SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________________________

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~October 1, 2017~~March 29, 2020

Commission File No. 001-12561

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ☑ Accelerated filer ¨☐ Non-accelerated filer ¨ ~~(Do not check if a smaller reporting company)~~☐ Smaller reporting company ¨☐Emerging growth company ¨☐

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbols

Name of each exchange on which registered

Common stock, $0.01 par value

BDC

New York Stock Exchange


~~PART I~~	~~FINANCIAL INFORMATION~~

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEETS

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

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

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

CONDENSED CONSOLIDATED CASH FLOW STATEMENTS

For all periods presented, the Condensed Consolidated Cash Flow Statement includes the results of the Grass Valley disposal group.

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

CONDENSED CONSOLIDATED STOCKHOLDERS’ EQUITY ~~STATEMENT~~

~~NINE MONTHS ENDED OCTOBER 1, 2017~~STATEMENTS


	Belden Inc. Stockholders
					Additional									Accumulated Other		Non-controlling
		Common Stock					Paid-In		Retained	Treasury Stock								Comprehensive
		Shares	Amount		Capital		Earnings		Shares	Amount		Income (Loss)		Interests		Total
	(In thousands)
Balance at December 31, 2019		50,335	$	503	$	811,955	$	518,004	(4,877)	$	(307,197)	$	(63,418)	$	5,972	$	965,819
Cumulative effect of change in accounting principle		—	—		—		(2,916)		—	—		—		—		(2,916)
Net loss		—	—		—		(11,189)		—	—		—		(30)		(11,219)
Other comprehensive income (loss), net of tax		—	—		—		—		—	—		22,323		(150)		22,173
Exercise of stock options, net of tax withholding forfeitures		—	—		(542)		—		7	370		—		—		(172)
Conversion of restricted stock units into common stock, net of tax withholding forfeitures		—	—		(2,631)		—		29	1,800		—		—		(831)
Share repurchase program		—	—		—		—		(592)	(21,239)		—		—		(21,239)
Share-based compensation		—	—		3,708		—		—	—		—		—		3,708
Common stock dividends ($0.05 per share)		—	—		—		(2,288)		—	—		—		—		(2,288)
Balance at March 29, 2020		50,335	$	503	$	812,490	$	501,611	(5,433)	$	(326,266)	$	(41,095)	$	5,792	$	953,035

Belden Inc. Stockholders
Mandatory Convertible Additional
Accumulated
Other
Non-controlling
Preferred Stock Common Stock Paid-In Retained Treasury Stock Comprehensive
Shares Amount Shares Amount Capital Earnings Shares Amount Income (Loss) Interest Total
(In thousands)
Balance at December 31, 2016 52
$ 1
50,335
$ 503
$ 1,116,090
$ 783,812
(8,155 ) $ (401,026 ) $ (39,067 ) $ 1,004
$ 1,461,317
Net income (loss) —
—
—
—
—
62,691
—
—
—
(274 ) 62,417
Foreign currency translation, net of $1.5 million tax —
—
—
—
—
—
—
—
(46,446 ) (32 ) (46,478 )
Adjustments to pension and postretirement liability, net of $0.7 million tax —
—
—
—
—
—
—
—
1,171
—
1,171
Other comprehensive loss, net of tax (45,307 )
Exercise of stock options, net of tax withholding forfeitures —
—
—
—
(1,628 ) —
34
(68 ) —
—
(1,696 )
Conversion of restricted stock units into common stock, net of tax withholding forfeitures —
—
—
—
(4,270 ) —
97
543
—
—
(3,727 )
Share repurchase program —
—
—
—
—
—
(151 ) (11,508 ) —
—
(11,508 )
Share-based compensation —
—
—
—
13,431
—
—
—
—
—
13,431
Preferred stock dividends —
—
—
—
—
(26,198 ) —
—
—
—
(26,198 )
Common stock dividends ($0.15 per share) —
—
—
—
—
(6,369 ) —
—
—
—
(6,369 )
Balance at October 1, 2017 52
$ 1
50,335
$ 503
$ 1,123,623
$ 813,936
(8,175 ) $ (412,059 ) $ (84,342 ) $ 698
$ 1,442,360


		Belden Inc. Stockholders
	Mandatory Convertible									Additional									Accumulated Other		Non-controlling
	Preferred Stock					Common Stock						Paid-In	Retained		Treasury Stock							Comprehensive
	Shares		Amount		Shares	Amount		Capital		Earnings		Shares	Amount		Income (Loss)		Interests		Total
		(In thousands)
Balance at December 31, 2018	52		$	1	50,335	$	503	$	1,139,395	$	922,000	(10,939)	$	(599,845)	$	(74,907)	$	441	$	1,387,588

Net income (loss)	—		—		—	—		—		25,202		—	—		—		(24)		25,178
Other comprehensive income, net of tax	—		—		—	—		—		—		—	—		29,009		1		29,010
Exercise of stock options, net of tax withholding forfeitures	—		—		—	—		(54)		—		1	16		—		—		(38)
Conversion of restricted stock units into common stock, net of tax withholding forfeitures	—		—		—	—		(2,570)		—		58	668		—		—		(1,902)

Share-based compensation	—		—		—	—		2,216		—		—	—		—		—		2,216
Preferred stock dividends	—		—		—	—		—		(8,733)		—	—		—		—		(8,733)
Common stock dividends ($0.05 per share)	—		—		—	—		—		(1,990)		—	—		—		—		(1,990)
Balance at March 31, 2019	52		$	1	50,335	$	503	$	1,138,987	$	936,479	(10,880)	$	(599,161)	$	(45,898)	$	418	$	1,431,329

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

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1: Summary of Significant Accounting Policies

Basis of Presentation

The accompanying Condensed Consolidated Financial Statements include Belden Inc. and all of its subsidiaries (the Company, us, we, or our). We eliminate all significant affiliate accounts and transactions in consolidation.

The accompanying Condensed Consolidated Financial Statements presented as of any date other than December 31, ~~2016:~~2019:

•Are prepared from the books and records without audit, and

•Are prepared in accordance with the instructions for Form 10-Q and do not include all of the information required by accounting principles generally accepted in the United States for complete statements, but

•Include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the financial statements.

These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Supplementary Data contained in our ~~2016~~2019 Annual Report on Form 10-K.

Business Description

We are a ~~signal transmission~~global supplier of specialty networking solutions ~~provider~~ built around ~~four~~2 global business platforms ~~– Broadcast Solutions,~~- Enterprise Solutions ~~Industrial Solutions,~~ and ~~Network~~Industrial Solutions. Our comprehensive portfolio of ~~signal transmission~~ solutions ~~provides industry leading~~enables customers to transmit and secure ~~and reliable transmission of~~ data, sound, and video for mission critical ~~applications.~~applications across complex enterprise and industrial environments.

Effective January 1, 2020, we transferred our West Penn Wire business and multi-conductor product lines from the Enterprise Solutions segment to the Industrial Solutions segment as a result of a shift in responsibilities among the segments. We have recast the prior period segment information to conform to the change in the composition of reportable segments.

Our fiscal year and fiscal fourth quarter both end on December 31. Our fiscal first quarter ends on the Sunday falling closest to 91 days after December 31, which was ~~April 2, 2017,~~March 29, 2020, the ~~92nd~~89th day of our fiscal year ~~2017.~~2020. Our fiscal second and third quarters each have 91 days. The ~~nine~~three months ended ~~October 1, 2017~~March 29, 2020 and ~~October 2, 2016~~March 31, 2019 included ~~274~~89 and ~~276~~90 days, ~~respectively.~~

~~Reclassifications~~

~~Operating Segments~~

Fair Value Measurement

Accounting guidance for fair value measurements specifies a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent sources or reflect our own assumptions of market participant valuation. The hierarchy is broken down into three levels based on the reliability of the inputs as follows:

•Level 2 – Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets, or financial instruments for which significant inputs are observable, either directly or indirectly; and

•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 nine~~ months ended ~~October 1, 2017~~March 29, 2020 and ~~October 2, 2016,~~March 31, 2019, we utilized Level 1 inputs to determine the fair value of cash equivalents, and we utilized Level 2 and Level 3 inputs to determine the fair value of net assets acquired in business combinations (see Note 2)3) and for impairment testing (see Notes 4 and 10). We did not have any transfers between Level 1 and Level 2 fair value measurements during the ~~nine~~three months ended ~~October 1, 2017~~March 29, 2020 and ~~October 2, 2016.~~March 31, 2019.

Cash and Cash Equivalents

We classify cash on hand and deposits in banks, including commercial paper, money market accounts, and other investments with an original maturity of three months or less, that we hold from time to time, as cash and cash equivalents. We periodically have cash equivalents consisting of short-term money market funds and other investments. As of March 29, 2020, 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. We do not enter into investments for trading or speculative purposes. As

During the three months ended March 29, 2020, we paid the sellers of ~~October 1, 2017, we did not have any significant~~Snell Advanced Media (SAM) the full earnout consideration of $31.4 million in cash ~~equivalents.~~as per the purchase agreement. SAM was acquired on February 8, 2018 and is included in the Grass Valley disposal group.

Contingent Liabilities

We have established liabilities for environmental and legal contingencies that are probable of occurrence and reasonably estimable, the amounts of which are currently not material. We accrue environmental remediation costs based on estimates of known environmental remediation exposures developed in consultation with our environmental consultants and legal counsel. We are, from time to time, subject to routine litigation incidental to our business. These lawsuits primarily involve claims for damages arising out of the use of our products, allegations of patent or trademark infringement, and litigation and administrative proceedings involving employment matters and commercial disputes. 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.

As of ~~October 1, 2017,~~March 29, 2020, we were party to standby letters of credit, bank guaranties, and surety bonds ~~and bank guaranties~~ totaling ~~$7.8~~$7.2 million, ~~$2.4~~$4.2 million, and ~~$2.0~~$3.3 million, respectively.

On July 5, 2011, our wholly-owned subsidiary, PPC Broadband, Inc. (PPC), filed an action for patent infringement against Corning Optical Communications RF LLC (Corning). The complaint alleged that Corning infringed two of PPC’s patents. In July 2015, a jury found that Corning willfully infringed both patents. In November 2016, following a series of post-trial motions, the trial judge issued rulings for a total judgment in our favor of approximately $61.3 million. In December 2016, Corning appealed the case to the U.S. Court of Appeals for the Federal Circuit, and that appeal remains pending. We have not recorded any amounts in our consolidated financial statements related to this matter due to the pendency of the appeal.

We recognize revenue ~~when all of~~consistent with the principles as outlined in the following ~~circumstances are satisfied:~~five step model: (1) ~~persuasive evidence of an arrangement exists,~~identify the contract with the customer, (2) ~~price is fixed or determinable, (3) collectability is reasonably assured, and (4) delivery has occurred. Delivery occurs~~identify the performance obligations in the ~~period in which~~contract, (3) determine the ~~customer takes title and assumes~~transaction price, (4) allocate the ~~risks and rewards of ownership of~~transaction price to the ~~products specified~~performance obligations in the ~~customer’s purchase order or sales agreement. At times, we enter into arrangements that involve the delivery of multiple elements. For these arrangements,~~contract, and (5) recognize revenue when ~~the elements can be separated, the revenue~~(or as) each performance obligation is allocated to each deliverable based on that element’s relative selling price and recognized based on the period of delivery for each element. Generally, we determine relative selling price using vendor specific objective evidence (VSOE) of fair value.

We ~~have~~ evaluated subsequent events after the balance sheet date through the financial statement issuance date for appropriate accounting and disclosure. See Note 19.

~~Pending~~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 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 Condensed Consolidated Statements of Operations. The joint venture is not material to our Condensed Consolidated financial statements as of or for the periods ended March 29, 2020 and March 31, 2019.

Furthermore, certain subsidiaries of our Opterna business, which we acquired in April of 2019 include noncontrolling interests. Because we have a controlling financial interest in these subsidiaries, they are consolidated into our financial statements. The results of these subsidiaries were consolidated into our financial statements as of the acquisition date. The results that are attributable to the noncontrolling interest holders are presented as net income attributable to noncontrolling interests in the Condensed Consolidated Statements of Operations. An immaterial amount of Opterna's annual revenues are generated from transactions with the noncontrolling interests. The subsidiaries of Opterna that include noncontrolling interests are not material to our Condensed Consolidated financial statements as of or for the period ended March 29, 2020.

Current-Year Adoption of ~~Recent~~ Accounting Pronouncements

In ~~May 2014, the FASB issued Accounting Standards Update No. 2014-09,~~ ~~Revenue from Contracts with Customers~~ (ASU 2014-09), which will replace most existing revenue recognition guidance in U.S. GAAP. The core principle of the ASU is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. ASU 2014-09 requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. We plan to adopt ASU 2014-09 on January 1, 2018, using the modified retrospective method of adoption. Our overall, initial assessment indicates that the impact of adopting ASU 2014-09 on our consolidated financial statements will not be material. We do not expect significant changes in the timing or method of revenue recognition for any of our material revenue streams. We are currently completing detailed contract reviews to determine if any adjustments are necessary to our existing accounting policies and to support our overall, initial assessment. We believe the most significant impact of adopting ASU 2014-09 will be on our disclosures regarding revenue recognition. We will continue our evaluation of ASU 2014-09, including new or emerging interpretations of the standard, through the date of adoption.

~~In February~~June 2016, the FASB issued Accounting Standards Update No. ~~2016-02,~~ ~~Leases~~ ~~(ASU 2016-02)~~2016-13 (“ASU 2016-13”), ~~a leasing standard for both lessees and lessors.~~Financial Instruments - Credit Losses. Under ~~its core principle, a lessee will recognize lease assets and liabilities on~~ the ~~balance sheet for all arrangements with terms longer than 12 months. Lessor accounting remains largely consistent with existing U.S. generally accepted accounting principles. The~~ new standard, ~~will be effective for us beginning January 1, 2019. Early adoption is permitted. The standard requires~~we are required to recognize estimated credit losses expected to occur over the ~~use of a modified retrospective transition method. We are evaluating the effect that ASU 2016-02 will have on our consolidated financial statements and related disclosures.~~

~~In October 2016, the FASB issued Accounting Standards Update No. 2016-16,~~ ~~Intra-Entity Transfers of Assets Other Than Inventory~~ ~~(ASU 2016-16), which requires recognition of the income tax consequences of an intra-entity transfer~~estimated life or remaining contractual life of an asset (which includes losses that may be incurred in future periods) using a broader range of information including past events, current conditions, and reasonable and supportable forecasts about future economic conditions. We adopted ASU 2016-13 on January 1, 2020, which resulted in an increase to our allowance for doubtful accounts for continuing operations of $1.0 million, and an increase for discontinued operations of $1.9 million. As of March 29, 2020, there have been no material adjustments, individually or in the aggregate, to the allowance for doubtful accounts under the new credit loss model other than ~~inventory~~the $2.9 million transition adjustment.

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. Taxes collected from customers and remitted to governmental authorities are not included in our revenues. The following tables present our revenues disaggregated by major product category.


	Cable & Connectivity		Networking, Software & Security		Total Revenues

Three Months Ended March 29, 2020	(In thousands)
Enterprise Solutions	$	204,836	$	7,377	$	212,213
Industrial Solutions	167,052		84,261		251,313
Total	$	371,888	$	91,638	$	463,526

Three Months Ended March 31, 2019
Enterprise Solutions	$	201,262	$	5,821	$	207,083
Industrial Solutions	190,917		102,140		293,057
Total	$	392,179	$	107,961	$	500,140

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 29, 2020	(In thousands)
Enterprise Solutions	$	155,429	$	35,862	$	20,922	$	212,213
Industrial Solutions	156,400		65,966		28,947		251,313
Total	$	311,829	$	101,828	$	49,869	$	463,526

Three Months Ended March 31, 2019
Enterprise Solutions	$	146,821	$	34,136	$	26,126	$	207,083
Industrial Solutions	184,983		73,315		34,759		293,057
Total	$	331,804	$	107,451	$	60,885	$	500,140

The following tables present our revenues disaggregated by products, including software products, and support and services.


