10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended June 30, 2015

OR

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Transition Period from                      to                     

Commission File Number 0-24612

ADTRAN, Inc.

(Exact name of Registrant as specified in its charter)

Delaware	63-0918200
(State of	(I.R.S. Employer
Incorporation)	Identification No.)

901 Explorer Boulevard, Huntsville, Alabama 35806-2807

(Address of principal executive offices, including zip code)

(256) 963-8000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T (232.405 of this chapter) during the preceding 12 months (or for shorter period that the Registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	x	Accelerated Filer	¨
Non-accelerated Filer	¨	Smaller Reporting Company	¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the latest practicable date:

Class	Outstanding at July 22, 2015
Common Stock, $.01 Par Value	49,928,495 Shares

ADTRAN, Inc.

Quarterly Report on Form 10-Q

For the Three and Six Months Ended June 30, 2015

Table of Contents

Item Number		Page Number
	PART I. FINANCIAL INFORMATION
1	Financial Statements:
	Consolidated Balance Sheets as of June 30, 2015 and December 31, 2014 – (Unaudited)		3
	Consolidated Statements of Income for the three and six months ended June 30, 2015 and 2014 – (Unaudited)		4
	Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2015 and 2014 – (Unaudited)		5
	Consolidated Statements of Cash Flows for the six months ended June 30, 2015 and 2014 – (Unaudited)		6
	Notes to Consolidated Financial Statements – (Unaudited)		7
2	Management’s Discussion and Analysis of Financial Condition and Results of Operations		25
3	Quantitative and Qualitative Disclosures About Market Risk		34
4	Controls and Procedures		36
	PART II. OTHER INFORMATION
1A	Risk Factors		36
2	Unregistered Sales of Equity Securities and Use of Proceeds		36
6	Exhibits		37
	SIGNATURE		38
	EXHIBIT INDEX		39

FORWARD LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of ADTRAN. ADTRAN and its representatives may from time to time make written or oral forward-looking statements, including statements contained in this report, our other filings with the Securities and Exchange Commission (SEC) and other communications with our stockholders. Generally, the words, “believe,” “expect,” “intend,” “estimate,” “anticipate,” “will,” “may,” “could” and similar expressions identify forward-looking statements. We caution you that any forward-looking statements made by us or on our behalf are subject to uncertainties and other factors that could cause such statements to be wrong. A list of factors that could materially affect our business, financial condition or operating results is included under “Factors that Could Affect Our Future Results” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in Item 2 of Part I of this report. They have also been discussed in Item 1A of Part I in our most recent Annual Report on Form 10-K for the year ended December 31, 2014 filed on February 24, 2015 with the SEC. Though we have attempted to list comprehensively these important factors, we caution investors that other factors may prove to be important in the future in affecting our operating results. New factors emerge from time to time, and it is not possible for us to predict all of these factors, nor can we assess the impact each factor or a combination of factors may have on our business.

You are further cautioned not to place undue reliance on these forward-looking statements because they speak only of our views as of the date that the statements were made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ADTRAN, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except per share amounts)

	June 30,			December 31,
	2015			2014
ASSETS
Current Assets
Cash and cash equivalents	$	87,215		$	73,439
Short-term investments		54,127			46,919
Accounts receivable, less allowance for doubtful accounts of $21 and $136 at June 30, 2015 and December 31, 2014, respectively		89,088			88,502
Other receivables		31,442			33,295
Inventory, net		100,048			86,710
Prepaid expenses		5,817			5,129
Deferred tax assets, net		17,038			17,095
Total Current Assets		384,775			351,089
Property, plant and equipment, net		73,347			74,828
Deferred tax assets, net		20,473			17,694
Goodwill		3,492			3,492
Other assets		10,236			10,942
Long-term investments		216,665			280,649
Total Assets	$	708,988		$	738,694
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	85,456		$	56,414
Unearned revenue		17,495			22,762
Accrued expenses		15,538			11,077
Accrued wages and benefits		15,515			13,855
Income tax payable, net		10,072			14,901
Total Current Liabilities		144,076			119,009
Non-current unearned revenue		9,444			10,948
Other non-current liabilities		31,268			30,924
Bonds payable		28,800			28,800
Total Liabilities		213,588			189,681
Commitments and contingencies (see Note 14)
Stockholders’ Equity
Common stock, par value $0.01 per share; 200,000 shares authorized; 79,652 shares issued and 50,573 shares outstanding at June 30, 2015 and 79,652 shares issued and 53,431 shares outstanding at December 31, 2014		797			797
Additional paid-in capital		244,920			241,829
Accumulated other comprehensive loss		(4,667	)		(75	)
Retained earnings		903,448			907,751
Less treasury stock at cost: 29,079 and 26,221 shares at June 30, 2015 and December 31, 2014, respectively		(649,098	)		(601,289	)
Total Stockholders’ Equity		495,400			549,013
Total Liabilities and Stockholders’ Equity	$	708,988		$	738,694

See notes to consolidated financial statements

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ADTRAN, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except per share amounts)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
Sales	$	160,138		$	176,129		$	302,973		$	323,133
Cost of sales		91,892			89,332			169,164			158,546
Gross Profit		68,246			86,797			133,809			164,587
Selling, general and administrative expenses		32,123			33,788			63,187			67,727
Research and development expenses		35,479			33,670			68,015			66,223
Operating Income		644			19,339			2,607			30,637
Interest and dividend income		908			1,054			1,841			2,348
Interest expense		(149	)		(148	)		(297	)		(375	)
Net realized investment gain		3,255			2,340			6,370			4,532
Other expense, net		(547	)		(774	)		(900	)		(652	)
Income before provision for income taxes		4,111			21,811			9,621			36,490
Provision for income taxes		(1,567	)		(7,416	)		(3,760	)		(12,488	)
Net Income	$	2,544		$	14,395		$	5,861		$	24,002
Weighted average shares outstanding – basic		51,822			55,409			52,607			56,077
Weighted average shares outstanding – diluted		51,917			55,729			52,742			56,559
Earnings per common share – basic	$	0.05		$	0.26		$	0.11		$	0.43
Earnings per common share – diluted	$	0.05		$	0.26		$	0.11		$	0.42
Dividend per share	$	0.09		$	0.09		$	0.18		$	0.18

See notes to consolidated financial statements

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ADTRAN, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2015			2014		2015			2014
Net Income	$	2,544		$	14,395	$	5,861		$	24,002
Other Comprehensive Income (Loss), net of tax:
Net unrealized gains (losses) on available-for-sale securities		(1,783	)		1,219		(2,286	)		298
Defined benefit plan adjustments		72			—		140			—
Foreign currency translation		872			134		(2,446	)		386
Other Comprehensive Income (Loss), net of tax		(839	)		1,353		(4,592	)		684
Comprehensive Income, net of tax	$	1,705		$	15,748	$	1,269		$	24,686

See notes to consolidated financial statements

5

ADTRAN, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	Six Months Ended June 30,
	2015			2014
Cash flows from operating activities:
Net income	$	5,861		$	24,002
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		7,256			7,467
Amortization of net premium on available-for-sale investments		1,578			2,272
Net realized gain on long-term investments		(6,370	)		(4,532	)
Net loss on disposal of property, plant and equipment		160			37
Stock-based compensation expense		3,114			4,149
Deferred income taxes		(1,743	)		377
Tax benefit from stock option exercises		(23	)		67
Excess tax benefits from stock-based compensation arrangements		38			(58	)
Changes in operating assets and liabilities:
Accounts receivable, net		(2,003	)		(31,583	)
Other receivables		(119	)		(4,072	)
Inventory		(14,254	)		841
Prepaid expenses and other assets		(1,433	)		(3,103	)
Accounts payable		30,938			14,425
Accrued expenses and other liabilities		2,175			8,248
Income tax payable, net		(3,961	)		4,442
Net cash provided by operating activities		21,214			22,979
Cash flows from investing activities:
Purchases of property, plant and equipment		(5,392	)		(4,919	)
Proceeds from disposals of property, plant and equipment		8			1
Proceeds from sales and maturities of available-for-sale investments		120,422			166,518
Purchases of available-for-sale investments		(62,626	)		(106,406	)
Net cash provided by investing activities		52,412			55,194
Cash flows from financing activities:
Proceeds from stock option exercises		833			1,781
Purchases of treasury stock		(49,307	)		(53,091	)
Dividend payments		(9,509	)		(10,137	)
Payments on long-term debt		—			(16,500	)
Excess tax benefits from stock-based compensation arrangements		(38	)		58
Net cash used in financing activities		(58,021	)		(77,889	)
Net increase in cash and cash equivalents		15,605			284
Effect of exchange rate changes		(1,829	)		321
Cash and cash equivalents, beginning of period		73,439			58,298
Cash and cash equivalents, end of period	$	87,215		$	58,903
Supplemental disclosure of non-cash investing activities:
Purchases of property, plant and equipment included in accounts payable	$	270		$	423

See notes to consolidated financial statements

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ADTRAN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In thousands, except per share amounts)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited consolidated financial statements of ADTRAN^®, Inc. and its subsidiaries (ADTRAN) have been prepared pursuant to the rules and regulations for reporting on Quarterly Reports on Form 10-Q. Accordingly, certain information and notes required by generally accepted accounting principles for complete financial statements are not included herein. The December 31, 2014 Consolidated Balance Sheet is derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States.

In the opinion of management, all adjustments necessary to fairly state these interim statements have been recorded and are of a normal and recurring nature. The results of operations for an interim period are not necessarily indicative of the results for the full year. The interim statements should be read in conjunction with the financial statements and notes thereto included in ADTRAN’s Annual Report on Form 10-K for the year ended December 31, 2014, filed on February 24, 2015 with the SEC.

Changes in Classifications

We reclassified $2.3 million from other receivables to accounts receivable at December 31, 2014 to conform to the current period presentation.

Out of Period Adjustment

In connection with the preparation of our Condensed Consolidated Financial Statements, we recorded corrections of certain out of period, immaterial misstatements that occurred in prior periods, the most significant of which resulted in an increase in Other Expense of $1.3 million in the first quarter of 2015. The aggregate impact of the corrections was a $0.8 million reduction to pre-tax income for the six months ended June 30, 2015 and is not expected to be material to the current year annual results.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. Our more significant estimates include the obsolete and excess inventory reserves, warranty reserves, customer rebates, determination of the deferred revenue components of multiple element sales agreements, estimated costs to complete obligations associated with deferred revenues, estimated income tax provision and income tax contingencies, the fair value of stock-based compensation, impairment of goodwill, valuation and estimated lives of intangible assets, estimated pension liability, fair value of investments, and the evaluation of other-than-temporary declines in the value of investments. Actual amounts could differ significantly from these estimates.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, and early application is not permitted. ASU 2014-09 allows for either full retrospective or modified retrospective adoption. We are currently evaluating the transition method that will be elected and the impact that the adoption of ASU 2014-09 will have on our financial position, results of operations and cash flows.

