What changed in this filing

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Item 1. Financial Statements

2023-11-02 compared with 2023-08-03 · 150 added, 108 removed, 611 unchanged (30% of the section changed)

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEETS

July 2, 2023 December 31, 2022

October 1, 2023 December 31, 2022

(In thousands)

34 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

Three Months Ended Six Months Ended

July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022

Three Months Ended Nine Months Ended

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

(In thousands, except per share data)

5 unchanged sentences

Amortization of intangibles ( 9,526 ) ( 10,105 ) ( 30,262 ) ( 28,099 )

Gain on sale of assets 12,056 37,891 12,056 37,891

Operating income 95,429 129,648 273,563 285,105

27 unchanged sentences

CONDENSED CONSOLIDATED CASH FLOW STATEMENTS

Six Months Ended

July 2, 2023 July 3, 2022

Nine Months Ended

October 1, 2023 October 2, 2022

(In thousands)

4 unchanged sentences

Share-based compensation 14,843 18,438

Loss on disposal of discontinued operations — 9,934

Loss on debt extinguishment — 6,392

Gain on sale of assets ( 12,056 ) ( 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 3,855 ( 17,500 )

Net cash provided by (used for) operating activities 54,715 ( 8,581 )

Net cash provided by operating activities 159,993 78,800

Cash flows from investing activities:

16 unchanged sentences

Cash and cash equivalents, end of period $ 530,971 $ 547,466

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

The Condensed Consolidated Cash Flow Statement for the nine months ended October 2, 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.

28 unchanged sentences

Balance at July 2, 2023 50,335 $ 503 $ 809,332 $ 879,179 ( 8,076 ) $ ( 497,873 ) $ ( 28,173 ) $ 23 $ 1,162,991

Net income (loss) — — — 72,347 — — — ( 20 ) 72,327

Other comprehensive income, net of tax — — — — — — 21,568 — 21,568

Common stock issuance — — 448 — 79 4,441 — — 4,889

Retirement Savings Plan stock contributions — — 692 — 18 1,031 — — 1,723

Exercise of stock options, net of tax withholding forfeitures — — ( 620 ) — 8 311 — — ( 309 )

Conversion of restricted stock units into common stock, net of tax withholding forfeitures — — ( 118 ) — 1 58 — — ( 60 )

Share repurchase program, net of excise tax — — — — ( 690 ) ( 64,311 ) — — ( 64,311 )

Share-based compensation — — 2,689 — — — — — 2,689

Common stock dividends ($ 0.05 per share)

— — — ( 2,104 ) — — — — ( 2,104 )

Balance at October 1, 2023 50,335 $ 503 $ 812,423 $ 949,422 ( 8,660 ) $ ( 556,343 ) $ ( 6,605 ) $ 3 $ 1,199,403

Additional Accumulated

25 unchanged sentences

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-based compensation — — 7,568 — — — — — 7,568

Common stock dividends ($ 0.05 per share)

— — — ( 2,185 ) — — — — ( 2,185 )

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

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

11 unchanged sentences

Business Description

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

We are a leading global supplier of network infrastructure and digitization 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.

3 unchanged sentences

Our fiscal second and third quarters each have 91 days.

The six months ended July 2, 2023 and July 3, 2022 included 183 and 184 days, respectively.

The nine months ended October 1, 2023 and October 2, 2022 included 274 and 275 days, respectively.

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 six months ended July 2, 2023 and July 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 six months ended July 2, 2023 and July 3, 2022.

As of and during the three and nine months ended October 1, 2023 and October 2, 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 nine months ended October 1, 2023 and October 2, 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 July 2, 2023, we had an immaterial amount of cash equivalents.

As of October 1, 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 July 2, 2023, we were party to standby letters of credit, surety bonds, and bank guaranties totaling $ 8.7 million, $ 4.7 million, and $ 4.3 million, respectively.

