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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 April 3, 2022
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, Missouri 63105
(Address of principal executive offices)
(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 classTrading SymbolsName of each exchange on which registered
Common stock, $0.01 par valueBDCNew York Stock Exchange
As of May 4, 2022, the Registrant had 44,256,175 outstanding shares of common stock.
-1-


PART I    FINANCIAL INFORMATION
Item 1. Financial Statements
BELDEN INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
April 3, 2022December 31, 2021
  
 (In thousands)
ASSETS
Current assets:
Cash and cash equivalents$559,582 $641,563 
Receivables, net375,626 383,444 
Inventories, net396,497 345,203 
Other current assets61,980 58,283 
Current assets of discontinued operations  449,402 
Total current assets1,393,685 1,877,895 
Property, plant and equipment, less accumulated depreciation340,081 343,564 
Operating lease right-of-use assets80,219 75,571 
Goodwill859,276 821,448 
Intangible assets, less accumulated amortization267,429 238,155 
Deferred income taxes32,747 31,486 
Other long-lived assets29,834 29,558 
$3,003,271 $3,417,677 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$359,811 $377,765 
Accrued liabilities223,737 278,108 
Current liabilities of discontinued operations 99,079 
Total current liabilities583,548 754,952 
Long-term debt1,213,639 1,459,991 
Postretirement benefits116,597 120,997 
Deferred income taxes60,014 49,027 
Long-term operating lease liabilities65,943 61,967 
Other long-term liabilities15,935 14,661 
Stockholders’ equity:
Common stock503 503 
Additional paid-in capital826,682 833,627 
Retained earnings539,294 505,717 
Accumulated other comprehensive loss(66,638)(70,566)
Treasury stock(353,071)(313,994)
Total Belden stockholders’ equity946,770 955,287 
Noncontrolling interests825 795 
Total stockholders’ equity947,595 956,082 
$3,003,271 $3,417,677 
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
-1-


BELDEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited) 
 Three Months Ended
 April 3, 2022April 4, 2021
 (In thousands, except per share data)
Revenues$610,371 $508,683 
Cost of sales(401,511)(339,500)
Gross profit208,860 169,183 
Selling, general and administrative expenses(103,066)(80,635)
Research and development expenses(23,456)(22,612)
Amortization of intangibles(8,817)(7,993)
Asset impairments (6,995)
Operating income73,521 50,948 
Interest expense, net(14,411)(15,511)
Loss on debt extinguishment(6,392) 
Non-operating pension benefit1,200 684 
Income from continuing operations before taxes53,918 36,121 
Income tax expense(9,822)(7,056)
Income from continuing operations44,096 29,065 
Loss from discontinued operations, net of tax(3,685)(324)
Loss on disposal of discontinued operations, net of tax(4,567) 
Net income35,844 28,741 
Less: Net income attributable to noncontrolling interest3 75 
Net income attributable to Belden stockholders$35,841 $28,666 
Weighted average number of common shares and equivalents:
Basic44,811 44,679 
Diluted45,567 45,045 
Basic income (loss) per share attributable to Belden stockholders:
Continuing operations$0.98 $0.65 
Discontinued operations(0.08)(0.01)
Disposal of discontinued operations(0.10) 
Net income$0.80 $0.64 
Diluted income (loss) per share attributable to Belden stockholders:
Continuing operations$0.97 $0.64 
Discontinued operations(0.08)(0.01)
Disposal of discontinued operations(0.10) 
Net income $0.79 $0.64 
Comprehensive income attributable to Belden $39,769 $82,391 
Common stock dividends declared per share$0.05 $0.05 
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
-2-


BELDEN INC.
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited)
 
