UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________________________

FORM 10-Q

_________________________________________________

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September ~~29, 2019~~27, 2020

Commission File No. 001-12561

_________________________________________________

BELDEN INC.

(Exact name of registrant as specified in its charter)

_________________________________________________



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

1 North Brentwood Boulevard

15th Floor

St. Louis,, Missouri63105

(Address of principal executive offices)

(~~314~~) (314) 854-8000

Registrant’s telephone number, including area code

_________________________________________________

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐.

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐.

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 ☑ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

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

As of October ~~31, 2019,~~28, 2020, the Registrant ~~had 45,457,559 outstanding~~had 44,609,972 outstanding shares of common stock.

-1-

PART I FINANCIAL INFORMATION


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

Item 1. Financial Statements

BELDEN INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


	September 29, 2019			December 31, 2018				September 27, 2020		December 31, 2019
	(Unaudited)							(Unaudited)
	(In thousands)							(In thousands)
ASSETS	ASSETS						ASSETS
Current assets:							Current assets:
Cash and cash equivalents	$	296,742		$	420,610		Cash and cash equivalents	$	391,497	$	407,480
Receivables, net	460,044			465,939			Receivables, net	331,232		334,634
Inventories, net	290,995			316,418			Inventories, net	244,815		231,333
Other current assets	74,876			55,757			Other current assets	39,211		29,172
Current assets of discontinued operations							Current assets of discontinued operations	0		375,135
Total current assets	1,122,657			1,258,724			Total current assets	1,006,755		1,377,754
Property, plant and equipment, less accumulated depreciation	384,183			365,970			Property, plant and equipment, less accumulated depreciation	347,668		345,918
Operating lease right-of-use assets	78,788			—			Operating lease right-of-use assets	57,380		62,251
Goodwill	1,265,006			1,557,653			Goodwill	1,247,432		1,243,669
Intangible assets, less accumulated amortization	471,386			511,093			Intangible assets, less accumulated amortization	294,592		339,505
Deferred income taxes	88,118			56,018			Deferred income taxes	29,845		25,216
Other long-lived assets	31,857			29,863			Other long-lived assets	52,410		12,446
	$	3,441,995		$	3,779,321			$	3,036,082	$	3,406,759

LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY						LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:							Current liabilities:
Accounts payable	$	275,889		$	352,646		Accounts payable	$	211,269	$	268,466
Accrued liabilities	301,599			364,276			Accrued liabilities	246,513		283,799
Current liabilities of discontinued operations							Current liabilities of discontinued operations	0		170,279
Total current liabilities	577,488			716,922			Total current liabilities	457,782		722,544
Long-term debt	1,403,670			1,463,200			Long-term debt	1,500,716		1,439,484
Postretirement benefits	127,090			132,791			Postretirement benefits	130,581		136,227
Deferred income taxes	75,192			39,943			Deferred income taxes	48,896		48,725
Long-term operating lease liabilities	73,436			—			Long-term operating lease liabilities	49,209		55,652
Other long-term liabilities	40,309			38,877			Other long-term liabilities	50,311		38,308
Stockholders’ equity:							Stockholders’ equity:
Preferred stock	—			1
Common stock	503			503			Common stock	503		503
Additional paid-in capital	807,087			1,139,395			Additional paid-in capital	818,661		811,955
Retained earnings	667,703			922,000			Retained earnings	446,198		518,004
Accumulated other comprehensive loss	(29,111		)	(74,907		)	Accumulated other comprehensive loss	(137,458)		(63,418)
Treasury stock	(307,482		)	(599,845		)	Treasury stock	(335,508)		(307,197)
Total Belden stockholders’ equity	1,138,700			1,387,147			Total Belden stockholders’ equity	792,396		959,847
Noncontrolling interests	6,110			441			Noncontrolling interests	6,191		5,972
Total stockholders’ equity	1,144,810			1,387,588			Total stockholders’ equity	798,587		965,819
	$	3,441,995		$	3,779,321			$	3,036,082	$	3,406,759

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

-1-

~~- 1-~~

BELDEN INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended						Nine Months Ended							Three Months Ended				Nine Months Ended
	September 29, 2019			September 30, 2018			September 29, 2019			September 30, 2018				September 27, 2020		September 29, 2019		September 27, 2020		September 29, 2019

	(In thousands, except per share data)													(In thousands, except per share data)
Revenues	$	620,318		$	655,774		$	1,845,023		$	1,929,978		Revenues	$	475,839	$	533,098	$	1,364,176	$	1,581,590
Cost of sales	(384,916		)	(394,917		)	(1,143,870		)	(1,180,931		)	Cost of sales	(308,247)		(334,293)		(876,143)		(990,857)
Gross profit	235,402			260,857			701,153			749,047			Gross profit	167,592		198,805		488,033		590,733
Selling, general and administrative expenses	(120,169		)	(132,716		)	(365,439		)	(396,430		)	Selling, general and administrative expenses	(85,037)		(98,245)		(275,129)		(298,654)
Research and development expenses	(31,351		)	(33,471		)	(100,539		)	(107,781		)	Research and development expenses	(30,324)		(23,992)		(81,633)		(72,014)
Amortization of intangibles	(22,243		)	(25,533		)	(67,952		)	(74,990		)	Amortization of intangibles	(16,104)		(19,026)		(48,306)		(56,258)
Goodwill and other asset impairment	(342,146		)	—			(342,146		)	—
Gain from patent litigation	—			62,141			—			62,141
Operating income (loss)	(280,507		)	131,278			(174,923		)	231,987

Operating income													Operating income	36,127		57,542		82,965		163,807
Interest expense, net	(14,200		)	(14,472		)	(42,561		)	(46,538		)	Interest expense, net	(15,607)		(14,002)		(43,188)		(41,951)
Non-operating pension benefit	489			1,356			1,517			824			Non-operating pension benefit	680		544		2,079		1,684
Loss on debt extinguishment	—			—			—			(22,990		)
Income (loss) before taxes	(294,218		)	118,162			(215,967		)	163,283
Income from continuing operations before taxes													Income from continuing operations before taxes	21,200		44,084		41,856		123,540
Income tax expense	(2,797		)	(32,304		)	(13,580		)	(46,063		)	Income tax expense	(631)		(6,053)		(3,223)		(16,179)
Income from continuing operations													Income from continuing operations	20,569		38,031		38,633		107,361
Loss from discontinued operations, net of tax													Loss from discontinued operations, net of tax	(6,231)		(335,046)		(103,395)		(336,908)
Gain on disposal of discontinued operations, net of tax													Gain on disposal of discontinued operations, net of tax	2,743		0		2,743		0
Net income (loss)	(297,015		)	85,858			(229,547		)	117,220			Net income (loss)	17,081		(297,015)		(62,019)		(229,547)
Less: Net income (loss) attributable to noncontrolling interests	(6		)	(23		)	60			(148		)
Less: Net income (loss) attributable to noncontrolling interest													Less: Net income (loss) attributable to noncontrolling interest	85		(6)		79		60
Net income (loss) attributable to Belden	(297,009		)	85,881			(229,607		)	117,368			Net income (loss) attributable to Belden	16,996		(297,009)		(62,098)		(229,607)
Less: Preferred stock dividends	971			8,732			18,437			26,198			Less: Preferred stock dividends	0		971		0		18,437
Net income (loss) attributable to Belden common stockholders	$	(297,980	)	$	77,149		$	(248,044	)	$	91,170		Net income (loss) attributable to Belden common stockholders	$	16,996	$	(297,980)	$	(62,098)	$	(248,044)

Weighted average number of common shares and equivalents:													Weighted average number of common shares and equivalents:
Basic	44,444			40,510			41,090			40,960			Basic	44,567		44,444		44,834		41,090
Diluted	44,444			47,678			41,090			41,268			Diluted	44,709		44,610		44,968		41,299
Basic income (loss) per share attributable to Belden common stockholders:													Basic income (loss) per share attributable to Belden common stockholders:
Continuing operations attributable to Belden common stockholders													Continuing operations attributable to Belden common stockholders	$	0.46	$	0.83	$	0.86	$	2.16
Discontinued operations attributable to Belden common stockholders													Discontinued operations attributable to Belden common stockholders	(0.14)		(7.54)		(2.31)		(8.20)
Disposal of discontinued operations attributable to Belden common stockholders													Disposal of discontinued operations attributable to Belden common stockholders	0.06		0		0.06		0
Net income (loss) per share attributable to Belden common stockholders													Net income (loss) per share attributable to Belden common stockholders	$	0.38	$	(6.70)	$	(1.39)	$	(6.04)
Diluted income (loss) per share attributable to Belden common stockholders:													Diluted income (loss) per share attributable to Belden common stockholders:
Continuing operations attributable to Belden common stockholders													Continuing operations attributable to Belden common stockholders	$	0.46	$	0.83	$	0.86	$	2.15
Discontinued operations attributable to Belden common stockholders													Discontinued operations attributable to Belden common stockholders	(0.14)		(7.54)		(2.31)		(8.20)
Disposal of discontinued operations attributable to Belden common stockholders													Disposal of discontinued operations attributable to Belden common stockholders	0.06		0		0.06		0
Net income (loss) per share attributable to Belden common stockholders													Net income (loss) per share attributable to Belden common stockholders	$	0.38	$	(6.70)	$	(1.39)	$	(6.04)

Basic income (loss) per share attributable to Belden common stockholders	$	(6.70	)	$	1.90		$	(6.04	)	$	2.23

Diluted income (loss) per share attributable to Belden common stockholders	$	(6.70	)	$	1.80		$	(6.04	)	$	2.21

Comprehensive income (loss) attributable to Belden	$	(263,530	)	$	68,620		$	(183,811	)	$	129,727
Comprehensive loss attributable to Belden													Comprehensive loss attributable to Belden	$	(34,921)	$	(263,530)	$	(136,138)	$	(183,811)

Common stock dividends declared per share	$	0.05		$	0.05		$	0.15		$	0.15		Common stock dividends declared per share	$	0.05	$	0.05	$	0.15	$	0.15

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

-2-

~~- 2-~~

BELDEN INC.

CONDENSED CONSOLIDATED CASH FLOW STATEMENTS

(Unaudited)


	Nine Months Ended							Nine Months Ended
	September 29, 2019			September 30, 2018				September 27, 2020		September 29, 2019

	(In thousands)							(In thousands)
Cash flows from operating activities:							Cash flows from operating activities:
Net income (loss)	$	(229,547	)	$	117,220
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Goodwill and other asset impairment	342,146			—
Net loss							Net loss	$	(62,019)	$	(229,547)
Adjustments to reconcile net loss to net cash provided by operating activities:							Adjustments to reconcile net loss to net cash provided by operating activities:
Asset impairment of discontinued operations							Asset impairment of discontinued operations	113,007		342,146
Depreciation and amortization	108,328			111,896			Depreciation and amortization	80,620		108,328
Share-based compensation	12,115			14,657			Share-based compensation	13,650		12,115
Loss on debt extinguishment	—			22,990
Changes in operating assets and liabilities, net of the effects of currency exchange rate changes and acquired businesses:
Gain on disposal of business							Gain on disposal of business	(2,743)		0
Changes in operating assets and liabilities, net of the effects of currency exchange rate changes, acquired businesses and disposals:							Changes in operating assets and liabilities, net of the effects of currency exchange rate changes, acquired businesses and disposals:
Receivables	6,002			(25,338		)	Receivables	35,645		6,002
Inventories	32,261			(16,642		)	Inventories	(9,327)		32,261
Accounts payable	(78,346		)	(81,296		)	Accounts payable	(69,579)		(78,346)
Accrued liabilities	(70,368		)	(29,474		)	Accrued liabilities	(11,646)		(70,368)
Income taxes	(19,650		)	4,463			Income taxes	(30,416)		(19,650)
Other assets	(9,088		)	(13,267		)	Other assets	1,860		(9,088)
Other liabilities	(4,336		)	(4,350		)	Other liabilities	(20,363)		(4,336)
Net cash provided by operating activities	89,517			100,859			Net cash provided by operating activities	38,689		89,517
Cash flows from investing activities:							Cash flows from investing activities:
Capital expenditures	(74,068		)	(63,451		)	Capital expenditures	(56,809)		(74,068)
Cash used to acquire businesses, net of cash acquired	(50,951		)	(84,580		)
Cash from business acquisitions, net of cash acquired							Cash from business acquisitions, net of cash acquired	590		(50,951)
Proceeds from disposal of tangible assets	19			1,556			Proceeds from disposal of tangible assets	3,090		19
Proceeds from disposal of business	—			40,171
Proceeds from disposal of business, net of cash sold							Proceeds from disposal of business, net of cash sold	50,051		0
Net cash used for investing activities	(125,000		)	(106,304		)	Net cash used for investing activities	(3,078)		(125,000)
Cash flows from financing activities:							Cash flows from financing activities:
Borrowings on revolver							Borrowings on revolver	190,000		0
Payments under borrowing arrangements							Payments under borrowing arrangements	(190,000)		0
Payments under share repurchase program	(50,000		)	(125,000		)	Payments under share repurchase program	(35,000)		(50,000)
Payment of earnout consideration							Payment of earnout consideration	(29,300)		0
Cash dividends paid	(32,153		)	(32,421		)	Cash dividends paid	(6,800)		(32,153)
Withholding tax payments for share-based payment awards	(2,063		)	(2,004		)	Withholding tax payments for share-based payment awards	(1,331)		(2,063)
Other	(232		)	—			Other	(154)		(232)
Payments under borrowing arrangements	—			(484,757		)
Debt issuance costs paid	—			(7,609		)
Redemption of stockholders' rights agreement	—			(411		)
Borrowings under credit arrangements	—			431,270
Net cash used for financing activities	(84,448		)	(220,932		)	Net cash used for financing activities	(72,585)		(84,448)
Effect of foreign currency exchange rate changes on cash and cash equivalents	(3,937		)	(5,704		)	Effect of foreign currency exchange rate changes on cash and cash equivalents	2,586		(3,937)
Decrease in cash and cash equivalents	(123,868		)	(232,081		)	Decrease in cash and cash equivalents	(34,388)		(123,868)
Cash and cash equivalents, beginning of period	420,610			561,108			Cash and cash equivalents, beginning of period	425,885		420,610
Cash and cash equivalents, end of period	$	296,742		$	329,027		Cash and cash equivalents, end of period	$	391,497	$	296,742

For all periods presented, the Condensed Consolidated Cash Flow Statement includes the results of the Grass Valley disposal group up to the disposal date, July 2, 2020.

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

-3-

~~- 3-~~

BELDEN INC.

CONDENSED CONSOLIDATED STOCKHOLDERS’ EQUITY STATEMENTS

(Unaudited)


		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
Net income (loss)		—	—		—		(67,905)		—	—		—		24		(67,881)
Other comprehensive income (loss), net of tax		—	—		—		—		—	—		(44,446)		147		(44,299)
Conversion of restricted stock units into common stock, net of tax withholding forfeitures		—	—		(1,598)		—		27	1,543		—		—		(55)
Share repurchase program		—	—		—		—		(384)	(13,761)		—		—		(13,761)
Share-based compensation		—	—		5,090		—		—	—		—		—		5,090
Common stock dividends ($0.05 per share)		—	—		—		(2,247)		—	—		—		—		(2,247)
Balance at June 28, 2020		50,335	$	503	$	815,982	$	431,459	(5,790)	$	(338,484)	$	(85,541)	$	5,963	$	829,882
Net income		—	—		—		16,996		—	—		—		85		17,081
Other comprehensive income (loss), net of tax		—	—		—		—		—	—		(51,917)		143		(51,774)
Retirement Savings Plan stock contributions		—	—		(747)		—		33	1,823		—		—		1,076
Conversion of restricted stock units into common stock, net of tax withholding forfeitures		—	—		(1,426)		—		17	1,153		—		—		(273)
Share-based compensation		—	—		4,852		—		—	—		—		—		4,852
Common stock dividends ($0.05 per share)		—	—		—		(2,257)		—	—		—		—		(2,257)
Balance at September 27, 2020		50,335	$	503	$	818,661	$	446,198	(5,740)	$	(335,508)	$	(137,458)	$	6,191	$	798,587