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In April 2015, the FASB issued Accounting Standards Update No. 2015-05, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement (ASU 2015-05), which provides guidance on accounting for fees paid by a customer in a cloud computing arrangement. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. ASU 2015-05 is effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. Early adoption is permitted. The amendments may be applied either prospectively to all arrangements entered into or materially modified after the effective date or retrospectively. We do not believe the adoption of ASU 2015-05 will have a material impact on our financial position, results of operations and cash flows.

In July 2015, the FASB issued Accounting Standards Update No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory (ASU 2015-11). Currently, Topic 330, Inventory, requires an entity to measure inventory at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. ASU 2015-11 does not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost. ASU 2015-11 requires an entity to measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The amendments should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. We do not believe the adoption of ASU 2015-05 will have a material impact on our financial position, results of operations and cash flows.

2. INCOME TAXES

Our effective tax rate increased from 34.2% in the six months ended June 30, 2014 to 39.1% in the six months ended June 30, 2015. The increase in the effective tax rate between the two periods is primarily attributable to the release of a valuation allowance attributable to a foreign subsidiary in 2014.

3. PENSION BENEFIT PLAN

We maintain a defined benefit pension plan covering employees in certain foreign countries.

The following table summarizes the components of net periodic pension cost for the three and six months ended June 30, 2015 and 2014:

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2015			2014			2015			2014
Service cost	$	324		$	306		$	664		$	611
Interest cost		152			216			311			431
Expected return on plan assets		(250	)		(280	)		(511	)		(559	)
Amortization of actuarial losses		100			—			205			—
Net periodic pension cost	$	326		$	242		$	669		$	483

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4. STOCK-BASED COMPENSATION

The following table summarizes the stock-based compensation expense related to stock options, restricted stock units (RSUs) and restricted stock for the three and six months ended June 30, 2015 and 2014, which was recognized as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2015			2014			2015			2014
Stock-based compensation expense included in cost of sales	$	53		$	119		$	143		$	235
Selling, general and administrative expense		723			1,015			1,414			2,041
Research and development expense		699			958			1,557			1,873
Stock-based compensation expense included in operating expenses		1,422			1,973			2,971			3,914
Total stock-based compensation expense		1,475			2,092			3,114			4,149
Tax benefit for expense associated with non-qualified options		(222	)		(296	)		(402	)		(580	)
Total stock-based compensation expense, net of tax	$	1,253		$	1,796		$	2,712		$	3,569

The fair value of our stock options is estimated using the Black-Scholes model. The determination of the fair value of stock options on the date of grant using the Black-Scholes model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables that may have a significant impact on the fair value estimate.

There were no options granted during the three months ended June 30, 2015 and 2014. The weighted-average assumptions and value of options granted for the six months ended June 30, 2015 and 2014 are as follows:

	Six Months Ended
	June 30, 2015			June 30, 2014
Expected volatility		38.75	%		39.57	%
Risk-free interest rate		1.46	%		1.86	%
Expected dividend yield		1.60	%		1.38	%
Expected life (in years)		6.47			6.25
Weighted-average estimated value	$	7.63		$	9.28

The fair value of our RSUs is calculated using a Monte Carlo Simulation valuation method. No RSUs were granted or vested during the three and six months ended June 30, 2015 and 2014. Twelve thousand RSUs were forfeited during the six months ended June 30, 2015.

The fair value of restricted stock is equal to the closing price of our stock on the date of grant. No restricted stock was granted or forfeited during the three and six months ended June 30, 2015 and 2014. Two thousand shares of restricted stock vested during the three months ended June 30, 2015.

Stock-based compensation expense recognized in our Consolidated Statements of Income for the three and six months ended June 30, 2015 and 2014 is based on options, RSUs and restricted stock ultimately expected to vest, and has been reduced for estimated forfeitures. Estimated forfeitures for stock options are based upon historical experience and approximate 3.3% annually. We estimated a 0% forfeiture rate for our RSUs and restricted stock due to the limited number of recipients and historical experience for these awards.

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As of June 30, 2015, total compensation expense related to non-vested stock options, RSUs and restricted stock not yet recognized was approximately $12.6 million, which is expected to be recognized over an average remaining recognition period of 2.5 years.

The following table is a summary of our stock options outstanding as of December 31, 2014 and June 30, 2015 and the changes that occurred during the six months ended June 30, 2015:

(In thousands, except per share amounts)	Number of Options			Weighted Avg. Exercise Price		Weighted Avg. Remaining Contractual Life In Years		Aggregate Intrinsic Value
Options outstanding, December 31, 2014		6,981		$	23.62		6.45	$	10,625
Options granted		2		$	22.56
Options forfeited		(243	)	$	21.01
Options expired		(157	)	$	26.78
Options exercised		(52	)	$	16.08
Options outstanding, June 30, 2015		6,531		$	23.70		5.92	$	446
Options vested and expected to vest, June 30, 2015		6,440		$	23.75		5.85	$	331
Options exercisable, June 30, 2015		4,190		$	25.21		4.51	$	446

The aggregate intrinsic values in the table above represent the total pre-tax intrinsic value (the difference between the closing price of our stock on the last trading day of the quarter and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on June 30, 2015. The aggregate intrinsic value will change based on the fair market value of our stock.

The total pre-tax intrinsic value of options exercised during the three and six months ended June 30, 2015 was $25 thousand and $0.1 million, respectively.

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5. INVESTMENTS

At June 30, 2015, we held the following securities and investments, recorded at either fair value or cost.

(In thousands)	Amortized Cost		Gross Unrealized					Carrying Value
			Gains		Losses
Deferred compensation plan assets	$	14,046	$	2,601	$	(113	)	$	16,534
Corporate bonds		114,446		123		(139	)		114,430
Municipal fixed-rate bonds		67,302		130		(45	)		67,387
Municipal variable rate demand notes		3,695		—		—			3,695
Marketable equity securities		28,901		9,265		(866	)		37,300
Available-for-sale securities held at fair value	$	228,390	$	12,119	$	(1,163	)	$	239,346
Restricted investment held at cost									30,000
Other investments held at cost									1,446
Total carrying value of available-for-sale investments								$	270,792

At December 31, 2014, we held the following securities and investments, recorded at either fair value or cost.

(In thousands)	Amortized Cost		Gross Unrealized					Carrying Value
			Gains		Losses
Deferred compensation plan assets	$	13,897	$	2,409	$	(12	)	$	16,294
Corporate bonds		111,261		186		(186	)		111,261
Municipal fixed-rate bonds		127,341		480		(34	)		127,787
Municipal variable rate demand notes		2,465		—		—			2,465
Marketable equity securities		26,399		12,395		(539	)		38,255
Available-for-sale securities held at fair value	$	281,363	$	15,470	$	(771	)	$	296,062
Restricted investment held at cost									30,000
Other investments held at cost									1,506
Total carrying value of available-for-sale investments								$	327,568

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As of June 30, 2015, our corporate bonds and municipal fixed-rate bonds had the following contractual maturities:

(In thousands)	Corporate bonds		Municipal fixed-rate bonds
Less than one year	$	32,179	$	18,254
One to two years		42,510		35,462
Two to three years		39,741		12,460
Three to five years		—		1,211
Total	$	114,430	$	67,387

Actual maturities may differ from contractual maturities because some borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

Our investment policy provides limitations for issuer concentration, which limits, at the time of purchase, the concentration in any one issuer to 5% of the market value of our total investment portfolio.

At June 30, 2015, we held a $30.0 million restricted certificate of deposit, which is carried at cost. This investment serves as a collateral deposit against the principal amount outstanding under loans made to ADTRAN pursuant to an Alabama State Industrial Development Authority revenue bond (the Bond). At June 30, 2015, the estimated fair value of the Bond using a level 2 valuation technique was approximately $29.9 million, based on a debt security with a comparable interest rate and maturity and a Standard and Poor’s credit rating of AAA. For more information on the Bond, see “Debt” under “Liquidity and Capital Resources” in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in Item 2 of Part I of this report.

We review our investment portfolio for potential “other-than-temporary” declines in value on an individual investment basis. We assess, on a quarterly basis, significant declines in value which may be considered other-than-temporary and, if necessary, recognize and record the appropriate charge to write-down the carrying value of such investments. In making this assessment, we take into consideration qualitative and quantitative information, including but not limited to the following: the magnitude and duration of historical declines in market prices, credit rating activity, assessments of liquidity, public filings, and statements made by the issuer. We generally begin our identification of potential other-than-temporary impairments by reviewing any security with a fair value that has declined from its original or adjusted cost basis by 25% or more for six or more consecutive months. We then evaluate the individual security based on the previously identified factors to determine the amount of the write-down, if any. For the three and six months ended June 30, 2015 and 2014, other-than-temporary impairment charges were not significant.

Realized gains and losses on sales of securities are computed under the specific identification method. The following table presents gross realized gains and losses related to our investments.

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2015			2014			2015			2014
Gross realized gains	$	3,459		$	2,407		$	6,604		$	4,635
Gross realized losses	$	(204	)	$	(67	)	$	(234	)	$	(103	)

As of June 30, 2015 and 2014, gross unrealized losses related to individual securities in a continuous loss position for 12 months or longer were not significant.

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We have categorized our cash equivalents held in money market funds and our investments held at fair value into a three-level fair value hierarchy based on the priority of the inputs to the valuation technique for the cash equivalents and investments as follows: Level 1—Values based on unadjusted quoted prices for identical assets or liabilities in an active market; Level 2—Values based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly; Level 3—Values based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs include information supplied by investees.

	Fair Value Measurements at June 30, 2015 Using
(In thousands)	Fair Value		Quoted Prices in Active Market for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents
Money market funds	$	1,087	$	1,087	$	—	$	—
Available-for-sale securities
Deferred compensation plan assets		16,534		16,534		—		—
Available-for-sale debt securities
Corporate bonds		114,430		—		114,430		—
Municipal fixed-rate bonds		67,387		—		67,387		—
Municipal variable rate demand notes		3,695		—		3,695		—
Available-for-sale marketable equity securities
Marketable equity securities – technology industry		7,786		7,786		—		—
Marketable equity securities – other		29,514		29,514		—		—
Available-for-sale securities		239,346		53,834		185,512		—
Total	$	240,433	$	54,921	$	185,512	$	—

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	Fair Value Measurements at December 31, 2014 Using
(In thousands)	Fair Value		Quoted Prices in Active Market for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents
Money market funds	$	1,163	$	1,163	$	—	$	—
Available-for-sale securities
Deferred compensation plan assets		16,294		16,294		—		—
Available-for-sale debt securities
Corporate bonds		111,261		—		111,261		—
Municipal fixed-rate bonds		127,787		—		127,787		—
Municipal variable rate demand notes		2,465		—		2,465		—
Available-for-sale marketable equity securities
Marketable equity securities – technology industry		9,661		9,661		—		—
Marketable equity securities – other		28,594		28,594		—		—
Available-for-sale securities		296,062		54,549		241,513		—
Total	$	297,225	$	55,712	$	241,513	$	—

The fair value of our Level 2 securities is calculated using a weighted average market price for each security. Market prices are obtained from a variety of industry standard data providers, security master files from large financial institutions, and other third-party sources. These multiple market prices are used as inputs into a distribution-curve-based algorithm to determine the daily market value of each security.

