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Reportable Segments | 9 Months Ended
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Sep. 29, 2019
Segment Reporting [Abstract] |
Reportable Segments | Reportable Segments We are organized around two global business platforms: Enterprise Solutions and Industrial Solutions. Each of the global business platforms represents a reportable segment. The key measures of segment profit or loss 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 Condensed Consolidated Statements of Operations and Comprehensive Income 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.
|  | Enterprise Solutions |  | Industrial Solutions |  | Total Segments
|  | (In thousands)
As of and for the three months ended September 29, 2019 |  |  |  |  |  |
Segment revenues |  | $ | 368,080 |  |  | $ | 252,238 |  |  | $ | 620,318 |
Affiliate revenues |  | 927 |  |  | 2 |  |  | 929 |
Segment EBITDA |  | 56,814 |  |  | 44,614 |  |  | 101,428 |
Depreciation expense |  | 7,381 |  |  | 4,766 |  |  | 12,147 |
Amortization of intangibles |  | 9,780 |  |  | 12,463 |  |  | 22,243 |
Amortization of software development intangible assets |  | 1,161 |  |  | 36 |  |  | 1,197 |
Severance, restructuring, and acquisition integration costs |  | 4,045 |  |  | — |  |  | 4,045 |
Purchase accounting effects of acquisitions |  | (186 | ) |  | — |  |  | (186 | )
Goodwill and other asset impairment |  | 342,146 |  |  | — |  |  | 342,146 |
Segment assets |  | 836,540 |  |  | 455,470 |  |  | 1,292,010 |
As of and for the three months ended September 30, 2018 |  |  |  |  |  |
Segment revenues |  | $ | 392,080 |  |  | $ | 266,923 |  |  | $ | 659,003 |
Affiliate revenues |  | 1,776 |  |  | 15 |  |  | 1,791 |
Segment EBITDA |  | 72,210 |  |  | 53,750 |  |  | 125,960 |
Depreciation expense |  | 7,092 |  |  | 4,579 |  |  | 11,671 |
Amortization of intangibles |  | 12,322 |  |  | 13,211 |  |  | 25,533 |
Amortization of software development intangible assets |  | 620 |  |  | — |  |  | 620 |
Severance, restructuring, and acquisition integration costs |  | 9,528 |  |  | 2,160 |  |  | 11,688 |
Purchase accounting effects of acquisitions |  | 821 |  |  | — |  |  | 821 |
Deferred revenue adjustments |  | 3,229 |  |  | — |  |  | 3,229 |
Segment assets |  | 766,505 |  |  | 448,626 |  |  | 1,215,131 |
As of and for the nine months ended September 29, 2019 |  |  |  |  |  |
Segment revenues |  | $ | 1,064,469 |  |  | $ | 780,554 |  |  | $ | 1,845,023 |
Affiliate revenues |  | 3,190 |  |  | 13 |  |  | 3,203 |
Segment EBITDA |  | 149,855 |  |  | 139,531 |  |  | 289,386 |
Depreciation expense |  | 22,655 |  |  | 14,515 |  |  | 37,170 |
Amortization of intangibles |  | 29,270 |  |  | 38,682 |  |  | 67,952 |
Amortization of software development intangible assets |  | 3,119 |  |  | 87 |  |  | 3,206 |
Severance, restructuring, and acquisition integration costs |  | 10,904 |  |  | — |  |  | 10,904 |
Purchase accounting effects of acquisitions |  | 1,845 |  |  | — |  |  | 1,845 |
Goodwill and other asset impairment |  | 342,146 |  |  | — |  |  | 342,146 |
Segment assets |  | 836,540 |  |  | 455,470 |  |  | 1,292,010 |
As of and for the nine months ended September 30, 2018 |  |  |  |  |  |
Segment revenues |  | $ | 1,142,765 |  |  | $ | 795,102 |  |  | $ | 1,937,867 |
Affiliate revenues |  | 4,318 |  |  | 61 |  |  | 4,379 |
Segment EBITDA |  | 199,943 |  |  | 153,401 |  |  | 353,344 |
Depreciation expense |  | 21,465 |  |  | 14,097 |  |  | 35,562 |
