What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-02-13 compared with 2023-02-24 · 225 added, 298 removed, 1221 unchanged (30% of the section changed)

28 unchanged sentences

As of December 31, 2023, the Company recorded a reserve for estimated price adjustments of $26.0 million, which was recognized as a reduction of revenues and accounts receivable, and a reserve of $15.6 million for estimated returns, which was recognized as a reduction of revenues and included in accrued liabilities.

Auditing the Company's measurement of variable consideration for estimated pricing adjustments and returns involved especially challenging judgment because the estimates involved subjective management assumptions, including historical adjustments as a percentage of revenues and the estimated period of time between the original sale and the issuance of the adjustment.

Auditing the Company's measurement of variable consideration for estimated pricing adjustments and returns involved especially challenging judgment because the estimates involved subjective management assumptions, including estimated adjustments as a percentage of revenues and the estimated period of time between the original sale and the issuance of the adjustment.

The estimates developed by the Company are also dependent on historical experience, anticipated sales demand, and trends in product pricing.

1 unchanged sentence

We performed audit procedures related to the Company’s estimates of variable consideration including, among others, evaluating the significant assumptions and the accuracy and completeness of the underlying data used in the Company's calculation.

This included testing the Company's estimate of historical adjustments as a percentage of revenues and the average time period between the original sale and the issuance of the adjustment.

This included testing the Company's estimate of adjustments as a percentage of revenues and the average time period between the original sale and the issuance of the adjustment.

In addition, we inspected the results of the Company's retrospective review of adjustments reserved compared to actual adjustments issued, evaluated the estimates made based on historical experience and performed sensitivity analyses to evaluate the changes in variable consideration that would result from changes in the Company's significant assumptions.

10 unchanged sentences

Other current assets 79,142 66,866

Assets of discontinued operations — 449,152

Total current assets 1,456,979 1,536,207

10 unchanged sentences

Accrued liabilities 290,289 289,861

Liabilities of discontinued operations — 96,993

Total current liabilities 633,504 639,919

29 unchanged sentences

Asset impairments — — ( 9,283 )

Gain on sale of asset 37,891 — —

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

Operating income 317,518 363,334 263,676

1 unchanged sentence

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

Non-operating pension benefit (cost) 4,005 4,476 ( 395 )

Non-operating pension benefit 1,863 4,005 4,476

Gain on sale of note receivable — — 27,036

4 unchanged sentences

Gain (loss) from disposal of discontinued operations, net of tax — ( 9,241 ) 1,860

Net income (loss) 254,822 64,317 ( 55,058 )

Net income attributable to noncontrolling interest 159 392 104

Net income (loss) attributable to Belden common stockholders $ 254,663 $ 63,925 $ ( 55,162 )

Net income 242,556 254,822 64,317

Net income (loss) attributable to noncontrolling interest ( 203 ) 159 392

Net income attributable to Belden common stockholders $ 242,759 $ 254,663 $ 63,925

Weighted average number of common shares and equivalents:

5 unchanged sentences

Disposal of discontinued operations — ( 0.21 ) 0.04

Net income (loss) $ 5.81 $ 1.43 $ ( 1.23 )

Net income $ 5.75 $ 5.81 $ 1.43

Diluted income (loss) per share attributable to Belden common stockholders:

2 unchanged sentences

Disposal of discontinued operations — ( 0.21 ) 0.04

Net income (loss) $ 5.72 $ 1.41 $ ( 1.23 )

Net income $ 5.66 $ 5.72 $ 1.41

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

3 unchanged sentences

(In thousands)

Net income (loss) $ 254,822 $ 64,317 $ ( 55,058 )

Net income $ 242,556 $ 254,822 $ 64,317

Foreign currency translation, net of tax ( 24,566 ) 39,509 88,290

1 unchanged sentence

Other comprehensive income (loss), net of tax ( 35,404 ) 64,680 119,862

Comprehensive income (loss) 319,502 184,179 ( 183,097 )

Comprehensive income 207,152 319,502 184,179

Comprehensive income (loss) attributable to noncontrolling interest ( 199 ) 144 ( 1,031 )

Comprehensive income (loss) attributable to Belden $ 319,358 $ 185,210 $ ( 183,595 )

Comprehensive income attributable to Belden $ 207,351 $ 319,358 $ 185,210

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

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Cash flows from operating activities:

Net income (loss) $ 254,822 $ 64,317 $ ( 55,058 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Net income $ 242,556 $ 254,822 $ 64,317

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 99,446 88,738 87,988

3 unchanged sentences

Deferred income tax expense (benefit) ( 12,957 ) ( 627 ) 3,575

Gain on sale of asset ( 37,891 ) — —

Gain on sale of assets ( 12,056 ) ( 37,891 ) —

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

8 unchanged sentences

Cash flows from investing activities:

Capital expenditures ( 116,731 ) ( 105,094 ) ( 90,982 )

Cash used for acquisitions and investments, net of cash acquired ( 106,712 ) ( 104,603 ) ( 73,340 )

Purchase of intangible assets — — ( 3,650 )

Proceeds from disposal of businesses, net of cash sold 9,300 334,574 45,735

Proceeds from disposal of tangible assets 13,785 43,534 30,234

Purchase of intangible assets — ( 3,650 ) —

Cash from (used for) acquisitions and investments, net of cash acquired ( 104,603 ) ( 73,340 ) 590

Capital expenditures ( 105,094 ) ( 90,982 ) ( 90,215 )

Net cash provided by (used for) investing activities ( 200,358 ) 168,411 ( 92,003 )

Cash flows from financing activities:

Payments under borrowing arrangements ( 230,639 ) ( 360,304 ) ( 190,000 )

Payments under share repurchase program ( 192,135 ) ( 150,000 ) —

Cash dividends paid ( 8,949 ) ( 9,056 ) ( 9,029 )

Withholding tax payments for share-based payment awards ( 17,444 ) ( 7,186 ) ( 5,570 )

Cash dividends paid ( 8,498 ) ( 8,949 ) ( 9,056 )

Payments under financing lease obligations ( 423 ) ( 157 ) ( 3,151 )

Payment of earnout consideration — — ( 29,300 )

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

Debt issuance costs paid — — ( 8,173 )

4 unchanged sentences

Effect of foreign currency exchange rate changes on cash and cash equivalents 2,020 ( 12,574 ) ( 5,363 )

Increase in cash and cash equivalents 43,919 141,763 76,109

Increase (decrease) in cash and cash equivalents ( 90,632 ) 43,919 141,763

Cash and cash equivalents, beginning of year 687,676 643,757 501,994

Cash and cash equivalents, end of year $ 597,044 $ 687,676 $ 643,757

The Consolidated Cash Flow Statement includes the results of our discontinued operations up to their disposal date - February 22, 2022 and July 2, 2020 for Tripwire and Grass Valley, respectively.

