unchanged sentences

Balance at April 3, 2022 50,335 $ 503 $ 826,682 $ 539,294 ( 6,093 ) $ ( 353,071 ) $ ( 66,638 ) $ 825 $ 947,595

Net income — — — 43,764 — — — 208 43,972

Other comprehensive loss, net of tax — — — — — — ( 21,265 ) ( 229 ) ( 21,494 )

Retirement Savings Plan stock contributions — — ( 418 ) — 34 3,723 — — 3,305

Exercise of stock options, net of tax withholding forfeitures — — ( 147 ) — 2 100 — — ( 47 )

Conversion of restricted stock units into common stock, net of tax withholding forfeitures — — ( 5,795 ) — 83 4,738 — — ( 1,057 )

Share-based compensation — — 6,228 — — — — — 6,228

Common stock dividends ($ 0.05 per share)

— — — ( 2,269 ) — — — — ( 2,269 )

Balance at July 4, 2021 50,335 $ 503 $ 827,139 $ 518,774 ( 5,492 ) $ ( 319,274 ) $ ( 159,391 ) $ 6,347 $ 874,098

Net income — — — 41,264 — — — 53 41,317

Other comprehensive income (loss), net of tax — — — — — — 28,126 ( 147 ) 27,979

Retirement Savings Plan stock contributions — — 87 — 29 ( 71 ) — — 16

Exercise of stock options, net of tax withholding forfeitures — — ( 59 ) — 1 20 — — ( 39 )

Conversion of restricted stock units into common stock, net of tax withholding forfeitures — — ( 1,528 ) — 16 1,473 — — ( 55 )

Share-based compensation — — 4,729 — — — — — 4,729

Common stock dividends ($ 0.05 per share)

— — — ( 2,274 ) — — — — ( 2,274 )

Balance at October 3, 2021 50,335 $ 503 $ 830,368 $ 557,764 ( 5,446 ) $ ( 317,852 ) $ ( 131,265 ) $ 6,253 $ 945,771

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

11 unchanged sentences

Business Description

We are a global supplier of specialty networking solutions built around two global businesses - Enterprise Solutions and Industrial Automation Solutions.

Our comprehensive portfolio of solutions enables customers to transmit and secure data, sound, and video for mission critical applications across complex enterprise and industrial environments.

We are a leading global supplier of network infrastructure solutions built around two global businesses - Enterprise Solutions and Industrial Automation Solutions.

Our mission is to build the foundation for a digital world that makes the digital journey simpler, smarter and secure.

Reporting Periods

Our fiscal year and fiscal fourth quarter both end on December 31.

Our fiscal first quarter ends on the Sunday falling closest to 91 days after December 31, which was April 3, 2022, the 93rd day of our fiscal year 2022.

Our fiscal first quarter ends on the Sunday falling closest to 91 days after December 31, which was April 2, 2023, the 92nd day of our fiscal year 2023.

Our fiscal second and third quarters each have 91 days.

The nine months ended October 2, 2022 and October 3, 2021 included 275 days and 276 days, respectively.

The three months ended April 3, 2022 included 93 days.

Fair Value Measurement

4 unchanged sentences

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

As of and during the three and nine months ended October 2, 2022 and October 3, 2021, we utilized Level 1 inputs to determine the fair value of cash equivalents, and we utilized Level 2 and Level 3 inputs to determine the fair value of net assets acquired in business combinations (see Note 3) and for impairment testing (see Notes 4 and 11).

We did not have any transfers between Level 1 and Level 2 fair value measurements during the nine months ended October 2, 2022 and October 3, 2021.

As of and during the three months ended April 2, 2023 and April 3, 2022, we utilized Level 1 inputs to determine the fair value of cash equivalents.

We did not have any transfers between Level 1 and Level 2 fair value measurements during the three months ended April 2, 2023 and April 3, 2022.

Cash and Cash Equivalents

1 unchanged sentence

We periodically have cash equivalents consisting of short-term money market funds and other investments.

As of October 2, 2022, we did not have any such cash equivalents on hand.

As of April 2, 2023, we did not have any such cash equivalents on hand.

The primary objective of our investment activities is to preserve our capital for the purpose of funding operations.

6 unchanged sentences

Based on facts currently available, we believe the disposition of the claims that are pending or asserted will not have a material adverse effect on our financial position, results of operations, or cash flow.

As of October 2, 2022, we were party to standby letters of credit, bank guaranties, and surety bonds totaling $ 7.2 million, $ 5.1 million, and $ 3.8 million, respectively.

As of April 2, 2023, we were party to standby letters of credit, bank guaranties, and surety bonds totaling $ 8.7 million, $ 4.4 million, and $ 3.8 million, respectively.

Revenue Recognition

9 unchanged sentences

The carrying value of our investment is included in Other Long-Lived Assets in the Condensed Consolidated Balance Sheets.

The results of our investment in Litmus were not material to our consolidated financial statements for the three or nine months ended October 2, 2022.

The results of our investment in Litmus were not material to our consolidated financial statements for the three months ended April 2, 2023.

Noncontrolling Interest

We have a 51 % ownership percentage in a joint venture with Shanghai Hi-Tech Control System Co, Ltd (Hite).

The purpose of the joint venture is to develop and provide certain Industrial Automation Solutions products and integrated solutions to customers in China.

Belden and Hite are committed to fund $ 1.53 million and $ 1.47 million, respectively, to the joint venture in the future.

The joint venture is determined to not have sufficient equity at risk;

therefore, it is considered a variable interest entity.

We have determined that Belden is the primary beneficiary of the joint venture, due to both our ownership percentage and our control over the activities of the joint venture that most significantly impact its economic performance based on the terms of the joint venture agreement with Hite.

Because Belden is the primary beneficiary of the joint venture, we have consolidated the joint venture in our financial statements.

We had a 51 % ownership percentage in a joint venture with Shanghai Hi-Tech Control System Co, Ltd (Hite).

The joint venture develops and provides certain Industrial Automation Solutions products and integrated solutions to customers in China.

