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What changed in BELDEN INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of BELDEN INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+231 added−245 removedSource: 10-K (2025-02-13) vs 10-K (2024-02-13)

Top changes in BELDEN INC.'s 2024 10-K

231 paragraphs added · 245 removed · 199 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

65 edited+10 added−5 removed37 unchanged
Biggest changeOur ESG goals span each pillar of our framework with a target completion date of 2025 are as follows: Environmental • Reduce Scope 1 and Scope 2 total combined emissions by 25% (FY19 baseline) for all global locations greater than 15,000 square feet. • Increase the use of electricity generated from site specific renewable sources from 2019 levels at our manufacturing and distribution locations. • Increase total global electricity use efficiency from 2019 levels at manufacturing and distribution locations. • Achieve at least 90% of waste diverted from landfill for manufacturing and distribution locations. • Increase the use of renewable or recyclable materials in packaging by 20% (FY21 baseline). 6 Social • As a first step towards our vision of a diverse, equitable, and inclusive workplace, we will deliver unconscious bias training to 100% of the Belden team worldwide. • Global team members will be encouraged to participate in an average of 16 hours per year of community related activities. • 60% of global team members will participate in company wellness programs. • 75% of Belden’s top leadership positions will be filled with talent that has been developed from within our company. • Over 200 professionals will have graduated from our Early Career Leadership Program and our Intern Program. • >85% of team members will agree that they have the opportunity for development and growth at Belden. • Assess the responsible sourcing risks in Belden’s supply chain, conduct audits of most at-risk tier 1 direct suppliers, and engage 100% of conflict minerals suppliers.
Biggest changeSocial • As a first step towards our vision of an inclusive workplace, we will deliver unconscious bias training to 100% of the Belden team worldwide. • Global team members will be encouraged to participate in an average of 16 hours per year of community related activities. • 60% of global team members will participate in company wellness programs. • 75% of Belden’s top leadership positions will be filled with talent that has been developed from within our company. • Over 200 professionals will have graduated from our Early Career Leadership Program and our Intern Program. • >85% of team members will agree that they have the opportunity for development and growth at Belden. • Assess the responsible sourcing risks in Belden’s supply chain, conduct audits of most at-risk tier 1 direct suppliers, and engage 100% of conflict minerals suppliers.
Our research and development has a strong focus on improving the performance of fiber optic technology, making it easier to handle and install, more robust for technicians and end users, leading to networks that can be deployed more quickly, with higher performance and reliability.
Our research and development has a strong focus on improving the performance of fiber optic technology, making it easier to handle and install and more robust for technicians and end users, leading to networks that can be deployed more quickly, with higher performance and reliability.
Dr. Chand has played a pivotal role in developing and executing Belden's long-term growth agenda, solutions and product strategy, and go-to-market efforts. He made key contributions towards establishing and growing Belden throughout the Asia Pacific region, including setting up manufacturing in China and India. Dr.
Chand has played a pivotal role in developing and executing Belden's long-term growth agenda, solutions and product strategy, and go-to-market efforts. He made key contributions towards establishing and growing Belden throughout the Asia Pacific region, including setting up manufacturing in China and India. Dr.
Governance • Achieve understanding of the Code of Conduct (CoC) from 100% of global non-production team members. • Be recognized as one of the most ethical global companies. As we progress towards our goals highlighted above, we build on existing initiatives and explore new technologies to reduce our greenhouse gas (GHG) emissions, waste sent to landfill, and water consumption.
Governance • Achieve understanding of the Code of Conduct (CoC) from 100% of global non-production team members. • Be recognized as one of the most ethical global companies. 6 As we progress towards our goals highlighted above, we build on existing initiatives and explore new technologies to reduce our greenhouse gas (GHG) emissions, waste sent to landfill, and water consumption.
Dr. Chand joined Belden in 2002, and most recently served as the Company's Executive Vice President of Industrial Automation Solutions since July 2019, and Managing Director of Belden Asia Pacific from August 2017. Over the course of his tenure with Belden, he has held roles across several functions, including sales and marketing and operations in both Asia and North America.
Dr. Chand joined Belden in 2002, and most recently served as the Company's Executive Vice President of Automation Solutions since July 2019, and Managing Director of Belden Asia Pacific from August 2017. Over the course of his tenure with Belden, he has held roles across several functions, including sales and marketing and operations in both Asia and North America. Dr.
We believe that our future success will depend in part upon our ability to enhance existing products and to develop, manufacture and deliver new products that meet or anticipate such changes in our served markets. In our Industrial Automation Solutions segment, customers are rapidly adopting new technologies that enable digital transformations.
We believe that our future success will depend in part upon our ability to enhance existing products and to develop, manufacture and deliver new products that meet or anticipate such changes in our served markets. In our Automation Solutions segment, customers are rapidly adopting new technologies that enable digital transformations.
Some OEM customer contracts have provisions for passing through raw material cost changes, generally with a lag of a few weeks to three months. 5 Backlog Our business is characterized generally by short-term order and shipment schedules.
Some OEM customer contracts have provisions for passing through raw material cost changes, generally with a lag of a few weeks to three months. Backlog Our business is characterized generally by short-term order and shipment schedules.
Prior to that, she served as the Vice President, Human Resources for the Company’s Industrial Automation platform as well as in other roles in the human resources organization. Prior to joining Belden, Ms. Tate held human resource roles in the Pulte Group and Ingersoll Rand. Ms.
Prior to that, she served as the Vice President, Human Resources for the Company’s Automation platform as well as in other roles in the human resources organization. Prior to joining Belden, Ms. Tate held human resource roles in the Pulte Group and Ingersoll Rand. Ms.
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. 9
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.
Tate holds a Bachelor of Science degree in Management and a Master of Science degree in Human Resource Management from Purdue University. Jay Wirts was appointed Executive Vice President, Enterprise Solutions in June 2023. Prior to that, he served as President, Smart Buildings and has served in other leadership roles since joining Belden in 2018. Prior to Belden, Mr.
Tate holds a Bachelor of Science degree in Management and a Master of Science degree in Human Resource Management from Purdue University. Jay Wirts was appointed Executive Vice President, Smart Infrastructure Solutions in June 2023. Prior to that, he served as President, Smart Buildings and has served in other leadership roles since joining Belden in 2018. Prior to Belden, Mr.
We consider our patents and trademarks to be valuable assets. Our most prominent trademarks are: Belden®, Alpha Wire™, Hirschmann®, Lumberg Automation™, Mohawk®, OTN Systems™, PPC®, ProSoft Technology®, Thinklogical®, Tofino®, and West Penn Wire™. Raw Materials The principal raw material used in many of our cable products is copper.
We consider our patents and trademarks to be valuable assets. Our most prominent trademarks are: Belden®, Alpha Wire™, Hirschmann®, Lumberg Automation™, OTN Systems™, PPC®, ProSoft Technology®, Thinklogical®, and West Penn Wire™. Raw Materials The principal raw material used in many of our cable products is copper.
Through our people and our strong commitment to our values, we continually strive to serve the needs of our customers and improve the communities where we live and work. We have a responsibility to make a positive, meaningful impact on the world around us, which is why our commitment to ESG is so important.
Through our people and our strong commitment to our values, we continually strive to serve the needs of our customers and improve the communities where we live and work. We have a responsibility to make a positive, meaningful impact on the world around us, which is why our commitment to sustainability is so important.
We are committed to leaving the world better than we found it. We are dedicated to continuously improving our global impact through visible and measurable progress. Our ESG strategy is overseen by our Board of Directors through the Nominating and Corporate Governance Committee.
We are committed to leaving the world better than we found it. We are dedicated to continuously improving our global impact through visible and measurable progress. Our sustainability strategy is overseen by our Board of Directors through the Nominating and Corporate Governance Committee.
Additionally, the committee reports to our Board on a quarterly basis and regularly brings forth ESG matters to be discussed at the Senior Leadership Team (SLT) level, with our CEO overseeing the incorporation of our strategy and goals throughout our business.
Additionally, the committee reports to our Board on a quarterly basis and regularly brings forth sustainability matters to be discussed at the Senior Leadership Team (SLT) level, with our CEO overseeing the incorporation of our strategy and goals throughout our business.
Within Enterprise Solutions, our Smart Buildings products offer in-building wired and wireless infrastructures, fiber technology innovation, and design collaboration and customization to connect people with facilities through innovative solutions for enhanced human engagement, productivity, and security.
Within Smart Infrastructure Solutions, our Smart Buildings products offer in-building wired and wireless infrastructures, fiber technology innovation, and design collaboration and customization to connect people with facilities through innovative solutions for enhanced human engagement, productivity, and security.
Most recently, in August 2023, we acquired CloudRail GmbH (CloudRail), which spec ializes in sensor to cloud data solutions allowing end users to quickly connect sensors on their machinery to cloud providers to drive business insights and improve outcomes.
In August 2023, we acquired CloudRail GmbH (CloudRail), which spec ializes in sensor to cloud data solutions allowing end users to quickly connect sensors on their machinery to cloud providers to drive business insights and improve outcomes.
While the adoption of this technology is at a more advanced stage in certain regions of the world, we believe that the trend will globalize. Enterprise Solutions R&D efforts are aligned to the secular trends in our markets for increased communication at faster speeds of transmission. This phenomenon is visible across all of our markets.
While the adoption of this technology is at a more advanced stage in certain regions of the world, we believe that the trend will globalize. Smart Infrastructure Solutions R&D efforts are aligned to the secular trends in our markets for increased communication at faster speeds of transmission. This phenomenon is visible across all of our markets.
Research and Development We conduct research and development on an ongoing basis, including new and existing hardware and software product development, testing and analysis, and process and equipment development and testing. See the Consolidated Statements of Operations for amounts incurred for research and development.
Research and Development We conduct research and development (R&D) on an ongoing basis, including new and existing hardware and software product development, testing and analysis, and process and equipment development and testing. See the Consolidated Statements of Operations for amounts incurred for research and development.
We will provide upon written request and without charge a printed copy of our Annual Report on Form 10-K. To obtain such a copy, please write to the Corporate Secretary, Belden Inc., 1 North Brentwood Boulevard, 15 th Floor, St. Louis, MO 63105.
We will provide upon written request and without charge a printed copy of our Annual Report on Form 10-K. To obtain such a copy, please write to the Corporate Secretary, Belden Inc., 1 North Brentwood Boulevard, 15 th Floor, St.
Building automation and the rapid rise of IoT has catalyzed the need to add more devices on the network. This is turn necessitates the distribution of power across the network.
Building automation and the rapid rise of IoT has catalyzed the need to add more devices on the network. This in turn necessitates the distribution of power across the network.
Common across the Enterprise Solutions segment, our R&D efforts are focused on ensuring continuously evolving solutions, be it copper and coax cable or fiber optic cable and connectivity as it becomes more pervasive across all networks including wireless.
Common across the Smart Infrastructure Solutions segment, our R&D efforts are focused on ensuring continuously evolving solutions, be it copper and coax cable or fiber optic cable and connectivity as it becomes more pervasive across all networks including wireless.
Once again, we are recognized as a Great Place to Work® in various global locations, including Belgium, China, Denmark, France, Germany, Hong Kong, Hungary, India, Mexico, Netherlands, Singapore, Spain, Switzerland, Tunisia, United Arab Emirates United Kingdom, and the United States – a testament of Belden’s commitment to our employees.
Once again, we are recognized as a Great Place to Work® in various global locations, including Belgium, Canada, China, Denmark, France, Germany, Hong Kong, Hungary, India, Italy, Mexico, Netherlands, Singapore, Spain, Tunisia, United Arab Emirates, United Kingdom, and United States – a testament of Belden’s commitment to our employees.
During 2023, approximately 45% of Belden’s sales were to customers outside the U.S. Our primary channels to international markets include both distributors and direct sales to end users and OEMs. Financial information for Belden by country is shown in Note 6 to the Co nsolidated Financial Statements.
During 2024, approximately 43% of Belden’s sales were to customers outside the U.S. Our primary channels to international markets include both distributors and direct sales to end users and OEMs. Financial information for Belden by country is shown in Note 6 to the Co nsolidated Financial Statements.
The Be Well program that formally launched in the United States now encompasses our entire operational footprint to support our workforce’s physical, emotional, social, and financial well-being with almost 65% of our workforce participating.
The Be Well program that formally launched in the United States now encompasses our entire operational footprint to support our workforce’s physical, emotional, social, and financial well-being with 60% of our workforce participating.
Also within Enterprise Solutions, our Broadband Solutions products offer a broad portfolio of end-to-end solutions, industry-leading innovation and technology, and worldwide technical service and support to enable a connected, digital world through broadband and wireless innovation.
Also within Smart Infrastructure Solutions, our Broadband Solutions products offer a broad portfolio of end-to-end solutions, industry-leading innovation and technology, and worldwide technical service and support to enable a connected, digital world through broadband and wireless innovation.
While we believe that our existing environmental control procedures are adequate, we will continue to evaluate and update our procedures as needed to address new or changing aspects of environmental matters. Environmental, Social, and Governance (ESG) at Belden At Belden, we have built a company and culture that is unique in our industry.
While we believe that our existing environmental control procedures are adequate, we will continue to evaluate and update our procedures as needed to address new or changing aspects of environmental matters. Sustainability at Belden At Belden, we have built a company and culture that is unique in our industry.
The Enterprise product portfolio is designed to support Internet Protocol convergence, the increased use of wireless communications, and cloud-based data centers by our customers. 2 Industrial Automation Solutions The Industrial Automation Solutions segment at Belden provides network infrastructure and digitization solutions to enable our customers to make informed decisions.
The product portfolio is designed to support Internet Protocol convergence, the increased use of wireless communications, and cloud-based data centers by our customers. 2 Automation Solutions The Automation Solutions segment at Belden provides network infrastructure and digitization solutions to enable our customers to make data-based business decisions.
Under the leadership of our Senior Vice President-Legal, General Counsel and Corporate Secretary, our ESG Steering Committee is responsible for implementation of our strategy and comprises cross-functional members of the organization. This Committee meets quarterly to discuss strategy and progress towards our goals.
Under the leadership of our Senior Vice President-Legal, General Counsel and Corporate Secretary, our sustainability Steering Committee is responsible for implementation of our strategy and comprises cross-functional members of the organization. This Committee meets regularly to discuss strategy and progress towards our goals.
Wirts served in various roles in Emerson and Vertiv following more than six years in the U.S. Marine Corps. He has a bachelor’s degree in History from Colgate University and an MBA from Northwestern University. Doug Zink has been Vice President and Chief Accounting Officer since September 2013.
Wirts served in various roles in Emerson and Vertiv following more than six years in the U.S. Marine Corps. He has a bachelor’s degree in History from Colgate University and an MBA from Northwestern University. 8 Doug Zink was appointed Vice President and Chief Accounting Officer in September 2013.
