What changed in this filing

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Item 1. Business

2024-02-13 compared with 2023-02-24 · 84 added, 58 removed, 186 unchanged (43% of the section changed)

(the Company, us, we, or our) is a leading global supplier of network infrastructure solutions that makes the digital journey simpler, smarter and secure.

(the Company, us, we, or our) is a leading global supplier of network infrastructure and digitization solutions that makes the digital journey simpler, smarter and secure.

We’re moving beyond connectivity, from what we make to what we make possible through a performance-driven portfolio, forward-thinking expertise and purpose-built solutions.

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Our purpose is to build the foundation for a digital world.

Within Enterprise Solutions, our Smart Buildings products offer in-building wired and wireless infrastructures, fiber technology innovation, and design collaboration & customization to connect people with facilities through innovative solutions for enhanced human engagement, productivity, and security.

Also within Enterprise Solutions, our Broadband & 5G products offer a broad portfolio of end-to-end solutions, industry-leading innovation & technology, and worldwide technical service & support to enable a connected, digital world through broadband and wireless innovation.

Within Industrial Automation Solutions, we are uniquely positioned to support digital transformation by providing end-to-end digitization infrastructure focused on robust network infrastructure, secure remote access, accelerated IT/OT convergence, and edge & data analytics.

Within Enterprise Solutions, our Smart Buildings products offer in-building wired and wireless infrastructures, fiber technology innovation, and design collaboration and customization to connect people with facilities through innovative solutions for enhanced human engagement, productivity, and security.

Also within Enterprise Solutions, our Broadband Solutions products offer a broad portfolio of end-to-end solutions, industry-leading innovation and technology, and worldwide technical service and support to enable a connected, digital world through broadband and wireless innovation.

Our customers are building the future, and we build the network that makes it possible.

We operate our business under the two segments – Enterprise Solutions and Industrial Automation Solutions.

We operate our business under two segments – Enterprise Solutions and Industrial Automation Solutions.

A synopsis of the segments is included below:

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The Enterprise Solutions (Enterprise) segment is a leading provider in network infrastructure and broadband solutions, as well as cabling and connectivity solutions for commercial audio/video and security applications.

We serve customers in markets such as hospitality, healthcare, education, financial, government, commercial real estate, and broadband and wireless service providers, as well as end-markets, including data centers, sport venues, stadiums, military installations, and academia.

Our priority vertical markets for our Smart Buildings Solutions include data centers, government, healthcare, and hospitality.

We also serve customers in markets such as commercial real estate, education, financial, stadiums and venues, and military installations.

Our Broadband Solutions primarily serve broadband and wireless service providers.

Enterprise product lines include copper cable and connectivity solutions, fiber cable and connectivity solutions, interconnect panels, racks and enclosures, and secure, high performance signal extension and matrix switching systems.

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Industrial Automation Solutions

The Industrial Automation Solutions (Industrial Automation) segment is a leading provider of high performance networking and machine connectivity products.

Industrial Automation products include physical network and fieldbus infrastructure components and on-machine connectivity systems to meet end user and OEM needs.

Products are designed to provide reliability and confidence of performance for a wide range of industrial automation applications.

The products are used in markets that include discrete automation, process automation, energy and mass transit.

Applications include network and fieldbus infrastructure;

sensor and actuator connectivity;

and power, control, and data transmission.

Industrial Automation products include solutions such as industrial Ethernet switches, network management software, routers, firewalls, gateways, input/output (I/O) connectors/systems, industrial Ethernet cables, optical fiber industrial Ethernet cables, Fieldbus cables, IP and networking cables, I/O modules, distribution boxes, and customer specific wiring solutions.

Our industrial cable products are used in discrete manufacturing and process operations involving the connection of computers, programmable controllers, robots, operator interfaces, motor drives, sensors, printers, and other devices.

Many industrial environments, such as petrochemical and other harsh-environment operations, require cables with exterior armor or jacketing that can endure physical abuse and exposure to chemicals, extreme temperatures, and outside elements.

Other applications require conductors, insulation, and jacketing materials that can withstand repeated flexing.

In addition to cable product configurations for these applications, we supply heat-shrinkable tubing and wire management products to protect and organize wire and cable assemblies.

Our industrial connector products are primarily used as sensor and actuator connections in factory automation supporting various fieldbus protocols as well as power connections in building automation.

These products are used both as components of manufacturing equipment and in the installation and networking of such equipment.