Our municipal variable rate demand notes have a structure that implies a standard expected market price. The frequent interest rate resets make it reasonable to expect the price to stay at par. These securities are priced at the expected market price.

6. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

We have certain customers and suppliers who are invoiced or pay in a non-functional currency. Changes in the monetary exchange rates may adversely affect our results of operations and financial condition. When appropriate, we enter into various derivative transactions to enhance our ability to manage the volatility relating to these typical business exposures. We do not hold or issue derivative instruments for trading or other speculative purposes. Our derivative instruments are recorded in the Consolidated Balance Sheets at their fair values. Our derivative instruments do not qualify for hedge accounting, and accordingly, all changes in the fair value of the instruments are recognized as other income (expense) in the Consolidated Statements of Income. The maximum contractual period for our derivatives is currently less than twelve months. Our derivative instruments are not subject to master netting arrangements and are not offset in the Consolidated Balance Sheets.

As of June 30, 2015, we had forward contracts outstanding with notional amounts totaling €39.0 million ($43.4 million), which mature at various times throughout 2015.

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The fair values of our derivative instruments recorded in the Consolidated Balance Sheet as of June 30, 2015 and December 31, 2014 were as follows:

(In thousands)	Balance Sheet Location	June 30, 2015			December 31, 2014
Derivatives Not Designated as Hedging Instruments (Level 2):
Foreign exchange contracts – asset derivatives	Other receivables	$	447		$	249
Foreign exchange contracts – liability derivatives	Accounts payable	$	(832	)	$	(10	)

The change in the fair values of our derivative instruments recorded in the Consolidated Statements of Income during the three and six months ended June 30, 2015 and 2014 were as follows:

		Three Months Ended						Six Months Ended
	Income Statement Location	June 30,						June 30,
(In thousands)		2015			2014			2015		2014
Derivatives Not Designated as Hedging Instruments:
Foreign exchange contracts	Other income (expense)	$	(1,299	)	$	(438	)	$	177	$	(548	)

7. INVENTORY

At June 30, 2015 and December 31, 2014, inventory consisted of the following:

(In thousands)	June 30, 2015		December 31, 2014
Raw materials	$	38,819	$	34,831
Work in process		3,489		3,750
Finished goods		57,740		48,129
Total	$	100,048	$	86,710

We establish reserves for estimated excess, obsolete, or unmarketable inventory equal to the difference between the cost of the inventory and the estimated fair value of the inventory based upon assumptions about future demand and market conditions. At June 30, 2015 and December 31, 2014, raw materials reserves totaled $17.6 million and $16.9 million, respectively, and finished goods inventory reserves totaled $7.6 million and $7.8 million, respectively.

8. GOODWILL AND INTANGIBLE ASSETS

Goodwill, all of which relates to our acquisition of Bluesocket, Inc. and is included in our Enterprise Networks division, was $3.5 million at June 30, 2015 and December 31, 2014. We evaluate the carrying value of goodwill during the fourth quarter of each year and between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. We have elected to first assess the qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit to which the goodwill is assigned is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step impairment test. If we determine that it is more likely than not that its fair value is less than its carrying amount, then the two-step impairment test will be performed. There have been no impairment losses recorded since acquisition.

Intangible assets are included in other assets in the accompanying Consolidated Balance Sheets and include intangibles acquired in conjunction with our acquisitions of Objectworld Communications Corporation on September 15, 2009, Bluesocket, Inc. on August 4, 2011, and the NSN BBA business on May 4, 2012.

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The following table presents our intangible assets as of June 30, 2015 and December 31, 2014:

(In thousands)	June 30, 2015							December 31, 2014
	Gross Value		Accumulated Amortization			Net Value		Gross Value		Accumulated Amortization			Net Value
Customer relationships	$	5,937	$	(2,350	)	$	3,587	$	6,310	$	(2,136	)	$	4,174
Developed technology		5,784		(3,962	)		1,822		6,005		(3,577	)		2,428
Intellectual property		2,340		(1,687	)		653		2,340		(1,520	)		820
Trade names		270		(235	)		35		270		(205	)		65
Other		11		(11	)		—		12		(11	)		1
Total	$	14,342	$	(8,245	)	$	6,097	$	14,937	$	(7,449	)	$	7,488

Amortization expense, all of which relates to business acquisitions, was $0.5 million and $0.6 million for the three months ended June 30, 2015 and 2014, respectively, and $1.0 million and $1.2 million for the six months ended June 30, 2015 and 2014, respectively.

As of June 30, 2015, the estimated future amortization expense of our intangible assets is as follows:

(In thousands)	Amount
Remainder of 2015	$	928
2016		1,679
2017		1,164
2018		703
2019		309
Thereafter		1,314
Total	$	6,097

9. STOCKHOLDERS’ EQUITY

A summary of the changes in stockholders’ equity for the six months ended June 30, 2015 is as follows:

(In thousands)	Stockholders’ Equity
Balance, December 31, 2014	$	549,013
Net income		5,861
Dividend payments		(9,509	)
Dividends accrued for unvested restricted stock units		10
Net unrealized losses on available-for-sale securities (net of tax)		(2,286	)
Defined benefit plan adjustments		140
Foreign currency translation adjustment		(2,446	)
Proceeds from stock option exercises		833
Purchase of treasury stock		(49,307	)
Income tax benefit from exercise of stock options		(23	)
Stock-based compensation expense		3,114
Balance, June 30, 2015	$	495,400

Stock Repurchase Program

Since 1997, our Board of Directors has approved multiple share repurchase programs that have authorized open market repurchase transactions of up to 45.0 million shares of our common stock. During the six months ended June 30, 2015, we repurchased 2.9 million shares of our common stock at an average price of $16.87 per share. As of June 30, 2015, we have the authority to purchase an additional 1.9 million shares of our common stock under the current plans approved by the Board of Directors.

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Stock Option Exercises

We issued 0.1 million shares of treasury stock during the six months ended June 30, 2015 to accommodate employee stock option exercises. The stock options had exercise prices ranging from $15.29 to $22.53. We received proceeds totaling $0.8 million from the exercise of these stock options during the six months ended June 30, 2015.

Dividend Payments

During the six months ended June 30, 2015, we paid cash dividends as follows (in thousands except per share amounts):

Record Date	Payment Date	Per Share Amount		Total Dividend Paid
February 5, 2015	February 19, 2015	$	0.09	$	4,811
May 7, 2015	May 21, 2015	$	0.09	$	4,698

Other Comprehensive Income

Other comprehensive income consists of unrealized gains (losses) on available-for-sale securities, reclassification adjustments for amounts included in net income related to impairments of available-for-sale securities, realized gains (losses) on available-for-sale securities, and amortization of actuarial gains (losses) related to our defined benefit plan, defined benefit plan adjustments, and foreign currency translation adjustments.

The following tables present changes in accumulated other comprehensive income, net of tax, by component for the three months ended June 30, 2015 and 2014:

	Three Months Ended June 30, 2015
(In thousands)	Unrealized Gains (Losses) on Available- for-Sale Securities			Defined Benefit Plan Adjustments			Foreign Currency Adjustments			Total
Beginning balance	$	8,461		$	(5,689	)	$	(6,600	)	$	(3,828	)
Other comprehensive income (loss) before reclassifications		177			—			872			1,049
Amounts reclassified from accumulated other comprehensive income		(1,960	)		72			—			(1,888	)
Net current period other comprehensive income (loss)		(1,783	)		72			872			(839	)
Ending balance	$	6,678		$	(5,617	)	$	(5,728	)	$	(4,667	)

	Three Months Ended June 30, 2014
(In thousands)	Unrealized Gains (Losses) on Available- for-Sale Securities			Defined Benefit Plan Adjustments			Foreign Currency Adjustments		Total
Beginning balance	$	9,816		$	(891	)	$	1,159	$	10,084
Other comprehensive income (loss) before reclassifications		2,516			—			134		2,650
Amounts reclassified from accumulated other comprehensive income		(1,297	)		—			—		(1,297	)
Net current period other comprehensive income (loss)		1,219			—			134		1,353
Ending balance	$	11,035		$	(891	)	$	1,293	$	11,437

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The following tables present changes in accumulated other comprehensive income, net of tax, by component for the six months ended June 30, 2015 and 2014:

	Six Months Ended June 30, 2015
(In thousands)	Unrealized Gains (Losses) on Available- for-Sale Securities			Defined Benefit Plan Adjustments			Foreign Currency Adjustments			Total
Beginning balance	$	8,964		$	(5,757	)	$	(3,282	)	$	(75	)
Other comprehensive income (loss) before reclassifications		1,537			—			(2,446	)		(909	)
Amounts reclassified from accumulated other comprehensive income		(3,823	)		140			—			(3,683	)
Net current period other comprehensive income (loss)		(2,286	)		140			(2,446	)		(4,592	)
Ending balance	$	6,678		$	(5,617	)	$	(5,728	)	$	(4,667	)

	Six Months Ended June 30, 2014
(In thousands)	Unrealized Gains (Losses) on Available- for-Sale Securities			Defined Benefit Plan Adjustments			Foreign Currency Adjustments		Total
Beginning balance	$	10,737		$	(891	)	$	907	$	10,753
Other comprehensive income (loss) before reclassifications		2,918			—			386		3,304
Amounts reclassified from accumulated other comprehensive income		(2,620	)		—			—		(2,620	)
Net current period other comprehensive income (loss)		298			—			386		684
Ending balance	$	11,035		$	(891	)	$	1,293	$	11,437

The following tables present the details of reclassifications out of accumulated other comprehensive income for the three months ended June 30, 2015 and 2014:

(In thousands)	Three Months Ended June 30, 2015
Details about Accumulated Other Comprehensive Income Components	Amount Reclassified from Accumulated Other Comprehensive Income			Affected Line Item in the Statement Where Net Income Is Presented
Unrealized gains (losses) on available-for-sale securities:
Net realized gain on sales of securities	$	3,264		Net realized investment gain
Impairment expense		(51	)	Net realized investment gain
Defined benefit plan adjustments – actuarial losses		(105	)	(1)
Total reclassifications for the period, before tax		3,108
Tax (expense) benefit		(1,220	)
Total reclassifications for the period, net of tax	$	1,888

⁽¹⁾ Included in the computation of net periodic pension cost. See Note 3 of Notes to Consolidated Financial Statements.