The joint venture was determined to not have sufficient equity at risk;

therefore, it was considered a variable interest entity.

We determined that Belden was the primary beneficiary of the joint venture, due to both our ownership percentage and our control over the activities of the joint venture that most significantly impact its economic performance based on the terms of the joint venture agreement with Hite.

Because Belden was the primary beneficiary of the joint venture, we consolidated the joint venture in our financial statements.

The results of the joint venture attributable to Hite’s ownership are presented as net income attributable to noncontrolling interest in the Condensed Consolidated Statements of Operations.

The joint venture is not material to our consolidated financial statements as of or for the periods ended October 2, 2022 and October 3, 2021.

Certain Belden subsidiaries include a noncontrolling interest as of and for the periods ended October 2, 2022 and October 3, 2021 .

The joint venture was not material to our consolidated financial statements as of or for the periods ended April 2, 2023 and April 3, 2022.

On April 28, 2023, we sold our 51 % ownership percentage to Hite for $ 0.9 million.

The sale also includes $ 0.6 million of potential earnout payments.

We deconsolidated the joint venture as of April 28, 2023.

Certain Belden subsidiaries include a noncontrolling interest as of and for the periods ended April 2, 2023 and April 3, 2022 .

The results attributable to the noncontrolling interest holders are not material to our consolidated financial statements , and are presented as net income attributable to noncontrolling interests in the Condensed Consolidated Statements of Operations.

During the fourth quarter of 2021, we purchased a noncontrolling interest for $ 2.3 million.

Current Year Adoption of Accounting Pronouncements

None of the accounting pronouncements that became effective during 2023 had a material impact to our condensed consolidated financial statements or disclosures.

Revenues are recognized when control of the promised goods or services is transferred to our customers and in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

1 unchanged sentence

The following tables present our revenues disaggregated by major product category.

& 5G Industrial Automation Smart Buildings Total

Three Months Ended October 2, 2022 (In thousands)

Enterprise Solutions $ 155,865 $ — $ 163,336 $ 319,201

Industrial Automation Solutions — 351,290 — 351,290

Total $ 155,865 $ 351,290 $ 163,336 $ 670,491

Three Months Ended October 3, 2021

Enterprise Solutions $ 124,330 $ — $ 161,901 $ 286,231

Industrial Automation Solutions — 318,530 — 318,530

Total $ 124,330 $ 318,530 $ 161,901 $ 604,761

Nine Months Ended October 2, 2022

Solutions Industrial Automation Smart Buildings Total

Three Months Ended April 2, 2023 (In thousands)

Enterprise Solutions $ 131,555 $ — $ 143,788 $ 275,343

1 unchanged sentence

Total $ 131,555 $ 366,446 $ 143,788 $ 641,789

Nine Months Ended October 3, 2021

Three Months Ended April 3, 2022

Enterprise Solutions $ 121,805 $ — $ 146,625 $ 268,430

3 unchanged sentences

Americas EMEA APAC Total Revenues

Three Months Ended October 2, 2022 (In thousands)

Enterprise Solutions $ 247,322 $ 35,045 $ 36,834 $ 319,201

Industrial Automation Solutions 202,632 87,828 60,830 351,290

Total $ 449,954 $ 122,873 $ 97,664 $ 670,491

Three Months Ended October 3, 2021

Enterprise Solutions $ 216,566 $ 34,963 $ 34,702 $ 286,231

Industrial Automation Solutions 184,033 84,868 49,629 318,530

Total $ 400,599 $ 119,831 $ 84,331 $ 604,761

Nine Months Ended October 2, 2022

Three Months Ended April 2, 2023 (In thousands)

Enterprise Solutions $ 213,887 $ 37,448 $ 24,008 $ 275,343

1 unchanged sentence

Total $ 429,100 $ 139,369 $ 73,320 $ 641,789

Nine Months Ended October 3, 2021

Three Months Ended April 3, 2022

Enterprise Solutions $ 204,386 $ 39,389 $ 24,655 $ 268,430

1 unchanged sentence

Total $ 408,696 $ 129,840 $ 71,835 $ 610,371

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

We generate revenues primarily by selling products that support communication, infrastructure, and delivery solutions that make the digital journey simpler, smarter, and more secure.

We also generate revenues from providing support and professional services.

8 unchanged sentences

We adjust our estimate of revenue at the earlier of when the most likely amount of consideration we expect to receive changes or when the consideration becomes fixed.

Adjustments to revenue for performance obligations satisfied in prior periods were not significant during the three and nine months ended October 2, 2022 and October 3, 2021 .

Adjustments to revenue for performance obligations satisfied in prior periods were not significant during the three months ended April 2, 2023 and April 3, 2022 .

The following table presents estimated and accrued variable consideration:

October 2, 2022 December 31, 2021

April 2, 2023 December 31, 2022

(in thousands)

5 unchanged sentences

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

As of October 2, 2022, total deferred revenue was $ 29.0 million, and of this amount, $ 21.6 million is expected to be recognized within the next twelve months, and the remaining $ 7.4 million is long- term and is expected to be recognized over a period greater than twelve months.

The following table presents deferred revenue activity during the three and nine months ended October 2, 2022 and October 3, 2021, respectively:

As of April 2, 2023, total deferred revenue was $ 29.3 million, and of this amount, $ 22.6 million is expected to be recognized within the next twelve months, and the remaining $ 6.7 million is long- term and is expected to be recognized over a period greater than twelve months.

The following table presents deferred revenue activity during the three months ended April 2, 2023 and April 3, 2022, respectively:

(In thousands)

4 unchanged sentences

Balance at the end of Q1 29,295 31,449

New deferrals 4,265 4,127

Acquisitions — ( 2,740 )

Revenue recognized ( 8,880 ) ( 83 )

Balance at the end of Q2 26,834 20,910

New deferrals 7,137 1,665

Revenue recognized ( 4,960 ) ( 3,070 )

Balance at the end of Q3 $ 29,011 $ 19,505

Service-type warranties represent $ 9.1 million of the deferred revenue balance at October 2, 2022, and of this amount $ 4.0 million is expected to be recognized in the next twelve months, and the remaining $ 5.1 million is long-term and will be recognized over a period greater than twelve months.

