What changed in this filing

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Item 1. Financial Statements

2024-08-01 compared with 2024-05-02 · 209 added, 86 removed, 453 unchanged (39% of the section changed)

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEETS

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(In thousands)

16 unchanged sentences

Accrued liabilities 277,290 290,289

Payable to sellers of Precision Optical Technologies 291,508 —

Total current liabilities 829,655 633,504

16 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

Three Months Ended

March 31, 2024 April 2, 2023

Three Months Ended Six Months Ended

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

(In thousands, except per share data)

11 unchanged sentences

Net income 49,034 68,775 86,343 131,720

Net loss attributable to noncontrolling interest ( 4 ) ( 247 )

Net income (loss) attributable to noncontrolling interest ( 10 ) 22 ( 14 ) ( 225 )

Net income attributable to Belden stockholders $ 49,044 $ 68,753 $ 86,357 $ 131,945

8 unchanged sentences

CONDENSED CONSOLIDATED CASH FLOW STATEMENTS

Three Months Ended

March 31, 2024 April 2, 2023

Six Months Ended

June 30, 2024 July 2, 2023

(In thousands)

12 unchanged sentences

Other liabilities 3,630 3,805

Net cash provided by (used for) operating activities 2,721 ( 31,872 )

Net cash provided by operating activities 85,680 54,715

Cash flows from investing activities:

Capital expenditures ( 46,246 ) ( 32,729 )

Cash from (used for) business acquisitions, net of cash acquired 526 ( 97,585 )

Proceeds from disposal of tangible assets 60 9

31 unchanged sentences

Balance at March 31, 2024 50,335 $ 503 $ 814,704 $ 1,021,061 ( 9,667 ) $ ( 648,292 ) $ ( 32,131 ) $ 41 $ 1,155,886

Net income (loss) — — — 49,044 — — — ( 10 ) 49,034

Other comprehensive income, net of tax — — — — — — 6,912 — 6,912

Retirement Savings Plan stock contributions — — 1,206 — 22 793 — — 1,999

Exercise of stock options, net of tax withholding forfeitures — — ( 194 ) — 4 97 — — ( 97 )

Conversion of restricted stock units into common stock, net of tax withholding forfeitures — — ( 757 ) — 20 665 — — ( 92 )

Adjustment to share repurchase excise tax — — — — — 42 — — 42

Share-based compensation — — 8,246 — — — — — 8,246

Common stock dividends ($ 0.05 per share)

— — — ( 2,053 ) — — — — ( 2,053 )

Balance at June 30, 2024 50,335 $ 503 $ 823,205 $ 1,068,052 ( 9,621 ) $ ( 646,695 ) $ ( 25,219 ) $ 31 $ 1,219,877

Additional Accumulated

15 unchanged sentences

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

Net income — — — 68,753 — — — 22 68,775

Other comprehensive income (loss), net of tax — — — — — — ( 4,863 ) 2 ( 4,861 )

Sale and deconsolidation of subsidiary — — — — — — ( 139 ) ( 695 ) ( 834 )

Retirement Savings Plan stock contributions — — 663 — 24 1,379 — — 2,042

Exercise of stock options, net of tax withholding forfeitures — — ( 2,698 ) — 27 767 — — ( 1,931 )

Conversion of restricted stock units into common stock, net of tax withholding forfeitures — — ( 4,130 ) — 55 2,413 — — ( 1,717 )

Share repurchase program, net of excise tax — — — — ( 394 ) ( 36,463 ) — — ( 36,463 )

Share-based compensation — — 5,901 — — — — — 5,901

Common stock dividends ($ 0.05 per share)

— — — ( 2,138 ) — — — — ( 2,138 )

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

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

17 unchanged sentences

Our fiscal second and third quarters each have 91 days.

The three months ended April 2, 2023 included 92 days.

The six months ended June 30, 2024 and July 2, 2023 included 182 and 183 days, respectively.

Fair Value Measurement

4 unchanged sentences

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

As of and during the three months ended March 31, 2024 and April 2, 2023, we utilized Level 1 inputs to determine the fair value of cash equivalents.