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(In thousands)	Three Months Ended June 30, 2014
Details about Accumulated Other Comprehensive Income Components	Amount Reclassified from Accumulated Other Comprehensive Income			Affected Line Item in the Statement Where Net Income Is Presented
Unrealized gains (losses) on available-for-sale securities:
Net realized gain on sales of securities	$	2,160			Net realized investment gain
Impairment expense		(34	)		Net realized investment gain
Total reclassifications for the period, before tax		2,126
Tax (expense) benefit		(829	)
Total reclassifications for the period, net of tax	$	1,297

The following tables present the details of reclassifications out of accumulated other comprehensive income for the six months ended June 30, 2015 and 2014:

(In thousands)	Six Months Ended June 30, 2015
Details about Accumulated Other Comprehensive Income Components	Amount Reclassified from Accumulated Other Comprehensive Income			Affected Line Item in the Statement Where Net Income Is Presented
Unrealized gains (losses) on available-for-sale securities:
Net realized gain on sales of securities	$	6,340		Net realized investment gain
Impairment expense		(73	)	Net realized investment gain
Defined benefit plan adjustments – actuarial losses		(203	)	(1)
Total reclassifications for the period, before tax		6,064
Tax (expense) benefit		(2,381	)
Total reclassifications for the period, net of tax	$	3,683

⁽¹⁾ Included in the computation of net periodic pension cost. See Note 3 of Notes to Consolidated Financial Statements.

(In thousands)	Six Months Ended June 30, 2014
Details about Accumulated Other Comprehensive Income Components	Amount Reclassified from Accumulated Other Comprehensive Income			Affected Line Item in the Statement Where Net Income Is Presented
Unrealized gains (losses) on available-for-sale securities:
Net realized gain on sales of securities	$	4,330		Net realized investment gain
Impairment expense		(34	)	Net realized investment gain
Total reclassifications for the period, before tax		4,296
Tax (expense) benefit		(1,676	)
Total reclassifications for the period, net of tax	$	2,620

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The following table presents the tax effects related to the change in each component of other comprehensive income for the three months ended June 30, 2015 and 2014:

	Three Months Ended June 30, 2015									Three Months Ended June 30, 2014
(In thousands)	Before-Tax Amount			Tax (Expense) Benefit			Net-of-Tax Amount			Before-Tax Amount			Tax (Expense) Benefit			Net-of-Tax Amount
Unrealized gains (losses) on available-for-sale securities	$	290		$	(113	)	$	177		$	4,125		$	(1,609	)	$	2,516
Reclassification adjustment for amounts included in net income		(3,108	)		1,220			(1,888	)		(2,126	)		829			(1,297	)
Foreign currency translation adjustment		872			—			872			134			—			134
Total Other Comprehensive Income (Loss)	$	(1,946	)	$	1,107		$	(839	)	$	2,133		$	(780	)	$	1,353

The following table presents the tax effects related to the change in each component of other comprehensive income for the six months ended June 30, 2015 and 2014:

	Six Months Ended June 30, 2015									Six Months Ended June 30, 2014
(In thousands)	Before-Tax Amount			Tax (Expense) Benefit			Net-of-Tax Amount			Before-Tax Amount			Tax (Expense) Benefit			Net-of-Tax Amount
Unrealized gains (losses) on available-for-sale securities	$	2,520		$	(983	)	$	1,537		$	4,784		$	(1,866	)	$	2,918
Reclassification adjustment for amounts included in net income		(6,064	)		2,381			(3,683	)		(4,296	)		1,676			(2,620	)
Foreign currency translation adjustment		(2,446	)		—			(2,446	)		386			—			386
Total Other Comprehensive Income (Loss)	$	(5,990	)	$	1,398		$	(4,592	)	$	874		$	(190	)	$	684

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10. EARNINGS PER SHARE

A summary of the calculation of basic and diluted earnings per share for the three and six months ended June 30, 2015 and 2014 is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands, except per share amounts)	2015		2014		2015		2014
Numerator
Net income	$	2,544	$	14,395	$	5,861	$	24,002
Denominator
Weighted average number of shares – basic		51,822		55,409		52,607		56,077
Effect of dilutive securities
Stock options		72		288		122		459
Restricted stock and restricted stock units		23		32		13		23
Weighted average number of shares – diluted		51,917		55,729		52,742		56,559
Net income per share – basic	$	0.05	$	0.26	$	0.11	$	0.43
Net income per share – diluted	$	0.05	$	0.26	$	0.11	$	0.42

Anti-dilutive options to purchase common stock outstanding were excluded from the above calculations. Anti-dilutive options totaled 6.1 million and 4.3 million for the three months ended June 30, 2015 and 2014, respectively, and 5.7 million and 3.1 million for the six months ended June 30, 2015 and 2014, respectively.

11. SEGMENT INFORMATION

We operate in two reportable segments: (1) the Carrier Networks Division and (2) the Enterprise Networks Division. We evaluate the performance of our segments based on gross profit; therefore, selling, general and administrative expenses, research and development expenses, interest and dividend income, interest expense, net realized investment gain/loss, other income/expense and provision for taxes are reported on an entity-wide basis only. There are no inter-segment revenues.

The following tables present information about the reported sales and gross profit of our reportable segments for the three and six months ended June 30, 2015 and 2014. Asset information by reportable segment is not reported, since we do not produce such information internally.

	Three Months Ended
	June 30, 2015				June 30, 2014
(In thousands)	Sales		Gross Profit		Sales		Gross Profit
Carrier Networks	$	135,397	$	54,699	$	143,455	$	68,053
Enterprise Networks		24,741		13,547		32,674		18,744
Total	$	160,138	$	68,246	$	176,129	$	86,797

	Six Months Ended
	June 30, 2015				June 30, 2014
(In thousands)	Sales		Gross Profit		Sales		Gross Profit
Carrier Networks	$	251,411	$	104,558	$	261,617	$	129,406
Enterprise Networks		51,562		29,251		61,516		35,181
Total	$	302,973	$	133,809	$	323,133	$	164,587

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Sales by Product

Our three major product categories are Carrier Systems, Business Networking and Loop Access.

Carrier Systems products are used by communications service providers to provide data, voice, and video services to consumers and enterprises. This category includes the following product areas and related services:

• Broadband Access

• Total Access^® 5000 Series of Multi-Service Access Node (MSAN)

• hiX 5600 Series of MSANs

• Total Access 1100/1200 Series of Fiber to the Node (FTTN) products

• hiX 1100 Series of Fiber to the Node (FTTN) products

• VDSL2 Vectoring based Digital Subscriber Line Access Multiplexer (DSLAM) products

• ADTRAN 500 Series of FTTdp G.fast Distribution Point Units (DPU)

• Optical

• Optical Networking Edge (ONE)

• NetVanta 8000 Series of Fiber Ethernet Access Devices (EAD)

• NetVanta 8400 Series of 10Gig Multi-service Edge Switches

• OPTI-6100 and Total Access 3000 optical Multi-Service Provisioning Platforms (MSPP)

• Pluggable Optical Products, including SFP, XFP, and SFP+

• Time Division Multiplexed (TDM) systems

Business Networking products provide access to communication services and facilitate the delivery of cloud connectivity and enterprise communications to the small and mid-sized enterprise (SME) market. This category includes the following product areas and related services:

• Internetworking products

• Total Access IP Business Gateways

• Optical Network Terminals (ONTs)

• Bluesocket^® virtual Wireless LAN (vWLAN^®)

• NetVanta^®

• Access Routers

• Enterprise Session Border Controllers (eSBC)

• Managed Ethernet Switches

• IP Business Gateways

• Unified Communications (UC) solutions

• Carrier Ethernet Network Terminating Equipment (NTE)

• Carrier Ethernet Routers and Gateways

• Network Management Solutions

Loop Access products are used by carrier and enterprise customers for access to copper-based communications networks. This category includes the following product areas and related services:

• High bit-rate Digital Subscriber Line (HDSL) products

• Digital Data Service (DDS)

• Integrated Services Digital Network (ISDN) products

• T1/E1/T3 Channel Service Units/Data Service Units (CSUs/DSUs)

• TRACER fixed-wireless products

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The table below presents sales information by product category for the three and six months ended June 30, 2015 and 2014:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2015		2014		2015		2014
Carrier Systems	$	119,039	$	128,824	$	219,478	$	228,377
Business Networking		34,210		41,969		69,591		79,888
Loop Access		6,889		5,336		13,904		14,868
Total	$	160,138	$	176,129	$	302,973	$	323,133

In addition, we identify subcategories of product revenues, which we divide into core products and legacy products. Our core products consist of Broadband Access and Optical products (included in Carrier Systems), and Internetworking products (included in Business Networking). Our legacy products include HDSL products (included in Loop Access) and other products not included in the aforementioned core products.

The table below presents subcategory revenues for the three and six months ended June 30, 2015 and 2014:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2015		2014		2015		2014
Core Products
Broadband Access (included in Carrier Systems)	$	100,746	$	108,309	$	185,540	$	189,836
Optical (included in Carrier Systems)		16,432		15,833		28,936		28,622
Internetworking (included in Business Networking)		33,158		40,986		67,317		77,932
Subtotal		150,336		165,128		281,793		296,390
Legacy Products
HDSL (does not include T1) (included in Loop Access)		6,399		4,798		13,102		13,675
Other products (excluding HDSL)		3,403		6,203		8,078		13,068
Subtotal		9,802		11,001		21,180		26,743
Total	$	160,138	$	176,129	$	302,973	$	323,133

12. LIABILITY FOR WARRANTY RETURNS

Our products generally include warranties of 90 days to ten years for product defects. We accrue for warranty returns at the time revenue is recognized based on our estimate of the cost to repair or replace the defective products. We engage in extensive product quality programs and processes, including actively monitoring and evaluating the quality of our component suppliers. Our products continue to become more complex in both size and functionality as many of our product offerings migrate from line card applications to systems products. The increasing complexity of our products will cause warranty incidences, when they arise, to be more costly. Our estimates regarding future warranty obligations may change due to product failure rates, material usage, and other rework costs incurred in correcting a product failure. In addition, from time to time, specific warranty accruals may be recorded if unforeseen problems arise. Should our actual experience relative to these factors be worse than our estimates, we will be required to record additional warranty expense. Alternatively, if we provide for more reserves than we require, we will reverse a portion of such provisions in future periods. The liability for warranty obligations totaled $8.9 million at June 30, 2015 and $8.4 million at December 31, 2014. These liabilities are included in accrued expenses in the accompanying Consolidated Balance Sheets.

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A summary of warranty expense and write-off activity for the six months ended June 30, 2015 and 2014 is as follows:

	Six Months Ended June 30,
	2015			2014
(In thousands)
Balance at beginning of period	$	8,415		$	8,977
Plus: Amounts charged to cost and expenses		1,128			1,339
Less: Deductions		(610	)		(1,999	)
Balance at end of period	$	8,933		$	8,317

13. RELATED PARTY TRANSACTIONS

During 2014, we employed the law firm of our director emeritus for legal services. All bills for services rendered by this firm were reviewed and approved by our Chief Financial Officer. We believe that the fees for such services were comparable to those charged by other firms for services rendered to us. The services of our director emeritus ended with his death on September 7, 2014. For the three and six months ended June 30, 2014, we incurred fees of $10 thousand per month for these legal services.