	Products		Support & Services		Total Revenues

Three Months Ended March 29, 2020	(In thousands)
Enterprise Solutions	$	212,213	$	—	$	212,213
Industrial Solutions	232,103		19,210		251,313
Total	$	444,316	$	19,210	$	463,526

Three Months Ended March 31, 2019
Enterprise Solutions	$	207,083	$	—	$	207,083
Industrial Solutions	271,113		21,944		293,057
Total	$	478,196	$	21,944	$	500,140

We generate revenues primarily by selling products that provide secure and reliable transmission of data, sound, and video for mission critical applications. We also generate revenues from providing support and professional services. We sell our products to distributors, end-users, installers, and directly to original equipment manufacturers. At times, we enter into arrangements that involve the delivery of multiple performance obligations. For these arrangements, revenue is allocated to each performance obligation based on its relative selling price and recognized when or as each performance obligation is satisfied. Most of our performance obligations related to the sale of products are satisfied at a point in time when control of the product is transferred based on the shipping terms of the arrangement. Generally, we determine relative selling price using the prices charged to customers on a standalone basis.

The amount of consideration we receive and revenue we recognize varies due to rebates, returns, and price adjustments. We estimate the expected rebates, returns, and price adjustments based on an analysis of historical experience, anticipated sales demand, and trends in product pricing. We adjust our estimate of revenue at the earlier of when the ~~transfer occurs. Consequently,~~most likely amount of consideration we expect to receive changes or when the ~~standard eliminates~~consideration becomes fixed. Adjustments to revenue for performance obligations satisfied in prior periods were not significant during the ~~exception to~~three months ended March 29, 2020 and March 31, 2019.

The following table presents estimated and accrued variable consideration:


	March 29, 2020		March 31, 2019

	(in thousands)
Accrued rebates	$	17,672	$	17,704
Accrued returns	10,491		8,148
Price adjustments recognized against gross accounts receivable	26,837		25,572

Depending on the terms of an arrangement, we may defer the recognition of some or all of the consideration received because we have to satisfy a future obligation. Consideration allocated to support services under a support and maintenance contract is typically paid in advance and recognized ratably over the term of the service. Consideration allocated to professional services is typically recognized when or as the services are performed depending on the terms of the arrangement. As of March 29, 2020, total deferred revenue was $69.5 million, and of this amount, $51.0 million is expected to be recognized within the next twelve months, and the remaining $18.5 million is long-term and is expected to be recognized over a period greater than twelve months.

The following table presents deferred revenue activity:


	Three Months Ended
	March 29, 2020		March 31, 2019

	(In thousands)
Beginning balance	$	70,070	$	72,358
New deferrals	23,830		26,033
Revenue recognized	(24,415)		(32,168)
Ending balance	$	69,485	$	66,223

We expense sales commissions as incurred when the duration of the related revenue arrangement is one year or less. We capitalize sales commissions in other current and deferred income taxes for an intra-entity asset transfer other than for inventory until the asset has been sold to an outside party. The new standard will be effective for us beginning January 1, 2018. Early adoption is permitted. We are evaluating the effect that ASU 2016-16 will havelong-lived assets on our ~~consolidated financial statements and related disclosures.~~

~~In March 2017,~~balance sheet when the ~~FASB issued Accounting Standards Update No. 2017-07,~~ ~~Compensation - Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost~~ (ASU 2017-07), which requires an entity to report the service cost component in the same line item or items as other compensation costs arising from the service rendered by their employees during the period. The other components of net benefit cost are required to be presented in the Statement of Operations separately from the service cost component after Operating Income. Additionally, only the service cost component will be eligible for capitalization, when applicable. The standard requires the amendments to be applied retrospectively for the presentationoriginal duration of the ~~service cost component~~related revenue arrangement is longer than one year, and we amortize it over the ~~other cost components~~related revenue arrangement period.

Total capitalized sales commissions was $3.0 million as of ~~net periodic pension cost~~March 29, 2020 and ~~net periodic OPEB cost in the Statement~~$3.4 million as of ~~Operations~~March 31, 2019. The following table presents sales commissions that are recorded within selling, general and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension and OPEB costs. The new standard will be effective for us beginning January 1, 2018. Early adoption is permitted. We are evaluating the effect that ASU 2017-07 will have on our consolidated financial statements and related disclosures.

administrative expenses:


	Three Months ended
	March 29, 2020		March 31, 2019

	(In thousands)
Sales commissions	$	4,175	$	5,033

Note 2:3: Acquisitions

~~Thinklogical Holdings, LLC~~Special Product Company

On December 6, 2019, we purchased substantially all the assets, and assumed certain specified liabilities of Special Product Company (SPC) for a preliminary purchase price of $22.5 million. SPC, based in Kansas City, Kansas, is a leading designer, manufacturer, and seller of outdoor cabinet products for optical fiber cable installations. The results of SPC have been included in our Condensed Consolidated Financial Statements from December 6, 2019, and are reported within the Enterprise Solutions segment. The acquisition of SPC was not material to our financial position or results of operations.

Opterna International Corp.

We acquired 100% of the ~~outstanding ownership interest~~shares of Opterna International Corp. (Opterna) on April 15, 2019 for a purchase price, net of cash acquired, of $51.7 million. Of the $51.7 million purchase price, $45.9 million was paid with cash on hand. The acquisition included a potential earnout, which is based upon future Opterna financial targets through April 15, 2021. The maximum earnout consideration is $25.0 million, but based upon a third party valuation specialist using certain assumptions in ~~Thinklogical Holdings, LLC (Thinklogical) on May 31, 2017 for~~a discounted cash flow model, the estimated fair value of ~~$171.3~~the earnout included in the purchase price is $5.8 million. ~~Thinklogical~~Opterna is an international fiber optics solutions business based in Sterling, Virginia, which designs and manufactures a range of complementary fiber connectivity, cabinet, and ~~markets high-bandwidth fiber matrix switches, video, and keyboard/video/mouse extender solutions, camera extenders, and console management solutions. Thinklogical is headquartered~~enclosure products used in ~~Connecticut.~~optical networks. The results of ~~Thinklogical~~Opterna have been included in our Condensed Consolidated Financial Statements from ~~May 31, 2017,~~April 15, 2019, and are reported within the ~~Broadcast~~Enterprise Solutions segment. Certain subsidiaries of Opterna include noncontrolling interests. Because Opterna has a controlling financial interest in these subsidiaries, they are consolidated into our financial statements. The results that are attributable to the noncontrolling interest holders are presented as net income attributable to noncontrolling interests in the Condensed Consolidated Statements of Operations. An immaterial amount of Opterna's annual revenues are generated from transactions with the noncontrolling interests. On October 25, 2019, we purchased the noncontrolling interest of one subsidiary for a purchase price of $0.8 million; of which $0.4 million was paid at closing and the remaining $0.4 million will be paid in 2021.

The following table summarizes the estimated, ~~preliminary~~ fair ~~value~~values of the assets acquired and the liabilities assumed as of ~~May 31, 2017~~April 15, 2019 (in thousands):


Receivables	$	5,308
Inventory	7,359
Prepaid and other current assets	566
Property, plant, and equipment	1,328
Intangible assets	28,000
Goodwill	35,012
Deferred income taxes	151
Operating lease right-to-use assets	2,204
Other long-lived assets	2,070
Total assets acquired	$	81,998

Accounts payable	$	4,847
Accrued liabilities	4,325
Long-term deferred tax liability	6,815
Long-term operating lease liability	1,923
Other long-term liabilities	7,152
Total liabilities assumed	$	25,062
Net assets	56,936

Noncontrolling interests	5,195

Net assets attributable to Belden	$	51,741

We did not record any material measurement-period adjustments in the first quarter of 2020.

Cash $ 5,376
Receivables 4,355
Inventory 16,424
Prepaid and other current assets 320
Property, plant, and equipment 4,289
Intangible assets 76,400
Goodwill 68,394
Total assets acquired $ 175,558

Accounts payable $ 1,231
Accrued liabilities 1,353
Deferred revenue 1,702
Total liabilities assumed $ 4,286

Net assets $ 171,272

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.

The ~~preliminary~~ fair value of acquired receivables is ~~$4.4~~$5.3 million, which is equivalent to its gross contractual amount.

For purposes of the above allocation, we based our estimate of the ~~preliminary~~ fair ~~value~~values for the acquired inventory, intangible assets, and ~~deferred revenue~~noncontrolling interests on ~~a preliminary~~ valuation ~~study~~studies performed by a third party valuation firm. We have estimated a ~~preliminary~~ fair value adjustment for inventories based on the estimated selling price of the work-in-process and finished goods acquired at the closing date less the sum of the costs to complete the work-in-process, the costs of disposal, and a reasonable profit allowance for our post acquisition selling efforts. 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 ~~and deferred revenue~~ (Level 3 valuation).

Our preliminary estimate of the fair values for the noncontrolling interests were based on the comparable EBITDA multiple valuation technique (Level 3 valuation).

Goodwill and other intangible assets reflected above were determined to meet the ~~criterion~~criteria for recognition apart from tangible assets acquired and liabilities assumed. The goodwill is primarily attributable to ~~expected synergies and~~expansion of product offerings in the ~~assembled workforce. The expected synergies for the Thinklogical acquisition primarily consist of utilizing Belden's~~optical fiber and connectivity portfolio with Thinklogical's connections between matrix switch, control systems, transmitters and source to expand our product portfolio across our segments to both existing and new customers.market. Our tax basis in the acquired goodwill is ~~approximately $41.0 million and is deductible for tax purposes over a period of 15 years up to the amount of the tax basis.~~0. The intangible assets related to the acquisition consisted of the following:


	Fair Value		Amortization Period		Fair Value		Amortization Period
	(In thousands)		(In years)		(In thousands)		(In years)
Intangible assets subject to amortization:				Intangible assets subject to amortization:
Developed technologies	$	65,200	10.0	Developed technologies	$	3,400	5.0
Customer relationships	6,600		8.0	Customer relationships	22,800		15.0
Sales backlog				Sales backlog	1,300		0.5
Trademarks	3,100		10.0	Trademarks	500		2.0
Sales backlog	1,500		0.3
Total intangible assets subject to amortization	$	76,400		Total intangible assets subject to amortization	$	28,000

Intangible assets not subject to amortization:				Intangible assets not subject to amortization:
Goodwill	$	68,394	n/a	Goodwill	$	35,012	n/a
Total intangible assets not subject to amortization	$	68,394		Total intangible assets not subject to amortization	$	35,012

Total intangible assets	$	144,794		Total intangible assets	$	63,012
Weighted average amortization period			9.6	Weighted average amortization period			12.9

The amortizable intangible assets reflected in the table above were determined by us to have finite lives. 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. 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 of the backlog intangible asset was based on our estimate of when the ordered items would ~~ship.~~

~~Our consolidated revenues~~ship and ~~consolidated loss before taxes~~control of the items transfers. The useful life for the ~~three months ended October 1, 2017 included revenues~~trademarks was based on the period of ~~$11.6 million and a loss before taxes of $2.7 million, respectively, from Thinklogical. Our consolidated revenues and consolidated income before taxes for~~time we expect to continue to go to market using the ~~nine months ended October 1, 2017 included revenues of $21.8 million and a loss before taxes of $1.7 million, respectively, from Thinklogical.~~trademarks.

The following table illustrates the unaudited pro forma effect on operating results as if the ~~Thinklogical~~Opterna acquisition had been completed as of January 1, ~~2016.~~2018.


	Three Months Ended
	March 31, 2019

	(In thousands, except per share data)
	(Unaudited)
Revenues	$	508,756
Net income from continuing operations attributable to Belden common stockholders	19,243
Diluted income from continuing operations per share attributable to Belden common stockholders	$	0.49

-10-

Three Months Ended Nine Months Ended
October 1, 2017 October 2, 2016 October1, 2017 October 2, 2016

(In thousands, except per share data)
(Unaudited)
Revenues $ 621,745
$ 616,760
$ 1,792,614
$ 1,772,202
Net income (loss) attributable to Belden common stockholders (5,128 ) 34,564
37,097
85,588
Diluted income (loss) per share attributable to Belden common stockholders $ (0.12 ) $ 0.81
$ 0.87
$ 2.01

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.

~~M2FX~~FutureLink

We acquired ~~100% of~~ the ~~shares of M2FX Limited (M2FX)~~FutureLink product line and related assets from Suttle, Inc. on ~~January 7, 2016~~April 5, 2019 for a purchase price of ~~$19.0 million. M2FX is~~$5.0 million, which was funded with cash on hand. The acquisition of FutureLink allows us to offer a ~~manufacturer~~more complete set of fiber ~~optic cable and fiber protective solutions for broadband access and telecommunications networks. M2FX is located in the United Kingdom.~~product offerings. The results from the acquisition of ~~M2FX~~FutureLink have been included in our Condensed Consolidated Financial Statements from ~~January 7, 2016,~~April 5, 2019, and are reported within the ~~Broadcast~~Enterprise Solutions segment. The ~~M2FX~~ acquisition of FutureLink was not material to our financial position or results of operations.

Note ~~3: Assets Held for Sale~~4: Discontinued Operations

We classify assets and liabilities as held for sale (disposal group) when management, having the authority to approve the action, commits to a plan to sell the disposal group, the sale is probable within one year, and the disposal group is available for immediate sale in its present condition. We also consider whether an active program to locate a buyer has been initiated, whether the disposal group is marketed actively for sale at a price that is reasonable in relation to its current fair value, and whether actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. When we classify a disposal group as held for sale, we test for impairment. An impairment charge is recognized when the carrying value of the disposal group exceeds the estimated fair value, less costs to sell. We also cease depreciation and amortization for assets classified as held for sale.

During the fourth quarter of ~~2016,~~2019, we committed to a plan to sell ~~our MCS business~~Grass Valley, and ~~Hirschmann JV and determined that we~~at such time, met all of the criteria to classify the assets and liabilities of ~~these businesses~~this business as held for sale. Furthermore, we determined a divestiture of Grass Valley represents a strategic shift that is expected to have a major impact on our operations and financial results. As a result, the Grass Valley disposal group, which was included in our Enterprise Solutions segment, is reported within discontinued operations. The ~~MCS business is part~~Grass Valley disposal group excludes certain Grass Valley pension liabilities that we expect to retain. We also ceased depreciating and amortizing the assets of the ~~Industrial Solutions segment and~~disposal group once they met the Hirschmann JV is an equity method investment that is not included in an operating segment. The MCS business operates in Germany and the United States, and the Hirschmann JV is an equity method investment located in China. Duringheld for sale criteria during the fourth quarter of ~~2016, we reached an agreement in principle~~2019. We intend to ~~sell this~~complete the sale of the Grass Valley disposal group ~~for a total sales price~~during 2020.

We wrote down the carrying value of ~~$39 million.~~ Grass Valley and recognized asset impairments totaling $23.2 million in the three months ended March 29, 2020. We determined the estimated fair values of the assets and of the reporting unit by calculating the present values of their estimated future cash flows.

The ~~carrying value~~following table summarizes the operating results of the disposal group ~~exceeded~~for the ~~fair value less costs to sell, which we determined based on~~three months ended ended March 29, 2020 and March 31, 2019:


	Three Months Ended
	March 29, 2020		March 31, 2019

	(In thousands)
Revenues	$	51,049	$	87,035
Cost of sales	(35,202)		(49,163)
Gross profit	15,847		37,872
Selling, general and administrative expenses	(17,519)		(24,831)
Research and development expenses	(8,499)		(10,907)
Amortization of intangibles	—		(5,178)
Asset impairment of discontinued operations	(23,197)		—
Interest expense, net	(206)		(206)
Non-operating pension income (cost)	(85)		(56)
Loss before taxes	$	(33,659)	$	(3,306)

-11-

The disposal group also had capital expenditures of approximately $7.9 million and $5.8 million during the ~~expected sales price, by $23.9 million. Therefore, we recognized an impairment charge equal to this amount in~~three months ended March 29, 2020 and March 31, 2019, respectively. Furthermore, the ~~fourth quarter~~disposal group incurred stock-based compensation expense (income) of ~~2016. During~~($0.9 million) and $0.3 million during the ~~first quarter of 2017, we signed a definitive sales agreement~~three months ended March 29, 2020 and March 31, 2019, respectively. The disposal group did not have any significant non-cash charges for ~~a purchase price of $39 million, and we expect~~investing activities during the ~~sale to be completed in the fourth quarter of 2017.~~ three months ended March 29, 2020 or March 31, 2019.

