Description of Business and Basis of Presentation

12 Months Ended

Dec. 31, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business and Basis of Presentation

Description of Business and Basis of Presentation

Description of Business

MRV Communications, Inc. ("MRV" or the "Company"), a Delaware corporation, is a global supplier of communications solutions to telecommunications service providers, enterprises and governments throughout the world. MRV's products enable customers to provide high-bandwidth data and video services and mobile communications services more efficiently and cost effectively. MRV markets and sells its products worldwide, through a variety of channels, which include a dedicated direct sales force, manufacturers' representatives, value-added-resellers, distributors and systems integrators. MRV conducts its business along two principal segments: the Network Equipment segment and the Network Integration segment. MRV's Network Equipment segment designs, manufactures, sells, and services equipment used by commercial customers, governments, and telecommunications service providers. Products include switches, optical transport platforms, physical layer products and out-of-band management products, and specialized networking products. The Italian Network Integration segment provides network system design, integration and distribution services that include products manufactured by third-party vendors.

Basis of Presentation

MRV's fiscal year is based on the calendar year ending on December 31. The accompanying financial statements include the accounts of MRV and its subsidiaries required to be consolidated in accordance with the Accounting Standards Codification, or ASC, 810-10 Consolidations ("ASC 810"). All significant intercompany transactions and accounts have been eliminated. MRV consolidates the financial results of less than majority-owned subsidiaries when it has effective control, voting control or has provided the entity's working capital. When others invest in these enterprises reducing its voting control below 50%, MRV discontinues consolidation and uses the cost or equity method of accounting for these investments, unless otherwise required by ASC 810.

On May 6, 2011, the Company sold all of the issued and outstanding capital stock of three wholly-owned operating subsidiaries, TurnKey Communications AG, TurnKey Services AG, and Elcoma AG (together “TurnKey"), which were part of our Network Integration segment. On March 29, 2012, we sold all of the issued and outstanding capital stock of Creative Electronic Systems SA ("CES"), which was part of our Network Equipment segment. On October 12, 2012, we sold all of the issued and outstanding capital stock of Alcadon-MRV AB ("Alcadon"), which was part of our Network Integration segment. On October 16, 2012, we sold all of the issued and outstanding capital stock of Pedrena Enterprises B.V. ("Pedrena"), which was part of our Network Integration segment. We have reclassified the historical financial results of TurnKey, CES, Alcadon and Pedrena to discontinued operations in all periods presented. Cash flows from discontinued operations are presented combined with the cash flows from continuing operations in the accompanying Statement of Cash Flows for 2012.