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Segment Information, Operations By Geographic Area And Customer Concentration | 9 Months Ended
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Sep. 29, 2013
Segment Reporting [Abstract] |
Segment Information, Operations By Geographic Area And Customer Concentration | Segment Information, Operations by Geographic Area and Significant Customers Operating segments are components of an enterprise about which separate financial information is available and is regularly evaluated by management, namely the Chief Operating Decision Maker (“CODM”) of an organization, in order to determine operating and resource allocation decisions. By this definition, the Company operates in three specific business units: retail, commercial, and service provider. The retail business unit consists of high performance, dependable and easy-to-use home networking, storage and digital media products to connect people with the Internet and their content and devices. The commercial business unit consists of business networking, storage and security solutions without the cost and complexity of Big IT. The service provider business unit consists of made-to-order and retail proven, whole home networking solutions sold to service providers for sale to their customers. Each business unit is managed by a Senior Vice President/General Manager. The Company believes this structure enables it to better focus its efforts on the Company’s core customer segments and allows it to be more nimble and opportunistic as a company overall. In the second quarter of 2012, the CEO began temporarily serving as interim General Manager of the commercial business unit due to the previous general manager's departure from the Company. The CEO continued serving as interim general manager until a replacement was hired in July 2013. The results of the reportable segments are derived directly from the Company’s management reporting system. The results are based on the Company’s method of internal reporting and are not necessarily in conformity with accounting principles generally accepted in the United States. Management measures the performance of each segment based on several metrics, including contribution income. Segment contribution income includes all product line segment revenues less the related cost of sales, research and development and sales and marketing costs. Contribution income is used, in part, to evaluate the performance of, and allocate resources to, each of the segments. Certain operating expenses are not allocated to segments because they are separately managed at the corporate level. These unallocated indirect costs include corporate costs, such as corporate research and development, general and administrative costs, stock-based compensation expenses, amortization of intangibles, acquisition-related integration costs, restructuring costs, litigation reserves and interest and other income, net. The Company does not evaluate operating segments using discrete asset information. Financial information for each reportable segment and a reconciliation of segment contribution income to income before income taxes is as follows (in thousands, except percentage data):
| Three Months Ended |  | Nine Months Ended
| September 29, 2013 |  | September 30, 2012 |  | September 29, 2013 |  | September 30, 2012
Net revenues: |  |  |  |  |  |  |
Retail | $ | 130,301 |  |  | $ | 123,457 |  |  | $ | 374,018 |  |  | $ | 366,258 |
Commercial | 76,957 |  |  | 79,240 |  |  | 236,254 |  |  | 234,498 |
Service provider | 154,637 |  |  | 112,513 |  |  | 402,741 |  |  | 360,729 |
Total net revenues | 361,895 |  |  | 315,210 |  |  | 1,013,013 |  |  | 961,485 |
Contribution income: |  |  |  |  |  |  |
Retail | $ | 19,317 |  |  | $ | 17,759 |  |  | $ | 53,696 |  |  | $ | 62,590 |
Retail contribution margin | 14.8 | % |  | 14.4 | % |  | 14.4 | % |  | 17.1 | %
Commercial | 16,903 |  |  | 19,998 |  |  | 51,190 |  |  | 52,272 |
Commercial contribution margin | 22.0 | % |  | 25.2 | % |  | 21.7 | % |  | 22.3 | %
Service Provider | 12,474 |  |  | 11,283 |  |  | 36,055 |  |  | 33,822 |
Service Provider contribution margin | 8.1 | % |  | 10.0 | % |  | 9.0 | % |  | 9.4 | %
Total segment contribution income | 48,694 |  |  | 49,040 |  |  | 140,941 |  |  | 148,684 |
Corporate and unallocated costs | (12,800 | ) |  | (12,866 | ) |  | (38,824 | ) |  | (36,430 | )
Amortization of intangible assets (1) | (4,439 | ) |  | (1,354 | ) |  | (10,782 | ) |  | (3,317 | )
Stock-based compensation expense | (4,511 | ) |  | (4,019 | ) |  | (12,492 | ) |  | (10,806 | )
Restructuring and other charges | (400 | ) |  | — |  |  | (1,957 | ) |  | — |
Acquisition-related expense | — |  |  | — |  |  | (924 | ) |  | — |
Impact to cost of sales from acquisition accounting adjustments to inventory | — |  |  | — |  |  | (568 | ) |  | — |
Litigation reserves, net | (305 | ) |  | (269 | ) |  | (3,908 | ) |  | (420 | )
Impairment charges | (2,000 | ) |  | — |  |  | (2,000 | ) |  | — |
Interest income | 71 |  |  | 109 |  |  | 315 |  |  | 344 |
Other income, net | 511 |  |  | 3,070 |  |  | 37 |  |  | 2,823 |
Income before income taxes | $ | 24,821 |  |  | $ | 33,711 |  |  | $ | 69,838 |  |  | $ | 100,878 |
________________________________
(1) | Amount excludes amortization expense related to patents within purchased intangible assets in costs of revenues.