The following table provides the major classes of assets and liabilities ~~classified as held for sale~~of the disposal group as of ~~October 1, 2017~~March 29, 2020 and December 31, ~~2016. In addition, the~~2019:


	March 29, 2020		December 31, 2019

	(In thousands)
Assets:
Cash and cash equivalents	$	42,742	$	18,405
Receivables, net	88,895		117,386
Inventories, net	53,635		55,002
Other current assets	46,659		35,187
Plant, property, and equipment, less accumulated depreciation	59,200		61,233
Operating lease right-of-use assets	15,050		16,902
Goodwill	25,306		26,707
Intangible assets, less accumulated depreciation	139,055		143,459
Deferred income taxes	57,868		59,560
Other long-lived assets	19,357		21,652
Impairment of disposal group	(203,555)		(180,358)
Total Assets of discontinued operations	$	344,212	$	375,135
Liabilities:
Accounts payable	$	42,683	$	52,425
Accrued liabilities	63,838		83,349
Postretirement benefits	5,310		6,224
Deferred income taxes	3,925		2,740
Long-term operating lease liabilities	18,357		20,459
Other long-term liabilities	1,342		5,082
Total Liabilities of discontinued operations	$	135,455	$	170,279

The disposal group also had ~~$5.1~~$30.3 million and ~~$15.7~~$42.3 million of accumulated other comprehensive losses ~~at October 1, 2017~~as of March 29, 2020 and December 31, ~~2016,~~2019, respectively.

October 1, 2017 December 31, 2016

(In thousands)
Receivables, net $ 5,937
$ 4,551
Inventories, net 4,302
2,848
Other current assets 1,101
1,131
Property, plant, and equipment, less accumulated depreciation 2,348
1,946
Intangible assets, less accumulated amortization 4,589
4,405
Goodwill 5,477
5,477
Other long-lived assets 36,130
26,766
Total assets of disposal group 59,884
47,124
Impairment of assets held for sale (23,931 ) (23,931 )
Total assets held for sale $ 35,953
$ 23,193
Accrued liabilities $ 1,325
$ 1,288
Postretirement benefits 407
448
Total liabilities held for sale $ 1,732
$ 1,736

Note ~~4: Operating~~5: Reportable Segments

We are organized around ~~four~~2 global business platforms: ~~Broadcast Solutions,~~ Enterprise Solutions ~~Industrial Solutions,~~ and ~~Network~~Industrial Solutions. Each of the global business platforms represents a reportable segment.

~~To leverage the Company's strengths in networking, IoT, and cybersecurity technologies, effective~~Effective January 1, ~~2017,~~2020, we ~~formed~~transferred our West Penn Wire business and multi-conductor product lines from the Enterprise Solutions segment to the Industrial Solutions segment as a ~~new segment called Network Solutions, which represents~~result of a shift in responsibilities among the ~~combination of the prior Industrial IT Solutions and Network Security Solutions~~ segments. ~~The formation of this new segment is a natural evolution in our organic and inorganic strategies for a range of industrial and non-industrial applications.~~ We have ~~revised~~recast the prior period segment information to conform to the change in the composition of ~~these~~ reportable segments. ~~This change had no impact to our reporting units for purposes of goodwill impairment testing.~~

Beginning in 2017, sales of certain audio-visual cable that had previously been reported in our Broadcast Solutions segment are now reported in our Enterprise Solutions segment. As the annual revenues associated with this product line are not material, we have not revised the prior period segment information.

The key measures of segment profit or loss ~~reviewed by our chief operating decision maker~~ are Segment Revenues and Segment EBITDA. Segment Revenues represent non-affiliate revenues and include revenues that would have otherwise been recorded by acquired businesses as independent entities but were not recognized in our Condensed Consolidated Statements of Operations and Comprehensive Income due to the effects of purchase accounting and the associated write-down of acquired deferred revenue to fair value. Segment EBITDA excludes certain items, including depreciation expense; amortization of intangibles; asset impairment; severance, restructuring, and acquisition integration costs; purchase accounting effects related to acquisitions, such as the adjustment of acquired

inventory and deferred revenue to fair value; and other costs. We allocate corporate expenses to the segments for purposes of measuring Segment EBITDA. Corporate expenses are allocated on the basis of each segment’s relative EBITDA prior to the allocation.

Our measure of segment assets does not include cash, goodwill, intangible assets, deferred tax assets, or corporate assets. All goodwill is allocated to reporting units of our segments for purposes of impairment testing.


	Enterprise Solutions		Industrial Solutions		Total Segments

	(In thousands)
As of and for the three months ended March 29, 2020
Segment revenues	$	212,213	$	251,313	$	463,526
Affiliate revenues	224		6		230
Segment EBITDA	24,712		35,527		60,239
Depreciation expense	5,081		5,201		10,282
Amortization of intangibles	5,504		10,681		16,185
Amortization of software development intangible assets	55		275		330
Severance, restructuring, and acquisition integration costs	2,550		1,069		3,619
Purchase accounting effects of acquisitions	20		—		20

Segment assets	503,658		468,600		972,258
As of and for the three months ended March 31, 2019
Segment revenues	$	207,083	$	293,057	$	500,140
Affiliate revenues	1,544		17		1,561
Segment EBITDA	21,635		54,664		76,299
Depreciation expense	4,805		5,298		10,103
Amortization of intangibles	4,699		13,465		18,164
Amortization of software development intangible assets	36		23		59
Segment assets	447,707		531,440		979,147

Broadcast
Solutions

Enterprise
Solutions

Industrial
Solutions
Network Solutions
Total
Segments

(In thousands)
As of and for the three months ended October 1, 2017
Segment revenues $ 193,753
$ 167,089
$ 160,471
$ 100,432
$ 621,745
Affiliate revenues 129
1,419
332
—
1,880
Segment EBITDA 35,671
26,409
30,545
24,906
117,531
Depreciation expense 4,088
2,740
3,285
1,570
11,683
Amortization expense 13,482
438
646
12,596
27,162
Severance, restructuring, and acquisition integration costs 3,056
6,253
6,840
530
16,679
Purchase accounting effects of acquisitions 2,922
—
—
—
2,922
Segment assets 373,848
284,327
291,984
108,554
1,058,713
As of and for the three months ended October 2, 2016
Segment revenues $ 196,173
$ 156,658
$ 149,847
$ 99,790
$ 602,468
Affiliate revenues 46
1,587
511
13
2,157
Segment EBITDA 36,545
27,294
23,649
24,448
111,936
Depreciation expense 4,063
3,210
2,738
1,592
11,603
Amortization expense 10,955
431
604
11,818
23,808
Severance, restructuring, and acquisition integration costs 174
5,573
4,746
2,302
12,795
Deferred gross profit adjustments 283
—
—
1,076
1,359
Segment assets 314,020
265,085
261,923
105,938
946,966
As of and for the nine months ended October 1, 2017
Segment revenues $ 550,420
$ 473,504
$ 465,907
$ 293,928
$ 1,783,759
Affiliate revenues 324
5,522
994
92
6,932
Segment EBITDA 90,681
77,310
87,314
65,563
320,868
Depreciation expense 12,095
8,034
9,659
4,806
34,594
Amortization expense 36,950
1,291
1,928
37,775
77,944
Severance, restructuring, and acquisition integration costs 4,434
19,267
8,307
831
32,839
Purchase accounting effects of acquisitions 4,089
—
—
—
4,089
Segment assets 373,848
284,327
291,984
108,554
1,058,713
As of and for the nine months ended October 2, 2016
Segment revenues $ 560,966
$ 452,951
$ 438,746
$ 296,986
$ 1,749,649
Affiliate revenues 644
4,615
906
44
6,209
Segment EBITDA 89,317
80,605
73,700
66,715
310,337
Depreciation expense 12,086
10,028
8,165
4,974
35,253
Amortization expense 37,306
1,292
1,796
35,209
75,603
Severance, restructuring, and acquisition integration costs 5,871
7,280
7,982
5,939
27,072
Purchase accounting effects of acquisitions 195
—
—
—
195
Deferred gross profit adjustments 1,391
—
—
4,021
5,412
Segment assets 314,020
265,085
261,923
105,938
946,966

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


	Three Months Ended
	March 29, 2020		March 31, 2019

	(In thousands)
Total Segment and Consolidated Revenues	$	463,526	$	500,140



Total Segment EBITDA	$	60,239	$	76,299
Amortization of intangibles	(16,185)		(18,164)
Depreciation expense	(10,282)		(10,103)
Severance, restructuring, and acquisition integration costs (1)	(3,619)		—
Amortization of software development intangible assets	(330)		(59)
Purchase accounting effects related to acquisitions (2)	(20)		—
Eliminations	(95)		(483)
Consolidated operating income	29,708		47,490
Interest expense, net	(13,324)		(13,988)
Total non-operating pension benefit	699		603
Consolidated income from continuing operations before taxes	$	17,083	$	34,105

Three Months Ended Nine Months Ended
October 1, 2017 October 2, 2016 October 1, 2017 October 2, 2016

(In thousands)
Total Segment Revenues $ 621,745
$ 602,468
$ 1,783,759
$ 1,749,649
Deferred revenue adjustments (1) —
(1,359 ) —
(5,412 )
Consolidated Revenues $ 621,745
$ 601,109
$ 1,783,759
$ 1,744,237

Total Segment EBITDA $ 117,531
$ 111,936
$ 320,868
$ 310,337
Amortization of intangibles (27,162 ) (23,808 ) (77,944 ) (75,603 )
Severance, restructuring, and acquisition integration costs (2) (16,679 ) (12,795 ) (32,839 ) (27,072 )
Depreciation expense (11,683 ) (11,603 ) (34,594 ) (35,253 )
Purchase accounting effects related to acquisitions (3) (2,922 ) —
(4,089 ) (195 )
Deferred gross profit adjustments (1) —
(1,359 ) —
(5,412 )
Income from equity method investment 2,551
586
5,835
1,077
Eliminations (845 ) (977 ) (2,628 ) (2,694 )
Consolidated operating income 60,791
61,980
174,609
165,185
Interest expense, net (19,385 ) (23,513 ) (66,424 ) (71,958 )
Loss on debt extinguishment (51,594 ) —
(52,441 ) —
Consolidated income (loss) before taxes $ (10,188 ) $ 38,467
$ 55,744
$ 93,227

(1) For the three and nine months ended October 2, 2016 , our segment results include revenues that would have been recorded by acquired businesses had they remained as independent entities. Our consolidated results do not include these revenues due to the purchase accounting effect of recording deferred revenue at fair value.

~~(2)~~ See Note 8, 11, Severance, Restructuring, and Acquisition Integration Activities, for ~~details~~.details.

~~(3) For~~(2) During the three ~~and nine~~ months ended ~~October 1, 2017 and nine months ended October 2, 2016,~~March 29, 2020, we recognized cost of sales ~~for the adjustment~~related to purchase accounting adjustments of acquired inventory to fair value ~~related to~~for the ~~Thinklogical and M2FX acquisitions, respectively.~~SPC acquisition.

-13-

Note 5:6: Income per Share

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


	Three Months Ended						Nine Months Ended							Three Months Ended
	October 1, 2017			October 2, 2016			October 1, 2017			October 2, 2016				March 29, 2020		March 31, 2019

	(In thousands)													(In thousands)
Numerator:													Numerator:
Net income	$	945		$	36,072		$	62,417		$	94,363
Income from continuing operations													Income from continuing operations	$	14,891	$	27,935
Less: Net loss attributable to noncontrolling interest	(82		)	(88		)	(274		)	(286		)	Less: Net loss attributable to noncontrolling interest	(30)		(24)
Less: Preferred stock dividends	8,732			6,695			26,198			6,695			Less: Preferred stock dividends	—		8,733
Income from continuing operations attributable to Belden common stockholders													Income from continuing operations attributable to Belden common stockholders	14,921		19,226
Add: Loss from discontinued operations, net of tax													Add: Loss from discontinued operations, net of tax	(26,110)		(2,757)
Net income (loss) attributable to Belden common stockholders	$	(7,705	)	$	29,465		$	36,493		$	87,954		Net income (loss) attributable to Belden common stockholders	$	(11,189)	$	16,469

Denominator:													Denominator:
Weighted average shares outstanding, basic	42,256			42,126			42,251			42,073			Weighted average shares outstanding, basic	45,390		39,420
Effect of dilutive common stock equivalents	—			522			412			461			Effect of dilutive common stock equivalents	148		240
Weighted average shares outstanding, diluted	42,256			42,648			42,663			42,534			Weighted average shares outstanding, diluted	45,538		39,660

For the three ~~and nine~~ months ended ~~October 1, 2017,~~March 29, 2020, diluted weighted average shares outstanding exclude outstanding equity awards of 1.4 million which are anti-dilutive. In addition, for the three months ended March 29, 2020, diluted weighted average shares outstanding do not include outstanding equity awards of ~~0.9~~0.3 million ~~and 0.5~~because the related performance conditions have not been satisfied.

For the three months ended March 31, 2019, diluted weighted average shares outstanding exclude outstanding equity awards of 1.0 million ~~respectively, because to do so would have been~~which are anti-dilutive. In addition, for ~~both~~ the three ~~and nine~~ months ended ~~October 1, 2017,~~March 31, 2019, diluted weighted average shares outstanding do not include outstanding equity awards of ~~0.2~~0.3 million because the related performance conditions have not been satisfied. Furthermore, for the three ~~and nine~~ months ended ~~October 1, 2017,~~March 31, 2019, diluted weighted average shares outstanding do not include the impact of preferred shares that ~~are convertible~~were converted into ~~6.8 million and~~ 6.9 million common shares, ~~respectively, because deducting the preferred stock dividends from net income was more dilutive.~~

For the three and nine months ended October 2, 2016, diluted weighted average shares outstanding do not include outstanding equity awards of 0.4 million and 0.7 million, respectively, because to do so would have been anti-dilutive. In addition, for both the three and nine months ended October 2, 2016, diluted weighted average shares outstanding do not include outstanding equity awards of 0.1 million because the related performance conditions have not been satisfied. Furthermore, for the three and nine months ended October 2, 2016, diluted weighted average shares outstanding do not include the impact of preferred shares that are convertible into 5.2 million and 1.7 million common shares, respectively, because deducting the preferred stock dividends from net income was more dilutive.

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. Necessary conditions are not satisfied until the vesting date, at which time holders of our restricted stock units receive shares of our common stock.

For purposes of calculating diluted earnings per share, unvested restricted stock units are included to the extent that they are dilutive. In determining whether unvested restricted stock units are dilutive, each issuance of restricted stock units is considered separately.

Once a restricted stock unit has vested, it is included in the calculation of both basic and diluted weighted average shares outstanding.

Note 6:7: 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 replaces the incurred loss impairment model with an expected credit loss impairment model for financial instruments, including trade receivables. The amendment requires entities to consider forward-looking information to estimate expected credit losses, resulting in earlier recognition of losses for receivables that are current or not yet due, which were not considered under the previous accounting guidance. Upon adoption, we recorded a noncash cumulative effect adjustment to retained earnings of $2.9 million. Of this amount, $1.0 million related to our continuing operations and $1.9 million related to our discontinued operations.

-14-

We are exposed to credit losses primarily through sales of products and services. Our expected loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions and a review of the current status of customers' trade accounts receivables. Due to the short-term nature of such receivables, the estimate of amount of accounts receivable that may not be collected is based on aging of the accounts receivable balances and the financial condition of customers. Additionally, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. 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.

Estimates are used to determine the allowance, which is based on an assessment of anticipated payment and all other historical, current and future information that is reasonably available. The allowance for doubtful accounts for our continuing operations was $3.5 million and $2.6 million as of March 29, 2020 and December 31, 2019, respectively. There were no material adjustments to the allowance for doubtful accounts during the three months ended March 29, 2020 other than the transition adjustment from adopting ASU 2016-13.

Note 8: Inventories

The major classes of inventories were as follows:


	March 29, 2020		December 31, 2019

	(In thousands)
Raw materials	$	113,310	$	98,530
Work-in-process	34,898		34,717
Finished goods	126,826		119,331
Gross inventories	275,034		252,578
Excess and obsolete reserves	(22,113)		(21,245)
Net inventories	$	252,921	$	231,333

Note 9: Leases

We have operating and finance leases for properties, including manufacturing facilities, warehouses, and office space; as well as vehicles and certain equipment. We make certain judgments in determining whether a contract contains a lease in accordance with ASU 2016-02. Our leases have remaining lease terms of less than 1 year to 16 years, some of which include options to extend the lease for a period of up to 15 years and some include options to terminate the leases within 1 year. We do not assume renewals in our determination of the lease term unless the renewals are deemed to be reasonably certain as of the commencement date of the lease. Our lease agreements do not contain any material residual value guarantees or material variable lease payments.

