Reportable Segments

6 Months Ended

Jun. 28, 2020

Segment Reporting [Abstract]

Reportable Segments

Reportable 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, 2020, we transferred our West Penn Wire business and multi-conductor product lines from the Enterprise Solutions segment to the Industrial Solutions segment as a result of a shift in responsibilities among the segments. We have recast the prior period segment information to conform to the change in the composition of reportable segments.

The key measures of segment profit or loss 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 Condensed Consolidated Statements of Operations and Comprehensive Income 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 June 28, 2020
Segment revenues	$	203,374	$	221,437	$	424,811
Affiliate revenues	485		14		499
Segment EBITDA	22,231		26,449		48,680
Depreciation expense	5,122		5,210		10,332
Amortization of intangibles	5,354		10,663		16,017
Amortization of software development intangible assets	56		330		386
Severance, restructuring, and acquisition integration costs	2,423		2,049		4,472
Purchase accounting effects of acquisitions	105		—		105
Segment assets	502,767		464,862		967,629
As of and for the three months ended June 30, 2019
Segment revenues	$	245,325	$	303,027	$	548,352
Affiliate revenues	893		—		893
Segment EBITDA	35,571		55,744		91,315
Depreciation expense	4,852		5,056		9,908
Amortization of intangibles	5,726		13,342		19,068
Amortization of software development intangible assets	35		28		63
Severance, restructuring, and acquisition integration costs	2,519		—		2,519
Purchase accounting effects of acquisitions	718		—		718
Segment assets	490,847		533,697		1,024,544
As of and for the six months ended June 28, 2020
Segment revenues	$	415,587	$	472,750	$	888,337
Affiliate revenues	709		20		729
Segment EBITDA	46,943		61,976		108,919
Depreciation expense	10,203		10,411		20,614
Amortization of intangibles	10,858		21,344		32,202
Amortization of software development intangible assets	111		605		716
Severance, restructuring, and acquisition integration costs	4,973		3,118		8,091
Purchase accounting effects of acquisitions	125		—		125
Segment assets	502,767		464,862		967,629
As of and for the six months ended June 30, 2019
Segment revenues	$	452,408	$	596,084	$	1,048,492
Affiliate revenues	2,437		17		2,454
Segment EBITDA	57,206		110,408		167,614
Depreciation expense	9,657		10,354		20,011
Amortization of intangibles	10,425		26,807		37,232
Amortization of software development intangible assets	71		51		122
Severance, restructuring, and acquisition integration costs	2,519		—		2,519
Purchase accounting effects of acquisitions	718		—		718
Segment assets	490,847		533,697		1,024,544

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

	Three Months Ended				Six Months Ended
	June 28, 2020		June 30, 2019		June 28, 2020		June 30, 2019
	(In thousands)
Total Segment and Consolidated Revenues	$	424,811	$	548,352	$	888,337	$	1,048,492
Total Segment EBITDA	$	48,680	$	91,315	$	108,919	$	167,614
Amortization of intangibles	(16,017)		(19,068)		(32,202)		(37,232)
Depreciation expense	(10,332)		(9,908)		(20,614)		(20,011)
Severance, restructuring, and acquisition integration costs (1)	(4,472)		(2,519)		(8,091)		(2,519)
Amortization of software development intangible assets	(386)		(63)		(716)		(122)
Purchase accounting effects related to acquisitions (2)	(105)		(718)		(125)		(718)
Eliminations	(238)		(264)		(333)		(747)
Consolidated operating income	17,130		58,775		46,838		106,265
Interest expense, net	(14,257)		(13,961)		(27,581)		(27,949)
Total non-operating pension benefit	700		537		1,399		1,140
Consolidated income from continuing operations before taxes	$	3,573	$	45,351	$	20,656	$	79,456

(1) See Note 11, Severance, Restructuring, and Acquisition Integration Activities, for details.

(2) During the three and six months ended June 28, 2020, we recognized cost of sales related to purchase accounting adjustments of acquired inventory to fair value for the SPC acquisition.