Chand holds a BA in Economics from Loyola College, Chennai, India, an MBA from XLRI Jamshedpur, India, and a Doctorate of Business Administration from the City University of Hong Kong. Brian Anderson has been Senior Vice President, Le gal, General Counsel and Corporate Secretary since April 2015.
Chand holds a BA in Economics from Loyola College, Chennai, India, an MBA from XLRI Jamshedpur, India, and a Doctorate of Business Administration from the City University of Hong Kong. Brian Anderson was appointed Senior Vice President, Le gal, General Counsel and Corporate Secretary in April 2015.
The chart below illustrates the high and low spot prices per pound of copper over the last three years. 2023 2022 2021 Copper spot prices per pound High $ 4.27 $ 4.93 $ 4.78 Low 3.54 3.21 3.54 Prices for materials such as PVC and other plastics derived from petrochemical feedstocks have also fluctuated.
The chart below illustrates the high and low spot prices per pound of copper over the last three years. 2024 2023 2022 Copper spot prices per pound High $ 5.12 $ 4.27 $ 4.93 Low 3.69 3.54 3.21 Prices for materials such as PVC and other plastics derived from petrochemical feedstocks have also fluctuated.
Voluntary turnover of management and professional staff remained low at 5% while the overall company Lost Time Incident Rate (LTIR) and Total Recordable Incident Rate (TRIR) were 0.43 and 0.53, respectively.
Voluntary turnover of management and professional staff remained low at 5% while the overall company Lost Time Incident Rate (LTIR) and Total Recordable Incident Rate (TRIR) were 0.21 and 0.45, respectively.
Information about our Executive Officers The following table sets forth certain information with respect to the persons who were Belden executive officers as of February 13, 2024. All executive officers are elected to terms that expire at the organizational meeting of the Board of Directors following the Annual Meeting of Shareholders.
Louis, MO 63105. 7 Information about our Executive Officers The following table sets forth certain information with respect to the persons who were Belden executive officers as of February 13, 2025. All executive officers are elected to terms that expire at the organizational meeting of the Board of Directors following the Annual Meeting of Shareholders.
Based on available data for our served markets, we estimate that our market share across our segments is significant, ranging from approximately 5% to 15%. A substantial acquisition in one of our served markets would be necessary to meaningfully change our estimated market share percentage.
Based on available data for our served markets, we estimate that our market share across our segments is significant, ranging from approxim ately 5% to 15%. A su bstantial acquisition in one of our served markets would be necessary to meaningfully change our estimated market share percentage.
Energy conservation and solar generation projects have been identified and are being implemented. Thus far, we have seen a decrease in Scope 1 and 2 absolute emissions by 9.5% and a decrease in Scope 1 and 2 GHG intensity by 25.0%.
Energy conservation and solar generation projects have been identified and are being implemented. Thus far, we have seen a decrease in Scope 1 and 2 absolute emissions and Scope 1 and 2 GHG intensity.
As used herein, unless an operating segment is identified or the context otherwise requires, “Belden,” the “Company”, and “we” refer to Belden Inc. and its subsidiaries as a whole. Strategy and Business Model Our purpose is to build the foundation for a digital world.
As used herein, unless an operating segment is identified or the context otherwise requires, “Belden,” the “Company”, and “we” refer to Belden Inc. and its subsidiaries as a whole. Strategy and Business Model Our purpose is to make connections.
We understand the operational, quality, safety and innovation demands of our customers and empower them to succeed by making the most of real-time operational technology data. Our industrial automation capabilities span networking, connectivity, and network security to design industrial networks and securely transmit data.
We help customers increase uptime and ensure network data availability, integrity and confidentiality. We understand the operational, quality, safety and innovation demands of our customers and empower them to succeed by making the most of real-time operational technology data. Our automation solution capabilities span networking, connectivity, and network security to design industrial networks and securely transmit data.
Environmental Matters We are subject to numerous federal, state, provincial, local, and foreign laws and regulations relating to the storage, handling, emission, and discharge of materials into the environment, including the Comprehensive Environmental Response, Compensation, and Liability Act; the Clean Water Act; the Clean Air Act; the Emergency Planning and Community Right-To-Know Act; the Resource Conservation and Recovery Act; and similar laws in the other countries in which we operate.
Almost all of the backlog at December 31, 2024 is scheduled to ship in 2025. 5 Environmental Matters We are subject to numerous federal, state, provincial, local, and foreign laws and regulations relating to the storage, handling, emission, and discharge of materials into the environment, including the Comprehensive Environmental Response, Compensation, and Liability Act; the Clean Water Act; the Clean Air Act; the Emergency Planning and Community Right-To-Know Act; the Resource Conservation and Recovery Act; and similar laws in the other countries in which we operate.
There will be a need for solutions offering power to these distributed devices and the Enterprise Solutions segment continues to innovate in this area in preparation for a world with a need to upgrade legacy systems as we build greenfield installations.
There will be a need for solutions offering power to these distributed devices and the Smart Infrastructure Solutions segment continues to innovate in this area in preparation for a world with a need to upgrade legacy systems.
Our high-performance solutions support all networking protocols up to and including 100G+ Ethernet technologies. Enterprise’s innovative products can deliver data in addition to power over Ethernet, which meets the higher performance requirements driven by the increasing number of connections in smart buildings. Enterprise products also include intelligent power, cooling, and airflow management for mission-critical data center operations.
Our innovative products can deliver data in addition to power over Ethernet, which meets the higher performance requirements driven by the increasing number of connections in smart buildings. Smart Infrastructure Solutions products also include intelligent power, cooling, and airflow management for mission-critical data center operations.
Since 2022, Belden became signatories of the United Nations and Caring for Climate Pledge and also recommitted to the UN Global Compact (UNGC). The UNGC is the world’s largest corporate sustainability initiative, comprised of over 20,000 companies across 160 countries.
Since 2022, Belden has been a participant of the UN Global Compact (UNGC) and committed to the United Nation’s Caring for Climate Pledge. The UNGC is the world’s largest corporate sustainability initiative, comprised of over 20,000 companies across 160 countries.
We have supply agreements with distributors and OEM customers. In general, our customers are not contractually obligated to buy our products exclusively, in minimum amounts, or for a significant period of time.
In general, our customers are not contractually obligated to buy our products exclusively, in minimum amounts, or for a significant period of time.
Within Industrial Automation Solutions, we are uniquely positioned to support digital transformation by providing end-to-end digitization infrastructure focused on robust network infrastructure, secure remote access, accelerated convergence of information technology systems with operational technology (IT/OT), and edge and data analytics. Our customers are building the future, and we build the network that makes it possible.
Within Automation Solutions, we are uniquely positioned to support digital transformation by providing end-to-end digitization infrastructure focused on robust network infrastructure, secure remote access, accelerated convergence of information technology systems with operational technology (IT/OT), and edge and data analytics. Segments We operate our business under two segments – Smart Infrastructure Solutions and Automation Solutions.
Name Age Position Ashish Chand 49 President and Chief Executive Officer Brian Anderson 49 Senior Vice President, Legal, General Counsel and Corporate Secretary Brian Lieser 58 Executive Vice President, Industrial Automation Solutions Jeremy Parks 48 Senior Vice President, Finance, and Chief Financial Officer Leah Tate 47 Senior Vice President, Human Resources Jay Wirts 53 Executive Vice President, Enterprise Solutions Doug Zink 48 Vice President and Chief Accounting Officer Ashish Chand was appointed President and Chief Executive Officer on February 22, 2023.
Name Age Position Ashish Chand 50 President and Chief Executive Officer Brian Anderson 50 Senior Vice President, Legal, General Counsel and Corporate Secretary Brian Lieser 59 Executive Vice President, Automation Solutions Hiran Bhadra 51 Senior Vice President, Strategy and Technology Jeremy Parks 49 Senior Vice President, Finance, and Chief Financial Officer Leah Tate 48 Senior Vice President, Human Resources Jay Wirts 54 Executive Vice President, Smart Infrastructure Solutions Doug Zink 49 Vice President and Chief Accounting Officer Ashish Chand was appointed President and Chief Executive Officer in February 2023.
Our priority vertical markets for our Smart Buildings Solutions include data centers, government, healthcare, and hospitality. We also serve customers in markets such as commercial real estate, education, financial, stadiums and venues, and military installations. Our Broadband Solutions primarily serve broadband and wireless service providers.
We also serve customers in markets such as commercial real estate, education, financial institutions, stadiums and venues, and military installations. Our Broadband Solutions primarily serve broadband and wireless service providers.
Parks worked for the Company in various financial roles, most recently as Vice President of Finance of the Company’s Industrial Solutions segment. Mr. Parks has a B.A. and M.A. in economics from State University of New York – Buffalo, and an M.B.A from Xavier University. Leah Tate was appointed Senior Vice President, Human Resources in March 2022.
Parks has a B.A. and M.A. in economics from State University of New York – Buffalo, and an M.B.A from Xavier University. Leah Tate was appointed Senior Vice President, Human Resources in March 2022.
Our backlog consists of product orders for which we have received a customer purchase order or purchase commitment and which have not yet been shipped. As of December 31, 2023 and 2022, our backlog wa s $539.6 million and $800.4 million, respectively. Almost all of the backlog at December 31, 2023 is scheduled to ship in 2024.
Our backlog consists of product orders for which we have received a customer purchase order or purchase commitment and which have not yet been shipped. As of December 31, 2024 and 20 23, our backlog was $509.7 million and $539.6 million, respectively.
At Belden, we are also increasing our use of reusable materials to include a focus on expanding the use of biodegradable materials by launching a global reusable cardboard packaging program to reduce plastic use from drop cable. This improvement will directly eliminate the use of 21 tons of plastic waste per year per 500 foot cables.
At Belden, we have increased our use of reusable materials to include a focus on expanding the use of biodegradable materials by launching a global reusable cardboard packaging program to reduce plastic use from drop cable.
Segments We operate our business under two segments – Enterprise Solutions and Industrial Automation Solutions. A synopsis of the segments is included below: Enterprise Solutions The Enterprise Solutions (Enterprise) segment is a leading provider in network infrastructure and broadband solutions, as well as cabling and connectivity solutions for commercial audio/video and security applications.
A synopsis of the segments is included below: Smart Infrastructure Solutions The Smart Infrastructure Solutions segment is a leading provider in network infrastructure and broadband solutions, as well as cabling and connectivity solutions for commercial audio/video and security applications. Our priority vertical markets for our Smart Buildings Solutions include data centers, government, healthcare, and hospitality.
Louis School of Law. 8 Brian Lieser was appointed Executive Vice President, Industrial Automation Solutions on February 22, 2023. Prior to that, he served as Vice President of Global Products of Industrial Automation Solutions where he was responsible for product strategy, roadmap, and development as well as domestic and international growth, particularly within Asia and Europe. Mr.
Prior to that, he served as Vice President of Global Products of Automation Solutions where he was responsible for product strategy, roadmap, and development as well as domestic and international growth, particularly within Asia and Europe. Mr. Lieser joined the Company in 2009 and has assumed positions of increasing responsibility primarily within the Automation Solutions segment. Previously, Mr.
With a legacy of quality and reliability spanning 120-plus years, we have a strong foundation to continue building the future. Our business is organized around two global businesses, Enterprise Solutions and Industrial Automation Solutions, both of which benefit from favorable secular trends which we expect to drive future growth. Each business represents a reportable segment.
Throughout our 120-plus year history we have evolved as a company, but making connections remains our purpose. Our business is organized around two global businesses, Smart Infrastructure Solutions and Automation Solutions, both of which benefit from favorable secular trends which we expect to drive future growth. Each business represents a reportable segment.
For more information regarding our most recent transactions, see Note 4 to the Consolidated Financial Statements. Customers We sell to distributors, OEMs, installers, and end-users. For the year ended December 31, 2023 , sales to our largest distributor represented approximately 15% of our consolidated revenues. No other customer accounted for more than 10% of our revenues in 2023.
For the year ended December 31, 2024 , sales to our largest distributor represented approximately 14% of our consolidated revenues. No other customer accounted for more than 10% of our revenues in 2024. We have supply agreements with distributors and OEM customers.
Enterprise product lines include copper cable and connectivity solutions, fiber cable and connectivity solutions, interconnect panels, racks and enclosures, and secure, high performance signal extension and matrix switching systems. Enterprise provides true end-to-end fiber and copper network systems, which are used in applications such as local area networks, data centers, access control, 5G, Fiber to the Home and building automation.
Smart Infrastructure Solutions provides true end-to-end fiber and copper network systems, which are used in applications such as local area networks, data centers, access control, 5G, Fiber to the Home and building automation. Our high-performance solutions support all networking protocols up to and including 100G+ Ethernet technologies.
We accelerate digital transformation by providing reliable and secure networks designed for the digitization and automation of industries and infrastructure. Our products and solutions encompass the four aspects of data handling including acquisition, transmission, orchestration and management. Our primary markets include discrete automation, process automation, energy, and mass transit.
We accelerate digital transformation by providing complete connection solutions that encompass the four aspects of data handling including acquisition, transmission, orchestration and management. Our primary markets include discrete automation, process automation, energy, and mass transit. Our automation products are sold directly to industrial equipment OEMs and through a network of distributors, value-added resellers and system integrators for broader reach.
As of December 31, 2023, our global team members totaled approximately 8,000 employees of which 25% are in the United States, 4% in Canada, 11% in China, 3% in India, 23% in Mexico, and 33% in the EMEA region.
As of December 31, 2024, our global team members totaled approximately 7,500 employees of which 26% are in the United States, 4% in Canada, 12% in China, 7% in India, 22% in Mexico, and 29% in the EMEA region. Women represent 37% of our workforce, 25% of the senior management, and 44% of our Board of Directors.
We also extend offers to high performing interns from our internship program to participate in our ECLP. 7 Employee Well-Being & Engagement To ensure we are working towards the betterment of our employees’ well-being, we conduct a bi-annual employee engagement survey, for which we saw an 80% participation rate in 2023 with an overall sustainable engagement score of 86%.
Employee Well-Being and Engagement To ensure we are working towards the betterment of our employees’ well-being, we conduct an annual employee engagement survey via Great Place to Work, for which we saw a 78% participation rate in 2024.
Jeremy Parks was appointed Senior Vice President, Finance, and Chief Financial Officer in February 2021. Prior to re-joining Belden in 2021, Mr. Parks worked as the Chief Financial Officer of International Wire Corp. From 2008 through August of 2020, Mr.
Parks worked as the Chief Financial Officer of International Wire Corp. From 2008 through August of 2020, Mr. Parks worked for the Company in various financial roles, most recently as Vice President of Finance of the Company’s Automation Solutions segment. Mr.