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

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

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Balance at December 31, 2020 50,335 $ 503 $ 823,605 $ 450,876 ( 5,692 ) $ ( 332,552 ) $ ( 191,851 ) $ 6,470 $ 757,051

Cumulative effect of change in accounting principle — — — ( 2,916 ) — — — — ( 2,916 )

Net income (loss) — — — ( 55,162 ) — — — 104 ( 55,058 )

Net income — — — 63,925 — — — 392 64,317

Other comprehensive income (loss), net of tax — — — — — — 121,285 ( 1,423 ) 119,862

Acquisition of noncontrolling interests — — 2,391 — — — — ( 4,644 ) ( 2,253 )

Retirement Savings Plan stock contributions — — ( 652 ) — 134 7,540 — — 6,888

1 unchanged sentence

Conversion of restricted stock units into common stock, net of tax withholding forfeitures — — ( 14,973 ) — 178 9,890 — — ( 5,083 )

Share repurchase program — — — — ( 976 ) ( 35,000 ) — — ( 35,000 )

Share-based compensation — — 24,871 — — — — — 24,871

4 unchanged sentences

Other comprehensive income (loss), net of tax — — — — — — 64,695 ( 15 ) 64,680

Acquisition of noncontrolling interests — — 2,391 — — — — ( 4,644 ) ( 2,253 )

Common stock issuance — — ( 2,775 ) — 82 6,492 — — 3,717

Retirement Savings Plan stock contributions — — ( 1,551 ) — 116 8,568 — — 7,017

1 unchanged sentence

Conversion of restricted stock units into common stock, net of tax withholding forfeitures — — ( 22,433 ) — 208 16,853 — — ( 5,580 )

Share repurchase program — — — — ( 2,588 ) ( 150,000 ) — — ( 150,000 )

Share-based compensation — — 23,676 — — — — — 23,676

2 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 — — — 254,663 — — — 159 254,822

Net income (loss) — — — 242,759 — — — ( 203 ) 242,556

Other comprehensive income (loss), net of tax — — — — — — ( 35,408 ) 4 ( 35,404 )

Sale and deconsolidation of Hite JV — — — — — — — ( 695 ) ( 695 )

Common stock issuance — — 28 — 116 6,540 — — 6,568

2 unchanged sentences

Conversion of restricted stock units into common stock, net of tax withholding forfeitures — — ( 22,477 ) — 255 9,919 — — ( 12,558 )

Share repurchase program — — — — ( 2,588 ) ( 150,000 ) — — ( 150,000 )

Share repurchase, net of excise tax — — — — ( 2,253 ) ( 193,578 ) — — ( 193,578 )

Share-based compensation — — 21,024 — — — — — 21,024

6 unchanged sentences

Business Description

(the Company, us, we, or our) is a leading global supplier of network infrastructure solutions built around two global businesses – Enterprise Solutions and Industrial Automation Solutions.

(the Company, us, we, or our) is a leading global supplier of network infrastructure and digitization solutions built around two global businesses – Enterprise Solutions and Industrial Automation Solutions.

We deliver the infrastructure 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.

We are aligned with attractive secular growth markets, positioned to provide comprehensive solutions that drive customer outcomes, focused on new product innovation and technology leadership, and committed to sustainable ESG practices.

Consolidation

Consolida tion

The accompanying Consolidated Financial Statements include Belden Inc.

and all of its subsidiaries, including variable interest entities for which we are the primary beneficiary.

and all of its subsidiaries.

We eliminate all significant affiliate accounts and transactions in consolidation.

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Future market conditions might require us to take actions to further reduce prices and increase customer return authorizations.

Unprocessed Changes recognized against our gross accounts receivable, such as price reductions, at December 31, 2022 and 2021 totale d $ 24.3 million and $ 23.4 million, respectively.

Unprocessed Changes recognized as accrued liabilities, such as product returns, at December 31, 2022 and 2021 totaled $ 11.7 million an d $ 12.5 million, respectively.

Unprocessed Changes recognized against our gross accounts receivable, such as price reductions, at December 31, 2023 and 2022 totaled $ 26.0 million and $ 24.3 million, respectively.

Unprocessed Changes recognized as accrued liabilities, such as product returns, at December 31, 2023 and 2022 totaled $ 15.6 million and $ 11.7 million, respectively.

We are exposed to credit losses primarily through sales of products and services.

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Our monitoring activities include timely account reconciliation, dispute resolution, payment confirmation, consideration of customers' financial condition and macroeconomic conditions.

Balances are written off when determined to be uncollectible.

As of December 31, 2022 and 2021, the allowance for doubtf ul accounts totaled $ 8.0 million and $ 4.9 million, respectively.

Balances are written off when dete rmined to be uncollectible.

As of December 31, 2023 and 2022, the allowance for doubtful accounts totaled $ 23.1 million and $ 8.0 million, respectively.

We also recognized bad debt expense, net of recoveries, in selling, general and administrative expenses of $ 15.6 million, $ 6.5 million, and $ 0.4 million in 2023, 2022, and 2021, respectively.

4 unchanged sentences

We evaluate the realizability of our inventory on a product-by-product basis in light of historical and anticipated sales demand, technological changes, product life cycle, component cost trends, product pricing, and inventory condition.

In circumstances where inventory levels are in excess of anticipated market demand, where inventory is deemed technologically obsolete or not saleable due to condition, or where inventory cost exceeds net realizable value, we record a charge to cost of sales and reduce the inventory to its net realizable value.

The allowances for excess and obsolete inventories at December 31, 2022 and 2021 totaled $ 45.9 million and $ 45.7 million, respe ctively.

In circumstances where inventory levels are in excess of anticipated market demand, where inventory is deemed technologically obsolete or not saleable due to condition, or where inve ntory cost exceeds net realizable value, we record a charge to cost of sales and reduce the inventory to its net realizable value.

The allowances for excess and obsolete inventories at December 31, 2023 and 2022 totaled $ 67.9 million and $ 45.9 million, respectively.

Property, Plant and Equipment

23 unchanged sentences

The accounting guidance related to goodwill impairment testing allows for the performance of an optional qualitative assessment of whether it is more likely than not that the fair value of a reporting unit is less than its carrying value.

Such an evaluation is made based on the weight of all available evidence and the significance of all identified events and circumstances that may influence the fair value of a reporting unit.

Such an evaluation is made based on the weight of all available evidence and the significance of all identified events and circumstances that may influence the fair value of a rep orting unit.

If it is more likely than not that the fair value is less than the carrying value, then a quantitative assessment is required for the reporting unit, as described in the paragraph below.

In 2022, we performed a qualitative assessment over five of our reporting units.

For our annual impairment test in 2022, we performed a quantitative assessment for one of our reporting units.

In 2023, we performed a qualitative assessment over three of our reporting units.

For our annual impairment test in 2023, we performed a quantitative assessment for three of our reporting units.

Under a quantitative assessment for goodwill impairment, we determine the fair value using the income approach (using Level 3 inputs).

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Consideration is given to the financial conditions and operating performance of the reporting unit being valued relative to those publicly-traded companies operating in the same or similar lines of business.

Based on our annual goodwill impairment test, the excess fair value over the carrying value for the reporting unit tested under the quantitative income approach was 48 %.

Based on our annual goodwill impairment test, the excess fair value over the carrying value for the reporting units tested under the quantitative income approach ranged fr om 30 % to 106 %.

Using both an income approach and market approach, we determined that there was no impairment during 2023.

During 2021 and 2020, we did no t recognize any goodwill impairment from continuing operations other than a $ 1.7 million impairment in 2021 in connection with the sale of our oil and gas business in Brazil.

See Notes 5 and 13 for further discussion.

During 2022 and 2021, we did no t recognize any goodwill impairment from continuing operations other than a $ 1.7 million impairment in 2021 in connection with the sale of an oil and gas business in Brazil.

See Notes 5 for further discussion.

We also evaluate indefinite lived intangible assets for impairment annually or at other times if events have occurred or circumstances exist that indicate the carrying values of those assets may no longer be recoverable.

5 unchanged sentences

We test intangible assets subject to amortization for impairment and estimate their fair values using the same assumptions and techniques we employ on property, plant and equipment.

We did no t recognize any impairment charges for amortizable intangible assets from continuing operations in 2022, 2021, or 2020 other than a $ 1.0 million impairment in 2021 in connection with the sale of our oil and gas business in Brazil.

Discontinued operations includes an impairment charge in 2021 of $ 131.2 million related to the Tripwire divestiture and an impairment charge in 2020 of $ 113.0 million related to the Grass Valley divestiture.

See Notes 5 and 13.