Amortization of intangibles |  | 35,301 |  |  | 39,689 |  |  | 74,990 |
Amortization of software development intangible assets |  | 1,344 |  |  | — |  |  | 1,344 |
Severance, restructuring, and acquisition integration costs |  | 46,949 |  |  | 10,061 |  |  | 57,010 |
Purchase accounting effects of acquisitions |  | 2,359 |  |  | — |  |  | 2,359 |
Deferred revenue adjustments |  | 7,889 |  |  | — |  |  | 7,889 |
Segment assets |  | 766,505 |  |  | 448,626 |  |  | 1,215,131 |
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 |  | Nine Months Ended
| September 29, 2019 |  | September 30, 2018 |  | September 29, 2019 |  | September 30, 2018
| (In thousands)
Total Segment Revenues | $ | 620,318 |  |  | $ | 659,003 |  |  | $ | 1,845,023 |  |  | $ | 1,937,867 |
Deferred revenue adjustments (1) | — |  |  | (3,229 | ) |  | — |  |  | (7,889 | )
Consolidated Revenues | $ | 620,318 |  |  | $ | 655,774 |  |  | $ | 1,845,023 |  |  | $ | 1,929,978 |
Total Segment EBITDA | $ | 101,428 |  |  | $ | 125,960 |  |  | $ | 289,386 |  |  | $ | 353,344 |
Goodwill and other asset impairment (2) | (342,146 | ) |  | — |  |  | (342,146 | ) |  | — |
Amortization of intangibles | (22,243 | ) |  | (25,533 | ) |  | (67,952 | ) |  | (74,990 | )
Depreciation expense | (12,147 | ) |  | (11,671 | ) |  | (37,170 | ) |  | (35,562 | )
Severance, restructuring, and acquisition integration costs (3) | (4,045 | ) |  | (11,688 | ) |  | (10,904 | ) |  | (57,010 | )
Amortization of software development intangible assets | (1,197 | ) |  | (620 | ) |  | (3,206 | ) |  | (1,344 | )
Purchase accounting effects related to acquisitions (4) | 186 |  |  | (821 | ) |  | (1,845 | ) |  | (2,359 | )
Deferred revenue adjustments (1) | — |  |  | (3,229 | ) |  | — |  |  | (7,889 | )
Loss on sale of assets | — |  |  | — |  |  | — |  |  | (94 | )
Costs related to patent litigation | — |  |  | (2,634 | ) |  | — |  |  | (2,634 | )
Gain from patent litigation | — |  |  | 62,141 |  |  | — |  |  | 62,141 |
Eliminations | (343 | ) |  | (627 | ) |  | (1,086 | ) |  | (1,616 | )
Consolidated operating income (loss) | (280,507 | ) |  | 131,278 |  |  | (174,923 | ) |  | 231,987 |
Interest expense, net | (14,200 | ) |  | (14,472 | ) |  | (42,561 | ) |  | (46,538 | )
Non-operating pension benefit | 489 |  |  | 1,356 |  |  | 1,517 |  |  | 824 |
Loss on debt extinguishment | — |  |  | — |  |  | — |  |  | (22,990 | )
Consolidated income (loss) before taxes | $ | (294,218 | ) |  | $ | 118,162 |  |  | $ | (215,967 | ) |  | $ | 163,283 |
(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) For the three and nine months ended September 29, 2019, we recognized a $342.1 million goodwill and other asset impairment charge for our Grass Valley reporting unit. See Note 8, Long-Lived Assets, for details. (3) See Note 9, Severance, Restructuring, and Acquisition Integration Activities, for details. (4) For the nine months ended September 29, 2019, we recognized expenses related to the earnout consideration for the SAM acquisition. For the three and nine months ended September 29, 2019, we recognized cost of sales for the adjustment of acquired inventory to fair value related to the Opterna and FutureLink acquisitions. For the three and nine months ended September 30, 2018, we recognized cost of sales for the adjustment of acquired inventory to fair value related to the SAM and NT2 acquisitions.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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