14. COMMITMENTS AND CONTINGENCIES

In the ordinary course of business, we may be subject to various legal proceedings and claims, including employment disputes, patent claims, disputes over contract agreements and other commercial disputes. In some cases, claimants seek damages or other relief, such as royalty payments related to patents, which, if granted, could require significant expenditures. Although the outcome of any claim or litigation can never be certain, it is our opinion that the outcome of all contingencies of which we are currently aware will not materially affect our business, operations, financial condition or cash flows.

We have committed to invest up to an aggregate of $7.9 million in two private equity funds, and we have contributed $8.4 million as of June 30, 2015, of which $7.7 million has been applied to these commitments.

15. SUBSEQUENT EVENTS

On July 14, 2015, we announced that our Board of Directors declared a quarterly cash dividend of $0.09 per common share to be paid to stockholders of record at the close of business on July 30, 2015. The payment date will be August 13, 2015. The quarterly dividend payment will be approximately $4.5 million. In July 2003, our Board of Directors elected to begin declaring quarterly dividends on our common stock considering the tax treatment of dividends and adequate levels of Company liquidity.

On July 14, 2015, our Board of Directors authorized the repurchase of an additional 5.0 million shares of our common stock (bringing the total shares authorized for repurchase to 50.0 million), which will commence upon completion of the repurchase plan announced May 14, 2014. This new authorization will be implemented through open market or private purchases from time to time as conditions warrant.

During the third quarter and as of August 5, 2015, we have repurchased 0.8 million shares of our common stock through open market purchases at an average cost of $16.31 per share. We currently have the authority to purchase an additional 6.0 million shares of our common stock under the current plan approved by the Board of Directors.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the Consolidated Financial Statements and the related notes that appear elsewhere in this document.

OVERVIEW

ADTRAN, Inc. is a leading global provider of networking and communications equipment. Our solutions enable voice, data, video and Internet communications across a variety of network infrastructures. These solutions are deployed by some of the world’s largest service providers, distributed enterprises and small and medium-sized businesses, public and private enterprises, and millions of individual users worldwide.

Our success depends upon our ability to increase unit volume and market share through the introduction of new products and succeeding generations of products having lower selling prices and increased functionality as compared to both the prior generation of a product and to the products of competitors. An important part of our strategy is to reduce the cost of each succeeding product generation and then lower the product’s selling price based on the cost savings achieved in order to gain market share and/or improve gross margins. As a part of this strategy, we seek in most instances to be a high-quality, low-cost provider of products in our markets. Our success to date is attributable in large measure to our ability to design our products initially with a view to their subsequent redesign, allowing both increased functionality and reduced manufacturing costs in each succeeding product generation. This strategy enables us to sell succeeding generations of products to existing customers, while increasing our market share by selling these enhanced products to new customers.

Our three major product categories are Carrier Systems, Business Networking and Loop Access.

Carrier Systems products are used by communications service providers to provide data, voice, and video services to consumers and enterprises. This category includes the following product areas and related services:

• Broadband Access

• Total Access^® 5000 Series of Multi-Service Access Node (MSAN)

• hiX 5600 Series of MSANs

• Total Access 1100/1200 Series of Fiber to the Node (FTTN) products

• hiX 1100 Series of Fiber to the Node (FTTN) products

• VDSL2 Vectoring based Digital Subscriber Line Access Multiplexer (DSLAM) products

• ADTRAN 500 Series of FTTdp G.fast Distribution Point Units (DPU)

• Optical

• Optical Networking Edge (ONE)

• NetVanta 8000 Series of Fiber Ethernet Access Devices (EAD)

• NetVanta 8400 Series of 10Gig Multi-service Edge Switches

• OPTI-6100 and Total Access 3000 optical Multi-Service Provisioning Platforms (MSPP)

• Pluggable Optical Products, including SFP, XFP, and SFP+

• Time Division Multiplexed (TDM) systems

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Business Networking products provide access to communication services and facilitate the delivery of cloud connectivity and enterprise communications to the small and mid-sized enterprise (SME) market. This category includes the following product areas and related services:

• Internetworking products

• Total Access IP Business Gateways

• Optical Network Terminals (ONTs)

• Bluesocket^® virtual Wireless LAN (vWLAN^®)

• NetVanta^®

• Access Routers

• Enterprise Session Border Controllers (eSBC)

• Managed Ethernet Switches

• IP Business Gateways

• Unified Communications (UC) solutions

• Carrier Ethernet Network Terminating Equipment (NTE)

• Carrier Ethernet Routers and Gateways

• Network Management Solutions

Loop Access products are used by carrier and enterprise customers for access to copper-based communications networks. This category includes the following product areas and related services:

• High bit-rate Digital Subscriber Line (HDSL) products

• Digital Data Service (DDS)

• Integrated Services Digital Network (ISDN) products

• T1/E1/T3 Channel Service Units/Data Service Units (CSUs/DSUs)

• TRACER fixed-wireless products

In addition, we identify subcategories of product revenues, which we divide into core products and legacy products. Our core products consist of Broadband Access and Optical products (included in Carrier Systems) and Internetworking products (included in Business Networking). Our legacy products include HDSL products (included in Loop Access) and other products not included in the aforementioned core products. Many of our customers are migrating their networks to deliver higher bandwidth services by utilizing newer technologies. We believe that products and services offered in our core product areas position us well for this migration. As a result of this migration, revenues of our legacy products, including HDSL, have decreased significantly. Despite occasional increases, we anticipate revenues of our legacy products, including HDSL, will continue to decline over time.

See Note 11 of Notes to Consolidated Financial Statements in this report for further information regarding these product categories.

Sales were $160.1 million and $303.0 million for the three and six months ended June 30, 2015 compared to $176.1 million and $323.1 million for the three and six months ended June 30, 2014. Product revenues for our three core areas, Broadband Access, Optical and Internetworking, were $150.3 million and $281.8 million for the three and six months ended June 30, 2015 compared to $165.1 million and $296.4 million for the three and six months ended June 30, 2014. Our gross margin decreased to 42.6% and 44.2% for the three and six months ended June 30, 2015 from 49.3% and 50.9% for the three and six months ended June 30, 2014. Our operating income margin decreased to 0.4% and 0.9% for the three and six months ended June 30, 2015 from 11.0% and 9.5% for the three and six months ended June 30, 2014. Net income was $2.5 million and $5.9 million for the three and six months ended June 30, 2015 compared to $14.4 million and $24.0 million for the three and six months ended June 30, 2014. Our effective tax rate increased to 38.1% and 39.1% for the three and six months ended June 30, 2015 from 34.0% and 34.2% for the three and six months ended June 30, 2014. Earnings per share, assuming dilution, were $0.05 and $0.11 for the three and six months ended June 30, 2015 compared to $0.26 and $0.42 for the three and six months ended June 30, 2014.

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Our operating results have fluctuated on a quarterly basis in the past, and may vary significantly in future periods due to a number of factors, including customer order activity and backlog. Backlog levels vary because of seasonal trends, the timing of customer projects and other factors that affect customer order lead times. Many of our customers require prompt delivery of products. This requires us to maintain sufficient inventory levels to satisfy anticipated customer demand. If near-term demand for our products declines, or if potential sales in any quarter do not occur as anticipated, our financial results could be adversely affected. Operating expenses are relatively fixed in the short term; therefore, a shortfall in quarterly revenues could significantly impact our financial results in a given quarter.

Our operating results may also fluctuate as a result of a number of other factors, including a decline in general economic and market conditions, foreign currency exchange rate movements, increased competition, customer order patterns, changes in product and services mix, timing differences between price decreases and product cost reductions, product warranty returns, expediting costs and announcements of new products by us or our competitors. Additionally, maintaining sufficient inventory levels to assure prompt delivery of our products increases the amount of inventory that may become obsolete and increases the risk that the obsolescence of this inventory may have an adverse effect on our business and operating results. Also, not maintaining sufficient inventory levels to assure prompt delivery of our products may cause us to incur expediting costs to meet customer delivery requirements, which may negatively impact our operating results in a given quarter.

Accordingly, our historical financial performance is not necessarily a meaningful indicator of future results, and, in general, management expects that our financial results may vary from period to period. A list of factors that could materially affect our business, financial condition or operating results is included under “Factors That Could Affect Our Future Results” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in Item 2 of Part I of this report. These factors have also been discussed in more detail in Item 1A of Part I in our most recent Annual Report on Form 10-K for the year ended December 31, 2014, filed on February 24, 2015 with the SEC.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our critical accounting policies and estimates have not changed significantly from those detailed in our most recent Annual Report on Form 10-K for the year ended December 31, 2014, filed on February 24, 2015 with the SEC.

EFFECT OF RECENT ACCOUNTING PRONOUNCEMENTS

See Note 1 of Notes to Consolidated Financial Statements in Item 1 of this Form 10-Q for a full description of recent accounting pronouncements, including the expected dates of adoption and estimated effects on results of operations and financial condition, which is incorporated herein by reference.

RESULTS OF OPERATIONS – THREE AND SIX MONTHS ENDED JUNE 30, 2015 COMPARED TO THREE AND SIX MONTHS ENDED JUNE 30, 2014

SALES

ADTRAN’s sales decreased 9.1% from $176.1 million in the three months ended June 30, 2014 to $160.1 million in the three months ended June 30, 2015 and decreased 6.2% from $323.1 million in the six months ended June 30, 2014 to $303.0 million in the six months ended June 30, 2015. The decrease in sales for the three months ended June 30, 2015 is primarily attributable to a $7.8 million decrease in sales of our Internetworking products, a $7.6 million decrease in sales of our Broadband Access products, and a $1.2 million decrease in sales of our HDSL and other legacy products. The decrease in sales for the six months ended June 30, 2015 is primarily attributable to a $10.6 million decrease in sales of our Internetworking products, a $4.3 million decrease in sales of our Broadband Access products, and a $5.6 million decrease in sales of our HDSL and other legacy products. Sales during the three and six months ended June 30, 2015 were also negatively impacted by the strengthening of the U.S. dollar against the Euro.

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Carrier Networks sales decreased 5.6% from $143.5 million in the three months ended June 30, 2014 to $135.4 million in the three months ended June 30, 2015, and decreased 3.9% from $261.6 million in the six months ended June 30, 2014 to $251.4 million in the six months ended June 30, 2015. The decrease in sales for the three and six months ended June, 2015 is primarily attributable to decreases in sales of our Broadband Access products and sales of our HDSL and other legacy products. The decrease in sales of our Broadband Access products is primarily attributable to the impact of the strengthening of the U.S. dollar against the Euro. The decrease in sales of HDSL and other legacy products for the three and six months ended June 30, 2015 has been expected as customers continue to upgrade their networks to deliver higher bandwidth services by migrating to newer technologies, including to our core products from our Broadband Access, Internetworking and Optical product lines. While we expect that revenues from HDSL and our other legacy products will continue to decline over time, these revenues may fluctuate and continue for years because of the time required for our customers to transition to newer technologies.