Priority areas for our Human Capital Management strategy are Diversity, Equity, and Inclusion (DEI), Employee Growth and Development, and Employee Well-Being and Engagement.
We are striving to make Belden a great place to work for all associates. Priority areas for our Human Capital Management strategy are our workplace culture, Employee Growth and Development, and Employee Well-Being and Engagement.
We are also a proud signatory of the CEO Action for Diversity and Inclusion pledge. Employee Growth and Development We believe in the potential of our employees and the importance of providing career development opportunities within our Company for those who wish to learn and grow with us.
Employee Growth and Development We believe in the potential of our employees and the importance of providing career development opportunities within our Company for those who wish to learn and grow with us. We invest in talent by promoting based on merit, with 86% of our top 170 positions being filled with people that have been promoted from within.
The results of Sichert and CAI have been included in our Consolidated Financial Statements as of the acquisition date and are reported within the Enterprise Solutions segment. The results of CloudRail, NetModule, Macmon and OTN Systems have been included in our Consolidated Financial Statements from their respective acquisition dates and are reported within the Industrial Automation Solutions segment.
The results of Voleatech, CloudRail, NetModule, and Macmon have been included in our Consolidated Financial Statements from their respective acquisition dates and are reported within the Automation Solutions segment. For more information regarding our most recent transactions, see Note 4 to the Consolidated Financial Statements. Customers We sell to distributors, OEMs, installers, and end-users.
Lieser joined the Company in 2009 and has assumed positions of increasing responsibility primarily within the Industrial Automation Solutions segment. Previously, Mr. Lieser held positions at Rockwell Automation, Rosemount, and MTS Systems. Mr. Lieser holds a Bachelor of Science in Aerospace Engineering from the University of Minnesota and an MBA in Marketing from the University of St. Thomas.
Lieser held positions at Rockwell Automation, Rosemount, and MTS Systems. Mr. Lieser holds a Bachelor of Science in Aerospace Engineering from the University of Minnesota and an MBA in Marketing from the University of St. Thomas. Jeremy Parks was appointed Senior Vice President, Finance, and Chief Financial Officer in February 2021. Prior to re-joining Belden in 2021, Mr.
In January 2022, we acquired macmon secure GmbH (Macmon), a leading provider of products and services that secure network infrastructures in a variety of mission critical industries . I n January 2021, we acquired OTN Systems N.V. (OTN Systems), a leading provider of automation networking infrastructure solutions.
In January 2022, we acquired macmon secure GmbH (Macmon), a leading provider of products and services that secure network infrastructures in a variety of mission critical industries . The results of Precision, Sichert, and CAI have been included in our Consolidated Financial Statements from their respective acquisition dates and are reported within the Smart Infrastructure Solutions segment.
For more information on our approach to ESG, visit https://www.belden.com/resources/sustainability. Human Capital Resources Our employees’ well-being is directly associated with our success. We prioritize fostering an equitable and supportive culture that incorporates diversity and inclusion across our entire value chain.
We are evaluating our product carbon footprints as part of our Scope 3 analysis and are determining how our products and solutions can help our customers solve their climate related challenges. For more information on our approach to ESG, visit https://www.belden.com/resources/sustainability. Human Capital Resources Our employees’ well-being is directly associated with our success.
Our onsite green energy initiative has allowed us to reduce the consumption of energy from the local GHG emission-producing grid, and instead utilize green energy solar panels at our manufacturing facilities in China and India and soon in Germany and Hungary as well.
Our onsite green energy initiative has allowed us to reduce the consumption of GHG intensive grid-supplied electricity through on-site solar installation and procurement of verified off-site green electricity.
We continue to live our value of “We Invest in Talent” with 85% of our top 156 positions being filled with people that have been promoted from within. Moreover, our Early Career Leadership Program (ECLP) gives us the ability to recruit and retain high caliber candidates at an early stage with 13 graduates in 2023.
Moreover, our Early Career Leadership Program, allows for us to recruit and retain high-caliber candidates at an early stage. In 2024, we had 25 graduates of Launch globally. Additionally, we extend offers to high performing interns from our formal internship program to join Launch.
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Item 1. Business General Belden Inc. (the Company, us, we, or our) is a leading global supplier of network infrastructure and digitization solutions that makes the digital journey simpler, smarter and secure. We’re moving beyond connectivity, from what we make to what we make possible through a performance-driven portfolio, forward-thinking expertise and purpose-built solutions.
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Item 1. Business General Belden Inc. (the Company, us, we, or our) is a leading global supplier of complete connection solutions that unlock untold possibilities for our customers, their customers and the world. We advance ideas and technologies that enable a safer, smarter and more prosperous future.
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Industrial Automation products are sold directly to industrial equipment OEMs and through a network of industrial distributors, value-added resellers and system integrators for broader reach. We help customers increase uptime and ensure network data availability, integrity and confidentiality.
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As Belden continues to advance forward with solutions focused on data infrastructure, we renamed our two reportable segments during 2024 from Enterprise Solutions and Industrial Automation Solutions to Smart Infrastructure Solutions and Automation Solutions, respectively. The composition of the segments did not change as a result of these name changes.
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Of our workforce, 39% identify as women and they represent 23% of the senior management and 40% of our Board of Directors. Individuals of ethnically diverse backgrounds make up 25% of our U.S. workforce and 30% of our Board of Directors.
Added
Smart Infrastructure Solutions product lines include copper cable and connectivity solutions, fiber cable and connectivity solutions, interconnect panels, racks and enclosures, and secure, high performance signal extension and matrix switching systems.
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Diversity, Equity, and Inclusion (DEI) At Belden, we are dedicated to creating a culture of equity, inclusivity and diversity for the people that we employ. Under the guidance of our Vice President of DEI and the Global DEI Council, they support our workplace culture and diversity initiatives across the company.
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Most recently, i n September 2024, we acquired Voleatech GmbH (Voleatech) which is known for its VT AIR Next Gen Firewall and will expand Belden's Firewall product portfolio and overall planning of security in OT networking.
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These efforts include providing education in 12 languages to employees, such as unconscious biases training for all employees and inclusive leadership training for all people leaders. Our Human Resources, Talent Acquisition teams, and Business Units also hold meetings throughout the year to ensure alignment with our DEI strategy to practice and uphold our commitment to diversity throughout the Company.
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I n June 2024, we acquired Precision Optical Technologies (Precision), a leading supplier of value-added optical transceivers with proprietary software, firmware configurations, and related components.
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Our sustainability goals span each pillar of our framework with a target completion date of 2025 are as follows: Environmental • Reduce Scope 1 and Scope 2 total combined emissions by 25% (FY19 baseline) for all global locations greater than 15,000 square feet. • Increase the use of electricity generated from site specific renewable sources from 2019 levels at our manufacturing and distribution locations. • Increase total global electricity use efficiency from 2019 levels at manufacturing and distribution locations. • Achieve at least 90% of waste diverted from landfill for manufacturing and distribution locations.
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Individuals of ethnically diverse backgrounds make up 27% of our U.S. workforce and 30% of our Board of Directors. Workplace Culture At Belden, we are dedicated to creating a workplace culture for our employees that allows them to thrive. This includes providing a work environment where all employees can Belong. Believe. Be You.
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We do this through our Belden Values, which guide how we operate each and every day. Additionally, we support our Employee Resource Groups (ERGs) focused on women, young professionals, and diverse abilities. Our ERGs provide support for our employees around 4 pillars: Learning and Development, Professional Networking, Community Engagement, and Business Solutions.
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Louis School of Law. Hiran Bhadra was appointed Senior Vice President, Strategy and Technology in May 2024. Prior to that, he served as Senior Vice President, Strategy from the time he joined Belden in 2022. Prior to joining Belden, Mr. Bhadra worked as a management consultant in leadership positions at Accenture and KPMG. Mr.
Added
Bhadra holds a B.Tech. in Electrical & Electronics Engineering from Indian Institute of Technology, Madras, India, and an MBA from XLRI Jamshedpur, India. Brian Lieser was appointed Executive Vice President, Automation Solutions in February 2023.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur success depends in part on our ability to anticipate and offer products that appeal to the changing needs and preferences of our customers in the various markets we serve. Developing new products and adapting existing products to meet evolving customer expectations requires high levels of innovation, and the development process may be lengthy and costly.
Biggest changeDeveloping new products and adapting existing products to meet evolving customer expectations requires high levels of innovation, and the development process may be lengthy and costly. If we are not able to timely anticipate, identify, develop and market products that respond to rapidly changing customer preferences, demand for our products could decline.
A global economic downturn could cause financial difficulties (including bankruptcy) for our distributors and other customers, which could adversely affect our results of operations. Actions of activists could cause us to incur substantial costs, divert management’s attention and resources, and have an adverse effect on our business.
A global economic downturn could cause financial difficulties (including bankruptcy) for our distributors and other customers, which could adversely affect our results of operations. 13 Actions of activists could cause us to incur substantial costs, divert management’s attention and resources, and have an adverse effect on our business.
The U.S. federal and state governments, countries in the European Union, as well as a number of other countries and organizations such as the Organization for Economic Cooperation and Development (OECD), are actively implementing changes to existing tax laws, including a global minimum tax.
The U.S. federal and state governments, countries in the European Union, as well as a number of other countries and organizations such as the Organization for Economic Cooperation and Development, are actively implementing changes to existing tax laws, including a global minimum tax.
A significant increase in our effective income tax rate could have a material adverse impact on our earnings. The increased prevalence of cloud computing and other disruptive business models may negatively impact certain aspects of our business.
A significant increase in our effective income tax rate could have a material adverse impact on our earnings. 12 The increased prevalence of cloud computing and other disruptive business models may negatively impact certain aspects of our business.
We also face political risks in the U.S., including tax or regulatory risks or potential adverse impacts from legislative impasses over, or significant legislative, regulatory or executive changes in fiscal or monetary policy and other foreign and domestic government policies, including, but not limited to, trade policies and import/export policies. Approximately 45% of our sales are outside the U.S.
We also face political risks in the U.S., including tax or regulatory risks or potential adverse impacts from legislative impasses over, or significant legislative, regulatory or executive changes in fiscal or monetary policy and other foreign and domestic government policies, including, but not limited to, trade policies and import/export policies. Approximately 43% of our sales are outside the U.S.
Such risks include, among others, the availability and adoption of new or additional technologies that reduce carbon or eliminate energy sources on a commercially reasonable basis, competing and evolving economic, policy and regulatory factors, the availability of qualified candidates in our labor markets and our ability to recruit and retain diverse talent, and customer engagement in our goals.
Such risks include, among others, the availability and adoption of new or additional technologies that reduce carbon or eliminate energy sources on a commercially reasonable basis, competing and evolving economic, policy and regulatory factors, the availability of qualified candidates in our labor markets and our ability to recruit and retain key talent, and customer engagement in our goals.
Consolidation of our distributors could adversely impact our revenues and earnings. It could also result in consolidation of distributor inventory, which would temporarily depress our revenues. We have also experienced financial failure of distributors from time to time, resulting in our inability to collect accounts receivable in full.
Consolidation of our distributors could adversely impact our revenues and earnings. It could also result in consolidation of distributor inventory, which would temporarily decrease our revenues. We have also experienced financial failure of distributors from time to time, resulting in our inability to collect accounts receivable in full.
Nevertheless, we may be subject to unanticipated obligations regarding our products which incorporate or use open source software. 17 If our goodwill or other intangible assets become impaired, we would be required to recognize charges that would reduce our income.
Nevertheless, we may be subject to unanticipated obligations regarding our products which incorporate or use open source software. 16 If our goodwill or other intangible assets become impaired, we would be required to recognize charges that would reduce our income.
In addition to the potential direct impacts of free trade restrictions, longer term macroeconomic consequences could result, including slower growth, inflation, higher interest rates and unfavorable impacts to currency exchange rates. Any of these factors could have a material adverse effect on our business, financial condition and results of operations.
In addition to the potential direct impacts of free trade restrictions, longer term macroeconomic consequences could result, including slower growth, inflation, higher interest rates and unfavorable impacts to currency exchange rates. Any of these factors could have a material adverse effect on our business, financial condition and results of operations. Changes in tax laws may adversely affect our financial position.
As a response to growing customer, investor, employee, governmental, and other stakeholder interest in our ESG practices, we have increased reporting of our ESG programs and performance and have established and announced our aspirational goals or targets, including those regarding greenhouse gas emissions and diversity, equity and inclusion.
As a response to growing customer, investor, employee, governmental, and other stakeholder interest in our sustainability practices, we have increased reporting of our sustainability programs and performance and have established and announced our aspirational goals or targets, including those regarding greenhouse gas emissions and other factors.
As a result, it is difficult to precisely forecast revenue and operating results for future quarters. 11 In addition, our revenue can be difficult to forecast due to unexpected changes in the level of our products held as inventory by our channel partners and customers.
The frequency and length of such delays can be difficult to predict. As a result, it is difficult to precisely forecast revenue and operating results for future quarters. In addition, our revenue can be difficult to forecast due to unexpected changes in the level of our products held as inventory by our channel partners and customers.
Our revenue for any particular period can be difficult to forecast, especially in light of the challenging and inconsistent global macroeconomic environment and related market uncertainty. Our revenue may grow at a slower rate than in past periods or even decline on a year-over-year basis. Changes in market growth rates can have a significant effect on our operating results.
Our revenue for any particular period can be difficult to forecast, especially in light of the challenging and inconsistent global macroeconomic environment and related market uncertainty. Our revenue may grow at a slower rate than in past periods or even decline on a year-over-year basis.
Similarly, in our non-cable businesses, customers could rapidly shift the methods by which they capture and transmit signals in ways that could lead to decreased demand for our current or future products. These factors, either together or in isolation, may negatively impact revenue and profitability. Cyber security incidents have and could in the future interfere with our business and operations.
Similarly, in our non-cable businesses, customers could rapidly shift the methods by which they capture and transmit signals in ways that could lead to decreased demand for our current or future products. These factors, either together or in isolation, may negatively impact revenue and profitability.
In addition, perceived uncertainties as to our future direction, strategy or leadership created as a consequence of activist initiatives may result in the loss of potential business opportunities, harm our ability to attract new investors, customers, employees, and joint venture partners, and cause our stock price to experience periods of volatility. 14 Perceived failure of our signal transmission solutions to provide expected results may result in negative publicity and harm our business and operating results.
In addition, perceived uncertainties as to our future direction, strategy or leadership created as a consequence of activist initiatives may result in the loss of potential business opportunities, harm our ability to attract new investors, customers, employees, and joint venture partners, and cause our stock price to experience periods of volatility.