We have entered into various short-term operating leases with an initial term of twelve months or less. These leases are not recorded on our balance sheet, and for the three months ended March 29, 2020, the rent expense for short-term leases was not material.

We have certain property and equipment lease contracts that may contain lease and non-lease components, and we have elected to utilize the practical expedient to account for these components together as a single combined lease component.

As the rate implicit in most of our leases is not readily determinable, we use 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.

-15-

October 1, 2017 December 31, 2016

(In thousands)
Raw materials $ 119,754
$ 90,019
Work-in-process 39,672
25,166
Finished goods 130,009
99,784
Gross inventories 289,435
214,969
Excess and obsolete reserves (26,941 ) (24,561 )
Net inventories $ 262,494
$ 190,408
The components of lease expense were as follows:


	Three Months Ended
	March 29, 2020		March 31, 2019

	(In thousands)
Operating lease cost	$	3,597	$	4,873

Finance lease cost
Amortization of right-of-use asset	$	33	$	26
Interest on lease liabilities	5		4
Total finance lease cost	$	38	$	30

Supplemental cash flow information related to leases was as follows:


	Three Months Ended
	March 29, 2020		March 31, 2019

	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	3,791	$	5,088
Operating cash flows from finance leases	5		9
Financing cash flows from finance leases	46		70

Supplemental balance sheet information related to leases was as follows:


	March 29, 2020		December 31, 2019

	(In thousands, except lease term and discount rate)
Operating leases:
Total operating lease right-of-use assets	$	58,960	$	62,251

Accrued liabilities	$	13,626	$	13,900
Long-term operating lease liabilities	52,084		55,652
Total operating lease liabilities	$	65,710	$	69,552

Finance leases:
Other long-lived assets, at cost	$	748	$	823
Accumulated depreciation	(392)		(391)
Other long-lived assets, net	$	356	$	432


Weighted Average Remaining Lease Term
Operating leases	5 years		6 years
Finance leases	3 years		3 years

Weighted Average Discount Rate
Operating leases	6.8	%	6.9	%
Finance leases	6.2	%	6.2	%

-16-

The following table summarizes maturities of lease liabilities as of March 29, 2020 (in thousands):


2020	$	14,579
2021	17,866
2022	15,067
2023	11,854
2024	9,032
Thereafter	16,573
Total	$	84,971

The following table summarizes maturities of lease liabilities as of December 31, 2019 (in thousands):


2020	$	19,086
2021	16,988
2022	14,128
2023	11,598
2024	9,032
Thereafter	16,655
Total	$	87,487

Note 7:10: Long-Lived Assets

Depreciation and Amortization Expense

We recognized depreciation expense of ~~$11.7~~$10.3 million and ~~$34.6~~$10.1 million in the three ~~and nine~~ months ended ~~October 1, 2017,~~March 29, 2020 and March 31, 2019, respectively. ~~We recognized depreciation expense of $11.6 million and $35.3 million in the three and nine months ended October 2, 2016, respectively.~~

In connection with the segment change discussed in Note 4, we re-evaluated the useful life of the Tripwire trademark and concluded that an indefinite life is no longer appropriate. We have estimated a useful life of 10 years and will re-evaluate this estimate if and when our expected use of the Tripwire trademark changes. We began amortizing the Tripwire trademark in the first quarter of 2017, which resulted in amortization expense of $0.8 million and $2.4 million for the three and nine months ended October 1, 2017, respectively. As of October 1, 2017, the net book value of the Tripwire trademark was $28.6 million.

We recognized amortization expense related to our intangible assets of ~~$27.2~~$16.5 million and ~~$77.9~~$18.2 million in the three ~~and nine~~ months ended ~~October 1, 2017,~~March 29, 2020 and March 31, 2019, respectively.

Interim Impairment Test

Due to equity market conditions during the three months ended March 29, 2020, we conducted an interim impairment test. We ~~recognized amortization expense~~determined that the carrying values of our definite-lived assets were recoverable; therefore, we did not record any impairment charges related to these assets. Goodwill is tested for impairment at the reporting unit level, and we conducted an interim impairment test for all of our reporting units. A reporting unit is an operating segment, or a business unit one level below an operating segment if discrete financial information for that business is prepared and regularly reviewed by segment management. However, components within an operating segment are aggregated as a single reporting unit if they have similar economic characteristics. We determined that each of our reportable segments (Enterprise Solutions and Industrial Solutions) represents an operating segment. Within those operating segments, we have identified reporting units based on whether there is discrete financial information prepared that is regularly reviewed by segment management.

When we evaluate goodwill for impairment using a quantitative assessment, we compare the fair value of each reporting unit to its carrying value. We determine the fair value using an income approach. Under the income approach, we calculate the fair value of a reporting unit based on the present value of estimated future cash flows using growth rates and discount rates that are consistent with current market conditions in our industry. If the fair value of the reporting unit exceeds the carrying value of the net assets including goodwill assigned to that unit, goodwill is not impaired. If the carrying value of the reporting unit’s net assets including goodwill exceeds the fair value of the reporting unit, then we record an impairment charge based on that difference. In addition to the income approach, we calculate the fair value of our reporting units under a market approach. The market approach measures the fair value of a reporting unit through analysis of financial multiples of comparable businesses. 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. Significant judgment is required when applying the market approach as there is a range of financial multiples of comparable businesses.

-17-

Based on our interim goodwill impairment test, we determined that the fair values of the reporting units were in excess of the carrying values; therefore, we did not record any goodwill impairment. The excess of the fair values over the carrying values of our reporting units ranged from 2% - 269%. The significant assumptions used to estimate fair values included sales growth, profitability, and related cash flows, along with cash flows associated with taxes and capital spending. The discount rate used to estimate fair value was risk adjusted in consideration of the economic conditions in effect at the time of the impairment test. We also considered assumptions that market participants may use. In our quantitative assessments, the discount rates ranged from 9.0% to 17.0%, the 2020 to 2029 compounded annual revenue growth rates ranged from 2.0% to 8.0%, and the long-term revenue growth rates ranged from 2.0% to 3.0%. By their nature, these assumptions involve risks and uncertainties. Furthermore, uncertainties associated with current market conditions increase the inherent risk associated with using an income approach to estimate fair values. While we have adjusted our key assumptions to reflect the current economic conditions, we have also assumed that economic conditions will improve beyond 2020. If current conditions persist and actual results are different from our estimates or assumptions, we may have to recognize an impairment charge that could be material.

We also tested our indefinite-lived intangible assets, which consist primarily of ~~$23.8 million~~trademarks, for impairment during the quarter ended March 29, 2020. We performed a quantitative assessment for each of our indefinite-lived trademarks using a relief from royalty methodology and ~~$75.6 million in~~compared the ~~three~~fair value to the carrying value. We determined that none of our trademarks were impaired as of March 29, 2020. Significant assumptions to determine fair value included sales growth, royalty rates, and ~~nine months ended October 2, 2016, respectively.~~discount rates.

Note 8:11: Severance, Restructuring, and Acquisition Integration Activities

Cost Reduction Program: 2019

~~Industrial and Network Solutions Restructuring Program: 2015-2016~~

Both our Industrial Solutions and Network Solutions segments were negatively impacted by a decline in sales volume in 2015. At such time, global demand for industrial products was negatively impacted byDuring the ~~strengthened U.S. dollar and lower energy prices. As a result, our customers reduced their capital spending. In response to these industrial market conditions,~~fourth quarter of 2019, we began a cost reduction program to ~~execute a restructuring program~~improve performance and enhance margins by streamlining the organizational structure and investing in ~~the fourth fiscal quarter of 2015~~technology to ~~reduce our cost structure.~~drive productivity. We recognized ~~$2.6 million and $8.4 million of severance and other restructuring costs for~~an immaterial amount associated with this program duringthe three ~~and nine~~ months ended ~~October 2, 2016, respectively. Most~~March 29, 2020. The cost reduction program is expected to deliver an estimated $60.0 million reduction in selling, general, and administrative expenses on an annual basis, of ~~these~~which $40.0 million is expected to be realized in 2020, with the full benefit materializing in 2021. We expect to incur incremental costs ~~were incurred by our Network Solutions segment. We did not incur any severance and other restructuring~~of approximately $20.0 million of costs for this program in ~~2017. To date,~~2020.

SPC, Opterna and FutureLink Integration Program: 2019

In 2019, we ~~have incurred~~began a ~~total of $13 million in severance and other restructuring costs for this program. We expect the~~ restructuring program to ~~generate approximately $18 million of~~integrate SPC, Opterna and FutureLink with our existing businesses. The restructuring and integration activities were focused on achieving desired cost savings ~~on an annualized basis,~~by consolidating existing and ~~we are substantially realizing such benefits.~~

~~Industrial Manufacturing Footprint Program: 2016 - 2017~~

~~In 2016, we began a program to consolidate our manufacturing footprint. The manufacturing consolidation is expected to be completed in 2018.~~acquired facilities and other support functions. We recognized ~~$10.0 million and $12.5~~$2.2 million of severance and other restructuring costs for this program during the three ~~and nine~~ months ended October 2, 2016, respectively. We recognized $11.4 million and $25.3 million of severance and other restructuring costs for this program during the three and nine months ended October 1, 2017, respectively. TheMarch 29, 2020. These costs were incurred by the Enterprise Solutions and Industrial Solutions segments, as the manufacturing locations involved in the program serve both platforms. To date, we have incurred a total of $43.1 million in severance and other restructuring costs, including manufacturing inefficiencies for this program.segment. We expect to incur incremental costs of approximately $7$2.5 million of additional severance and other restructuring costs for this program over 2017 and 2018. We expect the program to generate approximately $13 million of savings on an annualized basis, which we began to realize in the third quarter of 2017.

~~Grass Valley Restructuring Program: 2015-2016~~

Our Broadcast Solutions segment’s Grass Valley brand was negatively impacted by a decline in global demand of broadcast technology infrastructure products beginning in 2015. Outside of the U.S., demand for these products was impacted by the relative price increase of products due to the strengthened U.S. dollar as well as the impact of weaker economic conditions which resulted in lower capital spending. Within the U.S., demand for these products was impacted by deferred capital spending. We believe broadcast customers deferred their capital spending as they navigated through a number of important industry transitions and a changing media landscape. In response to these broadcast market conditions, we began to execute a restructuring program beginning in the third fiscal quarter of 2015 to reduce our cost structure. We recognized $0.1 million and $5.1 million of severance and other restructuring costs for this program during~~the three and nine months ended October 2, 2016, respectively. We did not incur any severance and other restructuring costs~~ for this program in 2017. To date, we have incurred a total of $34.1 million in severance and other restructuring costs for this program. We expect the restructuring program to generate approximately $30 million of savings on an annualized basis, and we are substantially realizing such benefits.

2020.

The following table summarizes the costs by segment of the ~~various~~ programs described above as well as other immaterial programs and acquisition integration ~~activities:~~

Severance
Other
Restructuring and
Integration Costs
Total Costs

Three Months Ended October 1, 2017 (In thousands)
Broadcast Solutions $ 510
$ 2,546
$ 3,056
Enterprise Solutions 712
5,541
6,253
Industrial Solutions 712
6,128
6,840
Network Solutions —
530
530
Total $ 1,934
$ 14,745
$ 16,679
Three Months Ended October 2, 2016
Broadcast Solutions $ (114 ) $ 288
$ 174
Enterprise Solutions (21 ) 5,594
5,573
Industrial Solutions 184
4,562
4,746
Network Solutions 1,103
1,199
2,302
Total $ 1,152
$ 11,643
$ 12,795
Nine Months Ended October 1, 2017
Broadcast Solutions $ 559
$ 3,875
$ 4,434
Enterprise Solutions 2,839
16,428
19,267
Industrial Solutions 865
7,442
8,307
Network Solutions —
831
831
Total $ 4,263
$ 28,576
$ 32,839
Nine Months Ended October 2, 2016
Broadcast Solutions $ (865 ) $ 6,736
$ 5,871
Enterprise Solutions 55
7,225
7,280
Industrial Solutions 1,961
6,021
7,982
Network Solutions 3,734
2,205
5,939
Total $ 4,885
$ 22,187
$ 27,072

~~Of the total severance, restructuring, and acquisition integration costs recognized in~~activities during the three months ended ~~October 1, 2017, $12.4 million, $4.2 million, and $0.1 million were included in cost of sales; selling, general and administrative expenses; and research and development, respectively. Of the total~~March 29, 2020:


	Severance		Other Restructuring and Integration Costs		Total Costs

Three Months Ended March 29, 2020	(In thousands)
Enterprise Solutions	$	(632)	$	3,182	$	2,550
Industrial Solutions	(955)		2,024		1,069
Total	$	(1,587)	$	5,206	$	3,619

The severance ~~restructuring, and acquisition integration~~ costs ~~recognized in~~incurred during the three months ended ~~October 2, 2016, $2.9 million, $9.9 million, and $0.0 million~~March 29, 2020 were ~~included~~offset by adjustments made during the quarter for changes in ~~cost of sales; selling, general and administrative expenses; and research and development, respectively.~~

Of the total severance, restructuring, and acquisition integration costs recognized in the nine months ended October 1, 2017, $26.5 million, $6.2 million, and $0.1 million were included in cost of sales; selling, general and administrative expenses; and research and development, respectively. Of the total severance, restructuring, and acquisition integration costs recognized in the nine months ended October 2, 2016, $6.8 million, $19.6 million, and $0.7 million were included in cost of sales; selling, general and administrative expenses; and research and development, respectively.

estimates primarily stemming from voluntary turnover. The other restructuring and integration costs primarily consisted of ~~non-cash pension settlement charges due in part to our restructuring activities as well as~~ equipment transfer, costs to consolidate operating and support facilities, retention bonuses, relocation, travel, legal, and other costs. The majority of the other ~~cash~~ restructuring and integration costs related to these actions were paid as incurred or are payable within the next 60 days.

There were no material severance and restructuring costs incurred during the three months ended March 31, 2019.

-18-

The following table summarizes the costs of the various programs described above as well as other immaterial programs and acquisition integration activities by financial statement line item in the Condensed Consolidated Statement of Operations for the three months ended March 29, 2020 (in thousands):


Cost of sales	$	45
Selling, general and administrative expenses	3,574

Total	$	3,619

Accrued Severance

The table below sets forth severance activity that occurred for the Cost Reduction Program described above. We did not incur any significant severance ~~accrual~~costs for the SPC, Opterna and FutureLink Integration Program. The balances below are included in accrued liabilities.


	Cost Reduction Program
	(In thousands)

Balance at December 31, 2019	$	19,575
New charges	2,529
Cash payments	(4,483)
Foreign currency translation	(89)
Other adjustments	(4,147)
Balance at March 29, 2020	$	13,385

The other adjustments were the result of changes in estimates. We experienced higher than expected voluntary turnover, and as ~~of October 1, 2017 or December 31, 2016.~~

a result, certain approved severance actions were not taken.

Note 9:12: Long-Term Debt and Other Borrowing Arrangements

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


	October 1, 2017			December 31, 2016				March 29, 2020		December 31, 2019

	(In thousands)							(In thousands)
Revolving credit agreement due 2022	$	—		$	—		Revolving credit agreement due 2022	$	—	$	—
Senior subordinated notes:							Senior subordinated notes:
3.875% Senior subordinated notes due 2028							3.875% Senior subordinated notes due 2028	378,175		392,910
3.375% Senior subordinated notes due 2027	528,165			—			3.375% Senior subordinated notes due 2027	486,225		505,170
4.125% Senior subordinated notes due 2026	234,740			209,081			4.125% Senior subordinated notes due 2026	216,100		224,520
2.875% Senior subordinated notes due 2025	352,110			—			2.875% Senior subordinated notes due 2025	324,150		336,780
5.25% Senior subordinated notes due 2024	200,000			200,000
5.50% Senior subordinated notes due 2023	238,805			529,146
5.50% Senior subordinated notes due 2022	—			700,000
9.25% Senior subordinated notes due 2019	—			5,221
Total senior subordinated notes	1,553,820			1,643,448			Total senior subordinated notes	1,404,650		1,459,380
Less unamortized debt issuance costs	(23,743		)	(23,287		)	Less unamortized debt issuance costs	(19,212)		(19,896)
Long-term debt	$	1,530,077		$	1,620,161		Long-term debt	$	1,385,438	$	1,439,484

Revolving Credit Agreement due 2022

~~On May 16, 2017, we entered into an Amended and Restated~~Our Revolving Credit Agreement ~~(the Revolver) to amend and restate our prior Revolving Credit Agreement. The Revolver~~ provides a $400.0 million multi-currency asset-based revolving credit ~~facility.~~facility (the Revolver). The borrowing base under the Revolver includes eligible accounts receivable; inventory; and property, plant and equipment of certain of our subsidiaries in the U.S., Canada, Germany, and the Netherlands. The maturity date of the Revolver is May 16, 2022. 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. We pay a commitment fee on our available borrowing capacity of 0.25%. In the event we borrow more than 90% of our borrowing base, we are subject to a fixed charge coverage ratio covenant. We recognized a $0.8 million loss on debt extinguishment for unamortized debt issuance costs related to creditors no longer participating in the new Revolver. In connection with executing the Revolver, we paid $2.2 million of fees to creditors and third parties that we will amortize over the remaining term of the Revolver.