We did no t recognize any impairment charges for amortizable intangible assets from continuing operations in 2023, 2022, or 2021 other than a $ 1.0 million impairment in 2021 in connection with the sale of an oil and gas business in Brazil.

Discontinued operations included an impairment charge in 2021 of $ 131.2 million related to the Tripwire divestiture.

Pension and Other Postretirement Benefits

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Future market conditions and product transitions might require us to take actions to increase sales rebates offered, possibly resulting in an incremental increase in accrued liabilities and an i ncremental reduction in revenues at the time the rebate is offered.

Accrued sales rebates at December 31, 2022 and 2021 totaled $ 55.6 million and $ 55.5 million, respecti vely.

Accrued sales rebates at December 31, 2023 and 2022 totaled $ 49.3 million and $ 55.6 million, respectively.

Contingent Liabilities

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

Equity Method Investment

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

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

We account for this investment using the equity method of accounting.

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

The results of our investment in Litmus were not material to our consolidated financial statements for the year ended December 31, 2022.

Acquisition Accounting

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To the extent we were to prevail in matters for which accruals have been established or would be required to pay amounts in excess of reserves, there could be a material effect on our income tax provisions in the period in which such determination is made.

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.

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

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures (ASU 2023-09) enhancing the transparency and decision usefulness of income tax disclosures.

ASU 2023-09 addresses investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information.

ASU 2023-09 is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

The amendments in ASU 2023-09 are applied on a prospective basis, though retrospective application is permitted.

We did not early adopt this pronouncement and are in the process of evaluating its impact on our consolidated financial statements and related disclosures.

Recently Adopted Securities and Exchange Commission Rules

The Inflation Reduction Act of 2022 imposed a 1% excise tax on the repurchase of more than $1 million of stock by publicly traded US corporations.

The excise tax equals 1% of the fair market value of the stock repurchased during the tax year, reduced by the fair market value of stock issued during the tax year, including stock issued to employees of the corporation.

The excise tax applies to repurchases of stock made after December 31, 2022.

The amount of excise tax accrued during the year ended December 31, 2023 was immaterial to our consolidated financial statements.

Current-Year Adoption of Accounting Pronouncements

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

Pending Adoption of Recent Accounting Pronouncements

The Financial Accounting Standards Board (FASB) amended the guidance in Accounting Standards Codification (ASC) 280, Segment Reporting , to require public companies disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually.

The guidance is effective for public entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The guidance is applied retrospectively to all periods presented in the financial statements, unless it is impracticable.

The new standard will be effective for us beginning with our 2024 Form 10-K and first quarter 2025 Form 10-Q, respectively.

We expect the amended guidance to have a minimal impact on our 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.

2 unchanged sentences

The following table presents our revenues disaggregated by major product category (in thousands).

Broadband and 5G Industrial Automation Smart Buildings Total

Broadband Solutions Industrial Automation Smart Buildings Total

Year Ended December 31, 2023

24 unchanged sentences

Total $ 1,489,043 $ 474,705 $ 337,512 $ 2,301,260

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 secure.

We also generate revenues from providing support and professional services.

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

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

As of December 31, 2023, total deferred revenue was $ 31.1 million, and of this amount, $ 23.7 million is expected to be recognized within the next twelve months, and the remaining $ 7.4 million is long-term and will be recognized over a period greater than twelve months.

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Balance at December 31, 2023 $ 31,062

S ervice-type warranties represent $ 8.9 million of the deferred revenue balance at December 31, 2022 , and of this amount $ 4.2 million is expected to be recognized in the next twelve months, and the remaining $ 4.7 million is long-term and will be recognized over a period greater than twelve months.

Service-type warranties represent $ 11.1 million of the deferred revenue balance at December 31, 2023, and of this amount $ 6.2 million is expected to be recognized in the next twelve months, and the remaining $ 4.9 million is long-term and will be recognized over a period greater than twelve months.

At December 31, 2023, we did not have any material contract assets recorded in the consolidated balance sheets.

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Total capitalized sales commissions were not material for the years ended December 31, 2023 , 2022, and 2021.

We recogn iz ed $ 24.1 million , $ 20.6 million, and $ 16.0 million of sales commissions expense in selling, general, and administrative expenses during the years ended December 31, 2022 , 2021 and 2020 , respectively.

During 2022, we completed three acquisitions.

On January 17, 2022, we acquired 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 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 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):

We recognized $ 24.5 million, $ 24.1 million, and $ 20.6 million of sales commissions expense in selling, general, and administrative expenses during the years ended December 31, 2023, 2022 and 2021, respectively.

In August 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 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.

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

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.

The results of Sichert have been included in our Consolidated Financial Statements from April 17, 2023 and are 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):

Receivables $ 5,093

4 unchanged sentences

Goodwill 32,243

Deferred income taxes 433

Operating lease right-of-use assets 131

Other long-lived assets 4,559

Total assets acquired $ 110,245

1 unchanged sentence

Accrued liabilities 4,283

Long-term debt 2,440

Deferred income taxes 6,551

Long-term operating lease liabilities 2,926

Other long-term liabilities 8,421

Total liabilities assumed $ 12,741

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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.

The preliminary measurement of receivables, intangible assets, 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.

During 2023, we recorded measurement-period adjustments that increased goodwill by $ 4.4 million.

The impact of these adjustments to the Consolidated Statements of Operations was immaterial.

The preliminary fair value of acquired receivables is $ 5.1 million, which is equivalent to its gross contractual amount.

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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 industrial automation and 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 .

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

The intangible assets related to the acquisition consisted of the following:

Fair Value Amortization Period

1 unchanged sentence

Intangible assets subject to amortization:

Developed technologies $ 26,626 4.0

Customer relationships $ 41,161 20.0

1 unchanged sentence

Sales backlog 983 0.2

Non-compete agreements 200 3.5

Total intangible assets subject to amortization $ 44,328

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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 during the year ended December 31, 2021.

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

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

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

Years Ended December 31,

2022 2021 2020

February 22, 2022 Year Ended

December 31, 2021

(In thousands)

7 unchanged sentences

Loss before taxes $ ( 5,540 ) $ ( 139,116 )

During the year ended December 31, 2022, th e Tripwire disposal group did not have any capital expenditures and recognized share-based compensation expense of $ 0.2 million.

During the year ended December 31, 2021, th e Tripwire disposal group had capital expenditu res of $ 6.1 million and recognized share-based compensation expense of $ 2.2 million .

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.

During the year ended December 31, 2021, th e Tripwire disposal group had capital expenditu res of $ 6.1 million and recognized share-based compensation expense of $ 2.2 million .

The disposal group did not have any significant non-cash charges for investing activities during the years ended December 31 , 2022, 2021, and 2020 .

The following table provides the major classes of assets and liabilities of the Tripwire disposal group:

(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 584

Other long-lived assets 5,325

Total assets of Tripwire disposal group $ 449,152

Accounts payable $ 6,458

Accrued liabilities 56,208

Deferred income taxes 8,878

Long-term operating lease liabilities 5,257

Other long-term liabilities 20,192

Total liabilities of Tripwire disposal group $ 96,993

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

Brazil Oil & Gas Cable Business

During 2021, we sold 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.

The disposal group did not have any significant non-cash charges for investing activities during either time period.

Brazil Oil and Gas Cable Business

During 2021, we sold an 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 of $ 3.4 million (includes a goodwill impairment of $ 1.7 million and intangible asset impairment of $ 1.0 million) in 2021.

Therefore, we recognized an impairment charge of $ 3.4 million (including a goodwill impairment of $ 1.7 million and intangible asset impairment of $ 1.0 million) in 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 2021 for $ 10.9 million, net of cash delivered with the business.