 Three Months Ended
 April 3, 2022April 4, 2021
 (In thousands)
Cash flows from operating activities:
Net income $35,844 $28,741 
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization21,083 22,196 
Loss on debt extinguishment6,392  
Share-based compensation5,224 7,285 
Asset impairments 6,995 
Changes in operating assets and liabilities, net of the effects of currency exchange rate changes, acquired businesses and disposals:
Receivables37,617 (50,208)
Inventories(46,959)(19,313)
Accounts payable(21,373)3,269 
Accrued liabilities(83,527)(30,765)
Income taxes2,209 1,416 
Other assets(2,915)(4,226)
Other liabilities(11,550)(6,885)
Net cash used for operating activities(57,955)(41,495)
Cash flows from investing activities:
Proceeds from disposal of businesses, net of cash sold338,686 1,106 
Proceeds from disposal of tangible assets56 12 
Capital expenditures(10,963)(11,223)
Cash used for business acquisitions, net of cash acquired(65,990)(72,232)
Net cash provided by (used for) investing activities261,789 (82,337)
Cash flows from financing activities:
Payments under borrowing arrangements(230,639)(1,841)
Payments under share repurchase program(50,000) 
Withholding tax payments for share-based payment awards(3,700)(905)
Cash dividends paid(2,276)(2,246)
Payments under financing lease obligations(45)(43)
Net cash used for financing activities(286,660)(5,035)
Effect of foreign currency exchange rate changes on cash and cash equivalents(1,349)(2,277)
Decrease in cash and cash equivalents(84,175)(131,144)
Cash and cash equivalents, beginning of period643,757 501,994 
Cash and cash equivalents, end of period$559,582 $370,850 

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

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
-3-


BELDEN INC.
CONDENSED CONSOLIDATED STOCKHOLDERS’ EQUITY STATEMENTS
(Unaudited)

 Belden Inc. Stockholders  
AdditionalAccumulated
Other
Non-controlling
 Common StockPaid-InRetainedTreasury StockComprehensive 
 SharesAmountCapitalEarningsSharesAmountIncome (Loss)InterestsTotal
 (In thousands)
Balance at December 31, 202150,335 $503 $833,627 $505,717 (5,360)$(313,994)$(70,566)$795 $956,082 
Net income— — — 35,841 — — — 335,844 
Other comprehensive income, net of tax— — — — — — 3,928 27 3,955 
Retirement Savings Plan stock contributions— — (356)— 43 2,809 — — 2,453 
Exercise of stock options, net of tax withholding forfeitures— — (526)— 6 375 — — (151)
Conversion of restricted stock units into common stock, net of tax withholding forfeitures— — (11,287)— 103 7,739 — — (3,548)
Share repurchase program— — — — (885)(50,000)— — (50,000)
Share-based compensation— — 5,224 — — — — — 5,224 
Common stock dividends ($0.05 per share)
— — — (2,264)— — — — (2,264)
Balance at April 3, 202250,335 $503 $826,682 $539,294 (6,093)$(353,071)$(66,638)$825 $947,595 

 Belden Inc. Stockholders  
AdditionalAccumulated
Other
Non-controlling
 Common StockPaid-InRetainedTreasury StockComprehensive 
 SharesAmountCapitalEarningsSharesAmountIncome (Loss)InterestsTotal
 (In thousands)
Balance at December 31, 202050,335 $503 $823,605 $450,876 (5,692)$(332,552)$(191,851)$6,470 $757,051 
Net income— — — 28,666 — — — 75 28,741 
Other comprehensive income (loss), net of tax— — — — — — 53,725 (197)53,528 
Acquisition of business with noncontrolling interests— — — — — — — 20 20 
Retirement Savings Plan stock contributions— — (493)— 45 2,496 — — 2,003 
Exercise of stock options, net of tax withholding forfeitures— — (723)— 9 541 — — (182)
Conversion of restricted stock units into common stock, net of tax withholding forfeitures— — (2,403)— 27 1,680 — — (723)
Share-based compensation— — 7,285 — — — — — 7,285 
Common stock dividends ($0.05 per share)
— — — (2,263)— — — — (2,263)
Balance at April 4, 202150,335 $503 $827,271 $477,279 (5,611)$(327,835)$(138,126)$6,368 $845,460 


