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Operating Segments | 6 Months Ended
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Jun. 28, 2015
Segment Reporting [Abstract] |
Operating Segments | Note 3: Operating Segments We are organized around five global business platforms: Broadcast, Enterprise Connectivity, Industrial Connectivity, Industrial IT, and Network Security. The Network Security platform was formed with our acquisition of Tripwire in January 2015. Each of the global business platforms represents a reportable segment. Effective January 1, 2015, the key measures of segment profit or loss reviewed by our chief operating decision maker are Segment Revenues and Segment EBITDA. Segment Revenues represent non-affiliate revenues and include revenues that would have otherwise been recorded by acquired businesses as independent entities but were not recognized in our Consolidated Statements of Operations due to the effects of purchase accounting and the associated write-down of acquired deferred revenue to fair value. Segment EBITDA excludes certain items, including depreciation expense; amortization of intangibles; asset impairment; severance, restructuring, and acquisition integration costs; purchase accounting effects related to acquisitions, such as the adjustment of acquired inventory and deferred revenue to fair value; and other costs. We allocate corporate expenses to the segments for purposes of measuring Segment EBITDA. Corporate expenses are allocated on the basis of each segment’s relative EBITDA prior to the allocation. The prior period presentation has been updated accordingly. Our measure of segment assets does not include cash, goodwill, intangible assets, deferred tax assets, or corporate assets. All goodwill is allocated to reporting units of our segments for purposes of impairment testing.
|  | Broadcast Solutions |  |  | Enterprise Connectivity Solutions |  |  | Industrial Connectivity Solutions |  |  | Industrial IT Solutions |  |  | Network Security Solutions |  |  | Total Segments |
|  | (In thousands) |
As of and for the three months ended June 28, 2015 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Segment revenues |  | $ | 219,415 |  |  | $ | 117,335 |  |  | $ | 160,875 |  |  | $ | 61,270 |  |  | $ | 39,618 |  |  | $ | 598,513 |
Affiliate revenues |  |  | 380 |  |  |  | 1,330 |  |  |  | 407 |  |  |  | 10 |  |  |  | - |  |  |  | 2,127 |
Segment EBITDA |  |  | 31,614 |  |  |  | 21,101 |  |  |  | 28,680 |  |  |  | 10,178 |  |  |  | 8,772 |  |  |  | 100,345 |
Depreciation expense |  |  | 4,373 |  |  |  | 2,947 |  |  |  | 2,869 |  |  |  | 584 |  |  |  | 919 |  |  |  | 11,692 |
Amortization expense |  |  | 12,889 |  |  |  | 135 |  |  |  | 807 |  |  |  | 1,479 |  |  |  | 10,607 |  |  |  | 25,917 |
Severance, restructuring, and acquisition integration costs |  |  | 3,283 |  |  |  | 83 |  |  |  | 1,163 |  |  |  | - |  |  |  | 378 |  |  |  | 4,907 |
Deferred gross profit adjustments |  |  | (924) |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 14,364 |  |  |  | 13,440 |
Segment assets |  |  | 410,194 |  |  |  | 222,015 |  |  |  | 267,448 |  |  |  | 63,599 |  |  |  | 42,241 |  |  |  | 1,005,497 |
As of and for the three months ended June 29, 2014 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Segment revenues |  | $ | 252,278 |  |  | $ | 121,272 |  |  | $ | 178,244 |  |  | $ | 53,260 |  |  | $ | - |  |  | $ | 605,054 |
Affiliate revenues |  |  | 84 |  |  |  | 1,628 |  |  |  | 485 |  |  |  | 6 |  |  |  | - |  |  |  | 2,203 |
Segment EBITDA |  |  | 31,318 |  |  |  | 19,667 |  |  |  | 29,462 |  |  |  | 8,806 |  |  |  | - |  |  |  | 89,253 |
Depreciation expense |  |  | 4,609 |  |  |  | 3,799 |  |  |  | 2,458 |  |  |  | 534 |  |  |  | - |  |  |  | 11,400 |
Amortization expense |  |  | 14,424 |  |  |  | 167 |  |  |  | 271 |  |  |  | 933 |  |  |  | - |  |  |  | 15,795 |
Severance, restructuring, and acquisition integration costs |  |  | 27,524 |  |  |  | 1,821 |  |  |  | 8,144 |  |  |  | 719 |  |  |  | - |  |  |  | 38,208 |
Purchase accounting effects of acquisitions |  |  | 7,148 |  |  |  | 147 |  |  |  | 250 |  |  |  | 618 |  |  |  | - |  |  |  | 8,163 |
Deferred gross profit adjustments |  |  | 3,915 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 3,915 |
Segment assets |  |  | 419,814 |  |  |  | 236,860 |  |  |  | 282,874 |  |  |  | 70,998 |  |  |  | - |  |  |  | 1,010,546 |
As of and for the six months ended June 28, 2015 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Segment revenues |  | $ | 433,001 |  |  | $ | 222,030 |  |  | $ | 313,847 |  |  | $ | 122,343 |  |  | $ | 76,743 |  |  | $ | 1,167,964 |
Affiliate revenues |  |  | 721 |  |  |  | 2,950 |  |  |  | 731 |  |  |  | 31 |  |  |  | 8 |  |  |  | 4,441 |
Segment EBITDA |  |  | 60,846 |  |  |  | 34,982 |  |  |  | 52,853 |  |  |  | 21,265 |  |  |  | 18,673 |  |  |  | 188,619 |