During 2020, we sold Grass Valley to Black Dragon Capital for gross cash consideration of $ 120.0 million, or approximately $ 56.2 million net of cash delivered with the business.

We recognized a loss of $ 9.9 million, net of $ 7.5 million income tax expense and recognized asset impairments totaling $ 113.0 million during the year ended December 31, 2020.

The divestiture of Grass Valley represented a strategic shift impacting our operations and financial results.

As a result, the Grass Valley disposal group, which was included in our Enterprise Solutions segment, is reported in discontinued operations.

The sale also included deferred consideration consisting of a $ 175.0 million seller’s note, up to $ 88 million in PIK (payment-in-kind) interest on the seller’s note, and $ 178.0 million in potential earnout payments.

We completed the sale of the oil and gas cable business in Brazil during 2021 for $ 10.9 million, net of cash delivered with the business.

During 2020, we sold Grass Valley to Black Dragon Capital.

The sale included deferred consideration consisting of a $ 175.0 million seller’s note, up to $ 88 million in PIK (payment-in-kind) interest on the seller’s note, and $ 178.0 million in potential earnout payments.

Based upon a third party valuation specialist using certain assumptions in a Monte Carlo analysis, the estimated fair value of the seller’s note was $ 34.9 million.

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Any subsequent recognition of an earnout will be based on the gain contingency guidance.

The following table summarizes the operating results of the disposal group up to the July 2, 2020 disposal date for the year ended December 31, 2020:

Year Ended December 31,

(In thousands)

Revenues $ 109,195

Cost of sales ( 70,199 )

Gross profit 38,996

Selling, general and administrative expenses ( 39,947 )

Research and development expenses ( 15,083 )

Asset impairment of discontinued operations ( 113,007 )

Interest expense, net ( 432 )

Non-operating pension cost ( 169 )

Loss before taxes $ ( 129,642 )

During 2020, the disposal group did not recognize any depreciation and amortization expense, but incurred capital expenditures and share-based compensation credits of $ 16.7 million and $ 0.9 million, respectively.

The disposal group did not have any significant non-cash charges for investing activities during the year ended December 31, 2020.

Operating Segments and Geographic Information

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Each of the global businesses represents a reportable segment.

In conjunction with the Tripwire divestiture during 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 segments design, manufacture, and market a portfolio of signal transmission solutions for mission critical applications used in a variety of end markets.

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Operating Segment Information

Enterprise Solutions Years Ended December 31,

Years Ended December 31,

2023 2022 2021

(In thousands)

Enterprise Solutions

Segment revenues $ 1,122,831 $ 1,198,478 $ 1,074,426

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Segment assets 637,105 593,653 563,141

Industrial Automation Solutions Years Ended December 31,

Years Ended December 31,

2023 2022 2021

(In thousands)

Industrial Automation Solutions

Segment revenues $ 1,389,253 $ 1,408,007 $ 1,226,834

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Segment assets 727,477 677,235 600,380

Total Segments Years Ended December 31,

2022 2021 2020

(In thousands)

Total Segments

Segment revenues $ 2,512,084 $ 2,606,485 $ 2,301,260

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Severance, restructuring, and acquisition integration costs (1) ( 25,152 ) ( 16,685 ) ( 23,867 )

Adjustments related to acquisitions and divestitures (2) ( 7,833 ) 5,035 ( 125 )

Amortization of software development intangible assets ( 7,692 ) ( 3,875 ) ( 1,579 )

Adjustments related to acquisitions and divestitures (2) ( 6,177 ) ( 7,833 ) 5,035

Asset impairments (3) — — ( 9,283 )

Gain on sale of asset (4) 37,891 — —

Gain on sale of assets (4) 12,056 37,891 —

Eliminations ( 198 ) ( 231 ) ( 120 )

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

Non-operating pension benefit (cost) 4,005 4,476 ( 395 )

Non-operating pension benefit 1,863 4,005 4,476

Gain on sale of note receivable — — 27,036

Consolidated income from continuing operations before taxes $ 285,756 $ 317,393 $ 226,780

(1) See Note 15, Severance, Restructuring, and Acquisiti on Integration Activities, for details .

(2) In 2022, we incurred $ 10.1 million for lease guarantees associated with the Grass Valley disposal (see Note 12), $ 2.2 million related to fair value adjustments of acquired inventory and investments, and gains of $ 4.5 million on collections from previously written off receivables associated with the sale of Grass Valley.

(1) Includes costs from programs described in Note 15, Restructuring Activities as well as other immaterial programs.

(2) In 2023, we incurred $ 4.1 million for lease guarantees associated with the Grass Valley disposal (see Note 12), $ 1.5 million related to fair value adjustments of acquired inventory and other assets, and $ 0.6 million of net losses associated with the sales of businesses.

In 2022, we incurred $ 10.1 million for lease guarantees associated with the Grass Valley disposal, $ 2.2 million related to fair value adjustments of acquired inventory and other assets, and gains of $ 4.5 million on collections from previously written off receivables associated with the sale of Grass Valley.

In 2021, we collected $ 2.2 million of receivables associated with the sale of Grass Valley and acquisition of SPC that were previously written off, reduced the Opterna earn-out liability by $ 5.8 million, recognized cost of sales of $ 2.3 million related to adjustments of acquired inventory to fair value, and recognized a $ 0.6 million loss on the sale of tangible assets.

In 2020, we recognized $ 0.1 million of cost of sales related to adjustments of acquired inventory to fair value.

(3) In 2021, we recognized a $ 3.6 million impairment on assets held and used and a $ 5.7 million impairment on assets held for sale .

See Note 11, Property, Plant, and Equipment , for details.

(4) During 2023, we sold certain real estate in Canada for $ 13.8 million, net of transaction costs and recognized a $ 12.1 million pre-tax gain on sale.

During 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.

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Assets of discontinued operations

— 449,152 583,626

Total assets $ 3,240,191 $ 3,161,675 $ 3,417,677

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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.

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

The joint venture is not material to our consolidated financial statements as of or for the years ended December 31, 2022, 2021, or 2020.

Certain Belden subsidiaries include noncontrolling interests as of and for the years ended December 31, 2022, 2021 and 2020.

During 2023, we sold our 51 % ownership interest in Shanghai Hi-Tech Control System Co, Ltd to (Hite) for $ 0.9 million and recognized a $ 0.4 million pretax gain on sale.

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

The joint venture developed and provided 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.

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 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 as of or for the years ended December 31, 2023, 2022, or 2021.

A Belden subsidiary includes a noncontrolling interest as of and for the years ended December 31, 2023, 2022 and 2021.

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 Consolidated Statements of Operations.

In 2021, we purchased certain noncontrolling interests for $ 2.7 million.

Income Per Share

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Income from continuing operations $ 242,556 $ 267,748 $ 198,841

Net income attributable to noncontrolling interest 159 392 104

Net income (loss) attributable to noncontrolling interest ( 203 ) 159 392

Income from continuing operations attributable to Belden common stockholders 242,759 267,589 198,449

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Gain (loss) on disposal of discontinued operations, net of tax — ( 9,241 ) 1,860

Net income (loss) attributable to Belden common stockholders $ 254,663 $ 63,925 $ ( 55,162 )

Net income attributable to Belden common stockholders $ 242,759 $ 254,663 $ 63,925

Weighted average shares outstanding, basic 42,237 43,845 44,802

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Basic weighted average shares outstanding is used to calculate diluted loss per share when the numerator is a loss because using diluted weighted average shares outstanding would be anti-dilutive.

For the years ended December 31, 2022, 2021, and 2020, diluted weighted average shares outstanding exclude outstanding equity awards of 0.8 million , 1.1 million, and 1.5 million, respectively, which are anti-dilutive.

