What changed in this filing

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Item 1. Financial Statements

2024-10-31 compared with 2024-08-01 · 169 added, 116 removed, 546 unchanged (34% of the section changed)

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, 2024 December 31, 2023

September 29, 2024 December 31, 2023

(In thousands)

16 unchanged sentences

Accrued liabilities 272,565 290,289

Payable to sellers of Precision Optical Technologies 291,508 —

Total current liabilities 579,310 633,504

16 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

(In thousands, except per share data)

5 unchanged sentences

Amortization of intangibles ( 13,738 ) ( 9,526 ) ( 34,487 ) ( 30,262 )

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

Operating income 75,349 95,429 197,281 273,563

4 unchanged sentences

Net income 53,689 72,327 140,032 204,047

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

Net loss attributable to noncontrolling interest ( 3 ) ( 20 ) ( 17 ) ( 245 )

Net income attributable to Belden stockholders $ 53,692 $ 72,347 $ 140,049 $ 204,292

8 unchanged sentences

CONDENSED CONSOLIDATED CASH FLOW STATEMENTS

Six Months Ended

June 30, 2024 July 2, 2023

Nine Months Ended

September 29, 2024 October 1, 2023

(In thousands)

4 unchanged sentences

Share-based compensation 22,079 14,843

Gain on sale of assets — ( 12,056 )

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

8 unchanged sentences

Cash flows from investing activities:

Cash used for business acquisitions, net of cash acquired ( 295,591 ) ( 106,712 )

Capital expenditures ( 70,759 ) ( 61,870 )

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

Proceeds from disposal of tangible assets 106 13,785

41 unchanged sentences

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

Net income (loss) — — — 53,692 — — — ( 3 ) 53,689

Other comprehensive loss, net of tax — — — — — — ( 29,934 ) — ( 29,934 )

Common stock issuance — — 2,613 — 88 3,152 — — 5,765

Retirement Savings Plan stock contributions — — 940 — 15 527 — — 1,467

Exercise of stock options, net of tax withholding forfeitures — — ( 735 ) — 13 ( 77 ) — — ( 812 )

Conversion of restricted stock units into common stock, net of tax withholding forfeitures — — ( 10 ) — — 2 — — ( 8 )

Share repurchase program, net of excise tax — — — — ( 181 ) ( 20,181 ) — — ( 20,181 )

Share-based compensation — — 7,436 — — — — — 7,436

Common stock dividends ($ 0.05 per share)

— — — ( 2,060 ) — — — — ( 2,060 )

Balance at September 29, 2024 50,335 $ 503 $ 833,449 $ 1,119,684 ( 9,686 ) $ ( 663,272 ) $ ( 55,153 ) $ 28 $ 1,235,239

Additional Accumulated

26 unchanged sentences

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

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

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

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

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

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

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

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

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

Common stock dividends ($ 0.05 per share)

— — — ( 2,104 ) — — — — ( 2,104 )

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

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

11 unchanged sentences

Business Description

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

We are a leading global supplier of network infrastructure and digitization solutions built around two global businesses - Smart Infrastructure Solutions and Automation Solutions.

As Belden continues to advance forward with solutions focused on data infrastructure, we renamed our two reportable segments during the three months ended September 29, 2024 from Enterprise Solutions and Industrial Automation Solutions to Smart Infrastructure Solutions and Automation Solutions, respectively.

The composition of the segments did not change as a result of these name changes.

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

3 unchanged sentences

Our fiscal second and third quarters each have 91 days.

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

The nine months ended September 29, 2024 and October 1, 2023 included 273 and 274 days, respectively.

Fair Value Measurement

4 unchanged sentences

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

As of and during the three and six months ended 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.

As of and during the three and nine months ended September 29, 2024 and October 1, 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 nine months ended September 29, 2024 and October 1, 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 June 30, 2024, we did not have any such cash equivalents on hand.

As of September 29, 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 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.

As of September 29, 2024, we were party to standby letters of credit, surety bonds, and bank guaranties totaling $ 8.3 million, $ 6.0 million, and $ 5.3 million, respectively.

Revenue Recognition

4 unchanged sentences

Noncontrolling Interest

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

A Belden subsidiary includes a noncontrolling interest as of and for the periods ended September 29, 2024 and October 1, 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.