As of October 1, 2023, we were party to standby letters of credit, surety bonds, and bank guaranties totaling $ 8.3 million, $ 4.7 million, and $ 4.1 million, respectively.

Revenue Recognition

10 unchanged sentences

As Belden was the primary beneficiary of the joint venture, due to both our ownership percentage and control over the activities of the joint venture, we consolidated the joint venture in our financial statements and presented the results of the joint venture attributable to Hite’s ownership as net income attributable to noncontrolling interest in the Condensed Consolidated Statements of Operations up to April 28, 2023 when we sold and deconsolidated the entity.

The joint venture was not material to our consolidated financial statements during the six months ended July 2, 2023 and July 3, 2022.

A Belden subsidiary includes a noncontrolling interest as of and for the periods ended July 2, 2023 and July 3, 2022 .

The joint venture was not material to our consolidated financial statements during the nine months ended October 1, 2023 and October 2, 2022.

A Belden subsidiary includes a noncontrolling interest as of and for the periods ended October 1, 2023 and October 2, 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.

5 unchanged sentences

Solutions Industrial Automation Smart Buildings Total

Three Months Ended July 2, 2023 (In thousands)

Three Months Ended October 1, 2023 (In thousands)

Enterprise Solutions $ 146,048 $ — $ 137,857 $ 283,905

1 unchanged sentence

Total $ 146,048 $ 342,902 $ 137,857 $ 626,807

Three Months Ended July 3, 2022

Three Months Ended October 2, 2022

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

1 unchanged sentence

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

Six Months Ended July 2, 2023

Nine Months Ended October 1, 2023

Enterprise Solutions $ 436,935 $ — $ 434,842 $ 871,777

1 unchanged sentence

Total $ 436,935 $ 1,089,064 $ 434,842 $ 1,960,841

Six Months Ended July 3, 2022

Nine Months Ended October 2, 2022

Enterprise Solutions $ 424,441 $ — $ 470,634 $ 895,075

3 unchanged sentences

Americas EMEA APAC Total Revenues

Three Months Ended July 2, 2023 (In thousands)

Three Months Ended October 1, 2023 (In thousands)

Enterprise Solutions $ 199,002 $ 51,476 $ 33,427 $ 283,905

1 unchanged sentence

Total $ 394,156 $ 143,665 $ 88,986 $ 626,807

Three Months Ended July 3, 2022

Three Months Ended October 2, 2022

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

1 unchanged sentence

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

Six Months Ended July 2, 2023

Nine Months Ended October 1, 2023

Enterprise Solutions $ 659,360 $ 125,595 $ 86,822 $ 871,777

1 unchanged sentence

Total $ 1,283,579 $ 428,760 $ 248,502 $ 1,960,841

Six Months Ended July 3, 2022

Nine Months Ended October 2, 2022

Enterprise Solutions $ 685,209 $ 110,931 $ 98,935 $ 895,075

1 unchanged sentence

Total $ 1,306,196 $ 380,975 $ 260,242 $ 1,947,413

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 generate revenues primarily by selling products that support communication, infrastructure, and delivery solutions that make the digital journey simpler, smarter, and 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 six months ended July 2, 2023 and July 3, 2022 .

Adjustments to revenue for performance obligations satisfied in prior periods were not significant during the three and nine months ended October 1, 2023 and October 2, 2022 .

The following table presents estimated and accrued variable consideration:

July 2, 2023 December 31, 2022

October 1, 2023 December 31, 2022

(in thousands)

3 unchanged sentences

Depending on the terms of an arrangement, we may defer the recognition of some or all of the consideration received because we have to satisfy a future obligation.

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

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

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 July 2, 2023, total deferred revenue was $ 29.7 million, and of this amount, $ 22.7 million is expected to be recognized within the next twelve months, and the remaining $ 7.0 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 six months ended July 2, 2023 and July 3, 2022, respectively:

Our contract terms for support, maintenance, and professional services typically require payment within one year or less of when the services will be provided.