-19-

As of ~~October 1, 2017,~~March 29, 2020, we had no0 borrowings outstanding on the Revolver, and our available borrowing capacity was ~~$314.1 million.~~$303.4 million, but at the beginning of the second quarter, we borrowed $190.0 million under our Revolver out of an abundance of caution due to the uncertainties arising from the COVID-19 pandemic. See Note 19.

Senior Subordinated Notes

~~In July 2017, we completed an offering for €450.0~~We have outstanding €350.0 million ~~($509.5 million at issuance)~~ aggregate principal amount of ~~3.375%~~3.875% senior subordinated notes due ~~2027~~2028 (the ~~2027~~2028 Notes). The carrying value of the ~~2027~~2028 Notes as of ~~October 1, 2017~~March 29, 2020 is ~~$528.2~~$378.2 million. The ~~2027~~2028 Notes are guaranteed on a senior subordinated basis by our current and future domestic subsidiaries. The 2027 Notes rank equal in right of payment with our senior subordinated notes due 2026, 2025, 2024, and 2023 and with any future subordinated debt, and they are subordinated to all of our senior debt and the senior debt of our subsidiary guarantors, including our Revolver. Interest is payable semiannually on January 15 and July 15 of each year, beginning on January 15, 2018. We paid approximately $8.7 million of fees associated with the issuance of the 2027 Notes, which will be amortized over the life of the 2027 Notes using the effective interest method. We used the net proceeds from this offering and cash on hand to repurchase all of the $700.0 million 2022 Notes outstanding for cash consideration of $722.7 million. We recognized a $29.8 million loss on debt extinguishment including the write-off of unamortized debt issuance costs.

We have outstanding €200.0 million aggregate principal amount of 4.125% senior subordinated notes due 2026 (the 2026 Notes). The carrying value of the 2026 Notes as of October 1, 2017 is $234.7 million. The 2026 Notes are guaranteed on a senior subordinated basis by our current and future domestic subsidiaries. The 2026 Notes rank equal in right of payment with our senior subordinated notes due 2027, 2025, 2024, and 2023 and with any future subordinated debt, and they are subordinated to all of our senior debt and the senior debt of our subsidiary guarantors, including our Revolver. Interest is payable semiannually on April 15 and October 15 of each year.

In September 2017, we completed an offering for €300.0 million ($357.2 million at issuance) aggregate principal amount of 2.875% senior subordinated notes due 2025 (the 2025 Notes). The carrying value of the 2025 Notes as of October 1, 2017 is $352.1 million. The 2025 Notes are guaranteed on a senior subordinated basis by our current and future domestic subsidiaries. The 20252028 Notes rank equal in right of payment with our senior subordinated notes due 2027, 2026, ~~2024,~~ and ~~2023~~2025 and with any future subordinated debt, and they are subordinated to all of our senior debt and the senior debt of our subsidiary guarantors, including our Revolver. Interest is payable semiannually on March 15 and September 15 of each year, beginning on March 15, 2018. We paid approximately $5.7 million of fees associated with the issuance of the 2025 Notes, which will be amortized over the life of the 2025 Notes using the effective interest method. We used the net proceeds from this offering to repurchase €300.0 million of the €500.0 million 2023 Notes outstanding. See further discussion below.year.

We have outstanding ~~$200.0~~€450.0 million aggregate principal amount of ~~5.25%~~3.375% senior subordinated notes due ~~2024~~2027 (the ~~2024~~2027 Notes). The ~~2024~~carrying value of the 2027 Notes as of March 29, 2020 is $486.2 million. The 2027 Notes are guaranteed on a senior subordinated basis by ~~certain of~~ our current and future domestic subsidiaries. The ~~2024~~2027 Notes rank equal in right of payment with our senior subordinated notes due ~~2027,~~2028, 2026, ~~2025,~~ and ~~2023~~2025 and with any future subordinated debt, and they are subordinated to all of our senior debt and the senior debt of our subsidiary guarantors, including our Revolver. Interest is payable semiannually on January 15 and July 15 of each year.

We ~~had~~have outstanding ~~€500.0~~€200.0 million aggregate principal amount of ~~5.5%~~4.125% senior subordinated notes due ~~2023~~2026 (the ~~2023~~2026 Notes). In September 2017, we repurchased €300.0 million of the €500.0 million 2023 Notes outstanding for cash consideration of $377.9 million and recognized a $21.8 million loss on debt extinguishment including the write-off of unamortized debt issuance costs. The carrying value of the ~~2023~~2026 Notes as of ~~October 1, 2017~~March 29, 2020 is ~~$238.8~~$216.1 million. The ~~2023~~2026 Notes are guaranteed on a senior subordinated basis by ~~certain of~~ our current and future domestic subsidiaries. The ~~notes~~2026 Notes rank equal in right of payment with our senior subordinated notes due 2028, 2027, ~~2026,~~and 2025 ~~and 2024~~ and with any future subordinated debt, and they are subordinated to all of our senior debt and the senior debt of our subsidiary guarantors, including our Revolver. Interest is payable semiannually on April 15 and October 15 of each year.

We ~~had~~have outstanding ~~$5.2~~€300.0 million aggregate principal amount of ~~9.25%~~2.875% senior subordinated notes due ~~2019~~2025 (the ~~2019~~2025 Notes). ~~On June 15, 2017, we repaid~~The carrying value of the 2025 Notes as of March 29, 2020 is $324.2 million. The 2025 Notes are guaranteed on a senior subordinated basis by our current and future domestic subsidiaries. The 2025 Notes rank equal in right of payment with our senior subordinated notes due 2028, 2027, and 2026 and with any future subordinated debt, and they are subordinated to all of our senior debt and the ~~2019 Notes outstanding, plus accrued interest,~~senior debt of our subsidiary guarantors, including our Revolver. Interest is payable semiannually on March 15 and ~~recognized an immaterial loss on debt extinguishment related to unamortized debt issuance costs.~~September 15 of each year.

Fair Value of Long-Term Debt

The fair value of our senior subordinated notes as of ~~October 1, 2017~~March 29, 2020 was approximately ~~$1,582.9~~$1,227.6 million based on quoted prices of the debt instruments in inactive markets (Level 2 valuation). This amount represents the fair ~~values~~value of our senior subordinated notes with a carrying value of ~~$1,553.8~~$1,404.7 million as of ~~October 1, 2017.~~March 29, 2020.

Note ~~10:~~13: Net Investment Hedge

All of our euro denominated notes were issued by Belden Inc., a USD functional currency ~~ledger.~~entity. As of ~~October 1, 2017, all~~March 29, 2020, €767.8 million of 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 ~~rates.~~rate. The transaction gain or loss is reported in the ~~cumulative~~ translation adjustment section of other comprehensive income. ~~The amount of~~For the ~~cumulative translation adjustment~~three months ended March 29, 2020 and March 31, 2019, the transaction gain associated with ~~these notes at October 1, 2017~~the net investment hedge that was ~~$25.3 million.~~reported in other comprehensive income was $54.7 million and $23.6 million, respectively. During the three months ended March 29, 2020, we de-designated €532.2 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 €532.2 million of debt are reported in income from continuing operations.

Note ~~11:~~14: Income Taxes

~~We recognized an income tax benefit of $11.1 million and $6.7 million for~~For the three ~~and nine~~ months ended ~~October 1, 2017, respectively, representing effective tax rates of 109.3% and (12.0)%, respectively. The effective tax rates were impacted by the following significant factors:~~

We recognized an income tax benefit of $2.5 million and $8.4 million in the three and nine months ended October 1, 2017, respectively, as a result of the implementation of a foreign tax credit planning strategy.

Foreign tax rate differences reduced our income tax expense by approximately $1.4 million and $8.4 million in the three and nine months ended October 1, 2017, respectively. The statutory tax rates associated with our foreign earnings generally are lower than the statutory U.S. tax rate of 35%. This had the greatest impact on our income before taxes that is generated in Germany, Canada, and the Netherlands, which have statutory tax rates of approximately 28%, 26%, and 25%, respectively.

~~We also recognized an income tax benefit of $6.4 million and $11.7 million in the three and nine months ended October 1, 2017, respectively, related to non-taxable currency translation gains.~~

~~All other items impacting the effective tax rate represented a net expense of $2.6 million and $2.3 million in the three and nine months ended October 1, 2017, respectively.~~

WeMarch 29, 2020, we recognized income tax expense of ~~$2.4~~$2.2 million, ~~for the three months ended October 2, 2016,~~ representing an effective tax rate of ~~6.2%~~ 12.8%. ~~We recognized an~~The effective tax rate was impacted by a $1.1 million income tax benefit for certain foreign tax credits.

In March 2020, the Coronavirus Relief and Economic Security Act (CARES Act) was signed into law in the United States. We are still analyzing the provisions of ~~$1.1 million~~the CARES Act to determine if there will be any impact to our income tax provision for the ~~nine~~year.

-20-

For the three months ended ~~October 2, 2016,~~March 31, 2019, we recognized income tax expense of $6.2 million, representing an effective tax rate of ~~(1.2)%~~18.1%. The effective tax ~~rates were~~rate was impacted by ~~the following significant factors:~~

~~We recognized $2.9~~an $0.8 million ~~and $11.0 million of~~income tax benefit resulting from a change in ~~the three and nine months ended October 2, 2016, respectively, as the result of securing a significant~~our valuation allowance on foreign tax ~~deduction for a foreign currency loss by implementing several transactions related to our international tax structure.~~

We also recognized a $7.0 million tax benefit in the nine months ended October 2, 2016 for the reduction of deferred tax liabilities related to a previously completed acquisition. As part of an implemented tax planning strategy, we secured a Private Letter Ruling from the Internal Revenue Service that effectively increased the tax basis in the acquired assetscredits due to the ~~full fair value. Accordingly, a book-tax difference was eliminated, and we reversed deferred tax liabilities previously recorded, resulting in the tax benefit.~~restructuring of certain foreign operations.

In the three and nine months ended October 2, 2016, we recognized tax benefits of $2.2 million and $6.0 million, respectively, as a result of reducing a deferred tax valuation allowance related to net operating loss carryforwards in a foreign jurisdiction. Based on certain restructuring transactions in the nine months ended October 2, 2016, the net operating loss carryforwards are expected to be realizable.

The tax benefits described above for the nine months ended October 2, 2016 were partially offset by a $2.7 million tax expense to record a liability for uncertain tax positions in one of our foreign jurisdictions.

Note ~~12:~~15: Pension and Other Postretirement Obligations

The following table provides the components of net periodic benefit costs for our pension and other postretirement benefit plans:


	Pension Obligations						Other Postretirement Obligations
	March 29, 2020		March 31, 2019		March 29, 2020		March 31, 2019

	(In thousands)
Three Months Ended
Service cost	$	932	$	1,007	$	8	$	10
Interest cost	2,337		2,960		202		272
Expected return on plan assets	(3,940)		(4,116)		—		—
Amortization of prior service cost (credit)	44		(14)		—		—
Actuarial losses (gains)	677		321		(19)		(26)
Net periodic benefit cost	$	50	$	158	$	191	$	256

Pension Obligations Other Postretirement Obligations
Three Months Ended October 1, 2017 October 2, 2016 October 1, 2017 October 2, 2016

(In thousands)
Service cost $ 1,206
$ 1,282
$ 14
$ 11
Interest cost 1,822
2,202
344
305
Expected return on plan assets (2,487 ) (2,931 ) —
—
Amortization of prior service credit (10 ) (11 ) —
(11 )
Actuarial losses 633
659
23
29
Settlement loss —
7,385
—
—
Net periodic benefit cost $ 1,164
$ 8,586
$ 381
$ 334
Nine Months Ended
Service cost $ 3,549
$ 4,118
$ 41
$ 40
Interest cost 5,391
7,020
1,000
1,152
Expected return on plan assets (7,415 ) (9,339 ) —
—
Amortization of prior service credit (30 ) (29 ) —
(33 )
Actuarial losses 1,866
2,067
68
260
Settlement loss —
7,385
—
—
Net periodic benefit cost $ 3,361
$ 11,222
$ 1,109
$ 1,419

Note ~~13:~~16: Comprehensive Income and Accumulated Other Comprehensive Income (Loss)

The following table summarizes total comprehensive income:

Three Months Ended Nine Months Ended
October 1, 2017 October 2, 2016 October 1, 2017 October 2, 2016

(In thousands)
Net income $ 945
$ 36,072
$ 62,417
$ 94,363
Foreign currency translation loss, net of $1.1 million, $0.4 million, $1.5 million, and $1.5 million tax, respectively (19,535 ) (8,762 ) (46,478 ) (9,855 )
Adjustments to pension and postretirement liability, net of $0.2 million, $3.1 million, $0.7 million, and $3.7 million tax, respectively 397
4,952
1,171
5,934
Total comprehensive income (loss) (18,193 ) 32,262
17,110
90,442
Less: Comprehensive loss attributable to noncontrolling interest (66 ) (91 ) (306 ) (318 )
Comprehensive income (loss) attributable to Belden $ (18,127 ) $ 32,353
$ 17,416
$ 90,760


	Three Months Ended
	March 29, 2020		March 31, 2019

	(In thousands)
Net income (loss)	$	(11,219)	$	25,178
Foreign currency translation gain, net of $1.0 million and $0.4 million tax, respectively	21,790		28,791
Adjustments to pension and postretirement liability, net of $0.1 million and $0.1 million tax, respectively	383		219
Total comprehensive income	10,954		54,188
Less: Comprehensive loss attributable to noncontrolling interests	(180)		(23)
Comprehensive income attributable to Belden	$	11,134	$	54,211

The accumulated balances related to each component of other comprehensive income (loss), net of tax, are as follows:


	Foreign Currency Translation Component		Pension and Other Postretirement Benefit Plans		Accumulated Other Comprehensive Income (Loss)

	(In thousands)
Balance at December 31, 2019	$	(18,225)	$	(45,193)	$	(63,418)
Other comprehensive income attributable to Belden before reclassifications	21,940		—		21,940
Amounts reclassified from accumulated other comprehensive income	—		383		383
Net current period other comprehensive gain attributable to Belden	21,940		383		22,323
Balance at March 29, 2020	$	3,715	$	(44,810)	$	(41,095)

-21-

Foreign
Currency
Translation
Component

Pension and
Other
Postretirement
Benefit Plans

Accumulated
Other
Comprehensive
Income (Loss)

(In thousands)
Balance at December 31, 2016 $ (4,661 ) $ (34,406 ) $ (39,067 )
Other comprehensive loss attributable to Belden before reclassifications (46,446 ) —
(46,446 )
Amounts reclassified from accumulated other comprehensive income (loss) —
1,171
1,171
Net current period other comprehensive loss attributable to Belden (46,446 ) 1,171
(45,275 )
Balance at October 1, 2017 $ (51,107 ) $ (33,235 ) $ (84,342 )

The following table summarizes the effects of reclassifications from accumulated other comprehensive income (loss) for the ~~nine~~three months ended ~~October 1, 2017:~~March 29, 2020:


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

	(In thousands)					(In thousands)
Amortization of pension and other postretirement benefit plan items:					Amortization of pension and other postretirement benefit plan items:
Actuarial losses	$	1,934		(1)	Actuarial losses	$	477	(1)
Prior service credit	(30		)	(1)
Prior service cost					Prior service cost	25		(1)
Total before tax	1,904				Total before tax	502
Tax benefit	(733		)		Tax benefit	(119)
Total net of tax	$	1,171			Total net of tax	$	383

(1) The amortization of these accumulated other comprehensive income (loss) components are included in the computation of net periodic benefit costs (see Note ~~12)~~15).