The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
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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, 2021:
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 2021 Annual Report on Form 10-K.
Business Description
We are a global supplier of specialty networking solutions built around two global businesses - Enterprise Solutions and Industrial Automation 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.
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 April 3, 2022, the 93rd day of our fiscal year 2022. Our fiscal second and third quarters each have 91 days. The three months ended April 3, 2022 and April 4, 2021 included 93 days and 94 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 months ended April 3, 2022 and April 4, 2021, 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 11). We did not have any transfers between Level 1 and Level 2 fair value measurements during the three months ended April 3, 2022 and April 4, 2021.
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 April 3, 2022, 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.
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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 material adverse effect on our financial position, results of operations, or cash flow.
As of April 3, 2022, we were party to standby letters of credit, bank guaranties, and surety bonds totaling $7.4 million, $6.2 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.
Noncontrolling Interest
We have a 51% ownership percentage in a joint venture with Shanghai Hi-Tech Control System Co, Ltd (Hite). The purpose of the joint venture is to develop and provide certain Industrial Automation Solutions products and integrated solutions to customers in China. Belden and Hite are committed to fund $1.53 million and $1.47 million, respectively, to the joint venture in the future. The joint venture is determined to not have sufficient equity at risk; therefore, it is considered a variable interest entity. We have determined that Belden is the primary beneficiary of the joint venture, due to both our ownership percentage and our control over the activities of the joint venture that most significantly impact its economic performance based on the terms of the joint venture agreement with Hite. Because Belden is the primary beneficiary of the joint venture, we have consolidated the joint venture in our financial statements. The results of the joint venture attributable to Hite’s ownership are presented as net income attributable to noncontrolling interest in the Condensed Consolidated Statements of Operations. The joint venture is not material to our consolidated financial statements as of or for the periods ended April 3, 2022 and April 4, 2021.

Certain subsidiaries of Opterna included noncontrolling interests, which generated an immaterial amount of Opterna's annual revenues. Because we had a controlling financial interest in these subsidiaries, they were consolidated into our financial statements, and the results that were attributable to the noncontrolling interest holders were presented as net income attributable to noncontrolling interests in the Condensed Consolidated Statements of Operations. During the fourth quarter of 2021, we purchased Opterna's noncontrolling interests for a purchase price of $2.3 million.

A subsidiary of OTN Systems includes a noncontrolling interest. Because we have a controlling financial interest in the subsidiary, it is consolidated into our financial statements. This subsidiary that includes a noncontrolling interest is not material to our consolidated financial statements as of or for the periods ended April 3, 2022 and April 4, 2021.
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.



