Operating Segments

3 Months Ended

Mar. 29, 2015

Segment Reporting [Abstract]

Operating Segments

Note 3:    Operating Segments

We are organized around five global business platforms: Broadcast, Enterprise Connectivity, Industrial Connectivity, Industrial IT, and Network Security. The Network Security platform was formed with our acquisition of Tripwire in January 2015. Each of the global business platforms represents a reportable segment.

Effective January 1, 2015, 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. The prior period presentation has been updated accordingly.

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.

	Broadcast Solutions		Enterprise Connectivity Solutions		Industrial Connectivity Solutions		Industrial IT Solutions		Network Security Solutions		Total Segments
	(In thousands)
As of and for the three months ended March 29, 2015
Segment Revenues	$	213,586	$	104,695	$	152,972	$	61,073	$	37,125	$	569,451
Affiliate revenues		341		1,620		323		21		8		2,313
Segment EBITDA		29,232		13,881		24,173		11,087		9,901		88,274
Segment depreciation and amortization		16,905		3,140		3,674		1,969		12,357		38,045
Segment assets		418,175		210,120		257,059		62,559		43,497		991,410
As of and for the three months ended March 30, 2014
Segment Revenues	$	166,485	$	108,394	$	159,318	$	54,110	$	-	$	488,307
Affiliate revenues		199		2,076		1,356		2		-		3,633
Segment EBITDA		26,171		14,175		23,682		9,588		-		73,616
Segment depreciation and amortization		13,400		3,868		2,649		1,321		-		21,238
Segment assets		292,690		228,401		270,295		61,001		-		852,387

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

	Three Months Ended
	March 29, 2015		March 30, 2014
	(In thousands)
Total Segment Revenues	$	569,451	$	488,307
Deferred revenue adjustments (1)		(22,494)		(617)
Consolidated Revenues	$	546,957	$	487,690
Total Segment EBITDA	$	88,274	$	73,616
Amortization of intangibles		(26,504)		(11,741)
Deferred gross profit adjustments (1)		(21,658)		(450)
Severance, restructuring, and acquisition integration costs (2)		(14,483)		(2,295)
Depreciation expense		(11,541)		(9,497)
Purchase accounting effects related to acquisitions (3)		(9,422)		-
Income from equity method investment		768		954
Eliminations		(536)		(1,076)
Consolidated operating income		4,898		49,511
Interest expense		(23,926)		(18,820)
Interest income		80		150
Consolidated income (loss) from continuing operations before taxes	$	(18,948)	$	30,841

(1) For the three months ended March 29, 2015, both our consolidated revenues and gross profit were negatively impacted by approximately $18.4 million, primarily due to the reduction of the acquired deferred revenue balance to fair value associated with our acquisition of Tripwire. In addition, for the three months ended March 29, 2015, our consolidated revenues and gross profit were negatively impacted by approximately $4.1 million and $3.3 million, respectively, primarily due to the reduction of the acquired deferred revenue balance to fair value associated with our acquisition of Grass Valley. See Note 2, Acquisitions.

(2) See Note 7, Severance, Restructuring, and Acquisition Integration Activities, for details by segment.

(3) For the three months ended March 29, 2015, we recognized $9.2 million of compensation expense related to the accelerated vesting of acquiree stock based compensation awards associated with our acquisition of Tripwire. In addition, we recognized $0.3 million of cost of sales related to the adjustment of acquired inventory to fair value related to our acquisition of Coast. See Note 2, Acquisitions.