As of October 2, 2022 and December 31, 2021, we did not have any material contract assets recorded in the Condensed Consolidated Balance Sheets.

Service-type warranties represent $ 8.2 million of the deferred revenue balance at April 2, 2023, and of this amount $ 3.9 million is expected to be recognized in the next twelve months, and the remaining $ 4.3 million is long-term and will be recognized over a period greater than twelve months.

As of April 2, 2023 and December 31, 2022, we did not have any material contract assets recorded in the Condensed Consolidated Balance Sheets.

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

We capitalize sales commissions when the original duration of the related revenue arrangement is longer than one year, and we amortize it over the related revenue arrangement period.

We did not have any capitalized sales commissions on our balance sheet as of October 2, 2022 and December 31, 2021.

We did not have any capitalized sales commissions on our balance sheet as of April 2, 2023 and December 31, 2022.

The following table presents sales commissions that are recorded within selling, general and administrative expenses:

Three Months Ended Nine Months ended

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

Three Months Ended

April 2, 2023 April 3, 2022

(In thousands)

Sales commissions $ 5,773 $ 5,223

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

On January 17, 2022, we acquired macmon secure GmbH (Macmon) for $ 41.9 million, net of cash acquired.

Macmon, based in Berlin, Germany, is a leading provider of products and services that secure network infrastructure in a variety of mission critical industries.

On March 3, 2022, we acquired NetModule AG (NetModule) for $ 23.5 million, net of cash acquired.

NetModule, based in Bern, Switzerland, is a leading provider of reliable, fast and secure wireless network infrastructures through advanced capabilities in 5G and WiFi6 technologies in a variety of mission critical industries with a strong focus on mass transit and intelligent traffic systems within the transportation vertical.

On April 15, 2022, we acquired Communication Associates, Inc.

(CAI) for $ 19.0 million, net of cash acquired.

CAI is headquartered in Anniston, Alabama and designs, manufactures, and sells a range of plug-in radio frequency filters used in outside plant hybrid fiber-coax nodes.

The results of operations of each acquisition have been included in our results of operations from their respective acquisition dates.

The three acquisitions were not material to our consolidated results of operations.

Macmon and NetModule are included in the Industrial Automation Solutions segment, and CAI is included in the Enterprise Solutions segment.

All three acquisitions were funded with cash on hand.

The following table summarizes the estimated, preliminary fair values of the assets acquired and liabilities assumed for all three acquisitions in total as of their respective acquisition dates (in thousands):

Receivables $ 6,537

Inventory 8,278

Other current assets 369

Property, plant and equipment 1,375

Intangible assets 40,709

Goodwill 51,520

Operating lease right-of-use assets 6,167

Total assets acquired $ 114,955

Accounts payable $ 2,497

Accrued liabilities 6,716

Long-term debt 2,440

Deferred income taxes 10,048

Long-term operating lease liabilities 2,926

Other long-term liabilities 5,936

Total liabilities assumed $ 30,563

Net assets $ 84,392

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

The preliminary measurement of receivables, intangible assets, goodwill, deferred income taxes, and other assets and liabilities are subject to change.

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

The preliminary fair value of acquired receivables is $ 6.5 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 values assigned to each class of acquired assets and assumed liabilities could materially affect the results of our operations.

For purposes of the above allocation, we based our preliminary estimate of the fair values for intangible assets on valuation studies performed by a third party valuation firm.

We used various valuation methods including discounted cash flows, lost income, excess earnings, and relief from royalty to estimate the preliminary fair value of the identifiable intangible assets (Level 3 valuation).

Goodwill and other intangible assets reflected above were determined to meet the criteria for recognition apart from tangible assets acquired and liabilities assumed.

The goodwill is primarily attributable to the expansion of industrial automation and broadband & 5G product offerings in end-to-end solutions.

Our tax basis in the acquired goodwill is zero .

The intangible assets related to the three acquisitions consisted of the following:

Fair Value Amortization Period

(In thousands) (In years)

Intangible assets subject to amortization:

Developed technologies $ 31,626 4.2

Customer relationships 4,677 15.0

Trademarks 2,806 2.0

Sales backlog 1,300 0.9

Non-compete agreements 300 4.0

Total intangible assets subject to amortization $ 40,709

Intangible assets not subject to amortization:

Goodwill $ 51,520 n/a

Total intangible assets not subject to amortization $ 51,520

Total intangible assets $ 92,229

Weighted average amortization period 5.3

The amortizable intangible assets reflected in the table above were determined by us to have finite lives.

The useful life for the developed technology intangible asset was based on the estimated time that the technology provides us with a competitive advantage and thus approximates the period and pattern of consumption of the intangible asset.

The useful life for the customer relationship intangible asset was based on our forecasts of estimated sales from recurring customers.

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

Opterna International Corp.

Our acquisition of Opterna International Corp.

(Opterna) in 2019 included potential earn-out consideration.

As of the acquisition date, we estimated the fair value of the earn-out to be $ 5.8 million.

The earn-out period ended in 2021, and the financial targets tied to the earn-out were not achieved.

We reduced the earn-out liability to zero and recognized a $ 5.8 million benefit in Selling, General and Administrative Expenses in the nine months ended October 3, 2021.

This benefit was excluded from Segment EBITDA of our Enterprise Solutions segment.

We classify assets and liabilities as held for sale (disposal group) when management, having the authority to approve the action, commits to a plan to sell the disposal group, the sale is probable within one year, and the disposal group is available for immediate sale in its present condition.

We also consider whether an active program to locate a buyer has been initiated, whether the disposal group is marketed actively for sale at a price that is reasonable in relation to its current fair value, and whether actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

When we classify a disposal group as held for sale, we test for impairment.

An impairment charge is recognized when the carrying value of the disposal group exceeds the estimated fair value, less costs to sell.