For the years ended December 31, 2023, 2022, and 2021, diluted weighted average shares outstanding do not include outstanding equity awards of 0.2 million, 0.8 million, and 1.1 million, respectively, because they are anti-dilutive.

In addition, for the years ended December 31, 2023, 2022, and 2021, diluted weighted average shares outstanding do not include outstanding equity awards of 0.3 million, 0.2 million, and 0.2 million, respectively, because the related performance conditions have not been satisfied.

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Credit Losses

Effective January 1, 2020, we adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments prospectively.

This ASU replaced the incurred loss impairment model with an expected credit loss impairment model for financial instruments, including trade receivables.

We are exposed to credit losses primarily through sales of products and services.

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Recoveries collected ( 121 )

Disposals ( 190 )

Acquisitions 319

Currency impact ( 75 )

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We recognized depreciation expense in income from continuing operations of $ 51.4 million, $ 46.7 million, and $ 43.9 million in 2023, 2022, and 2021, respectively.

Gain on Sale of Asset

Gain on Sale of Assets

During 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.

Sale-Leaseback

Sale-Leasebacks

During 2023, we sold certain real estate in Canada as part of a sale and leaseback transaction for CAD$ 18.6 million (approximately $ 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 of our Industrial Automation Solutions segment.

The lease is for a term of 10 years and as of December 31, 2023, had a total right-of-use asset balance of $ 10.1 million.

During 2021, we sold certain real estate in Germany as part of a sale and leaseback transaction for € 24.5 million (approximately $ 27.8 million) and recognized a $ 0.6 million loss on the sale.

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

Asset Impairment

During 2021, we sold our oil and gas business in Brazil and recognized an impairment charge of $ 3.4 million (includes a goodwill impairment of $ 1.7 million and intangible asset impairment of $ 1.0 million).

Asset Impairments

During 2021, we sold an oil and gas business in Brazil and recognized an impairment charge of $ 3.4 million (includes a goodwill impairment of $ 1.7 million and intangible asset impairment of $ 1.0 million).

During 2021, we also performed a recoverability test over certain held and used long-lived assets in our Industrial Automation Solutions segment.

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Operating and financing cash flows from finance leases were not material for the years ended December 31, 2023, 2022 and 2021.

S upplemental balance sheet information related to leases was as follows:

Supplemental balance sheet information related to leases was as follows:

(In thousands, except lease term and discount rate)

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Total $ 83,431

In addition to the supplemental lease information disclosed above, we are also party to two lease guarantees, whereby Belden has covenanted the lease payments for two Grass Valley property leases which expire in 2029 and 2035 and collectively have approximately $ 20 million of fixed lease payments remaining.

These lease guarantees were retained by Belden and not transferred to Black Dragon Capital as part of the Grass Valley sale in 2020 (see Note 5) .

Belden is required to make lease payments only if the primary obligor defaults.

During 2022, Grass Valley defaulted on both property leases.

In 2022, we recognized costs of $ 10.1 million related to the guarantees in selling, general and administrative expenses.

In addition, we covenanted the lease payments for certain Grass Valley property leases with expiration dates extending up to 2035.

These lease guarantees were retained by Belden and not transferred to the buyer of Grass Valley (see Note 5).

As of December 31, 2023, the fixed, remaining base rent payments were $ 22 million.

In 2023 and 2022, we recognized $ 4.1 million and $ 10.1 million, respectively, related to the guarantees in selling, general and administrative expenses.

These costs were excluded from Segment EBITDA of our Enterprise Solutions segment.

As of December 31, 2022, $ 9.4 million of the $ 10.1 million remained as a liability for expected, future payments.

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

As of December 31, 2023 and 2022, we had a liability for expected, future payments of $ 11.3 million and $ 9.4 million, respectively .

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

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

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Acquisitions 6,528 44,068 50,596

Impairment — ( 1,664 ) ( 1,664 )

Translation impact

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Balance at December 31, 2023 $ 511,524 $ 395,807 $ 907,331

The changes in the carrying amount of indefinite-lived trademarks are as follows:

Enterprise Solutions Industrial Automation Solutions Consolidated

(In thousands)

Balance at December 31, 2020 $ 27,000 $ 4,063 $ 31,063

Reclassify to definite-lived — ( 4,063 ) ( 4,063 )

Balance at December 31, 2021 and 2022 $ 27,000 $ — $ 27,000

The carrying amount of a certain indefinite-lived trademark in our Enterprise Solutions segment was $ 27.0 million as of December 31, 2023 and 2022.

Annual Impairment Test

The annual measurement date for our goodwill and indefinite-lived intangible assets impairment test is our fiscal November month-end.

For our 2022 goodwill impairment test, we performed a quantitative assessment for one of our reporting units and determined the estimated fair value by calculating the present value of its estimated future cash flows using Level 3 inputs.

We determined that the fair value for the reporting unit was in excess of its carrying value.

We performed a qualitative assessment for the remaining five reporting units, and determined that it was more likely than not that the fair value of each reporting unit was greater than its respective carrying value.

For our 2023 goodwill impairment test, we performed a quantitative assessment for three of our reporting units and determined the estimated fair values by calculating the present value of estimated future cash flows using Level 3 inputs.

We determined that the fair values for the reporting units were in excess of their respective carrying values.

We performed a qualitative assessment for the remaining three reporting units, and determined that it was more likely than not that the fair value of each reporting unit was greater than its respective carrying value.

Therefore, we did no t record any goodwill impairment in 2023.

We did no t recognize any goodwill impairment from continuing operations in 2021 or 2020 other than a $ 1.7 million impairment in 2021 in connection with the sale of our oil and gas business in Brazil.

For our quantitative impairment test in 2022, the excess of the fair value over the carrying value for the reporting unit was 48 %.

We did no t recognize any goodwill impairment from continuing operations in 2022 or 2021 other than a $ 1.7 million impairment in 2021 in connection with the sale of an oil and gas business in Brazil.

For our quantitative impairment test in 2023, the excess of the fair value over the carrying value for the reporting units ranged from 30 % to 106 %.

The assumptions used to estimate fair value were based on the past performance of the reporting unit as well as the projections incorporated in our strategic plan.

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We also considered assumptions that market participants may use.

In our assessment, the discount rate was 13.1 %, the 2023 to 2032 compounded annual revenue growth rate was 4.9 %, and the revenue growth rate beyond 2032 was 2.5 %.

In our assessment, the discount rate ranged from 11.9 % to 13.8 %, the 2024 to 2033 compounded annual revenue growth rate ranged from 4.2 % to 6.3 %, and the revenue growth rate beyond 2033 ranged from 2.0 % to 3.0 %.

By their nature, these assumptions involve risks and uncertainties.

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We did no t recognize any indefinite-lived intangible asset impairment charges in 2023, 2022, or 2021.

Disposal Group Impairment

Impairment of Discontinued Operations

Prior to the Tripwire divestiture in 2022, we recognized a goodwill impairment charge of $ 131.2 million during 2021.

We also wrote down the carrying value of the Grass Valley disposal group and recognized asset impairments totaling $ 113.0 million during 2020.

Amortization Expense

We recognized amortization expense in income from continuing operations of $ 41.7 million, $ 32.2 million, and $ 29.9 million in 2022, 2021, and 2020, respectively.

We recognized amortization expense in income from continuing operations of $ 48.1 million, $ 41.7 million, and $ 32.2 million in 2023, 2022, an d 2021, respectively.

We expect to recognize annual amortization expense of $ 44.7 million in 2024, $ 39.5 million in 2025, $ 27.6 million in 2026, $ 26.4 million in 2027, and $ 21.5 million in 2028 related to our intangible assets balance as of December 31, 2023.