We did not have any transfers between Level 1 and Level 2 fair value measurements during the three months ended March 31, 2024 and April 2, 2023.

As of and during the three and six months ended June 30, 2024 and July 2, 2023, we utilized Level 1 inputs to determine the fair value of cash equivalents.

We did not have any transfers between Level 1 and Level 2 fair value measurements during the six months ended June 30, 2024 and July 2, 2023.

Cash and Cash Equivalents

1 unchanged sentence

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

As of March 31, 2024, we did not have any such cash equivalents on hand.

As of June 30, 2024, we did not have any such cash equivalents on hand.

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

6 unchanged sentences

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

As of March 31, 2024, we were party to standby letters of credit, surety bonds, and bank guaranties totaling $ 7.5 million, $ 5.4 million, and $ 4.6 million, respectively.

As of June 30, 2024, we were party to standby letters of credit, surety bonds, and bank guaranties totaling $ 6.9 million, $ 6.0 million, and $ 5.2 million, respectively.

Revenue Recognition

4 unchanged sentences

Noncontrolling Interest

A Belden subsidiary includes a noncontrolling interest as of and for the periods ended March 31, 2024 and April 2, 2023 .

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

A Belden subsidiary includes a noncontrolling interest as of and for the periods ended June 30, 2024 and July 2, 2023 .

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

Current Year Adoption of Accounting Pronouncements

11 unchanged sentences

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

In March 2024, the SEC issued a final rule that requires registrants to disclose climate-related information in their annual reports and in registration statements.

In March 2024, the SEC issued a final climate disclosure rule, which requires registrants to disclose climate-related information in registration statements and annual reports.

The final rule also requires certain disclosures related to risk management and governance over climate-related risks, material climate targets and goals, and material Scope 1 and Scope 2 greenhouse gas emissions.

For calendar year companies, the ruling requires certain disclosures in annual reports for the year ending December 31, 2025.

We are currently evaluating the impact of the guidance on our consolidated financial statements and disclosures.

On April 4, 2024, the SEC voluntarily stayed the final rule pending the completion of judicial review of cases pending in the Eighth Circuit.

We are continuing to evaluate the impact of the final rule on our consolidated financial statements and 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

Solutions Industrial Automation Solutions Smart Buildings Solutions Total

Three Months Ended March 31, 2024 (In thousands)

Three Months Ended June 30, 2024 (In thousands)

Enterprise Solutions $ 136,020 $ — $ 134,453 $ 270,473

1 unchanged sentence

Total $ 136,020 $ 333,863 $ 134,453 $ 604,336

Three Months Ended April 2, 2023

Three Months Ended July 2, 2023

Enterprise Solutions $ 159,332 $ — $ 153,197 $ 312,529

1 unchanged sentence

Total $ 159,332 $ 379,716 $ 153,197 $ 692,245

Six Months Ended June 30, 2024

Enterprise Solutions $ 248,120 $ — $ 256,442 $ 504,562

Industrial Automation Solutions — 635,449 — 635,449

Total $ 248,120 $ 635,449 $ 256,442 $ 1,140,011

Six Months Ended July 2, 2023

Enterprise Solutions $ 290,887 $ — $ 296,985 $ 587,872

Industrial Automation Solutions — 746,162 — 746,162

Total $ 290,887 $ 746,162 $ 296,985 $ 1,334,034

The following tables present our revenues disaggregated by geography, based on the location of the customer purchasing the product.

Americas EMEA APAC Total Revenues

Three Months Ended March 31, 2024 (In thousands)

Three Months Ended June 30, 2024 (In thousands)

Enterprise Solutions $ 200,904 $ 42,379 $ 27,190 $ 270,473

1 unchanged sentence

Total $ 399,788 $ 125,396 $ 79,152 $ 604,336

Three Months Ended April 2, 2023

Three Months Ended July 2, 2023

Enterprise Solutions $ 246,471 $ 36,671 $ 29,387 $ 312,529

1 unchanged sentence

Total $ 460,323 $ 145,726 $ 86,196 $ 692,245

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

Six Months Ended June 30, 2024

Enterprise Solutions $ 367,233 $ 88,067 $ 49,262 $ 504,562

Industrial Automation Solutions 381,774 160,873 92,802 635,449

Total $ 749,007 $ 248,940 $ 142,064 $ 1,140,011

Six Months Ended July 2, 2023

Enterprise Solutions $ 460,358 $ 74,119 $ 53,395 $ 587,872

Industrial Automation Solutions 429,065 210,976 106,121 746,162

Total $ 889,423 $ 285,095 $ 159,516 $ 1,334,034

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

We also generate revenues from providing support and professional services.

