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Operating Segments and Geographic Information | 12 Months Ended
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Dec. 31, 2019
Segment Reporting [Abstract] |
Operating Segments and Geographic Information | Operating Segments and Geographic Information We are organized around two global business platforms: Enterprise Solutions and Industrial Solutions. 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. We sell the products manufactured by our segments 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, were not included in the corporate expense allocation. Operating Segment Information
Enterprise Solutions | Years ended December 31,
| 2019 |  | 2018 |  | 2017
| (In thousands)
Segment revenues | $ | 1,081,232 |  |  | $ | 1,095,900 |  |  | $ | 1,054,847 |
Affiliate revenues | 4,221 |  |  | 6,085 |  |  | 5,091 |
Segment EBITDA | 162,276 |  |  | 190,910 |  |  | 196,554 |
Depreciation expense | 20,765 |  |  | 19,374 |  |  | 19,255 |
Amortization of intangibles | 23,500 |  |  | 22,255 |  |  | 37,245 |
Amortization of software development intangible assets | 175 |  |  | 71 |  |  | — |
Severance, restructuring, and acquisition integration costs | 11,050 |  |  | 14,863 |  |  | 28,146 |
Purchase accounting effects of acquisitions | 592 |  |  | 1,690 |  |  | 6,133 |
Acquisition of property, plant and equipment | 42,897 |  |  | 42,938 |  |  | 34,613 |
Segment assets | 527,189 |  |  | 479,324 |  |  | 473,429 |
Industrial Solutions | Years ended December 31,
| 2019 |  | 2018 |  | 2017
| (In thousands)
Segment revenues | $ | 1,050,046 |  |  | $ | 1,069,802 |  |  | $ | 1,032,338 |
Affiliate revenues | 11 |  |  | 81 |  |  | 67 |
Segment EBITDA | 188,947 |  |  | 203,746 |  |  | 208,875 |
Depreciation expense | 19,644 |  |  | 18,935 |  |  | 19,369 |
Amortization of intangibles | 51,109 |  |  | 52,885 |  |  | 52,943 |
Amortization of software development intangible assets | 350 |  |  | 8 |  |  | — |
Severance, restructuring, and acquisition integration costs | 15,494 |  |  | 7,762 |  |  | 13,747 |
Acquisition of property, plant and equipment | 34,581 |  |  | 29,215 |  |  | 13,319 |
Segment assets | 464,418 |  |  | 459,647 |  |  | 464,683 |
Total Segments | Years ended December 31,
| 2019 |  | 2018 |  | 2017
| (In thousands)
Segment revenues | $ | 2,131,278 |  |  | $ | 2,165,702 |  |  | $ | 2,087,185 |
Affiliate revenues | 4,232 |  |  | 6,166 |  |  | 5,158 |
Segment EBITDA | 351,223 |  |  | 394,656 |  |  | 405,429 |
Depreciation expense | 40,409 |  |  | 38,309 |  |  | 38,624 |
Amortization of intangibles | 74,609 |  |  | 75,140 |  |  | 90,188 |
Amortization of software development intangible assets | 525 |  |  | 79 |  |  | — |
Severance, restructuring, and acquisition integration costs | 26,544 |  |  | 22,625 |  |  | 41,893 |
Purchase accounting effects of acquisitions | 592 |  |  | 1,690 |  |  | 6,133 |
Acquisition of property, plant and equipment | 77,478 |  |  | 72,153 |  |  | 47,932 |
Segment assets | 991,607 |  |  | 938,971 |  |  | 938,112 |
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,
| 2019 |  | 2018 |  | 2017
| (In thousands)
Total Segment Revenues | $ | 2,131,278 |  |  | $ | 2,165,702 |  |  | $ | 2,087,185 |
Deferred revenue adjustments | — |  |  | — |  |  | — |
Consolidated Revenues | $ | 2,131,278 |  |  | $ | 2,165,702 |  |  | $ | 2,087,185 |
Total Segment EBITDA | $ | 351,223 |  |  | $ | 394,656 |  |  | $ | 405,429 |
Amortization of intangibles | (74,609 | ) |  | (75,140 | ) |  | (90,188 | )
Depreciation expense | (40,409 | ) |  | (38,309 | ) |  | (38,624 | )
Severance, restructuring, and acquisition integration costs (1) | (26,544 | ) |  | (22,625 | ) |  | (41,893 | )
Purchase accounting effects related to acquisitions (2) | (592 | ) |  | (1,690 | ) |  | (6,133 | )
Amortization of software development intangible assets | (525 | ) |  | (79 | ) |  | — |
Loss on sale of assets (3) | — |  |  | (94 | ) |  | (1,013 | )
Costs related to patent litigation | — |  |  | (2,634 | ) |  | — |
Gain from patent litigation | — |  |  | 62,141 |  |  | — |
Income from equity method investment | — |  |  | — |  |  | 7,502 |
Eliminations | (1,337 | ) |  | (2,218 | ) |  | (1,439 | )
Consolidated operating income | 207,207 |  |  | 314,008 |  |  | 233,641 |
Interest expense, net | (55,814 | ) |  | (60,839 | ) |  | (82,651 | )
Non-operating pension benefit (cost) | 1,017 |  |  | (99 | ) |  | (561 | )
Loss on debt extinguishment | — |  |  | (22,990 | ) |  | (52,441 | )
Consolidated income from continuing operations before taxes | $ | 152,410 |  |  | $ | 230,080 |  |  | $ | 97,988 |
(1) | See Note 14, Severance, Restructuring, and Acquisition Integration Activities, for details.
