Segments and Geographic Information

9 Months Ended

Sep. 30, 2015

Segment Reporting [Abstract]

Segments and Geographic Information

8. SEGMENTS AND GEOGRAPHIC INFORMATION

Following the BNS acquisition, management is operating the Company in the following four reportable segments, which align with the manner in which the business is managed: Wireless, Enterprise, Broadband and Broadband Network Solutions (BNS). Management intends to re-evaluate reportable segments as a result of the integration of the BNS business.

The Wireless segment provides merchant radio frequency (RF) wireless network connectivity solutions, metro cell 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 antennas, microwave antennas, hybrid fiber-feeder cables, coaxial cables, connectors, amplifiers, filters and backup power solutions. Metro cell solutions can be found outdoors on street poles and on other urban structures and include RF delivery, equipment housing and concealment solutions. These fully integrated outdoor systems consist of specialized antennas, filters/combiners, backhaul solutions, intra-system cabling and power distribution systems, 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 commercial buildings and data centers. 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 BNS segment provides fiber-optic and copper connectivity for telecom, enterprise and wireless networks as well as small cell DAS solutions for the wireless market. The BNS telecom business primarily consists of fiber-to-the-X (FTTx) solutions and central office connectivity and equipment, including fiber optic connectors, fiber management systems, splice closures, couplers and splitters, high-density cable assemblies and complete cabling systems. The enterprise business primarily consists of fiber and copper connectivity, data center solutions, outlets, patch cords and panels and cable assemblies for use in office, data center, factory and residential applications. The wireless business consists of radio frequency distribution and distributed antenna systems to enhance wireless coverage and capacity.

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

	September 30, 2015		December 31, 2014
Identifiable segment-related assets:
Wireless	$	2,252.7	$	2,372.8
Enterprise		1,404.1		1,403.4
Broadband		327.6		352.6
BNS		3,168.6		—
Total identifiable segment-related assets		7,153.0		4,128.8
Reconciliation to total assets:
Cash and cash equivalents		618.0		729.3
Deferred income tax assets		90.2		59.0
Total assets	$	7,861.2	$	4,917.1

The following table provides net sales, operating income, depreciation and amortization by reportable segment, including BNS segment results of operations from August 28, 2015, the date of acquisition, through their fiscal period ended September 25, 2015 (in millions):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Net sales:
Wireless	$	475.3		$	633.0		$	1,486.8		$	1,985.0
Enterprise		227.8			218.0			661.0			638.0
Broadband		128.5			149.5			377.1			380.4
BNS		141.1			—			141.1			—
Inter-segment eliminations		(0.1	)		(0.1	)		(0.7	)		(1.7	)
Consolidated net sales	$	972.6		$	1,000.4		$	2,665.3		$	3,001.7
Operating income (loss):
Wireless (1)	$	(2.2	)	$	113.8		$	132.4		$	420.3
Enterprise (2)		39.3			25.3			98.0			78.3
Broadband (3)		2.0			11.9			11.2			2.6
BNS (4)		(81.6	)		—			(81.6	)		—
Consolidated operating income (loss)	$	(42.5	)	$	151.0		$	160.0		$	501.2
Depreciation:
Wireless	$	7.5		$	7.5		$	21.7		$	21.8
Enterprise		2.7			2.9			7.9			8.4
Broadband		1.9			2.0			5.6			6.0
BNS		3.5			—			3.5			—
Consolidated depreciation	$	15.6		$	12.4		$	38.7		$	36.2
Amortization (5):
Wireless	$	23.1		$	23.2		$	69.2		$	68.1
Enterprise		17.4			17.3			52.1			52.1
Broadband		3.8			4.3			12.4			13.2
BNS		10.0			—			10.0			—
Consolidated amortization	$	54.3		$	44.8		$	143.7		$	133.4

(1) Operating income for the three months ended September 30, 2015 and 2014 includes transaction and integration costs of $0.6 million and $1.7 million, respectively. Transaction and integration costs for the nine months ended September 30, 2015 and 2014 were $10.3 million and $2.9 million, respectively. Operating income includes restructuring charges of $1.3 million and $5.9 million for the three months ended September 30, 2015 and 2014, respectively. Restructuring charges for the nine months ended September 30, 2015 and 2014 were $4.0 million and $8.7 million, respectively. Operating income includes impairment charges of $74.4 million and $7.0 million for the three months and nine months ended September 30, 2015 and 2014, respectively.

(2) Operating income for the three months ended September 30, 2015 and 2014 includes transaction and integration costs of $0.3 million and $0.7 million, respectively. Transaction and integration costs for the nine months ended September 30, 2015 and 2014 were $6.0 million and $1.2 million, respectively. Operating income for the three and nine months ended September 30, 2014 includes gains of $0.7 million and $12.7 million, respectively, from adjustments to the estimated fair value of contingent consideration related to the Redwood acquisition.

(3) Operating income for the three months ended September 30, 2015 and 2014 includes transaction and integration costs of $0.2 million and $0.3 million, respectively. Transaction and integration costs for the nine months ended September 30, 2015 and 2014 were $6.0 million and $0.6 million, respectively. Operating income includes restructuring charges of $0.2 million and $1.6 million for the three months ended September 30, 2015 and 2014, respectively. Restructuring charges for the nine months ended September 30, 2015 and 2014 were $1.3 million and $2.9 million, respectively. Operating income includes impairment charges of $10.9 million for the three and nine months ended September 30, 2015, and impairment charges of $7.2 million for the nine months ended September 30, 2014.

(4) Operating income for the three and nine months ended September 30, 2015 includes transaction and integration costs of $59.8 million, restructuring charges of $5.3 million and purchase accounting charges related to the mark-up of inventory of $30.5 million.

(5) Excludes amortization of debt issuance costs and original issue discount.

Sales to customers located outside of the U.S. comprised 48.9% and 50.2% of total net sales for the three and nine months ended September 30, 2015, respectively, compared to 47.3% and 42.5% for the three and nine months ended September 30, 2014, respectively. Sales by geographic region, based on the destination of product shipments, were as follows (in millions):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
United States	$	497.3	$	527.1	$	1,326.9	$	1,726.6
Europe, Middle East and Africa		196.4		189.6		533.1		547.6
Asia Pacific		187.0		181.2		537.4		470.0
Central and Latin America		65.6		64.4		197.3		183.5
Canada		26.3		38.1		70.6		74.0
Consolidated net sales	$	972.6	$	1,000.4	$	2,665.3	$	3,001.7