We also cease depreciation and amortization for assets classified as held for sale.

During the first quarter of 2021, we committed to a plan to sell our oil and gas cable business in Brazil that met all of the criteria to classify the assets and liabilities of this business, formerly part of the Industrial Automation Solutions segment, as held for sale.

At such time, the carrying value of the disposal group exceeded the fair value less costs to sell, which we determined based upon the expected sale price, by $ 3.4 million.

Therefore, we recognized an impairment charge equal to this amount in the first quarter of 2021.

The impairment charge was excluded from Segment EBITDA of our Industrial Automation Solutions segment.

We completed the sale of our oil and gas cable business in Brazil during the second quarter of 2021 for $ 10.9 million, net of cash delivered with the business and recognized an immaterial loss on sale.

Discontinued Operations

On February 22, 2022, we sold Tripwire for gross cash consideration of $ 350 million.

T he divestiture of Tripwire represents a strategic shift impacting our operations and financial results.

T he divestiture of Tripwire represented a strategic shift impacting our operations and financial results.

As a result, the Tripwire disposal group, which was included in our Industrial Automation Solutions segment, is reported within discontinued operations.

We 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, respectively.

The $ 5.4 million loss recognized in the three months ended October 2, 2022 was the result of a sales price adjustment tied to working capital.

The following table summarizes the operating results of the Tripwire disposal group up to the February 22, 2022 disposal date:

Three Months Ended Nine Months Ended

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

(In thousands)

We recognized a loss on disposal of discontinued operations, net of tax of $ 4.6 million during the three months ended April 3, 2022.

The following table summarizes the operating results of the Tripwire disposal group from January 1, 2022 to the February 22, 2022 disposal date (in thousands):

Revenues $ 12,067

5 unchanged sentences

Loss before taxes $ ( 5,540 )

During the nine months ended October 2, 2022, th e Tripwire disposal group did not have any capital expenditures and recognized share-based compensation expense of $ 0.2 million.

During the three and nine months ended October 3, 2021, th e Tripwire disposal group had capital expenditu res of approximately $ 1.5 million and $ 3.8 million, respectively, and recognized share-based compensation expense of $ 0.6 million and $ 2.0 million, res pectively.

The disposal group did not have any significant non-cash charges for investing activities during the three and nine months ended October 2 , 2022 and October 3, 2021 .

The following table provides the major classes of assets and liabilities of the disposal group as of December 31, 2021:

December 31, 2021

(In thousands)

Cash and cash equivalents $ 2,194

Receivables, net 28,773

Inventories, net 150

Other current assets 7,418

Property, plant and equipment, less accumulated depreciation 6,250

Operating lease right-of-use assets 3,893

Goodwill 331,024

Intangible assets, less accumulated amortization 63,541

Deferred income taxes 834

Other long-lived assets 5,325

Total assets of Tripwire disposal group $ 449,402

Accounts payable $ 6,458

Accrued liabilities 56,208

Deferred income taxes 10,964

Long-term operating lease liabilities 5,257

Other long-term liabilities 20,192

Total liabilities of Tripwire disposal group $ 99,079

The Tripwire disposal group also had $ 3.4 million of accumulated other comprehensive income as of December 31, 2021.

During the three months ended April 3, 2022, th e Tripwire disposal group did not have any capital expenditures and recognized share-based compensation expense of $ 0.2 million.

The disposal group did not have any significant non-cash charges for investing activities during the three months ended April 3 , 2022 .

Reportable Segments

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Each of the global businesses represents a reportable segment.

In conjunction with the Tripwire divestiture during the first quarter of 2022, we changed the name of our former Industrial Solutions segment to Industrial Automation Solutions.

The composition of the segment did not change as a result of this name change.

The key measures of segment profit or loss are Segment Revenues and Segment EBITDA.

13 unchanged sentences

(In thousands)

As of and for the three months ended October 2, 2022

Segment Revenues $ 319,201 $ 351,290 $ 670,491

Segment EBITDA 46,110 71,055 117,165

Depreciation expense 6,020 5,827 11,847

Amortization of intangibles 4,512 5,593 10,105

Amortization of software development intangible assets 8 860 868

Severance, restructuring, and acquisition integration costs 2,702 1,858 4,560

Adjustments related to acquisitions and divestitures ( 2,537 ) 514 ( 2,023 )

Segment assets 575,829 632,997 1,208,826

As of and for the three months ended October 3, 2021

Segment Revenues $ 286,231 $ 319,032 $ 605,263

Segment EBITDA 40,411 59,947 100,358

Depreciation expense 5,280 5,306 10,586

Amortization of intangibles 4,427 3,353 7,780

Amortization of software development intangible assets 20 414 434

Severance, restructuring, and acquisition integration costs 3,381 947 4,328

Adjustments related to acquisitions and divestitures ( 713 ) 890 177

Asset impairments — 2,288 2,288

Segment assets 552,403 563,433 1,115,836

As of and for the nine months ended October 2, 2022

As of and for the three months ended April 2, 2023

Segment Revenues $ 275,343 $ 366,446 $ 641,789

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Segment assets 597,426 660,300 1,257,726

As of and for the nine months ended October 3, 2021

As of and for the three months ended April 3, 2022

Segment Revenues $ 268,430 $ 341,941 $ 610,371

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Severance, restructuring, and acquisition integration costs 328 3,395 3,723

Adjustments related to acquisitions and divestitures ( 7,052 ) 2,767 ( 4,285 )

Asset impairments — 9,283 9,283

Segment assets 574,494 628,290 1,202,784

The following table is a reconciliation of the total of the reportable segments’ Revenues and EBITDA to consolidated revenues and consolidated income from continuing operations before taxes, respectively.