This may negatively impact one or more of our businesses in a number of ways, including: • Consolidation of procurement power leading to the commoditization of IT products; • Reduction in the demand for infrastructure products previously used to support on-site data centers; • Lowering barriers to entry for certain markets, leading to new market entrants and enhanced competition; and • Preferences for software as a service billing and pricing models may reduce demand for non-cloud “packaged” software. 13 We may have difficulty integrating the operations of acquired businesses, which could negatively affect our results of operations, profitability, and achievement of our strategic plan.
This may negatively impact one or more of our businesses in a number of ways, including: • Consolidation of procurement power leading to the commoditization of IT products; • Reduction in the demand for infrastructure products previously used to support on-site data centers; • Lowering barriers to entry for certain markets, leading to new market entrants and enhanced competition; and • Preferences for software as a service billing and pricing models may reduce demand for non-cloud “packaged” software.
Our largest distributor, WESCO, accounted for app roximately 15% of our revenue in 2023 and our top seven distributors, including WESCO, accounted for a total of 31% of o ur reven ue in 2023. If we were to lose one of these key distributors, our revenue and profits would likely decline, at least temporarily.
Our largest distributor accounted for app roximately 14% of our revenue in 2024 and our top eight distributors accounted for a total of 33% of o ur reven ue in 2024. If we were to lose one of these key distributors, our revenue and profits would likely decline, at least temporarily.
We, and others on our behalf, also have possession of “personally identifiable information” (“PII”) with respect to employees, vendors, customers, and others. While we have implemented safeguards to protect the privacy of this information, it is possible that hackers or others might obtain this information in the future, as occurred in 2020.
We, and others on our behalf, also have possession of “personally identifiable information” (“PII”) with respect to employees, vendors, customers, and others. Based upon a past incident, we have implemented safeguards to protect the privacy of PII as it is possible that hackers or others might obtain this information.
While the impact of Brexit and the U.S. and Chinese tariff actions have not been material to us, unanticipated complications in the free movement of goods in Europe, an escalation of tariff activity anywhere in the world or changes to existing free trade agreements could materially impact our financial results.
While the impact of the U.S. and Chinese tariff actions prior to 2025 have not been material to us, unanticipated complications in the free movement of goods in North America or Europe, an escalation of tariff activity anywhere in the world, or changes to existing free trade agreements, especially the United States-Mexico-Canada Agreement (USMCA), could materially impact our financial results.
General Industry and Economic Risks Future epidemics, pandemics or other major disasters could impact our future results of operations and overall financial performance. In the past, our operations and the operations of our suppliers, channel partners and customers have been disrupted to varying degrees by a pandemic.
These negative consequences could have a negative impact on our employee safety and our financial performance. 14 Future epidemics, pandemics or other major disasters could impact our future results of operations and overall financial performance. In the past, our operations and the operations of our suppliers, channel partners and customers have been disrupted to varying degrees by a pandemic.
These U.S. and foreign laws and regulations affect our activities including, but not limited to, in areas of labor, advertising, real estate, billing, e-commerce, promotions, quality of services, property ownership and infringement, tax, import and export requirements, anti-corruption, foreign exchange controls and cash repatriation restrictions, machine learning and artificial intelligence, data privacy requirements, anti-competition, environmental, health and safety. 16 Compliance with these laws, regulations and similar requirements may be onerous and expensive, and they may be inconsistent from jurisdiction to jurisdiction, further increasing the cost of compliance and doing business.
These U.S. and foreign laws and regulations affect our activities including, but not limited to, in areas of labor, advertising, real estate, billing, e-commerce, promotions, quality of services, property ownership and infringement, tax, import and export requirements, anti-corruption, foreign exchange controls and cash repatriation restrictions, machine learning and artificial intelligence, data privacy requirements, anti-competition, environmental, health and safety.
Component suppliers may suffer from poor financial conditions, which can lead to business failure for the supplier or consolidation within a particular industry, further limiting the Company’s ability to obtain sufficient quantities of components on commercially reasonable terms. Health crises, such as a pandemic, could lead to quarantines or labor shortages, thus impacting the output of key suppliers.
Component suppliers may suffer from poor financial conditions, which can lead to business failure for the supplier or consolidation within a particular industry, further limiting the Company’s ability to obtain sufficient quantities of components on commercially reasonable terms.
As part of our strategic plan initiatives, we periodically execute acquisitions and divestitures. The extent to which appropriate acquisitions are made will affect our overall growth, operating results, financial condition, and cash flows.
We may have difficulty integrating the operations of acquired businesses, which could negatively affect our results of operations, profitability, and achievement of our strategic plan. As part of our strategic plan initiatives, we periodically execute acquisitions and divestitures. The extent to which appropriate acquisitions are made will affect our overall growth, operating results, financial condition, and cash flows.
Supply chain issues, including scarcity of raw materials or other components necessary to produce the products we manufacture, could increase costs or cause a delay in our ability to fulfill orders, and could adversely affect our future results of operations and our overall financial performance.
Moreover, some competitors that are highly leveraged both financially and operationally could become more aggressive in their pricing of products. 10 Supply chain issues, including scarcity of raw materials or other components necessary to produce the products we manufacture, could increase costs or cause a delay in our ability to fulfill orders, and could adversely affect our future results of operations and our overall financial performance.
The timing of orders for customer projects can also have a significant effect on our operating results in the period in which the products are shipped and recognized as revenue. The timing of such projects is difficult to predict, and the timing of revenue recognition from such projects may affect period to period changes in revenue.
Changes in market growth rates can have a significant effect on our operating results. 11 The timing of orders for customer projects can also have a significant effect on our operating results in the period in which the products are shipped and recognized as revenue.
Our customers use our signal transmission solutions in a wide variety of IT systems and application environments in order to help reduce security vulnerabilities and demonstrate compliance.
Perceived failure of our signal transmission solutions to provide expected results may result in negative publicity and harm our business and operating results. Our customers use our signal transmission solutions in a wide variety of IT systems and application environments in order to help reduce security vulnerabilities and demonstrate compliance.
Significant judgment is required in determining our global provision for income taxes, deferred tax assets or liabilities and in evaluating our tax positions on a worldwide basis.
We are a U.S.-based multinational company subject to tax in multiple U.S. and foreign tax jurisdictions. Significant judgment is required in determining our global provision for income taxes, deferred tax assets or liabilities and in evaluating our tax positions on a worldwide basis.
A challenging global economy could also make it difficult for our customers, our vendors, and us to accurately forecast and plan future business activities. Our customers could also face issues gaining timely access to sufficient credit, which could have an adverse effect on our results if such events cause reductions in revenues, delays in collection, or write-offs of receivables.
Our customers could also face issues gaining timely access to sufficient credit, which could have an adverse effect on our results if such events cause reductions in revenues, delays in collection, or write-offs of receivables.
In addition, we may need to enhance our information systems to provide additional capabilities and functionality. The implementation of new information systems and enhancements is frequently disruptive to the underlying business of an enterprise. Any disruptions affecting our ability to accurately report our financial performance on a timely basis could adversely affect our business in a number of respects.
In addition, we may need to enhance our information systems to provide additional capabilities and functionality. The implementation of new information systems and enhancements is frequently disruptive to the underlying business of an enterprise.
Our ability to implement our business strategy and grow our business, particularly through acquisitions, may depend on our ability to raise capital by selling equity or debt securities or obtaining additional debt financing.
Our ability to implement our business strategy and grow our business, particularly through acquisitions, may depend on our ability to raise capital by selling equity or debt securities or obtaining additional debt financing. Market conditions including changes in interest rates may prevent us from obtaining financing when we need it or on terms acceptable to us.
We may be unable to attract, develop, and retain appropriate talent to manage our businesses in emerging markets. Deterioration of social, political, labor, or economic conditions in a specific country or region may adversely affect our operations or financial results.
Deterioration of social, political, labor, or economic conditions in a specific country or region may adversely affect our operations or financial results. Emerging markets may not meet our growth expectations, and we may be unable to maintain such growth or to balance such growth with financial goals and compliance requirements.
Conversely, if we fail to raise employee wages in a manner sufficient to offset inflation, associates could leave the Company resulting in capacity constraints which could have a negative effect on revenues and earnings. Volatility of credit markets and rising interest rates could adversely affect our business.
Conversely, if we fail to raise employee wages in a manner sufficient to offset inflation, associates could leave the Company resulting in capacity constraints which could have a negative effect on revenues and earnings. Extreme weather events and other climate-related catastrophes could impact our locations, our people and our performance.
If we are not able to respond to and manage the impact of such events effectively, our business may be affected. Inflation and changes in the price and availability of raw materials may lead to higher input and labor costs in a way that could be detrimental to our profitability.
General Industry and Economic Risks Inflation and changes in the price and availability of raw materials may lead to higher input and labor costs in a way that could be detrimental to our profitability.
A challenging global economic environment could cause substantial reductions in our revenue and results of operations as a result of weaker demand by the end users of our products and price erosion. Price erosion may occur through competitors becoming more aggressive in pricing practices.
A challenging global economic environment or a downturn in the markets we serve could adversely affect our operating results and stock price in a material manner. A challenging global economic environment could cause substantial reductions in our revenue and results of operations as a result of weaker demand by the end users of our products and price erosion.
Generally, we have revenues and costs in the same currency, thereby reducing our overall currency risk, although any realignment of our manufacturing capacity among our global facilities could alter this balance.
Generally, we have revenues and costs in the same currency, thereby reducing our overall currency risk, although any realignment of our manufacturing capacity among our global facilities could alter this balance. When the U.S. dollar strengthens against other currencies, the results of our non-U.S. operations are translated at a lower exchange rate and thus into lower reported revenues and earnings.
We are subject to laws and regulations worldwide, changes to which could increase our costs and individually or in the aggregate adversely affect our business. We are subject to laws and regulations affecting our global operations in a number of areas.
We are subject to laws and regulations affecting our global operations in a number of areas.
In addition, the costs of compliance with local laws and regulations in emerging markets may negatively impact our competitive position as compared to locally owned manufacturers. Legal and Regulatory Risks Changes in tax laws may adversely affect our financial position. We are a U.S.-based multinational company subject to tax in multiple U.S. and foreign tax jurisdictions.
In addition, the costs of compliance with local laws and regulations in emerging markets may negatively impact our competitive position as compared to locally owned manufacturers. Legal and Regulatory Risks Changes in global tariffs and trade agreements may have a negative impact on global economic conditions, markets and our business.
When the U.S. dollar strengthens against other currencies, the results of our non-U.S. operations are translated at a lower exchange rate and thus into lower reported revenues and earnings. 10 The global markets in which we operate are highly competitive. We face competition from other manufacturers for each of our global business platforms and in each of our geographic regions.
A decline in energy prices, therefore, can have a negative impact on our revenues and results of operations. The global markets in which we operate are highly competitive. We face competition from other manufacturers for each of our global business platforms and in each of our geographic regions.
As a result, our operating results could vary materially from quarter to quarter based on the receipt of such orders and their ultimate recognition as revenue. Similarly, we are often informed by our customers well in advance that such customer intends to place an order related to a specific project in a given quarter.
Similarly, we are often informed by our customers well in advance that such customer intends to place an order related to a specific project in a given quarter. Such a customer’s timeline for execution of the project, and the resulting purchase order, may be unexpectedly delayed to a future quarter, or cancelled.
We may not be able to acquire businesses that fit our strategic plan on acceptable business terms, and we may not achieve our other strategic priorities.
We may not be able to acquire businesses that fit our strategic plan on acceptable business terms, and we may not achieve our other strategic priorities. The presence of substitute products in the marketplace may reduce demand for our products and negatively impact our business. Fiber optic and wireless systems are increasingly substitutable for copper-based cable systems.
If we are not able to timely anticipate, identify, develop and market products that respond to rapidly changing customer preferences, demand for our products could decline. The relative costs and merits of our solutions could change in the future as various competing technologies address the market opportunities.
The relative costs and merits of our solutions could change in the future as various competing technologies address the market opportunities.
Based on this occurrence or any future occurrence, in addition to having to take potentially costly remedial action, we may also be subject to fines, penalties, lawsuits, and reputational damage.
We may be subject to potentially costly remedial actions, fines, penalties, lawsuits, and reputational damage in the event of a future incident.
Market conditions including changes in interest rates may prevent us from obtaining financing when we need it or on terms acceptable to us. 15 We may be unable to achieve our strategic priorities in emerging markets. Emerging markets are a significant focus of our strategic plan. The developing nature of these markets presents a number of risks.
We may be unable to achieve our strategic priorities in emerging markets. Emerging markets are a significant focus of our strategic plan. The developing nature of these markets presents a number of risks. We may be unable to attract, develop, and retain appropriate talent to manage our businesses in emerging markets.
A decline in energy prices, therefore, can have a negative impact on our revenues and results of operations. Our results of operations are subject to foreign and domestic political, social, economic, and other uncertainties and are affected by changes in currency exchange rates.
Any disruptions affecting our ability to accurately report our financial performance on a timely basis could adversely affect our business in a number of respects. 9 Our results of operations are subject to foreign and domestic political, social, economic, and other uncertainties and are affected by changes in currency exchange rates.
Similarly, if the Company’s customers experience production challenges due to the inability to obtain certain components, this may negatively impact the customers’ ordering patterns from the Company. 12 The presence of substitute products in the marketplace may reduce demand for our products and negatively impact our business. Fiber optic and wireless systems are increasingly substitutable for copper-based cable systems.
Similarly, if the Company’s customers experience production challenges due to the inability to obtain certain components, this may negatively impact the customers’ ordering patterns from the Company. Our future success depends in part on our ability to develop and introduce new products and respond to changes in customer preferences.
Moreover, some competitors that are highly leveraged both financially and operationally could become more aggressive in their pricing of products. Our future success depends in part on our ability to develop and introduce new products and respond to changes in customer preferences. Our markets are characterized by the introduction of products with increasing technological capabilities.
Our markets are characterized by the introduction of products with increasing technological capabilities. Our success depends in part on our ability to anticipate and offer products that appeal to the changing needs and preferences of our customers in the various markets we serve.
Various countries have enacted or are expected to enact legislation to be effective as early as 2024, with widespread implementation of a global minimum tax expected by 2025. As the legislation becomes effective in countries in which we do business, our taxes could increase and negatively impact our provision for income taxes.
As changes to tax laws become effective in countries in which we do business, our taxes could increase and negatively impact our provision for income taxes. 15 We are subject to laws and regulations worldwide, changes to which could increase our costs and individually or in the aggregate adversely affect our business.
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Business and Operational Risks A challenging global economic environment or a downturn in the markets we serve could adversely affect our operating results and stock price in a material manner.
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Business and Operational Risks Volatility in global trade policies and practices could have direct and indirect impacts on our business.
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Such a customer’s timeline for execution of the project, and the resulting purchase order, may be unexpectedly delayed to a future quarter, or cancelled. The frequency and length of such delays can be difficult to predict.