-4-


			Belden Inc. Stockholders																															Belden Inc. Stockholders
	Mandatory Convertible									Additional											Accumulated Other			Non-controlling								Mandatory Convertible											Additional											Accumulated Other		Non-controlling
	Preferred Stock						Common Stock			Paid-In			Retained			Treasury Stock					Comprehensive										Preferred Stock						Common Stock					Paid-In			Retained			Treasury Stock					Comprehensive
	Shares			Amount			Shares	Amount		Capital			Earnings			Shares		Amount			Income (Loss)				Interests			Total					Shares			Amount			Shares		Amount			Capital			Earnings			Shares		Amount			Income (Loss)			Interests			Total
			(In thousands)																															(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		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			Net income (loss)		—			—			—		—			—			25,202			—		—			—		(24)			25,178
Other comprehensive income, net of tax	—			—			—	—		—			—			—		—			29,009			1			29,010			Other comprehensive income, net of tax		—			—			—		—			—			—			—		—			29,009		1			29,010
Exercise of stock options, net of tax withholding forfeitures	—			—			—	—		(54		)	—			1		16			—			—			(38		)	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		)	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			Share-based compensation		—			—			—		—			2,216			—			—		—			—		—			2,216
Preferred stock dividends ($168.75 per share)	—			—			—	—		—			(8,733		)	—		—			—			—			(8,733		)	Preferred stock dividends ($168.75 per share)		—			—			—		—			—			(8,733)			—		—			—		—			(8,733)
Common stock dividends ($0.05 per share)	—			—			—	—		—			(1,990		)	—		—			—			—			(1,990		)	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		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
Net income	—			—			—	—		—			42,200			—		—			—			90			42,290			Net income		—			—			—		—			—			42,200			—		—			—		90			42,290
Other comprehensive income (loss), net of tax	—			—			—	—		—			—			—		—			(16,693		)	40			(16,653		)	Other comprehensive income (loss), net of tax		—			—			—		—			—			—			—		—			(16,693)		40			(16,653)
Acquisition of business with noncontrolling interests	—			—			—	—		—			—			—		—			—			4,775			4,775
Exercise of stock options, net of tax withholding forfeitures	—			—			—	—		(10		)	—			—		2			—			—			(8		)
Conversion of restricted stock units into common stock, net of tax withholding forfeitures	—			—			—	—		(861		)	—			29		807			—			—			(54		)
Acquisition of business with noncontrolling interest																														Acquisition of business with noncontrolling interest		—			—			—		—			—			—			—		—			—		4,775			4,775
Exercise of stock options, net of tax witholding forfeitures																														Exercise of stock options, net of tax witholding forfeitures		—			—			—		—			(10)			—			—		2			—		—			(8)
Conversion of restricted stock units into common stock, net of tax witholding forfeitures																														Conversion of restricted stock units into common stock, net of tax witholding forfeitures		—			—			—		—			(861)			—			29		807			—		—			(54)
Share repurchase program	—			—			—	—		—			—			(397	)	(22,815		)	—			—			(22,815		)	Share repurchase program		—��			—			—		—			—			—			(397)		(22,815)			—		—			(22,815)
Share-based compensation	—			—			—	—		5,378			—			—		—			—			—			5,378			Share-based compensation		—			—			—		—			5,378			—			—		—			—		—			5,378
Preferred stock dividends ($168.75 per share)	—			—			—	—		—			(8,733		)	—		—			—			—			(8,733		)	Preferred stock dividends ($168.75 per share)		—			—			—		—			—			(8,733)			—		—			—		—			(8,733)
Common stock dividends ($0.05 per share)	—			—			—	—		—			(1,976		)	—		—			—			—			(1,976		)	Common stock dividends ($0.05 per share)		—			—			—		—			—			(1,976)			—		—			—		—			(1,976)
Balance at June 30, 2019	52			$	1		50,335	$	503	$	1,143,494		$	967,970		(11,248	)	$	(621,167	)	$	(62,591	)	$	5,323		$	1,433,533		Balance at June 30, 2019		52			$	1		50,335		$	503		$	1,143,494		$	967,970		(11,248)		$	(621,167)		$	(62,591)	$	5,323		$	1,433,533
Net loss	—			—			—	—		—			(297,009		)	—		—			—			(6		)	(297,015		)
Net income																														Net income		—			—			—		—			—			(297,009)			—		—			—		(6)			(297,015)
Other comprehensive income, net of tax	—			—			—	—		—			—			—		—			33,480			373			33,853			Other comprehensive income, net of tax		—			—			—		—			—			—			—		—			33,480		373			33,853
Adjustment to acquisition of business with noncontrolling interests	—			—			—	—		—			—			—		—			—			420			420
Exercise of stock options, net of tax withholding forfeitures	—			—			—	—		(25		)	—			1		11			—			—			(14		)
Conversion of restricted stock units into common stock, net of tax withoholding forfeitures	—			—			—	—		(115		)	—			2		70			—			—			(45		)
Adjustment to acquisition of business with noncontrolling interest																														Adjustment to acquisition of business with noncontrolling interest		—			—			—		—			—			—			—		—			—		420			420
Exercise of stock options, net of tax witholding forfeitures																														Exercise of stock options, net of tax witholding forfeitures		—			—			—		—			(25)			—			1		11			—		—			(14)
Conversion of restricted stock units into common stock, net of tax witholding forfeitures																														Conversion of restricted stock units into common stock, net of tax witholding forfeitures		—			—			—		—			(115)			—			2		70			—		—			(45)
Share repurchase program	—			—			—	—		—			—			(493	)	(27,185		)	—			—			(27,185		)	Share repurchase program		—			—			—		—			—			—			(493)		(27,185)			—		—			(27,185)
Share-based compensation	—			—			—	—		4,521			—			—		—			—			—			4,521			Share-based compensation		—			—			—		—			4,521			—			—		—			—		—			4,521
Preferred stock conversion	(52	)		(1		)	—	—		(340,788		)	—			6,857		340,789			—			—			—			Preferred stock conversion		(52)			(1)			—		—			(340,788)			—			6,857		340,789			—		—			0
Preferred stock dividends ($18.76 per share)	—			—			—	—		—			(971		)	—		—			—			—			(971		)	Preferred stock dividends ($18.76 per share)		—			—			—		—			—			(971)			—		—			—		—			(971)
Common stock dividends ($0.05 per share)	—			—			—	—		—			(2,287		)	—		—			—			—			(2,287		)	Common stock dividends ($0.05 per share)		—			—			—		—			—			(2,287)			—		—			—		—			(2,287)
Balance at September 29, 2019	—			$	—		50,335	$	503	$	807,087		$	667,703		(4,881	)	$	(307,482	)	$	(29,111	)	$	6,110		$	1,144,810		Balance at September 29, 2019		0			$	0		50,335		$	503		$	807,087		$	667,703		(4,881)		$	(307,482)		$	(29,111)	$	6,110		$	1,144,810

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, 2017 52
$ 1
50,335
$ 503
$ 1,123,832
$ 833,610
(8,316 ) $ (425,685 ) $ (98,026 ) $ 631
$ 1,434,866
Cumulative effect of change in accounting principles —
—
—
—
—
(29,041 ) —
—
—
—
(29,041 )
Net income (loss) —
—
—
—
—
2,618
—
—
—
(48 ) 2,570
Other comprehensive income (loss), net of tax —
—
—
—
—
—
—
—
(31,408 ) 16
(31,392 )
Exercise of stock options, net of tax withholding forfeitures —
—
—
—
(352 ) —
7
(9 ) —
—
(361 )
Conversion of restricted stock units into common stock, net of tax withholding forfeitures —
—
—
—
(1,242 ) —
27
100
—
—
(1,142 )
Share repurchase program —
—
—
—
—
—
(1,050 ) (75,270 ) —
—
(75,270 )
Share-based compensation —
—
—
—
3,126
—
—
—
—
—
3,126
Redemption of stockholders' rights agreement —
—
—
—
—
(411 ) —
—
—
—
(411 )
Preferred stock dividends ($168.75 per share) —
—
—
—
—
(8,733 ) —
—
—
—
(8,733 )
Common stock dividends ($0.05 per share) —
—
—
—
—
(2,066 ) —
—
—
—
(2,066 )
Balance at April 1, 2018 52
$ 1
50,335
$ 503
$ 1,125,364
$ 795,977
(9,332 ) $ (500,864 ) $ (129,434 ) $ 599
$ 1,292,146
Net income (loss) —
—
—
—
—
28,869
—
—
—
(77 ) 28,792
Other comprehensive income (loss), net of tax —
—
—
—
—
—
—
—
61,028
(17 ) 61,011
Exercise of stock options, net of tax withholding forfeitures —
—
—
—
(64 ) —
2
20
—
—
(44 )
Conversion of restricted stock units into common stock, net of tax withholding forfeitures —
—
—
—
(552 ) —
19
520
—
—
(32 )
Share repurchase program —
—
—
—
—
—
(388 ) (24,730 ) —
—
(24,730 )
Share-based compensation —
—
—
—
4,742
—
—
—
—
—
4,742
Preferred stock dividends ($168.75 per share) —
—
—
—
—
(8,733 ) —
—
—
—
(8,733 )
Common stock dividends ($0.05 per share) —
—
—
—
—
(2,042 ) —
—
—
—
(2,042 )
Balance at July 1, 2018 52
$ 1
50,335
$ 503
$ 1,129,490
$ 814,071
(9,699 ) $ (525,054 ) $ (68,406 ) $ 505
$ 1,351,110
Net income (loss) —
—
—
—
—
85,881
—
—
—
(23 ) 85,858
Other comprehensive income (loss), net of tax —
—
—
—
—
—
—
—
(17,261 ) (6 ) (17,267 )
Exercise of stock options, net of tax withholding forfeitures —
—
—
—
(467 ) —
11
107
—
—
(360 )
Conversion of restricted stock units into common stock, net of tax withholding forfeitures —
—
—
—
(113 ) —
2
48
—
—
(65 )
Share repurchase program —
—
—
—
—
—
(344 ) (25,000 ) —
—
(25,000 )
Share-based compensation —
—
—
—
6,789
—
—
—
—
—
6,789
Preferred stock dividends ($168.75 per share) —
—
—
—
—
(8,732 ) —
—
—
—
(8,732 )
Common stock dividends ($0.05 per share) —
—
—
—
—
(2,031 ) —
—
—
—
(2,031 )
Balance at Balance at September 30, 2018 52

$ 1

50,335

$ 503

$ 1,135,699

$ 889,189

(10,030 )
$ (549,899 )
$ (85,667 )
$ 476

$ 1,390,302

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

-5-

~~- 6-~~

BELDEN INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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, ~~2018:~~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 ~~2018~~2019 Annual Report on Form 10-K.

Business Description

We are a global supplier of specialty networking solutions built around 2 global business platforms - Enterprise Solutions and Industrial Solutions. Our comprehensive portfolio of solutions enables customers to transmit and secure data, sound, and video for mission critical 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.

Reporting Periods

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 March ~~31, 2019,~~29, 2020, the ~~90th~~89th day of our fiscal year ~~2019.~~2020. Our fiscal second and third quarters each have 91 days. The nine months ended September 27, 2020 and September 29, 2019 included 271 and ~~September 30, 2018 included~~ 272 ~~and 273~~ days, respectively.

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 1 – Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities;

•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 September ~~29, 2019~~27, 2020 and September ~~30, 2018,~~29, 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 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 months ended September ~~29, 2019~~27, 2020 and September ~~30, 2018.~~29, 2019.

-6-

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 September ~~29, 2019,~~27, 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.

During the nine months ended September 27, 2020, we paid the sellers of Snell Advanced Media (SAM) the full earnout consideration of $31.4 million in cash in accordance with 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~~material adverse effect on our financial position, results of operations, or cash flow.

As of September ~~29, 2019,~~27, 2020, we were party to standby letters of credit, bank guaranties, and surety bonds totaling ~~$9.7~~$5.9 million, ~~$3.9~~$4.1 million, and $3.3 million, respectively.

Revenue Recognition

We recognize revenue consistent with the principles as outlined in the following five step model: (1) identify the contract with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) each performance obligation is satisfied. See Note 2.

Subsequent Events

We evaluated subsequent events after the balance sheet date through the financial statement issuance date for appropriate accounting and disclosure. ~~See Note 17.~~

~~Current-Year Adoption~~Noncontrolling Interest

We have a 51% ownership percentage in a joint venture with Shanghai Hi-Tech Control System Co, Ltd (Hite). The purpose of ~~Accounting Pronouncements~~

~~In February 2016,~~ the ~~FASB issued Accounting Standards Update No. 2016-02,~~ ~~Leases~~ ~~("ASU 2016-02"),~~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 ~~leasing standard for~~variable interest entity. We have determined that Belden is the primary beneficiary of the joint venture, due to both ~~lessees~~our ownership percentage and ~~lessors~~our control over the activities of the joint venture that ~~supersedes the lease requirements in Accounting Standards Codification (ASC) Topic 840, "Leases." Under~~most significantly impact its ~~core principle, a lessee will recognize a right-of-use (ROU) asset and lease liability~~economic performance based on the balance sheet for nearly all leased assets, and additional disclosures are required to enable users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. Lessor accounting remains largely consistent with existing U.S. generally accepted accounting principles. We adopted ASU 2016-02 on January 1, 2019 using the permitted transition method issued in July 2018, under ASU No. 2018-11 (“ASU 2018-11”), ~~Leases: Targeted Improvements~~, which provides an additional (and optional) transition method for adopting the new lease standard. Furthermore, we elected the following practical expedients and accounting policy elections upon adoption: (i) the package of practical expedients as defined in ASU 2016-02, (ii) the short-term lease accounting policy election, (iii) the practical expedient to not separate non-lease components from lease components, and (iv) the easement practical expedient, which permits an entity to continue applying its current policy for accounting for land easements that existed asterms of the ~~effective date~~joint venture agreement with Hite. Because Belden is the primary beneficiary of ~~ASU 2016-02.~~the joint venture, we have consolidated the joint venture in our financial statements. The ~~adoption~~results of ~~ASU 2016-02 on January 1, 2019 resulted~~the joint venture attributable to Hite’s ownership are presented as net income (loss) attributable to noncontrolling interest in the recognition of right-of-use assets of approximately $90.5 million and lease liabilities for operating leases of approximately $103.4 million on the Condensed Consolidated Balance Sheet, with no material impact to the Condensed Consolidated Statements of ~~Operations or~~Operations. The joint venture is not material to our Condensed Consolidated ~~Cash Flow Statement.~~financial statements as of or for the periods ended September 27, 2020 and September 29, 2019.

-7-

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 ~~difference between the initial lease liabilities and the ROU assets is related primarily to previously existing lease liabilities. See Note 7 for further information regarding the impact~~results of these subsidiaries were consolidated into our financial statements as of the ~~adoption of ASU 2016-02 on~~acquisition date. The results that are attributable to the ~~Company's financial statements.~~

~~In August 2017, the FASB issued Accounting Standards Update No. ASU 2017-12,~~ ~~Derivatives and Hedging (Topic 815): Targeted Improvements~~noncontrolling interest holders are presented as net income attributable to ~~Accounting for Hedging Activities~~ (“ASU 2017-12”). The new guidance better aligns an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The new guidance also makes certain targeted improvements to simplify the application of hedge accounting guidance and ease the administrative burden of hedge documentation requirements and assessing hedge effectiveness. The standard is effective for fiscal years beginning after December 15, 2018. We adopted ASU 2017-12 effective January 1, 2019. The adoption had no impact on our results of operations.

~~In February 2018, the FASB issued ASU No. 2018-02 (“ASU 2018-02”),~~ ~~Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income~~. ASU 2018-02 provides an option to allow reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. The new guidance is effective for annual and interim periods beginning after December 15, 2018. We adopted ASU 2018-02 effective January 1, 2019, and elected to not reclassify the income tax effects of the Act from accumulated other comprehensive income to retained earnings. The adoption had no impact on our results of operations.

~~In June 2018, the FASB issued ASU No. 2018-07 (“ASU 2018-07”),~~ ~~Improvements to Nonemployee Share-Based Payment Accounting~~. The amendments in ASU 2018-07 expand the scope of Topic 718, Compensation - Stock Compensation, to include share-based payment transactions for acquiring goods and services from non-employees, and provide that non-employee share-based payment awards be measured at their grant-date fair value and the probability of satisfying performance conditions be taken into account when non-employee share-based payment awards contain such conditions. The standard is effective for fiscal years beginning after December 15, 2018. We adopted ASU 2018-07 effective January 1, 2019. The adoption had no impact on our results of operations.

~~In August 2018, the Securities and Exchange Commission (“SEC”) adopted the final rule under SEC Release No. 33-10532,~~ ~~Disclosure Update and Simplification~~, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. Additionally, the amendments expanded the disclosure requirements on the analysis of stockholders' equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders' equity presentednoncontrolling interests in the ~~balance sheet must be provided in a note~~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 ~~separate statement. The analysis should present a reconciliation of~~for the beginning balance to the ending balance of each period presented. This final rule was effective on November 5, 2018. We implemented SEC Release No. 33-10532 effective January 1, 2019, which had no impact on our results of operations.periods ended September 27, 2020 and September 29, 2019.

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

In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (“ASU 2016-13”), Financial Instruments - Credit Losses. ~~The main provisions~~Under the new standard, we are required to recognize estimated credit losses expected to occur over the 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 ~~provide financial statement users with more decision-useful information about the expected credit losses~~ on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date, and require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The new standard will be effective for us beginning January 1, ~~2020. Early adoption is permitted. We are currently evaluating~~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. See further discussion as well as adjustments to the ~~impact this update will have on our consolidated financial statements and related disclosures.~~allowance for doubtful accounts under the new credit loss model in Note 7.

Note 2: Revenues

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.


	Broadband & 5G		Cyber-security		Industrial Automation		Smart Buildings		Total Revenues

Three Months Ended September 27, 2020	(In thousands)
Enterprise Solutions	$	115,149	$	0	$	0	$	113,948	$	229,097
Industrial Solutions	0		27,384		219,358		0		246,742
Total	$	115,149	$	27,384	$	219,358	$	113,948	$	475,839

Three Months Ended September 29, 2019
Enterprise Solutions	$	107,067	$	0	$	0	$	140,169	$	247,236
Industrial Solutions	0		29,760		256,102		0		285,862
Total	$	107,067	$	29,760	$	256,102	$	140,169	$	533,098

Nine Months Ended September 27, 2020
Enterprise Solutions	$	318,765	$	0	$	0	$	325,919	$	644,684
Industrial Solutions	0		78,829		640,663		0		719,492
Total	$	318,765	$	78,829	$	640,663	$	325,919	$	1,364,176

Nine Months Ended September 29, 2019
Enterprise Solutions	$	287,338	$	0	$	0	$	412,306	$	699,644
Industrial Solutions	0		96,054		785,892		0		881,946
Total	$	287,338	$	96,054	$	785,892	$	412,306	$	1,581,590

-8-

Cable & Connectivity Networking, Software & Security Total Revenues

Three Months Ended September 29, 2019 (In thousands)
Enterprise Solutions $ 263,857
$ 104,223
$ 368,080
Industrial Solutions 149,537
102,701
252,238
Total $ 413,394
$ 206,924
$ 620,318

Three Months Ended September 30, 2018
Enterprise Solutions $ 271,928
$ 116,923
$ 388,851
Industrial Solutions 162,460
104,463
266,923
Total $ 434,388
$ 221,386
$ 655,774

Nine Months Ended September 29, 2019
Enterprise Solutions $ 765,909
$ 298,560
$ 1,064,469
Industrial Solutions 475,166
305,388
780,554
Total $ 1,241,075
$ 603,948
$ 1,845,023

Nine Months Ended September 30, 2018
Enterprise Solutions $ 785,970
$ 348,906
$ 1,134,876
Industrial Solutions 498,062
297,040
795,102
Total $ 1,284,032
$ 645,946
$ 1,929,978

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 September 29, 2019 (In thousands)
Enterprise Solutions $ 250,382
$ 70,949
$ 46,749
$ 368,080
Industrial Solutions 147,940
62,701
41,597
252,238
Total $ 398,322
$ 133,650
$ 88,346
$ 620,318

Three Months Ended September 30, 2018
Enterprise Solutions $ 254,320
$ 72,467
$ 62,064
$ 388,851
Industrial Solutions 156,334
71,280
39,309
266,923
Total $ 410,654
$ 143,747
$ 101,373
$ 655,774

Nine Months Ended September 29, 2019
Enterprise Solutions $ 706,291
$ 211,226
$ 146,952
$ 1,064,469
Industrial Solutions 454,773
207,740
118,041
780,554
Total $ 1,161,064
$ 418,966
$ 264,993
$ 1,845,023

Nine Months Ended September 30, 2018
Enterprise Solutions $ 735,794
$ 228,394
$ 170,688
$ 1,134,876
Industrial Solutions 461,667
217,851
115,584
795,102
Total $ 1,197,461
$ 446,245
$ 286,272
$ 1,929,978

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

Products Support & Services Total Revenues

Three Months Ended September 29, 2019 (In thousands)
Enterprise Solutions $ 346,501
$ 21,579
$ 368,080
Industrial Solutions 231,223
21,015
252,238
Total $ 577,724
$ 42,594
$ 620,318

Three Months Ended September 30, 2018
Enterprise Solutions $ 368,389
$ 20,462
$ 388,851
Industrial Solutions 243,578
23,345
266,923
Total $ 611,967
$ 43,807
$ 655,774

Nine Months Ended September 29, 2019
Enterprise Solutions $ 1,004,631
$ 59,838
$ 1,064,469
Industrial Solutions 715,367
65,187
780,554
Total $ 1,719,998
$ 125,025
$ 1,845,023

Nine Months Ended September 30, 2018
Enterprise Solutions $ 1,080,549
$ 54,327
$ 1,134,876
Industrial Solutions 723,653
71,449
795,102
Total $ 1,804,202
$ 125,776
$ 1,929,978


	Americas		EMEA		APAC		Total Revenues

Three Months Ended September 27, 2020	(In thousands)
Enterprise Solutions	$	170,734	$	30,185	$	28,178	$	229,097
Industrial Solutions	148,421		59,180		39,141		246,742
Total	$	319,155	$	89,365	$	67,319	$	475,839

Three Months Ended September 29, 2019
Enterprise Solutions	$	183,183	$	36,065	$	27,988	$	247,236
Industrial Solutions	175,869		68,386		41,607		285,862
Total	$	359,052	$	104,451	$	69,595	$	533,098

Nine Months Ended September 27, 2020
Enterprise Solutions	$	481,007	$	92,197	$	71,480	$	644,684
Industrial Solutions	429,461		182,406		107,625		719,492
Total	$	910,468	$	274,603	$	179,105	$	1,364,176

Nine Months Ended September 29, 2019
Enterprise Solutions	$	508,616	$	106,823	$	84,205	$	699,644
Industrial Solutions	544,780		219,105		118,061		881,946
Total	$	1,053,396	$	325,928	$	202,266	$	1,581,590

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 most likely amount of consideration we expect to receive changes or when the consideration becomes fixed. Adjustments to revenue for performance obligations satisfied in prior periods were not significant during the three and nine months ended September ~~29, 2019~~27, 2020 and September ~~30, 2018.~~29, 2019.

