Operating Segments

6 Months Ended

Jun. 28, 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 June 28, 2015
Segment revenues	$	219,415	$	117,335	$	160,875	$	61,270		$	39,618	$	598,513
Affiliate revenues		380		1,330		407		10			-		2,127
Segment EBITDA		31,614		21,101		28,680		10,178			8,772		100,345
Depreciation expense		4,373		2,947		2,869		584			919		11,692
Amortization expense		12,889		135		807		1,479			10,607		25,917
Severance, restructuring, and acquisition integration costs		3,283		83		1,163		-			378		4,907
Deferred gross profit adjustments		(924)		-		-		-			14,364		13,440
Segment assets		410,194		222,015		267,448		63,599			42,241		1,005,497
As of and for the three months ended June 29, 2014
Segment revenues	$	252,278	$	121,272	$	178,244	$	53,260		$	-	$	605,054
Affiliate revenues		84		1,628		485		6			-		2,203
Segment EBITDA		31,318		19,667		29,462		8,806			-		89,253
Depreciation expense		4,609		3,799		2,458		534			-		11,400
Amortization expense		14,424		167		271		933			-		15,795
Severance, restructuring, and acquisition integration costs		27,524		1,821		8,144		719			-		38,208
Purchase accounting effects of acquisitions		7,148		147		250		618			-		8,163
Deferred gross profit adjustments		3,915		-		-		-			-		3,915
Segment assets		419,814		236,860		282,874		70,998			-		1,010,546
As of and for the six months ended June 28, 2015
Segment revenues	$	433,001	$	222,030	$	313,847	$	122,343		$	76,743	$	1,167,964
Affiliate revenues		721		2,950		731		31			8		4,441
Segment EBITDA		60,846		34,982		52,853		21,265			18,673		188,619
Depreciation expense		8,558		5,949		5,720		1,143			1,863		23,233
Amortization expense		25,609		273		1,630		2,889			22,020		52,421
Severance, restructuring, and acquisition integration costs		14,821		640		2,936		(52	)		1,045		19,390
Purchase accounting effects of acquisitions		-		-		267		-			9,155		9,422
Deferred gross profit adjustments		2,370		-		-		-			32,728		35,098
Segment assets		410,194		222,015		267,448		63,599			42,241		1,005,497
As of and for the six months ended June 29, 2014
Segment revenues	$	418,763	$	229,666	$	337,562	$	107,370		$	-	$	1,093,361
Affiliate revenues		283		3,704		1,841		8			-		5,836
Segment EBITDA		57,489		33,842		53,144		18,394			-		162,869
Depreciation expense		7,490		7,499		4,842		1,066			-		20,897
Amortization expense		24,943		335		536		1,722			-		27,536
Severance, restructuring, and acquisition integration costs		28,967		1,821		8,144		719			-		39,651
Purchase accounting effects of acquisitions		7,458		286		533		738			-		9,015
Deferred gross profit adjustments		4,365		-		-		-			-		4,365
Segment assets		419,814		236,860		282,874		70,998			-		1,010,546

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				Six Months Ended
	June 28, 2015		June 29, 2014		June 28, 2015		June 29, 2014
	(In thousands)				(In thousands)
Total Segment Revenues	$	598,513	$	605,054	$	1,167,964	$	1,093,361
Deferred revenue adjustments (1)		(12,758)		(4,163)		(35,252)		(4,780)
Consolidated Revenues	$	585,755	$	600,891	$	1,132,712	$	1,088,581
Total Segment EBITDA	$	100,345	$	89,253	$	188,619	$	162,869
Amortization of intangibles		(25,917)		(15,795)		(52,421)		(27,536)
Deferred gross profit adjustments (1)		(13,440)		(3,915)		(35,098)		(4,365)
Severance, restructuring, and acquisition integration costs (2)		(4,907)		(38,208)		(19,390)		(39,651)
Depreciation expense		(11,692)		(11,400)		(23,233)		(20,897)
Purchase accounting effects related to acquisitions (3)		-		(8,163)		(9,422)		(9,015)
Income from equity method investment		343		1,256		1,111		2,210
Eliminations		(589)		(702)		(1,125)		(1,778)
Consolidated operating income		44,143		12,326		49,041		61,837
Interest expense, net		(24,769)		(18,092)		(48,615)		(36,762)
Consolidated income (loss) from continuing operations before taxes	$	19,374	$	(5,766)	$	426	$	25,075

(1) For the three and six months ended June 28, 2015, both our consolidated revenues and gross profit were negatively impacted by the reduction of the acquired deferred revenue balance to fair value associated with our acquisition of Tripwire. See Note 2, Acquisitions.

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

(3) For the six months ended June 28, 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.