20 unchanged sentences

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

Solutions Industrial Automation Solutions Smart Buildings Solutions Total

Three Months Ended June 30, 2024 (In thousands)

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

Industrial Automation Solutions — 333,863 — 333,863

Solutions Automation Solutions Smart Buildings Solutions Total

Three Months Ended September 29, 2024 (In thousands)

Smart Infrastructure Solutions $ 174,467 $ — $ 145,180 $ 319,647

Automation Solutions — 335,279 — 335,279

Total $ 174,467 $ 335,279 $ 145,180 $ 654,926

Three Months Ended July 2, 2023

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

Industrial Automation Solutions — 379,716 — 379,716

Three Months Ended October 1, 2023

Smart Infrastructure Solutions $ 146,048 $ — $ 137,857 $ 283,905

Automation Solutions — 342,902 — 342,902

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

Six Months Ended June 30, 2024

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

Industrial Automation Solutions — 635,449 — 635,449

Nine Months Ended September 29, 2024

Smart Infrastructure Solutions $ 422,588 $ — $ 401,621 $ 824,209

Automation Solutions — 970,728 — 970,728

Total $ 422,588 $ 970,728 $ 401,621 $ 1,794,937

Six Months Ended July 2, 2023

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

Industrial Automation Solutions — 746,162 — 746,162

Nine Months Ended October 1, 2023

Smart Infrastructure Solutions $ 436,935 $ — $ 434,842 $ 871,777

Automation Solutions — 1,089,064 — 1,089,064

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

1 unchanged sentence

Americas EMEA APAC Total Revenues

Three Months Ended June 30, 2024 (In thousands)

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

Industrial Automation Solutions 198,884 83,017 51,962 333,863

Three Months Ended September 29, 2024 (In thousands)

Smart Infrastructure Solutions $ 243,759 $ 45,480 $ 30,408 $ 319,647

Automation Solutions 196,326 87,733 51,220 335,279

Total $ 440,085 $ 133,213 $ 81,628 $ 654,926

Three Months Ended July 2, 2023

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

Industrial Automation Solutions 213,852 109,055 56,809 379,716

Three Months Ended October 1, 2023

Smart Infrastructure Solutions $ 199,002 $ 51,476 $ 33,427 $ 283,905

Automation Solutions 195,154 92,189 55,559 342,902

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

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

Nine Months Ended September 29, 2024

Smart Infrastructure Solutions $ 610,992 $ 133,547 $ 79,670 $ 824,209

Automation Solutions 578,101 248,606 144,021 970,728

Total $ 1,189,093 $ 382,153 $ 223,691 $ 1,794,937

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

Nine Months Ended October 1, 2023

Smart Infrastructure Solutions $ 659,360 $ 125,595 $ 86,822 $ 871,777

Automation Solutions 624,219 303,165 161,680 1,089,064

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

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

We generate revenues primarily by selling products and delivering 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 and six months ended June 30, 2024 and July 2, 2023 .

Adjustments to revenue for performance obligations satisfied in prior periods were not significant during the three and nine months ended September 29, 2024 and October 1, 2023 .

The following table presents estimated and accrued variable consideration:

June 30, 2024 December 31, 2023

September 29, 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 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:

As of September 29, 2024, total deferred revenue was $ 29.1 million, and of this amount, $ 21.9 million is expected to be recognized within the next twelve months, and the remaining $ 7.2 million is long- term and is expected to be recognized over a period greater than twelve months.

The following table presents deferred revenue activity during the three and nine months ended September 29, 2024 and October 1, 2023, respectively:

(In thousands)

6 unchanged sentences

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.

New deferrals 14,714 9,146

Acquisitions 46 104

Revenue recognized ( 15,240 ) ( 11,224 )

Balance at the end of Q3 $ 29,133 $ 27,693

Service-type warra nties represent $ 9.8 million of the deferred revenue balance at September 29, 2024, and of this amount $ 5.1 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.

As of September 29, 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 June 30, 2024 and December 31, 2023.

Capitalized sales commissions as of September 29, 2024 and December 31, 2023 were not material.

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

Three Months Ended Six Months ended

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

Three Months Ended Nine Months ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

(In thousands)

Sales commissions $ 6,865 $ 4,729 $ 18,036 $ 16,819

On September 16, 2024, we acquired Voleatech GmbH ("Voleatech") with cash on hand for € 5.0 million ($ 5.6 million), net of cash acquired.

The acquisition includes a potential earn-out up to € 3.0 million based upon certain targets over three years , which will be accounted for as compensation cost.Voleatech, based in Germany, is known for their VT AIR Next Gen Firewall and expands Belden's Firewall product portfolio and overall planning of security in OT (Operational Technology) networking.

Voleatech is reported within the Automation Solutions segment and is not material to our financial position or results of operations.

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

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

(“Precision”) with cash on hand 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.

Precision is reported within the Smart Infrastructure Solutions segment.

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):

42 unchanged sentences

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

Our consolidated revenues and income before taxes for the three and nine months ended September 29, 2024 included $ 34.4 million and $ 1.2 million, respectively, from Precision.

For the three and nine months ended September 29, 2024, income before taxes included $ 4.1 million of severance and other restructuring costs, $ 3.7 million of amortization of intangible assets, and $ 0.3 million of cost of sales related to the adjustment of acquired inventory to fair value for Precision.