The Company conducts business across three geographic regions: Americas, Europe, Middle-East and Africa (“EMEA”) and Asia Pacific ("APAC"). Net revenue by geography comprises gross revenue less such items as end-user customer rebates and other sales incentives deemed to be a reduction of net revenue per the authoritative guidance for revenue recognition, sales returns and price protection. For reporting purposes revenue is attributed to each geographic region based on the location of the customer. The following table shows net revenue by geography for the periods indicated (in thousands):
| Three Months Ended |  | Nine Months Ended
| September 29, 2013 |  | September 30, 2012 |  | September 29, 2013 |  | September 30, 2012
United States | $ | 214,755 |  |  | $ | 172,926 |  |  | $ | 564,604 |  |  | $ | 495,717 |
Americas (excluding U.S.) | 5,732 |  |  | 4,721 |  |  | 13,407 |  |  | 13,723 |
United Kingdom | 34,094 |  |  | 45,127 |  |  | 116,924 |  |  | 141,731 |
EMEA (excluding U.K.) | 63,126 |  |  | 59,241 |  |  | 195,788 |  |  | 205,533 |
APAC | 44,188 |  |  | 33,195 |  |  | 122,290 |  |  | 104,781 |
Total net revenue | $ | 361,895 |  |  | $ | 315,210 |  |  | $ | 1,013,013 |  |  | $ | 961,485 |
Long-lived assets, comprising fixed assets, are reported based on the location of the asset. Long-lived assets by geographic location are as follows (in thousands):
| September 29, 2013 |  | December 31, 2012
United States | $ | 10,901 |  |  | $ | 9,898 |
Americas (excluding U.S.) | 2,079 |  |  | 36 |
EMEA | 986 |  |  | 1,173 |
China | 9,564 |  |  | 6,763 |
APAC (excluding China) | 1,920 |  |  | 1,155 |
| $ | 25,450 |  |  | $ | 19,025 |
No single customer accounted for greater than 10% of net revenues in the three and nine months ended September 29, 2013 and three months ended September 30, 2012. Virgin Media Limited and Affiliates represented 10% of net revenues during the nine months ended September 30, 2012.

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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 1 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599 Reference 2: 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=6534315&loc=d3e8933-108599 Reference 3: 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=6534315&loc=d3e8538-108599 Reference 4: 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=6534315&loc=d3e8844-108599 Reference 5: 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=6534315&loc=d3e8864-108599 Reference 6: 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=6534315&loc=d3e8981-108599 Reference 7: 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=6534315&loc=d3e8984-108599 Reference 8: 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=6534315&loc=d3e9038-108599 Reference 9: 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=6534315&loc=d3e8906-108599 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=6534315&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 31 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599 Reference 12: 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=6534315&loc=d3e9031-108599 Reference 13: 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=6534315&loc=d3e8971-108599 Reference 14: 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=6534315&loc=d3e8595-108599 + Details
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