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Operating Segments and Geographic Information | 12 Months Ended
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Dec. 31, 2017
Segment Reporting [Abstract] |
Operating Segments and Geographic Information | Operating Segments and Geographic Information We are organized around four global business platforms: Broadcast Solutions, Enterprise Solutions, Industrial Solutions, and Network Solutions. To leverage the Company’s strengths in networking, IoT, and cybersecurity technologies, the Network Solutions platform was formed in January 2017 with the combination of the former Industrial IT and Network Security platforms. The former Network Security platform was formed with our acquisition of Tripwire in January 2015. The formation of the Network Solutions platform is a natural evolution in our organic and inorganic strategies for a range of industrial and non-industrial applications. In addition, 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 Solutions platform to our Enterprise Solutions platform effective January 1, 2016. We have revised the prior period segment information to conform to the changes in the composition of these reportable segments. These changes had no impact to our reporting units for purposes of goodwill impairment testing. We have determined that each of the global business platforms represents a reportable segment. The segments design, manufacture, and market a portfolio of signal transmission solutions for mission critical applications used in a variety of end markets, including broadcast, enterprise, and industrial. We sell the products manufactured by our segments principally through distributors or directly to systems integrators, original equipment manufacturers (OEMs), end-users, and installers. 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. The results of our former equity method investment in the Hirschmann JV, which we sold effective December 31, 2017 (see Note 4), were not included in the corporate expense allocation. Operating Segment Information
Broadcast Solutions | Years ended December 31,
| 2017 |  | 2016 |  | 2015
| (In thousands)
Segment revenues | $ | 725,139 |  |  | $ | 769,753 |  |  | $ | 739,970 |
Affiliate revenues | 440 |  |  | 744 |  |  | 916 |
Segment EBITDA | 112,849 |  |  | 137,870 |  |  | 113,638 |
Depreciation expense | 15,763 |  |  | 16,229 |  |  | 16,295 |
Amortization of intangibles | 49,325 |  |  | 47,248 |  |  | 49,812 |
Amortization of software development intangible assets | 56 |  |  | — |  |  | — |
Severance, restructuring, and acquisition integration costs | 5,532 |  |  | 10,414 |  |  | 39,078 |
Purchase accounting effects of acquisitions | 6,133 |  |  | (2,991 | ) |  | 132 |
Deferred gross profit adjustments | — |  |  | 1,774 |  |  | 2,446 |
Patent settlement | — |  |  | (5,554 | ) |  | — |
Acquisition of property, plant and equipment | 21,314 |  |  | 15,713 |  |  | 27,365 |
Segment assets | 405,842 |  |  | 325,396 |  |  | 346,095 |
Enterprise Solutions | Years ended December 31,
| 2017 |  | 2016 |  | 2015
| (In thousands)
Segment revenues | $ | 631,166 |  |  | $ | 603,188 |  |  | $ | 605,910 |
Affiliate revenues | 7,385 |  |  | 5,977 |  |  | 5,322 |
Segment EBITDA | 103,650 |  |  | 101,298 |  |  | 100,214 |
Depreciation expense | 10,509 |  |  | 13,226 |  |  | 12,591 |
Amortization of intangibles | 1,729 |  |  | 1,718 |  |  | 1,720 |
Severance, restructuring, and acquisition integration costs | 23,511 |  |  | 11,962 |  |  | 723 |
Purchase accounting effects of acquisitions | — |  |  | 912 |  |  | 52 |
Acquisition of property, plant and equipment | 28,126 |  |  | 22,679 |  |  | 10,323 |
Segment assets | 282,072 |  |  | 246,564 |  |  | 238,400 |
Industrial Solutions | Years ended December 31,
| 2017 |  | 2016 |  | 2015
| (In thousands)
Segment revenues | $ | 628,458 |  |  | $ | 585,476 |  |  | $ | 603,350 |
Affiliate revenues | 1,441 |  |  | 1,325 |  |  | 1,613 |
Segment EBITDA | 119,642 |  |  | 101,248 |  |  | 99,941 |
Depreciation expense | 12,968 |  |  | 11,038 |  |  | 11,235 |
Amortization of intangibles | 2,571 |  |  | 2,394 |  |  | 3,154 |
