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Operating Segments | 6 Months Ended
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Jul. 02, 2017
Segment Reporting [Abstract] |
Operating Segments | Operating Segments We are organized around four global business platforms: Broadcast Solutions, Enterprise Solutions, Industrial Solutions, and Network Solutions. Each of the global business platforms represents a reportable segment. To leverage the Company's strengths in networking, IoT, and cybersecurity technologies, effective January 1, 2017, we formed a new segment called Network Solutions, which represents the combination of the prior Industrial IT Solutions and Network Security Solutions segments. The formation of this new segment is a natural evolution in our organic and inorganic strategies for a range of industrial and non-industrial applications. We have revised the prior period segment information to conform to the change in the composition of these reportable segments. This change had no impact to our reporting units for purposes of goodwill impairment testing. Beginning in 2017, sales of certain audio-visual cable that had previously been reported in our Broadcast Solutions segment are now reported in our Enterprise Solutions segment. As the annual revenues associated with this product line are not material, we have not revised the prior period segment information. 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 Solutions |  | Industrial Solutions |  | Network Solutions |  | Total Segments
|  | (In thousands)
As of and for the three months ended July 2, 2017 |  |  |  |  |  |  |  |  |  |
Segment revenues |  | $ | 188,071 |  |  | $ | 160,733 |  |  | $ | 159,255 |  |  | $ | 102,574 |  |  | $ | 610,633 |
Affiliate revenues |  | 94 |  |  | 1,545 |  |  | 275 |  |  | 32 |  |  | 1,946 |
Segment EBITDA |  | 29,610 |  |  | 26,801 |  |  | 31,036 |  |  | 22,780 |  |  | 110,227 |
Depreciation expense |  | 4,058 |  |  | 2,695 |  |  | 3,168 |  |  | 1,607 |  |  | 11,528 |
Amortization expense |  | 13,453 |  |  | 429 |  |  | 640 |  |  | 12,591 |  |  | 27,113 |
Severance, restructuring, and acquisition integration costs |  | 970 |  |  | 8,141 |  |  | 346 |  |  | 103 |  |  | 9,560 |
Purchase accounting effects of acquisitions |  | 1,167 |  |  | — |  |  | — |  |  | — |  |  | 1,167 |
Segment assets |  | 359,160 |  |  | 275,770 |  |  | 282,068 |  |  | 105,070 |  |  | 1,022,068 |
As of and for the three months ended July 3, 2016 |  |  |  |  |  |  |  |  |  |
Segment revenues |  | $ | 193,521 |  |  | $ | 160,401 |  |  | $ | 147,808 |  |  | $ | 101,651 |  |  | $ | 603,381 |
Affiliate revenues |  | 173 |  |  | 1,328 |  |  | 214 |  |  | 4 |  |  | 1,719 |
Segment EBITDA |  | 29,505 |  |  | 29,575 |  |  | 27,064 |  |  | 22,191 |  |  | 108,335 |
Depreciation expense |  | 4,061 |  |  | 3,429 |  |  | 2,709 |  |  | 1,788 |  |  | 11,987 |
Amortization expense |  | 13,420 |  |  | 432 |  |  | 601 |  |  | 11,810 |  |  | 26,263 |
Severance, restructuring, and acquisition integration costs |  | 1,319 |  |  | 1,207 |  |  | 2,371 |  |  | 972 |  |  | 5,869 |
Deferred gross profit adjustments |  | 494 |  |  | — |  |  | — |  |  | 1,256 |  |  | 1,750 |
Segment assets |  | 329,250 |  |  | 253,424 |  |  | 255,250 |  |  | 107,176 |  |  | 945,100 |
As of and for the six months ended July 2, 2017 |  |  |  |  |  |  |  |  |  |
Segment revenues |  | $ | 356,667 |  |  | $ | 306,415 |  |  | $ | 305,436 |  |  | $ | 193,496 |  |  | $ | 1,162,014 |
Affiliate revenues |  | 195 |  |  | 4,103 |  |  | 662 |  |  | 92 |  |  | 5,052 |
Segment EBITDA |  | 55,010 |  |  | 50,901 |  |  | 56,769 |  |  | 40,657 |  |  | 203,337 |
Depreciation expense |  | 8,007 |  |  | 5,294 |  |  | 6,374 |  |  | 3,236 |  |  | 22,911 |