Industrial Automation products are sold directly to industrial equipment OEMs and through a network of industrial distributors, value-added resellers, and system integrators.

The Industrial Automation Solutions segment at Belden provides network infrastructure and digitization solutions to enable our customers to make informed decisions.

We accelerate digital transformation by providing reliable and secure networks designed for the digitization and automation of industries and infrastructure.

Our products and solutions encompass the four aspects of data handling including acquisition, transmission, orchestration and management.

Our primary markets include discrete automation, process automation, energy, and mass transit.

Industrial Automation products are sold directly to industrial equipment OEMs and through a network of industrial distributors, value-added resellers and system integrators for broader reach.

We help customers increase uptime and ensure network data availability, integrity and confidentiality.

We understand the operational, quality, safety and innovation demands of our customers and empower them to succeed by making the most of real-time operational technology data.

Our industrial automation capabilities span networking, connectivity, and network security to design industrial networks and securely transmit data.

Our global team of engineers and consultants at our Customer Innovation Centers work directly with customers to understand operational issues, anticipate what successful outcomes require and solve unique networking needs.

See Note 6 to the Consolidated Financial Statements for additional information regarding our segments.

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We have completed a number of acquisitions in recent years as part of this strategy.

Most recently, in April 2022, we acquired Communication Associates, Inc.

Most recently, in August 2023, we acquired CloudRail GmbH (CloudRail), which 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.

In April 2023, we acquired Berthold Sichert GmbH (Sichert), which designs and manufactures a portfolio of polycarbonate street cabinets utilized in outside plant passive optical networks (“PON”) and 5G networks.

In April 2022, we acquired Communication Associates, Inc.

(CAI), a leading designer and manufacturer of various plug-in radio frequency filters used in outside plant hybrid fiber-coax nodes.

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(OTN Systems), a leading provider of automation networking infrastructure solutions.

The results of CAI have been included in our Consolidated Financial Statements as of the acquisition date and are reported within the Enterprise Solutions segment.

The results of NetModule, Macmon and OTN Systems have been included in our Consolidated Financial Statements from their respective acquisition dates and are reported within the Industrial Automation Solutions segment.

For more information regarding these transactions, see Note 4 to the Consolidated Financial Statements.

The results of Sichert and CAI have been included in our Consolidated Financial Statements as of the acquisition date and are reported within the Enterprise Solutions segment.

The results of CloudRail, NetModule, Macmon and OTN Systems have been included in our Consolidated Financial Statements from their respective acquisition dates and are reported within the Industrial Automation Solutions segment.

For more information regarding our most recent transactions, see Note 4 to the Consolidated Financial Statements.

We sell to distributors, OEMs, installers, and end-users.

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A substantial acquisition in one of our served markets would be necessary to meaningfully change our estimated market share percentage.

The principal competitive factors in all our product markets are technical features, quality, availability, price, customer support, and distribution coverage.

The principal competitive factor in our markets is the ability to solve customer problems based on product features, quality, availability, price, customer support, and distribution coverage.

The relative importance of each of these factors varies depending on the customer.

Some products are manufactured to meet published industry specifications and are less differentiated on the basis of product characteristics.

We believe that Belden stands out in many of our markets on the basis of the breadth of our product portfolio, the quality and performance characteristics of our products, our customer service, and our technical support.

We believe that Belden stands out in many of our markets on the basis of our ability to offer complete network solutions that solve customer problems, the breadth of our product portfolio, the quality and performance characteristics of our products, our customer service, and our technical support.

Research and Development

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We believe that our future success will depend in part upon our ability to enhance existing products and to develop, manufacture and deliver new products that meet or anticipate such changes in our served markets.

In our Industrial Automation Solutions segment, customers are rapidly adopting new technology to enable digital transformations and improve their environmental impact.

In our Industrial Automation Solutions segment, customers are rapidly adopting new technologies that enable digital transformations.

This includes deploying Industry 4.0 to increase visibility of their digitized assets and adopting Artificial Intelligence (AI) to increase analytics and autonomous decision-making in their systems.

These approaches need users to refine workflows by collecting data from disparate sources, transmitting it to points of consolidation and decision making, and converting it to standard formats that application software can use.

Digital transformations require users to refine workflows by collecting data from disparate sources, transmitting it to points of consolidation and decision making, and converting it to standard formats.