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In February 2025, the United States government issued orders increasing tariffs on imports from certain countries, including Canada, China and Mexico on certain products, including steel and aluminum, and has discussed increasing tariffs globally, which is likely to lead to reciprocal tariffs on U.S. exports to those countries.
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Emerging markets may not meet our growth expectations, and we may be unable to maintain such growth or to balance such growth with financial goals and compliance requirements.
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Implementation of orders related to Canada and Mexico was initially deferred until March 2025. Because not all goods can be sourced in all countries, global companies like Belden will experience increased costs in their supply chains that may lead to reduced margins or increased prices.
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Numerous countries have agreed to a statement in support of the OECD model rules that propose a global minimum tax rate of 15% and European Union member states have agreed to implement the global minimum tax.
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These increased costs and the uncertainty during transition periods could lead to changes in buying behavior, such as decreased demand. These impacts could have a negative effect on our financial results, including our revenue and profitability. Cyber security incidents have and could in the future interfere with our business and operations.
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We will continue to monitor pending legislation and implementation by individual countries and are in the process of evaluating the potential impact on our business in future periods. Changes in global tariffs and trade agreements may have a negative impact on global economic conditions, markets and our business.
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Price erosion may occur through competitors becoming more aggressive in pricing practices. A challenging global economy could also make it difficult for our customers, our vendors, and us to accurately forecast and plan future business activities.
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Restrictions on the free movement of goods, like tariffs or sanctions regimes, or health crises, such as a pandemic, could impact the regular availability or cost of important components.
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The timing of such projects is difficult to predict, and the timing of revenue recognition from such projects may affect period to period changes in revenue. As a result, our operating results could vary materially from quarter to quarter based on the receipt of such orders and their ultimate recognition as revenue.
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An increased incidence in catastrophic events, including, but not limited to, hurricanes, tornadoes, flooding, drought and wildfires, increases the probability that our physical locations or communities in which we employ our people will be impacted.
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In addition to direct physical damages, such events can lead to supply chain disruptions and increased costs of doing business, including costs to retrofit existing facilities to comply with green building standards and increased property and casualty insurance premiums.
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If we are not able to respond to and manage the impact of such events effectively, our business may be affected. Volatility of credit markets and rising interest rates could adversely affect our business.
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Compliance with these laws, regulations and similar requirements may be onerous and expensive, and they may be inconsistent from jurisdiction to jurisdiction, further increasing the cost of compliance and doing business.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeImpact of Cybersecurity Risks on Strategy and Results Risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected, and the Company believes that they are not reasonably likely to materially affect, the Company, including its business strategy, results of operations or financial condition. The Company experienced a cybersecurity breach in 2020.
Biggest changeWe perform cybersecurity due diligence through this program as appropriate in connection with the on-boarding of a third-party relationship and conduct periodic reviews based on the inherent risk profile of the particular provider. 17 Impact of Cybersecurity Risks on Strategy and Results Risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected, and the Company believes that they are not reasonably likely to materially affect, the Company, including its business strategy, results of operations or financial condition.
The Subcommittee has full access to management and consultants engaged by management and receives regular reporting directly from the Company’s chief information officer, head of cybersecurity, internal audit and the legal function, as well as third-party assessments of the Company’s cybersecurity processes. In addition, the full Board of Directors receives a report on cybersecurity annually, or as necessary.
The Subcommittee has full access to management and consultants engaged by management and receives regular reporting directly from the Company’s chief information officer, head of cybersecurity, internal audit and the legal function, as well as third-party assessments of the Company’s cybersecurity processes and posture. In addition, the full Board of Directors receives a report on cybersecurity annually, or as necessary.
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy Cybersecurity risk oversight and management is a top priority for the Company and the Board of Directors. The Company offers a broad portfolio of industrial cybersecurity solutions to its customers, and an understanding of cybersecurity risks is critical to both the Company internally and to our customers and business partners.
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy Cybersecurity risk oversight and management is a top priority for the Company and the Board of Directors. The Company offers a broad portfolio of cybersecurity solutions to its customers, and an understanding of cybersecurity risks is critical to both the Company internally and to our customers and business partners.
Findings from these activities are reported to senior management and the Belden Board of Directors. 18 The Company recognizes the importance of identifying and managing material cybersecurity risks associated with our use of third-party service providers.
Findings from these activities are reported to senior management and the Belden Board of Directors. The Company recognizes the importance of identifying and managing material cybersecurity risks associated with our use of third-party service providers.
The Company has adopted processes and procedures for incident detection, containment and response, which are provided through a variety of resources, including: • 24/7 Security Operations Center, • advanced endpoint detection/response, • user behavior analytics, • vulnerability identification/patching, • email threat prevention, • data loss prevention, • privileged access management, and • ongoing/annual phishing training / testing.
The Company has adopted processes and procedures for incident detection, containment and response, which are provided through a variety of resources, including: • 24/7 Security Operations Center, • advanced endpoint detection and response, • user behavior analytics, • vulnerability identification and patching, • email threat prevention, • data loss prevention, • identity and privileged access management, and • ongoing phishing training and testing.
The Company’s program is regularly evaluated internally and externally and updates are presented to senior management and the Subcommittee. The Company also actively engages with key vendors, industry participants, and knowledge leaders as part of the Company’s continuing efforts to evaluate and enhance the effectiveness of its information security policies and procedures. 19
The Company’s program is regularly evaluated internally and externally and updates are presented to senior management and the Subcommittee. The Company also actively engages with key vendors, industry participants, and knowledge leaders as part of the Company’s continuing efforts to evaluate and enhance the effectiveness of its information security policies and procedures. 18
The Company determined the impact of this incident was not material, but enhanced its cybersecurity controls and processes in response to the incident. The Company has taken reasonable measures to protect against future compromise, and believes these measures will protect against material adverse impact, including its business strategy, results of operations or financial condition.
The Company determined the impact of a past incident was not material, but enhanced its cybersecurity controls and processes in response to the incident. The Company has taken reasonable measures to protect against future compromise, and believes these measures will protect against material adverse impact, including its business strategy, results of operations or financial condition.
Removed
We perform cybersecurity due diligence through this program as appropriate in connection with the on-boarding of a third-party relationship and conduct periodic reviews based on the inherent risk profile of the particular provider.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeEnterprise Solutions Industrial Solutions Both Segments Total Belgium — 1 — 1 Canada — 1 — 1 China 1 — 1 2 Czech Republic — 1 — 1 Denmark 2 — — 2 Germany 1 1 — 2 Hungary — — 1 1 India — — 1 1 Italy — — 1 1 Mexico — — 2 2 Netherlands — — 1 1 Poland 1 — — 1 Tunisia 1 — — 1 United Kingdom 1 — — 1 United States 5 2 2 9 Total 12 6 9 27 In addition to the manufacturing and other operating facilities summarized above, our business operations also utilize approximately 8 warehouses worldwide.
Biggest changeSmart Infrastructure Solutions Automation Solutions Both Segments Total Belgium — 1 — 1 Canada — 1 — 1 China 1 — 1 2 Czech Republic — 1 — 1 Denmark 2 — — 2 Germany 1 1 — 2 Hungary — — 1 1 India 1 — 1 2 Italy — — 1 1 Mexico — — 3 3 Netherlands — — 1 1 Poland 1 — — 1 Tunisia 1 — — 1 United Kingdom 1 — — 1 United States 6 2 2 10 Total 14 6 10 30 In addition to the manufacturing and other operating facilities summarized above, our business operations also utilize approxim ately 9 warehouses w orldwide.
Item 2. Properties Belden owns and leases manufacturing, warehousing, sales, and administrative space in locations around the world. We also have a corporate office that we lease in St. Louis, Missouri. The leases are of varying terms, expiring from 2024 through 2039.
Item 2. Properties Belden owns and leases manufacturing, warehousing, sales, and administrative space in locations around the world. We also have a corporate office that we lease in St. Louis, Missouri. The leases are of varying terms, expiring from 2025 through 2039.
The table below summarizes the geographic locations of our manufacturing and other operating facilities utilized by our segments as of December 31, 2023.
The table below summarizes the geographic locations of our manufacturing and other operating facilities utilized by our segments as of December 31, 2024.
As of December 31, 2023, we owned or leased a total of approximately 6 million square feet of facility space worldwide. We believe that our production facilities are suitable for their present and intended purposes and adequate for our current level of operations.
As of December 31, 2024, we owned or leased a total of ap proximately 6 million square feet of facility space wor ldwide. We believe that our production facilities are suitable for their present and intended purposes and adequate for our current level of operations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeHowever, 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 4. Mine Safety Disclosures Not applicable. 20 PART II
Biggest changeHowever, 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 4. Mine Safety Disclosures Not applicable. 19 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeTotal Return To Shareholders (Includes reinvestment of dividends) ANNUAL RETURN PERCENTAGE Years Ended December 31, Company Name / Index 2019 2020 2021 2022 2023 Belden Inc. 32.1 % (23.4) % 57.5 % 9.7 % 7.7 % S&P 500 Index 31.5 % 18.4 % 28.7 % (18.1) % 26.3 % S&P 1500 Industrials Index 29.8 % 11.7 % 22.2 % (6.4) % 20.4 % INDEXED RETURNS Years Ended December 31, Company Name / Index Base Period 2018 2019 2020 2021 2022 2023 Belden Inc. $ 100.00 $ 132.14 $ 101.22 $ 159.39 $ 174.92 $ 188.38 S&P 500 Index 100.00 131.49 155.68 200.37 164.08 207.21 S&P 1500 Industrials Index 100.00 129.80 144.98 177.13 165.75 199.52 Item 6.
Biggest change(23.4) % 57.5 % 9.7 % 7.7 % 46.1 % S&P 500 Index 18.4 % 28.7 % (18.1) % 26.3 % 25.0 % S&P 1500 Industrials Index 11.7 % 22.2 % (6.4) % 20.4 % 16.9 % INDEXED RETURNS Years Ended December 31, Company Name / Index Base Period 2019 2020 2021 2022 2023 2024 Belden Inc. $ 100.00 $ 76.60 $ 120.62 $ 132.37 $ 142.56 $ 208.22 S&P 500 Index 100.00 118.40 152.39 124.79 157.59 197.02 S&P 1500 Industrials Index 100.00 111.69 136.47 127.69 153.71 179.75 Item 6. [Reserved] 21
The stock performance shown on the graph below represents historical stock performance and is not necessarily indicative of future stock price performance. 21 (1) The chart above and the accompanying data are “furnished,” not “filed,” with the SEC.
The stock performance shown on the graph below represents historical stock performance and is not necessarily indicative of future stock price performance. 20 (1) The chart above and the accompanying data are “furnished,” not “filed,” with the SEC.
The comparison assumes $100 was invested on December 31, 2018, in Belden’s common stock and in each of the foregoing indices and assumes reinvestment of dividends.
The comparison assumes $100 was invested on December 31, 2019, in Belden’s common stock and in each of the foregoing indices and assumes reinvestment of dividends.
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the New York Stock Exchange under the symbol “BDC.” As of February 7, 2024, there were 203 recor d holders of common stock of Belden Inc.
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the New York Stock Exchange under the symbol “BDC.” As of February 5, 2025, there were 190 recor d holders of common stock of Belden Inc.
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of shares Repurchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs Balance at October 1, 2023 $ 215,000 October 2, 2023 through November 5, 2023 — $ — — 215,000 November 6, 2023 through December 3, 2023 — — — 215,000 December 4, 2023 through December 31, 2023 576 73.17 576 172,865 Total 576 $ 73.17 576 $ 172,865 Stock Performance Graph The following graph compares the cumulative total shareholder return on Belden’s common stock over the five-year period ended December 31, 2023, with the cumulative total return during such period of the Standard and Poor’s 500 Stock Index and the Standard and Poor’s 1500 Industrials Index.
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of shares Repurchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs Balance at September 29, 2024 $ 394,911 September 30, 2024 through November 3, 2024 356 $ 116.83 356 353,367 November 4, 2024 through December 1, 2024 94 117.12 94 342,396 December 2, 2024 through December 31, 2024 20 116.47 20 340,000 Total 470 $ 116.87 470 $ 340,000 Stock Performance Graph The following graph compares the cumulative total shareholder return on Belden’s common stock over the five-year period ended December 31, 2024, with the cumulative total return during such period of the Standard and Poor’s 500 Stock Index and the Standard and Poor’s 1500 Industrials Index.
As of December 31, 2023, we had $172.9 million of authorizations remaining under the program. Set forth below is information regarding our stock repurchases for the three months ended December 31, 2023 (in thousands, except per share amounts).
Set forth below is information regarding our stock repurchases for the three months ended December 31, 2024 (in thousands, except per share amounts).
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 security laws and other regulations. In April 2023, our Board of Directors authorized an additional $300.0 million under the share repurchase program.
We have a share repurchase program which allows us to purchase our common stock through open market repurchases, negotiated transactions, or other means, in accordance with applicable securities laws and other restrictions. This program is funded with cash on hand and cash flows from operating activities and does not have an expiration date.
From inception of our program, we have repurchased 6.7 million shares of our common stock for an aggregate cost of $427.1 million and an average price per share of $63.67. During 2023, we repurchased 2.3 million shares of our common stock for an aggregate cost of $192.1 million at an average price per share of $85.27.
During 2024, our Board of Directors increased the authorizations under this program by $300.0 million. During 2024, we repurchased 1.3 million shares of our common stock for an aggregate cost of $132.9 million at an average price per share of $100.15. As of December 31, 2024, we had $340.0 million of authorizations remaining under the program.
Removed
This program is funded with cash on hand and cash flows from operating activities. The program does not have an expiration date and may be suspended at any time at the discretion of the Company.
Added
Total Return To Shareholders (Includes reinvestment of dividends) ANNUAL RETURN PERCENTAGE Years Ended December 31, Company Name / Index 2020 2021 2022 2023 2024 Belden Inc.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeYear Ended December 31, Percentage Change 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 (In thousands, except percentages) GAAP and Adjusted Revenues $ 2,512,084 $ 2,606,485 $ 2,301,260 (3.6) % 13.3 % Adjusted EBITDA 438,100 443,559 371,549 (1.2) % 19.4 % as a percent of adjusted revenues 17.4 % 17.0 % 16.1 % 2023 Compared to 2022 Revenues decreased $94.4 million from 2022 to 2023 due to the following factors: • Lower sales volume resulted in a $108.4 million decrease in revenues. • Copper prices had a $19.9 million unfavorable impact on revenues. • Divestitures had a $1.4 million unfavorable impact on revenues. • Currency translation had a $0.4 million unfavorable impact on revenues. • Acquisitions contributed $35.7 million in revenues.