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The following tables present our revenues disaggregated by major product category.
Broadband
 & 5G
Industrial AutomationSmart BuildingsTotal 
Revenues 
Three Months Ended April 3, 2022(In thousands)
Enterprise Solutions$121,805 $ $146,625 $268,430 
Industrial Automation Solutions 341,941  341,941 
Total$121,805 $341,941 $146,625 $610,371 
Three Months Ended April 4, 2021 
Enterprise Solutions$105,091 $ $121,264 $226,355 
Industrial Automation Solutions 282,328  282,328 
Total$105,091 $282,328 $121,264 $508,683 
The following tables present our revenues disaggregated by geography, based on the location of the customer purchasing the product.
AmericasEMEAAPACTotal Revenues
Three Months Ended April 3, 2022(In thousands)
Enterprise Solutions$204,386 $39,389 $24,655 $268,430 
Industrial Automation Solutions204,310 90,451 47,180 341,941 
Total$408,696 $129,840 $71,835 $610,371 
Three Months Ended April 4, 2021   
Enterprise Solutions$162,675 $37,936 $25,744 $226,355 
Industrial Automation Solutions166,223 75,096 41,009 282,328 
Total$328,898 $113,032 $66,753 $508,683 
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. Generally, we determine relative selling price using the prices charged to customers on a standalone basis. 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. Typically, payments are due after control transfers, which is less than one year from satisfaction of the performance obligation.
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 months ended April 3, 2022 and April 4, 2021.
The following table presents estimated and accrued variable consideration:
April 3, 2022December 31, 2021
(in thousands)
Accrued rebates included in accrued liabilities$28,897 $55,520 
Accrued returns included in accrued liabilities11,492 12,500 
Price adjustments recognized against gross accounts receivable22,742 23,035 
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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 April 3, 2022, total deferred revenue was $31.4 million, and of this amount, $23.9 million is expected to be recognized within the next twelve months, and the remaining $7.5 million is long-term and is expected to be recognized over a period greater than twelve months.
The following table presents deferred revenue activity during the three months ended April 3, 2022 and April 4, 2021:
20222021
(In thousands)
Beginning balance at January 1$19,390 $11,130 
New deferrals8,857 3,751 
Acquisitions6,567 5,997 
Revenue recognized(3,365)(1,272)
Balance at the end of Q1$31,449 $19,606 
Service-type warranties represent $9.0 million of the deferred revenue balance at April 3, 2022, and of this amount $4.2 million is expected to be recognized in the next twelve months, and the remaining $4.8 million is long-term and will be recognized over a period greater than twelve months.
As of April 3, 2022 and December 31, 2021, we did not have any material contract assets recorded in the Condensed Consolidated Balance Sheets. We expense sales commissions as incurred when the duration of the related revenue arrangement is one year or less. We capitalize sales commissions when the original duration of the related revenue arrangement is longer than one year, and we amortize it over the related revenue arrangement period. We did not have any capitalized sales commissions on our balance sheet as of April 3, 2022 and December 31, 2021. The following table presents sales commissions that are recorded within selling, general and administrative expenses:
Three Months Ended
April 3, 2022April 4, 2021
(In thousands)
Sales commissions$5,223 $3,782 
Note 3:  Acquisitions
NetModule AG
We acquired NetModule AG (NetModule) on March 3, 2022 for a preliminary purchase price, net of cash acquired of $23.5 million, which was funded with cash on hand. NetModule, based in Bern, Switzerland, is a leading provider of reliable, fast and secure wireless network infrastructures through advanced capabilities in 5G and WiFi6 technologies in a variety of mission critical industries with a strong focus on mass transit and intelligent traffic systems within the transportation vertical. The results of NetModule have been included in our Condensed Consolidated Financial Statements from March 3, 2022, and are reported within the Industrial Automation Solutions segment. The NetModule acquisition was not material to our financial position or results of operations.

macmon secure GmbH
We acquired macmon secure GmbH (Macmon) on January 17, 2022, for a preliminary purchase price, net of cash acquired of $42.4 million, which was funded with cash on hand. Macmon, based in Berlin, Germany, is a leading provider of products and services that secure network infrastructures in a variety of mission critical industries. The results of Macmon have been included in our Condensed Consolidated Financial Statements from January 17, 2022, and are reported within the Industrial Automation Solutions segment. The Macmon acquisition was not material to our results of operations.


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The following table summarizes the estimated, preliminary fair values of the assets acquired and the liabilities assumed as of January 17, 2022 (in thousands):
Receivables$1,836 
Other current assets173 
Property, plant and equipment160 
Intangible assets22,248 
Goodwill31,258 
Operating lease right-of-use assets2,979 
   Total assets acquired$58,654 
Accounts payable$371 
Accrued liabilities4,079 
Deferred income taxes5,828 
Long-term operating lease liabilities2,534 
Other long-term liabilities3,401 
   Total liabilities assumed$16,213 
Net assets $42,441 
The above purchase price allocation is preliminary and subject to revision as additional information about the fair value of individual assets and liabilities becomes available. The preliminary measurement of receivables, intangible assets, goodwill, deferred income taxes, and other assets and liabilities are subject to change. A change in the estimated fair value of the net assets acquired will change the amount of the purchase price allocable to goodwill.
The preliminary fair value of acquired receivables is $1.8 million, which is equivalent to its gross contractual amount. A single estimate of fair value results from a complex series of judgments about future events and uncertainties and relies heavily on estimates and assumptions. The judgments we have used in estimating the preliminary fair values assigned to each class of acquired assets and assumed liabilities could materially affect the results of our operations.
For purposes of the above allocation, we based our preliminary estimate of the fair values for intangible assets on valuation studies performed by a third party valuation firm. We used various valuation methods including discounted cash flows, lost income, excess earnings, and relief from royalty to estimate the preliminary fair value of the identifiable intangible assets (Level 3 valuation).
Goodwill and other intangible assets reflected above were determined to meet the criteria for recognition apart from tangible assets acquired and liabilities assumed. The goodwill is primarily attributable to the expansion of industrial automation product offerings in complete end-to-end solutions. Our tax basis in the acquired goodwill is zero. The intangible assets related to the Macmon acquisition consisted of the following:
Fair ValueAmortization Period
(In thousands)(In years)
Intangible assets subject to amortization:
Developed technologies$18,825 4.0
Customer relationships2,282 15.0
Trademarks1,141 2.0
Total intangible assets subject to amortization$22,248 
Intangible assets not subject to amortization:
Goodwill$31,258 n/a
Total intangible assets not subject to amortization$31,258 
Total intangible assets$53,506 
Weighted average amortization period5.0
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The amortizable intangible assets reflected in the table above were determined by us to have finite lives. The useful life for the developed technology intangible asset was based on the estimated time that the technology provides us with a competitive advantage and thus approximates the period and pattern of consumption of the intangible asset. The useful life for the customer relationship intangible asset was based on our forecasts of estimated sales from recurring customers. The useful life for the trademarks was based on the period of time we expect to continue to go to market using the trademarks.