Three Months Ended Nine Months Ended

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

Three Months Ended

April 2, 2023 April 3, 2022

(In thousands)

Total Segment Revenues $ 670,491 $ 605,263 $ 1,947,413 $ 1,690,652

Adjustments related to acquisitions — ( 502 ) — ( 1,351 )

Consolidated revenues $ 670,491 $ 604,761 $ 1,947,413 $ 1,689,301

Total Segment and Consolidated Revenues $ 641,789 $ 610,371

Total Segment EBITDA $ 110,992 $ 98,349

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

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

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

Depreciation expense ( 12,354 ) ( 11,226 )

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Amortization of software development intangible assets ( 1,452 ) ( 1,007 )

Adjustments related to acquisitions and divestitures (2) ( 298 ) —

Eliminations ( 29 ) ( 55 )

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Consolidated income from continuing operations before taxes $ 77,824 $ 53,918

(1) 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.

(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) 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.

(1) Severance, restructuring, and acquisition integration costs for the three months ended April 2, 2023 and April 3, 2022 primarily related to our Acquisition Integration program.

(2) During the three months ended April 2, 2023, we incurred $ 0.3 million for fair value adjustments of acquired investments.

Income (loss) per Share

The following table presents the basis for the income (loss) per share computations:

Three Months Ended Nine Months Ended

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

Three Months Ended

April 2, 2023 April 3, 2022

(In thousands)

Income from continuing operations $ 62,945 $ 44,096

Net income attributable to noncontrolling interest 27 53 111 336

Net income (loss) attributable to noncontrolling interest ( 247 ) 3

Income from continuing operations attributable to Belden stockholders 63,192 44,093

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Weighted average shares outstanding, diluted 43,669 45,567

For the three and nine months ended October 2, 2022, diluted weighted average shares outstanding exclude outstanding equity awards of 0.7 million and 0.9 million as they are anti-dilutive.

In addition, for the three and nine months ended October 2, 2022, diluted weighted average shares outstanding do not include outstanding equity a wards of 0.0 million and 0.1 million, respectively, becau se the related performance conditions have not been satisfied.

For the three and nine months ended October 3, 2021, diluted weighted average shares outstanding exclude outstanding equity awards of 1.0 million and 1.2 million as they are anti-dilutive.

In addition, for the three and nine months ended October 3, 2021, diluted weighted average shares outstanding do not include outstanding equity a wards of 0.2 million and 0.3 million becau se the related performance conditions have not been satisfied.

For the three months ended April 2, 2023 and April 3, 2022, diluted weighted average shares outstanding excluded outstanding equity awards of 0.2 million and 1.1 million, respectively, as they were anti-dilutive.

In addition, for both the three months ended April 2, 2023 and April 3, 2022, diluted weighted average shares outstanding did not include outstanding equity a wards of 0.1 million becau se the related performance conditions have not been satisfied.

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.

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

The following table presents the activity in the trade receivables allowance for doubtful accounts for our continuing operations for the three and nine months ended October 2, 2022 and October 3, 2021, respectively:

The following table presents the activity in the trade receivables allowance for doubtful accounts for our continuing operations for the three months ended April 2, 2023 and April 3, 2022, respectively:

(In thousands)

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Acquisitions — 319

Write-offs ( 667 ) ( 47 )

Recoveries collected — ( 50 )

Fx impact ( 19 ) ( 17 )

Q1 ending balance $ 5,293 $ 5,050

Current period provision 656 224

Acquisitions — ( 192 )

Write-offs ( 3 ) ( 667 )

Recoveries collected ( 12 ) ( 36 )

Fx impact ( 25 ) ( 19 )

Q1 ending balance $ 11,930 $ 5,293

Current period provision 92 94

Write-offs ( 2,717 ) ( 246 )

Recoveries collected ( 23 ) ( 107 )

Fx impact ( 104 ) ( 19 )

Q3 ending balance $ 3,040 $ 4,744

The following table presents the major classes of inventories as of October 2, 2022 and December 31, 2021, respectively:

October 2, 2022 December 31, 2021

The following table presents the major classes of inventories as of April 2, 2023 and December 31, 2022 , respectively:

April 2, 2023 December 31, 2022

(In thousands)

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We have operating and finance leases for properties, including manufacturing facilities, warehouses, and office space;

as well as vehicles and certain equipment.

as well as vehicles and equipment.

We make certain judgments in determining whether a contract contains a lease in accordance with ASU 2016-02.

Our leases have remaining lease terms of less than 1 year to 17 years;

some of which include extension and termination options for an additional 15 years or within 1 year, respectively.

Our leases have remaining lease terms within 1 to 15 years;

some of which include extension and termination options.

We do not assume renewals in our determination of the lease term unless the renewals are deemed to be reasonably certain as of the commencement date of the lease.

Our lease agreements do not contain any material residual value guarantees or material variable lease payments.

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, and for the three and nine months ended October 2, 2022 and October 3, 2021, 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.

As the rate implicit in most of our leases is not readily determinable, we use the incremental borrowing rate to determine the present value of the lease payments, which is unique to each leased asset, and is based upon the term of the lease, commencement date of the lease, local currency of the leased asset, and the credit rating of the legal entity leasing the asset.

We are party to a lease guarantee, whereby Belden has covenanted the lease payments for one of Grass Valley's property leases through its 2035 expiration date.

This lease guarantee was retained by Belden and not transferred to Black Dragon Capital as part of the sale of Grass Valley .

Belden would be required to make lease payments only if the primary obligor, Black Dragon Capital, fails to make the payments.

As of October 2, 2022, the lease had approximately $ 15.1 million of lease payments remaining.

We have not recorded a liability associated with this guarantee.

We have a few short-term operating leases with terms less than twelve months - these leases are not recorded on our balance sheet and the overall rent expense is not material.

We also have certain lease contracts that contain both lease and non-lease components.

We have elected the practical expedient to account for these components together as a single, combined lease component.

T he rate implicit in most of our leases is not readily determinable.

As a result, we utilize the incremental borrowing rate to determine the present value of the lease payments, which is unique to each leased asset, and is based upon the term of the lease, commencement date of the lease, local currency of the leased asset, and the credit rating of the legal entity leasing the asset.

Our lease agreements do not contain material residual value gu arantees.

Our variable lease expense was approximately $ 0.8 million for each the three months ended April 2, 2023 and April 3, 2022.