Biggest changeAdjusted results should be considered only in conjunction with results reported according to accounting principles generally accepted in the United States. 26 Year Ended December 31, Percentage Change 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 (In thousands, except percentages) Revenues $ 2,460,979 $ 2,512,084 $ 2,606,485 (2.0) % (3.6) % Adjusted EBITDA 410,772 438,100 443,559 (6.2) % (1.2) % as a percent of revenues 16.7 % 17.4 % 17.0 % 2024 Compared to 2023 Adjusted EBITDA decreased $27.3 million in 2024 from 2023 primarily due to the decline in revenues as discussed above, partially offset by favorable mix and benefits realized from our productivity improvement initiatives. 2023 Compared to 2022 Adjusted EBITDA decreased $5.5 million in 2023 from 2022 primarily due to the decrease in revenues discussed above, partially offset by favorable mix.
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; fair value adjustments and transaction costs related to acquisitions; 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.
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; fair value adjustments and transaction costs related to acquisitions; 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 gains (losses) from patent settlements; discontinued operations; and other costs.
If actual results are materially different than the assumptions we used to determine fair value of the assets and liabilities acquired through a business combination, it is possible that adjustments to the carrying values of such assets and liabilities will have an impact on our net earnings. See Note 4. 34
If actual results are materially different than the assumptions we used to determine fair value of the assets and liabilities acquired through a business combination, it is possible that adjustments to the carrying values of such assets and liabilities will have an impact on our net earnings. See Note 4.
In the future, if we prevail in matters for which accruals have been established previously or pay amounts in excess of reserves, there could be a material effect on our income tax provisions in the period in which such determination is made. 32 In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures (ASU 2023-09) enhancing the transparency and decision usefulness of income tax disclosures.
In the future, if we prevail in matters for which accruals have been established previously or pay amounts in excess of reserves, there could be a material effect on our income tax provisions in the period in which such determination is made. 30 In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures (ASU 2023-09) enhancing the transparency and decision usefulness of income tax disclosures.
We expect our operating activities to generate cash in 2024 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 were we to complete a significant acquisition.
We expect our operating activities to generate cash in 2025 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 were we to complete a significant acquisition.
A 50 basis point increase in the expected return on plan assets would have resulted in a decrease in the 2023 net periodic benefit cost of approximately $1.5 million. Acquisition Accounting We allocate the consideration of an acquired business to its identifiable assets and liabilities based on estimated fair values.
A 50 basis point increase in the expected return on plan assets would have resulted in a decrease in the 2024 net periodic benefit cost of approximately $1.5 million. Acquisition Accounting We allocate the consideration of an acquired business to its identifiable assets and liabilities based on estimated fair values.
However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material. 31 Our significant accounting policies are discussed in Note 2 of our Consolidated Financial Statements.
However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material. 29 Our significant accounting policies are discussed in Note 2 of our Consolidated Financial Statements.
As such, all references to the effect of channel inventory changes are estimates. 23 Market Growth and Market Share The markets in which we operate can generally be characterized as highly competitive and highly fragmented, with many players.
As such, all references to the effect of channel inventory changes are estimates. 22 Market Growth and Market Share The markets in which we operate can generally be characterized as highly competitive and highly fragmented, with many players.
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, Mexican peso, Australian dollar, British pound, Indian rupee, and Swiss franc.
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, Mexican peso, Australian dollar, British pound, and Indian rupee.
However, if actual results are not consistent with our estimates or assumptions, we may be exposed to losses or gains that could be material. A 10% change in our sales reserve for such Changes as of December 31, 2023 would have affected net income by approximately $2.5 million in 2023 .
However, if actual results are not consistent with our estimates or assumptions, we may be exposed to losses or gains that could be material. A 10% change in our sales reserve for such Changes as of December 31, 2024 would have affected net income by approximately $2.2 million in 2024 .
A 50 basis point decline in the expected return on plan assets would have resulted in an increase in the 2023 net periodic benefit cost of approximately $1.5 million.
A 50 basis point decline in the expected return on plan assets would have resulted in an increase in the 2024 net periodic benefit cost of approximately $1.5 million.
Significant Trends and Events in 2023 The following trends and events during 2023 had varying effects on our financial condition, results of operations, and cash flows.
Significant Trends and Events in 2024 The following trends and events during 2024 had varying effects on our financial condition, results of operations, and cash flows.
Within those operating segments, we have identified reporting units based on whether there is discrete fina ncial information prepared that is regularly reviewed by segment management. As a result of this evaluation, we have identified three reporting units within Enterprise Solutions and three reporting units within Industrial Automation Solutions for purposes of goodwill impairment testing.
Within those operating segments, we have identified reporting units based on whether there is discrete fina ncial information prepared that is regularly reviewed by segment management. As a result of this evaluation, we have identified three reporting units within Smart Infrastructure Solutions and three reporting units within Automation Solutions for purposes of goodwill impairment testing.
At December 31, 2023, the following contractual obligations and commercial commitments were outstanding: a. Principal payments on long-term debt totaled $1.2 billion, none of which is due in 2024 (see Note 16).
At December 31, 2024, the following contractual obligations and commercial commitments were outstanding: • Principal payments on long-term debt totaled $1.1 billion, none of which is due in 2025 (see Note 16).
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 Automation Solutions) represents an operating segment.
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 ( Smart Infrastructure Solutions and Automation Solutions) represents an operating segment.
If it is more likely than not that the fair value is less than the carrying value, then a quantitative assessment is required for the reporting unit, as described in the paragraph below. In 2023, we performed a qualitative assessment over three of our re porting units.
If it is more likely than not that the fair value is less than the carrying value, then a quantitative assessment is required for the reporting unit, as described in the paragraph below. In 2024, we performed a qualitative assessment over all six of our re porting units.
Our outstanding debt obligations as of December 31, 2023 consisted of $1.2 billion of senior subordinated notes. As of December 31, 2023, we had no borrowings outstanding on the Revolver, and our available borrowing capacity was $289.1 million. Additional discussion regarding our various borrowing arrangements is included in Note 16 to the Consolidated Financial Statements.
Our outstanding debt obligations as of December 31, 2024 consisted of $1.1 billion of senior subordinated notes. As of December 31, 2024, we had no borrowings outstanding on the Revolver, and our available borrowing capacity was $282.4 million. Additional discussion regarding our various borrowing arrangements is included in Note 16 to the Consolidated Financial Statements.
Depending on the conditions in the credit markets, we may refinance this debt, or we may use cash from operations, including temporarily accessing our Revolving Credit Agreement, to repay this debt. b. Interest payments on long-term debt of $216.0 million, of which $44.2 million is due in 2024. c.
Depending on the conditions in the credit markets, we may refinance this debt, or we may use cash from operations, including temporarily accessing our Revolving Credit Agreement, to repay this debt. • Interest payments on long-term debt of $171.9 million, of which $44.2 million is due in 2025.
Goodwill and Indefinite-Lived Intangible Assets We test our goodwill and other indefinite-lived intangible assets not subject to amortization for impairment on an annual basis during the fourth quarter or when indicators of impairment exist. We base our estimates on assumptions we believe to be reasonable, but which are not predictable with precision and therefore are inherently uncertain.
Goodwill and Indefinite-Lived Intangible Assets We test our goodwill for impairment on an annual basis during the fourth quarter or when indicators of impairment exist. We base our estimates on assumptions we believe to be reasonable, but which are not predictable with precision and therefore are inherently uncertain. Actual future results could differ from these estimates.
Actual future results could differ from these estimates. We test goodwill annually for impairment at the reporting unit level. 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.
We test goodwill annually for impairment at the reporting unit level. 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.
Conversely, the effect of a 50 basis point increase in the assumed discount rate would have resulted in a decrease in the 2023 net periodic benefit cost of less than $0.1 million and a decrease in the projected benefit obligation of approximately $18.3 million as of December 31, 2023.
Conversely, the effect of a 50 basis point increase in the assumed discount rate would have resulted in an increase in the 2024 net periodic benefit cost of approximately $0.3 million and a decrease in the projected benefit obligation of approximately $15.3 million as of December 31, 2024.
We monitor inflation pressures and proactively implement selling price increases and cost control measures as appropriate. Share Repurchase Program During 2023, we repurchased 2.3 million shares of our common stock for an aggregate cost of $192.1 million at an average price per share of $85.27. See Note 22.
We monitor inflation pressures and proactively implement selling price increases and cost control measures as appropriate. Share Repurchase Program During 2024, we repurchased 1.3 million shares of our common stock for an aggregate cost of $132.9 million at an average price per share of $100.15. See Note 22.
The effective tax rate was primarily impacted by the effect of our foreign operations, including statutory tax rates differences and foreign tax credits. See Note 18. 2022 We recognized income tax expense of $49.6 million in 2022, representing an effective tax rate of 15.6%.
In 2023, we recognized income tax expense of $43.2 million, representing an effective tax rate of 15.1%. The effective tax rates were primarily impacted by the effect of our foreign operations, including statutory tax rates differences and foreign tax credits. In 2022, we recognized income tax expense of $49.6 million, representing an effective tax rate of 15.6%.
These commitments are generally issued to secure obligations we have for a variety of commercial reasons such as workers compensation self-insurance programs in several states and the importation and exportation of product. We expect to replace most of these when they expire or mature. g.
These commitments are generally issued to secure obligations we have for a variety of commercial reasons such as workers compensation self-insurance programs in several states and the importation and exportation of product. We expect to replace most of these when they expire or mature. • Obligations for uncertain tax positions of $15.7 million, none of which is due in 2024.
Operating income decreased $45.8 million from 2022 to 2023 primarily due to the increase in expenses and decrease in the gain on sale of assets discussed above.
Operating income decreased $45.8 million from 2022 to 2023 primarily due to the increase in expenses and decrease in the gain on sale of assets discussed above. Net interest expense decreased $9.9 million from 2022 to 2023 primarily due to the retirement of the 2026 Notes during 2022 and an increase in interest income.
All of these obligations are due in 2024. f. Standby financial letters of credit, bank guarantees, and surety bonds totaled $19.9 million, of which $13.5 million will expire or mature in 2024.
All of these obligations are due in 2025. • Standby financial letters of credit, bank guarantees, and surety bonds totaled $22.0 million, of which $13.4 million will expire or mature in 2025.
Financing activities for 2022 included repayments of debt obligations of $230.6 million, payments under our share repurchase program of $150.0 million, cash dividend payments of $8.9 million, net payments related to share based compensation activities of $7.2 million, financing lease payments of $0.2 million, and proceeds from the issuance of common stock of $3.7 million.
Financing activities for 2024 included payments under our share repurchase program of $134.3 million, payments related to share based compensation activities of $9.7 million, cash dividend payments of $8.2 million, financing lease payments of $1.1 million, and proceeds from the issuance of common stock of $8.9 million.
Investing activities for 2023 included $116.7 million for capital expenditures and $106.7 million primarily for the acquisitions of Sichert and Cloudrail, partially offset by $13.7 million for asset sales and $9.3 million received from the disposals of businesses.
Investing activities for 2023 included $116.7 million for capital expenditures and $106.7 million primarily for the acquisitions of Sichert and Cloudrail, partially offset by $13.7 million for asset sales and $9.3 million received from the disposals of businesses. 28 Net cash flows used for financing activities totaled $143.7 million for 2024 compared to $211.9 million for 2023.
Obligations for uncertain tax positions of $7.1 million, none of which is due in 2024 (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.
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.
Significant assumptions included sales growth, profitability, and related cash flows, along with cash flows associated with taxes and capital spending. The discount rate used to estimate fair value was risk adjusted in consideration of the economic conditions in effect at the time of the impairment test. We also considered assumptions that market participants may use.
Significant assumptions included sales growth, profitability, and related cash flows, along with cash flows associated with taxes and capital spending. The discount rate used to estimate fair value was risk adjusted in consideration of the economic conditions in effect at the time of the impairment test. There is inherent risk associated with using an income approach to estimate fair values.
Our cash and cash equivalents balance was $597.0 million as of December 31, 2023. Of this amount, $303.2 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.
Our cash and cash equivalents balance was $370.3 million as of December 31, 2024. Of this amoun t, $224.1 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.
See Note 2. 24 Results of Operations Consolidated Income from Continuing Operations before Taxes Years Ended December 31, Percentage Change 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 (In thousands, except percentages) Revenues $ 2,512,084 $ 2,606,485 $ 2,301,260 (3.6) % 13.3 % Gross profit 954,966 916,289 771,843 4.2 % 18.7 % Selling, general and administrative expenses 492,702 448,636 378,027 9.8 % 18.7 % Research and development expenses 116,427 104,350 90,227 11.6 % 15.7 % Amortization of intangibles 40,375 37,860 30,630 6.6 % 23.6 % Asset impairments — — 9,283 n/a (100.0) % Gain on sale of assets 12,056 37,891 — (68.2) % n/a Operating income 317,518 363,334 263,676 (12.6) % 37.8 % Interest expense, net 33,625 43,554 62,693 (22.8) % (30.5) % Non-operating pension benefit 1,863 4,005 4,476 53.5 % (10.5) % Gain on sale of note receivable — — 27,036 n/a (100.0) % Loss on debt extinguishment — 6,392 5,715 100.0 % 11.8 % Income from continuing operations before taxes 285,756 317,393 226,780 (10.0) % 40.0 % 2023 Compared to 2022 Revenues decreased $94.4 million from 2022 to 2023 due to the following factors: • Lower sales volume resulted in a $108.4 million decrease in revenues. • Copper prices had a $19.9 million unfavorable impact on revenues. • Divestitures had a $1.4 million unfavorable impact on revenues. • Currency translation had a $0.4 million unfavorable impact on revenues. • Acquisitions contributed $35.7 million in revenues.
See Note 4. 23 Results of Operations Consolidated Income from Continuing Operations before Taxes Years Ended December 31, Percentage Change 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 (In thousands, except percentages) Revenues $ 2,460,979 $ 2,512,084 $ 2,606,485 (2.0) % (3.6) % Gross profit 922,222 954,966 916,289 (3.4) % 4.2 % Selling, general and administrative expenses 494,603 492,702 448,636 0.4 % 9.8 % Research and development expenses 112,365 116,427 104,350 (3.5) % 11.6 % Amortization of intangibles 48,794 40,375 37,860 20.9 % 6.6 % Gain on sale of assets — 12,056 37,891 (100.0) % (68.2) % Operating income 266,460 317,518 363,334 (16.1) % (12.6) % Interest expense, net 38,303 33,625 43,554 13.9 % (22.8) % Non-operating pension benefit (cost) (215) 1,863 4,005 (111.5) % (53.5) % Loss on debt extinguishment — — 6,392 n/a (100.0) % Income from continuing operations before taxes 227,942 285,756 317,393 (20.2) % (10.0) % 2024 Compared to 2023 Revenues decreased $51.1 million from 2023 to 2024 due to the following factors: • Lower sales volume resulted in a $141.3 million decrease in revenues. • Currency translation had a $10.1 million unfavorable impact on revenues. • Divestitures had a $0.4 million unfavorable impact on revenues. • Acquisitions contributed $72.9 million in revenues. • Copper pass-through pricing contributed $27.6 million in revenues.