The weighted-average amortization period for our customer relationships, developed technology, trademarks, in-service research and development, non-compete agreements, and backlog is 19.0 years, 8.0 years, 6.6 years, 5.0 years, 3.5 years, and 0.9 years, respectively.

At the beginning of 2021, we re-evaluated the useful life of a certain trademark in our Industrial Automation Solutions segment and concluded that an indefinite life for this trademark was no longer appropriate.

We estimated a useful life of five years for the trademark and will re-evaluate this estimate if and when our expected use of the trademark changes.

We began amortizing the trademark in 2021, which resulted in amortization expense of $ 0.8 million for each of the years ended December 31, 2022 and 2021.

As of December 31, 2022 and 2021, the net book value of this trademark was $ 2.5 million and $ 3.3 million, respectively.

Accrued Liabilities

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Deferred revenue 23,718 26,215

Accrued interest 18,154 20,847

Lease liabilities 18,945 16,833

Accrued interest 18,774 18,154

Other (individual items less than 5% of total current liabilities) 80,230 60,143

Accrued liabilities $ 290,289 $ 289,861

Severance, Restructuring, and Acquisition Integration Activities

Manufacturing Footprint Program

We are consolidating our manufacturing footprint in the Americas region.

We recognized $ 8.3 million of severance and other restructuring costs for this program during the year ended December 31 , 2022 .

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

Restructuring Activities

During 2023, 2022 and 2021, we incurred costs related to the programs described below.

We also incurred costs related to other individually insignificant programs.

Productivity Initiative Program

We initiated a productivity program in response to weaker economic conditions experienced in the second half of 2023.

The Enterprise Solutions and Industrial Automation Solutions segments incurred $ 3.6 million and $ 5.5 million, respectively, of severance and other costs during the year ended December 31, 2023.

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.

We recognized $ 8.2 million, $ 12.6 million, and $ 4.9 million of severance and other restructuring costs for this program during the years ended December 31, 2022, 2021, and 2020, respectively.

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

We are integrating our recent acquisitions with our existing businesses to achieve desired cost savings, primarily by focusing on con solidating existing and acquired facilities as well as other support functions.

The Enterprise Solutions segment incurred $ 6.5 million, $ 4.8 million, and $ 9.6 million of restructuring and integration costs during the years ended December 31, 2023, 2022, and 2021, respectively.

The Industrial Automation Solutions segment incurred $ 3.0 million, $ 3.4 million, and $ 3.0 million of res tructuring and integration co sts during the years ended December 31, 2023, 2022, and 2021, respectively.

Manufacturing Footprint Program

We consolidated our manufacturing footprint in the Americas region during 2022.

The Enterprise Solutions and Industrial Automation Solutions segments incurred $ 3.3 million and $ 5.0 million, respectively, of severance and other costs during the year ended December 31, 2022.

Cost Reduction Program

We executed a cost reduction program to streamline the organizational structure and invest in technology to drive productivity.

We recognized $ 5.8 million and $ 4.0 million of severance and other restructuring costs for this program during the years ended December 31, 2021 and 2020, respectively.

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

The following table summarizes the severance and other restructuring and integration costs of the Manufacturing Footprint Program, Acquisition Integration Program and Cost Reduction Program described above by segment:

Severance Other Restructuring

The Enterprise Solutions and Industrial Automation Solutions segments incurred $ 2.6 million and $ 3.2 million, respectively, of severance and other costs during the year ended December 31, 2021.

The following table summarizes the costs of the programs described above by segment, all of which were excluded from Segment EBITDA:

Severance Restructuring

and Integration Costs Total Costs

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

There were no significant severance accrual balances as of December 31, 2022 or December 31, 2021.

The following table summarizes the costs of the programs described above by financial statement line item in the Consolidated Statement of Operations:

Years Ended December 31,

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Selling, general and administrative expenses 15,362 6,410 9,874

Research and development expenses 1,625 — —

Total $ 18,654 $ 16,470 $ 18,367

Accrued Severance

There were no significant severance accrual balances as of December 31, 2022.

The table below sets forth severance activity included in accrued liabilities that occurred for the Productivity Initiative Program described above (in thousands).

Balance at December 31, 2022 $ —

New charges 8,254

Cash payments ( 3,151 )

Foreign currency translation 68

Other adjustments ( 161 )

Balance at December 31, 2023 $ 5,010

Long-Term Debt and Other Borrowing Arrangements

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3.375 % Senior subordinated notes due 2027

497,025 480,330

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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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As of December 31, 2023, we had no borrowings outstanding on the Revolver, and our available borrowing capacity was $ 289.1 million.

In April 2020, we borrowed $ 190.0 million on our Revolver due to the initial uncertainties arising from the COVID-19 pandemic.

We fully repaid the borrowings during 2020.

Senior Subordinated Notes

We had outstanding € 300.0 million aggregate principal amount of 2.875 % senior subordinated notes due 2025 (the 2025 Notes).

In 2021, we repurchased the full € 300.0 million 2025 Notes outstanding for cash consideration of € 302.2 million ($ 358.5 million), including a redemption premium, and recognized a $ 5.7 million loss on debt extinguishment including the write-off of unamortized debt issuance costs.

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

In 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).

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In 2021, we paid approximately $ 5.9 million of fees associated with the issuance of the 2031 Notes, which are being amortized over the life of the 2031 Notes using the effective interest method.

We used the net proceeds from this offering, along with cash on hand, to fund the full redemption of the 2025 Notes - see further discussion above.

The senior subordinated notes due 2027, 2028, and 2031 are redeemable after July 15, 2022, March 15, 2023, and July 15, 2026 respectively, at the following redemption prices as a percentage of the face amount of the notes:

We used the net proceeds from this offering, along with cash on hand, to fund the full redemption of the 2025 Notes.

We had outstanding € 300.0 million aggregate principal amount of 2.875 % senior subordinated notes due 2025 (the 2025 Notes).

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

Fair Value of Long-Term Debt

The fair value of our senior subordinated notes as of December 31, 2023 was approximately $ 1,141.8 million based on quoted prices of the debt instruments in inactive markets (Level 2 valuation).

This amount represents the fair values of our senior subordinated notes with a carrying value of $ 1,215.0 million as of December 31, 2023.

Redemption Prices

The senior subordinated notes due 2027 and 2028 were redeemable after July 15, 2022 and March 15, 2023, respectively, and the senior subordinated notes due 2031 are redeemable after July 15, 2026 at the following redemption prices as a percentage of the face amount of the notes:

Senior Subordinated Notes due

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2025 and thereafter 100.000 % 2026 and thereafter 100.000 % 2029 and thereafter 100.000 %

Fair Value of Long-Term Debt

The fair value of our senior subordinated notes as of December 31, 2022 was approximately $ 1,046.3 million based on quoted prices of the debt instruments in inactive markets (Level 2 valuation).

This amount represents the fair values of our senior subordinated notes with a carrying value of $ 1,174.1 million as of December 31, 2022.

Maturities on outstanding long-term debt and other borrowings during each of the five years subsequent to December 31, 2023 are as follows (in thousands):

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For the years ended December 31, 2023, 2022, and 2021, the transaction gain (loss) associated with the net investment hedge reported in other comprehensive income was $( 21.5 ) million, $ 41.9 million, and $ 67.6 million, respectively.

During 2022 and 2020, we de-designated € 200.0 million and € 532.2 million, respectively, of our outstanding debt that was previously designated as a net investment hedge.

During 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 debt are reported in income from continuing operations.

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(in thousands)

Income (loss) before taxes:

Income from continuing operations before taxes:

United States operations $ 86,805 $ 97,900 $ 188,650

Foreign operations 198,951 219,493 38,130

Income before taxes $ 317,393 $ 226,780 $ 90,816

Income from continuing operations before taxes $ 285,756 $ 317,393 $ 226,780

Income tax expense (benefit):

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Impact of share-based compensation 0.1 % 0.4 % 1.0 %

Impact of CARES act — % — % ( 1.3 )%

15.1 % 15.6 % 12.3 %

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We recognized a total income tax expense from domestic permanent differences and tax credits of $ 8.4 million in 2023, primarily associated with our foreign income inclusions.