This overall process can be referred to as "digitization" and a key part of our research and development is focused on supporting these customer journeys with technology that adds value at multiple steps in the digitization process, during data acquisition, data transmission, and data orchestration and management.

Our research and development enables customized enhanced solutions to support customers' innovative methods surrounding the collection, analysis, and transmission of data.

There is a growing trend toward adoption of Industrial Ethernet technology, bringing to the critical infrastructure the advantages of digital communication and the ability to network devices made by different manufacturers and integrate them with enterprise systems.

There is a growing trend toward adoption of Industrial Ethernet technology, which enhances the ability to connect and integrate devices made by different manufacturers.

While the adoption of this technology is at a more advanced stage in certain regions of the world, we believe that the trend will globalize.

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Our research and development has a strong focus on improving the performance of fiber optic technology, making it easier to handle and install, more robust for technicians and end users, leading to networks that can be deployed more quickly, with higher performance and reliability.

Even with the explosive growth in fiber, connections to the end devices that consumers utilize to live, work and play, be it wireless access points or IoT devices, are still going to strongly benefit from the remaining advantages of copper-based connectivity, with a heavy focus on powering the ever-increasing collection of data consuming and generating devices connected to our increasingly digitized world.

Even with the explosive growth in fiber, connections to the end devices that consumers utilize to live, work and play, be it wireless access points or the internet of things (IoT) devices, are still going to strongly benefit from the remaining advantages of copper-based connectivity, with a heavy focus on powering the ever-increasing collection of data consuming and generating devices connected to our increasingly digitized world.

Building automation and the rapid rise of IoT has catalyzed the need to add more devices on the network.

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Our most prominent trademarks are:

Belden®, Alpha Wire™, GarrettCom®, Hirschmann®, Lumberg Automation™, Mohawk®, OTN Systems™, PPC®, ProSoft Technology®, Thinklogical®, Tofino®, and West Penn Wire™.

Belden®, Alpha Wire™, Hirschmann®, Lumberg Automation™, Mohawk®, OTN Systems™, PPC®, ProSoft Technology®, Thinklogical®, Tofino®, and West Penn Wire™.

Raw Materials

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With respect to all major raw materials used by us, we generally have either alternative sources of supply or access to alternative materials.

Over the past three years, the prices of metals, particularly copper, have been highly volatile.

Over the past three years, the prices of metals, particularly copper, have been volatile.

The chart below illustrates the high and low spot prices per pound of copper over the last three years.

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While we generally are able to adjust our pricing for fluctuations in commodity prices, we can experience short-term favorable or unfavorable variances.

When the cost of raw materials increases, we are generally able to recover these costs through higher pricing of our finished products.

When the costs of raw materials increase, we are generally able to recover these costs through higher pricing of our finished products.

The majority of our products are sold through distribution, and we manage the pricing of these products through published price lists, which we update from time to time, with new prices typically taking effect a few weeks after they are announced.

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As of December 31, 2023 and 2022, our backlog wa s $539.6 million and $800.4 million, respectively.

The majority of the backlog at December 31, 2022 is scheduled to ship in 2023.

Almost all of the backlog at December 31, 2023 is scheduled to ship in 2024.

Environmental Matters

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Environmental, Social, and Governance (ESG) at Belden

Belden believes in creating shared value for all our stakeholders, including our employees, customers, the communities we touch across our value chain, and the planet.

Responsible stewardship, managing our climate impacts, and driving sustainability through innovation is core to our business strategy.

We are dedicated to making progress towards our 2025 goals for the topics most material to our business and are working across our operations to further integrate ESG matters into how we operate.

As part of our efforts towards stakeholder transparency, we look forward to sharing our progress and work under way in our inaugural ESG Report, which we expect to publish during 2023.

Our ESG matters are overseen by our Board of Directors through the Nominating and Corporate Governance Committee.

Belden’s ESG Steering Committee manages our global ESG strategy and implementation.

At Belden, we have built a company and culture that is unique in our industry.

Through our people and our strong commitment to our values, we continually strive to serve the needs of our customers and improve the communities where we live and work.

We have a responsibility to make a positive, meaningful impact on the world around us, which is why our commitment to ESG is so important.

We are committed to leaving the world better than we found it.

We are dedicated to continuously improving our global impact through visible and measurable progress.

Our ESG strategy is overseen by our Board of Directors through the Nominating and Corporate Governance Committee.

