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Operating Segments | 6 Months Ended
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Jul. 03, 2016
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. Each of the global business platforms represents a reportable segment. To capitalize on the adoption of IP technology and accelerate our penetration of the commercial audio-video market, we transferred responsibility of audio-video cable and connectors from our Broadcast platform to our Enterprise Connectivity platform effective January 1, 2016. We have revised the prior period segment information to conform to the change in the composition of these reportable segments. This transfer had no impact to our reporting units for purposes of goodwill impairment testing. 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. 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 July 3, 2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Segment revenues |  | $ | 193,521 |  |  | $ | 160,401 |  |  | $ | 147,808 |  |  | $ | 62,510 |  |  | $ | 39,141 |  |  | $ | 603,381 |
Affiliate revenues |  |  | 173 |  |  |  | 1,328 |  |  |  | 214 |  |  |  | 4 |  |  |  | - |  |  |  | 1,719 |
Segment EBITDA |  |  | 29,505 |  |  |  | 29,575 |  |  |  | 27,064 |  |  |  | 12,676 |  |  |  | 9,515 |  |  |  | 108,335 |
Depreciation expense |  |  | 4,061 |  |  |  | 3,429 |  |  |  | 2,709 |  |  |  | 660 |  |  |  | 1,128 |  |  |  | 11,987 |
Amortization expense |  |  | 13,420 |  |  |  | 432 |  |  |  | 601 |  |  |  | 1,506 |  |  |  | 10,304 |  |  |  | 26,263 |
Severance, restructuring, and acquisition integration costs |  |  | 1,319 |  |  |  | 1,207 |  |  |  | 2,371 |  |  |  | 943 |  |  |  | 29 |  |  |  | 5,869 |
Deferred gross profit adjustments |  |  | 494 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,256 |  |  |  | 1,750 |
Segment assets |  |  | 329,250 |  |  |  | 253,424 |  |  |  | 255,250 |  |  |  | 65,603 |  |  |  | 41,573 |  |  |  | 945,100 |
As of and for the three months ended June 28, 2015 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Segment revenues |  | $ | 174,923 |  |  | $ | 161,827 |  |  | $ | 160,875 |  |  | $ | 61,270 |  |  | $ | 39,618 |  |  | $ | 598,513 |
Affiliate revenues |  |  | - |  |  |  | 1,708 |  |  |  | 408 |  |  |  | 10 |  |  |  | - |  |  |  | 2,126 |
Segment EBITDA |  |  | 22,878 |  |  |  | 29,792 |  |  |  | 28,680 |  |  |  | 10,178 |  |  |  | 8,772 |  |  |  | 100,300 |
Depreciation expense |  |  | 4,140 |  |  |  | 3,180 |  |  |  | 2,869 |  |  |  | 584 |  |  |  | 919 |  |  |  | 11,692 |
Amortization expense |  |  | 12,595 |  |  |  | 429 |  |  |  | 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 |  |  | 352,848 |  |  |  | 279,360 |  |  |  | 267,448 |  |  |  | 63,599 |  |  |  | 42,241 |  |  |  | 1,005,496 |
As of and for the six months ended July 3, 2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Segment revenues |  | $ | 364,793 |  |  | $ | 296,293 |  |  | $ | 288,899 |  |  | $ | 116,392 |  |  | $ | 80,804 |  |  | $ | 1,147,181 |
Affiliate revenues |  |  | 597 |  |  |  | 3,027 |  |  |  | 396 |  |  |  | 32 |  |  |  | - |  |  |  | 4,052 |
Segment EBITDA |  |  | 52,772 |  |  |  | 53,311 |  |  |  | 50,051 |  |  |  | 21,285 |  |  |  | 20,982 |  |  |  | 198,401 |
Depreciation expense |  |  | 8,023 |  |  |  | 6,818 |  |  |  | 5,427 |  |  |  | 1,184 |  |  |  | 2,198 |  |  |  | 23,650 |
Amortization expense |  |  | 26,351 |  |  |  | 861 |  |  |  | 1,192 |  |  |  | 3,016 |  |  |  | 20,375 |  |  |  | 51,795 |
Severance, restructuring, and acquisition integration costs |  |  | 5,697 |  |  |  | 1,707 |  |  |  | 3,236 |  |  |  | 3,608 |  |  |  | 29 |  |  |  | 14,277 |
Purchase accounting effects of acquisitions |  |  | 195 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 195 |
Deferred gross profit adjustments |  |  | 1,108 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,945 |  |  |  | 4,053 |
Segment assets |  |  | 329,250 |  |  |  | 253,424 |  |  |  | 255,250 |  |  |  | 65,603 |  |  |  | 41,573 |  |  |  | 945,100 |