The following table illustrates the unaudited pro forma effect on operating results as if the Precision acquisition had been completed as of January 1, 2023.

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

(In thousands, except per share data)

Revenues $ 654,926 $ 667,789 $ 1,865,778 $ 2,057,521

Net income attributable to Belden stockholders 57,021 74,122 140,744 200,609

Diluted income per share attributable to Belden stockholders $ 1.38 $ 1.74 $ 3.40 $ 4.65

The above unaudited pro forma financial information is presented for informational purposes only and does not purport to represent what our results of operations would have been had we completed the acquisition on the date assumed, nor is it necessarily indicative of the results that may be expected in future periods.

Pro forma adjustments exclude cost savings from any synergies resulting from the acquisition.

Reportable Segments

We are organized around two global businesses:

Enterprise Solutions and Industrial Automation Solutions.

Smart Infrastructure Solutions and Automation Solutions.

The composition of the segments did not change as a result of these name changes.

Each of the global businesses represents a reportable segment.

12 unchanged sentences

Inter-company revenues between our segments is not material.

Enterprise Solutions Industrial Automation Solutions Total Segments

Smart Infrastructure Solutions Automation Solutions Total Segments

(In thousands)

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

As of and for the three months ended September 29, 2024

Segment Revenues $ 319,647 $ 335,279 $ 654,926

6 unchanged sentences

Segment assets 686,960 772,740 1,459,700

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

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

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

6 unchanged sentences

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

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

As of and for the nine months ended September 29, 2024

Segment revenues $ 824,209 $ 970,728 $ 1,794,937

6 unchanged sentences

Segment assets 686,960 772,740 1,459,700

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

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

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

7 unchanged sentences

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

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

(In thousands)

7 unchanged sentences

Eliminations ( 22 ) ( 63 ) ( 47 ) ( 146 )

Gain on sale of asset — 12,056 — 12,056

Consolidated operating income 75,349 95,429 197,281 273,563

2 unchanged sentences

Consolidated income before taxes $ 64,780 $ 87,177 $ 170,574 $ 249,432

(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.

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

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

Income per Share

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

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

(In thousands)

Net income $ 53,689 $ 72,327 $ 140,032 $ 204,047

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

Net loss attributable to noncontrolling interest ( 3 ) ( 20 ) ( 17 ) ( 245 )

Net income attributable to Belden stockholders $ 53,692 $ 72,347 $ 140,049 $ 204,292

2 unchanged sentences

Weighted average shares outstanding, diluted 41,417 42,625 41,371 43,129

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 both the three and nine months ended September 29, 2024, diluted weighted average shares outstanding do not include outstanding equity awards of 0.1 million because they are anti-dilutive.

For the three and nine months ended October 1, 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 nine months ended September 29, 2024, diluted weighted average shares outstanding do not include outstanding equity awards of 0.2 million and 0.3 million, respectively, because the related performance conditions have not been satisfied.

Fo r the three and nine months ended October 1, 2023, diluted weighted average shares outstanding do not include outstanding equity awards of 0.2 million and 0.3 million, respectively, because the related performance conditions have not been satisfied.

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

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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 and six months ended June 30, 2024 and July 2, 2023, respectively:

The following table presents the activity in the trade receivables allowance for doubtful accounts for the three and nine months ended September 29, 2024 and October 1, 2023, respectively:

(In thousands)

7 unchanged sentences

Acquisitions 50 19

Recoveries collected — ( 8 )

Fx impact ( 44 ) 11

Write-offs ( 5 ) —

Q2 ending balance $ 24,059 $ 16,146

Current period provision 79 4,933

Fx impact 140 ( 72 )

Write-offs ( 48 ) ( 31 )

Recoveries collected ( 1 ) ( 824 )

Q3 ending balance $ 24,229 $ 20,152

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

The following table presents the major classes of inventories as of September 29, 2024 and December 31, 2023 , respectively:

September 29, 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 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.

Our lease agreements do not contain material residual value guarantees.

Our variable lease expense was approximately $ 0.9 million and $ 2.7 million for the three and nine months ended September 29, 2024, respectively, and $ 0.8 million and $ 2.4 million for the t hree and nine months ended October 1, 2023, respectively.

The components of lease expense were as follows:

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

(In thousands)

4 unchanged sentences

Total finance lease cost $ 355 $ 262 $ 957 $ 810

Supplemental cash flow information related to leases was as follows:

Three Months Ended Six Months Ended

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

S upplemental cash flow information related to leases was as follows:

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

(In thousands)

1 unchanged sentence

Operating cash flows from operating leases $ 4,423 $ 4,674 $ 15,926 $ 13,964

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

Operating cash flows from finance leases were not material during the three and nine months ended September 29, 2024 and October 1, 2023 .