The following table presents estimated and accrued variable consideration:

September 29, 2019 September 30, 2018

(in thousands)
Accrued rebates $ 29,468
$ 30,089
Accrued returns 14,304
9,265
Price adjustments recognized against gross accounts receivable 30,454
28,963


	September 27, 2020		September 29, 2019

	(in thousands)
Accrued rebates	$	25,085	$	29,430
Accrued returns	12,001		10,292
Price adjustments recognized against gross accounts receivable	27,234		29,908

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 September ~~29, 2019,~~27, 2020, total deferred revenue was ~~$99.2~~$70.2 million, and of this amount, ~~$86.5~~$46.1 million is expected to be recognized within the next twelve months, and the remaining ~~$12.7~~$24.1 million is long-term and is expected to be recognized over a period greater than twelve months.

-9-

The following table presents deferred revenue activity:

Nine Months Ended
September 29, 2019 September 30, 2018

(In thousands)
Beginning balance $ 113,347
$ 104,412
New deferrals 141,263
135,827
Revenue recognized (155,400 ) (149,400 )
Ending balance $ 99,210
$ 90,839


	2020		2019

	(In thousands)
Beginning balance	$	70,070	$	72,358
New deferrals	23,830		26,033
Revenue recognized	(24,415)		(32,168)
Balance at March 29, 2020	69,485		66,223
New deferrals	21,322		21,892
Revenue recognized	(22,200)		(24,807)
Balance at June 28, 2020	68,607		63,308
New deferrals	22,243		21,937
Revenue recognized	(20,649)		(25,063)
Balance at September 27, 2020	$	70,201	$	60,182

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 long-lived assets on our balance sheet when the original duration of the related revenue arrangement is longer than one year, and we amortize it over the related revenue arrangement period.

Total capitalized sales commissions was $4.6 million as of September 27, 2020 and $3.0 million as of September 29, ~~2019 and $2.3 million as of September 30, 2018.~~2019. The following table presents sales commissions that are recorded within selling, general and administrative expenses:


	Three Months ended				Nine Months ended
	September 27, 2020		September 29, 2019		September 27, 2020		September 29, 2019

	(In thousands)
Sales commissions	$	4,240	$	4,535	$	12,270	$	14,079

Three Months ended Nine Months Ended
September 29, 2019 September 30, 2018 September 29, 2019 September 30, 2018

(In thousands)
Sales commissions $ 5,112
$ 5,931
$ 15,881
$ 18,392

Note 3: Acquisitions

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 shares of Opterna International Corp. (Opterna) on April 15, 2019 for a ~~preliminary~~ purchase price, net of cash acquired, of $51.7 million. Of the $51.7 million purchase price, ~~$45.5 million and $0.4~~$45.9 million was paid ~~on April 15, 2019 and September 25, 2019, respectively,~~ 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 a discounted cash flow model, the estimated fair value of the earnout included

in the purchase price is $5.8 million. Opterna is an international fiber optics solutions business based in Sterling, Virginia, which designs and manufactures a range of complementary fiber connectivity, cabinet, and enclosure products used in optical networks. The results of Opterna have been included in our Condensed Consolidated Financial Statements from April 15, 2019, and are reported within the 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.

-10-

The following table summarizes the estimated ~~preliminary~~ fair values of the assets acquired and the liabilities assumed as of 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	35,057
Deferred income taxes	80
Operating lease right-to-use assets	2,204
Other long-lived assets	2,070
Total assets acquired	$	81,972

Accounts payable	$	4,847
Accrued liabilities	4,301
Long-term deferred tax liability	6,813
Long-term operating lease liability	1,923
Other long-term liabilities	7,152
Total liabilities assumed	$	25,036
Net assets	56,936

Noncontrolling interests	5,195

Net assets attributable to Belden	$	51,741

Receivables $ 5,308
Inventory 7,470
Prepaid and other current assets 566
Property, plant, and equipment 1,328
Intangible assets 28,000
Goodwill 35,565
Deferred income taxes 36
Operating lease right-to-use assets 2,204
Other long-lived assets 2,070
Total assets acquired $ 82,547

Accounts payable $ 4,847
Accrued liabilities 4,346
Long-term deferred tax liability 7,342
Long-term operating lease liability 1,923
Other long-term liabilities 7,153
Total liabilities assumed $ 25,611
Net assets 56,936

Noncontrolling interests 5,195

Net assets attributable to Belden $ 51,741

The above purchase price allocation is preliminary, and is subject to revision as additional information about the fair value of individual assets and liabilities becomes available. The preliminary measurement of receivables, inventories, intangible assets, goodwill, deferred income taxes, other assets and liabilities, and noncontrolling interests are subject to change. A changeWe did not record any material measurement-period adjustments in the ~~estimated fair value of the net assets acquired or noncontrolling interests will change the amount of the purchase price allocable to goodwill.~~

During the third quarter 2019, we recorded measurement-period adjustments that decreased goodwill by approximately $9.4 million primarily for changes in the fair value of the earnout. The impact of these adjustments to the consolidated statement of operations was immaterial.nine months ended September 27, 2020.

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 $5.3 million, which is equivalent to its gross contractual amount.

For purposes of the above allocation, we based our ~~preliminary~~ estimate of the fair values for the acquired inventory, intangible assets, and noncontrolling interests on valuation 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 (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).

-11-

Goodwill and other intangible assets reflected above were determined to meet the criteria for recognition apart from tangible assets acquired and liabilities assumed. The goodwill is primarily attributable to expansion of product offerings in the optical fiber market. Our tax basis in the acquired goodwill is 0. The intangible assets related to the acquisition consisted of the following:

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

Intangible assets not subject to amortization:
Goodwill $ 35,565
n/a
Total intangible assets not subject to amortization $ 35,565

Total intangible assets $ 63,565

Weighted average amortization period 12.9


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

Intangible assets not subject to amortization:
Goodwill	$	35,057	n/a
Total intangible assets not subject to amortization	$	35,057

Total intangible assets	$	63,057
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 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 and control of the items transfers. The useful life for the trademarks was based on the period of time we expect to continue to go to market using the trademarks.

Our consolidated revenues for the three and nine months ended September 29, 2019 included $9.1 million and $17.9 million, respectively, from Opterna. Our consolidated loss before taxes for the three and nine months ended September 29, 2019 included $(0.2) million and $(0.3) million, respectively, from Opterna. For the three months ended September 29, 2019, the loss before taxes included $3.1 million of severance and other restructuring costs, $1.4 million of amortization of intangible assets, and $(0.1) million of cost of sales related to the adjustment of acquired inventory to fair value. For the nine months ended September 29, 2019, the loss before taxes included $5.6 million of severance and other restructuring costs, $2.3 million of amortization of intangible assets, and $0.5 million of cost of sales related to the adjustment of acquired inventory to fair value. Our consolidated loss for the three and nine months ended September 29, 2019 included $0.0 million and $0.1 million, respectively, of net income attributable to noncontrolling interests of Opterna.

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

Three Months Ended Nine Months Ended
September 29, 2019 September 30, 2018 September 29, 2019 September 30, 2018

(In thousands, except per share data)
(Unaudited)
Revenues $ 620,318
$ 666,048
$ 1,853,639
$ 1,957,512
Net income (loss) attributable to Belden common stockholders (295,312 ) 77,417
(242,579 ) 87,250
Diluted income (loss) per share attributable to Belden common stockholders $ (6.64 ) $ 1.62
$ (5.90 ) $ 2.11


	Three Months Ended		Nine Months Ended
	September 29, 2019		September 29, 2019

	(In thousands, except per share data)
	(Unaudited)
Revenues	$	533,098	$	1,590,206
Net income from continuing operations attributable to Belden common stockholders	39,721		91,459
Diluted income from continuing operations per share attributable to Belden common stockholders	$	0.89	$	2.21

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.

FutureLink

We acquired the FutureLink product line and related assets from Suttle, Inc. on April 5, 2019 for a purchase price of $5.0 million, which was funded with cash on hand. The acquisition of FutureLink allows us to offer a more complete set of fiber product offerings. The results from the acquisition of FutureLink have been included in our Condensed Consolidated Financial Statements from April 5, 2019, and are reported within the Enterprise Solutions segment. The acquisition of FutureLink was not material to our financial position or results of operations.

~~Net-Tech Technology, Inc.~~

-12-

Note 4: Discontinued Operations

We ~~acquired 100%~~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.

During the fourth quarter of 2019, we committed to a plan to sell Grass Valley, and at such time, met all of the ~~shares~~criteria to classify the assets and liabilities of ~~Net-Tech Technology, Inc. (NT2)~~this business as held for sale. Furthermore, we determined a divestiture of Grass Valley represented a strategic shift that is expected to have a major impact on ~~April 25, 2018 for~~our operations and financial results. As a ~~purchase price of $8.5 million,~~result, the Grass Valley disposal group, which was funded with cash on hand. NT2 is an integrator of optical passive components and network optimization products used within broadband network applications where optical backhaul is used. NT2 is located in the United States. The results of NT2 have been included in our ~~Consolidated Financial Statements from April 25, 2018, and are~~Enterprise Solutions segment, is reported within discontinued operations. The Grass Valley disposal group excludes certain Grass Valley pension liabilities that we retained. We also ceased depreciating and amortizing the ~~Enterprise Solutions segment. The NT2 acquisition was not material to our financial position or results~~assets of ~~operations.~~the disposal group once they met the held for sale criteria during the fourth quarter of 2019.

~~Snell Advanced Media~~

We wrote down the carrying value of Grass Valley and recognized asset impairments totaling $113.0 million and $342.1 million in the nine months ended September 27, 2020 and September 29, 2019, respectively. 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.

We ~~acquired 100%~~completed the sale of Grass Valley to Black Dragon Capital on July 2, 2020 and recognized a gain of $2.7 million, net of a $2.0 million income tax benefit. The terms of the ~~outstanding ownership interest in Snell Advanced Media (SAM) on February 8, 2018 for a purchase price,~~sale included gross cash consideration of $120.0 million, or approximately $59.5 million net of cash ~~acquired,~~delivered with the business and certain preliminary working capital adjustments. The sale also included deferred consideration consisting of ~~$104.6 million. Of~~a $175.0 million seller’s note that matures in 2025, up to $88 million in PIK (payment-in-kind) interest on the ~~$104.6~~seller’s note, and $178.0 million ~~purchase price, $75.2 million was paid on February 8, 2018 and was funded with cash on hand. The acquisition included a~~in potential earnout ~~which is based upon future combined earnings of SAM and Grass Valley through December 31, 2019. The maximum earnout consideration is $31.4 million, but based~~payments. Based upon a third party valuation specialist using certain assumptions in a ~~discounted cash flow model,~~Monte Carlo analysis, the estimated fair value of the seller’s note is $34.9 million, which we recorded in Other Long-Lived Assets. We accounted for the earnout ~~included in the purchase price was $29.3 million. We assumed debt of $19.3 million~~under a loss recovery approach and ~~paid it off during the first quarter of 2018. During the first quarter of 2019, we signed a settlement agreement with the sellers of SAM for claims arising over the timing~~did not record an asset as of the disposal date. Any subsequent recognition of an earnout ~~consideration outlined in~~will be based on the ~~purchase agreement, and as~~gain contingency guidance.

As part of the ~~settlement,~~transaction, we also invested $3.0 million for a 9% equity interest in Grass Valley with the ~~parties agreed~~right to put the equity back to Black Dragon Capital at any time on or before October 31, 2020. On October 23, 2020, we notified Black Dragon Capital that we are exercising our right to put the ~~maximum earnout consideration~~equity back to them. We expect to finalize the sale of ~~$31.4 million would be payable~~our equity interest during the ~~first~~fourth quarter ~~2020, unless earlier payment is required~~of 2020. We deconsolidated Grass Valley as ~~per the terms~~ of the purchase agreement. SAM designs, manufactures, and sells innovative content production and distribution systems for the broadcast and media markets. SAM is located in the United Kingdom. The results of SAM have been included in our Consolidated Financial Statements from February 8, 2018,July 2, 2020 and are ~~reported within~~accounting for our equity interest under the ~~Enterprise Solutions segment.~~ cost method. Our equity interest is recorded in Other Long-Lived Assets.

The seller’s note accrues PIK interest at an annual rate of 8.5%. During the three months ended September 27, 2020, the seller’s note accrued interest of $3.6 million, which we reserved for based on our expected loss allowance methodology.

We are performing certain services for Grass Valley under a transition services agreement. During the three months ended September 27, 2020, the amount of transition services totaled $1.0 million, which we expect to collect in 2021.

-13-

The following table summarizes the ~~estimated fair value~~operating results of the ~~assets acquired~~disposal group up to the July 2, 2020 disposal date for the three and ~~the liabilities assumed as of February 8, 2018 (in thousands):~~nine months ended September 27, 2020 and September 29, 2019, respectively:

Receivables $ 16,551
Inventory 15,084
Prepaid and other current assets 3,799
Property, plant, and equipment 7,716
Intangible assets 51,000
Goodwill 103,466
Deferred income taxes 1,388
Other long-lived assets 3,046
Total assets acquired $ 202,050

Accounts payable $ 11,825
Accrued liabilities 25,135
Deferred revenue 8,860
Long-term debt 19,315
Postretirement benefits 31,774
Other long-term liabilities 591
Total liabilities assumed $ 97,500

Net assets $ 104,550


	Three Months Ended				Nine Months Ended
	September 27, 2020		September 29, 2019		September 27, 2020		September 29, 2019

	(In thousands)
Revenues	$	1,334	$	87,221	$	109,195	$	263,434
Cost of sales	(1,008)		(50,622)		(70,199)		(153,012)
Gross profit	326		36,599		38,996		110,422
Selling, general and administrative expenses	(574)		(21,924)		(37,435)		(66,785)
Research and development expenses	(610)		(7,360)		(15,083)		(28,526)
Amortization of intangibles	0		(3,218)		0		(11,695)
Asset impairment of discontinued operations	0		(342,146)		(113,007)		(342,146)
Interest expense, net	(12)		(198)		(432)		(611)
Non-operating pension benefit (cost)	27		(55)		(169)		(166)
Loss before taxes	$	(843)	$	(338,302)	$	(127,130)	$	(339,507)

~~During 2019, we did not record any significant measurement-period adjustments.~~

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 fair values assigned to each class of acquired assets and assumed liabilities could materially affect the results of our operations.

~~The fair value of acquired receivables is $16.6 million, which is equivalent to its gross contractual amount.~~

For purposes of the above allocation, we based our estimate of the fair values for the acquired inventory; property, plant, and equipment; intangible assets; and deferred revenue on valuation studies performed by a third party valuation firm. We have estimated a 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. To determine the value of the acquired property, plant, and equipment, we used various valuation methods, including both the market approach, which considers sales prices of similar assets in similar conditions (Level 2 valuation), and the cost approach, which considers the cost to replace the asset adjusted for depreciation (Level 3 valuation). We used various valuation methods including discounted cash flows, lost income, excess earnings, and relief from royalty to estimate the fair value of the identifiable intangible assets and deferred revenue (Level 3 valuation).

Goodwill and other intangible assets reflected above were determined to meet the criteria for recognition apart from tangible assets acquired and liabilities assumed. The goodwill is primarily attributable to expected synergies and the assembled workforce. The expected synergies for the SAM acquisition may be gained from helping broadcast and media content creators, aggregators and distributors significantly improve their effectiveness and efficiency during a period of rapid change in technology, viewer and advertiser behavior and business models. Our tax basis in the acquired goodwill is 0. The intangible assets related to the acquisition consisted of the following:

Fair Value Amortization Period
(In thousands) (In years)
Intangible assets subject to amortization:
Developed technologies $ 36,500
5.0
Customer relationships 11,000
12.0
Sales backlog 1,900
0.3
Trademarks 1,600
0.9
Total intangible assets subject to amortization $ 51,000

Intangible assets not subject to amortization:
Goodwill $ 103,466
n/a
Total intangible assets not subject to amortization $ 103,466

Total intangible assets $ 154,466

Weighted average amortization period 6.2 years

The ~~amortizable intangible assets reflected in~~disposal group had capital expenditures of approximately $0.3 million and $16.7 million during the table above were determined by us to have finite lives. The useful life for the developed technology intangible asset was based on the estimated time that the technology provides us with a competitive advantagethree and ~~thus approximates the period~~nine months ended September 27, 2020, respectively; 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. The useful life for the trademarks was based on the period of time we expect to continue to go to market using the trademarks.