Note ~~14:~~17: Preferred Stock

~~On July 26,~~In 2016, we issued 5.2 million depositary shares, each of which represents 1/100th interest in a share of 6.75% Series B Mandatory Convertible Preferred Stock (the Preferred Stock), for an offering price of $100 per depositary share. ~~Holders~~We received approximately $501 million of the Preferred Stock may elect to convert their shares into common stock at any time prior to the mandatory conversion date. Unless earlier converted, each share of Preferred Stock will automatically convert into common stock on or aroundnet proceeds from this offering, which were used for general corporate purposes. On July 15, 2019, all outstanding Preferred Stock was automatically converted into ~~between 120.46 and 132.50~~ shares of Belden common stock ~~subject to customary anti-dilution adjustments. This represents a range~~at the conversion rate of ~~6.2 million to~~132.50, resulting in the issuance of approximately 6.9 million shares of Belden common ~~stock to be issued upon conversion. The number of shares of Belden common stock issuable upon the mandatory~~stock. Upon conversion, of the Preferred Stock ~~will be determined based upon~~was automatically extinguished and discharged, is no longer deemed outstanding for all purposes, and delisted from trading on the volume-weighted average price of Belden’s common stock over the 20 day trading period beginning on, and including, the 22nd scheduled trading day prior to July 15, 2019. The net proceeds from this offering were approximately $501 million. The net proceeds are for general corporate purposes. With respect to dividend and liquidation rights, the PreferredNew York Stock ~~ranks senior to our common stock and junior to all of our existing and future indebtedness.~~Exchange. During the three ~~and nine~~ months ended ~~October 1, 2017,~~March 31, 2019, dividends on the Preferred Stock were $8.7 ~~million and $26.2 million, respectively.~~million.

Note ~~15:~~18: Share ~~Repurchases~~Repurchase

On ~~May 25, 2017,~~November 29, 2018, our Board of Directors authorized a share repurchase program, which allows us to purchase up to ~~$200.0~~$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. This program is funded with cash on hand and cash flows from operating activities. ~~The program does not have an expiration date and may be suspended at any time at the discretion of the Company.~~ During ~~both~~ the three ~~and nine~~ months ended ~~October 1, 2017,~~March 29, 2020, we repurchased ~~0.2~~0.6 million shares of our common stock under the share repurchase program for an aggregate cost of ~~$11.5~~$21.2 million and an average price per share of ~~$76.16.~~

Note 19: Subsequent Events

Due to the uncertainties arising from the COVID-19 pandemic, out of an abundance of caution, at the beginning of the second quarter we borrowed $190.0 million under our Revolving Credit Agreement, which provides a $400.0 million multi-currency asset-based revolving credit facility. The maturity date of the Revolver is May 16, 2022. 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. See Note 12.

During 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. This program is funded with cash on hand and cash flows from operating activities. During the fiscal second quarter, we repurchased 0.4 million shares of our common stock under the share repurchase program for an aggregate cost of $13.8 million and an average price per share of $35.80.

Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

Belden Inc. (the Company, us, we, or our) is a ~~signal transmission~~global supplier of specialty networking solutions ~~company~~ built around ~~four~~two global business platforms ~~– Broadcast Solutions,~~- Enterprise Solutions ~~Industrial Solutions,~~ and ~~Network~~Industrial Solutions. Our comprehensive portfolio of ~~signal transmission~~ solutions ~~provides industry leading~~enables customers to transmit and secure ~~and reliable transmission of~~ data, sound, and video for mission critical ~~applications.~~applications across complex enterprise and industrial environments.

We strive for operational excellence through the execution of our Belden Business System, which includes three areas of focus: Lean enterprise initiatives, our Market Delivery System, and our Talent Management System. Through operational excellence we generate ~~significant~~ free cash flow on an annual basis. We utilize the cash flow generated by our business to fuel our continued transformation and generate shareholder value. We believe our business system, balance across markets and geographies, systematic go-to-market approach, extensive portfolio of innovative solutions, commitment to Lean principles, and improving margins present a unique value proposition for shareholders.

We use a set of tools and processes that are designed to continuously improve business performance in the critical areas of quality, delivery, cost, and innovation. We consider revenue growth, Adjusted EBITDA margin, free cash flows, and return on invested capital to be our key operating performance indicators. We also seek to acquire businesses that we believe can help us achieve these objectives.

The following trends and events during ~~2017~~2020 have had varying effects on our financial condition, results of operations, and cash flows.

On March 11, 2020, the World Health Organization (WHO) declared the outbreak of the novel coronavirus (COVID-19) a pandemic. The recent outbreak of COVID-19 has resulted and will continue to result in significant economic disruption and has affected and will adversely affect our business in the future. We have experienced and expect to continue to experience reductions in customer demand in several of our end-markets. We expect that the social distancing measures, the reduced operational status of some of our suppliers and reductions in production at certain facilities will more meaningfully impact our operations in the second quarter, and general business uncertainty will continue to negatively impact demand in several of our end-markets in the second quarter, and possibly beyond.

Our foremost focus has been on the health and safety of our employees and customers. In response to the outbreak, we have modified practices at our manufacturing locations and offices to adhere to guidance from the WHO, the U.S. Centers for Disease Control and Prevention and other local health and governmental authorities with respect to social distancing, physical separation, personal protective equipment and sanitization. We are approaching our response to this outbreak with a recognition that we provide essential and important products and services upon which our customers rely upon daily to support critical functions. Therefore, most of our U.S. and global facilities have remained substantially operational during the outbreak while implementing enhanced safety protocols designed to protect the well-being of our employees. Operations at the facilities in countries with broad-based mandated shutdowns (e.g., India and Brazil) were suspended for a portion of the first quarter.

The extent of the impact of the COVID-19 outbreak on our operational and financial performance will depend on certain developments, including the duration and spread of the outbreak, its impact on our customers and suppliers and the range of governmental and community reactions to the pandemic, which are uncertain and cannot be fully predicted at this time. Unlike typical seasonal patterns in our business, we expect revenues to be down in the second quarter compared to the first quarter 2020. We will continue to proactively respond to the situation and may take further actions that alter our business operations as may be required by governmental authorities, or that we determine are in the best interests of our employees and customers.

Our exposure to currency rate fluctuations primarily relates to exchange rate movements between the U.S. dollar and the ~~Euro,~~euro, Canadian dollar, Hong Kong dollar, Chinese yuan, Japanese yen, Mexican peso, Australian dollar, British pound, Indian rupee, and Brazilian real. Generally, as the U.S. dollar strengthens against these foreign currencies, our revenues and earnings are negatively impacted as our foreign denominated revenues and earnings are translated into U.S. dollars at a lower rate. Conversely, as the U.S. dollar weakens against foreign currencies, our revenues and earnings are positively impacted.

During the ~~nine~~three months ended ~~October 1, 2017,~~March 29, 2020, approximately ~~47%~~45% of our consolidated revenues were to customers outside of the U.S.

In addition to the translation impact described above, currency rate fluctuations have an economic impact on our financial results. As the U.S. dollar strengthens or weakens against foreign currencies, it results in a relative price increase or decrease for certain of our products that are priced in U.S. dollars in a foreign location.

Our operating results can be affected by changes in prices of commodities, primarily copper and compounds, which are components in some of the products we sell. Generally, as the costs of inventory purchases increase due to higher commodity prices, we raise selling prices to customers to cover the increase in costs, resulting in higher sales revenue but a lower gross profit percentage. Conversely, a decrease in commodity prices would result in lower sales revenue but a higher gross profit percentage. Selling prices of our products are affected by many factors, including end market demand, capacity utilization, overall economic conditions, and commodity prices. Importantly, however, there is no exact measure of the effect of changing commodity prices, as there are thousands of transactions in any given quarter, each of which has various factors involved in the individual pricing decisions. Therefore, all references to the effect of copper prices or other commodity prices are estimates.

Our operating results also can be affected by the levels of Belden products purchased and held as inventory by our channel partners and customers. Our channel partners and customers purchase and hold the products they bought from us in their inventory in order to meet the service and on-time delivery requirements of their customers. Generally, as our channel partners and customers change the level of products they buy from us and hold in their inventory, it impacts our revenues. Comparisons of our results between periods can be impacted by changes in the levels of channel inventory. We use information provided to us by our channel partners

Market Growth and Market Share

The markets in which we operate can generally be characterized as highly competitive and highly fragmented, with many players. We monitor available data regarding market growth, including independent market research reports, publicly available indices, and the financial results of our direct and indirect peer companies, in order to estimate the extent to which our served markets grew or contracted during a particular period. We expect that our unit sales volume will increase or decrease consistently with the market growth rate. Our strategic goal is to utilize our Market Delivery System to target faster growing geographies, applications, and trends within our end markets, in order to achieve growth that is higher than the general market growth rate. To the extent that we exceed the market growth rates, we consider it to be the result of capturing market share.

~~Operating Segments~~Earnout Consideration Payment

~~To leverage~~During the ~~Company's strengths~~three months ended March 29, 2020, we paid the sellers of Snell Advanced Media (SAM) the full earnout consideration of $31.4 million in ~~networking, IoT,~~cash as per the purchase agreement. SAM was acquired on February 8, 2018 and ~~cybersecurity technologies, effective~~is included in the Grass Valley disposal group. See Note 1.

Discontinued Operations Treatment of the Grass Valley Disposal Group and Impairment Charge

During the fourth quarter of 2019, we committed to a plan to sell Grass Valley, and at such time, met all of the criteria to classify the assets and liabilities of this business as held for sale. Furthermore, we determined a divestiture of Grass Valley represents a strategic shift that is expected to have a major impact on our operations and financial results. As a result, the Grass Valley disposal group, which was included in our Enterprise Solutions segment, is now reported within discontinued operations. As such, comparable prior period information has been recast to exclude the Grass Valley disposal group from continuing operations, with the exception of the Condensed Consolidated Cash Flow Statements. The Grass Valley disposal group excludes certain Grass Valley pension plans that we will retain. During the three months ended March 29, 2020, we wrote down the carrying value of the disposal group and recognized asset impairments totaling $23.2 million. See Note 4.

Effective January 1, ~~2017,~~2020, we ~~formed~~transferred our West Penn Wire business and multi-conductor product lines from the Enterprise Solutions segment to the Industrial Solutions segment as a ~~new segment called Network Solutions, which represents~~result of a shift in responsibilities among the ~~combination of the prior Industrial IT Solutions and Network Security Solutions~~ segments. ~~The formation is a natural evolution in our organic and inorganic strategies for a range of industrial and non-industrial applications.~~ We have ~~revised~~recast the prior period segment information to conform to the change in the composition of ~~these~~ reportable segments. ~~In connection with this change, we re-evaluated~~See Note 5.

Cost Reduction Program

During the useful life of the Tripwire trademark and concluded that an indefinite life is no longer appropriate. We have estimated a useful life of 10 years and will re-evaluate this estimate if and when our expected use of the Tripwire trademark changes. We began amortizing the Tripwire trademark in the firstfourth quarter of 2017, which resulted in amortization expense of $0.8 million and $2.4 million for the three and nine months ended October 1, 2017, respectively. As of October 1, 2017, the net book value of the Tripwire trademark was $28.6 million. See Note 4.

We completed the acquisition of Thinklogical Holdings, LLC (Thinklogical) on May 31, 2017. The results of Thinklogical have been included in our Consolidated Financial Statements from the acquisition date and are reported in the Broadcast Solutions segment. See Note 2.

~~Industrial Manufacturing Footprint Program~~

~~In 2016,~~2019, we began a cost reduction program to ~~consolidate our manufacturing footprint.~~improve performance and enhance margins by streamlining the organizational structure and investing in technology to drive productivity. We recognized an immaterial amount associated with this program during the three months ended March 29, 2020. The ~~manufacturing consolidation~~cost reduction program is expected to deliver an estimated $60.0 million reduction in selling, general, and administrative expenses on an annual basis, of which $40.0 million is expected to be ~~completed~~realized in ~~2018.~~2020, with the full benefit materializing in 2021. We expect to incur incremental costs of approximately $20.0 million for this program in 2020. See Note 11.

SPC, Opterna and FutureLink Integration Program

In 2019, we began a restructuring program to integrate SPC, Opterna and FutureLink with our existing businesses. The restructuring and integration activities are focused on achieving desired cost savings by consolidating existing and acquired facilities and other support functions. We recognized ~~$11.4 million and $25.3~~$2.2 million of severance and other restructuring costs for this program during the three ~~and nine~~ months ended ~~October 1, 2017, respectively. The~~March 29, 2020. These costs were incurred by the Enterprise Solutions ~~and Industrial Solutions segments, as the manufacturing locations involved in the program serve both platforms.~~segment. We expect to incur incremental costs of approximately $7$2.5 million ~~of additional severance and other restructuring costs~~ for this program in ~~2017 and 2018. We expect the~~2020. See Note 11.

Share Repurchase Program

In 2018, our Board of Directors authorized a share repurchase program, which allows us to ~~generate approximately $13~~purchase up to $300.0 million of ~~savings on an annualized basis, which we began to realize~~our common stock through open market repurchases, negotiated transactions, or other means, in ~~the third quarter of 2017.~~

~~In July 2017, we issued €450.0 million aggregate principal amount of new senior subordinated notes due 2027 at an interest rate of 3.375%. We used the net proceeds of this offering~~accordance with applicable securities laws and other restrictions. This program is funded with cash on hand ~~to repurchase all~~and cash flows from operating activities. The program does not have an expiration date and may be suspended at any time at the discretion of the Company. During the three months ended March 29, 2020, we repurchased 0.6 million shares of our ~~outstanding $700.0~~common stock under the share repurchase program for an aggregate cost of $21.2 million ~~5.5% senior subordinated notes due 2022. In September,~~and an average price per share of $35.85. See Note 18.

During the fiscal second quarter, we ~~issued €300.0~~repurchased 0.4 million ~~aggregate principal amount of new senior subordinated notes due 2025 at an interest rate of 2.875%. We used the net proceeds of this offering to repurchase €300.0 million~~shares of our ~~outstanding €500.0~~common stock under the share repurchase program for an aggregate cost of $13.8 million ~~5.5% senior subordinated notes due 2023. We recognized a loss on debt extinguishment in~~and an average price per share of $35.80. Year-to-date, we have repurchased 1.0 million shares of our common stock under the ~~third quarter~~share repurchase program for an aggregate cost of ~~approximately $51.6~~$35.0 million ~~for the premium paid~~and an average price per share of $35.83. See Notes 18 and 19.

Due to the ~~bond holders to retire~~uncertainties arising from the ~~2022 and 2023 notes and for~~COVID-19 pandemic, out of an abundance of caution, at the ~~unamortized debt issuance costs that~~beginning of the second quarter we ~~wrote-off.~~

~~In May 2017, we entered into an Amended and Restated~~borrowed $190.0 million under our Revolving Credit Agreement, ~~(the Revolver) to amend and restate our prior Revolving Credit Agreement. The Revolver~~which provides a $400.0 million multi-currency asset-based revolving credit facility. ~~We recognized a $0.8 million loss on debt extinguishment for unamortized debt issuance costs related to creditors no longer participating in the new Revolver. In connection with executing~~The maturity date of the Revolver ~~we paid $2.2 million of fees to creditors~~is May 16, 2022. 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. See Notes 12 and third parties that we will amortize over the remaining term of the Revolver. As of October 1, 2017, we had no borrowings outstanding on the Revolver, and our available borrowing capacity was $314.1 million. Additionally, in June 2017, we repaid all of the outstanding $5.2 million aggregate principal amount of 9.25% senior subordinated notes due 2019, plus accrued interest, and recognized an immaterial loss on debt extinguishment related to unamortized debt issuance costs. See Note 9.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, results of operations, or cash flows that are or would be considered material to investors.

Critical Accounting Policies

During the ~~nine~~three months ended ~~October 1, 2017:~~March 29, 2020:

•We did not change any of our existing critical accounting policies from those listed in our ~~2016~~2019 Annual Report on Form ~~10-K;~~10-K other than updating our accounting policies for the adoption of ASU 2016-13;

•No existing accounting policies became critical accounting policies because of an increase in the materiality of associated transactions or changes in the circumstances to which associated judgments and estimates relate; and

•There were no significant changes in the manner in which critical accounting policies were applied or in which related judgments and estimates were ~~developed, except for the change in the Tripwire trademark discussed above.~~developed.