11 unchanged sentences

We adjust other current assets and cost of sales for the estimated level of returns.

Adjustments to revenue for performance obligations satisfied in prior periods were not significant during the three months ended March 31, 2024 and April 2, 2023 .

Adjustments to revenue for performance obligations satisfied in prior periods were not significant during the three and six months ended June 30, 2024 and July 2, 2023 .

The following table presents estimated and accrued variable consideration:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(in thousands)

6 unchanged sentences

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

As of March 31, 2024, total deferred revenue was $ 30.0 million, and of this amount, $ 22.4 million is expected to be recognized within the next twelve months, and the remaining $ 7.5 million is long- term and is expected to be recognized over a period greater than twelve months.

The following table presents deferred revenue activity during the three months ended March 31, 2024 and April 2, 2023, respectively:

As of June 30, 2024, total deferred revenue was $ 29.6 million, and of this amount, $ 22.1 million is expected to be recognized within the next twelve months, and the remaining $ 7.5 million is long- term and is expected to be recognized over a period greater than twelve months.

The following table presents deferred revenue activity during the three and six months ended June 30, 2024 and July 2, 2023, respectively:

(In thousands)

3 unchanged sentences

Balance at the end of Q1 $ 29,950 $ 29,295

Service-type warranties represent $ 10.6 million of the deferred revenue balance at March 31, 2024, and of this amount $ 5.5 million is expected to be recognized in the next twelve months, and the remaining $ 5.1 million is long-term and will be recognized over a period greater than twelve months.

As of March 31, 2024 and December 31, 2023, we did not have any material contract assets recorded in the Condensed Consolidated Balance Sheets.

New deferrals 11,058 6,900

Revenue recognized ( 11,395 ) ( 6,528 )

Balance at the end of Q2 $ 29,613 $ 29,667

Service-type warranties r epresent $ 9.7 million of the deferred revenue balance at June 30, 2024, and of this amount $ 4.5 million is expected to be recognized in the next twelve months, and the remaining $ 5.2 million is long-term an d will be recognized over a period greater than twelve months.

As of June 30, 2024 and December 31, 2023, we did not have any material contract assets recorded in the Condensed Consolidated Balance Sheets.

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

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

We did not have any capitalized sales commissions as of March 31, 2024 and December 31, 2023.

We did not have any capitalized sales commissions as of June 30, 2024 and December 31, 2023.

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

Three Months Ended

March 31, 2024 April 2, 2023

Three Months Ended Six Months ended

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

(In thousands)

Sales commissions $ 5,848 $ 6,316 $ 11,171 $ 12,089

On June 30, 2024, we acquired Precision Optical Technologies, Inc.

(“Precision”) for $ 289.6 million, net of cash acquired.

Precision, based in New York, is a leading supplier of value-added optical transceivers with proprietary software, firmware configurations, and related components.

Precision is reported within the Enterprise Solutions segment.

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

Consideration for the acquisition was funded with cash on hand in July and is included in current liabilities in the June 30, 2024 condensed consolidated balance sheet.

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

Receivables $ 18,386

Inventory 11,680

Other current assets 2,391

Property, plant and equipment 5,109

Intangible assets 176,500

Goodwill 131,402

Operating lease right-of-use assets 3,272

Total assets acquired $ 348,740

Accounts payable $ 11,350

Accrued liabilities 3,485

Deferred income taxes 41,379

Long-term operating lease liabilities 2,936

Total liabilities assumed $ 59,150

Net assets $ 289,590

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, inventory, intangible assets, goodwill, deferred income taxes, and other assets and liabilities are subject to change.