Enterprise Networks sales decreased 24.3% from $32.7 million in the three months ended June 30, 2014 to $24.7 million in the three months ended June 30, 2015, and decreased 16.2% from $61.5 million in the six months ended June 30, 2014 to $51.6 million in the six months ended June 30, 2015. The decrease in sales for the three and six months ended June 30, 2015 is primarily attributable to decreases in sales of our Internetworking products. The decrease in sales of our Internetworking products for the Enterprise Networks division was primarily attributable to continued weakness in our IP gateway product segment, primarily in our CLEC customer base. Internetworking product sales attributable to Enterprise Networks were 93.1% and 93.5% of the division’s sales in the three and six months ended June 30, 2015, compared to 95.0% and 94.7% in the three and six months ended June 30, 2014. Legacy products primarily comprise the remainder of Enterprise Networks sales. Enterprise Networks sales as a percentage of total sales decreased from 18.6% and 19.0% for the three and six months ended June 30, 2014 to 15.4% and 17.0% for the three and six months ended June 30, 2015.

International sales, which are included in the Carrier Networks and Enterprise Networks amounts discussed above, decreased 29.5% from $79.1 million in the three months ended June 30, 2014 to $55.7 million in the three months ended June 30, 2015, and decreased 13.7% from $133.4 million in the six months ended June 30, 2014 to $115.1 million in the six months ended June 30, 2015. International sales, as a percentage of total sales, decreased from 44.9% and 41.3% for the three and six months ended June 30, 2014 to 34.8% and 38.0% for the three and six months ended June 30, 2015. The decrease in international sales for the three and six months ended June 30, 2015 is primarily attributable to a decrease in sales in the EMEA region, Latin America and the Asia-Pacific region. The decrease in sales in the EMEA region is primarily attributable to the strengthening of the U.S. dollar against the Euro during the three and six months ended June 30, 2015.

Carrier System product sales decreased $9.8 million and $8.9 million in the three and six months ended June 30, 2015 compared to the three and six months ended June 30, 2014. The decrease for the three months ended June 30, 2015 is primarily attributable to a $7.6 million decrease in Broadband Access product sales and a $2.8 million decrease in legacy product sales. The decrease for the six months ended June 30, 2015 is primarily attributable to a $4.3 million decrease in Broadband Access product sales and a $4.9 million decrease in legacy product sales. The decreases for the three and six months ended June 30, 2015 are primarily attributable to the factors discussed above.

Business Networking product sales decreased $7.8 million and $10.3 million in the three and six months ended June 30, 2015 compared to the three and six months ended June 30, 2014. The decrease for the three months ended June 30, 2015 is primarily attributable to a $7.8 million decrease in Internetworking product sales. The decrease for the six months ended June 30, 2015 is primarily attributable to a $10.6 million decrease in Internetworking product sales. The decreases for the three and six months ended June 30, 2015 are primarily attributable to the factors discussed above.

Loop Access product sales increased $1.6 million in the three months ended June 30, 2015 compared to the three months ended June 30, 2014, and decreased $1.0 million in the six months ended June 30, 2015 compared to the six months ended June 30, 2014. The increase for the three months ended June 30, 2015 is primarily attributable to a $1.6 million increase in HDSL product sales. The decrease for the six months ended June 30, 2015 is primarily attributable to a $0.6 million decrease in HDSL product sales. The changes for the three and six months ended June 30, 2015 are primarily attributable to the factors discussed above.

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COST OF SALES

As a percentage of sales, cost of sales increased from 50.7% in the three months ended June 30, 2014 to 57.4% in the three months ended June 30, 2015, and increased from 49.1% in the six months ended June 30, 2014 to 55.8% in the six months ended June 30, 2015. The increase for the three months ended June 30, 2015 is primarily attributable to the strengthening of the U.S. dollar against the Euro, growth in our service-related material sales in the U.S. market, and customer mix. The increase in the six months ended June 30, 2015 is primarily attributable to the strengthening of the U.S. dollar against the Euro, growth in our service-related material sales in the U.S. market, and product to services mix.

Carrier Networks cost of sales, as a percent of division sales, increased from 52.6% in the three months ended June 30, 2014 to 59.6% in the three months ended June 30, 2015, and increased from 50.5% in the six months ended June 30, 2014 to 58.4% in the six months ended June 30, 2015. The increases for the three and six months ended June 30, 2015 are primarily attributable to the strengthening of the U.S. dollar against the Euro, growth in service-related material sales in the U.S. market, customer mix, and customer price movements to achieve market share position.

Enterprise Networks cost of sales, as a percent of division sales, increased from 42.6% in the three months ended June 30, 2014 to 45.2% in the three months ended June 30, 2015, and increased from 42.8% in the six months ended June 30, 2014 to 43.3% in the six months ended June 30, 2015. The increases for the three and six months ended June 30, 2015 are primarily attributable to customer mix and product to services mix.

An important part of our strategy is to reduce the product cost of each succeeding product generation and then to lower the product’s price based on the cost savings achieved. This may cause variations in our gross profit percentage due to timing differences between the recognition of cost reductions and the lowering of product selling prices.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses decreased 4.9% from $33.8 million in the three months ended June 30, 2014 to $32.1 million in the three months ended June 30, 2015, and decreased 6.7% from $67.7 million in the six months ended June 30, 2014 to $63.2 million in the six months ended June 30, 2015. The decrease in selling, general and administrative expenses for the three months ended June 30, 2015 is primarily attributable to decreases in compensation expense and travel expense, partially offset by restructuring charges. These restructuring charges were primarily attributable to consolidation in our sales force. The decrease in selling, general and administrative expenses for the six months ended June 30, 2015 is primarily attributable to decreases in compensation expense, legal expense, and independent contractor expense, partially offset by restructuring charges.

As a percentage of sales, selling, general and administrative expenses increased from 19.2% in the three months ended June 30, 2014 to 20.1% in the three months ended June 30, 2015, and decreased from 21.0% in the six months ended June 30, 2014 to 20.9% in the six months ended June 30, 2015. Selling, general and administrative expenses as a percentage of sales may fluctuate whenever there is a significant fluctuation in revenues for the periods being compared.

RESEARCH AND DEVELOPMENT EXPENSES

Research and development expenses increased 5.4% from $33.7 million in the three months ended June 30, 2014 to $35.5 million in the three months ended June 30, 2015, and increased 2.7% from $66.2 million in the six months ended June 30, 2014 to $68.0 million in the six months ended June 30, 2015. The increases in research and development expenses for the three and six months ended June 30, 2015 are primarily attributable to restructuring charges and engineering and testing expense. These restructuring charges were primary attributable to the consolidation of engineering resources.

As a percentage of sales, research and development expenses increased from 19.1% in the three months ended June 30, 2014 to 22.2% in the three months ended June 30, 2015, and increased from 20.5% in the six months ended June 30, 2014 to 22.4% in the six months ended June 30, 2015. Research and development expenses as a percentage of sales will fluctuate whenever there are incremental product development activities or a significant fluctuation in revenues for the periods being compared.

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We expect to continue to incur research and development expenses in connection with our new and existing products and our expansion into international markets. We continually evaluate new product opportunities and engage in intensive research and product development efforts which provides for new product development, enhancement of existing products and product cost reductions. We may incur significant research and development expenses prior to the receipt of revenues from a major new product group.

INTEREST AND DIVIDEND INCOME

Interest and dividend income decreased 13.9% from $1.1 million in the three months ended June 30, 2014 to $0.9 million in the three months ended June 30, 2015, and decreased 21.6% from $2.3 million in the six months ended June 30, 2014 to $1.8 million in the six months ended June 30, 2015. The decreases in interest and dividend income for the three and six months ended June 30, 3015 are primarily attributable to a reduction in investment principal partially offset by a slightly higher rate of return.

INTEREST EXPENSE

Interest expense, which is primarily related to our taxable revenue bond, remained constant at $0.1 million in the three months ended June 30, 2014 and 2015, and $0.4 million in the six months ended June 30, 2014 and $0.3 million in the six months ended June 30, 2015, as we had no substantial change in our fixed-rate borrowing. See “Liquidity and Capital Resources” below for additional information on our revenue bond.

NET REALIZED INVESTMENT GAIN

Net realized investment gain increased 39.1% from $2.3 million in the three months ended June 30, 2014 to $3.3 million in the three months ended June 30, 2015, and increased 40.6% from $4.5 million in the six months ended June 30, 2014 to $6.4 million in the six months ended June 30, 2015. The increases in realized investment gains for the three and six months ended June 30, 2015 are primarily attributable to increased gains from the sale of equity securities. See “Investing Activities” in “Liquidity and Capital Resources” below for additional information.

OTHER INCOME (EXPENSE), NET

Other income (expense), net, comprised primarily of miscellaneous income, gains and losses on foreign currency transactions, investment account management fees, and scrap raw material sales, changed from $0.8 million of expense in the three months ended June 30, 2014 to $0.5 million of expense in the three months ended June 30, 2015. The change in the three months ended June 30, 2015 is primarily attributable to a decrease in losses on foreign currency transactions during the second quarter of 2015. Other income (expense) changed from $0.7 million of expense in the six months ended June 30, 2014 to $0.9 million of expense in the six months ended June 30, 2015. The change in the six months ended June 30, 2015 is primarily attributable to losses on foreign currency transactions during the first quarter of 2015.

INCOME TAXES

Our effective tax rate increased from 34.2% in the six months ended June 30, 2014 to 39.1% in the six months ended June 30, 2015. The increase in the effective tax rate between the two periods is primarily attributable to the release of a valuation allowance attributable to a foreign subsidiary in 2014.

NET INCOME

As a result of the above factors, net income decreased $11.9 million from $14.4 million in the three months ended June 30, 2014 to $2.5 million in the three months ended June 30, 2015, and decreased $18.1 million from $24.0 million in the six months ended June 30, 2014 to $5.9 million in the six months ended June 30, 2015.

As a percentage of sales, net income decreased from 8.2% in the three months ended June 30, 2014 to 1.6% in the three months ended June 30, 2015, and decreased from 7.4% in the six months ended June 30, 2014 to 1.9% in the six months ended June 30, 2015.

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LIQUIDITY AND CAPITAL RESOURCES

Liquidity

We intend to finance our operations with cash flow from operations. We have used, and expect to continue to use, the cash generated from operations for working capital, purchases of treasury stock, shareholder dividends, and other general corporate purposes, including (i) product development activities to enhance our existing products and develop new products and (ii) expansion of sales and marketing activities. We believe our cash and cash equivalents, investments and cash generated from operations to be adequate to meet our operating and capital needs for at least the next 12 months.

At June 30, 2015, cash on hand was $87.2 million and short-term investments were $54.1 million, which resulted in available short-term liquidity of $141.3 million. At December 31, 2014, our cash on hand of $73.4 million and short-term investments of $46.9 million resulted in available short-term liquidity of $120.4 million. The increase in short-term liquidity from December 31, 2014 to June 30, 2015 is primarily attributable to a reallocation of our investments to provide additional funds for our short-term cash needs, which includes operating activities, capital expenditures, purchase of treasury stock, and shareholder dividends.