Results of Operations

Consolidated Income before Taxes


	Three Months Ended
	March 29, 2020		March 31, 2019		% Change

	(In thousands, except percentages)
Revenues	$	463,526	$	500,140	(7.3)	%
Gross profit	170,501		186,856		(8.8)	%
Selling, general and administrative expenses	(98,389)		(97,955)		0.4	%
Research and development expenses	(26,219)		(23,247)		12.8	%
Amortization of intangibles	(16,185)		(18,164)		(10.9)	%
Operating income	29,708		47,490		(37.4)	%
Interest expense, net	(13,324)		(13,988)		(4.7)	%
Non-operating pension benefit	699		603		15.9	%
Income from continuing operations before taxes	17,083		34,105		(49.9)	%

Revenues ~~increased~~decreased $36.6 million in the three ~~and nine~~ months ended ~~October 1, 2017~~March 29, 2020 from the comparable ~~periods~~period of ~~2016~~2019 due to the following ~~factors:~~factors:

•Lower sales volume due in part to changes in channel inventory levels resulted in a $45.4 million decrease in the three months ended March 29, 2020.

•~~Higher copper costs contributed $5.1~~Copper prices had a $4.4 million ~~and $22.6 million to the increase in~~unfavorable impact on revenues in the three ~~and nine~~ months ended ~~October 1, 2017, respectively.~~March 29, 2020.

•~~Acquisitions contributed $11.6 million and $21.8 million to the increase in revenues, respectively.~~

•Currency translation had ~~an $8.1 million favorable impact and~~ a ~~$2.3~~$3.8 million unfavorable impact toon revenues ~~respectively.~~in the three months ended March 29, 2020.

•~~Lower sales volume resulted~~Acquisitions contributed an estimated $17.0 million in ~~a $4.2 million and $2.5 million decrease in revenues, respectively.~~the three months ended March 29, 2020.

Gross profit decreased $16.4 million in the three ~~and nine~~ months ended ~~October 1, 2017~~March 29, 2020 from the comparable ~~periods~~period of ~~2016~~2019 due to ~~increases~~the decreases in ~~severance, restructuring, and acquisition integration costs in cost of sales of $9.5 million and $19.7 million, respectively, and declines in volume. These decreases were~~revenues discussed above as well as unfavorable mix; partially offset by the impact of acquisitions and productivity resulting from our restructuring actions. Furthermore, the increase in copper costs which result in higher revenues as discussed above, has minimal impact to gross profit dollars, and as a result, lowers gross profit margins.acquisitions.

Selling, general and administrative expenses decreased $10.2 million and $25.3 million, respectively, in the three and nine months ended October 1, 2017 from the comparable periods of 2016. Decreases in severance, restructuring, and acquisition integration costs contributed $5.7 million and $13.4 million, respectively. The remaining decreases were primarily due to improved productivity.

~~Research and development expenses~~ increased ~~$1.9~~$0.4 million in the three months ended ~~October 1, 2017~~March 29, 2020 from the comparable period of ~~2016.~~2019. Acquisitions ~~currency translation,~~ and increases in ~~severance,~~ restructuring ~~and acquisition integration~~ costs each contributed

~~$0.5~~ $3.6 million ~~$0.4 million, and $0.1 million, respectively,~~ to the increase in ~~research~~selling, general and ~~development expense in~~administrative expenses over the ~~three months ended October 1, 2017. The remaining increase is due to investments in research and development.~~

Research and development expenses decreased $1.2 million in the nine months ended October 1, 2017 from the comparable period of 2016. Improved productivity, currency translation, and decreases in severance, restructuring, and acquisition integration costs contributed $1.1 million, $0.4 million, and $0.6 million, respectively, to the decrease in research and development expense in the nine months ended October 1, 2017. These decreases were partially offset by the impact of acquisitions, which increased research and development expense by $0.9 million in the nine months ended October 1, 2017.

Amortization of intangibles increased $3.4 million and $2.3 million, respectively, in the three and nine months ended October 1, 2017 from the comparable periods of 2016. This is primarily due to the acquisition of Thinklogical and amortization from the Tripwire trademark, which we began amortizing in 2017.year ago period. These increases were partially offset by the ~~intangible assets classified~~benefits realized from our Cost Reduction Program, productivity improvement initiatives, and currency translations, which contributed to a decline in selling, general and administrative expenses of approximately $5.0 million, $1.3 million, and $0.5 million, respectively, as ~~held for sale for which we ceased amortizing in~~compared to the ~~fourth quarter of 2016 (see Note 3).~~year ago period.

~~Operating income decreased $1.2~~Research and development expenses increased $3.0 million in the three months ended ~~October 1, 2017~~March 29, 2020 from the comparable period of ~~2016~~2019 primarily due to ~~the decrease~~increased investments in gross profit, increase in research and development, and increase in amortization expense, partially offset by the decrease in selling, general and administrative expenses discussed above. Operating income increased $9.4R&D projects as well as acquisitions.

Amortization of intangibles decreased $2.0 million in the ~~nine~~three months ended ~~October 1, 2017~~March 29, 2020 from the comparable period of ~~2016~~2019 primarily due to certain intangible assets becoming fully amortized.

Operating income decreased $17.8 million in the ~~decrease in selling, general and administrative expenses and research and development, partially offset by~~three months ended March 29, 2020 from the ~~decrease~~comparable period of 2019 primarily as a result of the $16.4 million decline in gross profit ~~and increase in amortization expense~~ discussed above.

Net interest expense ~~decreased $4.1~~remained relatively flat year-over-year, with a decrease of $0.7 million, ~~and $5.5 million, respectively,~~or 4.7%, in the three ~~and nine~~ months ended ~~October 1, 2017~~March 29, 2020 from the comparable ~~periods~~period of ~~2016~~2019 primarily as a result of ~~debt transactions during 2017. In July 2017, we issued €450.0~~currency translation.

Income from continuing operations before taxes decreased $17.0 million aggregate principal amount of new senior subordinated notes due 2027 at an interest rate of 3.375%. We used the net proceeds of this offering and cash on hand to repurchase all of our outstanding $700.0 million 5.5% senior subordinated notes due 2022. In September 2017, we issued €300.0 million aggregate principal amount of new senior subordinated notes due 2025 at an interest rate of 2.875%. We used the net proceeds of this offering to repurchase €300.0 million of our outstanding €500.0 million 5.5% senior subordinated notes due 2023.


	Three Months Ended
	March 29, 2020			March 31, 2019			% Change

	(In thousands, except percentages)
Income before taxes	$	17,083		$	34,105		(49.9)	%
Income tax expense	2,192			6,170			(64.5)	%
Effective tax rate	12.8		%	18.1		%

For the three months ended ~~October 1, 2017,~~March 29, 2020, we recognized a $10.2 million loss before taxes, as compared to $38.5 million of income before taxes in the year ago period. Income before taxes decreased $37.5 million in the nine months ended October 1, 2017 from the comparable period of 2016. In addition to the changes in operating income, these decreases are predominantly due to the loss on debt extinguishment, partially offset by the decrease in interest expense, both discussed above (see Note 9).

We recognized an income tax benefit of $11.1 million and $6.7 million for the three and nine months ended October 1, 2017, respectively, representing effective tax rates of 109.3% and (12.0)%, respectively. The effective tax rates were impacted by the following significant factors:

~~All other items impacting the effective tax rate represented a net expense of $2.6 million and $2.3 million in the three and nine months ended October 1, 2017, respectively.~~

In March 2020, the Coronavirus Relief and Economic Security Act (CARES Act) was signed into law in the ~~three and nine months ended October 2, 2016, respectively, as~~United States. We are still analyzing the ~~result~~provisions of ~~securing a significant tax deduction for a foreign currency loss by implementing several transactions related~~the CARES Act to determine if there will be any impact to our ~~international~~income tax ~~structure.~~

Consolidated Adjusted Revenues and Adjusted EBITDA


	Three Months Ended
	March 29, 2020			March 31, 2019			% Change

	(In thousands, except percentages)
Adjusted Revenues	$	463,526		$	500,140		(7.3)	%
Adjusted EBITDA	60,843			76,419			(20.4)	%
as a percent of adjusted revenues	13.1		%	15.3		%

•~~Higher copper costs contributed $5.1~~Lower sales volume due in part to changes in channel inventory levels resulted in a $45.4 million ~~and $22.6 million to the increase~~decrease in ~~revenues.in~~ the three ~~and nine~~ months ended ~~October 1, 2017, respectively.~~March 29, 2020.

•~~Acquisitions contributed $11.6~~Copper prices had a $4.4 million ~~and $21.8 million to~~unfavorable impact on revenues in the ~~increase in revenues, respectively.~~three months ended March 29, 2020.

•Currency translation had ~~an $8.1 million favorable impact and~~ a ~~$2.3~~$3.8 million unfavorable impact toon revenues ~~respectively.~~in the three months ended March 29, 2020.

•~~Lower sales volume resulted~~Acquisitions contributed an estimated $17.0 million in ~~a $5.6 million and $7.9 million decrease in revenues, respectively.~~the three months ended March 29, 2020.

Adjusted EBITDA ~~increased~~decreased $15.6 million in the three ~~and nine~~ months ended ~~October 1, 2017~~March 29, 2020 from the comparable ~~periods~~period of ~~2016~~2019 primarily ~~due to improved productivity resulting from our restructuring actions and proven Lean enterprise system. Accordingly,~~ as ~~compared to~~a result of the ~~year ago periods, EBITDA margins expanded 70 basis points and 60 basis points for the three and nine months ended October 1, 2017 to 19.2% and 18.2%, respectively.~~

decrease in Adjusted Revenues discussed above.

Use of Non-GAAP Financial Information

Adjusted Revenues, Adjusted EBITDA, Adjusted EBITDA margin, and free cash flow are non-GAAP financial measures. In addition to reporting financial results in accordance with accounting principles generally accepted in the United States, we provide non-GAAP operating results adjusted for certain items, including: asset impairments; accelerated depreciation expense due to plant consolidation activities; purchase accounting effects related to acquisitions, such as the adjustment of acquired inventory and deferred revenue to fair value, and transaction costs; severance, restructuring, and acquisition integration costs; gains (losses) recognized on the disposal of businesses and tangible assets; amortization of intangible assets; gains (losses) on debt extinguishment; certain revenues and gains (losses) from patent settlements; discontinued operations; and other costs. We adjust for the items listed above in all periods presented, unless the impact is clearly immaterial to our financial statements. When we calculate the tax effect of the adjustments, we include all current and deferred income tax expense commensurate with the adjusted measure of pre-tax profitability.

We utilize the adjusted results to review our ongoing operations without the effect of these adjustments and for comparison to budgeted operating results. We believe the adjusted results are useful to investors because they help them compare our results to previous periods and provide important insights into underlying trends in the business and how management oversees our business operations on a day-to-day basis. As an example, we adjust for the purchase accounting effect of recording deferred revenue at fair value in order to reflect the revenues that would have otherwise been recorded by acquired businesses had they

remained as independent entities. We believe this presentation is useful in evaluating the underlying performance of acquired companies. Similarly, we adjust for other acquisition-related expenses, such as amortization of intangibles and other impacts of fair value adjustments because they generally are not related to the acquired business' core business performance. As an additional example, we exclude the costs of restructuring programs, which can occur from time to time for our current businesses and/or recently acquired businesses. We exclude the costs in calculating adjusted results to allow us and investors to evaluate the performance of the business based upon its expected ongoing operating structure. We believe the adjusted measures, accompanied by the disclosure of the costs of these programs, provides valuable insight.

Adjusted results should be considered only in conjunction with results reported according to accounting principles generally accepted in the United States. The following tables reconcile our GAAP results to our non-GAAP financial measures:


	Three Months Ended
	March 29, 2020			March 31, 2019

	(In thousands, except percentages)
GAAP and adjusted revenues	$	463,526		$	500,140



GAAP net income (loss)	$	(11,219)		$	25,178
Loss from discontinued operations, net of tax	26,110			2,757
Amortization of intangible assets	16,185			18,164
Interest expense, net	13,324			13,988
Depreciation expense	10,282			10,103
Severance, restructuring, and acquisition integration costs (1)	3,619			—
Income tax expense	2,192			6,170
Amortization of software development intangible assets	330			59
Purchase accounting effects related to acquisitions (2)	20			—
Adjusted EBITDA	$	60,843		$	76,419

GAAP net income (loss) margin	(2.4)		%	5.0		%
Adjusted EBITDA margin	13.1		%	15.3		%

~~(2)~~ See Note 8, 11, Severance, Restructuring, and Acquisition Integration Activities, for ~~details~~.details.

Segment Results of Operations

For additional information regarding our segment measures, see Note 45 to the Condensed Consolidated Financial Statements.

~~Broadcast~~Enterprise Solutions


	Three Months Ended
	March 29, 2020			March 31, 2019			% Change

	(In thousands, except percentages)
Segment Revenues	$	212,213		$	207,083		2.5	%
Segment EBITDA	24,712			21,635			14.2	%
as a percent of segment revenues	11.6		%	10.4		%

Enterprise Solutions revenues increased $5.1 million in the three months ended March 29, 2020 from the comparable period of 2019 due to acquisitions, which attributed a $17.0 million increase in revenues. This increase was partially offset by a decline in volume, lower copper prices, and unfavorable currency translation, which contributed an estimated $9.1 million, $2.0 million, and $0.8 million to the decline in revenues, respectively. The decrease in volume was due in part to declines in the levels of inventory at our channel partners.

Enterprise Solutions EBITDA increased $3.1 million in the three months ended March 29, 2020 compared to the year ago period primarily as a result of the increase in revenues discussed above as well as improved productivity.

Three Months Ended Nine Months Ended
October 1, 2017 October 2, 2016
%
Change
October 1, 2017 October 2, 2016
%
Change

(In thousands, except percentages)
Segment Revenues $ 193,753
$ 196,173
(1.2 )% $ 550,420
$ 560,966
(1.9 )%
Segment EBITDA 35,671
36,545
(2.4 )% 90,681
89,317
1.5 %
as a percent of segment revenues 18.4 % 18.6 % 16.5 % 15.9 %
Industrial Solutions


	Three Months Ended
	March 29, 2020			March 31, 2019			% Change

	(In thousands, except percentages)
Segment Revenues	$	251,313		$	293,057		(14.2)	%
Segment EBITDA	35,527			54,664			(35.0)	%
as a percent of segment revenues	14.1		%	18.7		%

~~Broadcast~~Industrial Solutions revenues decreased $41.7 million in ~~both~~ the three ~~and nine~~ months ended ~~October 1, 2017~~March 29, 2020 from the comparable ~~periods~~period of ~~2016~~2019. The decrease in revenues in the three months ended March 29, 2020 from the comparable period of 2019 was primarily due to decreases in ~~sales~~ volume, unfavorable currency translation, and lower copper prices, which had an estimated impact of ~~$14.2~~$36.3 million, $3.0 million, and ~~$26.0~~$2.4 million, respectively. The ~~decline~~decrease in volume was ~~most notable~~due in ~~North America, and adversely impacted by natural disasters. Furthermore, a product line transfer~~part to the Enterprise Solutions segment contributed $1.0 million and $4.3 million to the decrease in revenues, respectively. Currency translation had a $1.2 million favorable impact and a $2.1 million unfavorable impact on revenuesdeclines in the ~~three and nine months ended October 1, 2017, respectively. The acquisition~~levels of ~~Thinklogical contributed $11.6 million and $21.8 million of revenues, respectively.~~inventory at our channel partners.

~~Broadcast~~Industrial Solutions EBITDA decreased ~~$0.8~~$19.1 million ~~and increased $1.4 million in the three and nine months ended October 1, 2017 from the comparable periods of 2016, respectively. The decline in EBITDA~~ in the three months ended October 1, 2017 is primarily attributable to the decline in revenues discussed above. The increase in EBITDA in the nine months ended October 1, 2017 is primarily due to improved productivity resulting from our restructuring actions and acquisition integration activities. As a result, EBITDA margins expanded to 16.5%, an improvement of 60 basis points over the year ago period.

~~Enterprise Solutions~~

Enterprise Solutions revenues increased $10.4 million and $20.5 million in the three and nine months ended October 1, 2017 from the comparable periods of 2016, respectively. Higher copper costs resulted in an increase in revenues of $2.4 million and $11.6 million, respectively. Volume growth had a $4.7 million and $5.1 million favorable impact on revenues, respectively, primarily driven by our successful commercial programs, as well as growth in our connectivity and Category 6A cable products. A product line transfer from our Broadcast Solutions segment contributed $1.0 million and $4.3 million, respectively. Currency translation had a $2.3 million favorable impact on revenues and $0.5 million unfavorable impact on revenues, respectively.