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

The preliminary fair value of acquired receivables is $ 18.4 million , which is equivalent to its gross contractual amount.

A single estimate of fair value results from a complex series of judgments about future events and uncertainties and relies heavily on estimates and assumptions.

The judgments we have used in estimating the preliminary fair values assigned to each class of acquired assets and assumed liabilities could materially affect the results of our operations.

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

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

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

The goodwill is primarily attributable to the expansion of Belden’s solution selling capabilities, particularly the ability to offer more complete fiber infrastructure solutions.

Our tax basis in the acquired goodwill is zero .

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

Fair Value Amortization Period

(In thousands) (In years)

Intangible assets subject to amortization:

Developed technologies $ 21,000 5.0

Customer relationships 145,000 20.0

Trademarks 6,000 5.0

Non-compete agreements 4,500 5.0

Total intangible assets subject to amortization $ 176,500

Intangible assets not subject to amortization:

Goodwill $ 131,402 n/a

Total intangible assets not subject to amortization $ 131,402

Total intangible assets $ 307,902

Weighted average amortization period 17.3

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

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

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

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

Reportable Segments

17 unchanged sentences

(In thousands)

As of and for the three months ended March 31, 2024

As of and for the three months ended June 30, 2024

Segment Revenues $ 270,473 $ 333,863 $ 604,336

6 unchanged sentences

Segment assets 671,250 762,736 1,433,986

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

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

Segment Revenues $ 312,529 $ 379,716 $ 692,245

6 unchanged sentences

Segment assets 648,344 699,092 1,347,436

As of and for the six months ended June 30, 2024

Segment revenues $ 504,562 $ 635,449 $ 1,140,011

Segment EBITDA 57,244 126,482 183,726

Depreciation expense 12,519 14,523 27,042

Amortization of intangibles 10,741 10,008 20,749

Amortization of software development intangible assets — 5,177 5,177

Severance, restructuring, and acquisition integration costs 3,899 4,306 8,205

Adjustments related to acquisitions and divestitures — 596 596

Segment assets 671,250 762,736 1,433,986

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

Segment Revenues $ 587,872 $ 746,162 $ 1,334,034

Segment EBITDA 81,161 152,418 233,579

Depreciation expense 12,147 12,889 25,036

Amortization of intangibles 10,703 10,033 20,736

Amortization of software development intangible assets — 3,272 3,272

Severance, restructuring, and acquisition integration costs 1,694 4,077 5,771

Adjustments related to acquisitions and divestitures 325 222 547

Segment assets 648,344 699,092 1,347,436

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

Three Months Ended

March 31, 2024 April 2, 2023

Three Months Ended Six Months Ended

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

(In thousands)

11 unchanged sentences

Consolidated income before taxes $ 60,125 $ 84,431 $ 105,794 $ 162,255

(1) Includes restructuring and integration costs associated with acquisitions as well as costs associated with certain manufacturing footprint actions.

(2) Adjustments related to acquisitions and divestitures include fair value adjustments of acquired assets.

(1) Includes restructuring and integration costs associated with acquisitions and costs associated with certain manufacturing footprint actions.

(2) Adjustments related to acquisitions and divestitures include fair value adjustments of acquired assets and gains associated with the sales of businesses.

Income per Share

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

Three Months Ended

March 31, 2024 April 2, 2023

Three Months Ended Six Months Ended

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

(In thousands)

Net income $ 49,034 $ 68,775 $ 86,343 $ 131,720

Net loss attributable to noncontrolling interest ( 4 ) ( 247 )

Net income (loss) attributable to noncontrolling interest ( 10 ) 22 ( 14 ) ( 225 )

Net income attributable to Belden stockholders $ 49,044 $ 68,753 $ 86,357 $ 131,945

2 unchanged sentences

Weighted average shares outstanding, diluted 41,204 43,088 41,348 43,380

For the three months ended March 31, 2024 and April 2, 2023, diluted weighted average shares outstanding do not include outstanding equity awards of 0.1 million and 0.2 million, respectively, because they are anti-dilutive.

