Industry Segments, Major Customers, Related Party Transactions and Geographic Information

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Industry Segments, Major Customers, Related Party Transactions and Geographic Information

14. INDUSTRY SEGMENTS, MAJOR CUSTOMERS, RELATED PARTY TRANSACTIONS AND GEOGRAPHIC INFORMATION

Segment Information

The Company’s three reportable segments, which align with the manner in which the business is managed, are Wireless, Enterprise and Broadband.

The Wireless segment provides merchant radio frequency (RF) wireless network connectivity solutions and small cell distributed antenna systems (DAS) solutions. These solutions, marketed primarily under the Andrew brand, enable wireless operators to deploy both cell sites and small cell DAS solutions to meet 2G, 3G and 4G cellular coverage and capacity requirements. Macro cell site solutions can be found at wireless tower sites and on rooftops and include base station, microwave antennas, hybrid fiber-feeder cables, coaxial cables, connectors, amplifiers, filters and backup power. Metro cell solutions can be found outdoors on street poles and on other urban structures and include RF delivery, equipment housing and concealment. These fully integrated outdoor systems consist of specialized antennas, filters/combiners, backhaul solutions, intra-system cabling and power distribution, all minimized to fit an urban environment. The small cell DAS solutions are composed of distributed antenna systems that allow wireless operators to extend and enhance cellular coverage and capacity in challenging network conditions such as commercial buildings, urban areas, stadiums and transportation systems.

The Enterprise segment provides connectivity and network intelligence for data centers and commercial buildings. These solutions include optical fiber and twisted pair structured cabling applications, intelligent infrastructure software, network rack and cabinet enclosures, intelligent building sensors, advanced LED lighting control systems and network design services.

The Broadband segment consists of cable and communications equipment that support the multi-channel video, voice and high-speed data services provided by cable operators. The segment’s products include coaxial and fiber-optic cables, fiber-to-the-home equipment, amplifiers, splitters, conduit and headend solutions for the network core.

The following table provides summary financial information by reportable segment (in millions):

	December 31,
	2014		2013
Identifiable segment-related assets:
Wireless	$	2,370.4	$	2,419.8
Enterprise		1,401.9		1,495.1
Broadband		352.1		363.4
Total identifiable segment-related assets		4,124.4		4,278.3
Reconciliation to total assets:
Cash and cash equivalents		729.3		346.3
Deferred income tax asset		59.0		59.7
Deferred financing fees		43.2		49.8
Total assets	$	4,955.9	$	4,734.1

The following table provides net sales, operating income (loss), depreciation, and amortization by reportable segment (in millions):

	Year Ended December 31,
	2014			2013			2012
Net sales:
Wireless	$	2,469.8		$	2,174.2		$	1,917.1
Enterprise		850.5			827.9			846.5
Broadband		511.1			484.6			564.0
Inter-segment eliminations		(1.8	)		(6.6	)		(5.7	)
Consolidated net sales	$	3,829.6		$	3,480.1		$	3,321.9
Operating income (loss):
Wireless (1)	$	468.1		$	303.4		$	106.7
Enterprise (2)		99.8			66.7			119.6
Broadband (3)		9.5			(40.4	)		11.9
Consolidated operating income	$	577.4		$	329.7		$	238.2
Depreciation:
Wireless	$	29.1		$	32.6		$	44.3
Enterprise		11.3			12.4			13.3
Broadband		8.4			10.2			11.9
Consolidated depreciation	$	48.8		$	55.2		$	69.5
Amortization (4):
Wireless	$	91.3		$	88.1		$	90.7
Enterprise		69.4			68.4			66.6
Broadband		17.6			18.4			18.4
Consolidated amortization	$	178.3		$	174.9		$	175.7

(1) Wireless segment operating income includes net restructuring costs of $16.2 million, $24.3 million and $21.9 million for the years ended December 31, 2014, 2013 and 2012, respectively. Operating income for the years ended December 31, 2014, 2013 and 2012, includes asset impairment charges of $4.9 million, $9.4 million and $40.9 million, respectively.

(2) Enterprise segment operating income includes net restructuring costs of $0.1 million, $5.1 million and $0.3 million for the years ended December 31, 2014, 2013 and 2012, respectively.

(3) Broadband segment operating income includes net restructuring costs (gains) of $2.9 million, ($7.3) million and $0.8 million for the years ended December 31, 2014, 2013 and 2012, respectively. Operating income includes asset impairment charges of $7.2 million and $36.2 million for the years ended December 31, 2014 and 2013, respectively.

(4) Excludes amortization of deferred financing fees and original issue discount.

Customer Information

Net sales to Anixter International Inc. and its affiliates (Anixter) accounted for 11%, 12% and 13% of the Company’s total net sales during the years ended December 31, 2014, 2013 and 2012, respectively. Sales to Anixter primarily originate in the Enterprise segment. Other than Anixter, no other direct customer accounted for 10% or more of the Company’s total net sales for any of the above periods.

Accounts receivable from Anixter represented approximately 13% and 14% of accounts receivable as of December 31, 2014 and 2013, respectively. Other than Anixter, no other direct customer accounted for more than 10% of the Company’s accounts receivable as of December 31, 2014 or 2013.

Related Party Transactions

The Company paid fees to Carlyle in connection with a management agreement of $3.0 million during each of the years ended December 31, 2013 and 2012. Additionally, the Company paid Carlyle a fee of $20.2 million in 2013 to terminate the management agreement. The fees paid to Carlyle are reflected in selling, general and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income. Other than the transactions noted above, there were no material related party transactions for the years ended December 31, 2014, 2013 or 2012.

Geographic Information

Sales to customers located outside of the United States comprised 45%, 45% and 47% of total net sales during the years ended December 31, 2014, 2013 and 2012, respectively. Sales by geographic region, based on the destination of product shipments, were as follows:

	Year Ended December 31,
	2014		2013		2012
	(in millions)
United States	$	2,107.6	$	1,903.0	$	1,754.3
Europe, Middle East and Africa (EMEA)		739.3		711.5		692.4
Asia Pacific (APAC)		641.3		524.7		543.6
Central and Latin America		252.8		269.9		254.6
Canada		88.6		71.0		77.0
Consolidated net sales	$	3,829.6	$	3,480.1	$	3,321.9

Long-lived assets, excluding intangible assets, consist substantially of property, plant and equipment. The Company’s long-lived assets, excluding intangible assets, located in the U.S., APAC region (Asia Pacific) and EMEA region (Europe, Middle East and Africa) represented the following percentages of such long-lived assets: 54%, 26% and 15%, respectively, as of December 31, 2014 and 53%, 25% and 16%, respectively, as of December 31, 2013.