Enterprise Solutions EBITDA decreased in the three and nine months ended October 1, 2017 compared to the year ago periods primarily because we have been unable to fully pass through the rise in copper costs to our customers.

~~Industrial Solutions~~

Industrial Solutions revenues increased $10.6 million and $27.1 million, respectively, in the three and nine months ended October 1, 2017 from the comparable periods of 2016. Increases in volume resulted in revenue growth of $5.4 million and $15.4 million, respectively. We experienced strong organic growth in discrete manufacturing, with robust demand from machine builders primarily driven by increased investments in automation. Higher copper costs resulted in an increase in revenues of $2.6 million and $10.9 million, respectively, and favorable currency translation resulted in an increase in revenues of $2.6 million and $0.8 million, respectively.

Industrial Solutions EBITDA increased $6.9 million and $13.6 million, respectively, in the three and nine months ended October 1, 2017 from the comparable periods of 2016 primarily due to leverage on volume and productivity gains. Accordingly, Industrial Solutions EBITDA margins expanded a robust 320 basis points and 190 basis points to 19.0% and 18.7%, respectively.

~~Network Solutions~~

Network Solutions revenues increased $0.6 million and decreased $3.1 million, respectively, in the three and nine months ended October 1, 2017 from the comparable periods of 2016. Currency translation had a $2.0 million favorable impact on revenues and $0.5 million unfavorable impact on revenues, respectively. Decreases in volume had a $1.4 million and $2.6 million unfavorable impact on revenues, respectively.



Delaware						36-3601505
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


	October 1, 2017			December 31, 2016				March 29, 2020		December 31, 2019
	(Unaudited)							(Unaudited)
	(In thousands)							(In thousands)
ASSETS	ASSETS						ASSETS
Current assets:							Current assets:
Cash and cash equivalents	$	461,363		$	848,116		Cash and cash equivalents	$	250,993	$	407,480
Receivables, net	439,276			388,059			Receivables, net	307,064		334,634
Inventories, net	262,494			190,408			Inventories, net	252,921		231,333
Other current assets	67,048			29,176			Other current assets	31,781		29,172
Assets held for sale	35,953			23,193
Current assets of discontinued operations							Current assets of discontinued operations	344,212		375,135
Total current assets	1,266,134			1,478,952			Total current assets	$	1,186,971	1,377,754
Property, plant and equipment, less accumulated depreciation	324,617			309,291			Property, plant and equipment, less accumulated depreciation	336,441		345,918
Operating lease right-of-use assets							Operating lease right-of-use assets	58,960		62,251
Goodwill	1,475,467			1,385,995			Goodwill	1,238,837		1,243,669
Intangible assets, less accumulated amortization	566,958			560,082			Intangible assets, less accumulated amortization	323,648		339,505
Deferred income taxes	35,565			33,706			Deferred income taxes	23,758		25,216
Other long-lived assets	36,107			38,777			Other long-lived assets	10,693		12,446
	$	3,704,848		$	3,806,803			$	3,179,308	$	3,406,759

LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY						LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:							Current liabilities:
Accounts payable	$	301,173		$	258,203		Accounts payable	$	220,195	$	268,466
Accrued liabilities	257,729			310,340			Accrued liabilities	218,568		283,799
Liabilities held for sale	1,732			1,736
Current liabilities of discontinued operations							Current liabilities of discontinued operations	135,455		170,279
Total current liabilities	560,634			570,279			Total current liabilities	574,218		722,544
Long-term debt	1,530,077			1,620,161			Long-term debt	1,385,438		1,439,484
Postretirement benefits	112,938			104,050			Postretirement benefits	124,968		136,227
Deferred income taxes	21,528			14,276			Deferred income taxes	46,796		48,725
Long-term operating lease liabilities							Long-term operating lease liabilities	52,084		55,652
Other long-term liabilities	37,311			36,720			Other long-term liabilities	42,769		38,308
Stockholders’ equity:							Stockholders’ equity:
Preferred stock	1			1
Common stock	503			503			Common stock	503		503
Additional paid-in capital	1,123,623			1,116,090			Additional paid-in capital	812,490		811,955
Retained earnings	813,936			783,812			Retained earnings	501,611		518,004
Accumulated other comprehensive loss	(84,342		)	(39,067		)	Accumulated other comprehensive loss	(41,095)		(63,418)
Treasury stock	(412,059		)	(401,026		)	Treasury stock	(326,266)		(307,197)
Total Belden stockholders’ equity	1,441,662			1,460,313			Total Belden stockholders’ equity	947,243		959,847
Noncontrolling interest	698			1,004
Noncontrolling interests							Noncontrolling interests	5,792		5,972
Total stockholders’ equity	1,442,360			1,461,317			Total stockholders’ equity	953,035		965,819
	$	3,704,848		$	3,806,803			$	3,179,308	$	3,406,759


	Nine Months Ended							Three Months Ended
	October 1, 2017			October 2, 2016				March 29, 2020		March 31, 2019

	(In thousands)							(In thousands)
Cash flows from operating activities:							Cash flows from operating activities:
Net income	$	62,417		$	94,363
Adjustments to reconcile net income to net cash provided by operating activities:
Net income (loss)							Net income (loss)	$	(11,219)	$	25,178
Adjustments to reconcile net income (loss) to net cash used for operating activities:							Adjustments to reconcile net income (loss) to net cash used for operating activities:
Depreciation and amortization	112,538			110,857			Depreciation and amortization	26,798		37,001
Asset impairment of discontinued operations							Asset impairment of discontinued operations	23,197		—
Share-based compensation	13,431			13,943			Share-based compensation	3,708		2,216
Loss on debt extinguishment	52,441			—
Changes in operating assets and liabilities, net of the effects of currency exchange rate changes and acquired businesses:							Changes in operating assets and liabilities, net of the effects of currency exchange rate changes and acquired businesses:
Receivables	(32,950		)	(9,843		)	Receivables	43,627		61,388
Inventories	(50,232		)	5,626			Inventories	(29,054)		(9,485)
Accounts payable	30,290			(3,889		)	Accounts payable	(50,827)		(97,450)
Accrued liabilities	(54,828		)	(43,594		)	Accrued liabilities	(38,425)		(70,925)
Income taxes	(32,071		)	(17,375		)	Income taxes	(16,500)		609
Other assets	(9,046		)	2,798			Other assets	6,144		650
Other liabilities	11,625			(5,457		)	Other liabilities	(9,501)		4,758
Net cash provided by operating activities	103,615			147,429
Net cash used for operating activities							Net cash used for operating activities	(52,052)		(46,060)
Cash flows from investing activities:							Cash flows from investing activities:
Cash used to acquire businesses, net of cash acquired	(166,896		)	(17,848		)
Capital expenditures	(33,430		)	(36,057		)	Capital expenditures	(20,935)		(23,595)
Other	—			(971		)
Cash from business acquisitions, net of cash acquired							Cash from business acquisitions, net of cash acquired	590		—
Proceeds from disposal of tangible assets	15			282			Proceeds from disposal of tangible assets	2,090		10
Net cash used for investing activities	(200,311		)	(54,594		)	Net cash used for investing activities	(18,255)		(23,585)
Cash flows from financing activities:							Cash flows from financing activities:
Payments under borrowing arrangements	(1,105,892		)	(51,875		)
Payment of earnout consideration							Payment of earnout consideration	(29,300)		—
Payments under share repurchase program							Payments under share repurchase program	(21,239)		—
Cash dividends paid	(32,535		)	(6,307		)	Cash dividends paid	(2,296)		(10,725)
Debt issuance costs paid	(16,586		)	—
Payments under share repurchase program	(11,508		)	—
Withholding tax payments for share-based payment awards, net of proceeds from the exercise of stock options	(5,421		)	(5,302		)
Proceeds from the issuance of preferred stock, net	—			501,498
Borrowings under credit arrangements	866,700			—
Net cash provided by (used for) financing activities	(305,242		)	438,014
Withholding tax payments for share-based payment awards							Withholding tax payments for share-based payment awards	(1,003)		(1,940)
Other							Other	(58)		(70)
Net cash used for financing activities							Net cash used for financing activities	(53,896)		(12,735)
Effect of foreign currency exchange rate changes on cash and cash equivalents	15,185			705			Effect of foreign currency exchange rate changes on cash and cash equivalents	(7,947)		752
Increase (decrease) in cash and cash equivalents	(386,753		)	531,554
Decrease in cash and cash equivalents							Decrease in cash and cash equivalents	(132,150)		(81,628)
Cash and cash equivalents, beginning of period	848,116			216,751			Cash and cash equivalents, beginning of period	425,885		420,610
Cash and cash equivalents, end of period	$	461,363		$	748,305		Cash and cash equivalents, end of period	$	293,735	$	338,982



Cash	$	5,376
Receivables	4,355
Inventory	16,424
Prepaid and other current assets	320
Property, plant, and equipment	4,289
Intangible assets	76,400
Goodwill	68,394
Total assets acquired	$	175,558

Accounts payable	$	1,231
Accrued liabilities	1,353
Deferred revenue	1,702
Total liabilities assumed	$	4,286

Net assets	$	171,272



	Broadcast Solutions		Enterprise Solutions		Industrial Solutions		Network Solutions		Total Segments

	(In thousands)
As of and for the three months ended October 1, 2017
Segment revenues	$	193,753	$	167,089	$	160,471	$	100,432	$	621,745
Affiliate revenues	129		1,419		332		—		1,880
Segment EBITDA	35,671		26,409		30,545		24,906		117,531
Depreciation expense	4,088		2,740		3,285		1,570		11,683
Amortization expense	13,482		438		646		12,596		27,162
Severance, restructuring, and acquisition integration costs	3,056		6,253		6,840		530		16,679
Purchase accounting effects of acquisitions	2,922		—		—		—		2,922
Segment assets	373,848		284,327		291,984		108,554		1,058,713
As of and for the three months ended October 2, 2016
Segment revenues	$	196,173	$	156,658	$	149,847	$	99,790	$	602,468
Affiliate revenues	46		1,587		511		13		2,157
Segment EBITDA	36,545		27,294		23,649		24,448		111,936
Depreciation expense	4,063		3,210		2,738		1,592		11,603
Amortization expense	10,955		431		604		11,818		23,808
Severance, restructuring, and acquisition integration costs	174		5,573		4,746		2,302		12,795
Deferred gross profit adjustments	283		—		—		1,076		1,359
Segment assets	314,020		265,085		261,923		105,938		946,966
As of and for the nine months ended October 1, 2017
Segment revenues	$	550,420	$	473,504	$	465,907	$	293,928	$	1,783,759
Affiliate revenues	324		5,522		994		92		6,932
Segment EBITDA	90,681		77,310		87,314		65,563		320,868
Depreciation expense	12,095		8,034		9,659		4,806		34,594
Amortization expense	36,950		1,291		1,928		37,775		77,944
Severance, restructuring, and acquisition integration costs	4,434		19,267		8,307		831		32,839
Purchase accounting effects of acquisitions	4,089		—		—		—		4,089
Segment assets	373,848		284,327		291,984		108,554		1,058,713
As of and for the nine months ended October 2, 2016
Segment revenues	$	560,966	$	452,951	$	438,746	$	296,986	$	1,749,649
Affiliate revenues	644		4,615		906		44		6,209
Segment EBITDA	89,317		80,605		73,700		66,715		310,337
Depreciation expense	12,086		10,028		8,165		4,974		35,253
Amortization expense	37,306		1,292		1,796		35,209		75,603
Severance, restructuring, and acquisition integration costs	5,871		7,280		7,982		5,939		27,072
Purchase accounting effects of acquisitions	195		—		—		—		195
Deferred gross profit adjustments	1,391		—		—		4,021		5,412
Segment assets	314,020		265,085		261,923		105,938		946,966



	Foreign Currency Translation Component			Pension and Other Postretirement Benefit Plans			Accumulated Other Comprehensive Income (Loss)

	(In thousands)
Balance at December 31, 2016	$	(4,661	)	$	(34,406	)	$	(39,067	)
Other comprehensive loss attributable to Belden before reclassifications	(46,446		)	—			(46,446		)
Amounts reclassified from accumulated other comprehensive income (loss)	—			1,171			1,171
Net current period other comprehensive loss attributable to Belden	(46,446		)	1,171			(45,275		)
Balance at October 1, 2017	$	(51,107	)	$	(33,235	)	$	(84,342	)


	Principal Amount by Expected Maturity									Fair
	2020		Thereafter			Total		Value

	(In thousands, except interest rates)
€350.0 million fixed-rate senior subordinated notes due 2028	$	—	$	378,175		$	378,175	$	344,347
Average interest rate			3.875		%
€450.0 million fixed-rate senior subordinated notes due 2027	$	—	$	486,225		$	486,225	$	422,889
Average interest rate			3.375		%
€200.0 million fixed-rate senior subordinated notes due 2026	$	—	$	216,100		$	216,100	$	201,371
Average interest rate			4.125		%
€300.0 million fixed-rate senior subordinated notes due 2025	$	—	$	324,150		$	324,150	$	259,035
Average interest rate			2.875		%
Total						$	1,404,650	$	1,227,642



	Principal Amount by Expected Maturity							Fair
	2017		Thereafter			Total		Value

	(In thousands, except interest rates)
Fixed-rate senior subordinated notes due 2027	$	—	$	528,165		$	528,165	$	530,278
Average interest rate			3.375		%
Fixed-rate senior subordinated notes due 2026	$	—	$	234,740		$	234,740	$	249,942
Average interest rate			4.125		%
Fixed-rate senior subordinated notes due 2025	$	—	$	352,110		$	352,110	$	347,638
Average interest rate			2.875		%
Fixed-rate senior subordinated notes due 2024	$	—	$	200,000		$	200,000	$	208,500
Average interest rate			5.25		%
Fixed-rate senior subordinated notes due 2023	$	—	$	238,805		$	238,805	$	246,511
Average interest rate			5.50		%
Total						$	1,553,820	$	1,582,869


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs (1)	Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs

Balance at December 31, 2019					$	250,000
January 1, 2020 through February 2, 2020	—	$	—	—	250,000
February 3, 2020 through March 1, 2020	—	—		—	250,000
March 2, 2020 through March 29, 2020	592	35.85		592	228,761
Total	592	$	35.85	592	$	228,761



Exhibit ~~4.1~~31.1		~~Fifth Supplemental Indenture relating to 5.5% Senior Subordinated Notes due 2023.~~

~~Exhibit 4.2~~	~~Fourth Supplemental Indenture relating to 5.25% Senior Subordinated Notes due 2024.~~

~~Exhibit 4.3~~	~~First Supplemental Indenture relating to 2.875% Senior Subordinated Notes due 2025.~~

~~Exhibit 4.4~~	~~Second Supplemental Indenture relating to 4.125% Senior Subordinated Notes due 2026.~~

~~Exhibit 4.5~~	~~First Supplemental Indenture relating to 3.375% Senior Subordinated Notes due 2027.~~

~~Exhibit 10.1~~	~~Amendment #1 to Amended and Restated Credit Agreement.~~

~~Exhibit 31.1~~	Certificate of the Chief Executive Officer pursuant to § 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 31.2		Certificate of the Chief Financial Officer pursuant to § 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.1		Certificate of the Chief Executive Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.2		Certificate of the Chief Financial Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002.

Exhibit ~~101.INS~~101.DEF		~~XBRL Instance~~Definition Linkbase Document

Exhibit ~~101.SCH~~101.PRE		~~XBRL Taxonomy Extension Schema~~Presentation Linkbase Document

Exhibit ~~101.CAL~~101.LAB		~~XBRL Taxonomy Extension Calculation~~Labels Linkbase Document

Exhibit ~~101.DEF~~101.CAL		~~XBRL Taxonomy Extension Definition~~Calculation Linkbase Document

Exhibit ~~101.LAB~~101.SCH		~~XBRL Taxonomy Extension Label~~Schema Document

Exhibit ~~101.PRE~~101.INS		Instance Document - the instance document does not appear in the Interactive Data File because its XBRL ~~Taxonomy Extension Presentation~~tags are embedded within the Inline XBRL document


~~Item 1.~~	~~Financial Statements~~