~~SAM is included in our Grass Valley reporting unit,~~$8.3 million and ~~as discussed further in Note 8,~~$22.8 million during the three and nine months ended September 29, 2019, werespectively.

The disposal group recognized ~~a total goodwill~~credits to stock-based compensation of $0.0 million and ~~other asset impairment charge of $342.1~~$0.9 million ~~for the Grass Valley reporting unit.~~

~~Our consolidated revenues for~~during the three and nine months ended September ~~30, 2018 included an estimated $25.3~~27, 2020, respectively. The disposal group incurred stock based compensation expense of $0.2 million and ~~$77.2~~$0.8 million respectively, from SAM. Due to the integration of SAM into our existing business, we are unable to reasonably estimate the amount of income before taxes from SAM included in our consolidated financial statements. Our consolidated income before

~~taxes for~~during the three ~~months ended September 30, 2018 included $7.1 million of severance~~ and other restructuring costs, $3.7 million of amortization of intangible assets, and $0.6 million of cost of sales related to the adjustment of acquired inventory to fair value from SAM. Our consolidated income before taxes for the nine months ended September ~~30, 2018 included $36.6 million of severance~~29, 2019, respectively.

The disposal group did not have any significant non-cash charges for investing activities during the three and ~~other restructuring costs, $8.7 million of amortization of intangible assets, and $1.8 million of cost of sales related to the adjustment of acquired inventory to fair value from SAM.~~nine months ended September 27, 2020 or September 29, 2019.

-14-

The following table ~~illustrates~~provides the ~~unaudited pro forma effect on operating results as if~~major classes of assets and liabilities of the ~~SAM acquisition had been completed~~disposal group as of ~~January 1, 2017.~~December 31, 2019:

Three Months Ended Nine Months Ended
September 30, 2018 September 30, 2018

(In thousands, except per share data)
(Unaudited)
Revenues $ 659,003
$ 1,944,628
Net income attributable to Belden common stockholders 92,769
126,937
Diluted income per share attributable to Belden common stockholders $ 2.13
$ 3.08


	December 31, 2019

	(In thousands)
Assets:
Cash and cash equivalents	$	18,405
Receivables, net	117,386
Inventories, net	55,002
Other current assets	35,187
Plant, property, and equipment, less accumulated depreciation	61,233
Operating lease right-of-use assets	16,902
Goodwill	26,707
Intangible assets, less accumulated depreciation	143,459
Deferred income taxes	59,560
Other long-lived assets	21,652
Impairment of disposal group	(180,358)
Total Assets of discontinued operations	$	375,135
Liabilities:
Accounts payable	$	52,425
Accrued liabilities	83,349
Postretirement benefits	6,224
Deferred income taxes	2,740
Long-term operating lease liabilities	20,459
Other long-term liabilities	5,082
Total Liabilities of discontinued operations	$	170,279

The ~~above unaudited pro forma financial information is presented for informational purposes only and does not purport to represent what our results~~disposal group also had $42.3 million of ~~operations would have been had we completed the acquisition on the date assumed, nor is it necessarily indicative~~accumulated other comprehensive losses as of ~~the results that may be expected in future periods. Pro forma adjustments exclude cost savings from any synergies resulting from the acquisition.~~December 31, 2019.

Note 4:5: Reportable Segments

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

The key measures of segment profit or loss 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.

-15-


	Enterprise Solutions		Industrial Solutions		Total Segments

	(In thousands)
As of and for the three months ended September 27, 2020
Segment revenues	$	229,097	$	246,742	$	475,839
Affiliate revenues	231		10		241
Segment EBITDA	26,250		38,391		64,641
Depreciation expense	5,005		5,450		10,455
Amortization of intangibles	5,408		10,696		16,104
Amortization of software development intangible assets	73		456		529
Severance, restructuring, and acquisition integration costs	1,337		20		1,357


Segment assets	519,142		486,110		1,005,252
As of and for the three months ended September 29, 2019
Segment revenues	$	247,236	$	285,862	$	533,098
Affiliate revenues	753		2		755
Segment EBITDA	35,868		54,849		90,717
Depreciation expense	4,919		5,060		9,979
Amortization of intangibles	6,269		12,757		19,026
Amortization of software development intangible assets	49		36		85
Severance, restructuring, and acquisition integration costs	3,047		0		3,047
Purchase accounting effects of acquisitions	(186)		0		(186)
Segment assets	517,448		501,278		1,018,726
As of and for the nine months ended September 27, 2020
Segment revenues	$	644,684	$	719,492	$	1,364,176
Affiliate revenues	940		30		970
Segment EBITDA	73,193		100,367		173,560
Depreciation expense	15,208		15,861		31,069
Amortization of intangibles	16,266		32,040		48,306
Amortization of software development intangible assets	184		1,061		1,245
Severance, restructuring, and acquisition integration costs	6,310		3,138		9,448
Purchase accounting effects of acquisitions	125		0		125
Segment assets	519,142		486,110		1,005,252
As of and for the nine months ended September 29, 2019
Segment revenues	$	699,644	$	881,946	$	1,581,590
Affiliate revenues	3,190		19		3,209
Segment EBITDA	93,074		165,257		258,331
Depreciation expense	14,576		15,414		29,990
Amortization of intangibles	16,694		39,564		56,258
Amortization of software development intangible assets	120		87		207
Severance, restructuring, and acquisition integration costs	5,566		0		5,566
Purchase accounting effects of acquisitions	532		0		532
Segment assets	517,448		501,278		1,018,726

Enterprise
Solutions

Industrial
Solutions

Total
Segments

(In thousands)
As of and for the three months ended September 29, 2019
Segment revenues $ 368,080
$ 252,238
$ 620,318
Affiliate revenues 927
2
929
Segment EBITDA 56,814
44,614
101,428
Depreciation expense 7,381
4,766
12,147
Amortization of intangibles 9,780
12,463
22,243
Amortization of software development intangible assets 1,161
36
1,197
Severance, restructuring, and acquisition integration costs 4,045
—
4,045
Purchase accounting effects of acquisitions (186 ) —
(186 )
Goodwill and other asset impairment 342,146
—
342,146
Segment assets 836,540
455,470
1,292,010
As of and for the three months ended September 30, 2018
Segment revenues $ 392,080
$ 266,923
$ 659,003
Affiliate revenues 1,776
15
1,791
Segment EBITDA 72,210
53,750
125,960
Depreciation expense 7,092
4,579
11,671
Amortization of intangibles 12,322
13,211
25,533
Amortization of software development intangible assets 620
—
620
Severance, restructuring, and acquisition integration costs 9,528
2,160
11,688
Purchase accounting effects of acquisitions 821
—
821
Deferred revenue adjustments 3,229
—
3,229
Segment assets 766,505
448,626
1,215,131
As of and for the nine months ended September 29, 2019
Segment revenues $ 1,064,469
$ 780,554
$ 1,845,023
Affiliate revenues 3,190
13
3,203
Segment EBITDA 149,855
139,531
289,386
Depreciation expense 22,655
14,515
37,170
Amortization of intangibles 29,270
38,682
67,952
Amortization of software development intangible assets 3,119
87
3,206
Severance, restructuring, and acquisition integration costs 10,904
—
10,904
Purchase accounting effects of acquisitions 1,845
—
1,845
Goodwill and other asset impairment 342,146
—
342,146
Segment assets 836,540
455,470
1,292,010
As of and for the nine months ended September 30, 2018
Segment revenues $ 1,142,765
$ 795,102
$ 1,937,867
Affiliate revenues 4,318
61
4,379
Segment EBITDA 199,943
153,401
353,344
Depreciation expense 21,465
14,097
35,562
Amortization of intangibles 35,301
39,689
74,990
Amortization of software development intangible assets 1,344
—
1,344
Severance, restructuring, and acquisition integration costs 46,949
10,061
57,010
Purchase accounting effects of acquisitions 2,359
—
2,359
Deferred revenue adjustments 7,889
—
7,889
Segment assets 766,505
448,626
1,215,131

-16-

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 Nine Months Ended
September 29, 2019 September 30, 2018 September 29, 2019 September 30, 2018

(In thousands)
Total Segment Revenues $ 620,318
$ 659,003
$ 1,845,023
$ 1,937,867
Deferred revenue adjustments (1) —
(3,229 ) —
(7,889 )
Consolidated Revenues $ 620,318
$ 655,774
$ 1,845,023
$ 1,929,978

Total Segment EBITDA $ 101,428
$ 125,960
$ 289,386
$ 353,344
Goodwill and other asset impairment (2) (342,146 ) —
(342,146 ) —
Amortization of intangibles (22,243 ) (25,533 ) (67,952 ) (74,990 )
Depreciation expense (12,147 ) (11,671 ) (37,170 ) (35,562 )
Severance, restructuring, and acquisition integration costs (3) (4,045 ) (11,688 ) (10,904 ) (57,010 )
Amortization of software development intangible assets (1,197 ) (620 ) (3,206 ) (1,344 )
Purchase accounting effects related to acquisitions (4) 186
(821 ) (1,845 ) (2,359 )
Deferred revenue adjustments (1) —
(3,229 ) —
(7,889 )
Loss on sale of assets —
—
—
(94 )
Costs related to patent litigation —
(2,634 ) —
(2,634 )
Gain from patent litigation —
62,141
—
62,141
Eliminations (343 ) (627 ) (1,086 ) (1,616 )
Consolidated operating income (loss) (280,507 ) 131,278
(174,923 ) 231,987
Interest expense, net (14,200 ) (14,472 ) (42,561 ) (46,538 )
Non-operating pension benefit 489
1,356
1,517
824
Loss on debt extinguishment —
—
—
(22,990 )
Consolidated income (loss) before taxes $ (294,218 ) $ 118,162
$ (215,967 ) $ 163,283


	Three Months Ended				Nine Months Ended
	September 27, 2020		September 29, 2019		September 27, 2020		September 29, 2019

	(In thousands)
Total Segment and Consolidated Revenues	$	475,839	$	533,098	$	1,364,176	$	1,581,590



Total Segment EBITDA	$	64,641	$	90,717	$	173,560	$	258,331
Amortization of intangibles	(16,104)		(19,026)		(48,306)		(56,258)
Depreciation expense	(10,455)		(9,979)		(31,069)		(29,990)
Severance, restructuring, and acquisition integration costs (1)	(1,357)		(3,047)		(9,448)		(5,566)
Amortization of software development intangible assets	(529)		(85)		(1,245)		(207)
Purchase accounting effects related to acquisitions (2)	0		186		(125)		(532)
Eliminations	(69)		(1,224)		(402)		(1,971)
Consolidated operating income	36,127		57,542		82,965		163,807
Interest expense, net	(15,607)		(14,002)		(43,188)		(41,951)
Total non-operating pension benefit	680		544		2,079		1,684
Consolidated income from continuing operations before taxes	$	21,200	$	44,084	$	41,856	$	123,540

(1) 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. See Note 3, ~~Acquisitions, for details.~~

~~(2) For the three and nine months ended September 29, 2019, we recognized a $342.1 million goodwill and other asset impairment charge for our Grass Valley reporting unit. See Note 8,~~ ~~Long-Lived Assets,~~ ~~for details~~.

~~(3) See Note 9,~~ 11, Severance, Restructuring, and Acquisition Integration Activities, for ~~details~~.details.

~~(4) For~~(2) During the nine months ended September ~~29, 2019,~~27, 2020, we recognized ~~expenses~~cost of sales related to ~~the earnout consideration~~purchase accounting adjustments of acquired inventory to fair value for the ~~SAM~~SPC acquisition. For the three and nine months ended September 29, 2019, we recognized cost of sales for the adjustment of acquired inventory to fair value related to the Opterna and FutureLink acquisitions. ~~For the three and nine months ended September 30, 2018, we recognized cost of sales for the adjustment of acquired inventory to fair value related to the SAM and NT2 acquisitions.~~

Note 5:6: Income (loss) per Share

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


	Three Months Ended				Nine Months Ended
	September 27, 2020		September 29, 2019		September 27, 2020		September 29, 2019

	(In thousands)
Numerator:
Income from continuing operations	$	20,569	$	38,031	$	38,633	$	107,361
Less: Net income (loss) attributable to noncontrolling interest	85		(6)		79		60
Less: Preferred stock dividends	0		971		0		18,437
Income from continuing operations attributable to Belden common stockholders	20,484		37,066		38,554		88,864
Add: Loss from discontinued operations, net of tax	(6,231)		(335,046)		(103,395)		(336,908)
Add: Gain on disposal of discontinued operations, net of tax	2,743		0		2,743		0
Net income (loss) attributable to Belden common stockholders	$	16,996	$	(297,980)	$	(62,098)	$	(248,044)

Denominator:
Weighted average shares outstanding, basic	44,567		44,444		44,834		41,090
Effect of dilutive common stock equivalents	142		166		134		209
Weighted average shares outstanding, diluted	44,709		44,610		44,968		41,299

-17-

Three Months Ended Nine Months Ended
September 29, 2019 September 30, 2018 September 29, 2019 September 30, 2018

(In thousands)
Numerator:
Net income (loss) $ (297,015 ) $ 85,858
$ (229,547 ) $ 117,220
Less: Net income (loss) attributable to noncontrolling interests (6 ) (23 ) 60
(148 )
Less: Preferred stock dividends 971
8,732
18,437
26,198
Net income (loss) attributable to Belden common stockholders, basic (297,980 ) 77,149
(248,044 ) 91,170
Plus Preferred stock dividends —
8,732
—
—
Net income (loss) attributable to Belden common stockholders, diluted $ (297,980 ) $ 85,881
$ (248,044 ) $ 91,170

Denominator:
Weighted average shares outstanding, basic 44,444
40,510
41,090
40,960
Assumed conversion of preferred stock into common stock —
6,857
—
—
Effect of dilutive common stock equivalents —
311
—
308
Weighted average shares outstanding, diluted 44,444
47,678
41,090
41,268
For the three and nine months ended September 27, 2020, diluted weighted average shares outstanding exclude outstanding equity awards of 1.6 million and 1.5 million, respectively, which are anti-dilutive. In addition, for both the three and nine months ended September 27, 2020, diluted weighted average shares outstanding do not include outstanding equity awards of 0.4 million because the related performance conditions have not been satisfied.

For the three and nine months ended September 29, 2019, diluted weighted average shares outstanding ~~do not include~~exclude outstanding equity awards of 1.4 million and 1.2 million, respectively, ~~because to do so would have been~~which are anti-dilutive. In addition, for both the three and nine months ended September 29, 2019, diluted weighted average shares outstanding do not include outstanding equity awards of 0.3 million because the related performance conditions have not been satisfied. Furthermore, for the three and nine months ended September 29, 2019, diluted weighted average shares outstanding do not include the weighted average impact of 1.1 million and 4.9 million shares, respectively, related to converting preferred shares into common shares because deducting the preferred stock dividends from net income was more dilutive.

For the three and nine months ended September 30, 2018, diluted weighted average shares outstanding do not include outstanding equity awards of 0.9 million and 0.8 million, respectively, because to do so would have been anti-dilutive. In addition, for the three and nine months ended September 30, 2018, diluted weighted average shares outstanding do not include outstanding equity awards of 0.3 million and 0.2 million, respectively, because the related performance conditions have not been satisfied. Furthermore, for the nine months ended September 30, 2018, diluted weighted average shares outstanding do not include the impact of preferred shares that were converted into ~~6.9~~1.1 million and 4.9 million common shares, 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.

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 upon an assessment of anticipated payments as well as other historical, current and future information that is reasonably available. The following table presents the activity in the allowance for doubtful accounts for our continuing operations for the three and nine months ended September 27, 2020 (in thousands).

-18-


Balance at December 31, 2019	$	2,569
Adoption adjustment	1,011
Current period provision	(172)
Recoveries collected	(9)
Fx impact	(213)
Balance at March 29, 2020	$	3,186
Current period provision	2,621
Writeoffs	(52)
Recoveries collected	(100)
Fx impact	37
Balance at June 28, 2020	$	5,692
Current period provision	(108)
Writeoffs	(76)
Fx impact	29
Balance at September 27, 2020	$	5,537

Note 8: Inventories

The major classes of inventories were as follows:


	September 27, 2020		December 31, 2019

	(In thousands)
Raw materials	$	112,957	$	98,530
Work-in-process	34,348		34,717
Finished goods	125,774		119,331
Gross inventories	273,079		252,578
Excess and obsolete reserves	(28,264)		(21,245)
Net inventories	$	244,815	$	231,333

September 29, 2019 December 31, 2018

(In thousands)
Raw materials $ 137,687
$ 146,803
Work-in-process 43,602
45,939
Finished goods 136,559
152,572
Gross inventories 317,848
345,314
Excess and obsolete reserves (26,853 ) (28,896 )
Net inventories $ 290,995
$ 316,418

Note 7:9: 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,~~years; some of which include extension and termination options ~~to extend the lease~~ for ~~a period of up to~~an additional 15 years ~~and some include options to terminate the leases~~or within 1 ~~year.~~year, respectively. 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 and nine months ended September 27, 2020 and September 29, 2019, 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 ~~lease~~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.