Opterna International Corp.
Our acquisition of Opterna International Corp. (Opterna) in 2019 included potential earn-out consideration. As of the acquisition date, we estimated the fair value of the earn-out to be $5.8 million. The earn-out period ended in 2021, and the financial targets tied to the earn-out were not achieved. We reduced the earn-out liability to zero and recognized a $5.8 million benefit in Selling, General and Administrative Expenses in the three months ended April 4, 2021. This benefit was excluded from Segment EBITDA of our Enterprise Solutions segment.
Note 4: Disposals
We classify assets and liabilities as held for sale (disposal group) when management, having the authority to approve the action, commits to a plan to sell the disposal group, the sale is probable within one year, and the disposal group is available for immediate sale in its present condition. We also consider whether an active program to locate a buyer has been initiated, whether the disposal group is marketed actively for sale at a price that is reasonable in relation to its current fair value, and whether actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. When we classify a disposal group as held for sale, we test for impairment. An impairment charge is recognized when the carrying value of the disposal group exceeds the estimated fair value, less costs to sell. We also cease depreciation and amortization for assets classified as held for sale.
During the first quarter of 2021, we committed to a plan to sell our oil and gas cable business in Brazil that met all of the criteria to classify the assets and liabilities of this business, formerly part of the Industrial Automation Solutions segment, as held for sale. At such time, the carrying value of the disposal group exceeded the fair value less costs to sell, which we determined based upon the expected sale price, by $3.4 million. Therefore, we recognized an impairment charge in Selling, General and Administrative Expenses equal to this amount in the first quarter of 2021. The impairment charge was excluded from Segment EBITDA of our Industrial Automation Solutions segment. We completed the sale of our oil and gas cable business in Brazil during the second quarter of 2021 for $10.9 million, net of cash delivered with the business.
Note 5:  Discontinued Operations
On February 7, 2022, we signed a definitive agreement to divest Tripwire for $350 million in cash, and completed the transaction on February 22, 2022. We recognized a loss on disposal of discontinued operations, net of tax of $4.6 million during the three months ended April 3, 2022. The divestiture of Tripwire represents a strategic shift impacting our operations and financial results. As a result, the Tripwire disposal group, which was included in our Industrial Automation Solutions segment, is reported within discontinued operations. The following table summarizes the operating results of the Tripwire disposal group up to the February 22, 2022 disposal date during the first quarter of 2022 and 2021, respectively :