Depreciation expense |  |  | 8,558 |  |  |  | 5,949 |  |  |  | 5,720 |  |  |  | 1,143 |  |  |  | 1,863 |  |  |  | 23,233 |
Amortization expense |  |  | 25,609 |  |  |  | 273 |  |  |  | 1,630 |  |  |  | 2,889 |  |  |  | 22,020 |  |  |  | 52,421 |
Severance, restructuring, and acquisition integration costs |  |  | 14,821 |  |  |  | 640 |  |  |  | 2,936 |  |  |  | (52 | ) |  |  | 1,045 |  |  |  | 19,390 |
Purchase accounting effects of acquisitions |  |  | - |  |  |  | - |  |  |  | 267 |  |  |  | - |  |  |  | 9,155 |  |  |  | 9,422 |
Deferred gross profit adjustments |  |  | 2,370 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 32,728 |  |  |  | 35,098 |
Segment assets |  |  | 410,194 |  |  |  | 222,015 |  |  |  | 267,448 |  |  |  | 63,599 |  |  |  | 42,241 |  |  |  | 1,005,497 |
As of and for the six months ended June 29, 2014 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Segment revenues |  | $ | 418,763 |  |  | $ | 229,666 |  |  | $ | 337,562 |  |  | $ | 107,370 |  |  | $ | - |  |  | $ | 1,093,361 |
Affiliate revenues |  |  | 283 |  |  |  | 3,704 |  |  |  | 1,841 |  |  |  | 8 |  |  |  | - |  |  |  | 5,836 |
Segment EBITDA |  |  | 57,489 |  |  |  | 33,842 |  |  |  | 53,144 |  |  |  | 18,394 |  |  |  | - |  |  |  | 162,869 |
Depreciation expense |  |  | 7,490 |  |  |  | 7,499 |  |  |  | 4,842 |  |  |  | 1,066 |  |  |  | - |  |  |  | 20,897 |
Amortization expense |  |  | 24,943 |  |  |  | 335 |  |  |  | 536 |  |  |  | 1,722 |  |  |  | - |  |  |  | 27,536 |
Severance, restructuring, and acquisition integration costs |  |  | 28,967 |  |  |  | 1,821 |  |  |  | 8,144 |  |  |  | 719 |  |  |  | - |  |  |  | 39,651 |
Purchase accounting effects of acquisitions |  |  | 7,458 |  |  |  | 286 |  |  |  | 533 |  |  |  | 738 |  |  |  | - |  |  |  | 9,015 |
Deferred gross profit adjustments |  |  | 4,365 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 4,365 |
Segment assets |  |  | 419,814 |  |  |  | 236,860 |  |  |  | 282,874 |  |  |  | 70,998 |  |  |  | - |  |  |  | 1,010,546 |
The following table is a reconciliation of the total of the reportable segments’ Revenues and EBITDA to consolidated revenues and consolidated income (loss) from continuing operations before taxes, respectively.
|  | Three Months Ended |  |  | Six Months Ended |
|  | June 28, 2015 |  |  | June 29, 2014 |  |  | June 28, 2015 |  |  | June 29, 2014 |
|  | (In thousands) |  |  | (In thousands) |
Total Segment Revenues |  | $ | 598,513 |  |  | $ | 605,054 |  |  | $ | 1,167,964 |  |  | $ | 1,093,361 |
Deferred revenue adjustments (1) |  |  | (12,758) |  |  |  | (4,163) |  |  |  | (35,252) |  |  |  | (4,780) |
Consolidated Revenues |  | $ | 585,755 |  |  | $ | 600,891 |  |  | $ | 1,132,712 |  |  | $ | 1,088,581 |
Total Segment EBITDA |  | $ | 100,345 |  |  | $ | 89,253 |  |  | $ | 188,619 |  |  | $ | 162,869 |
Amortization of intangibles |  |  | (25,917) |  |  |  | (15,795) |  |  |  | (52,421) |  |  |  | (27,536) |
Deferred gross profit adjustments (1) |  |  | (13,440) |  |  |  | (3,915) |  |  |  | (35,098) |  |  |  | (4,365) |
Severance, restructuring, and acquisition integration costs (2) |  |  | (4,907) |  |  |  | (38,208) |  |  |  | (19,390) |  |  |  | (39,651) |
Depreciation expense |  |  | (11,692) |  |  |  | (11,400) |  |  |  | (23,233) |  |  |  | (20,897) |
Purchase accounting effects related to acquisitions (3) |  |  | - |  |  |  | (8,163) |  |  |  | (9,422) |  |  |  | (9,015) |
Income from equity method investment |  |  | 343 |  |  |  | 1,256 |  |  |  | 1,111 |  |  |  | 2,210 |
Eliminations |  |  | (589) |  |  |  | (702) |  |  |  | (1,125) |  |  |  | (1,778) |
Consolidated operating income |  |  | 44,143 |  |  |  | 12,326 |  |  |  | 49,041 |  |  |  | 61,837 |
Interest expense, net |  |  | (24,769) |  |  |  | (18,092) |  |  |  | (48,615) |  |  |  | (36,762) |
Consolidated income (loss) from continuing operations before taxes |  | $ | 19,374 |  |  | $ | (5,766) |  |  | $ | 426 |  |  | $ | 25,075 |
(1) For the three and six months ended June 28, 2015, both our consolidated revenues and gross profit were negatively impacted by the reduction of the acquired deferred revenue balance to fair value associated with our acquisition of Tripwire. See Note 2, Acquisitions. (2) See Note 7, Severance, Restructuring, and Acquisition Integration Activities, for details. (3) For the six months ended June 28, 2015, we recognized $9.2 million of compensation expense related to the accelerated vesting of acquiree stock based compensation awards associated with our acquisition of Tripwire. In addition, we recognized $0.3 million of cost of sales related to the adjustment of acquired inventory to fair value related to our acquisition of Coast. See Note 2, Acquisitions.

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