-19-

The components of lease expense were as follows:


	Three Months Ended				Nine Months Ended
	September 27, 2020		September 29, 2019		September 27, 2020		September 29, 2019

	(In thousands)
Operating lease cost	$	3,571	$	3,432	$	10,512	$	10,872

Finance lease cost
Amortization of right-of-use asset	$	35	$	37	$	101	$	104
Interest on lease liabilities	4		6		13		16
Total finance lease cost	$	39	$	43	$	114	$	120

Three Months Ended Nine Months Ended
September 29, 2019

(In thousands)
Operating lease cost $ (4,505 ) $ (14,247 )

Finance lease cost
Amortization of right-of-use asset $ (43 ) $ (111 )
Interest on lease liabilities (6 ) (16 )
Total finance lease cost $ (49 ) $ (127 )

Supplemental cash flow information related to leases was as follows:


	Three Months Ended				Nine Months Ended
	September 27, 2020		September 29, 2019		September 27, 2020		September 29, 2019

	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	3,891	$	3,528	$	11,352	$	10,770
Operating cash flows from finance leases	4		6		13		20
Financing cash flows from finance leases	43		64		130		210

Three Months Ended Nine Months Ended
September 29, 2019

(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ (4,842 ) $ (14,978 )
Operating cash flows from finance leases (8 ) (24 )
Financing cash flows from finance leases (59 ) (232 )

Supplemental balance sheet information related to leases was as follows:


	September 27, 2020		December 31, 2019

	(In thousands, except lease term and discount rate)
Operating leases:
Total operating lease right-of-use assets	$	57,380	$	62,251

Accrued liabilities	$	14,657	$	13,900
Long-term operating lease liabilities	49,209		55,652
Total operating lease liabilities	$	63,866	$	69,552

Finance leases:
Other long-lived assets, at cost	$	759	$	823
Accumulated depreciation	(449)		(391)
Other long-lived assets, net	$	310	$	432

September 29, 2019

(In thousands, except lease term and discount rate)
Operating leases:
Total operating lease right-of-use assets $ 78,788

Accrued liabilities $ 16,981
Long-term operating lease liabilities 73,436
Total operating lease liabilities $ 90,417

Finance leases:
Other long-lived assets, at cost $ 723
Accumulated depreciation (592 )
Other long-lived assets, net $ 131


Weighted Average Remaining Lease Term
Operating leases	5 years		6 years
Finance leases	2 years		3 years

Weighted Average Discount Rate
Operating leases	6.6	%	6.9	%
Finance leases	6.0	%	6.2	%



~~Weighted Average Remaining Lease Term~~
~~Operating leases~~	~~7 years~~
~~Finance leases~~	~~2 years~~

~~Weighted Average Discount Rate~~
~~Operating leases~~	~~6.9~~	%
~~Finance leases~~	~~5.9~~	%

~~Maturities~~The following table summarizes maturities of lease liabilities as of September ~~29, 2019 were as follows:~~27, 2020 (in thousands):

Operating Leases Finance Leases

(In thousands)
2019 $ 6,045
$ 68
2020 23,051
229
2021 19,742
131
2022 16,107
59
2023 13,382
34
Thereafter 41,896
11
Total $ 120,223
$ 532

-20-


2020	$	5,080
2021	19,129
2022	16,220
2023	12,446
2024	9,436
Thereafter	17,433
Total	$	79,744

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 8:10: Long-Lived Assets

Depreciation and Amortization Expense

We recognized depreciation expense of ~~$12.1~~$10.5 million and ~~$37.2~~$31.1 million in the three and nine months ended September ~~29, 2019,~~27, 2020, respectively. We recognized depreciation expense of ~~$11.7~~$10.0 million and ~~$35.6~~$30.0 million in the three and nine ~~months~~ ended September ~~30, 2018,~~29, 2019, respectively.

We recognized amortization expense related to our intangible assets of ~~$23.4~~$16.6 million and ~~$71.2~~$49.6 million in the three and nine months ended September ~~29, 2019.~~27, 2020, respectively. We recognized amortization expense related to our intangible assets of ~~$26.2~~$19.1 million and ~~$76.3~~$56.5 million in the three and nine ended September 29, 2019, respectively.

Interim Impairment Test

Due to equity market conditions during the nine months ended September ~~30, 2018, respectively.~~27, 2020, we conducted an interim impairment test. We 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 a quantitative interim impairment test for one 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.

~~Impairment~~

~~Due~~When we evaluate goodwill for impairment using a quantitative assessment, we compare the fair value of each reporting unit to its ~~overall financial performance during~~carrying value. We determine the ~~fiscal third quarter~~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 ~~a potential divestiture~~discount rates that are consistent with current market conditions in our industry. If the fair value of the reporting unit ~~we performed an interim impairment test on~~exceeds the Grass Valley reporting unit, which resulted in a total goodwill and other asset impairment charge of $342.1 million for the three and nine months ended September 29, 2019. The Grass Valley reporting unit is part of our Enterprise Solutions Segment. The impairment charge consisted of impairments to goodwill, customer relationships, and trademarks of $326.1 million, $14.4 million, and $1.6 million, respectively. We determined the estimated fair valuescarrying value of the net assets ~~and~~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.

-21-

Based on our interim goodwill impairment test, we determined that the fair value of the reporting unit was in excess of its carrying value by ~~calculating~~approximately 2%; therefore, we did not record any goodwill impairment. The significant assumptions used to estimate fair value included sales growth, profitability, and related cash flows, along with cash flows associated with taxes and capital spending. To estimate the ~~present values~~fair value, we used a 10.5% discount rate that reflected the economic conditions in effect at the time of the impairment test. We also considered assumptions that market participants may use. In our quantitative assessment, the 2020 to 2029 compounded annual revenue growth rate was 6.0% and the revenue growth rate beyond 2029 was 3.0%. By their ~~estimated future cash flows.~~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.

Note 9:11: Severance, Restructuring, and Acquisition Integration Activities

Cost Reduction Program: 2019

During the fourth quarter of 2019, we began a cost reduction program to improve performance and enhance margins by streamlining the organizational structure and investing in technology to drive productivity. We recognized $0.2 million and $3.2 million of severance and other restructuring costs for this program during the three and nine months ended September 27, 2020, respectively. These costs were incurred by both the Enterprise Solutions and Industrial Solutions segments. 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 which $40.0 million is expected to be realized in 2020, with the full benefit materializing in 2021. We expect to incur incremental costs of approximately $9.6 million for this program.

SPC, Opterna and FutureLink Integration ~~program:~~Program: 2019

In 2019, we began a restructuring program to integrate SPC, Opterna and FutureLink with our existing businesses. The restructuring and integration activities were focused on achieving desired cost savings by consolidating existing and acquired facilities and other support functions. We recognized $0.9 million and $4.0 million of severance and other restructuring costs for this program during the three and nine months ended September 27, 2020, respectively. We recognized $3.1 million and $5.6 million of severance and other restructuring costs for this program during the three and nine months ended September 29, ~~2019, respectively.~~2019. These costs were incurred by the Enterprise Solutions segment. We ~~do not~~ expect to incur ~~any more~~incremental costs of approximately $0.6 million for this program.

~~Grass Valley and SAM Integration Program: 2018 - 2019~~

In 2018, we began a restructuring program to integrate SAM with Grass Valley. The restructuring and integration activities were focused on achieving desired cost savings by consolidating existing and acquired facilities and other support functions. We did 0t recognize severance and other restructuring costs for this program during the three months ended September 29, 2019, and we recognized $3.0 million of severance and other restructuring costs for this program during the nine months ended September 29, 2019. We recognized $7.1 million and $36.6 million of severance and other restructuring costs for this program during the three and nine months ended September 30, 2018, respectively. The costs were incurred by the Enterprise Solutions segment. The integration of these businesses is complete, and thus, we do not expect to incur any more costs for this program.

~~Industrial Manufacturing Footprint Program: 2016 - 2018~~

In 2016, we began a program to consolidate our manufacturing footprint. The manufacturing consolidation was complete as of December 31, 2018. We recognized $4.3 million and $15.8 million of severance and other restructuring costs for this program during the three and nine months ended September 30, 2018. The costs were incurred by the Enterprise Solutions and Industrial Solutions segments, as the manufacturing locations involved in the program serve both platforms.

The following table summarizes the costs by segment of the ~~various~~ programs described above as well as other immaterial programs and acquisition integration ~~activities:~~activities during the three and nine months ended September 27, 2020 and September 29, 2019:


	Severance		Other Restructuring and Integration Costs		Total Costs

Three Months Ended September 27, 2020	(In thousands)
Enterprise Solutions	$	327	$	1,010	$	1,337
Industrial Solutions	314		(294)		20
Total	$	641	$	716	$	1,357

Three Months Ended September 29, 2019
Enterprise Solutions	$	269	$	2,778	$	3,047
Industrial Solutions	0		0		0
Total	$	269	$	2,778	$	3,047

Nine Months Ended September 27, 2020
Enterprise Solutions	$	1,162	$	5,148	$	6,310
Industrial Solutions	1,132		2,006		3,138
Total	$	2,294	$	7,154	$	9,448

Nine Months Ended September 29, 2019
Enterprise Solutions	$	269	$	5,297	$	5,566
Industrial Solutions	0		0		0
Total	$	269	$	5,297	$	5,566

Severance
Other
Restructuring and
Integration Costs
Total Costs

Three Months Ended September 29, 2019 (In thousands)
Enterprise Solutions $ 269
$ 3,776
$ 4,045
Industrial Solutions —
—
—
Total $ 269
$ 3,776
$ 4,045

Three Months Ended September 30, 2018
Enterprise Solutions $ (1,283 ) $ 10,811
$ 9,528
Industrial Solutions 136
2,024
2,160
Total $ (1,147 ) $ 12,835
$ 11,688

Nine Months Ended September 29, 2019
Enterprise Solutions $ 489
$ 10,415
$ 10,904
Industrial Solutions —
—
—
Total $ 489
$ 10,415
$ 10,904

Nine Months Ended September 30, 2018
Enterprise Solutions $ 10,097
$ 36,852
$ 46,949
Industrial Solutions 378
9,683
10,061
Total $ 10,475
$ 46,535
$ 57,010

-22-

The other restructuring and integration costs primarily consisted of equipment transfer, costs to consolidate operating and support facilities, retention bonuses, relocation, travel, legal, and other costs. The majority of the other restructuring and integration costs related to these actions were paid as incurred or are payable within the next 60 days.

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:


	Three Months Ended				Nine Months Ended
	September 27, 2020		September 29, 2019		September 27, 2020		September 29, 2019

	(In Thousands)
Cost of sales	$	85	$	792	$	222	$	1,092
Selling, general and administrative expenses	1,272		2,255		9,226		4,474

Total	$	1,357	$	3,047	$	9,448	$	5,566

Three Months ended Nine Months Ended
September 29, 2019 September 30, 2018 September 29, 2019 September 30, 2018

(In thousands)
Cost of sales $ 792
$ 4,820
$ 1,777
$ 21,482
Selling, general and administrative expenses 3,253
6,341
8,364
30,287
Research and development expenses —
527
763
5,241
Total $ 4,045
$ 11,688
$ 10,904
$ 57,010
Accrued Severance

The table below sets forth severance activity that occurred for the Cost Reduction Program as well as the SPC, Opterna and FutureLink Integration Program described above. The balances below are included in accrued liabilities (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

New charges	4,660
Cash payments	(4,795)
Foreign currency translation	(132)
Other adjustments	(1,420)
Balance at June 28, 2020	11,698

New charges	2,060
Cash payments	(3,968)
Foreign currency translation	(156)
Other adjustments	(1,541)
Balance at September 27, 2020	$	8,093

The other ~~restructuring~~adjustments were the result of changes in estimates. We experienced higher than expected voluntary turnover, and integration costs primarily consisted of equipment transfer, costs to consolidate operating and support facilities, retention bonuses, relocation, travel, legal, and other costs. The majority of the other restructuring and integration costs related to theseas a result, certain approved severance actions were ~~paid as incurred or are payable within the next 60 days.~~ not taken.

~~There were no significant severance accrual balances as of September 29, 2019 or December 31, 2018.~~

-23-

Note ~~10:~~12: Long-Term Debt and Other Borrowing Arrangements

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

September 29, 2019 December 31, 2018

(In thousands)
Revolving credit agreement due 2022 $ —
$ —
Senior subordinated notes:
3.875% Senior subordinated notes due 2028 383,460
400,050
3.375% Senior subordinated notes due 2027 493,020
514,350
4.125% Senior subordinated notes due 2026 219,120
228,600
2.875% Senior subordinated notes due 2025 328,680
342,900
Total senior subordinated notes 1,424,280
1,485,900
Less unamortized debt issuance costs (20,610 ) (22,700 )
Long-term debt $ 1,403,670
$ 1,463,200


	September 27, 2020		December 31, 2019

	(In thousands)
Revolving credit agreement due 2022	$	0	$	0
Senior subordinated notes:
3.875% Senior subordinated notes due 2028	408,835		392,910
3.375% Senior subordinated notes due 2027	525,645		505,170
4.125% Senior subordinated notes due 2026	233,620		224,520
2.875% Senior subordinated notes due 2025	350,430		336,780
Total senior subordinated notes	1,518,530		1,459,380


Less unamortized debt issuance costs	(17,814)		(19,896)
Long-term debt	$	1,500,716	$	1,439,484

Revolving Credit Agreement due 2022

Our Revolving Credit Agreement provides a $400.0 million multi-currency asset-based revolving credit 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.

Senior Subordinated Notes

We have outstanding €350.0 million aggregate principal amount of 3.875% senior subordinated notes due 2028 (the 2028 Notes). The carrying value of the 2028 Notes as of September ~~29, 2019~~27, 2020 is ~~$383.5~~$408.8 million. The 2028 Notes are guaranteed on a senior subordinated basis by our current and future domestic subsidiaries. The 2028 Notes rank equal in right of payment with our senior subordinated notes due 2027, 2026, and 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.

We have outstanding €450.0 million aggregate principal amount of 3.375% senior subordinated notes due 2027 (the 2027 Notes). The carrying value of the 2027 Notes as of September ~~29, 2019~~27, 2020 is ~~$493.0~~$525.6 million. The 2027 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 2028, 2026, and 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 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 September ~~29, 2019~~27, 2020 is ~~$219.1~~$233.6 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 2028, 2027, and 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 April 15 and October 15 of each year.

-24-

We have outstanding €300.0 million aggregate principal amount of 2.875% senior subordinated notes due 2025 (the 2025 Notes). The carrying value of the 2025 Notes as of September ~~29, 2019~~27, 2020 is ~~$328.7~~$350.4 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 senior debt of our subsidiary guarantors, including our Revolver. Interest is payable semiannually on March 15 and September 15 of each year.

Fair Value of Long-Term Debt

The fair value of our senior subordinated notes as of September ~~29, 2019~~27, 2020 was approximately ~~$1,494.8~~$1,500.2 million based on quoted prices of the debt instruments in inactive markets (Level 2 valuation). This amount represents the fair value of our senior subordinated notes with a carrying value of ~~$1,424.3~~$1,518.5 million as of September ~~29, 2019.~~27, 2020.

Note ~~11:~~13: Net Investment Hedge

All of our euro denominated notes were issued by Belden Inc., a USD functional currency entity. As of September ~~29, 2019, all~~27, 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~~against adverse changes in the euro exchange rate. The transaction gain or loss is reported in the translation adjustment section of other comprehensive income. For the nine months ended September 27, 2020 and September 29, 2019, ~~and September 30, 2018,~~ the transaction ~~gain~~gain/(loss) associated with ~~these notes that was~~the net investment hedge reported in other comprehensive income was $(13.1) million and $62.1 million, ~~and $46.3~~respectively. During the nine months ended September 27, 2020, we de-designated €532.2 million ~~respectively.~~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 ~~12:~~14: Income Taxes

For the three and nine months ended September 27, 2020, we recognized income tax expense of $0.6 million and $3.2 million, respectively, representing an effective tax rate of 3.0% and 7.7%, respectively. The effective tax rates were impacted by income tax benefits for certain foreign tax credits of $0.9 million and $2.1 million in the three and nine months ended September 27, 2020, respectively. 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 the CARES Act to determine if there will be any impact to our income tax provision for the year.

For the three and nine months ended September 29, 2019, we recognized income tax expense of ~~$2.8~~$6.1 million and ~~$13.6~~$16.2 million, respectively, representing an effective tax rate of ~~(1.0%)~~13.7% and ~~(6.3%)~~13.1%, respectively. The effective tax rates were impacted by an income tax benefit of $5.7 million as a result of changes in our estimated valuation allowance requirement related to foreign tax credits due to the restructuring of certain foreign operations. These effective rates are also reflective of the impact of more favorable statutory tax rates applied to the earnings of these foreign operations due to the restructuring efforts. The income tax expense for the three and nine months ended September 29, 2019 was also impacted by a $5.1 million income tax benefit for the partial deductibility of the goodwill and other asset impairment charge during the period.

For the three and nine months ended September 30, 2018, we recognized income tax expense of $32.3 million and $46.1 million, respectively, representing an effective tax rate of 27.3% and 28.2%, respectively. The effective tax rate was impacted by the following significant factors:

We recognized income tax expense of $3.8 million and $4.3 million, respectively, in the three and nine months ended September 30, 2018 as a result of changes in our valuation allowance for the “Tax Cuts and Jobs Act” (the Act).

We recognized income tax expense of $1.8 million in the nine months ended September 30, 2018 as a result of a change in our valuation allowance on foreign tax credits associated with our euro debt refinancing.

~~We recognized an income tax benefit of $3.3 million and $4.4 million, respectively, in the three and nine months ended September 30, 2018 primarily related to certain foreign tax credits.~~

We recognized an income tax benefit of $1.2 million in the nine months ended September 30, 2018 due to a decrease in reserves for uncertain tax positions of prior years.Our income tax expense and effective tax rate in future periods may be impacted by many factors, including our geographic mix of income and changes in tax laws.