Amortization expense |  | 23,468 |  |  | 853 |  |  | 1,282 |  |  | 25,179 |  |  | 50,782 |
Severance, restructuring, and acquisition integration costs |  | 1,378 |  |  | 13,014 |  |  | 1,467 |  |  | 301 |  |  | 16,160 |
Purchase accounting effects of acquisitions |  | 1,167 |  |  | — |  |  | — |  |  | — |  |  | 1,167 |
Segment assets |  | 359,160 |  |  | 275,770 |  |  | 282,068 |  |  | 105,070 |  |  | 1,022,068 |
As of and for the six months ended July 3, 2016 |  |  |  |  |  |  |  |  |  |
Segment revenues |  | $ | 364,793 |  |  | $ | 296,293 |  |  | $ | 288,899 |  |  | $ | 197,196 |  |  | $ | 1,147,181 |
Affiliate revenues |  | 597 |  |  | 3,027 |  |  | 396 |  |  | 32 |  |  | 4,052 |
Segment EBITDA |  | 52,772 |  |  | 53,311 |  |  | 50,051 |  |  | 42,267 |  |  | 198,401 |
Depreciation expense |  | 8,023 |  |  | 6,818 |  |  | 5,427 |  |  | 3,382 |  |  | 23,650 |
Amortization expense |  | 26,351 |  |  | 861 |  |  | 1,192 |  |  | 23,391 |  |  | 51,795 |
Severance, restructuring, and acquisition integration costs |  | 5,697 |  |  | 1,707 |  |  | 3,236 |  |  | 3,637 |  |  | 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 |  |  | 107,176 |  |  | 945,100 |
The following table is a reconciliation of the total of the reportable segments’ Revenues and EBITDA to consolidated revenues and consolidated income before taxes, respectively.
| Three Months Ended |  | Six Months Ended
| July 2, 2017 |  | July 3, 2016 |  | July 2, 2017 |  | July 3, 2016
| (In thousands)
Total Segment Revenues | $ | 610,633 |  |  | $ | 603,381 |  |  | $ | 1,162,014 |  |  | $ | 1,147,181 |
Deferred revenue adjustments (1) | — |  |  | (1,750 | ) |  | — |  |  | (4,053 | )
Consolidated Revenues | $ | 610,633 |  |  | $ | 601,631 |  |  | $ | 1,162,014 |  |  | $ | 1,143,128 |
Total Segment EBITDA | $ | 110,227 |  |  | $ | 108,335 |  |  | $ | 203,337 |  |  | $ | 198,401 |
Amortization of intangibles | (27,113 | ) |  | (26,263 | ) |  | (50,782 | ) |  | (51,795 | )
Depreciation expense | (11,528 | ) |  | (11,987 | ) |  | (22,911 | ) |  | (23,650 | )
Severance, restructuring, and acquisition integration costs (2) | (9,560 | ) |  | (5,869 | ) |  | (16,160 | ) |  | (14,277 | )
Purchase accounting effects related to acquisitions (3) | (1,167 | ) |  | — |  |  | (1,167 | ) |  | (195 | )
Deferred gross profit adjustments (1) | — |  |  | (1,750 | ) |  | — |  |  | (4,053 | )
Income from equity method investment | 2,277 |  |  | 661 |  |  | 3,284 |  |  | 491 |
Eliminations | (655 | ) |  | (886 | ) |  | (1,783 | ) |  | (1,717 | )
Consolidated operating income | 62,481 |  |  | 62,241 |  |  | 113,818 |  |  | 103,205 |
Interest expense, net | (23,533 | ) |  | (24,049 | ) |  | (47,039 | ) |  | (48,445 | )
Loss on debt extinguishment | (847 | ) |  | — |  |  | (847 | ) |  | — |
Consolidated income before taxes | $ | 38,101 |  |  | $ | 38,192 |  |  | $ | 65,932 |  |  | $ | 54,760 |
(1) For the three and six months ended July 3, 2016 , our segment results include revenues that would have been recorded by acquired businesses had they remained as independent entities. Our consolidated results do not include these revenues due to the purchase accounting effect of recording deferred revenue at fair value. (2) See Note 8, Severance, Restructuring, and Acquisition Integration Activities, for details. (3) For the three and six months ended July 2, 2017 and July 3, 2016, we recognized cost of sales for the adjustment of acquired inventory to fair value related to the Thinklogical and M2FX acquisitions, respectively.

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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 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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