In addition, for the three months ended March 31, 2024 and April 2, 2023, diluted weighted average shares outstanding do not include outstanding equity awards of 0.3 million and 0.1 million, respectively, because the related performance conditions have not been satisfied.

For both the three and six months ended June 30, 2024 and July 2, 2023, diluted weighted average shares outstanding do not include outstanding equity awards of 0.1 million and 0.2 million, respectively, because they are anti-dilutive.

In addition, for the three and six months ended June 30, 2024, diluted weighted average shares outstanding do not include outstanding equity awards of 0.2 million an d 0.3 million, respectively, because the related performance conditions have not been satisfied.

Fo r the three and six months ended July 2, 2023, diluted weighted average shares outstanding do not include outstanding equity awards of 0.2 million because the related performance conditions have not been satisfied.

For purposes of calculating basic earnings per share, unvested restricted stock units are not included in the calculation of basic weighted average shares outstanding until all necessary conditions have been satisfied and issuance of the shares underlying the restricted stock units is no longer contingent.

11 unchanged sentences

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

The following table presents the activity in the trade receivables allowance for doubtful accounts for the three months ended March 31, 2024 and April 2, 2023, respectively:

The following table presents the activity in the trade receivables allowance for doubtful accounts for the three and six months ended June 30, 2024 and July 2, 2023, respectively:

(In thousands)

5 unchanged sentences

Q1 ending balance $ 23,420 $ 11,930

The following table presents the major classes of inventories as of March 31, 2024 and December 31, 2023 , respectively:

March 31, 2024 December 31, 2023

Current period provision 606 4,194

Acquisitions 50 19

Fx impact ( 44 ) 11

Write-offs ( 5 ) —

Recoveries collected 32 ( 8 )

Q2 ending balance $ 24,059 $ 16,146

The following table presents the major classes of inventories as of June 30, 2024 and December 31, 2023 , respectively:

June 30, 2024 December 31, 2023

(In thousands)

16 unchanged sentences

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

Our lease agreements do not contain material residual value guarantees.

Our variable lease expense was approximately $ 0.9 million and $ 0.8 million for the t hree months ended March 31, 2024 and April 2, 2023, respectively.

Our lease agreements d o not contain material residual value guarantees.

Our variable lease expense was approximately $ 0.9 million and $ 1.8 million for the three and six months ended June 30, 2024, respectively, and $ 0.8 million and $ 1.6 million for the t hree and six months ended July 2, 2023, respectively.

The components of lease expense were as follows:

Three Months Ended

March 31, 2024 April 2, 2023

Three Months Ended Six Months Ended

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

(In thousands)

5 unchanged sentences

Supplemental cash flow information related to leases was as follows:

Three Months Ended

March 31, 2024 April 2, 2023

Three Months Ended Six Months Ended

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

(In thousands)

1 unchanged sentence

Operating cash flows from operating leases $ 4,776 $ 4,625 $ 11,503 $ 9,290

Operating cash flows from finance leases were not material during the three months ended March 31, 2024 and April 2, 2023 .

Operating cash flows from finance leases were not material during the three and six months ended June 30, 2024 and July 2, 2023 .

Supplemental balance sheet information related to leases was as follows:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(In thousands)

12 unchanged sentences

Total finance lease liabilities $ 7,981 $ 6,803

The increases in operating lease right-of-use assets and lease liabilities are primarily due to the initial recognition of a new lease during the three months ended March 31, 2024 that had balances of $ 34.2 million and $ 33.2 million, respectively.

March 31, 2024 December 31, 2023

The increases in operating lease right-of-use assets and lease liabilities are primarily due to the recognition of a new lease that had balances of $ 34.0 million and $ 33.4 million, respectively, as of June 30, 2024.

June 30, 2024 December 31, 2023

Weighted Average Remaining Lease Term

4 unchanged sentences

Finance leases 4.6 % 4.3 %

In addition, we guaranteed 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.

As of March 31, 2024, the fixed, remaining base rent payments were approximately $ 21 million.

As of March 31, 2024 and April 2, 2023, we had a liability for expected, future payments of $ 11.0 million and $ 8.8 million, respectively.