-25-

Note ~~13:~~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
Three Months Ended	September 27, 2020		September 29, 2019		September 27, 2020		September 29, 2019

	(In thousands)
Service cost	$	885	$	978	$	8	$	10
Interest cost	2,493		2,901		202		273
Expected return on plan assets	(4,091)		(3,841)		0		0
Amortization of prior service cost (credit)	47		(143)		0		0
Actuarial losses (gains)	688		292		(19)		(25)
Net periodic benefit cost	$	22	$	187	$	191	$	258

Nine Months Ended
Service cost	$	2,709	$	2,952	$	24	$	29
Interest cost	7,240		8,779		599		815
Expected return on plan assets	(12,035)		(11,978)		0		0
Amortization of prior service cost (credit)	136		(117)		0		0
Actuarial losses (gains)	2,038		894		(57)		(76)
Net periodic benefit cost	$	88	$	530	$	566	$	768

Pension Obligations Other Postretirement Obligations
September 29, 2019 September 30, 2018 September 29, 2019 September 30, 2018

(In thousands)
Three Months Ended
Service cost $ 1,058
$ 1,717
$ 10
$ 14
Interest cost 2,921
2,011
273
257
Expected return on plan assets (3,842 ) (4,660 ) —
—
Amortization of prior service credit (143 ) (37 ) —
—
Actuarial losses (gains) 327
1,073
(25 ) —
Net periodic benefit cost $ 321
$ 104
$ 258
$ 271

Nine Months Ended
Service cost $ 3,164
$ 3,792
$ 29
$ 40
Interest cost 8,869
5,792
815
781
Expected return on plan assets (11,977 ) (9,688 ) —
—
Amortization of prior service credit (117 ) (59 ) —
—
Actuarial losses (gains) 969
2,350
(76 ) —
Net periodic benefit cost $ 908
$ 2,187
$ 768
$ 821

Note ~~14:~~16: Comprehensive Income and Accumulated Other Comprehensive Income (Loss)

The following table summarizes total comprehensive ~~income:~~income (losses):


	Three Months Ended				Nine Months Ended
	September 27, 2020		September 29, 2019		September 27, 2020		September 29, 2019

	(In thousands)
Net income (loss)	$	17,081	$	(297,015)	$	(62,019)	$	(229,547)
Foreign currency translation adjustments, net of $0.0 million, $0.2 million, $1.0 million, and $0.6 million tax, respectively	(52,910)		33,732		(75,791)		45,619
Adjustments to pension and postretirement liability, net of $0.1 million, $0.0 million, $0.3 million, and $0.2 million tax, respectively	1,136		120		1,891		591
Total comprehensive loss	(34,693)		(263,163)		(135,919)		(183,337)
Less: Comprehensive income attributable to noncontrolling interests	228		367		219		474
Comprehensive loss attributable to Belden	$	(34,921)	$	(263,530)	$	(136,138)	$	(183,811)

Three Months Ended Nine Months Ended
September 29, 2019 September 30, 2018 September 29, 2019 September 30, 2018

(In thousands)
Net income (loss) $ (297,015 ) $ 85,858
$ (229,547 ) $ 117,220
Foreign currency translation gain (loss), net of $0.2 million, $0.5 million, $0.6 million, and $0.7 million tax, respectively 33,732
(17,904 ) 45,619
10,943
Adjustments to pension and postretirement liability, net of $0.0 million, $0.4 million, $0.2 million, and $0.9 million tax, respectively 120
637
591
1,409
Total comprehensive income (loss) (263,163 ) 68,591
(183,337 ) 129,572
Less: Comprehensive income (loss) attributable to noncontrolling interests 367
(29 ) 474
(155 )
Comprehensive income (loss) attributable to Belden $ (263,530 ) $ 68,620
$ (183,811 ) $ 129,727

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, 2018 $ (41,882 ) $ (33,025 ) $ (74,907 )
Other comprehensive income attributable to Belden before reclassifications 45,205
—
45,205
Amounts reclassified from accumulated other comprehensive income —
591
591
Net current period other comprehensive gain attributable to Belden 45,205
591
45,796
Balance at September 29, 2019 $ 3,323
$ (32,434 ) $ (29,111 )

-26-


	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 loss attributable to Belden before reclassifications	(86,076)		0		(86,076)
Amounts reclassified from accumulated other comprehensive income (loss)	10,145		1,891		12,036
Net current period other comprehensive gain (loss) attributable to Belden	(75,931)		1,891		(74,040)
Balance at September 27, 2020	$	(94,156)	$	(43,302)	$	(137,458)

The following table summarizes the effects of reclassifications from accumulated other comprehensive income (loss) for the nine months ended September ~~29, 2019:~~27, 2020:


	Amount Reclassified from Accumulated Other Comprehensive Income			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	$	893		(1)	Actuarial losses	$	1,408	(1)
Prior service credit	(117		)	(1)
Accumulated losses of Grass Valley disposal group					Accumulated losses of Grass Valley disposal group	771		(2)
Prior service cost					Prior service cost	62		(1)
Total before tax	776				Total before tax	2,241
Tax benefit	(185		)		Tax benefit	(350)
Total net of tax	$	591			Total net of tax	$	1,891

(1) The amortization of these accumulated other comprehensive income (loss) components are included in the computation of net periodic benefit costs (see Note ~~13)~~15). The amounts in the table above include both continuing and discontinued operations.

(2) In addition, we reclassified $10.1 million of accumulated foreign currency translation losses associated with the Grass Valley disposal group that are included in the calculation of the gain on disposal of discontinued operations.

Note ~~15:~~17: Preferred Stock

In 2016, we issued 5.2 million depositary shares, each of which ~~represents~~represented 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. We received approximately $501 million of net proceeds from this offering, which were used for general corporate purposes. On July 15, 2019, all outstanding Preferred Stock was automatically converted into shares of Belden common stock at the conversion rate of 132.50, resulting in the issuance of approximately 6.9 million shares of Belden common stock. Upon conversion, the Preferred Stock was automatically extinguished and discharged, is no longer deemed outstanding for all purposes, and delisted from trading on the New York Stock Exchange. During the three and nine months ended September 29, 2019, dividends on the Preferred Stock were $1.0 million and $18.4 million, respectively. ~~During the three and nine months ended September 30, 2018, dividends on the Preferred Stock were $8.7 million and $26.2 million, respectively.~~

Note ~~16:~~18: Share Repurchase

On November 29, 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. ~~The~~During the nine months ended September 27, 2020, we repurchased 1.0 million shares of our common stock under the share repurchase program ~~does not have~~for an ~~expiration date and may be suspended~~aggregate cost of $35.0 million at ~~any time at the discretion~~an average price per share of ~~the Company.~~$35.83. During the three months ended September 29, 2019, we repurchased 0.5 million shares of our common stock under the share repurchase program for an aggregate cost of $27.2 million and an average price per share of $55.17. During the nine months ended September 29, 2019, we repurchased 0.9 million shares of our common stock under the share repurchase program for an aggregate cost of $50.0 million and an average price per share of $56.19. During the three months ended September 30, 2018, we repurchased 0.3 million shares of our common stock under a previous share repurchase program for an aggregate cost of $25.0 million and an average price per share of $72.62. During the nine months ended September 30, 2018, we repurchased 1.8 million shares of our common stock under a previous share repurchase program for an aggregate cost of $125.0 million and an average price per share of $70.13.

~~Note 17: Subsequent Events~~

~~Assets Held for Sale~~

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. 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. As a result, the Grass Valley disposal group, which is currently part of the Enterprise Solutions segment, will be included in discontinued operations commencing in the fourth quarter. We also ceased

depreciating and amortizing the assets of the disposal group once they met the held for sale criteria in the fourth quarter. We intend to complete the sale of the Grass Valley disposal group during the next twelve months. As discussed in Note 8, we recognized an impairment charge for the disposal group of $342.1 million during the third quarter of 2019, which consisted of impairments to goodwill, customer relationships, and trademarks of $326.1 million, $14.4 million, and $1.6 million, respectively. As of September 29, 2019, Grass Valley had total assets and total liabilities of $491.8 million and $194.0 million, respectively, and accumulated other comprehensive losses of $73.2 million.

~~Cost Reduction Program~~

During the fourth quarter, we announced a cost reduction program designed to improve performance and enhance margins by streamlining the organizational structure and investing in technology to drive productivity. The cost reduction program is expected to deliver an estimated $40.0 million annualized reduction in selling, general, and administrative expenses, with some benefit in 2020, and the full benefit realized in 2021. We expect to incur severance and other related costs as part of this program but the timing and amounts of such costs are not yet known.

~~- 28-~~

-27-

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

Overview

Belden Inc. (the Company, us, we, or our) is a global supplier of specialty networking solutions built around two global business platforms - Enterprise Solutions and Industrial Solutions. Our comprehensive portfolio of solutions enables customers to transmit and secure data, sound, and video for mission critical 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 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.

Trends and Events

The following trends and events during ~~2019~~2020 have had varying effects on our financial condition, results of operations, and cash flows.

Global Pandemic

On March 11, 2020, the World Health Organization (WHO) declared the outbreak of the novel coronavirus (COVID-19) a pandemic. We expect the outbreak of COVID-19 will continue to result in significant economic disruption and will continue to adversely affect our business in the future. As compared to the year ago period, we 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 continue to have an adverse impact on our operations, and general business uncertainty will continue to negatively impact demand in several of our end-markets in the near future.

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, but not all, 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.

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. 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.

Foreign currency

Our exposure to currency rate fluctuations primarily relates to exchange rate movements between the U.S. dollar and the 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 three and nine months ended September 29, 2019, approximately 48%~~Approximately 43% of our consolidated revenues during the quarter ended September 27, 2020 were to customers outside of the U.S.

-28-

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.

Commodity prices

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.

Channel Inventory

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 and make certain assumptions based on our sales to them to determine the amount of products they bought from us and hold in their inventory. As such, all references to the effect of channel inventory changes are estimates.

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.

~~Acquisitions~~Earnout Consideration Payment

We completed the acquisitions of Opterna International Corp. (Opterna) on April 15, 2019 and FutureLink on April 5, 2019. The results of Opterna and FutureLink have been included in our Condensed Consolidated Financial Statements from the acquisition dates and are reported in the Enterprise Solutions segment. See Note 3.

~~Goodwill and Other Asset Impairment~~

We performed an interim impairment test on our Grass Valley reporting unit, which resulted in a total goodwill and other asset impairment charge of $342.1 million for the three and nine months ended September 29, 2019. See Note 8.

~~Opterna and FutureLink Integration Program~~

In 2019, we began a restructuring program to integrate 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 $3.1 million and $5.6 million of severance and other restructuring costs for this program during the three and nine months ended September 29, 2019, respectively. The costs were incurred by the Enterprise Solutions segment. We do not expect to incur any more costs for this program.

~~Grass Valley and SAM Integration Program~~

In 2018, we began a restructuring program to integrate SAM with Grass Valley. The restructuring and integration activities are focused on achieving desired cost savings by consolidating existing and acquired facilities and other support functions. We recognized $3.0 million of severance and other restructuring costs for this program duringDuring the nine months ended September ~~29, 2019. The costs were incurred by~~27, 2020, we paid the ~~Enterprise Solutions segment. The integration~~sellers of ~~these businesses is complete,~~Snell Advanced Media (SAM) the full earnout consideration of $31.4 million in cash in accordance with the purchase agreement. SAM was acquired on February 8, 2018 and ~~thus, we do not expect to incur any more costs for this program.~~

~~Preferred Stock Conversion~~

~~On July 15, 2019, all outstanding Preferred Stock~~ was ~~automatically converted into shares of Belden common stock at the conversion rate of 132.50, resulting~~included in the issuance of approximately 6.9 million shares of Belden common stock. Upon conversion, the Preferred Stock was automatically extinguished and discharged, is no longer deemed outstanding for all purposes, and delisted from trading on the New York Stock Exchange. During the three and nine months ended September 29, 2019, dividends on the Preferred Stock were $1.0 million and $18.4 million, respectively.Grass Valley disposal group. See Note ~~15.~~1.

~~Subsequent Events~~Grass Valley Disposal

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. As a result, the Grass Valley disposal group, which ~~is currently part of the~~was included in our Enterprise Solutions segment, ~~will be included in~~has been reported within discontinued operations ~~commencing in~~as of such time, and the ~~fourth quarter. We intend~~comparable prior period information has been recast accordingly to ~~complete the sale of~~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 retained by Belden. Prior to the divestiture, we wrote down the carrying value of Grass Valley and recognized asset impairments totaling $113.0 million during the ~~next twelve months.~~nine months ended September 27, 2020.

-29-

We completed the sale of Grass Valley to Black Dragon Capital on July 2, 2020 and recognized a gain of $2.7 million, net of a $2.0 million income tax benefit. The terms of the sale included gross cash consideration of $120.0 million, or approximately $59.5 million net of cash delivered with the business and certain preliminary working capital adjustments. The sale also included deferred consideration consisting of a $175.0 million seller’s note that matures in 2025, up to $88 million in PIK interest on the seller’s note, and $178.0 million in potential earnout payments. Based upon a third party valuation specialist, the estimated fair value of the seller’s note is $34.9 million, which we recorded in Other Long-Lived Assets. As part of the transaction, we also invested $3.0 million for a 9% equity interest in Grass Valley with the right to put the equity back to Black Dragon Capital at any time on or before October 31, 2020. On October 23, 2020, we notified Black Dragon Capital that we are exercising our right to put the equity back to them.We expect to finalize the sale of our equity interest during the fourth quarter of 2020. We deconsolidated Grass Valley as of July 2, 2020 and are accounting for our equity interest under the cost method. We are also performing certain services for Grass Valley under a transition services agreement, which totaled $1.0 million during the three months ended September 27, 2020. See Note 4.

Segment Transfer

Cost Reduction Program

During the fourth quarter of 2019, we ~~announced~~began a cost reduction program ~~designed~~ to improve performance and enhance margins by streamlining the organizational structure and investing in technology to drive productivity. We recognized $0.2 million and $3.2 million of severance and other restructuring costs for this program during the three and nine months ended September 27, 2020, respectively. The cost reduction program is expected to deliver an estimated ~~$40.0~~$60.0 million ~~annualized~~ reduction in selling, general, and administrative expenses ~~with some benefit~~on an annual basis, of which $40.0 million is expected to be realized in 2020, ~~and~~with the full benefit ~~realized~~materializing in 2021. We expect to incur incremental costs of approximately $9.6 million for this program. 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 $0.9 million and $4.0 million of severance and other ~~related~~restructuring costs ~~as part of~~for this program ~~but~~during the ~~timing~~three and ~~amounts~~nine months ended September 27, 2020, respectively. These costs were incurred by the Enterprise Solutions segment. We expect to incur incremental costs of ~~such costs are not yet known.~~approximately $0.6 million for this program. See Note 11.

Revolving Credit Agreement

Due to the initial uncertainties arising from the COVID-19 pandemic and out of an abundance of caution, we borrowed $190.0 million on our Revolver at the beginning of the second quarter. As a result of improving and sufficient cash flow and liquidity throughout the year, we subsequently repaid $100.0 million and the remaining $90.0 million during the second and third quarter, respectively. Our Revolving Credit Agreement provides a $400.0 million multi-currency asset-based revolving credit facility and matures on 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. As of September 27, 2020, our available borrowing capacity was $265.2 million. See Note 12.

Share Repurchase Program

In 2018, our Board of Directors authorized a share repurchase program, which allows us to purchase up to $300.0 million of our common stock through open market repurchases, negotiated transactions, or other means, in accordance with applicable securities laws and other restrictions. This program is funded with cash on hand and cash flows from operating activities. During the nine months ended September 27, 2020, we repurchased 1.0 million shares of our common stock under the share repurchase program for an aggregate cost of $35.0 million at an average price per share of $35.83. See Note 18.

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.

-30-

Critical Accounting Policies

During the nine months ended September ~~29, 2019:~~27, 2020:

•We did not change any of our existing critical accounting policies from those listed in our ~~2018~~2019 Annual Report on Form 10-K other than updating our ~~lease~~ accounting policies for the adoption of ASU ~~2016-02;~~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.

Results of Operations

Consolidated Income before Taxes


	Three Months Ended								Nine Months Ended									Three Months Ended						Nine Months Ended
	September 29, 2019			September 30, 2018			% Change		September 29, 2019			September 30, 2018			% Change			September 27, 2020		September 29, 2019		% Change		September 27, 2020		September 29, 2019		% Change

	(In thousands, except percentages)																	(In thousands, except percentages)
Revenues	$	620,318		$	655,774		(5.4	)%	$	1,845,023		$	1,929,978		(4.4	)%	Revenues	$	475,839	$	533,098	(10.7)	%	$	1,364,176	$	1,581,590	(13.7)	%
Gross profit	235,402			260,857			(9.8	)%	701,153			749,047			(6.4	)%	Gross profit	167,592		198,805		(15.7)	%	488,033		590,733		(17.4)	%
Selling, general and administrative expenses	(120,169		)	(132,716		)	(9.5	)%	(365,439		)	(396,430		)	(7.8	)%	Selling, general and administrative expenses	(85,037)		(98,245)		(13.4)	%	(275,129)		(298,654)		(7.9)	%
Research and development expenses	(31,351		)	(33,471		)	(6.3	)%	(100,539		)	(107,781		)	(6.7	)%	Research and development expenses	(30,324)		(23,992)		26.4	%	(81,633)		(72,014)		13.4	%
Amortization of intangibles	(22,243		)	(25,533		)	(12.9	)%	(67,952		)	(74,990		)	(9.4	)%	Amortization of intangibles	(16,104)		(19,026)		(15.4)	%	(48,306)		(56,258)		(14.1)	%
Goodwill and other asset impairment	(342,146		)	—			n/a		(342,146		)	—			n/a
Gain from patent litigation	—			62,141			(100.0	)%	—			62,141			(100.0	)%
Operating income (loss)	(280,507		)	131,278			(313.7	)%	(174,923		)	231,987			(175.4	)%
Operating income																	Operating income	36,127		57,542		(37.2)	%	82,965		163,807		(49.4)	%
Interest expense, net	(14,200		)	(14,472		)	(1.9	)%	(42,561		)	(46,538		)	(8.5	)%	Interest expense, net	(15,607)		(14,002)		11.5	%	(43,188)		(41,951)		2.9	%
Non-operating pension benefit	489			1,356			(63.9	)%	1,517			824			84.1	%	Non-operating pension benefit	680		544		25.0	%	2,079		1,684		23.5	%
Loss on debt extinguishment	—			—			n/a		—			(22,990		)	(100.0	)%
Income (loss) before taxes	(294,218		)	118,162			(349.0	)%	(215,967		)	163,283			(232.3	)%
Income from continuing operations before taxes																	Income from continuing operations before taxes	21,200		44,084		(51.9)	%	41,856		123,540		(66.1)	%

Revenues decreased ~~$35.5~~$57.3 million and ~~$85.0~~$217.4 million in the three and nine months ended September ~~29, 2019,~~27, 2020, respectively, from the comparable periods of ~~2018~~2019 due to the following factors:

•Lower sales volume resulted in a ~~$36.5~~$67.4 million and ~~$72.9~~$232.0 million decrease in revenues in the three and nine months ended September ~~29, 2019,~~27, 2020, respectively.

~~Currency translation~~•Copper prices had a ~~$7.1~~$3.9 million favorable and ~~$31.9~~$6.9 million unfavorable impact on revenues in the three and nine months ended September ~~29, 2019,~~27, 2020, respectively.

~~Copper prices~~•Currency translation had a ~~$5.6~~$1.3 million favorable and ~~$17.0~~$7.3 million unfavorable impact on revenues in the three and nine months ended September ~~29, 2019,~~27, 2020, respectively.

•Acquisitions contributed an estimated ~~$7.3~~$4.9 million and ~~$36.8~~$28.8 million in revenues in the three and nine months ended September 27, 2020, respectively.

Gross profit decreased $31.2 million and $102.7 million in the three and nine months ended September ~~29, 2019, respectively.~~

~~Gross profit decreased $25.5 million and $47.9 million in the three and nine months ended September 29, 2019,~~27, 2020, respectively, from the comparable periods of ~~2018. Gross profit for the three months ended September 29,~~ 2019 ~~decreased~~ due to the decreases in ~~revenue~~revenues discussed above as well as unfavorable mix; partially offset by ~~decreases in severance, restructuring, and acquisition integration costs~~the impact of $4.0 million from the comparable period of 2018. Gross profit for the nine months ended September 29, 2019 decreased due to the decreases in revenue discussed above as well as unfavorable mix; partially offset by decreases in severance, restructuring, and acquisition integration costs of $19.7 million from the comparable period of 2018.acquisitions.