Severance, restructuring, and acquisition integration costs | 12,272 |  |  | 9,923 |  |  | 6,228 |
Purchase accounting effects of acquisitions | — |  |  | — |  |  | 334 |
Acquisition of property, plant and equipment | 8,151 |  |  | 10,486 |  |  | 8,836 |
Segment assets | 300,172 |  |  | 226,306 |  |  | 231,265 |
Network Solutions | Years ended December 31,
| 2017 |  | 2016 |  | 2015
| (In thousands)
Segment revenues | $ | 403,880 |  |  | $ | 399,388 |  |  | $ | 411,353 |
Affiliate revenues | 96 |  |  | 79 |  |  | 78 |
Segment EBITDA | 93,893 |  |  | 92,773 |  |  | 87,873 |
Depreciation expense | 6,357 |  |  | 6,715 |  |  | 6,430 |
Amortization of intangibles | 50,372 |  |  | 47,025 |  |  | 49,105 |
Severance, restructuring, and acquisition integration costs | 1,475 |  |  | 6,471 |  |  | 1,141 |
Purchase accounting effects of acquisitions | — |  |  | — |  |  | 9,229 |
Deferred gross profit adjustments | — |  |  | 4,913 |  |  | 50,430 |
Acquisition of property, plant and equipment | 5,168 |  |  | 4,704 |  |  | 7,048 |
Segment assets | 158,309 |  |  | 115,732 |  |  | 118,520 |
Total Segments | Years ended December 31,
| 2017 |  | 2016 |  | 2015
| (In thousands)
Segment revenues | $ | 2,388,643 |  |  | $ | 2,357,805 |  |  | $ | 2,360,583 |
Affiliate revenues | 9,362 |  |  | 8,125 |  |  | 7,929 |
Segment EBITDA | 430,034 |  |  | 433,189 |  |  | 401,666 |
Depreciation expense | 45,597 |  |  | 47,208 |  |  | 46,551 |
Amortization of intangibles | 103,997 |  |  | 98,385 |  |  | 103,791 |
Amortization of software development intangible assets | 56 |  |  | — |  |  | — |
Severance, restructuring, and acquisition integration costs | 42,790 |  |  | 38,770 |  |  | 47,170 |
Purchase accounting effects of acquisitions | 6,133 |  |  | (2,079 | ) |  | 9,747 |
Deferred gross profit adjustments | — |  |  | 6,687 |  |  | 52,876 |
Patent settlement | — |  |  | (5,554 | ) |  | — |
Acquisition of property, plant and equipment | 62,759 |  |  | 53,582 |  |  | 53,572 |
Segment assets | 1,146,395 |  |  | 913,998 |  |  | 934,280 |
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.
| Years Ended December 31,
| 2017 |  | 2016 |  | 2015
| (In thousands)
Total Segment Revenues | $ | 2,388,643 |  |  | $ | 2,357,805 |  |  | $ | 2,360,583 |
Deferred revenue adjustments (1) | — |  |  | (6,687 | ) |  | (51,361 | )
Patent settlement (2) | — |  |  | 5,554 |  |  | — |
Consolidated Revenues | $ | 2,388,643 |  |  | $ | 2,356,672 |  |  | $ | 2,309,222 |
Total Segment EBITDA | $ | 430,034 |  |  | $ | 433,189 |  |  | $ | 401,666 |
Amortization of intangibles | (103,997 | ) |  | (98,385 | ) |  | (103,791 | )
Depreciation expense | (45,597 | ) |  | (47,208 | ) |  | (46,551 | )
Severance, restructuring, and acquisition integration costs (3) | (42,790 | ) |  | (38,770 | ) |  | (47,170 | )
Purchase accounting effects related to acquisitions (4) | (6,133 | ) |  | 2,079 |  |  | (9,747 | )
Loss on sale of assets (5) | (1,013 | ) |  | — |  |  | — |
Amortization of software development intangible assets | (56 | ) |  | — |  |  | — |
Impairment of assets held for sale (5) | — |  |  | (23,931 | ) |  | — |
Deferred gross profit adjustments (1) | — |  |  | (6,687 | ) |  | (52,876 | )
Patent settlement (2) | — |  |  | 5,554 |  |  | — |
Income from equity method investment | 7,502 |  |  | 1,793 |  |  | 1,770 |
Eliminations | (3,260 | ) |  | (3,781 | ) |  | (2,748 | )
Consolidated operating income | 234,690 |  |  | 223,853 |  |  | 140,553 |
Interest expense, net | (82,901 | ) |  | (95,050 | ) |  | (100,613 | )
Loss on debt extinguishment | (52,441 | ) |  | (2,342 | ) |  | — |
Consolidated income from continuing operations before taxes | $ | 99,348 |  |  | $ | 126,461 |  |  | $ | 39,940 |
(1) | 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. See Note 3, Acquisitions, for details.
(2) | Both our consolidated revenues and gross profit were positively impacted by royalty revenues received during 2016 that related to years prior to 2016 as a result of a patent settlement.
(3) | See Note 13, Severance, Restructuring, and Acquisition Integration Activities, for details.