As of and for the six months ended June 28, 2015 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Segment revenues |  | $ | 351,423 |  |  | $ | 303,608 |  |  | $ | 313,847 |  |  | $ | 122,343 |  |  | $ | 76,743 |  |  | $ | 1,167,964 |
Affiliate revenues |  |  | - |  |  |  | 3,680 |  |  |  | 731 |  |  |  | 31 |  |  |  | 8 |  |  |  | 4,450 |
Segment EBITDA |  |  | 46,005 |  |  |  | 49,801 |  |  |  | 52,853 |  |  |  | 21,265 |  |  |  | 18,673 |  |  |  | 188,597 |
Depreciation expense |  |  | 8,113 |  |  |  | 6,394 |  |  |  | 5,720 |  |  |  | 1,143 |  |  |  | 1,863 |  |  |  | 23,233 |
Amortization expense |  |  | 25,021 |  |  |  | 861 |  |  |  | 1,630 |  |  |  | 2,889 |  |  |  | 22,020 |  |  |  | 52,421 |
Severance, restructuring, and acquisition integration costs |  |  | 14,810 |  |  |  | 651 |  |  |  | 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 |  |  | 352,848 |  |  |  | 279,360 |  |  |  | 267,448 |  |  |  | 63,599 |  |  |  | 42,241 |  |  |  | 1,005,496 |
The following table is a reconciliation of the total of the reportable segments’ Revenues and EBITDA to consolidated revenues and consolidated income from continuing operations before taxes, respectively.
|  | Three Months Ended |  |  | Six Months Ended |
|  | July 3, 2016 |  |  | June 28, 2015 |  |  | July 3, 2016 |  |  | June 28, 2015 |
|  | (In thousands) |  |  | (In thousands) |
Total Segment Revenues |  | $ | 603,381 |  |  | $ | 598,513 |  |  | $ | 1,147,181 |  |  | $ | 1,167,964 |
Deferred revenue adjustments (1) |  |  | (1,750) |  |  |  | (12,758) |  |  |  | (4,053) |  |  |  | (35,252) |
Consolidated Revenues |  | $ | 601,631 |  |  | $ | 585,755 |  |  | $ | 1,143,128 |  |  | $ | 1,132,712 |
Total Segment EBITDA |  | $ | 108,335 |  |  | $ | 100,300 |  |  | $ | 198,401 |  |  | $ | 188,597 |
Amortization of intangibles |  |  | (26,263) |  |  |  | (25,917) |  |  |  | (51,795) |  |  |  | (52,421) |
Deferred gross profit adjustments (1) |  |  | (1,750) |  |  |  | (13,440) |  |  |  | (4,053) |  |  |  | (35,098) |
Severance, restructuring, and acquisition integration costs (2) |  |  | (5,869) |  |  |  | (4,907) |  |  |  | (14,277) |  |  |  | (19,390) |
Depreciation expense |  |  | (11,987) |  |  |  | (11,692) |  |  |  | (23,650) |  |  |  | (23,233) |
Purchase accounting effects related to acquisitions (3) |  |  | - |  |  |  | - |  |  |  | (195) |  |  |  | (9,422) |
Income from equity method investment |  |  | 661 |  |  |  | 343 |  |  |  | 491 |  |  |  | 1,111 |
Eliminations |  |  | (886) |  |  |  | (544) |  |  |  | (1,717) |  |  |  | (1,103) |
Consolidated operating income |  |  | 62,241 |  |  |  | 44,143 |  |  |  | 103,205 |  |  |  | 49,041 |
Interest expense, net |  |  | (24,049) |  |  |  | (24,769) |  |  |  | (48,445) |  |  |  | (48,615) |
Consolidated income from continuing operations before taxes |  | $ | 38,192 |  |  | $ | 19,374 |  |  | $ | 54,760 |  |  | $ | 426 |
(1) For both the three and six months ended July 3, 2016 and 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 2015 acquisition of Tripwire. (2) See Note 7, Severance, Restructuring, and Acquisition Integration Activities, for details. (3) For the six months ended July 3, 2016, we recognized $0.2 million of cost of sales related to the adjustment of acquired inventory to fair value related to our acquisition of M2FX. 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.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8981-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9038-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8971-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8595-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8984-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9031-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8538-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8864-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8924-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8906-108599 + Details
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