Deferred tax assets generally represent future tax benefits to be received when these carryforwards can be applied against future taxable income or when expenses previously reported in our Consolidated Financial Statements become deductible for income tax purposes. A deferred tax asset valuation allowance is required when some portion or all of the deferred tax assets may not be realized.
Deferred tax assets generally represent future tax benefits to be received when these carryforwards can be applied against future taxable income or when expenses previously reported in our Consolidated Financial Statements become deductible for income tax purposes.
Industrial Automation Solutions Years Ended December 31, Percentage Change 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 (In thousands, except percentages) Segment Revenues $ 1,389,253 $ 1,408,007 $ 1,226,834 (1.3) % 14.8 % Segment EBITDA 287,328 277,079 222,684 3.7 % 24.4 % as a percent of segment revenues 20.7 % 19.7 % 18.2 % 29 2023 Compared to 2022 Industrial Automation revenues decreased $18.8 million in 2023 as compared to 2022 primarily due to decreases in volume and lower copper prices of $15.9 m illion and $9.7 million, respectively, partially offset by favorable currency translation and acquisitions, net of disposals of $4.2 million and $2.6 million, respectively.
Automation Solutions Years Ended December 31, Percentage Change 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 (In thousands, except percentages) Segment Revenues $ 1,317,189 $ 1,389,253 $ 1,408,007 (5.2) % (1.3) % Segment EBITDA 269,766 287,328 277,079 (6.1) % 3.7 % as a percent of segment revenues 20.5 % 20.7 % 19.7 % 27 2024 Compared to 2023 Automation Solutions revenues decreased $ 72.1 million in 2024 as compared to 2023 primarily due to decreases in volume and unfavorable currency translation of $80.4 m illion and $9.0 million, respectively, partially offset by higher copper pass-through prices and acquisitions, net of disposals of $16.9 million and $0.4 million, respectively.
The loss on debt extinguishment in 2022 represents the premium paid to the bond holders to retire the 2026 Notes and for the unamortized debt issuance costs on the 2026 Notes that we were required to write-off. See Note 16.
Loss on debt extinguishment decreased $6.4 million from 2022 to 2023 due to the debt refinancing that took place during 2022. The loss on debt extinguishment in 2022 represents the premium paid to the bond holders to retire the 2026 Notes and for the unamortized debt issuance costs on the 2026 Notes that we were required to write-off.
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.
The 2022 effective tax rate was primarily impacted by foreign tax rate differences, domestic permanent differences, and tax credits primarily associated with our foreign income inclusions. 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.
Decreases in volume, lower copper prices, and unfavorable currency translation contribu ted $92.5 m illion, $10.2 million, and $4.6 million, respectively, to the decrease in revenues, partially offset by revenues of $31.7 million from acquisitions.
Decreases in volume, lower copper pass-through pricing, and unfavorable currency translation contribu ted $92.5 m illion, $10.2 million, and $4.6 million, respectively, to the decrease in revenues, partially offset by revenues of $31.7 million from acquisitions. Smart Infrastructure Solutions EBITDA decreased $12.4 million in 2023 as compared to 2022 primarily due to the decreases in revenues discussed above.
Consolidated Adjusted EBITDA Years Ended December 31, 2023 2022 2021 (In thousands, except percentages) GAAP and Adjusted Revenues $ 2,512,084 $ 2,606,485 $ 2,301,260 GAAP income from continuing operations $ 242,556 $ 267,748 $ 198,841 Depreciation expense 51,379 46,669 43,073 Income tax expense 43,200 49,645 27,939 Amortization of intangibles 40,375 37,860 30,630 Interest expense, net 33,625 43,554 62,693 Severance, restructuring, and acquisition integration costs (1) 25,152 16,685 23,867 Amortization of software development intangible assets 7,692 3,875 1,579 Adjustments related to acquisitions and divestitures (2) 6,177 7,833 (5,035) Loss on debt extinguishment — 6,392 5,715 Non-operating pension settlement loss — 1,189 — Asset impairments (3) — — 9,283 Gain on sale of assets (4) (12,056) (37,891) — Gain on sale of note receivable (5) — — (27,036) Adjusted EBITDA $ 438,100 $ 443,559 $ 371,549 GAAP income from continuing operations margin 9.7 % 10.3 % 8.6 % Adjusted EBITDA margin 17.4 % 17.0 % 16.1 % 27 (1) Includes costs from programs described in Note 15, Restructuring Activities as well as other immaterial programs.
See Note 18. 25 Consolidated Adjusted EBITDA Years Ended December 31, 2024 2023 2022 (In thousands, except percentages) Revenues $ 2,460,979 $ 2,512,084 $ 2,606,485 GAAP income from continuing operations $ 198,414 $ 242,556 $ 267,748 Depreciation expense 56,383 51,379 46,669 Amortization of intangibles 48,794 40,375 37,860 Interest expense, net 38,303 33,625 43,554 Income tax expense 29,528 43,200 49,645 Severance, restructuring, and acquisition integration costs (1) 22,814 25,152 16,685 Amortization of software development intangible assets 10,564 7,692 3,875 Adjustments related to acquisitions and divestitures (2) 4,764 6,177 7,833 Non-operating pension settlement loss 1,208 — 1,189 Loss on debt extinguishment — — 6,392 Gain on sale of assets (3) — (12,056) (37,891) Adjusted EBITDA $ 410,772 $ 438,100 $ 443,559 GAAP income from continuing operations margin 8.1 % 9.7 % 10.3 % Adjusted EBITDA margin 16.7 % 17.4 % 17.0 % (1) Includes costs associated with acquisitions, productivity initiatives, and manufacturing footprint actions.
Enterprise Solutions Years Ended December 31, Percentage Change 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 (In thousands, except percentages) Segment Revenues $ 1,122,831 $ 1,198,478 $ 1,074,426 (6.3) % 11.5 % Segment EBITDA 149,107 161,517 144,509 (7.7) % 11.8 % as a percent of segment revenues 13.3 % 13.5 % 13.4 % 2023 Compared to 2022 Enterprise revenues decreased $75.6 million in 2023 as compared to 2022.
Smart Infrastructure Solutions Years Ended December 31, Percentage Change 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 (In thousands, except percentages) Segment Revenues $ 1,143,790 $ 1,122,831 $ 1,198,478 1.9 % (6.3) % Segment EBITDA 140,092 149,107 161,517 (6.0) % (7.7) % as a percent of segment revenues 12.2 % 13.3 % 13.5 % 2024 Compared to 2023 Smart Infrastructure Solutions revenues increased $21.0 million in 2024 as compared to 2023.
Income from continuing operations before taxes increased $90.6 million from 2021 to 2022 primarily due to the increase in operating income discussed above. 26 Income Taxes Years Ended December 31, Percentage Change 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 (In thousands, except percentages) Income from continuing operations before taxes $ 285,756 $ 317,393 $ 226,780 (10.0) % 40.0 % Income tax expense (43,200) (49,645) (27,939) (13.0) % 77.7 % Effective tax rate 15.1 % 15.6 % 12.3 % 2023 We recognized income tax expense of $43.2 million in 2023, representing an effective tax rate of 15.1%.
Income Taxes Years Ended December 31, Percentage Change 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 (In thousands, except percentages) Income from continuing operations before taxes $ 227,942 $ 285,756 $ 317,393 (20.2) % (10.0) % Income tax expense (29,528) (43,200) (49,645) (31.6) % (13.0) % Effective tax rate 13.0 % 15.1 % 15.6 % In 2024, we recognized income tax expense of $29.5 million, representing an effective tax rate of 13.0%.
The following table is derived from our Consolidated Cash Flow S tatements and includes the results and cash flow activity of discontinued operations up to the February 22, 2022 disposal date : Years Ended December 31, 2023 2022 (In thousands) Net cash provided by (used for): Operating activities $ 319,638 $ 281,296 Investing activities (200,358) 168,411 Financing activities (211,932) (393,214) Effects of currency exchange rate changes on cash and cash equivalents 2,020 (12,574) Increase (decrease) in cash and cash equivalents (90,632) 43,919 Cash and cash equivalents, beginning of year 687,676 643,757 Cash and cash equivalents, end of year $ 597,044 $ 687,676 Net cash provided by operating activities totaled $319.6 million for 2023 compared to $281.3 million for 2022.
The following table is derived from our Consolidated Cash Flow S tatements : Years Ended December 31, 2024 2023 (In thousands) Net cash provided by (used for): Operating activities $ 352,076 $ 319,638 Investing activities (426,755) (200,358) Financing activities (143,718) (211,932) Effects of currency exchange rate changes on cash and cash equivalents (8,345) 2,020 Net decrease in cash and cash equivalents (226,742) (90,632) Cash and cash equivalents, beginning of year 597,044 687,676 Cash and cash equivalents, end of year $ 370,302 $ 597,044 Net cash provided by operating activities totaled $352.1 million for 2024 compared to $319.6 million for 2023.
Adjusted EBITDA increased $72.0 million in 2022 from 2021 primarily due to the leverage on higher sales volume, as discussed above. Accordingly, adjusted EBITDA margins expanded to 17.0% from 16.1% in the year ago period. Segment Results of Operations For additional information regarding our segment measures, see Note 6 to the Consolidated Financial Statements.
Adjusted EBITDA margins expanded to 17.4% from 17.0% in the year ago period. Segment Results of Operations For additional information regarding our segment measures, see Note 6 to the Consolidated Financial Statements.
Industrial Automation EBITDA increased $10.2 million in 2023 as compared to 2022 primarily as a result of favorable mix and manufacturing productivity.
Automation Solutions EBITDA increased $10.2 million in 2023 as compared to 2022 primarily as a result of favorable mix and manufacturing productivity. Accordingly, Adjusted EBITDA margins expanded to 20.7% from 19.7% in the year ago period.
(4) In 2023, we sold certain real estate in Canada for $13.8 million, net of transaction costs and recognized a $12.1 million pre-tax gain on sale. In 2022, we sold certain real estate in the United States for $42.2 million, net of transaction costs and recognized a $37.9 million pre-tax gain on sale.
(2) Includes fair value adjustments of acquired assets and costs associated with a former subsidiary that was previously divested. (3) In 2023, we sold certain real estate in Canada for $13.8 million, net of transaction costs and recognized a $12.1 million pre-tax gain on sale.
Income from continuing operations before taxes decreased $31.6 million from 2022 to 2023 primarily due to the decrease in operating income discussed above. 2022 Compared to 2021 Revenues increased $305.2 million from 2021 to 2022 due to the following factors: • Higher sales volume and favorable pricing from industrial automation, smart buildings, and broadband products resulted in a $365.0 million increase in revenues. • Acquisitions, net of disposals contributed $19.3 million in revenues. • Currency translation had a $65.3 million unfavorable impact on revenues. • Copper prices had a $13.8 million unfavorable impact on revenues.
Income from continuing operations before taxes decreased $57.8 million from 2023 to 2024 primarily due to the decrease in operating income and increase in net interest expense discussed above. 24 2023 Compared to 2022 Revenues decreased $94.4 million from 2022 to 2023 due to the following factors: • Lower sales volume resulted in a $108.4 million decrease in revenues. • Copper pass-through pricing had a $19.9 million unfavorable impact on revenues. • Divestitures had a $1.4 million unfavorable impact on revenues. • Currency translation had a $0.4 million unfavorable impact on revenues. • Acquisitions contributed $35.7 million in revenues.
Actual results that differ from our assumptions are accumulated and, if in excess of the lesser of 10% of the projected benefit obligation or the fair market value of plan assets, amortized over the estimated future working life of the plan participants.
Actual results that differ from our assumptions are accumulated and, if in excess of the lesser of 10% of the projected benefit obligation or the fair market value of plan assets, amortized over the estimated future working life of the plan participants. 31 As a sensitivity measure, the effect of a 50 basis point decline in the assumed discount rate would have resulted in an increase in the 2024 net periodic benefit cost of less than $0.1 million and an increase in the projected benefit obligations of approximately $16.8 million as of December 31, 2024.
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. For our annual impairment test in 2023, we performed a quantitative assessment over three of our reporting units.
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. The assumptions used to estimate fair values were based on the past performance of the reporting unit as well as the projections incorporated in our strategic plan.
See Notes 5, 11 and 12. Gain on sale of assets increased $37.9 million from 2021 to 2022. During 2022, we sold certain real estate in the United States and recognized a $37.9 million pre-tax gain on sale. See Note 11.
Research and development expenses decreased $4.1 million from 2023 to 2024 primarily due to the timing of projects. Amortization of intangibles increased $8.4 million from 2023 to 2024 primarily due to acquisitions. During 2023, we sold certain real estate in Canada and recognized a $12.1 million pre-tax gain on sale. See Note 11.
Opera ting lease obligations of $91.5 million, of which $18.0 million is due in 2024 (see Note 12). d. Pension and other postemployment obligation s of $106.6 million, of which $12.3 million is d ue in 2024 (see Note 19). e. Obligations to purchase goods or services that are enforceable and legally binding of $43.7 million.
See Note 16. • Operating lease obligations of $166.4 million, of which $26.1 million is due in 2025. See Note 12. • Pension and other postemployment obligations of $105.8 million, of which $9.8 million is due in 2025. See Note 19. • Obligations to purchase goods or services that are enforceable and legally binding of $36.1 million.
Our current business goals are to: • Drive organic revenue growth in excess of GDP; • Deliver incremental Adjusted EBITDA margins of approximately 30%; • Generate free cash flows of approximately $1 billion cumulatively from 2022 through 2025; • Execute a disciplined capital allocation strategy while maintaining net leverage of approximately 1.5x; and • Drive Adjusted EPS to at least $8.00 by 2025.
Our long-term business goals are to: • Achieve mid-single-digit annual revenue growth; • Deliver incremental Adjusted EBITDA margins between 25% to 30%; • Generate free cash flow margin approaching 10%; • Execute a disciplined capital allocation strategy while maintaining net leverage around 1.5x; and • Strive for annual Adjusted EPS growth of 10% to 12%.
Accordingly, Adjusted EBITDA margins expanded to 20.7% from 19.7% in the year ago period. 2022 Compared to 2021 Industrial Automation revenues increased $181.2 million in 2022 as compared to 2021 primarily due to increases in volume and favorable pricing of $230.1 million and acquisitions, net of disposals of $13.9 million, partially offset by unfavorable currency translation and lower copper pass-through pricing of $52.0 million and $10.8 million, respectively.