In addition, we recognized a total income tax benefit from changes in deferred tax asset valuation allowances of $ 7.9 million in 2022, primarily due to the release of a valuation allowance against the capital loss for the sale of certain real estate in the U.S.

If we were to repatriate foreign cash to the U.S., we may be required to accrue and pay U.S.

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Net deferred income tax liability $ ( 33,733 ) $ ( 43,940 )

On February 22, 2022, we completed the divestiture of Tripwire.

The increase in deferred tax assets related to net operating loss, capital loss, and tax credit carryforwards primarily relates to the $ 72.8 million deferred tax asset associated with the capital loss that was derived on the sale.

A full valuation allowance has been placed against this deferred tax asset as we do not expect to be able to utilize it prior to its expiration.

The decreases in valuation allowances and deferred tax assets related to net operating loss, capital loss, and tax credit carryforwards primarily relate to the write-offs of the $ 35.0 million deferred tax asset and corresponding $ 35.0 million valuation allowance associated with a capital loss from the divestiture of Tripwire that we will not be able to utilize prior to its expiration.

As of December 31, 2023, we had $ 93.6 million of gross net operating loss carryforwards, $ 6.2 million of tax credit carryforwards, and $ 399.5 million of gross capital loss carryforwards.

Unless otherwise utilized, net operating loss carryforwards will expire upon the filing of the tax returns for the following respective years:

$ 1.5 million in 2022, $ 6.6 million between 2023 and 2025, and $ 50.5 million between 2026 and 2041.

$ 8.8 million between 2024 and 2026 and $ 42.2 million between 2027 and 2042.

Net operating loss with an indefinite carryforward period total $ 42.6 million.

2 unchanged sentences

Unless otherwise utilized, tax credit carryforwards of $ 6.2 million will expire as follows:

$ 0.6 million in 2022, $ 0.7 million between 2023 and 2025, and $ 3.3 million between 2026 and 2041.

$ 0.6 million between 2024 and 2026 and $ 3.4 million between 2027 and 2042.

Tax credit carryforwards with an indefinite carryforward period total $ 2.2 million.

6 unchanged sentences

(In thousands)

Australia $ 8,551

United States - Federal and various states $ 44,066

Germany 19,418

Netherlands 1,071

United Kingdom 13,641

United States - Federal and various states 49,955

Australia 8,234

Total $ 93,649

1 unchanged sentence

(In thousands)

Belgium $ 1,227

United States $ 4,705

Belgium 1,509

Total $ 6,214

3 unchanged sentences

Balance at beginning of year $ 6,180 $ 5,821

Additions based on tax positions related to the current year 359 422

Additions for tax positions of prior years 605 —

Reductions for tax positions of prior years - Settlement — ( 3,264 )

Reduction for tax positions of prior years - Statute of limitations — ( 78 )

Additions based on tax positions related to the current year 358 359

Balance at end of year $ 7,143 $ 6,180

4 unchanged sentences

Our state and foreign income tax returns for the tax years 2013 and later remain subject to examination by various state and foreign tax authorities.

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

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

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 Benefits

We sponsor defined benefit pension plans and defined contribution plans that cover substantially all employees in Canada, the Netherlands, Switzerland, the United Kingdom, the U.S., and certain employees in Germany.

Certain defined benefit plans in the United Kingdom are frozen and additional benefits are not being earned by the participants.

16 unchanged sentences

Participant contributions ( 435 ) ( 350 ) ( 3 ) ( 5 )

Actuarial gain 123,851 19,778 5,690 1,391

Actuarial gain (loss) ( 16,231 ) 123,851 ( 1,179 ) 5,690

Acquisitions and divestitures — ( 9,257 ) — —

4 unchanged sentences

Benefit obligation, end of year $ ( 342,759 ) $ ( 317,424 ) $ ( 21,311 ) $ ( 19,944 )

During 2022, the actuarial gain was primarily due to increases in discount rates.

Pension Benefits Other Benefits

18 unchanged sentences

The accumulated benefit obligation for all defined benefit pension plans was $ 360.7 million and $ 305.7 million at December 31, 2023 and 2022, respectively.

The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for the pension plans with a projected benefit obligation in excess of plan assets were $ 262.7 million, $ 251.0 million, and $ 210.4 million, re spectively, as of December 31, 2022 and $ 265.5 million, $ 261.3 million, and $ 167.5 million, respectively, as of December 31, 2021.

The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for the pension plans with a projected benefit obligation in excess of plan assets were $ 281.1 million, $ 278.4 million, and $ 224.0 million, respectively, as of December 31, 2023 and $ 262.7 million, $ 251.0 million, and $ 210.4 million, re spectively, as of December 31, 2022.

The accumulated benefit obligation and fair value of plan assets for other postretirement benefit plans with an accumulated benefit obligation in excess of plan assets were $ 21.3 million and $ 0.0 million , respectively, as of December 31, 2023 and were $ 19.9 million and $ 0.0 million , respectively, as of December 31, 2022.

12 unchanged sentences

Net periodic benefit cost (income) $ 494 $ ( 1,187 ) $ ( 1,207 ) $ 286 $ 712 $ 717

We recorded settlement losses totaling $ 1.2 million and $ 3.2 million during 2022 and 2020, respectively.

We recorded settlement losses totaling $ 1.2 million during 2022.

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

16 unchanged sentences

Year that the rate reaches the rate it is assumed to remain at N/A N/A 2028 2023

During 2023, there was a ruling in the United Kingdom related to the validity of certain amendments to benefits in contracted-out salary-related defined benefit pension plans.

The ruling is subject to an ongoing appeal.

The ruling may potentially be applicable to certain defined benefit pension plans we have in the United Kingdom.

While we do not believe the impact of this ruling will have a material impact to our projected benefit obligation, we will continue to monitor the appeals process.

As of December 31, 2023, no specific adjustments for this matter have been included in estimating our projected benefit obligation and related net periodic benefit costs.

Plan assets are invested using a total return investment approach whereby a mix of equity securities and fixed income securities are used to preserve asset values, diversify risk, and achieve our target investment return benchmark.

3 unchanged sentences

an asset growth portion and an asset protection portion.

The expected role of asset growth investments is to maximize the long-term real growth of assets, while the role of asset protection

investments is to generate current income, provide for more stable periodic returns, and provide some protection against a permanent loss of capital.

The expected role of asset growth investments is to maximize the long-term real growth of assets, while the role of asset protection investments is to generate current income, provide for more stable periodic returns, and provide some protection against a permanent loss of capital.

Absent regulatory or statutory limitations, the target asset allocation for the investment of the assets for our ongoing pension plans is 45 - 60 % in asset protection investments and 40 - 55 % in asset growth investments and for our pension plans where the majority of the participants are in payment or terminated vested status is 80 - 90 % in asset protection investments and 10 - 20 % in asset growth investments.

24 unchanged sentences

Other investments(e) 9,565 — — 9,565 10,531 — — 10,531

Cash & equivalents 9,388 3,242 — 6,146 11,301 5,271 — 5,344

Cash and equivalents 6,887 2,662 — 4,225 9,388 3,242 — 6,146

Total $ 301,378 $ 2,662 $ — $ 298,716 $ 281,332 $ 13,019 $ 9,186 $ 259,127

24 unchanged sentences

Total $ 210,748 $ 14,732

We anticipa te contributing $ 8.2 million and $ 1.4 million to our pension and other postretirement plans, respectively, during 2023.