Selling, general and administrative expenses decreased ~~$12.5~~$13.2 million and ~~$31.0~~$23.5 million in the three and nine months ended September ~~29, 2019,~~27, 2020, respectively, from the comparable periods of ~~2018. Improved productivity;~~2019. For the three months ended September 27, 2020, benefits realized from our Cost Reduction Program coupled with productivity improvement initiatives and a ~~decline~~decrease in ~~severance,~~ restructuring ~~and acquisition integration costs; and currency translation~~charges contributed ~~$10.0 million, $3.0~~an estimated $13.4 million and ~~$1.2~~$1.0 million ~~respectively, to the decrease~~decline in selling, general and administrative expenses, ~~for~~respectively; partially offset by a $1.2 million increase from acquisitions. For the ~~three~~nine months ended September ~~29, 2019 as compared to the year ago period; partially offset by the impact of acquisitions, which increased~~27, 2020, benefits realized from our Cost Reduction Program coupled with productivity improvement initiatives and currency translation contributed an estimated $33.3 million and $1.3 million decline in selling, general and administrative expenses, by $1.7 million. A decline in severance, restructuring, and acquisition integration costs; improved productivity; and currency translation contributed $21.9 million, $14.3 million, and $3.9 million, respectively, to the decrease in selling, general

~~and administrative expenses for the nine months ended September 29, 2019 as compared to the year ago period;~~respectively; partially offset by ~~the impact of~~a $6.3 million and $4.8 million increase from acquisitions ~~which increased selling, general~~ and ~~administrative expenses by $9.1 million. The improved productivity stems from successful cost saving measures implemented during the current year.~~restructuring charges, respectively.

Research and development expenses ~~decreased $2.1~~increased $6.3 million and ~~$7.2~~$9.6 million in the three and nine months ended September ~~29, 2019,~~27, 2020, respectively, from the comparable periods of ~~2018. Productivity improvement initiatives contributed $1.4~~2019 primarily due to increased investments in R&D projects as we continue our commitment to growth initiatives.

-31-

Amortization of intangibles decreased $2.9 million and $3.2 million to the decline in research and development expenses in the three and nine months ended September 29, 2019, respectively, from the comparable periods of 2018. Decreases in severance, restructuring, and acquisition integration costs of $0.5 million and $4.4 million also contributed to the decline in research and development expenses in the three and nine months ended September 29, 2019, respectively, over the year ago period. Currency translation contributed $0.3 million and $1.1 million to the decline in research and development expenses in the three and nine months ended September 29, 2019, respectively, as compared to the year ago period. The above decreases were partially offset by the impact of acquisitions, which increased research and development expenses by $0.1 million and 1.5$8.0 million in the three and nine months ended September ~~29,~~27, 2020, respectively, from the comparable periods of 2019 ~~respectively, as compared~~primarily due to ~~the year ago period.~~certain intangible assets becoming fully amortized.

~~Amortization of intangibles~~Operating income decreased ~~$3.3~~$21.4 million and ~~$7.0~~$80.8 million in the three and nine months ended September ~~29, 2019,~~27, 2020, respectively, from the comparable periods of ~~2018 primarily due to certain intangible assets becoming fully amortized.~~

~~Goodwill and other asset impairment increased $342.1 million in the three and nine months ended September 29,~~ 2019 from the comparable periods of 2018. We performed an interim impairment test on our Grass Valley reporting unit, which resulted in a total goodwill and other asset impairment charge of $342.1 million for the three and nine months ended September 29, 2019.

Gain from patent litigation decreased $62.1 million in the three and nine months ended September 29, 2019 from the comparable periods of 2018. In 2011, our wholly-owned subsidiary, PPC, filed an action for patent infringement against Corning alleging they willfully infringed upon two of their patents, and after years of post-trial motions and appeals, the District Court ruled that Corning shall pay judgments of $62.1 million, which we received in July 2018 and recorded as a gain from patent litigation for the three and nine months ended September 30, 2018.

~~Operating income decreased $411.8 million and $406.9 million in the three and nine months ended September 29, 2019, respectively, from the comparable periods of 2018~~ primarily as a result of the $342.1 million goodwill and other asset impairment charge recognized during the three and nine months ended September 29, 2019, the $62.1 million gain from patent litigation during the nine months ended September 30, 2018, and the decline in gross profit discussed above.

Net interest expense ~~decreased $0.3~~increased $1.6 million and ~~$4.0~~$1.2 million in the three and nine months ended September ~~29, 2019,~~27, 2020, respectively, from the comparable periods of ~~2018 as a~~2019. The increase is primarily the result of interest accrued on the Revolver borrowings during the three and nine months ended September 27, 2020. During the second quarter, we borrowed $190.0 million on our ~~debt transactions during 2018. In March 2018, we issued €350.0~~Revolver and then subsequently repaid $100.0 million aggregate principal amount of new senior subordinated notes due 2028 at an interest rate of 3.875%, and used the net proceeds of this offering and cash on hand to repurchase all of our outstanding €200.0 million 5.5% senior subordinated notes due 2023 as well as all of our outstanding $200.0 million 5.25% senior subordinated notes due 2024.

~~The loss on debt extinguishment recognized in 2018 represents the premium paid to the bond holders to retire a portion of the 2023 and 2024 notes~~ and the ~~unamortized debt issuance costs written-off.~~remaining $90.0 million during the second and third quarter, respectively. See Note 12.

Income ~~(loss)~~from continuing operations before taxes decreased ~~$412.4~~$22.9 million and ~~$379.3~~$81.7 million in the three and nine months ended September ~~29, 2019,~~27, 2020, respectively, from the comparable periods of ~~2018. The decrease is~~2019 primarily ~~a result of~~due to the decline in operating ~~loss during~~income discussed above.

Income Taxes


	Three Months Ended						%		Nine Months Ended						%
	September 27, 2020			September 29, 2019			Change		September 27, 2020			September 29, 2019			Change

	(In thousands, except percentages)
Income before taxes	$	21,200		$	44,084		(51.9)	%	$	41,856		$	123,540		(66.1)	%
Income tax expense	631			6,053			(89.6)	%	3,223			16,179			(80.1)	%
Effective tax rate	3.0		%	13.7		%			7.7		%	13.1		%

For the three and nine months ended September ~~29, 2019; partially offset~~27, 2020, we recognized income tax expense of $0.6 million and $3.2 million, respectively, representing an effective tax rate of 3.0% and 7.7%, respectively. The effective tax rates were impacted by ~~the loss on debt extinguishment~~income tax benefits for certain foreign tax credits of $0.9 million and $2.1 million in the three and nine months ended September ~~30, 2018.~~27, 2020, respectively. 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 the CARES Act to determine if there will be any impact to our income tax provision for the year.

~~Income Taxes~~

Three Months Ended Nine Months Ended
September 29, 2019 September 30, 2018
%
Change
September 29, 2019 September 30, 2018
%
Change

(In thousands, except percentages)
Income (loss) before taxes $ (294,218 ) $ 118,162
(349.0 )% $ (215,967 ) $ 163,283
(232.3 )%
Income tax expense 2,797
32,304
(91.3 )% 13,580
46,063
(70.5 )%
Effective tax rate (1.0 )% 27.3 % (6.3 )% 28.2 %

For the three and nine months ended September 29, 2019, we recognized income tax expense of ~~$2.8~~$6.1 million and ~~$13.6~~$16.2 million, respectively, representing an effective tax rate of ~~(1.0)%~~13.7% and ~~(6.3)%~~13.1%, respectively. The effective tax rates were impacted by an income tax benefit of $5.7 million as a result of changes in our estimated valuation allowance requirement related to foreign tax credits due to the restructuring of certain foreign operations. These effective rates ~~are~~were also reflective of the impact of more favorable statutory tax rates applied to the earnings of these foreign operations due to the restructuring efforts. The income tax expense for the three and nine months ended September 29, 2019 was also impacted by a $5.1 million income tax benefit for the partial deductibility of the goodwill and other asset impairment charge during the period.

~~We recognized an income tax benefit of $3.3 million and $4.4 million, respectively, in the three and nine months ended September 30, 2018 primarily related to certain foreign tax credits.~~

~~We recognized an income tax benefit of $1.2 million in the nine months ended September 30, 2018 due to a decrease in reserves for uncertain tax positions of prior years.~~

~~Our income tax expense and effective tax rate in future periods may be impacted by many factors, including our geographic mix of income and changes in tax laws.~~

Consolidated Adjusted Revenues and Adjusted EBITDA


	Three Months Ended								Nine Months Ended									Three Months Ended						%		Nine Months Ended						%
	September 29, 2019			September 30, 2018			% Change		September 29, 2019			September 30, 2018			% Change			September 27, 2020			September 29, 2019			Change		September 27, 2020			September 29, 2019			Change

	(In thousands, except percentages)																	(In thousands, except percentages)
Adjusted Revenues	$	620,318		$	659,003		(5.9	)%	$	1,845,023		$	1,937,867		(4.8	)%	Adjusted Revenues	$	475,839		$	533,098		(10.7)	%	$	1,364,176		$	1,581,590		(13.7)	%
Adjusted EBITDA	101,574			126,689			(19.8	)%	289,817			352,552			(17.8	)%	Adjusted EBITDA	65,252			90,037			(27.5)	%	175,237			258,044			(32.1)	%
as a percent of adjusted revenues	16.4		%	19.2		%			15.7		%	18.2		%			as a percent of adjusted revenues	13.7		%	16.9		%			12.8		%	16.3		%

Adjusted ~~revenues~~Revenues decreased ~~$38.7~~$57.3 million and ~~$92.9~~$217.4 million in the three and nine months ended September ~~29, 2019, respectively,~~27, 2020 from the comparable periods of ~~2018~~2019 due to the following factors:

•Lower sales volume resulted in a ~~$36.5~~$67.4 million and ~~$72.9~~$232.0 million decrease in revenues in the three and nine months ended September ~~29, 2019,~~27, 2020, respectively.

-32-

•Acquisitions contributed an estimated ~~$10.5~~$4.9 million and ~~$28.9~~$28.8 million in revenues in the three and nine months ended September 27, 2020, respectively.

Adjusted EBITDA decreased $24.8 million and $82.8 million in the three and nine months ended September ~~29, 2019, respectively.~~

~~Adjusted EBITDA decreased $25.1 million and $62.7 million in the three and nine months ended September 29, 2019,~~27, 2020, respectively, from the comparable periods of ~~2018. Adjusted EBITDA for both~~2019 primarily as a result of the ~~three and nine months ended September 29, 2019 decreased due to the decreases~~decrease in Adjusted Revenues discussed above, ~~as well as unfavorable mix as compared to~~partially offset by the ~~year ago period of 2018.~~benefits realized from our SG&A Cost Reduction Program. See Note 11.

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:

-33-

Three Months Ended Nine Months Ended
September 29, 2019 September 30, 2018 September 29, 2019 September 30, 2018

(In thousands, except percentages)
GAAP revenues $ 620,318
$ 655,774
$ 1,845,023
$ 1,929,978
Deferred revenue adjustments (1) —
3,229
—
7,889
Adjusted revenues $ 620,318
$ 659,003
$ 1,845,023
$ 1,937,867

GAAP net income (loss) $ (297,015 ) $ 85,858
$ (229,547 ) $ 117,220
Goodwill and other asset impairment (2) 342,146
—
342,146
—
Amortization of intangible assets 22,243
25,533
67,952
74,990
Interest expense, net 14,200
14,472
42,561
46,538
Depreciation expense 12,147
11,671
37,170
35,562
Income tax expense 2,797
32,304
13,580
46,063
Severance, restructuring, and acquisition integration costs (3) 4,045
11,688
10,904
57,010
Amortization of software development intangible assets 1,197
620
3,206
1,344
Purchase accounting effects related to acquisitions (4) (186 ) 821
1,845
2,359
Loss on debt extinguishment —
—
—
22,990
Deferred revenue adjustments (1) —
3,229
—
7,889
Costs related to patent litigation —
2,634
—
2,634
Gain from patent litigation —
(62,141 ) —
(62,141 )
Loss on sale of assets —
—
—
94
Adjusted EBITDA $ 101,574
$ 126,689
$ 289,817
$ 352,552

GAAP net income (loss) margin (47.9 )% 13.1 % (12.4 )% 6.1 %
Adjusted EBITDA margin 16.4 % 19.2 % 15.7 % 18.2 %


	Three Months Ended						Nine Months Ended
	September 27, 2020			September 29, 2019			September 27, 2020			September 29, 2019

	(In thousands, except percentages)
GAAP and adjusted revenues	$	475,839		$	533,098		$	1,364,176		$	1,581,590



GAAP net income (loss)	$	17,081		$	(297,015)		$	(62,019)		$	(229,547)
Loss from discontinued operations, net of tax	6,231			335,046			103,395			336,908
Gain on disposal of discontinued operations, net of tax	(2,743)			—			(2,743)			—
Amortization of intangible assets	16,104			19,026			48,306			56,258
Interest expense, net	15,607			14,002			43,188			41,951
Depreciation expense	10,455			9,979			31,069			29,990
Severance, restructuring, and acquisition integration costs (1)	1,357			3,047			9,448			5,566
Income tax expense	631			6,053			3,223			16,179
Amortization of software development intangible assets	529			85			1,245			207
Purchase accounting effects related to acquisitions (2)	—			(186)			125			532
Adjusted EBITDA	$	65,252		$	90,037		$	175,237		$	258,044

GAAP net income (loss) margin	3.6		%	(55.7)		%	(4.5)		%	(14.5)		%
Adjusted EBITDA margin	13.7		%	16.9		%	12.8		%	16.3		%

~~(3) See Note 9,~~ 11, Severance, Restructuring, and Acquisition Integration Activities, for details.

(2) During the nine months ended September 27, 2020, we recognized cost of sales related to purchase accounting adjustments of acquired inventory to fair value for the SPC acquisition. During ~~for details~~the .

~~(4) For the~~ nine months ended September 29, 2019, we recognized expenses related to the earnout consideration for the SAM ~~acquisition. For~~acquisition, and during the three and nine months ended September 29, 2019, we recognized cost of sales for the adjustment of acquired inventory to fair value ~~related~~

tofor the Opterna and FutureLink acquisitions. ~~For the three and nine months ended September 30, 2018, we recognized cost of sales for the adjustment of acquired inventory to fair value related to the SAM and NT2 acquisitions.~~

Segment Results of Operations

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

Enterprise Solutions


	Three Months Ended								Nine Months Ended									Three Months Ended						%		Nine Months Ended						%
	September 29, 2019			September 30, 2018			% Change		September 29, 2019			September 30, 2018			% Change			September 27, 2020			September 29, 2019			Change		September 27, 2020			September 29, 2019			Change

	(In thousands, except percentages)																	(In thousands, except percentages)
Segment Revenues	$	368,080		$	392,080		(6.1	)%	$	1,064,469		$	1,142,765		(6.9	)%	Segment Revenues	$	229,097		$	247,236		(7.3)	%	$	644,684		$	699,644		(7.9)	%
Segment EBITDA	56,814			72,210			(21.3	)%	149,855			199,943			(25.1	)%	Segment EBITDA	26,250			35,868			(26.8)	%	73,193			93,074			(21.4)	%
as a percent of segment revenues	15.4		%	18.4		%			14.1		%	17.5		%			as a percent of segment revenues	11.5		%	14.5		%			11.4		%	13.3		%

Enterprise Solutions revenues decreased ~~$24.0~~$18.1 million and ~~$78.3~~$55.0 million in the three and nine months ended September ~~29, 2019,~~27, 2020, respectively, from the comparable periods of ~~2018. For~~2019. The decrease in revenues in the three months ended September ~~29, 2019,~~27, 2020 was primarily due to decreases in volume ~~unfavorable currency translation, and lower copper prices contributed an estimated $28.2~~of $24.9 million ~~$3.5 million, and $2.8 million to the decline in revenues, respectively;~~ partially offset by ~~the impact~~acquisitions, higher copper prices, and favorable currency translation of ~~acquisitions, which contributed an estimated $10.5~~$4.9 million, ~~increase in revenues.~~$1.4 million, and $0.5 million, respectively. For the nine months ended September ~~29, 2019,~~27, 2020, decreases in volume, lower copper prices, and unfavorable currency translation ~~and lower copper prices~~ contributed ~~an estimated $86.5~~$79.2 million, ~~$13.9~~$3.0 million, and ~~$6.7~~$1.6 million, respectively, to the decline in ~~revenues, respectively,~~revenues; partially offset by ~~the impact of~~ acquisitions which ~~contributed an estimated~~grew revenues by $28.8 million ~~increase in revenues. The decrease in revenues was most notable in Asia, and partially offset by continued growth and share capture in~~over the ~~Americas region.~~year ago period.

Enterprise Solutions EBITDA decreased ~~$15.4~~$9.6 million and ~~$50.1~~$19.9 million in the three and nine months ended September ~~29, 2019,~~27, 2020, respectively, compared to the year ago periods primarily as a result of the ~~decline~~decrease in revenues discussed ~~above.~~above, partially offset by the benefits realized from our SG&A Cost Reduction Program.

-34-

Industrial Solutions


	Three Months Ended								Nine Months Ended									Three Months Ended						%		Nine Months Ended						%
	September 29, 2019			September 30, 2018			% Change		September 29, 2019			September 30, 2018			% Change			September 27, 2020			September 29, 2019			Change		September 27, 2020			September 29, 2019			Change

	(In thousands, except percentages)																	(In thousands, except percentages)
Segment Revenues	$	252,238		$	266,923		(5.5	)%	$	780,554		$	795,102		(1.8	)%	Segment Revenues	$	246,742		$	285,862		(13.7)	%	$	719,492		$	881,946		(18.4)	%
Segment EBITDA	44,614			53,750			(17.0	)%	139,531			153,401			(9.0	)%	Segment EBITDA	38,391			54,849			(30.0)	%	100,367			165,257			(39.3)	%
as a percent of segment revenues	17.7		%	20.1		%			17.9		%	19.3		%			as a percent of segment revenues	15.6		%	19.2		%			13.9		%	18.7		%

Industrial Solutions revenues decreased ~~$14.7~~$39.1 million and ~~$14.5~~$162.5 million in the three and nine months ended September ~~29, 2019,~~27, 2020, respectively, from the comparable ~~period~~periods of ~~2018.~~2019. The decrease in revenues in the three months ended September ~~29, 2019 from the comparable period of 2018~~27, 2020 was primarily due to ~~decrease~~decreases in volume of $42.4 million partially offset by higher copper prices and favorable currency translation of $2.5 million and $0.8 million, respectively. For the nine months ended September 27, 2020, decreases in volume, unfavorable currency translation, and lower copper prices ~~which had an estimated impact of $8.3~~contributed $152.9 million, ~~$3.6~~$5.7 million, and ~~$2.8~~$3.9 million, ~~respectively. The decrease~~respectively, to the decline in volume was primarily due to changes in channel inventory levels. The decrease in revenues in the nine months ended September 29, 2019 from the comparable period of 2018 was primarily due to unfavorable currency translation and lower copper prices, which had an estimated impact of $18.0 million and $8.8 million, respectively; partially offset by an increase in volume, which increased revenues $12.3 million over the year ago period.revenues.