As of October 1, 2023, total deferred revenue was $ 27.7 million, and of this amount, $ 21.5 million is expected to be recognized within the next twelve months, and the remaining $ 6.2 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 1, 2023 and October 2, 2022, respectively:

(In thousands)

7 unchanged sentences

Balance at the end of Q2 $ 29,667 $ 26,834

Service-type warranties represent $ 9.5 million of the deferred revenue balance at July 2, 2023, and of this amount $ 4.9 million is expected to be recognized in the next twelve months, and the remaining $ 4.6 million is long-term and will be recognized over a period greater than twelve months.

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

New deferrals 9,146 7,137

Acquisitions 104 —

Revenue recognized ( 11,224 ) ( 4,960 )

Balance at the end of Q3 $ 27,693 $ 29,011

Service-type warranties represent $ 9.9 million of the deferred revenue balance at October 1, 2023, and of this amount $ 6.1 million is expected to be recognized in the next twelve months, and the remaining $ 3.8 million is long-term and will be recognized over a period greater than twelve months.

As of October 1, 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 July 2, 2023 and December 31, 2022.

We did not have any capitalized sales commissions on our balance sheet as of October 1, 2023 and December 31, 2022.

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

Three Months Ended Six Months ended

July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022

Three Months Ended Nine Months ended

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

(In thousands)

Sales commissions $ 4,729 $ 6,372 $ 16,819 $ 17,721

On August 31, 2023, we acquired CloudRail GmbH (CloudRail) with cash on hand for $ 9.2 million, net of cash acquired.

CloudRail, based in Mannheim, Germany, spec ializes in sensor to cloud data solutions allowing end users to quickly connect sensors on their machinery to cloud providers to drive business insights and improve outcomes.

The results of CloudRail have been included in our Condensed Consolidated Financial Statements from August 31, 2023 and are reported within the Industrial Automation Solutions segment.

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

On April 17, 2023, we acquired Berthold Sichert GmbH (Sichert) with cash on hand for $ 97.5 million, net of cash acquired.

1 unchanged sentence

Sichert is reported within the Enterprise Solutions segment.

The Sichert acquisition was not material to our results of operations.

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

19 unchanged sentences

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).

We used various valuation methods including discounted cash flows, 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 broadband & 5G product offerings in end-to-end solutions.

The goodwill is primarily attributable to the expansion of broadband product offerings in end-to-end solutions.

Our tax basis in the acquired goodwill is zero .

19 unchanged sentences

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 $ 4.6 million during the six months ended July 3, 2022.

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

6 unchanged sentences

Loss before taxes $ ( 5,540 )

During the six months ended July 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 six months ended July 3, 2022 .

From January 1, 2022 to February 22 , 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 from January 1, 2022 to February 22, 2022 .

Reportable Segments

8 unchanged sentences

severance, restructuring, and acquisition integration costs;

purchase accounting effects related to acquisitions, such as the adjustment of acquired inventory to fair value;

accounting effects related to acquisitions, such as the adjustment of acquired inventory to fair value;

and other costs.

6 unchanged sentences

(In thousands)

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

As of and for the three months ended October 1, 2023

Segment Revenues $ 283,905 $ 342,902 $ 626,807

6 unchanged sentences

Segment assets 625,356 698,287 1,323,643

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

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

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

6 unchanged sentences

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

As of and for the six months ended July 2, 2023

As of and for the nine months ended October 1, 2023

Segment revenues $ 871,777 $ 1,089,064 $ 1,960,841

6 unchanged sentences

Segment assets 625,356 698,287 1,323,643

As of and for the six months ended July 3, 2022

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

Segment Revenues $ 895,075 $ 1,052,338 $ 1,947,413

7 unchanged sentences

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 Six Months Ended

July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022

Three Months Ended Nine Months Ended

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

(In thousands)

1 unchanged sentence

Total Segment EBITDA $ 114,937 $ 117,165 $ 348,516 $ 325,461

Gain on sale of asset 12,056 37,891 12,056 37,891

Depreciation expense ( 13,442 ) ( 11,847 ) ( 38,478 ) ( 34,443 )

9 unchanged sentences

Consolidated income from continuing operations before taxes $ 87,177 $ 119,791 $ 249,432 $ 245,439

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

(1) Severance, restructuring, and acquisition integration costs for the three and nine months ended October 1, 2023 and October 2, 2022 included costs related to our Acquisition Integration Program.