The components of lease expense were as follows:

Three Months Ended Nine Months Ended

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

Three Months Ended

April 2, 2023 April 3, 2022

(In thousands)

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Supplemental cash flow information related to leases was as follows:

Three Months Ended Nine Months Ended

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

Three Months Ended

April 2, 2023 April 3, 2022

(In thousands)

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Operating cash flows from operating leases $ 4,665 $ 4,776

Operating cash flows from finance leases were not material during the three and nine months ended October 2, 2022 and October 3, 2021.

Operating cash flows from finance leases were not material during the three months ended April 2, 2023 and April 3, 2022.

Supplemental balance sheet information related to leases was as follows:

October 2, 2022 December 31, 2021

April 2, 2023 December 31, 2022

(In thousands, except lease term and discount rate)

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Other long-lived assets, net $ 5,449 $ 5,590

October 2, 2022 December 31, 2021

Accrued liabilities $ 487 $ 391

Other long-term liabilities 5,867 5,928

Total finance lease liabilities $ 6,354 $ 6,319

April 2, 2023 December 31, 2022

(In thousands, except lease term and discount rate)

5 unchanged sentences

Finance leases 4.2 % 4.2 %

The following table summarizes maturities of lease liabilities as of October 2, 2022 and December 31, 2021, respectively:

October 2, 2022 December 31, 2021

The following table summarizes maturities of lease liabilities as of April 2, 2023 and December 31, 2022, respectively:

April 2, 2023 December 31, 2022

(In thousands)

6 unchanged sentences

Total $ 82,759 $ 83,431

In addition, we are party to two lease guarantees.

Belden covenanted the lease payments for two Grass Valley property leases which will expire in 2029 and 2035, and collectively have approximately $ 19 million of fixed lease payments remaining.

These lease guarantees were retained by Belden and not transferred to the buyer of Grass Valley.

During 2022, Grass Valley defaulted on both property leases.

As of April 2, 2023, we have a liability for expected, future payments of $ 8.8 million.

The liability is based on certain assumptions, such as receiving a level of sublease income, that we will reassess on an ongoing basis.

We will update the estimated liability balance for changes in assumptions as needed.

Long-Lived Assets

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.

Depreciation and Amortization Expense

We recognized depreciation expense in income from continuing operations of $ 11.8 million and $ 34.4 million in the three and nine months ended October 2, 2022, respectively.

We recognized depreciation expense in income from continuing operations of $ 10.6 million and $ 32.0 million in the three and nine months ended October 3, 2021, respectively.

We recognized amortization expense in income from continuing operations of $ 11.0 million and $ 31.0 million in the three and nine months ended October 2, 2022, respectively.

We recognized amortization expense in income from continuing operations of $ 8.2 million and $ 24.1 million in the three and nine months ended October 3, 2021, respectively.

Sale-Leaseback

During the fourth quarter of 2021, we sold certain real estate in Germany as part of a sale and leaseback transaction.

When the assets met the held for sale criteria during the third quarter of 2021, we performed a recoverability test and determined that the carrying values of the assets were not recoverable and as a result, recognized a $ 2.3 million impairment charge to write them down to fair value.

This $ 2.3 million impairment charge recognized during the three and nine months ended October 3, 2021 was excluded from Segment EBITDA of our Industrial Automation Solutions segment.

Asset Impairment

During the nine months ended October 3, 2021, we sold our oil and gas cable business in Brazil and recognized an impairment charge of $ 3.4 million .

Also during the nine months ended October 3, 2021, we performed a recoverability test over certain held and used long-lived assets in our Industrial Automation Solutions segment.

We determined that the carrying values of the assets were not recoverable and recognized a $ 3.6 million impairment charge to write them down to fair value.

This impairment charge was excluded from Segment EBITDA of our Industrial Automation Solutions segment.

We recognized depreciation expense in income from continuing operations of $ 12.4 million and $ 11.2 million in the three months ended April 2, 2023 and April 3, 2022, respectively.

We recognized amortization expense in income from continuing operations of $ 11.1 million and $ 9.8 million in the three months ended April 2, 2023 and April 3, 2022, respectively.

Asset Held for Sale

On January 18, 2023, we entered into an agreement to sell our property in Ontario, Canada as part of a sale and leaseback transaction for $ 17.4 million.

When the asset met the held for sale criteria, we performed a recoverability test and determined that the carrying value of the property to be disposed of is less than the purchase price less cost to sell;

thus, the long-lived asset group is recoverable and no impairment exists.

The carrying value of the property is not material and is included in property, plant, and equipment in the condensed consolidated balance sheets.

The sale is expected to close during 2023.

Severance, Restructuring, and Acquisition Integration Activities

Manufacturing Footprint Program

We are consolidating our manufacturing footprint in the Americas region.

We recognized $ 0.8 million and $ 6.7 million of severance and other restructuring costs for this program during the three and nine months ended October 2, 2022 , respectively.

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

We expect to incur approximately $ 2 million of incremental costs for this program in 2022.

Acquisition Integration Program

We are integrating our recent acquisitions with our existing businesses to achieve desired cost savings, which are primarily focused on consolidating existing and acquired facilities as well as other support functions.

The Enterprise Solutions segment incurred $ 3.7 million and $ 4.7 million of restructuring and integration co sts during the three and nine months ended October 2, 2022, respectively, related to the CAI acquisition, and the Industrial Automation Solutions segment incurred $ 0.1 million and $ 3.2 million of restructuring and integration costs during the three and nine months ended October 2, 2022, respectively, related to the Macmon, NetModule and OTN Systems acquisitions.

We expect to incur approximately $ 2 million of incremental costs for this program in 2022.

The Enterprise Solutions and Industrial Automation Solutions segments recognized $ 0.8 million and $ 3.2 million of severance and other restructuring and integration costs during the three and nine months ended October 3, 2021, respectively, related to the OTN Systems and Opterna acquisitions.

The Industrial Automation Solutions segment incurred $ 0.7 million and $ 3.0 million of restructuring and integration co sts during the three months ended April 2, 2023 and April 3, 2022, respectively.