Under the leadership of our Senior Vice President-Legal, General Counsel and Corporate Secretary, our ESG Steering Committee is responsible for implementation of our strategy and comprises cross-functional members of the organization.

This Committee meets quarterly to discuss strategy and progress towards our goals.

Additionally, the committee reports to our Board on a quarterly basis and regularly brings forth ESG matters to be discussed at the Senior Leadership Team (SLT) level, with our CEO overseeing the incorporation of our strategy and goals throughout our business.

Since 2022, Belden became signatories of the United Nations and Caring for Climate Pledge and also recommitted to the UN Global Compact (UNGC).

The UNGC is the world’s largest corporate sustainability initiative, comprised of over 20,000 companies across 160 countries.

The UNGC embraces principles on human rights, labor, the environment, and anti-corruption, all of which we hope to support and advance to create a better tomorrow.

Belden also joined the Responsible Business Alliance in the pursuit of creating an ethical and sustainable supply chain with other industry partners by advancing the environmentally responsible procurement of materials and a workforce free of forced labor and ethical injustices.

Our ESG goals span each pillar of our framework with a target completion date of 2025 are as follows:

Environmental

• Reduce Scope 1 and Scope 2 total combined emissions by 25% (FY19 baseline) for all global locations greater than 15,000 square feet.

• Increase the use of electricity generated from site specific renewable sources from 2019 levels at our manufacturing and distribution locations.

• Increase total global electricity use efficiency from 2019 levels at manufacturing and distribution locations.

• Achieve at least 90% of waste diverted from landfill for manufacturing and distribution locations.

• Increase the use of renewable or recyclable materials in packaging by 20% (FY21 baseline).

• As a first step towards our vision of a diverse, equitable, and inclusive workplace, we will deliver unconscious bias training to 100% of the Belden team worldwide.

• Global team members will be encouraged to participate in an average of 16 hours per year of community related activities.

• 60% of global team members will participate in company wellness programs.

• 75% of Belden’s top leadership positions will be filled with talent that has been developed from within our company.

• Over 200 professionals will have graduated from our Early Career Leadership Program and our Intern Program.

• >85% of team members will agree that they have the opportunity for development and growth at Belden.

• Assess the responsible sourcing risks in Belden’s supply chain, conduct audits of most at-risk tier 1 direct suppliers, and engage 100% of conflict minerals suppliers.

• Achieve understanding of the Code of Conduct (CoC) from 100% of global non-production team members.

• Be recognized as one of the most ethical global companies.

As we progress towards our goals highlighted above, we build on existing initiatives and explore new technologies to reduce our greenhouse gas (GHG) emissions, waste sent to landfill, and water consumption.

Energy conservation and solar generation projects have been identified and are being implemented.

Thus far, we have seen a decrease in Scope 1 and 2 absolute emissions by 9.5% and a decrease in Scope 1 and 2 GHG intensity by 25.0%.

Our onsite green energy initiative has allowed us to reduce the consumption of energy from the local GHG emission-producing grid, and instead utilize green energy solar panels at our manufacturing facilities in China and India and soon in Germany and Hungary as well.

At Belden, we are also increasing our use of reusable materials to include a focus on expanding the use of biodegradable materials by launching a global reusable cardboard packaging program to reduce plastic use from drop cable.

This improvement will directly eliminate the use of 21 tons of plastic waste per year per 500 foot cables.

For more information on our approach to ESG, visit https://www.belden.com/resources/sustainability.

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We prioritize fostering an equitable and supportive culture that incorporates diversity and inclusion across our entire value chain.

Priority areas for our Human Capital Management strategy are Diversity, Equity, and Inclusion (DEI), Employee Growth & Development, and Employee Well-Being & Engagement.

As of December 31, 2022, our global team members totaled 8,000 employees of which 25% are in the United States, 4% in Canada, 11% in China, 3% in India, 23% in Mexico, and 28% in the European Union.

Priority areas for our Human Capital Management strategy are Diversity, Equity, and Inclusion (DEI), Employee Growth and Development, and Employee Well-Being and Engagement.

As of December 31, 2023, our global team members totaled approximately 8,000 employees of which 25% are in the United States, 4% in Canada, 11% in China, 3% in India, 23% in Mexico, and 33% in the EMEA region.

Of our workforce, 39% identify as women and they represent 23% of the senior management and 40% of our Board of Directors.

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At Belden, we are dedicated to creating a culture of equity, inclusivity and diversity for the people that we employ.