Supplemental balance sheet information related to leases was as follows:

June 30, 2024 December 31, 2023

September 29, 2024 December 31, 2023

(In thousands)

12 unchanged sentences

Total finance lease liabilities $ 7,749 $ 6,803

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

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 $ 33.8 million and $ 33.3 million, respectively, as of September 29, 2024.

September 29, 2024 December 31, 2023

Weighted Average Remaining Lease Term

6 unchanged sentences

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.

As of September 29, 2024, the fixed, remaining base rent payments were approximately $ 21 million.

As of September 29, 2024 and December 31, 2023, we had a liability for expected, future payments of $ 9.6 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 $ 13.6 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.

We recognized depreciation expense of $ 14.7 million and $ 41.7 million in the three and nine months ended September 29, 2024, respectively, and $ 13.4 million and $ 38.5 million in the three and nine months ended October 1, 2023, respectively.

We recognized amortization expense of $ 16.4 million and $ 42.3 million in the three and nine months ended September 29, 2024, respectively, and $ 11.5 million and $ 35.5 million in the three and nine months ended October 1, 2023, respectively.

Gain on Sale of Assets

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

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

Long-Term Debt and Other Borrowing Arrangements

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

June 30, 2024 December 31, 2023

September 29, 2024 December 31, 2023

(In thousands)

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

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

As of September 29, 2024, we had no borrowings outstanding on the Revolver, and our available borrowing capacity was $ 291.4 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 June 30, 2024 is $ 480.5 million.

The carrying value of the 2027 Notes as of September 29, 2024 is $ 502.4 million.

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

2 unchanged sentences

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

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

The carrying value of the 2028 Notes as of September 29, 2024 is $ 390.7 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 June 30, 2024 is $ 320.3 million.

The carrying value of the 2031 Notes as of September 29, 2024 is $ 334.9 million.

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

2 unchanged sentences

Fair Value of Long-Term Debt

The fair value of our senior subordinated notes as of 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.

The fair value of our senior subordinated notes as of September 29, 2024 was approximately $ 1,190.0 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 $ 1,228.0 million as of September 29, 2024.

Net Investment Hedge

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

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.

As of September 29, 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 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.

For the nine months ended September 29, 2024 and October 1, 2023, the transaction gain (loss) associated with the net investment hedge reported in other comprehensive income was $( 6.7 ) million and $ 8.8 million, respectively.

For the three and nine months ended September 29, 2024, we recognized income tax expense of $ 11.1 million and $ 30.5 million, respectively, representing effective tax rates of 17.1 % and 17.9 %, respectively .

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

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

4 unchanged sentences

Pension Obligations Other Postretirement Obligations

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

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

(In thousands)

6 unchanged sentences

Net periodic benefit cost $ 392 $ 133 $ 129 $ 64

Six Months Ended

Nine Months Ended

Service cost $ 2,284 $ 2,056 $ 30 $ 6

6 unchanged sentences

The following table summarizes total comprehensive income:

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

(In thousands)

3 unchanged sentences

Total comprehensive income 23,757 93,895 126,158 203,456

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

Comprehensive loss attributable to noncontrolling interests ( 3 ) ( 20 ) ( 17 ) ( 241 )

Comprehensive income attributable to Belden $ 23,760 $ 93,915 $ 126,175 $ 203,697

7 unchanged sentences

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

Other comprehensive income attributable to Belden before reclassifications 16,208 — 16,208

Other comprehensive loss attributable to Belden before reclassifications ( 13,653 ) — ( 13,653 )

Amounts reclassified from accumulated other comprehensive loss — ( 221 ) ( 221 )

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

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:

Net current period other comprehensive loss attributable to Belden ( 13,653 ) ( 221 ) ( 13,874 )

Balance at September 29, 2024 $ ( 40,167 ) $ ( 14,986 ) $ ( 55,153 )

The following table summarizes the effects of reclassifications from accumulated other comprehensive loss for the nine months ended September 29, 2024:

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

8 unchanged sentences

Share Repurchase

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

We have a share repurchase program which allows us to purchase our common stock through open market repurchases, negotiated transactions, or other means, in accordance with applicable securities laws and other restrictions.

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

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

During September 2024, our Board of Directors increased the authorizations under this program by $ 300.0 million.

During the three months ended September 29, 2024, we repurchased 0.2 million shares of our common stock for an aggregate cost of $ 20.1 million at an average price per share of $ 110.84 .

During the nine months ended September 29, 2024, we repurchased 0.9 million shares of our common stock for an aggregate cost of $ 78.0 million at an average price per share of $ 90.98 .

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

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

Subsequent to September 29, 2024, we repurchased 0.3 million shares of our common stock for an aggregate cost of $ 37.6 million at an average price per share of $ 116.90 .

As of the da te of this filing, we had $ 357.3 million of authorizations remaining under the program.

This share repurchase authorization does not have an expiration date.

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