We anticipate contributing $ 12.3 million and $ 1.5 million to our pension and other postretirement plans, respectively, during 2024.

The pre-tax amounts in accumulated other comprehensive loss that have not yet been recognized as components of net periodic benefit cost at December 31, 2023 and the changes in these amounts during the year ended December 31, 2023 are as follows.

9 unchanged sentences

Net actuarial loss (gain), beginning of year $ 11,695 $ ( 7,117 )

Amortization of actuarial gain (loss) ( 734 ) 73

Actuarial gain ( 123,851 ) ( 5,690 )

Asset loss 100,618 —

Amortization of actuarial gain 938 737

Actuarial loss 16,231 1,179

Asset gain ( 4,629 ) —

Settlement loss recognized 101 —

17 unchanged sentences

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

Other comprehensive income attributable to Belden before reclassifications 42,531 23,629 66,160

Other comprehensive loss attributable to Belden before reclassifications ( 24,431 ) ( 9,696 ) ( 34,127 )

Amounts reclassified from accumulated other comprehensive income ( 139 ) ( 1,142 ) ( 1,281 )

Net current period other comprehensive income attributable to Belden 39,524 25,171 64,695

Net current period other comprehensive loss attributable to Belden ( 24,570 ) ( 10,838 ) ( 35,408 )

Balance at December 31, 2023 $ ( 26,514 ) $ ( 14,765 ) $ ( 41,279 )

9 unchanged sentences

Amortization of pension and other postretirement benefit plan items:

Settlement losses $ 1,189 (2)

Actuarial losses 661 (2)

Actuarial gains $ ( 1,675 ) (1)

Prior service cost 176 (1)

Total before tax ( 1,499 )

Tax benefit ( 482 )

Tax expense 357

Total net of tax $ ( 1,142 )

(1) We also reclassified $ 3.0 million of accumulated foreign currency translation gains associated with the sale of Tripwire.

(1) The amortization of these accumulated other comprehensive income (loss) components are included in the computation of net periodic benefit costs (see Note 19).

(2) In addition, we reclassified $ 0.1 million of accumulated foreign currency translation gains associated with the sale of the Hite JV.

Share-Based Compensation

19 unchanged sentences

Compensation costs for awards with performance conditions and graded vesting are amortized to expense using the graded attribution method.

During the year ended December 31, 2020, certain restricted stock units with performance vesting conditions were modified as a result of approved changes to the performance targets.

There were no other changes to the terms of the restricted stock units.

The modification was applicable to all employees who were previously granted the affected restricted stock units.

Prior to the modification, the performance targets were not expected to be achieved.

Therefore, we had not recognized any expense for these restricted stock units on a cumulative basis.

As of the modification date, we expected to recognize total incremental compensation expense as a result of the modification of $ 4.4 million.

The expense will be recognized over the applicable service periods, which extend to 2023.

Years Ended December 31,

17 unchanged sentences

(In thousands, except exercise prices, fair values, and contractual terms)

Outstanding at January 1, 2022 1,244 $ 63.18 n/a n/a 964 $ 50.08

Granted 165 53.83 n/a n/a 395 61.61

Exercised or converted ( 340 ) 56.18 n/a n/a ( 307 ) 54.70

Forfeited or expired ( 111 ) 62.64 n/a n/a ( 155 ) 51.37

Outstanding at January 1, 2023 958 $ 64.13 4.8 $ 10,017 897 $ 54.59

Granted 115 85.77 410 95.32

Exercised or converted ( 576 ) 67.85 ( 398 ) 49.77

Forfeited or expired ( 84 ) 63.97 ( 210 ) 59.98

Outstanding at December 31, 2023 413 $ 64.97 6.6 $ 6,220 699 $ 71.95

Vested or expected to vest at December 31, 2022 282 $ 50.19 8.5 $ 6,132

Exercisable or convertible at December 31, 2023 213 $ 61.16 4.8 $ 3,684

At December 31, 2022, the total unrecognized compensat ion cost related to all nonvested awards was $ 34.9 million.

At December 31, 2023, the total unrecognized compensation cost related to all nonvested awards was $ 31.5 million.

That cost is expected to be recognized over a weighted-average period of 2.0 years.

2 unchanged sentences

In 2018, our Board of Directors authorized a share repurchase program, which allows us to purchase up to $ 300.0 million of our common stock through open market repurchases, negotiated transactions, or other means, in accordance with applicable securities laws and other restrictions.

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

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

During 2023, we repurchased 2.3 million shares of our common stock for an aggregate cost of $ 192.1 million at an average price per share of $ 85.27 .

During 2021, we did no t repurchase shares of our common stock.

During 2022, we repurchased 2.6 million shares of our common stock for an aggregate cost of $ 150.0 million at an average price per share of $ 57.95 .

From inception of our program, we have repurchased 4.5 million shares of our common stock for an aggregate cost of $ 235.0 million and an average price of $ 52.75 .

As of Dec ember 31, 2022, we had $ 65.0 million of authorizations remaining under the program.

During 2021, we did no t repurchase shares of our common stock.

From inception of our program, we have repurchased 6.7 million shares of our common stock for an aggregate cost of $ 427.1 million and an average price per share of $ 63.67 .

As of December 31, 2023, we had $ 172.9 million of authorizations remaining under the program.

This share repurchase authorization does not have an expiration date.

Market Concentrations and Risks

1 unchanged sentence

We sell our products to many customers in several markets across multiple geographic areas.

The ten largest customers, of which eight are distributors, constitute in aggregate approximately 45 %, 44 %, and 43 % of revenues in 2022, 2021, and 2020, respectively.

The ten largest customers, of which seven are distributors, constitute in aggregate approximately 44 %, 45 %, and 44 % of revenues in 2023, 2022, and 2021, respectively.

Unconditional Commodity Purchase Obligations

At December 31, 2023, we were committed to purchase approximately 2.7 million pounds of copper at an aggregate fixed cost of $ 10.5 million.

At December 31, 2022, this fixed cost was $ 0.3 million less than the market cost that would be incurred on a spot purchase of the same amount of copper.

At December 31, 2023, this fixed cost was $ 0.1 million greater than the market cost that would be incurred on a spot purchase of the same amount of copper.

The aggregate market cost was based on the current market price of copper obtained from the New York Mercantile Exchange.

Approximately 27 % of our labor force is covered by collective bargaining agreements at various locations around the world.

Approximately 25 % of our labor force is covered by collective bargaining agreements that we expect to renegotiate during 2023.

Approximately 27 % of our labor force is covered by collective bargaining agreements at various locations around the world, and we expect to renegotiate these agreements during 2024.

Fair Value of Financial Instruments

7 unchanged sentences

Letters of Credit, Guarantees and Bonds

At December 31, 2022, we were party to unused standby letters of credit, bank guarantees, and surety bonds totaling $ 7.9 million, $ 5.6 million, and $ 3.8 million, respectively.

At December 31, 2023, we were party to unused standby letters of credit, surety bonds, and bank guarantees totaling $ 10.6 million, $ 4.7 million, and $ 4.6 million, respectively.

These commitments are generally issued to secure obligations we have for a variety of commercial reasons, such as workers compensation self-insurance programs in several states and the importation and exportation of product.

7 unchanged sentences

Interest paid ( 42,105 ) ( 45,168 ) ( 54,176 )

Subsequent Events

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.

The sale is expected to close during 2023.

On February 22, 2023, Roel Vestjens resigned from the Company, and Ashish Chand was appointed President and Chief Executive Officer.

Chand joined the Company in 2002 and most recently served as Executive Vice President of Industrial Automation Solutions since July 2019, and Managing Director of Belden Asia Pacific from August 2017.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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 8. Financial Statements and Supplementary Data