(2) Adjustments related to acquisitions and divestitures included fair value adjustments of acquired inventory and investments as well as gains associated with the sales of businesses.

1 unchanged sentence

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

Three Months Ended Six Months Ended

July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022

Three Months Ended Nine Months Ended

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

(In thousands)

8 unchanged sentences

Weighted average shares outstanding, diluted 42,625 44,063 43,129 44,810

For both the three and six months ended July 2, 2023, diluted weighted average shares outstanding excluded outstanding equity awards of 0.2 million as they were anti-dilutive.

In addition, for both the three and six months ended July 2, 2023, diluted weighted average shares outstanding did not include outstanding equity a wards of 0.2 million becau se the related performance conditions have not been satisfied.

For both the three and six months ended July 3, 2022, diluted weighted average shares outstanding exclude outstanding equity awards of 1.1 million as they are anti-dilutive.

In addition, for the three and six months ended July 3, 2022, diluted weighted average shares outstanding do not include outstanding equity awards of 0.2 million and 0.3 million, respectively, because the related performance conditions have not been satisfied.

For the three and nine months ended October 1, 2023, diluted weighted average shares outstanding excluded outstanding equity awards of 0.1 million and 0.2 million, respectively, as they were anti-dilutive.

In addition, for the three and nine months ended October 1, 2023, diluted weighted average shares outstanding did 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 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 awards of 0.0 million and 0.1 million, respectively, because 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.

11 unchanged sentences

Provisions and recoveries are included in selling, general and administrative expenses.

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

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 1, 2023 and October 2, 2022, respectively:

(In thousands)

12 unchanged sentences

Q2 ending balance $ 16,146 $ 5,792

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

July 2, 2023 December 31, 2022

Current period provision 4,933 92

Write-offs ( 31 ) ( 2,717 )

Recoveries collected ( 824 ) ( 23 )

Fx impact ( 72 ) ( 104 )

Q3 ending balance $ 20,152 $ 3,040

The following table presents the major classes of inventories as of October 1, 2023 and December 31, 2022 , respectively:

October 1, 2023 December 31, 2022

(In thousands)

17 unchanged sentences

Our lease agreements do not contain material residual value guarantees.

Our variable lease expense was approximately $ 0.8 million and $ 1.6 million for the three and six months ended July 2, 2023, respectively.

Our variable lease expense was approximately $ 0.7 million and $ 1.5 million for the three and six months ended July 3, 2022, respectively.

Our variable lease expense was approximately $ 0.8 million and $ 2.4 million for the three and nine months ended October 1, 2023, respectively.

Our variable lease expense was approximately $ 0.7 million and $ 2.2 million for the three and nine months ended October 2, 2022, respectively.

The components of lease expense were as follows:

Three Months Ended Six Months Ended

July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022

Three Months Ended Nine Months Ended

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

(In thousands)

5 unchanged sentences

Supplemental cash flow information related to leases was as follows:

Three Months Ended Six Months Ended

July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022

Three Months Ended Nine Months Ended

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

(In thousands)

1 unchanged sentence

Operating cash flows from operating leases $ 4,674 $ 4,488 $ 13,964 $ 13,825

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

Operating cash flows from finance leases were not material during the three and nine months ended October 1, 2023 and October 2, 2022 .