(4) | In 2017, we recognized $6.1 million of cost of sales related to the adjustment of acquired inventory to fair value for our Thinklogical acquisition. In 2016, we made a $3.2 million adjustment to reduce the earn-out liability associated with the M2FX acquisition. This adjustment was partially offset by $0.8 million and $0.2 million of cost of sales related to the adjustment of acquired inventory to fair value related to our Enterprise Solutions segment and M2FX acquisition, respectively. In 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.
(5) | In 2017 and 2016, we recognized a $1.0 million loss on sale of assets and $23.9 million impairment of assets held for sale, respectively, for the sale of our MCS business and Hirschmann JV. See Note 4, Assets Held for Sale, for details.
Below are reconciliations of other segment measures to the consolidated totals.
| Years Ended December 31,
| 2017 |  | 2016 |  | 2015
| (In thousands)
Total segment assets | $ | 1,146,395 |  |  | $ | 913,998 |  |  | $ | 934,280 |
Cash and cash equivalents | 561,108 |  |  | 848,116 |  |  | 216,751 |
Goodwill | 1,478,257 |  |  | 1,385,995 |  |  | 1,385,115 |
Intangible assets, less accumulated amortization | 545,207 |  |  | 560,082 |  |  | 655,871 |
Deferred income taxes | 42,549 |  |  | 33,706 |  |  | 34,295 |
Income tax receivable | — |  |  | — |  |  | 3,787 |
Corporate assets | 67,097 |  |  | 64,906 |  |  | 60,503 |
Total assets | $ | 3,840,613 |  |  | $ | 3,806,803 |  |  | $ | 3,290,602 |
Total segment acquisition of property, plant and equipment | $ | 62,759 |  |  | $ | 53,582 |  |  | $ | 53,572 |
Corporate acquisition of property, plant and equipment | 1,502 |  |  | 392 |  |  | 1,397 |
Total acquisition of property, plant and equipment | $ | 64,261 |  |  | $ | 53,974 |  |  | $ | 54,969 |
Geographic Information The Company attributes foreign sales based on the location of the customer purchasing the product. The table below summarizes net sales and long-lived assets for the years ended December 31, 2017, 2016 and 2015 for the following countries: the U.S., Canada, China, and Germany. No other individual foreign country’s net sales or long-lived assets are material to the Company.
| United States |  | Canada |  | China |  | Germany |  | All Other |  | Total
| (In thousands, except percentages)
Year ended December 31, 2017 |  |  |  |  |  |  |  |  |  |  |
Revenues | $ | 1,265,455 |  |  | $ | 167,605 |  |  | $ | 121,600 |  |  | $ | 113,990 |  |  | $ | 719,993 |  |  | $ | 2,388,643 |
Percent of total revenues | 53 | % |  | 7 | % |  | 5 | % |  | 5 | % |  | 30 | % |  | 100 | %
Long-lived assets | $ | 231,938 |  |  | $ | 33,806 |  |  | $ | 34,774 |  |  | $ | 38,029 |  |  | $ | 63,982 |  |  | $ | 402,529 |
Year ended December 31, 2016 |  |  |  |  |  |  |  |  |  |  |
Revenues | $ | 1,283,925 |  |  | $ | 159,985 |  |  | $ | 114,605 |  |  | $ | 104,214 |  |  | $ | 693,943 |  |  | $ | 2,356,672 |
Percent of total revenues | 55 | % |  | 7 | % |  | 5 | % |  | 4 | % |  | 29 | % |  | 100 | %
Long-lived assets | $ | 193,263 |  |  | $ | 31,278 |  |  | $ | 30,487 |  |  | $ | 32,386 |  |  | $ | 60,654 |  |  | $ | 348,068 |
Year ended December 31, 2015 |  |  |  |  |  |  |  |  |  |  |
Revenues | $ | 1,270,467 |  |  | $ | 170,522 |  |  | $ | 114,863 |  |  | $ | 103,106 |  |  | $ | 650,264 |  |  | $ | 2,309,222 |
Percent of total revenues | 55 | % |  | 7 | % |  | 5 | % |  | 4 | % |  | 29 | % |  | 100 | %
Long-lived assets | $ | 188,032 |  |  | $ | 27,315 |  |  | $ | 62,794 |  |  | $ | 35,588 |  |  | $ | 64,434 |  |  | $ | 378,163 |
Major Customer Revenues generated from sales to the distributor Anixter International Inc., primarily in the Enterprise Solutions and Industrial Solutions segments, were $292.2 million (12% of revenues), $286.2 million (12% of revenues), and $281.9 million (12% of revenues) for 2017, 2016, and 2015, respectively. At December 31, 2017, we had $38.2 million in accounts receivable outstanding from Anixter International Inc. This represented approximately 8% of our total accounts receivable outstanding at December 31, 2017.

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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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