January 1, 2022 - February 22, 2022January 1, 2021 - April 4, 2021
(In thousands)
Revenues$12,067 $27,698 
Cost of sales(3,256)(5,257)
Gross profit8,811 22,441 
Selling, general and administrative expenses(8,185)(10,819)
Research and development expenses(5,528)(8,888)
Amortization of intangible assets(638)(1,954)
Income (loss) before taxes $(5,540)$780 
During the three months ended April 3, 2022 and April 4, 2021, the Tripwire disposal group had capital expenditures of approximately $0.0 million and $0.7 million, respectively, and recognized share-based compensation expense of $0.2 million and $0.7 million, respectively. The disposal group did not have any significant non-cash charges for investing activities during the three months ended April 3, 2022 and April 4, 2021.
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The following table provides the major classes of assets and liabilities of the disposal group as of December 31, 2021:
December 31, 2021
(In thousands)
Assets:
Cash and cash equivalents$2,194 
Receivables, net28,773 
Inventories, net150 
Other current assets7,418 
Property, plant and equipment, less accumulated depreciation6,250 
Operating lease right-of-use assets3,893 
Goodwill331,024 
Intangible assets, less accumulated amortization63,541 
Deferred income taxes834 
Other long-lived assets5,325 
Total assets of Tripwire disposal group$449,402 
Liabilities:
Accounts payable$6,458 
Accrued liabilities56,208 
Deferred income taxes10,964 
Long-term operating lease liabilities5,257 
Other long-term liabilities20,192 
Total liabilities of Tripwire disposal group$99,079 

The Tripwire disposal group also had $3.4 million of accumulated other comprehensive income as of December 31, 2021.
Note 6:  Reportable Segments
We are organized around two global businesses: Enterprise Solutions and Industrial Automation Solutions. Each of the global businesses represents a reportable segment. In conjunction with the Tripwire divestiture during the first quarter of 2022, we changed the name of our former Industrial Solutions segment to Industrial Automation Solutions. The composition of the segment did not change as a result of this name change.

The key measures of segment profit or loss are Segment Revenues and Segment EBITDA. Segment Revenues represent non-affiliate revenues. 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 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. Inter-company revenues between our segments is not material.
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Enterprise SolutionsIndustrial Automation SolutionsTotal Segments
 (In thousands)
As of and for the three months ended April 3, 2022   
Segment Revenues$268,430 $341,941 $610,371 
Segment EBITDA30,821 67,528 98,349 
Depreciation expense5,426 5,800 11,226 
Amortization of intangibles4,097 4,720 8,817 
Amortization of software development intangible assets22 985 1,007 
Severance, restructuring, and acquisition integration costs328 3,395 3,723 
Segment assets574,494 628,290 1,202,784 
As of and for the three months ended April 4, 2021   
Segment Revenues$226,355 $282,328 $508,683 
Segment EBITDA28,291 47,611 75,902 
Depreciation expense5,363 5,364 10,727 
Amortization of intangibles4,336 3,657 7,993 
Amortization of software development intangible assets32 377 409 
Severance, restructuring, and acquisition integration costs1,952 3,219 5,171 
Adjustments related to acquisitions and divestitures(6,307)(67)(6,374)
Asset impairments 6,995 6,995 
Segment assets476,217 560,351 1,036,568 
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
 April 3, 2022April 4, 2021
 (In thousands)
Total Segment and Consolidated Revenues$610,371 $508,683 
Total Segment EBITDA$98,349 $75,902 
Depreciation expense(11,226)(10,727)
Amortization of intangibles(8,817)(7,993)
Amortization of software development intangible assets(1,007)(409)
Severance, restructuring, and acquisition integration costs (1)(3,723)(5,171)
Asset impairments (2) (6,995)
Adjustments related to acquisitions and divestitures (3) 6,374 
Eliminations(55)(33)
Consolidated operating income73,521 50,948 
Interest expense, net(14,411)(15,511)
Loss on debt extinguishment(6,392) 
Total non-operating pension benefit1,200 684 
Consolidated income from continuing operations before taxes $53,918 $36,121 