Supplemental balance sheet information related to leases was as follows:

July 2, 2023 December 31, 2022

October 1, 2023 December 31, 2022

(In thousands, except lease term and discount rate)

12 unchanged sentences

Total finance lease liabilities $ 6,218 $ 6,319

July 2, 2023 December 31, 2022

October 1, 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 July 2, 2023 and December 31, 2022, respectively:

July 2, 2023 December 31, 2022

The following table summarizes maturities of lease liabilities as of October 1, 2023 and December 31, 2022, respectively:

October 1, 2023 December 31, 2022

(In thousands)

9 unchanged sentences

During 2022, Grass Valley defaulted on two property leases.

As of July 2, 2023, we have a liability for expected, future payments of $ 8.2 million .

As of October 1, 2023, we have a liability for expected, future payments of $ 7.4 million .

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

2 unchanged sentences

Depreciation and Amortization Expense

We recognized depreciation expense in income from continuing operations of $ 12.7 million and $ 25.0 million in the three and six months ended July 2, 2023, respectively.

We recognized depreciation expense in income from continuing operations of $ 11.4 million and $ 22.6 million in the three and six months ended July 3, 2022, respectively.

We recognized amortization expense in income from continuing operations of $ 12.9 million and $ 24.0 million in the three and six months ended July 2, 2023, respectively.

We recognized amortization expense in income from continuing operations of $ 10.2 million and $ 20.0 million in the three and six months ended July 3, 2022, respectively.

Asset Held for Sale

During the six months ended July 2, 2023, we entered into an agreement to sell our property in Ontario, Canada as part of a sale and leaseback transaction for $ 15.6 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.

We recognized depreciation expense in income from continuing operations of $ 13.4 million and $ 38.5 million in the three and nine months ended October 1, 2023, respectively.

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 amortization expense in income from continuing operations of $ 11.5 million and $ 35.5 million in the three and nine months ended October 1, 2023, 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.

Gain on Sale of Assets

During the three and nine months ended October 1, 2023, we sold our property in Ontario, Canada as part of a sale and leaseback transaction for $ 13.8 million, net of transaction costs and recognized a $ 12.1 million pre-tax gain on sale.

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

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.

Severance, Restructuring, and Acquisition Integration Activities

1 unchanged sentence

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 $ 1.3 million of restructuring and integration costs during the three and six months ended July 2, 2023, and the Industrial Automation Solutions segment incurred $ 0.1 million and $ 0.8 million of restructuring and integration co sts during the three and six months ended July 2, 2023, respectively.

The Enterprise Solutions segment incurred $ 1.0 million of restructuring and integration costs during the three and six months ended July 3, 2022, and the Industrial Automation Solutions segment incurred $ 0.1 million and $ 3.1 million of restructuring and integration costs during the three and six months ended July 3, 2022, respectively.

The Enterprise Solutions segment incurred $ 3.2 million and $ 4.5 million of restructuring and integration costs during the three and nine months ended October 1, 2023 , and the Industrial Automation Solutions segment incurred $ 1.6 million and $ 2.4 million of restructuring and integration co sts during the three and nine months ended October 1, 2023, respectively.

The Enterprise Solutions segment incurred $ 3.7 million and $ 4.7 million of restructuring and integration costs during the three and nine months ended October 2, 2022, 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.

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 July 2, 2023 or December 31, 2022.

Furthermore, t here were no significant severance accrual balances as of October 1, 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 Six Months Ended

July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022

Three Months Ended Nine Months Ended

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

(In thousands)

5 unchanged sentences

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

July 2, 2023 December 31, 2022

October 1, 2023 December 31, 2022

(In thousands)

20 unchanged sentences

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.

As of July 2, 2023, we had no borrowings outstanding on the Revolver, and our available borrowing capacity was $ 291.2 million.

As of October 1, 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 six months ended July 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.

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.

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 July 2, 2023 is $ 490.5 million.

The carrying value of the 2027 Notes as of October 1, 2023 is $ 473.4 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 July 2, 2023 is $ 381.5 million.

