Item 2: Management's Discussion and Analysis of Financial Condition and Results
of Operations
Overview
We design, manufacture, and market signal transmission solutions, including cable, connectivity and active components for mission-critical applications in markets ranging from industrial automation to data centers, broadcast studios, and aerospace.
We consider revenue growth, operating margin, cash flows, return on invested capital, and working capital management metrics to be our key operating performance indicators.
Trends and Events
The following trends and events arising during 2008 have had varying effects on our financial condition, results of operations and cash flows. Capitalization
In 2007, the Board of Directors authorized the Company to repurchase up to $100.0 million of common stock in the open market or in privately negotiated transactions. During the nine months ended September 28, 2008, we completed the share repurchase program and repurchased 1,753,794 shares of our common stock at an aggregate cost of $68.3 million, an average price per share of $38.96. From the inception of the share repurchase program in August 2007 through its completion, we repurchased a total of 2,430,594 shares of our common stock at an aggregate cost of $100.0 million, an average price per share of $41.14. On July 14, 2008, we called all of our convertible subordinated debentures for redemption as of July 31, 2008. As a result of the call for redemption, holders of the debentures had the option to convert each $1,000 principal amount of their debentures and receive value in a combination of cash and shares equal to 56.8246 shares of Belden's common stock (a conversion price of $17.598). All holders of the debentures elected to convert their debentures. We completed the conversion on August 29, 2008 and paid $110.0 million in cash and issued 3,343,509 shares of common stock. We financed the cash portion of the conversion through borrowings under our senior secured credit facility. Acquisition
On July 16, 2008, we acquired Trapeze for cash of $136.0 million, including transaction costs. We financed the total purchase price with borrowings under our revolving credit facility. California-based Trapeze is a provider of wireless local area networking equipment. The acquisition of Trapeze improves our ability to provide a full complement of signal transmission solutions including wireless systems. The results of operations of Trapeze have been included in our results of operations from July 16, 2008. Trapeze is reported as a separate operating segment disclosed as the Wireless segment. Restructuring Activities
In 2008, we finalized certain plans to realign part of our EMEA operations in order to consolidate manufacturing capacity. We recognized $28.9 million of restructuring costs related to these realignment plans, including $23.9 million that was accounted for through purchase accounting and $5.0 million that was charged to the statement of operations. We do not expect to recognize additional costs related to this prior year restructuring activity.

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At the end of 2007, we initiated a voluntary separation program primarily for associates in the United States who were at least 50 years of age and had 10 years of service with the Company. As a result of the voluntary separation program, we recognized severance costs in 2008 of $6.5 million. We do not expect to recognize additional costs related to this program.
Beginning in 2006, we identified certain positions throughout the organization for elimination in an effort to reduce production, selling, and administration costs. In 2008, we recognized severance costs totaling $0.6 million related to North America position eliminations in the Specialty Products segment. We do not expect to recognize additional costs related to this program. We continuously review our business strategies and evaluate potential restructuring actions. This could result in additional restructuring costs in future periods. We also evaluate goodwill and other intangible assets not subject to amortization for impairment at least once a year. This evaluation, which is typically performed in the fourth quarter, may result in future impairment charges.
Share-Based Compensation
We provide certain employees with share-based compensation in the form of stock options, stock appreciation rights, restricted stock shares, restricted stock units with service vesting conditions, and restricted stock units with performance vesting conditions. At September 28, 2008, the total unrecognized compensation cost related to all nonvested awards was $21.3 million. That cost is expected to be recognized over a weighted-average period of 2.1 years. Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a material effect on our financial condition, results of operations, or cash flows.
Adoption of Recent Accounting Pronouncements Discussion regarding our adoption of recent accounting pronouncements is included in Note 1 to the Consolidated Financial Statements. Critical Accounting Policies
During the nine months ended September 28, 2008:
• We did not change any of our existing critical accounting policies from those listed in our 2007 Annual Report on Form 10-K except for expanding our revenue recognition policy for the acquisition of Trapeze, which is included in Note 1 to the Consolidated Financial Statements herein;

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

• There were no significant changes in the manner in which critical accounting policies were applied or in which related judgments and estimates were developed.

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