Operating Activities

Our working capital, which consists of current assets less current liabilities, increased 3.7% from $232.1 million as of December 31, 2014 to $240.7 million as of June 30, 2015. The quick ratio, defined as cash, cash equivalents, short-term investments, and net accounts receivable, divided by current liabilities, decreased from 1.75 as of December 31, 2014 to 1.60 as of June 30, 2015. The current ratio, defined as current assets divided by current liabilities, decreased from 2.95 as of December 31, 2014 to 2.67 as of June 30, 2015. The changes in our working capital, quick ratio and current ratio are primarily attributable to increases in cash, inventory, and short-term investments, and a decrease in unearned revenue, partially offset by an increase in accounts payable.

Net accounts receivable increased 0.7% from $88.5 million at December 31, 2014 to $89.1 million at June 30, 2015. Our allowance for doubtful accounts was $0.1 million at December 31, 2014 and $21 thousand at June 30, 2015. Quarterly accounts receivable days sales outstanding (DSO) decreased from 57 days as of December 31, 2014 to 51 days as of June 30, 2015. The change in net accounts receivable is due to changes in customer mix and the timing of sales and collections during the quarter. Certain international customers can have longer payment terms than U.S. customers. Other receivables decreased from $33.3 million at December 31, 2014 to $31.4 million at June 30, 2015. The decrease in other receivables is primarily attributable to the timing of filing returns and collections of VAT receivables in our international subsidiaries. Other receivables will also fluctuate due to the timing of shipments and collections for materials supplied to our contract manufacturers during the quarter.

Quarterly inventory turnover increased from 3.5 turns as of December 31, 2014 to 3.8 turns as of June 30, 2015. Inventory increased 15.4% from December 31, 2014 to June 30, 2015. We expect inventory levels to fluctuate as we attempt to maintain sufficient inventory in response to seasonal cycles of our business ensuring competitive lead times while managing the risk of inventory obsolescence that may occur due to rapidly changing technology and customer demand.

Accounts payable increased 51.5% from $56.4 million at December 31, 2014 to $85.5 million at June 30, 2015. Accounts payable will fluctuate due to variations in the timing of the receipt of supplies, inventory and services and our subsequent payments for these purchases.

Investing Activities

Capital expenditures totaled approximately $5.4 million and $4.9 million for the six months ended June 30, 2015 and 2014, respectively. These expenditures were primarily used to purchase manufacturing and test equipment and computer software and hardware.

Our combined short-term and long-term investments decreased $56.8 million from $327.6 million at December 31, 2014 to $270.8 million at June 30, 2015. This decrease reflects the impact of our cash needs for capital expenditures, share repurchases, and dividends, as well as net realized and unrealized losses and amortization of net premiums on our combined investments, partially offset by additional funds available for investment provided by our operating activities and stock option exercises by our employees.

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We invest all available cash not required for immediate use in operations primarily in securities that we believe bear minimal risk of loss. At June 30, 2015 these investments included corporate bonds of $114.4 million, municipal fixed-rate bonds of $67.4 million, and municipal variable rate demand notes of $3.7 million. At December 31, 2014, these investments included corporate bonds of $111.3 million, municipal fixed-rate bonds of $127.8 million, and municipal variable rate demand notes of $2.5 million. As of June 30, 2015, our corporate bonds, municipal fixed-rate bonds, and municipal variable rate demand notes were classified as available-for-sale and had a combined duration of 1.0 years with an average credit rating of A. Because our bond portfolio has a high quality rating and contractual maturities of a short duration, we are able to obtain prices for these bonds derived from observable market inputs, or for similar securities traded in an active market, on a daily basis.

Our long-term investments decreased 22.8% from $280.6 million at December 31, 2014 to $216.7 million at June 30, 2015. Long-term investments at June 30, 2015 and December 31, 2014 included an investment in a certificate of deposit of $30.0 million, which serves as collateral for our revenue bond, as discussed below. We have various equity investments included in long-term investments at a cost of $28.9 million and $26.4 million, and with a fair value of $37.3 million and $38.3 million, at June 30, 2015 and December 31, 2014, respectively.

Long-term investments at June 30, 2015 and December 31, 2014 also included $16.5 million and $16.3 million, respectively, related to our deferred compensation plans, and $1.4 million and $1.5 million, respectively, of other investments carried at cost, consisting of interests in two private equity funds and an investment in a privately held telecommunications equipment manufacturer.

We review our investment portfolio for potential “other-than-temporary” declines in value on an individual investment basis. We assess, on a quarterly basis, significant declines in value which may be considered other-than-temporary and, if necessary, recognize and record the appropriate charge to write-down the carrying value of such investments. In making this assessment, we take into consideration qualitative and quantitative information, including but not limited to the following: the magnitude and duration of historical declines in market prices, credit rating activity, assessments of liquidity, public filings, and statements made by the issuer. We generally begin our identification of potential other-than-temporary impairments by reviewing any security with a fair value that has declined from its original or adjusted cost basis by 25% or more for six or more consecutive months. We then evaluate the individual security based on the previously identified factors to determine the amount of the write-down, if any. For the three and six months ended June 30, 2015 and 2014, other-than-temporary impairment charges were not significant.

Financing Activities

Dividends

In July 2003, our Board of Directors elected to begin declaring quarterly dividends on our common stock considering the tax treatment of dividends and adequate levels of Company liquidity. During the six months ended June 30, 2015, we paid dividends totaling $9.5 million.

Debt

We have amounts outstanding under loans made pursuant to an Alabama State Industrial Development Authority revenue bond (the Bond) which totaled $30.0 million at June 30, 2015 and December 31, 2014. At June 30, 2015, the estimated fair value of the Bond was approximately $29.9 million, based on a debt security with a comparable interest rate and maturity and a Standard & Poor’s credit rating of AAA. Included in long-term investments are restricted funds in the amount of $30.0 million at June 30, 2015 and December 31, 2014, which is a collateral deposit against the principal amount of the Bond. We have the right to set-off the balance of the Bond with the collateral deposit in order to reduce the balance of the indebtedness. The Bond matures on January 1, 2020, and bears interest at the rate of 2% per annum. In conjunction with this program, we are eligible to receive certain economic incentives from the state of Alabama that reduce the amount of payroll withholdings we are required to remit to the state for those employment positions that qualify under this program. We are required to make payments in the amounts necessary to pay the interest on the amounts currently outstanding. It is our intent to make annual principal payments in addition to the interest amounts that are due. In connection with this decision, $1.2 million of the Bond has been classified as a current liability in accounts payable in the Consolidated Balance Sheet at June 30, 2015.

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Stock Repurchase Program

Since 1997, our Board of Directors has approved multiple share repurchase programs that have authorized open market repurchase transactions of up to 45.0 million shares of our common stock. This authorization will be implemented through open market or private purchases from time to time as conditions warrant. During the six months ended June 30, 2015, we repurchased 2.9 million shares of our common stock at an average price of $16.87 per share. As of June 30, 2015, we have the authority to purchase an additional 1.9 million shares of our common stock under the current plans approved by the Board of Directors.

Stock Option Exercises

To accommodate employee stock option exercises, we issued 0.1 million shares of treasury stock for $0.8 million during the six months ended June 30, 2015.

Off-Balance Sheet Arrangements and Contractual Obligations

We do not have off-balance sheet financing arrangements and have not engaged in any related party transactions or arrangements with unconsolidated entities or other persons that are reasonably likely to materially affect liquidity or the availability of or requirements for capital resources. During the six months ended June 30, 2015, there have been no material changes in contractual obligations and commercial commitments from those discussed in our most recent Annual Report on Form 10-K for the year ended December 31, 2014 filed on February 24, 2015 with the SEC.

We have committed to invest up to an aggregate of $7.9 million in two private equity funds, and we have contributed $8.4 million as of June 30, 2015, of which $7.7 million has been applied to these commitments.

FACTORS THAT COULD AFFECT OUR FUTURE RESULTS

The following are some of the risks that could affect our financial performance or could cause actual results to differ materially from those expressed or implied in our forward-looking statements:

• Our operating results may fluctuate in future periods, which may adversely affect our stock price.

• Our revenue for a particular period can be difficult to predict, and a shortfall in revenue may harm our operating results.

• General economic conditions may reduce our revenues and harm our operating results.

• Our exposure to the credit risks of our customers and distributors may make it difficult to collect accounts receivable and could adversely affect our operating results and financial condition.

• We expect gross margin to vary over time, and our level of product gross margin may not be sustainable.

• We must continue to update and improve our products and develop new products in order to compete and to keep pace with improvements in communications technology.

• Our products may not continue to comply with evolving regulations governing their sale, which may harm our business.

• Our failure or the failure of our contract manufacturers to comply with applicable environmental regulations could adversely impact our results of operations.

• If our products do not interoperate with our customers’ networks, installations may be delayed or cancelled, which could harm our business.

• The lengthy approval process required by major and other service providers for new products could result in fluctuations in our revenue.

• We engage in research and development activities to improve the application of developed technologies, and as a consequence may miss certain market opportunities enjoyed by larger companies with substantially greater research and development efforts who may focus on more leading edge development.

• We depend heavily on sales to certain customers; the loss of any of these customers would significantly reduce our revenues and net income.

• Our strategy of outsourcing a portion of our manufacturing requirements to subcontractors located in various international regions may result in us not meeting our cost, quality or performance standards.

• Our dependence on a limited number of suppliers for certain raw materials and key components may prevent us from delivering our products on a timely basis, which could have a material adverse effect on customer relations and operating results.

33

• We compete in markets that have become increasingly competitive, which may result in reduced gross profit margins and market share.

• Our estimates regarding future warranty obligations may change due to product failure rates, shipment volumes, field service obligations and other rework costs incurred in correcting product failures. If our estimates change, the liability for warranty obligations may be increased or decreased, impacting future cost of goods sold.

• Managing our inventory is complex and may include write-downs of excess or obsolete inventory.

• The continuing growth of our international operations could expose us to additional risks, increase our costs and adversely affect our operating results and financial condition.

• We may be adversely affected by fluctuations in currency exchange rates.

• Our success depends on our ability to reduce the selling prices of succeeding generations of our products.

• Breaches in our information systems could cause significant damage to our business and reputation.

• Our failure to maintain rights to intellectual property used in our business could adversely affect the development, functionality, and commercial value of our products.

• Software under license from third parties for use in certain of our products may not continue to be available to us on commercially reasonable terms.

• We may incur liabilities or become subject to litigation that would have a material effect on our business.

• Consolidation and deterioration in the competitive service provider market could result in a significant decrease in our revenue.

• We depend on distributors who maintain inventories of our products. If the distributors reduce their inventories of these products, our sales could be adversely affected.

• If we are unable to successfully develop and maintain relationships with system integrators, service providers, and enterprise value added resellers, our sales may be negatively affected.

• If we fail to manage our exposure to worldwide financial and securities markets successfully, our operating results and financial statements could be materially impacted.

• Changes in our effective tax rate or assessments arising from tax audits may have an adverse impact on our results.