The carrying value of the 2028 Notes as of October 1, 2023 is $ 368.2 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 July 2, 2023 is $ 327.0 million.

The carrying value of the 2031 Notes as of October 1, 2023 is $ 315.6 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 July 2, 2023 was approximately $ 1,099.5 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 $ 1,199.0 million as of July 2, 2023.

The fair value of our senior subordinated notes as of October 1, 2023 was approximately $ 1,042.3 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 $ 1,157.1 million as of October 1, 2023.

Net Investment Hedge

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

As of July 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.

As of October 1, 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 six months ended July 2, 2023 and July 3, 2022, the transaction gain (loss) associated with the net investment hedge reported in other comprehensive income was $( 13.0 ) million and $ 53.5 million, respectively.

For the nine months ended October 1, 2023 and October 2, 2022, the transaction gain associated with the net investment hedge reported in other comprehensive income was $ 8.8 million and $ 102.1 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 six months ended July 2, 2023, we recognized income tax expense of $ 15.7 million and $ 30.5 million, respectively, representing an effective tax rate of 18.5 % and 18.8 %, respectively.

For the three and nine months ended October 1, 2023, we recognized income tax expense of $ 14.9 million and $ 45.4 million, respectively, representing an effective tax rate of 17.0 % and 18.2 %, respectively.

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 effective tax rates 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.

1 unchanged sentence

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

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 % for each period.

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

Pension and Other Postretirement Obligations

1 unchanged sentence

Pension Obligations Other Postretirement Obligations

July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

(In thousands)

5 unchanged sentences

Actuarial losses (gains) ( 234 ) 212 ( 192 ) ( 20 )

Net periodic benefit cost (income) $ 137 $ ( 424 ) $ 64 $ 179

Six Months Ended

Settlement loss — 954 —

Net periodic benefit cost $ 133 $ 562 $ 64 $ 176

Nine Months Ended

Service cost $ 2,056 $ 2,488 $ 6 $ 18

3 unchanged sentences

Actuarial losses (gains) ( 692 ) 672 ( 574 ) ( 60 )

Settlement loss — 954 — —

Net periodic benefit cost (income) $ 412 $ ( 326 ) $ 188 $ 536

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:

Three Months Ended Six Months Ended

July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022

Three Months Ended Nine Months Ended

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

(In thousands)

16 unchanged sentences

Net current period other comprehensive loss attributable to Belden 114 ( 848 ) ( 734 )

Balance at July 2, 2023 $ ( 23,682 ) $ ( 4,491 ) $ ( 28,173 )

The following table summarizes the effects of reclassifications from accumulated other comprehensive loss for the six months ended July 2, 2023:

Balance at October 1, 2023 $ ( 1,830 ) $ ( 4,775 ) $ ( 6,605 )

The following table summarizes the effects of reclassifications from accumulated other comprehensive loss for the nine months ended October 1, 2023:

Reclassified from Accumulated Other Comprehensive Income (2) Affected Line Item in the Consolidated Statements of Operations and Comprehensive Loss

12 unchanged sentences

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

During the three months ended July 2, 2023 , we repurchased 0.4 million shares of our common stock for an aggregate cost of $ 36.2 million at an average price per share of $ 92.01 .

During the six months ended July 2, 2023 , we repurchased 1.0 million shares of our common stock for an aggregate cost of $ 86.2 million at an average price per share of $ 87.30 .

As of July 2, 2023, we had $ 278.8 million of authorizations remaining under the program.

During the three months ended October 1, 2023 , we repurchased 0.7 million shares of our common stock for an aggregate cost of $ 63.8 million at an average price per share of $ 92.46 .

During the nine months ended October 1, 2023 , we repurchased 1.7 million shares of our common stock for an aggregate cost of $ 150.0 million at an average price per share of $ 89.42 .

As of October 1, 2023, we had $ 215.0 million of authorizations remaining under the program.

This share repurchase authorization does not have an expiration date.

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 .

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