Operating Segments

We are organized around two global business platforms: Enterprise Solutions and Industrial Solutions. Each of the global business platforms represents a reportable segment.

Effective January 1, 2018, we changed our organizational structure and, as a result, now are reporting two segments. The segments formerly known as Broadcast Solutions and Enterprise Solutions now are presented as the Enterprise Solutions segment, and the segments formerly known as Industrial Solutions and Network Solutions now are presented as the Industrial Solutions segment. The reorganization allows us to further accelerate progress in key strategic areas and the segment consolidation properly aligns our external reporting with the way the businesses are now managed. We have recast the prior period segment information to conform to the change in the composition of these reportable segments. This change had no impact to our reporting units for purposes of goodwill impairment testing.

The key measures of segment profit or loss reviewed by our chief operating decision maker are Segment Revenues and Segment EBITDA. Segment Revenues represent non-affiliate revenues and include revenues that would have otherwise been recorded by acquired businesses as independent entities but were not recognized in our Consolidated Statements of Operations due to the effects of purchase accounting and the associated write-down of acquired deferred revenue to fair value. Segment EBITDA excludes certain items, including depreciation expense; amortization of intangibles; asset impairment; severance, restructuring, and acquisition integration costs; purchase accounting effects related to acquisitions, such as the adjustment of acquired inventory and deferred revenue to fair value; and other costs. We allocate corporate expenses to the segments for purposes of measuring Segment EBITDA. Corporate expenses are allocated on the basis of each segment’s relative EBITDA prior to the allocation.

Our measure of segment assets does not include cash, goodwill, intangible assets, deferred tax assets, or corporate assets. All goodwill is allocated to reporting units of our segments for purposes of impairment testing.



	Enterprise Solutions		Industrial Solutions		Total Segments

	(In thousands)
As of and for the three months ended April 1, 2018
Segment revenues	$	350,990	$	256,433	$	607,423
Affiliate revenues	846		29		875
Segment EBITDA	57,452		46,426		103,878
Depreciation expense	7,220		4,645		11,865
Amortization of intangibles	11,170		13,248		24,418
Amortization of software development intangible assets	236		—		236
Severance, restructuring, and acquisition integration costs	14,534		5,860		20,394
Purchase accounting effects of acquisitions	502		—		502
Deferred revenue adjustments	1,858		—		1,858
Segment assets	747,971		432,473		1,180,444
As of and for the three months ended April 2, 2017
Segment revenues	$	314,278	$	237,103	$	551,381
Affiliate revenues	2,033		26		2,059
Segment EBITDA	49,523		43,847		93,370
Depreciation expense	6,548		4,835		11,383
Amortization of intangibles	10,439		13,230		23,669
Severance, restructuring, and acquisition integration costs	5,281		1,319		6,600
Segment assets	571,540		369,172		940,712

The following table is a reconciliation of the total of the reportable segments’ Revenues and EBITDA to consolidated revenues and consolidated income before taxes, respectively.



	Three Months Ended
	April 1, 2018			April 2, 2017

	(In thousands)
Total Segment Revenues	$	607,423		$	551,381
Deferred revenue adjustments (1)	(1,858		)	—
Consolidated Revenues	$	605,565		$	551,381

Total Segment EBITDA	$	103,878		$	93,370
Amortization of intangibles	(24,418		)	(23,669		)
Severance, restructuring, and acquisition integration costs (2)	(20,394		)	(6,600		)
Depreciation expense	(11,865		)	(11,383		)
Deferred revenue adjustments (1)	(1,858		)	—
Purchase accounting effects related to acquisitions (3)	(502		)	—
Amortization of software development costs	(236		)	—
Loss on sale of assets	(94		)	—
Income from equity method investment	—			1,007
Eliminations	(308		)	(1,128		)
Consolidated operating income	44,203			51,597
Interest expense, net	(16,978		)	(23,506		)
Non-operating pension costs	(275		)	(260		)
Loss on debt extinguishment	(19,960		)	—
Consolidated income before taxes	$	6,990		$	27,831

(1) For the three months ended April 1, 2018, our segment results include revenues that would have been recorded by acquired businesses had they remained as independent entities. Our consolidated results do not include these revenues due to the purchase accounting effect of recording deferred revenue at fair value.

(2) See Note 9, Severance, Restructuring, and Acquisition Integration Activities, for details.

(3) For the three months ended ended April 1, 2018, we recognized cost of sales for the adjustment of acquired inventory to fair value related to the SAM acquisition.