Under the guidance of our Vice President of Diversity, Equity & Inclusion, the Authentic Voices for Inclusion and Diversity (AVID) Council supports our workplace culture and diversity initiatives across the company.

Under the guidance of our Vice President of DEI and the Global DEI Council, they support our workplace culture and diversity initiatives across the company.

These efforts include providing education in 12 languages to employees, such as unconscious biases training for all employees and inclusive leadership training for all people leaders.

Our Human Resources, Talent Acquisition teams, and Business Units also hold meetings throughout the year to ensure alignment with our DEI strategy to practice and uphold our commitment to diversity throughout the Company.

We are also a proud signatory of the CEO Action for Diversity & Inclusion pledge.

Employee Growth & Development

We are also a proud signatory of the CEO Action for Diversity and Inclusion pledge.

Employee Growth and Development

We believe in the potential of our employees and the importance of providing career development opportunities within our Company for those who wish to learn and grow with us.

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Employee Well-Being & Engagement

To ensure we are working towards the betterment of our employees’ well-being, we conduct a bi-annual employee engagement survey, for which we saw a 83% participation rate in 2022 with an overall sustainable engagement score of 88%.

To ensure we are working towards the betterment of our employees’ well-being, we conduct a bi-annual employee engagement survey, for which we saw an 80% participation rate in 2023 with an overall sustainable engagement score of 86%.

Voluntary turnover of management and professional staff remained low at 5% while the overall company Lost Time Incident Rate (LTIR) and Total Recordable Incident Rate (TRIR) were 0.43 and 0.53, respectively.

The Be Well program that formally launched in the United States now encompasses our entire operational footprint to support our workforce’s physical, emotional, social, and financial wellbeing with almost 50% of our workforce participating.

Once again, we are recognized as a Great Place to Work® in various global locations, including Canada, Denmark, France, Germany, Hong Kong, Hungary, India, Mexico, Singapore, Spain, United Kingdom, and the United States – a testament of Belden’s commitment to our employees.

The Be Well program that formally launched in the United States now encompasses our entire operational footprint to support our workforce’s physical, emotional, social, and financial well-being with almost 65% of our workforce participating.

Once again, we are recognized as a Great Place to Work® in various global locations, including Belgium, China, Denmark, France, Germany, Hong Kong, Hungary, India, Mexico, Netherlands, Singapore, Spain, Switzerland, Tunisia, United Arab Emirates United Kingdom, and the United States – a testament of Belden’s commitment to our employees.

Available Information

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Brian Lieser 58 Executive Vice President, Industrial Automation Solutions

Anshu Mehrotra 52 Executive Vice President, Broadband & 5G

Jeremy Parks 48 Senior Vice President, Finance, and Chief Financial Officer

Leah Tate 47 Senior Vice President, Human Resources

Jay Wirts 53 Executive Vice President, Enterprise Solutions

Doug Zink 48 Vice President and Chief Accounting Officer

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Lieser holds a Bachelor of Science in Aerospace Engineering from the University of Minnesota and an MBA in Marketing from the University of St.

Anshu Mehrotra was appointed Executive Vice President, Broadband & 5G in August 2022.

Prior to that, he served as Senior Vice President, Sales and Marketing since January 2021.

Prior to joining Belden, he was Group President for Welding at Illinois Tool Works (ITW), leading the global Industrial Welding platform.

Prior to ITW, he has had a number of leadership roles in general management and sales at Ingersoll Rand, Allegion and Johnson Controls.

He has a B.S.

in Electronics Engineering from Delhi University, an M.S.

in Industrial Engineering from Northern Illinois University and an M.B.A.

from Northwestern University at Kellogg School of Management.

Jeremy Parks was appointed Senior Vice President, Finance, and Chief Financial Officer in February 2021.

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Tate holds a Bachelor of Science degree in Management and a Master of Science degree in Human Resource Management from Purdue University.

Jay Wirts was appointed Executive Vice President, Enterprise Solutions in June 2023.

Prior to that, he served as President, Smart Buildings and has served in other leadership roles since joining Belden in 2018.

Prior to Belden, Mr.

Wirts served in various roles in Emerson and Vertiv following more than six years in the U.S.

Marine Corps.

He has a bachelor’s degree in History from Colgate University and an MBA from Northwestern University.

Doug Zink has been Vice President and Chief Accounting Officer since September 2013.

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

What changed 10-K

Item 1. Business