In addition, we guaranteed the lease payments for certain property leases of a former subsidiary with expiration dates extending up to 2035.

These lease guarantees were retained by Belden and not transferred to the buyer of the former subsidiary.

As of June 30, 2024, the fixed, remaining base rent payments were approximately $ 21 million.

As of June 30, 2024 and December 31, 2023, we had a liability for expected, future payments of $ 10.0 million and $ 11.3 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.

2 unchanged sentences

Depreciation and Amortization Expense

We recognized depreciation expense of $ 13.5 million and $ 12.4 million in the three months ended March 31, 2024 and April 2, 2023, respectively.

We recognized amortization expense of $ 13.5 million and $ 11.1 million in the three months ended March 31, 2024 and April 2, 2023, respectively.

We recognized depreciation expense of $ 13.6 million and $ 27.0 million in the three and six months ended June 30, 2024, respectively, and $ 12.7 million and $ 25.0 million in the three and six months ended July 2, 2023, respectively.

We recognized amortization expense of $ 12.4 million and $ 25.9 million in the three and six months ended June 30, 2024, respectively, and $ 12.9 million and $ 24.0 million in the three and six months ended July 2, 2023, respectively.

Long-Term Debt and Other Borrowing Arrangements

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(In thousands)

20 unchanged sentences

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

As of March 31, 2024, we had no borrowings outstanding on the Revolver, and our available borrowing capacity was $ 292.6 million.

As of June 30, 2024, we had no borrowings outstanding on the Revolver, and our available borrowing capacity was $ 293.3 million.

Senior Subordinated Notes

We have outstanding € 450.0 million aggregate principal amount of 3.375 % senior subordinated notes due 2027 (the 2027 Notes).

The carrying value of the 2027 Notes as of March 31, 2024 is $ 486.9 million.

The carrying value of the 2027 Notes as of June 30, 2024 is $ 480.5 million.

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

2 unchanged sentences

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

The carrying value of the 2028 Notes as of March 31, 2024 is $ 378.7 million.

The carrying value of the 2028 Notes as of June 30, 2024 is $ 373.7 million.

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

2 unchanged sentences

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

The carrying value of the 2031 Notes as of March 31, 2024 is $ 324.6 million.

The carrying value of the 2031 Notes as of June 30, 2024 is $ 320.3 million.

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

2 unchanged sentences

Fair Value of Long-Term Debt

The fair value of our senior subordinated notes as of March 31, 2024 was approximately $ 1,139.9 million based on quoted prices of the debt instruments in inactive markets (Level 2 valuation).

This amount represents the fair value of our senior subordinated notes with a carrying value of $ 1,190.3 million as of March 31, 2024.

The fair value of our senior subordinated notes as of June 30, 2024 was approximately $ 1,120.4 million based on quoted prices of the debt instruments in inactive markets (Level 2 valuation).

This amount represents the fair value of our senior subordinated notes with a carrying value of $ 1,174.5 million as of June 30, 2024.

Net Investment Hedge

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

As of March 31, 2024, € 567.8 million o f our outstanding foreign denominated debt is designated as a net investment hedge on the foreign currency risk of our net investment in our euro foreign operations.

As of June 30, 2024, € 567.8 million o f our outstanding foreign denominated debt is designated as a net investment hedge on the foreign currency risk of our net investment in our euro foreign operations.

The objective of the hedge is to protect the net investment in the foreign operation against adverse changes in the euro exchange rate.

The transaction gain or loss is reported in the translation adjustment section of other comprehensive income.

For the three months ended March 31, 2024 and April 2, 2023, the transaction gain (loss) associated with the net investment hedge reported in other comprehensive income was $ 12.7 million and $( 9.1 ) million, respectively.

For the three months ended March 31, 2024, we recognized income tax expense of $ 8.4 million representing an effective tax rate of 18.3 %.

For the three months ended April 2, 2023 , we recognized income tax expense of $ 14.9 million representing an effective tax rates of 19.1 %.

For the six months ended June 30, 2024 and July 2, 2023, the transaction gain (loss) associated with the net investment hedge reported in other comprehensive income was $ 21.0 million and $( 13.0 ) million, respectively.