The restructuring and integration costs incurred during 2023 and 2022 primarily consisted of equipment transfer, costs to consolidate operating and support facilities, retention bonuses, relocation, travel, legal, and other costs.

The majority of the restructuring and integration costs related to these actions were paid as incurred or are payable within the next 60 days.

Furthermore, t here were no significant severance accrual balances as of October 2, 2022 or December 31, 2021.

The following table summarizes the severance and other restructuring and integration costs of the Acquisition Integration Program and Manufacturing Footprint Program described above by financial statement line item in the Condensed Consolidated Statement of Operations:

Three Months Ended Nine Months Ended

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

Furthermore, t here were no significant severance accrual balances as of April 2, 2023 or December 31, 2022.

The following table summarizes the severance and other restructuring and integration costs of the Acquisition Integration Program described above by financial statement line item in the Condensed Consolidated Statement of Operations:

Three Months Ended

April 2, 2023 April 3, 2022

(In thousands)

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The carrying values of our long-term debt were as follows:

October 2, 2022 December 31, 2021

April 2, 2023 December 31, 2022

(In thousands)

2 unchanged sentences

3.375 % Senior subordinated notes due 2027

487,395 480,330

7 unchanged sentences

Revolving Credit Agreement due 2026

On June 2, 2021, we entered into an amended and restated Revolving Credit Agreement that provides a $ 300.0 million multi-currency asset-based revolving credit facility (the Revolver).

We have a $ 300.0 million multi-currency asset-based revolving credit facility (the Revolver).

The maturity date of the Revolver is June 2, 2026.

1 unchanged sentence

and property, plant and equipment of certain of our subsidiaries in the United States, Canada, Germany, the United Kingdom and the Netherlands.

Interest on outstanding borrowings is variable, based upon LIBOR or other similar indices in foreign jurisdictions, plus a spread that ranges from 1.25 %- 1.75 %, depending upon our leverage position.

Interest on outstanding borrowings is variable, based upon SOFR or other similar indices in foreign jurisdictions, plus a spread that ranges from 1.25 %- 1.75 %, depending upon our leverage position.

Outstanding borrowings in the U.S.

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In the event that we borrow more than 90 % of our combined borrowing base or our borrowing base availability is less than $ 20.0 million, we are subject to a fixed charge coverage ratio covenant.

We paid approximately $ 2.3 million of fees associated with the amended Revolver, which will be amortized over its term using the effective interest method.

As of October 2, 2022, we had no borrowings outstanding on the Revolver, and our available borrowing capacity was $ 292.9 million.

As of April 2, 2023, we had no borrowings outstanding on the Revolver, and our available borrowing capacity was $ 291.9 million.

Senior Subordinated Notes

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

During the nine months ended October 2, 2022, we repurchased the full € 200.0 million 2026 Notes outstanding for cash consideration of € 204.1 million ($ 227.9 million), including a redemption premium, and recognized a $ 6.4 million loss on debt extinguishment including the write-off of unamortized debt issuance costs.

During the three months ended April 3, 2022, we repurchased the full € 200.0 million 2026 Notes outstanding for cash consideration of € 204.1 million ($ 227.9 million), including a redemption premium, and recognized a $ 6.4 million loss on debt extinguishment including the write-off of unamortized debt issuance costs.

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 October 2, 2022 is $ 433.2 million.

The carrying value of the 2027 Notes as of April 2, 2023 is $ 487.4 million.

The 2027 Notes are guaranteed on a senior subordinated basis by our current and future domestic subsidiaries.

2 unchanged sentences

We have outstanding € 350.0 million aggregate principal amount of 3.875 % senior subordinated notes due 2028 (the 2028 Notes).

The carrying value of the 2028 Notes as of October 2, 2022 is $ 336.9 million.

The carrying value of the 2028 Notes as of April 2, 2023 is $ 379.1 million.

The 2028 Notes are guaranteed on a senior subordinated basis by our current and future domestic subsidiaries.

2 unchanged sentences

We have outstanding € 300.0 million aggregate principal amount of 3.375 % senior subordinated notes due 2031 (the 2031 Notes).

The carrying value of the 2031 Notes as of October 2, 2022 is $ 288.8 million.

The carrying value of the 2031 Notes as of April 2, 2023 is $ 324.9 million.

The 2031 Notes are guaranteed on a senior subordinated basis by our current and future domestic subsidiaries.

2 unchanged sentences

Fair Value of Long-Term Debt

The fair value of our senior subordinated notes as of October 2, 2022 was approximately $ 880.6 million based on quoted prices of the debt instruments in inactive markets (Level 2 valuation).

This amount represents the fair value of our senior subordinated notes with a carrying value of $ 1,058.9 million as of October 2, 2022.

The fair value of our senior subordinated notes as of April 2, 2023 was approximately $ 1,073.2 million based on quoted prices of the debt instruments in inactive markets (Level 2 valuation).

This amount represents the fair value of our senior subordinated notes with a carrying value of $ 1,191.4 million as of April 2, 2023.

Net Investment Hedge

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

As of October 2, 2022, € 567.8 million o f 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.

As of April 2, 2023, € 567.8 million o f 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 nine months ended October 2, 2022 and October 3, 2021, the transaction gain associated with the net investment hedge reported in other comprehensive income was $ 102.1 million and $ 47.9 million, respectively.

During the nine months ended October 2, 2022, we de-designated € 200.0 million of our outstanding debt that was previously designated as a net investment hedge.

For the three months ended April 2, 2023 and April 3, 2022, the transaction gain (loss) associated with the net investment hedge reported in other comprehensive income was $( 9.1 ) million and $ 13.7 million, respectively.

In 2022, we de-designated € 200.0 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 € 200.0 million of debt are reported in income from continuing operations.

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.

For the three months ended April 2, 2023 and April 3, 2022, we recognized income tax expense of $ 14.9 million and $ 9.8 million, respectively, representing an effective tax rate of 19.1 % and 18.2 %, respectively.

