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Segment Information
 6 Months Ended
Jul. 01, 2016
Segment Reporting [Abstract]  
Segment Information
SEGMENT INFORMATION
Operating segments are defined as components of an enterprise that engage in business activities for which separate financial information is available and evaluated by the Company’s Chief Operating Decision Maker ( the “CODM”), which for Harmonic is its Chief Executive Officer, in deciding how to allocate resources and assess performance. Based on our internal reporting structure, the Company consists of two operating segments: Video and Cable Edge, and prior to the fourth quarter of 2014, the Company operated its business in only one reportable segment. The operating segments were determined based on the nature of the products offered. The Video segment sells video processing and production and playout solutions and services worldwide to broadcast and media companies, streaming new media companies, cable operators, and satellite and telecommunications (telco) Pay-TV service providers. The Cable Edge segment sells cable edge solutions and related services to cable operators globally.
The Company does not allocate amortization of intangibles, stock-based compensation, restructuring and related charges, TVN acquisition- and integration-related costs, and certain other non-recurring charges to the operating income for each segment because management does not include this information in the measurement of the performance of the operating segments. A measure of assets by segment is not applicable as segment assets are not included in the discrete financial information provided to the CODM.
On February 29, 2016, the Company completed its acquisition of 100% of the outstanding equity of TVN and assigned TVN to its Video operating segment.

The following tables provide summary financial information by reportable segment (in thousands):


 
Three months ended
 
Six months ended
 
July 1, 2016
 
July 3, 2015
 
July 1, 2016
 
July 3, 2015
Net revenue:


 


 


 


  Video
$
90,588

 
$
78,207

 
$
155,596

 
$
147,489

  Cable Edge
18,983

 
24,896

 
35,807

 
59,630

Total consolidated net revenue
$
109,571

 
$
103,103

 
$
191,403

 
$
207,119

 


 


 


 


Operating income (loss):


 


 


 


  Video
$
518

 
$
4,901

 
$
(6,829
)
 
$
4,811

  Cable Edge
(498
)
 
357

 
(2,351
)
 
6,545

Total segment operating income (loss)
20

 
5,258

 
(9,180
)
 
11,356

Unallocated corporate expenses (1)
(9,831
)
 
(185
)
 
(15,510
)
 
(229
)
Stock-based compensation
(2,768
)
 
(3,884
)
 
(5,862
)
 
(8,018
)
Amortization of intangibles
(5,539
)
 
(1,532
)
 
(8,322
)
 
(3,439
)
Loss from operations
(18,118
)
 
(343
)
 
(38,874
)
 
(330
)
Non-operating income (expense)
(2,319
)
 
76

 
(6,225
)
 
(2,880
)
Loss before income taxes
$
(20,437
)
 
$
(267
)
 
$
(45,099
)
 
$
(3,210
)

(1) Unallocated corporate expenses include certain corporate-level operating expenses and charges such as restructuring and related charges and excess facilities charges. Additionally, the unallocated corporate expenses in 2016 include TVN acquisition- and integration-related costs (see Note 3, “Business Acquisition” for additional information) and an inventory obsolescence charge of approximately $4.5 million recorded in the second quarter of 2016 for some older Cable Edge product lines in accordance with the Company’s policy for excess and obsolete inventory and also as part of our strategic plan to re-position and dedicate the Company’s primary Cable Edge resources to its new CableOS products.