(1) Severance, restructuring, and acquisition integration costs for the three months ended April 3, 2022 primarily relate to our Acquisition Integration Program. See Note 12. Costs for the three months ended April 4, 2021 primarily relate to our Acquisition Integration Program and completed Cost Reduction Program.
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(2) During the three months ended April 4, 2021, we recognized a $3.6 million impairment on assets held and used and a $3.4 million impairment on assets held for sale. See Note 11.
(3) During the three months ended April 4, 2021, we reduced the Opterna earn-out liability by $5.8 million, collected $1.4 million of receivables associated with the sale of Grass Valley that were previously written off, and recognized cost of sales of $0.8 million related to purchase accounting adjustments of acquired inventory to fair value for the OTN Systems acquisition.
Note 7: Income (loss) per Share
The following table presents the basis for the income (loss) per share computations:
 Three Months Ended
 April 3, 2022April 4, 2021
 (In thousands)
Numerator:
Income from continuing operations$44,096 $29,065 
Less: Net income attributable to noncontrolling interest3 75 
Income from continuing operations attributable to Belden stockholders44,093 28,990 
Add: Loss from discontinued operations, net of tax(3,685)(324)
Add: Loss on disposal of discontinued operations, net of tax(4,567) 
Net income attributable to Belden stockholders$35,841 $28,666 
Denominator:
Weighted average shares outstanding, basic44,811 44,679 
Effect of dilutive common stock equivalents756 366 
     Weighted average shares outstanding, diluted45,567 45,045 
For the three months ended April 3, 2022 and April 4, 2021, diluted weighted average shares outstanding exclude outstanding equity awards of 1.1 million and 1.3 million, respectively, as they are anti-dilutive. In addition, for the three months ended April 3, 2022 and April 4, 2021, diluted weighted average shares outstanding do not include outstanding equity awards of 0.1 million and 0.4 million, respectively, because the related performance conditions have not been satisfied.
For purposes of calculating basic earnings per share, unvested restricted stock units are not included in the calculation of basic weighted average shares outstanding until all necessary conditions have been satisfied and issuance of the shares underlying the restricted stock units is no longer contingent. 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 8: Credit Losses
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 estimated 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.
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Estimates are used to determine the allowance, which is based upon an assessment of anticipated payments as well as other information that is reasonably available. The following table presents the activity in the trade receivables allowance for doubtful accounts for our continuing operations for the three months ended April 3, 2022 and April 4, 2021, respectively:
20222021
(In thousands)
Beginning balance at January 1$4,864 $5,085 
    Current period provision846 52 
    Acquisitions319  
    Write-offs(667)(47)
    Recoveries collected(50)(23)
    Fx impact(19)(17)
Q1 ending balance$5,293 $5,050 
Note 9:  Inventories
The following table presents the major classes of inventories as of April 3, 2022 and December 31, 2021, respectively:
April 3, 2022December 31, 2021
 (In thousands)
Raw materials$173,524 $157,315 
Work-in-process47,361 43,644 
Finished goods221,226 189,907 
Gross inventories442,111 390,866 
Excess and obsolete reserves(45,614)(45,663)
Net inventories$396,497 $345,203 
Note 10:  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 17 years; some of which include extension and termination options for an additional 15 years or within 1 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 months ended April 3, 2022 and April 4, 2021, the rent expense for short-term leases was not material.

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

As the rate implicit in most of our leases is not readily determinable, we use the incremental borrowing rate to determine the present value of the lease payments, which is unique to each leased asset, and is based upon the term of the lease, commencement date of the lease, local currency of the leased asset, and the credit rating of the legal entity leasing the asset.

We are party to a lease guarantee, whereby Belden has covenanted the lease payments for one of Snell Advanced Media's (SAM) property leases through its 2035 expiration date. The lease guarantee was executed in 2018 following the acquisition of SAM, which we subsequently sold on July 2, 2020 as part of the Grass Valley disposal group. This lease guarantee was retained by Belden and not transferred to Black Dragon Capital as part of the sale of Grass Valley. Belden would be required to make lease payments only if the primary obligor, Black Dragon Capital, fails to make the payments. As of April 3, 2022, the SAM lease has approximately $19.2 million of lease payments remaining. We have not recorded a liability associated with this guarantee.
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The components of lease expense were as follows:

Three Months Ended
April 3, 2022April 4, 2021
(In thousands)
Operating lease cost$5,428 $4,430 
Finance lease cost
Amortization of right-of-use asset$288 $32 
Interest on lease liabilities6 3 
Total finance lease cost$294 $35 

Supplemental cash flow information related to leases was as follows:

Three Months Ended
April 3, 2022April 4, 2021
(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$4,776 $3,671 
Operating cash flows from finance leases6 3