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

On August 16, 2022, the Inflation Reduction Act of 2022 (the Act) was signed into law.

We are evaluating the effect that the Act will have on our consolidated financial statements and related disclosures.

At this time, none of the tax provisions of the Act are expected to have a material impact to our tax provision.

For the three and nine months ended October 3, 2021 , we recognized income tax expense of $ 9.8 million and $ 26.4 million, respectively, representing an effective tax rate of 18.2 % and 18.3 %, respectively.

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

None of the tax provisions of the Act are expected to have a material impact to our consolidated financial statements and related disclosures.

Pension and Other Postretirement Obligations

1 unchanged sentence

Pension Obligations Other Postretirement Obligations

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

April 2, 2023 April 3, 2022 April 2, 2023 April 3, 2022

(In thousands)

5 unchanged sentences

Actuarial losses (gains) ( 226 ) 236 ( 191 ) ( 20 )

Settlement loss 954 — — —

Net periodic benefit cost (income) $ 142 $ ( 464 ) $ 63 $ 181

Nine Months Ended

Service cost $ 2,488 $ 2,982 $ 18 $ 26

Interest cost 6,833 5,617 578 545

Expected return on plan assets ( 11,405 ) ( 12,276 ) — —

Amortization of prior service cost 132 83 — —

Actuarial losses (gains) 672 2,926 ( 60 ) ( 16 )

Settlement loss 954 — — —

Net periodic benefit cost (income) $ ( 326 ) $ ( 668 ) $ 536 $ 555

We recorded a settlement loss of $ 1.0 million during the three and nine months ended October 2, 2022.

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

Comprehensive Income and Accumulated Other Comprehensive Income (Loss)

The following table summarizes total comprehensive income (losses):

Three Months Ended Nine Months Ended

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

Three Months Ended

April 2, 2023 April 3, 2022

(In thousands)

6 unchanged sentences

The tax impacts of the foreign currency translation adjustments and pension liability adjustments in the table above are not material.

The accumulated balances related to each component of other comprehensive income (loss), net of tax, are as follows:

The accumulated balances related to each component of other comprehensive income, net of tax, are as follows:

Foreign Currency Translation Component Pension and Other

1 unchanged sentence

Benefit Plans Accumulated Other

Comprehensive Income (Loss)

Comprehensive Loss

(In thousands)

Balance at December 31, 2022 $ ( 1,944 ) $ ( 3,927 ) $ ( 5,871 )

Other comprehensive income attributable to Belden before reclassifications 109,437 — 109,437

Other comprehensive loss attributable to Belden before reclassifications ( 17,020 ) — ( 17,020 )

Amounts reclassified from accumulated other comprehensive income (loss) — ( 280 ) ( 280 )

Net current period other comprehensive income attributable to Belden 106,430 1,262 107,692

Balance at October 2, 2022 $ 64,962 $ ( 27,836 ) $ 37,126

The following table summarizes the effects of reclassifications from accumulated other comprehensive income (loss) for the nine months ended October 2, 2022:

Amount Reclassified from Accumulated Other

Comprehensive Income (2) Affected Line Item in the Consolidated Statements of Operations and Comprehensive Income

Net current period other comprehensive loss attributable to Belden ( 17,020 ) ( 280 ) ( 17,300 )

Balance at April 2, 2023 $ ( 18,964 ) $ ( 4,207 ) $ ( 23,171 )

The following table summarizes the effects of reclassifications from accumulated other comprehensive income (loss) for the three months ended April 2, 2023:

Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Consolidated Statements of Operations and Comprehensive Loss

(In thousands)

Amortization of pension and other postretirement benefit plan items:

Settlement loss $ 954 (1)

Actuarial losses 612 (1)

Actuarial gains $ ( 417 ) (1)

Prior service cost 43 (1)

Total before tax ( 374 )

Tax benefit ( 436 )

Tax expense 94

Total net of tax $ ( 280 )

(1) The amortization of these accumulated other comprehensive income (loss) components are included in the computation of net periodic benefit costs (see Note 16).

(2) In addition, we reclassified $ 3.0 million of accumulated foreign currency translation gains associated with the sale of Tripwire.

(1) The amortization of these accumulated other comprehensive loss components are included in the computation of net periodic benefit costs (see Note 14).

Share Repurchase

1 unchanged sentence

This program is funded with cash on hand and cash flows from operating activities.

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 .

Subsequent to October 2, 2022, we repurchased 0.2 million shares of our common stock for an aggregate cost of $ 13.6 million at an average price per share of $ 62.85 .

During the three months ended April 2, 2023 , we repurchased 0.6 million shares of our common stock for an aggregate cost of $ 50.0 million at an average price per share of $ 84.18 .

As of April 2, 2023, we had $ 15.0 million of authorizations remaining under the program.

On April 24, 2023, our Board of Directors authorized an additional $ 300.0 million under the share repurchase program.

This share repurchase authorization does not have an expiration date.

As of the date of this filing, we had $ 315.0 million of authorizations remaining under the program.

During the three and nine months ended October 3, 2021, we did no t repurchase any stock.

During the three months ended April 3, 2022 , we repurchased 0.9 million shares of our common stock for an aggregate cost of $ 50.0 million at an average price per share of $ 56.51 .

Subsequent Events

On April 17, 2023, we acquired Berthold Sichert GmbH (Sichert) for approximately $ 98 million, which we funded with cash on hand.

Sichert, based in Berlin Germany, designs and manufactures a portfolio of polycarbonate street cabinets utilized in outside plant passive optical networks (“PON”) and 5G networks.

Sichert will be reported within the Enterprise Solutions segment.

On April 24, 2023, our Board of Directors authorized an additional $ 300.0 million under the share repurchase program.

On April 28, 2023, we sold our 51 % ownership interest in Shanghai Hi-Tech Control System Co, Ltd to Hite for $ 0.9 million.

The sale also includes $ 0.6 million of potential earnout payments.

We deconsolidated the joint venture as of April 28, 2023.

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 1. Financial Statements