(2) | In 2019, we collectively recognized $0.6 million of cost of sales related to purchase accounting adjustments of acquired inventory to fair value for both our SPC and Opterna acquisitions. In 2018, we made a $1.7 million adjustment to increase the earn-out liability associated with an acquisition. 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.
(3) | In 2018 and 2017, we recognized a $0.1 million and $1.0 million loss on sale of assets, respectively, for the sale of our MCS business and Hirschmann JV. See Note 2.
Below are reconciliations of other segment measures to the consolidated totals.
| Years Ended December 31,
| 2019 |  | 2018 |  | 2017
| (In thousands)
Total segment assets | $ | 991,607 |  |  | $ | 938,971 |  |  | $ | 938,112 |
Cash and cash equivalents | 407,480 |  |  | 407,454 |  |  | 541,350 |
Goodwill | 1,243,669 |  |  | 1,206,877 |  |  | 1,208,587 |
Intangible assets, less accumulated amortization | 339,505 |  |  | 359,931 |  |  | 424,932 |
Deferred income taxes | 25,216 |  |  | 26,459 |  |  | 28,517 |
Corporate assets | 24,147 |  |  | 16,786 |  |  | 60,865 |
Assets of discontinued operations | 375,135 |  |  | 822,843 |  |  | 638,250 |
Total assets | $ | 3,406,759 |  |  | $ | 3,779,321 |  |  | $ | 3,840,613 |
Total segment acquisition of property, plant and equipment | $ | 77,478 |  |  | $ | 72,153 |  |  | $ | 47,932 |
Corporate acquisition of property, plant and equipment | 3,110 |  |  | 3,013 |  |  | 1,502 |
Total acquisition of property, plant and equipment | $ | 80,588 |  |  | $ | 75,166 |  |  | $ | 49,434 |
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, 2019, 2018 and 2017 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, 2019 |  |  |  |  |  |  |  |  |  |  |
Revenues | $ | 1,271,628 |  |  | $ | 170,683 |  |  | $ | 129,716 |  |  | $ | 105,614 |  |  | $ | 453,637 |  |  | $ | 2,131,278 |
Percent of total revenues | 60 | % |  | 8 | % |  | 6 | % |  | 5 | % |  | 21 | % |  | 100 | %
Long-lived assets | $ | 152,214 |  |  | $ | 16,452 |  |  | $ | 40,247 |  |  | $ | 48,272 |  |  | $ | 101,179 |  |  | $ | 358,364 |
Year ended December 31, 2018 |  |  |  |  |  |  |  |  |  |  |
Revenues | $ | 1,206,401 |  |  | $ | 166,669 |  |  | $ | 107,582 |  |  | $ | 100,691 |  |  | $ | 584,359 |  |  | $ | 2,165,702 |
Percent of total revenues | 56 | % |  | 8 | % |  | 5 | % |  | 4 | % |  | 27 | % |  | 100 | %
Long-lived assets | $ | 170,368 |  |  | $ | 13,352 |  |  | $ | 36,989 |  |  | $ | 39,724 |  |  | $ | 63,776 |  |  | $ | 324,209 |
Year ended December 31, 2017 |  |  |  |  |  |  |  |  |  |  |
Revenues | $ | 1,254,758 |  |  | $ | 167,466 |  |  | $ | 120,568 |  |  | $ | 112,976 |  |  | $ | 431,417 |  |  | $ | 2,087,185 |
Percent of total revenues | 60 | % |  | 8 | % |  | 6 | % |  | 5 | % |  | 21 | % |  | 100 | %
Long-lived assets | $ | 210,292 |  |  | $ | 13,200 |  |  | $ | 34,647 |  |  | $ | 37,875 |  |  | $ | 49,834 |  |  | $ | 345,848 |
Major Customer Revenues generated from sales to the distributor Anixter International Inc., in both the Enterprise Solutions and Industrial Solutions segments, were $285.0 million (13% of revenues), $309.0 million (14% of revenues), and $292.2 million (14% of revenues) for 2019, 2018, and 2017, respectively. Revenues generated from sales to both Anixter and WESCO combined were approximately $328.2 million (15% of revenues), $361.7 million (17% of revenues), and $342.8 million (16% of revenues) for 2019, 2018, and 2017, respectively. At December 31, 2019, we had $10.2 million in accounts receivable outstanding from Anixter International Inc. This represented approximately 3% of our total accounts receivable outstanding at December 31, 2019.

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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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