For the three and six months ended June 30, 2024, we recognized income tax expense of $ 11.1 million and $ 19.5 million, respectively, representing effective tax rates of 18.4 % and 18.4 %, respectively .

For the three and six months ended July 2, 2023 , we recognized income tax expense of $ 15.7 million and $ 30.5 million, respectively, representing effective tax rates of 18.5 % and 18.8 %, respectively.

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

The Organization for Economic Cooperation and Development (OECD) is actively implementing changes to existing tax laws, including a global minimum tax of 15% which went into effect in 2024.

The Organization for Economic Cooperation and Development is actively implementing changes to existing tax laws, including a global minimum tax of 15% which went into effect in 2024.

This legislation has not materially impacted our provision for income taxes, but we will continually monitor and evaluate the potential impact on the countries in which we do business in future periods.

2 unchanged sentences

Pension Obligations Other Postretirement Obligations

March 31, 2024 April 2, 2023 March 31, 2024 April 2, 2023

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

(In thousands)

6 unchanged sentences

Net periodic benefit cost $ 390 $ 137 $ 129 $ 64

Six Months Ended

Service cost $ 1,487 $ 1,534 $ 20 $ 6

Interest cost 7,336 7,554 473 503

Expected return on plan assets ( 8,074 ) ( 8,438 ) — —

Amortization of prior service cost 89 87 — —

Actuarial gains ( 52 ) ( 458 ) ( 233 ) ( 382 )

Net periodic benefit cost $ 786 $ 279 $ 260 $ 127

Comprehensive Income and Accumulated Other Comprehensive Income (Loss)

The following table summarizes total comprehensive income:

Three Months Ended

March 31, 2024 April 2, 2023

Three Months Ended Six Months Ended

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

(In thousands)

3 unchanged sentences

Total comprehensive income 55,946 63,914 102,403 109,561

Comprehensive loss attributable to noncontrolling interests ( 4 ) ( 245 )

Comprehensive income (loss) attributable to noncontrolling interests ( 10 ) 24 ( 14 ) ( 221 )

Comprehensive income attributable to Belden $ 55,956 $ 63,890 $ 102,417 $ 109,782

10 unchanged sentences

Net current period other comprehensive income (loss) attributable to Belden 16,208 ( 148 ) 16,060

Balance at March 31, 2024 $ ( 17,292 ) $ ( 14,839 ) $ ( 32,131 )

The following table summarizes the effects of reclassifications from accumulated other comprehensive loss for the three months ended March 31, 2024:

Balance at June 30, 2024 $ ( 10,306 ) $ ( 14,913 ) $ ( 25,219 )

The following table summarizes the effects of reclassifications from accumulated other comprehensive loss for the six months ended June 30, 2024:

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

11 unchanged sentences

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

During the three months ended March 31, 2024, we repurchased 0.7 million shares of our common stock for an aggregate cost of $ 57.9 million at an average price per share of $ 85.66 .

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

During the three months ended June 30, 2024, we did not repurchase shares of our common stock.

During the six months ended June 30, 2024, we repurchased 0.7 million shares of our common stock for an aggregate cost of $ 57.9 million at an average price per share of $ 85.66 .

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

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

From inception of our program to the date of this filing, we have repurchased 7.4 million shares of our common stock for an aggregate cost of $ 485.0 million and an average price per share of $ 65.68 .

As of March 31, 2024, we had $ 115.0 million of authorizations remaining under the program.

As of June 30, 2024, we had $ 115.0 million of authorizations remaining under the program.

This share repurchase authorization does not have an expiration date.

Subsequent Events

On April 30, 2024, we entered into a definitive agreement to acquire Precision Optical Technologies, Inc.

(“Precision Optical Technologies”) for approximately $ 290 million in cash.

Precision Optical Technologies, based in New York, is a leading supplier of value-added optical transceivers with proprietary software, firmware configurations, and related components.

The acquisition of Precision Optical Technologies is expected to close by the end of the second quarter of 2024 and will be reported within the Enterprise Solutions segment.

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

What changed 10-Q

Item 1. Financial Statements