Automation Solutions EBITDA decreased $17.6 million in 2024 as compared to 2023 primarily as a result of the decrease in revenues discussed above, partially offset by benefits realized from our productivity improvement initiatives. 2023 Compared to 2022 Automation Solutions revenues decreased $18.8 million in 2023 as compared to 2022 primarily due to decreases in volume and lower copper prices of $15.9 m illion and $9.7 million, respectively, partially offset by favorable currency translation and acquisitions, net of disposals of $4.2 million and $2.6 million, respectively.
Operating income increased $99.7 million from 2021 to 2022 primarily as a result of the increase in gross profit, the gain on sale of assets in 2022, and lack of asset impairment charges as compared to 2021, partially offset by the increase in selling, general and administrative expenses; research and development expenses; and amortization of intangibles expense discussed above.
Operating income decreased $51.1 million from 2023 to 2024 primarily due to the decrease in gross profit, decrease in the gain on sale of assets, and increase in amortization expense discussed above. Net interest expense increased $4.7 million from 2023 to 2024 primarily due to fluctuations in interest income and foreign currency translation.
Adjusted EBITDA decreased $5.5 million in 2023 from 2022 primarily due to the decrease in revenues discussed above, partially offset by favorable mix.
See Note 16. Income from continuing operations before taxes decreased $31.6 million from 2022 to 2023 primarily due to the decrease in operating income discussed above.
The increase in revenues was primarily due to increases in volume and favorable pricing of $135.0 million and acquisitions of $5.4 million, partially offset by unfavorable currency translation and lower copper pass-through pricing of $13.3 million and $3.0 million, respectively. Enterprise EBITDA increased $17.0 million in 2022 as compared to 2021 primarily due to the increase in revenues discussed above.
Reven ues from acquisitions and higher copper pass-through pricing contributed $72.1 million and $10.7 million, respectively, to the increases in revenues, partially offset by a decline in volume of $60.7 million and unfavorable currency translation of $1.1 million.
Sichert Acquisition During 2023, we acquired Sichert with cash on hand for $97.5 million, net of cash acquired. Sichert, based in Berlin Germany, designs and manufactures a portfolio of polycarbonate street cabinets utilized in outside plant passive optical networks (“PON”) and 5G networks. Sichert is reported within the Enterprise Solutions segment. See Note 4.
Precision Optical Technologies Acquisition During 2024, we acquired Precision for $289.6 million, net of cash acquired. Precision, based in New York, is a leading supplier of value-added optical transceivers with proprietary software, firmware configurations, and related components. Precision is reported within the Smart Infrastructure Solutions segment. See Note 4.
Enterprise EBITDA decreased $12.4 million in 2023 as compared to 2022 primarily due to the decreases in revenues discussed above. 2022 Compared to 2021 Enterprise revenues increased $124.1 million in 2022 as compared to 2021.
Smart Infrastructure Solutions EBITDA decreased $9.0 million in 2024 as compared to 2023 primarily due to unfavorable mix. 2023 Compared to 2022 Smart Infrastructure Solutions revenues decreased $75.6 million in 2023 as compared to 2022.
There is inherent risk associated with using an income approach to estimate fair values. If actual results are significantly different from our estimates or assumptions, we may have to recognize impairment charges that could be material. 33 We also test our indefinite-lived intangible asset, a trademark, for impairment on an annual basis during the fourth quarter.
If actual results are significantly different from our estimates or assumptions, we may have to recognize impairment charges that could be material. I n 2024, we did not perform a quantitative assessment over any reporting units.
Removed
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview Belden is a leading global supplier of network infrastructure and digitization solutions that makes the digital journey simpler, smarter and secure. We’re moving beyond connectivity, from what we make to what we make possible through a performance-driven portfolio, forward-thinking expertise and purpose-built solutions.
Added
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview Belden is a leading global supplier of complete connection solutions that unlock untold possibilities for our customers, their customers and the world. We advance ideas and technologies that enable a safer, smarter and more prosperous future.
Removed
We are aligned with attractive secular growth markets, positioned to provide comprehensive solutions that drive customer outcomes, focused on new product innovation and technology leadership, and committed to sustainable ESG practices.
Added
Throughout our 120-plus year history we have evolved as a company, but making connections remains our purpose. By connecting people, information and ideas, we make it possible.
Removed
CloudRail Acquisition During 2023, we acquired CloudRail with cash on hand for $9.2 million, net of cash acquired. CloudRail, based in Mannheim, Germany, spec ializes in sensor to cloud data solutions allowing end users to quickly connect sensors on their machinery to cloud providers to drive business insights and improve outcomes. CloudRail is reported within the Industrial Automation Solutions segment.
Added
Voleatech GmbH Acquisition During 2024, we acquired Voleatech for €5.0 million ($5.6 million), net of cash acquired. The acquisition includes a potential earn-out up to €3.0 million based upon certain targets over three years, which will be accounted for as compensation cost.
Removed
See Note 4. Gain on Sale of Assets During 2023, we sold our property in Ontario, Canada as part of a sale and leaseback transaction for $13.8 million and recognized a $12.1 million pre-tax gain on sale. This gain on sale was excluded from Segment EBITDA. See Note 11.
Added
Voleatech, based in Germany, is known for their VT AIR Next Gen Firewall and expands Belden's Firewall product portfolio and overall planning of security in OT networking. Voleatech is reported within the Automation Solutions segment.
Removed
Sale and Deconsolidation of Hite During 2023, we sold our 51% ownership interest in Shanghai Hi-Tech Control System Co, Ltd to (Hite) for $0.9 million and recognized a $0.4 million pretax gain on sale. The sale also includes $0.6 million of potential earnout payments.
Added
Gross profit decreased $32.7 million from 2023 to 2024 primarily due to the changes in revenues discussed above. Selling, general and administrative expenses increased $1.9 million from 2023 to 2024 primarily due to expenses from the operations of companies acquired in 2024, partially offset by the benefits realized from our productivity initiatives. See Note 15.
Removed
The joint venture developed and provided certain Industrial Automation Solutions products and integrated solutions to customers in China.
Added
In 2022, we sold certain real estate in the United States for $42.2 million, net of transaction costs and recognized a $37.9 million pre-tax gain on sale. See Note 11, Property, Plant, and Equipment , for details. Use of Non-GAAP Financial Information Adjusted EBITDA, Adjusted EBITDA margin, and free cash flow are non-GAAP financial measures.
Removed
As Belden was the primary beneficiary of the joint venture, due to both our ownership percentage and control over the activities of the joint venture, we consolidated the joint venture in our financial statements and presented the results of the joint venture attributable to Hite’s ownership as net income attributable to noncontrolling inter est in the Consolidated Statements of Operations up to the disposal date when we sold and deconsolidated the entity.
Added
The increase is primarily due to a $44.7 million improvement in operating assets and liabilities that was primarily driven by favorable changes in inventory. Inventory turns improved to 4.9 turns by the end of 2024 compared to 3.8 turns by the end of 2023.
Removed
Net interest expense decreased $9.9 million from 2022 to 2023 primarily due to the retirement of the 2026 Notes during 2022 and an increase in interest income. 25 Loss on debt extinguishment decreased $6.4 million from 2022 to 2023 due to the debt refinancing that took place during 2022.
Added
We calculate inventory turns by dividing annualized cost of sales for the quarter by the inventory balance at the end of the quarter. Net cash from investing activities was a use of cash of $426.8 million for 2024 compared to $200.4 million for 2023.
Removed
Gross profit increased $144.4 million from 2021 to 2022 due to the increases in revenues discussed above. Accordingly, gross profit margins expanded nearly 200 basis points year over year. Selling, general and administrative expenses increased $70.6 million from 2021 to 2022.
Added
Investing activities for 2024 included $296.5 million primarily for the acquisitions of Precision and Voleatech, $129.1 million for capital expenditures, and $1.3 million related to the disposal of a business, partially offset by asset sales of $0.1 million.
Removed
The increase in selling, general and administrative expenses is primarily attributable to strategic investments to enhance our solution selling capabilities, expenses from our acquired businesses and costs associated with lease guarantees as discussed in Note 12.
Added
A deferred tax asset valuation allowance is required when some portion or all of the deferred tax assets is not more likely than not to be realized.
Removed
Research and development expenses increased $14.1 million from 2021 to 2022 primarily due to increased investments as we further strengthen our product offering and continue our commitment to growth initiatives. Amortization of intangibles increased $7.2 million from 2021 to 2022 primarily due to acquisitions.
Removed
Asset impairments decreased $9.3 million from 2021 to 2022 as a result of the following impairment charges during 2021: $3.6 million to write down certain held and used long-lived assets in our Industrial Automation Solutions segment to fair value, $3.4 million for our former oil and gas business in Brazil sold during 2021, and a $2.3 million charge to write down certain real estate in Germany to its fair value and sold as part of a sale and leaseback transaction during 2021.
Removed
Net interest expense decreased $19.1 million from 2021 to 2022 primarily due to the repurchase of senior subordinated notes previously due 2026 and currency translation. Gain on sale of note receivable decreased $27.0 million from 2021 to 2022 as a result of the sale of the Seller’s Note in 2021 related to the 2020 divestiture of Grass Valley.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeGenerally, the currency in which we sell our products is the same as the currency in which we incur the costs to manufacture our products, resulting in a natural hedge. Our currency exchange rate management strategy primarily involves the use of natural techniques, where possible, such as the offsetting or netting of like-currency cash flows.
Biggest changeIn 2024 and 2023, we recorded approximatel y $0.8 million and $1.8 million, respectively, of net foreign currency transaction losses. 32 Generally, the currency in which we sell our products is the same as the currency in which we incur the costs to manufacture our products, resulting in a natural hedge.
Interest Rate Risk We have occasionally managed our debt portfolio by using interest rate derivative instruments, such as swap agreements, to achieve an overall desired position of fixed and floating rates. We were not a party to any interest rate derivative instruments as of or for the years ended December 31, 2023 or 2022.
Interest Rate Risk We have occasionally managed our debt portfolio by using interest rate derivative instruments, such as swap agreements, to achieve an overall desired position of fixed and floating rates. We were not a party to any interest rate derivative instruments as of or for the years ended December 31, 2024 or 2023.
We do not generally use commodity price derivatives and did not have any outstanding at December 31, 2023 or 2022. The following table presents unconditional commodity purchase obligations outstanding as of December 31, 2023. The unconditional purchase obligations are expected to settle during 2024.
We do not generally use commodity price derivatives and did not have any outstanding at December 31, 2024 or 2023. The following table presents unconditional commodity purchase obligations outstanding as of December 31, 2024. The unconditional purchase obligations are expected to settle during 2025.
The following table provides information about our financial instruments that are sensitive to changes in interest rates. The following table presents principal amounts by expected maturity date and fair value as of December 31, 2023.
The following table provides information about our financial instruments that are sensitive to changes in interest rates. The following table presents principal amounts by expected maturity date and fair value as of December 31, 2024.
Although we do not obtain collateral or other security to support these financial instruments, we evaluate the credit standing of the counterparty financial institutions. As of December 31, 2023, we ha d $61.9 million in accounts receivable outstanding from our largest customer. This represented approximately 15% of our total accounts receivable outstanding at December 31, 2023.
Although we do not obtain collateral or other security to support these financial instruments, we evaluate the credit standing of the counterparty financial institutions. As of December 31, 2024, we had $55.9 million in accounts receivable outstanding from our largest customer. This represented approximately 14% of our total accounts receivable outstanding at December 31, 2024.
Purchase Amount Fair Value (In thousands, except average price) Unconditional copper purchase obligations: Commitment volume in pounds 2,697 Weighted average price per pound $ 3.89 Commitment amounts $ 10,500 $ 10,376 35 We are also exposed to price risk related to our purchase of selected commodities derived from petrochemical feedstocks used in our products.
Purchase Amount Fair Value (In thousands, except average price) Unconditional copper purchase obligations: Commitment volume in pounds 3,499 Weighted average price per pound $ 4.30 Commitment amounts $ 15,029 $ 13,947 We are also exposed to price risk related to our purchase of selected commodities derived from petrochemical feedstocks used in our products.
Outstanding receivables are generally paid within thirty to sixty days of invoice receipt. 36
Outstanding receivable s are generally paid within thirty to sixty days of invoice receipt. 34
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, Mexican peso, Australian dollar, British pound, Indian rupee, and Swiss franc.
We did not have any foreign currency derivatives outstanding as of December 31, 2024. 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, Mexican peso, Australian dollar, British pound, Indian rupee, and Swiss franc.
That increase or decrease in expected functional currency cash flows is a foreign exchange transaction gain or loss that is included in our operating income in the Consolidated Statements of Operatio ns. In 2023 and 2022, we recorded approximately $1.8 million and $2.8 million, respectively, of net foreign currency transaction losses.
That increase or decrease in expected functional currency cash flows is a foreign exchange transaction gain or loss that is included in our operating income in the Consolidated Statements of Operatio ns.
Principal Amount by Expected Maturity Fair Value 2024 Thereafter Total (In thousands, except interest rates) €450.0 million fixed-rate senior subordinated notes due 2027 $ — $ 497,025 $ 497,025 $ 477,765 Average interest rate 3.375 % €350.0 million fixed-rate senior subordinated notes due 2028 $ — $ 386,575 $ 386,575 $ 372,079 Average interest rate 3.875 % €300.0 million fixed-rate senior subordinated notes due 2031 $ — $ 331,350 $ 331,350 $ 292,002 Average interest rate 3.375 % Total $ 1,214,950 $ 1,141,846 Concentrations of Credit Risk Financial instruments that potentially subject us to significant concentrations of credit risk consist of cash and cash equivalents and accounts receivable.
Principal Amount by Expected Maturity Fair Value 2025 Thereafter Total (In thousands, except interest rates) €450.0 million fixed-rate senior subordinated notes due 2027 $ — $ 465,795 $ 465,795 $ 463,466 Average interest rate 3.375 % €350.0 million fixed-rate senior subordinated notes due 2028 $ — $ 362,285 $ 362,285 $ 362,285 Average interest rate 3.875 % €300.0 million fixed-rate senior subordinated notes due 2031 $ — $ 310,530 $ 310,530 $ 300,826 Average interest rate 3.375 % Total $ 1,138,610 $ 1,126,577 33 Concentrations of Credit Risk Financial instruments that potentially subject us to significant concentrations of credit risk consist of cash and cash equivalents and accounts receivable.
However, we re-evaluate our strategy as the foreign currency environment changes, and it is possible that we could utilize derivative financial instruments to manage this risk in the future. We did not have any foreign currency derivatives outstanding as of December 31, 2023.
Our currency exchange rate management strategy primarily involves the use of natural techniques, where possible, such as the offsetting or netting of like-currency cash flows. However, we re-evaluate our strategy as the foreign currency environment changes, and it is possible that we could utilize derivative financial instruments to manage this risk in the future.

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