Industrial Solutions EBITDA decreased ~~$9.1~~$16.5 million and ~~$13.9~~$64.9 million in the three and nine months ended September ~~29, 2019,~~27, 2020, respectively, from the comparable periods of ~~2018~~2019 primarily as a result of the ~~changes~~decline in revenues discussed ~~above.~~above and increased investments in R&D projects as we continue our commitment to growth initiatives, partially offset by the benefits realized from our SG&A Cost Reduction Program.

Liquidity and Capital Resources

Significant factors affecting our cash liquidity include (1) cash from operating activities, (2) disposals of businesses and tangible assets, (3) cash used for acquisitions, restructuring actions, capital expenditures, share repurchases, dividends, and senior subordinated note repurchases, and (4) our available credit facilities and other borrowing ~~arrangements, and (5) cash proceeds from equity offerings.~~arrangements. We expect our operating activities to generate cash in ~~2019~~2020 and believe our sources of liquidity are sufficient to

fund current working capital requirements, capital expenditures, contributions to our retirement plans, share repurchases, senior subordinated note repurchases, quarterly dividend payments, and our short-term operating strategies. However, we may require external financing in the event we complete a significant acquisition. Our ability to continue to fund our future needs from business operations could be affected by many factors, including, but not limited to: economic conditions worldwide, customer demand, competitive market forces, customer acceptance of our product mix, and commodities pricing.

The following table is derived from our Condensed Consolidated Cash Flow Statements and includes the results and cash flow activity of Grass Valley through the disposal date of July 2, 2020 consistent with the Condensed Consolidated Cash Flow Statements:


	Nine Months Ended
	September 27, 2020		September 29, 2019

	(In thousands)
Net cash provided by (used for):
Operating activities	$	38,689	$	89,517
Investing activities	(3,078)		(125,000)
Financing activities	(72,585)		(84,448)
Effects of currency exchange rate changes on cash and cash equivalents	2,586		(3,937)
Decrease in cash and cash equivalents	(34,388)		(123,868)
Cash and cash equivalents, beginning of period	425,885		420,610
Cash and cash equivalents, end of period	$	391,497	$	296,742

Nine Months Ended
September 29, 2019 September 30, 2018

(In thousands)
Net cash provided by (used for):
Operating activities $ 89,517
$ 100,859
Investing activities (125,000 ) (106,304 )
Financing activities (84,448 ) (220,932 )
Effects of currency exchange rate changes on cash and cash equivalents (3,937 ) (5,704 )
Decrease in cash and cash equivalents (123,868 ) (232,081 )
Cash and cash equivalents, beginning of period 420,610
561,108
Cash and cash equivalents, end of period $ 296,742
$ 329,027

Operating cash flows were a source of cash of $38.7 million and $89.5 million in the nine months ended September 27, 2020 and ~~$100.9 million in~~September 29, 2019, ~~and 2018,~~ respectively. ~~The $11.4 million decline~~Operating cash flows declined as compared to ~~prior~~the year isago period primarily due to the ~~$62 million pre-tax cash proceeds from the Corning patent litigation received~~decreases in ~~2018. Excluding the patent litigation proceeds, operating cash flows increased year-over-year due in part to favorable changes in receivables~~revenues and inventory. Receivables were a source of cash of $6.0 million compared to a use of cash of $25.3 million in the prior year. Inventory was a source of cash of $32.3 million compared to a use of cash of $16.6 million in the prior year. The improvements in receivables and inventory are attributable to effective working capital management.income discussed above.

-35-

Net cash used for investing activities totaled $3.1 million in the nine months ended September 27, 2020, compared to $125.0 million in ~~2019, compared to $106.3 million for~~ the ~~comparable period of 2018.~~nine months ended September 29, 2019. Investing activities for the nine months ended September ~~29, 2019~~27, 2020 included capital expenditures of ~~$74.1~~$56.8 million compared to ~~$63.5~~$74.1 million in the comparable period of ~~2018.~~2019. The ~~increase in~~nine months ended September 27, 2020 also included proceeds of $50.1 million, $3.1 million, and $0.6 million from the sale of the Grass Valley disposal group, the sale of tangible property, and a working capital ~~expenditures of $10.6 million is due in part~~adjustment related to the ~~investments we are making in India and software development.~~SPC acquisition. The nine months ended September 29, 2019 also included payments, net of cash acquired ~~for acquisitions~~ of $51.0 million primarily for the acquisition of Opterna, and the nine months ended September 30, 2018 included payments, net of cash acquired for acquisitions of $84.6 million for the acquisitions of SAM and NT2. Additionally, the nine months ended September 30, 2018 included proceeds from the disposal of the MCS business and Hirshmann JV of $40.2 million, which closed on December 31, 2017.Opterna.

Net cash used for financing activities totaled $72.6 million for the nine months ended September 27, 2020, compared to $84.4 million for the nine months ended September 29, ~~2019 totaled $84.4 million, compared to $220.9 million~~2019. Financing activities for the ~~comparable period~~nine months ended September 27, 2020 included borrowings on our revolver of ~~2018.~~$190.0 million, repayments of our revolver borrowings of $190.0 million, payments under our share repurchase program of $35.0 million, earnout consideration payments of $29.3 million, cash dividend payments of $6.8 million, and net payments related to share based compensation activities of $1.3 million. Financing activities for the nine months ended September 29, 2019 included payments under our share repurchase program of $50.0 million, cash dividend payments of $32.2 million, and net payments related to share based compensation activities of $2.1 million. Financing activities for the nine months ended September 30, 2018 included payments under borrowing arrangements of $484.8 million, payments under our share repurchase program of $125.0 million, cash dividend payments of $32.4 million, debt issuance costs of $7.6 million, net payments related to share based compensation activities of $2.0 million, and $431.3 million of cash proceeds from the issuance of the €350.0 million 3.875% Notes due 2028.

Our cash and cash equivalents balance was ~~$296.7~~$391.5 million as of September ~~29, 2019.~~27, 2020. Of this amount, ~~$199.5~~$215.7 million was held outside of the U.S. in our foreign operations. Substantially all of the foreign cash and cash equivalents are readily convertible into U.S. dollars or other foreign currencies. We consider the undistributed earnings of our foreign subsidiaries to be indefinitely reinvested, and accordingly, no provision for any withholding taxes has been recorded. Upon distribution of those earnings in the form of dividends or otherwise, we may be subject to withholding taxes payable to the respective foreign countries.

Our outstanding debt obligations as of September ~~29, 2019~~27, 2020 consisted of ~~$1,424.3~~$1,518.5 million of senior subordinated notes. Additional discussion regarding our various borrowing arrangements is included in Note 1012 to the Condensed Consolidated Financial Statements. ~~As of September 29, 2019, we had $287.0 million in available borrowing capacity under our Revolver.~~

Forward-Looking Statements

Statements in this report other than historical facts are “forward-looking statements” made in reliance upon the safe harbor of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding future financial performance (including revenues, expenses, earnings, margins, cash flows, dividends, capital expenditures and financial condition), plans and objectives, and related assumptions. These forward-looking statements reflect management’s current beliefs and expectations and are not guarantees of future performance. Actual results may differ materially from those suggested by any forward-looking statements based on a number of factors. These factors include, among others, those set forth in Part II, Item 1A and in other documents that we file with the SEC.

We expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

Item 3: Quantitative and Qualitative Disclosures about Market Risks

The following table provides information about our financial instruments that are sensitive to changes in interest rates. The table presents principal amounts by expected maturity dates and fair values as of September ~~29, 2019.~~27, 2020.


	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	$	—	$	408,835		$	408,835	$	406,088
Average interest rate			3.875		%
€450.0 million fixed-rate senior subordinated notes due 2027	$	—	$	525,645		$	525,645	$	517,760
Average interest rate			3.375		%
€200.0 million fixed-rate senior subordinated notes due 2026	$	—	$	233,620		$	233,620	$	237,005
Average interest rate			4.125		%
€300.0 million fixed-rate senior subordinated notes due 2025	$	—	$	350,430		$	350,430	$	339,325
Average interest rate			2.875		%
Total						$	1,518,530	$	1,500,178

-36-

Principal Amount by Expected Maturity Fair
2019 Thereafter Total Value

(In thousands, except interest rates)
€350.0 million fixed-rate senior subordinated notes due 2028 $ —
$ 383,460
$ 383,460
$ 405,946
Average interest rate 3.875 %
€450.0 million fixed-rate senior subordinated notes due 2027 $ —
$ 493,020
$ 493,020
$ 518,844
Average interest rate 3.375 %
€200.0 million fixed-rate senior subordinated notes due 2026 $ —
$ 219,120
$ 219,120
$ 233,420
Average interest rate 4.125 %
€300.0 million fixed-rate senior subordinated notes due 2025 $ —
$ 328,680
$ 328,680
$ 336,608
Average interest rate 2.875 %
Total $ 1,424,280
$ 1,494,818

Item 7A of our ~~2018~~2019 Annual Report on Form 10-K provides information as to the practices and instruments that we use to manage market risks. There were no material changes in our exposure to market risks since December 31, ~~2018.~~2019, and our debt is fixed at an average interest rate of 3.5% with no maturities until 2025 to 2028. We have no maintenance covenants on our outstanding debt. Our only covenant is an incurrence covenant, which limits our ability to take on additional debt if EBITDA drops below a certain threshold.

Item 4: Controls and Procedures

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of the principal executive officer and principal financial officer, of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based on this evaluation, the principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

There was no change in our internal control over financial reporting during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

-37-

~~- 37-~~

PART II OTHER INFORMATION

Item 1: Legal Proceedings

SEC Investigation - As disclosed in our Current Report on Form 8-K filed with the SEC on December 3, 2018, we are fully cooperating with an SEC investigation related to the material weakness in internal controls over financial reporting as of December 31, 2017 disclosed in our 2017 Form 10-K. We continue to believe that the outcome of the investigation will not have a material adverse effect on the Company.

We are a party to various other legal proceedings and administrative actions that are incidental to our operations. In our opinion, the proceedings and actions in which we are involved should not, individually or in the aggregate, have a material adverse effect on our financial condition, operating results, or cash flows. However, since the trends and outcome of this litigation are inherently uncertain, we cannot give absolute assurance regarding the future resolution of such litigation, or that such litigation may not become material in the future.

Item 1A: Risk Factors

There have been no material changes with respect to risk factors as previously disclosed in our ~~2018 Annual Report~~Form 8-K filed on ~~Form 10-K.~~

~~Item 2: Unregistered Sales of Equity Securities and Use of Proceeds~~

~~Set forth below is information regarding our stock repurchases for the three months ended September 29, 2019 (in thousands, except per share amounts).~~

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 June 30, 2019 $ 277,185
July 1, 2019 through August 4, 2019 493
$ 55.17
493
250,000
August 5, 2019 through September 1, 2019 —
—
—
250,000
September 2, 2019 through September 29, 2019 —
—
—
250,000
Total 493
$ 57.47
493
$ 250,000

(1) In November 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 security laws and other regulations. This program is funded with cash on hand and cash flows from operating activities. The program does not have an expiration date andJune 12, 2020. There may be ~~suspended at any time at the discretion of the Company. From inception of~~additional risks that impact our ~~program and during the nine months ended September 29, 2019,~~business that we ~~have repurchased 0.9 million shares of~~currently do not recognize as, or that are not currently, material to our common stock under the program for an aggregate cost of $50.0 million and an average price of $56.19. During the three months ended September 29, 2019, we repurchased 0.5 million shares of our common stock under the share repurchase program for an aggregate cost of $27.2 million and an average price per share of $55.17.business.

Item 6: Exhibits

Exhibits



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.DEF						Definition Linkbase Document

Exhibit 101.PRE						Presentation Linkbase Document

Exhibit 101.LAB						Labels Linkbase Document

Exhibit 101.CAL						Calculation Linkbase Document

Exhibit 101.SCH						Schema Document

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

~~- 39-~~

-38-

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

BELDEN INC.

Date:

November ~~4, 2019~~2, 2020

By:

/s/ ~~John S. Stroup~~Roel Vestjens

~~John S. Stroup~~Roel Vestjens

President and Chief Executive Officer ~~and Chairman~~

Date:

November ~~4, 2019~~2, 2020

By:

/s/ Henk Derksen

Henk Derksen

Senior Vice President, Finance, and Chief Financial Officer

Date:

November ~~4, 2019~~2, 2020

By:

/s/ Douglas R. Zink

Douglas R. Zink

Vice President and Chief Accounting Officer

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	Cable & Connectivity		Networking, Software & Security		Total Revenues

Three Months Ended September 29, 2019	(In thousands)
Enterprise Solutions	$	263,857	$	104,223	$	368,080
Industrial Solutions	149,537		102,701		252,238
Total	$	413,394	$	206,924	$	620,318

Three Months Ended September 30, 2018
Enterprise Solutions	$	271,928	$	116,923	$	388,851
Industrial Solutions	162,460		104,463		266,923
Total	$	434,388	$	221,386	$	655,774

Nine Months Ended September 29, 2019
Enterprise Solutions	$	765,909	$	298,560	$	1,064,469
Industrial Solutions	475,166		305,388		780,554
Total	$	1,241,075	$	603,948	$	1,845,023

Nine Months Ended September 30, 2018
Enterprise Solutions	$	785,970	$	348,906	$	1,134,876
Industrial Solutions	498,062		297,040		795,102
Total	$	1,284,032	$	645,946	$	1,929,978



	Products		Support & Services		Total Revenues

Three Months Ended September 29, 2019	(In thousands)
Enterprise Solutions	$	346,501	$	21,579	$	368,080
Industrial Solutions	231,223		21,015		252,238
Total	$	577,724	$	42,594	$	620,318

Three Months Ended September 30, 2018
Enterprise Solutions	$	368,389	$	20,462	$	388,851
Industrial Solutions	243,578		23,345		266,923
Total	$	611,967	$	43,807	$	655,774

Nine Months Ended September 29, 2019
Enterprise Solutions	$	1,004,631	$	59,838	$	1,064,469
Industrial Solutions	715,367		65,187		780,554
Total	$	1,719,998	$	125,025	$	1,845,023

Nine Months Ended September 30, 2018
Enterprise Solutions	$	1,080,549	$	54,327	$	1,134,876
Industrial Solutions	723,653		71,449		795,102
Total	$	1,804,202	$	125,776	$	1,929,978



Receivables	$	16,551
Inventory	15,084
Prepaid and other current assets	3,799
Property, plant, and equipment	7,716
Intangible assets	51,000
Goodwill	103,466
Deferred income taxes	1,388
Other long-lived assets	3,046
Total assets acquired	$	202,050

Accounts payable	$	11,825
Accrued liabilities	25,135
Deferred revenue	8,860
Long-term debt	19,315
Postretirement benefits	31,774
Other long-term liabilities	591
Total liabilities assumed	$	97,500

Net assets	$	104,550



	Enterprise Solutions			Industrial Solutions		Total Segments

	(In thousands)
As of and for the three months ended September 29, 2019
Segment revenues	$	368,080		$	252,238	$	620,318
Affiliate revenues	927			2		929
Segment EBITDA	56,814			44,614		101,428
Depreciation expense	7,381			4,766		12,147
Amortization of intangibles	9,780			12,463		22,243
Amortization of software development intangible assets	1,161			36		1,197
Severance, restructuring, and acquisition integration costs	4,045			—		4,045
Purchase accounting effects of acquisitions	(186		)	—		(186		)
Goodwill and other asset impairment	342,146			—		342,146
Segment assets	836,540			455,470		1,292,010
As of and for the three months ended September 30, 2018
Segment revenues	$	392,080		$	266,923	$	659,003
Affiliate revenues	1,776			15		1,791
Segment EBITDA	72,210			53,750		125,960
Depreciation expense	7,092			4,579		11,671
Amortization of intangibles	12,322			13,211		25,533
Amortization of software development intangible assets	620			—		620
Severance, restructuring, and acquisition integration costs	9,528			2,160		11,688
Purchase accounting effects of acquisitions	821			—		821
Deferred revenue adjustments	3,229			—		3,229
Segment assets	766,505			448,626		1,215,131
As of and for the nine months ended September 29, 2019
Segment revenues	$	1,064,469		$	780,554	$	1,845,023
Affiliate revenues	3,190			13		3,203
Segment EBITDA	149,855			139,531		289,386
Depreciation expense	22,655			14,515		37,170
Amortization of intangibles	29,270			38,682		67,952
Amortization of software development intangible assets	3,119			87		3,206
Severance, restructuring, and acquisition integration costs	10,904			—		10,904
Purchase accounting effects of acquisitions	1,845			—		1,845
Goodwill and other asset impairment	342,146			—		342,146
Segment assets	836,540			455,470		1,292,010
As of and for the nine months ended September 30, 2018
Segment revenues	$	1,142,765		$	795,102	$	1,937,867
Affiliate revenues	4,318			61		4,379
Segment EBITDA	199,943			153,401		353,344
Depreciation expense	21,465			14,097		35,562
Amortization of intangibles	35,301			39,689		74,990
Amortization of software development intangible assets	1,344			—		1,344
Severance, restructuring, and acquisition integration costs	46,949			10,061		57,010
Purchase accounting effects of acquisitions	2,359			—		2,359
Deferred revenue adjustments	7,889			—		7,889
Segment assets	766,505			448,626		1,215,131



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

	(In thousands)
Balance at December 31, 2018	$	(41,882	)	$	(33,025	)	$	(74,907	)
Other comprehensive income attributable to Belden before reclassifications	45,205			—			45,205
Amounts reclassified from accumulated other comprehensive income	—			591			591
Net current period other comprehensive gain attributable to Belden	45,205			591			45,796
Balance at September 29, 2019	$	3,323		$	(32,434	)	$	(29,111	)



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 June 30, 2019					$	277,185
July 1, 2019 through August 4, 2019	493	$	55.17	493	250,000
August 5, 2019 through September 1, 2019	—	—		—	250,000
September 2, 2019 through September 29, 2019	—	—		—	250,000
Total	493	$	57.47	493	$	250,000