• We are required to periodically evaluate the value of our long-lived assets, including the value of intangibles acquired and goodwill resulting from business acquisitions. Any future impairment charges required may adversely affect our operating results.

• Our success depends on attracting and retaining key personnel.

• Regulatory and potential physical impacts of climate change and other natural events may affect our customers and our production operations, resulting in adverse effects on our operating results.

• While we believe our internal control over financial reporting is adequate, a failure to maintain effective internal control over financial reporting as our business expands could result in a loss of investor confidence in our financial reports and have an adverse effect on our stock price.

• The price of our common stock has been volatile and may continue to fluctuate significantly.

The foregoing list of risks is not exclusive. For a more detailed description of the risk factors associated with our business, see Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2014, filed on February 24, 2015 with the SEC.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to financial market risks, including changes in interest rates, foreign currency rates and prices of marketable equity and fixed-income securities. The primary objective of the large majority of our investment activities is to preserve principal while at the same time achieving appropriate yields without significantly increasing risk. To achieve this objective, a majority of our marketable securities are investment grade, municipal fixed-rate bonds, municipal variable rate demand notes and municipal money market instruments denominated in U.S. dollars. Our investment policy provides limitations for issuer concentration, which limits, at the time of purchase, the concentration in any one issuer to 5% of the market value of our total investment portfolio.

34

We maintain depository investments with certain financial institutions. Although these depository investments may exceed government insured depository limits, we have evaluated the credit worthiness of these financial institutions, and determined the risk of material financial loss due to exposure of such credit risk to be minimal. As of June 30, 2015, $84.4 million of our cash and cash equivalents, primarily certain domestic money market funds and foreign depository accounts, were in excess of government provided insured depository limits.

As of June 30, 2015, approximately $201.9 million of our cash and investments may be directly affected by changes in interest rates. We have performed a hypothetical sensitivity analysis assuming market interest rates increase or decrease by 50 basis points (bps) for an entire year, while all other variables remain constant. At June 30, 2015, we held $88.0 million of cash and investments where a change in interest rates would impact our interest income. A hypothetical 50 bps decline in interest rates as of June 30, 2015 would reduce annualized interest income on our cash and investments by approximately $0.4 million. In addition, we held $178.2 million of fixed-rate municipal bonds and corporate bonds whose fair values may be directly affected by a change in interest rates. A hypothetical 50 bps increase in interest rates as of June 30, 2015 would reduce the fair value of our municipal fixed-rate bonds and corporate bonds by approximately $0.9 million.

As of June 30, 2014, approximately $287.1 million of our cash and investments was subject to being directly affected by changes in interest rates. We have performed a hypothetical sensitivity analysis assuming market interest rates increase or decrease by 50 bps for the entire year, while all other variables remain constant. A hypothetical 50 bps decline in interest rates as of June 30, 2014 would have reduced annualized interest income on our cash, money market instruments and municipal variable rate demand notes by approximately $0.5 million. In addition, a hypothetical 50 bps increase in interest rates as of June 30, 2014 would have reduced the fair value of our municipal fixed-rate bonds and corporate bonds by approximately $1.4 million.

We are exposed to changes in foreign currency exchange rates to the extent that such changes affect our revenue and gross margin on revenue derived from some international customers, expenses, and assets and liabilities held in non-functional currencies related to our foreign subsidiaries. Our primary exposure to foreign currency exchange rates is with our German subsidiary, whose functional currency is the Euro, and our Australian subsidiary, whose functional currency is the Australian dollar. We are exposed to changes in foreign currency exchange rates to the extent of our German subsidiaries use of contract manufacturers and raw material suppliers whom we predominately pay in U.S. dollars. As a result, changes in currency exchange rates could cause variations in gross margin in the products that we sell in the EMEA region.

We have certain international customers who are invoiced or pay in a non-functional currency. Changes in the monetary exchange rates used to invoice such customers versus the functional currency of the entity billing such customers may adversely affect our results of operations and financial condition. To manage the volatility relating to these typical business exposures, we may enter into various derivative transactions, when appropriate. We do not hold or issue derivative instruments for trading or other speculative purposes. The Saudi Arabian Riyal is the predominant currency of the customers who are billed in their local currency. Taking into account the effects of foreign currency fluctuations of the Riyal versus the Euro, a hypothetical 10% weakening of the Euro as of June 30, 2015 would provide a gain on foreign currency of approximately $0.3 million. Conversely, a hypothetical 10% strengthening of the Euro as of June 30, 2015 would provide a loss on foreign currency of approximately $0.3 million. All other non-functional currencies billed would result in a combined hypothetical gain or loss of $1.1 million if the U.S. dollar weakened or strengthened against the billing currencies. Any gain or loss would be partially mitigated by the forward contracts discussed in the following paragraph.

As of June 30, 2015, we had no material contracts, other than accounts receivable, accounts payable, and loans to a subsidiary, denominated in foreign currencies. As of June 30, 2015, we had forward contracts outstanding with notional amounts totaling €39.0 million ($43.4 million), which mature at various times throughout 2015. The fair value of these forward contracts was a net liability of approximately $0.4 million as of June 30, 2015.

For further information about the fair value of our available-for-sale investments and our derivative and hedging activities as of June 30, 2015, see Notes 5 and 6 of Notes to Consolidated Financial Statements.

35

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures. Our Chief Executive Officer and Chief Financial Officer are responsible for establishing and maintaining “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) for ADTRAN. Our Chief Executive Officer and Interim Chief Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures as of the end of the period covered by this quarterly report, have concluded that our disclosure controls and procedures are effective.

(b) Changes in internal control over financial reporting. There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1A. RISK FACTORS

A list of factors that could materially affect our business, financial condition or operating results is included under “Factors That Could Affect Our Future Results” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in Item 2 of Part I of this report. There have been no material changes to the risk factors as disclosed in Item 1A of Part I of our most recent Annual Report on Form 10-K for the year ended December 31, 2014, filed on February 24, 2015 with the SEC.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table sets forth repurchases of our common stock for the months indicated:

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
April 1, 2015 – April 30, 2015		543,896	$	16.08		543,896		4,107,889
May 1, 2015 – May 31, 2015		2,238,391	$	16.77		2,238,391		1,869,498
June 1, 2015 – June 30, 2015		—		—		—		1,869,498	(1)
Total		2,782,287				2,782,287

On May 14, 2014, our Board of Directors authorized the repurchase of an additional 5.0 million shares of our common stock (bringing the total shares authorized for repurchase to 45.0 million). This authorization is being implemented through open market or private purchases from time to time as conditions warrant.

⁽¹⁾ On July 14, 2015, our Board of Directors authorized the repurchase of an additional 5.0 million shares of our common stock (bringing the total shares authorized for repurchase to 50.0 million). This new authorization will be implemented through open market or private purchases from time to time as conditions warrant.

36

ITEM 6. EXHIBITS

Exhibits.

Exhibit No.	Description
31	Rule 13a-14(a)/15d-14(a) Certifications
32	Section 1350 Certifications
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document

* Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

37

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ADTRAN, Inc.
	(Registrant)
Date: August 5, 2015	/s/ Michael Foliano
	Michael Foliano
	Senior Vice President – Global Operations,
	Interim Chief Financial Officer, Treasurer and Secretary
	(Interim Principal Financial Officer)

38

EXHIBIT INDEX

Exhibit No.	Description
31	Rule 13a-14(a)/15d-14(a) Certifications
32	Section 1350 Certifications
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document

* Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

39

EX-31

Exhibit 31

CERTIFICATIONS

I, Thomas R. Stanton, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of ADTRAN, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 5, 2015

/s/ Thomas R. Stanton

Thomas R. Stanton

Chief Executive Officer and Chairman of the Board

CERTIFICATIONS

I, Michael Foliano, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of ADTRAN, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 5, 2015

/s/ Michael Foliano

Michael Foliano

Senior Vice President – Global Operations,

Interim Chief Financial Officer, Treasurer and Secretary

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of ADTRAN, Inc. (the “Company”) on Form 10-Q for the quarter ending June 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas R. Stanton, Chief Executive Officer and Chairman of the Board of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Thomas R. Stanton

Thomas R. Stanton

Chief Executive Officer and Chairman of the Board

August 5, 2015

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of ADTRAN, Inc. (the “Company”) on Form 10-Q for the quarter ending June 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael Foliano, Senior Vice President – Global Operations and Interim Chief Financial Officer, Treasurer and Secretary, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Michael Foliano

Michael Foliano

Senior Vice President – Global Operations,

Interim Chief Financial Officer, Treasurer

and Secretary

August 5, 2015

XML

Stock-Based Compensation - Summary of Stock Options Outstanding (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended	12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Dec. 31, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Aggregate Intrinsic Value, Options outstanding, Beginning Balance				$ 10,625
Number of Options, outstanding, Beginning Balance			6,981,000
Number of options, granted	0	0	2,000
Number of Options, forfeited			(243,000)
Number of Options, expired			(157,000)
Number of Options, exercised			(52,000)
Number of Options, outstanding, Ending Balance	6,531,000		6,531,000	6,981,000
Number of Options, vested and expected to vest, Ending Balance	6,440,000		6,440,000
Number of Options, Options exercisable	4,190,000		4,190,000
Weighted Average Exercise Price, outstanding, Beginning Balance			$ 23.62
Weighted Average Exercise Price, granted			22.56
Weighted Average Exercise Price, forfeited			21.01
Weighted Average Exercise Price, expired			26.78
Weighted Average Exercise Price, exercised			16.08
Weighted Average Exercise Price, outstanding, Ending Balance	$ 23.70		23.70	$ 23.62
Weighted Average Exercise Price, vested and expected to vest, Ending Balance	23.75		23.75
Weighted Average Exercise Price, Options exercisable	$ 25.21		$ 25.21
Weighted Average Remaining Contractual Life In Years, Options outstanding			5 years 11 months 1 day	6 years 5 months 12 days
Weighted Average Remaining Contractual Life In Years, Options vested and expected to vest			5 years 10 months 6 days
Weighted Average Remaining Contractual Life In Years, Options exercisable			4 years 6 months 4 days
Aggregate Intrinsic Value, Options outstanding, Ending Balance	$ 446		$ 446
Aggregate Intrinsic Value, Options vested and expected to vest	331		331
Aggregate Intrinsic Value, Options exercisable	$ 446		$ 446

XML

Stockholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Equity, Class of Treasury Stock [Line Items]
Stock repurchased, shares	2,900,000
Shares repurchased, average price per share	$ 16.87
Additional shares authorized for purchase	1,900,000
Number of Options, exercised	(52,000)
Exercise price of stock options, lower range limit	$ 15.29
Exercise price of stock options, upper range limit	$ 22.53
Proceeds from stock option exercises	$ 833	$ 1,781
Predecessor [Member]
Equity, Class of Treasury Stock [Line Items]
Maximum shares authorized for repurchase, prior and new announcements and total after new announcement	45,000,000

XML

Inventory - Components of Inventory (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Inventory Disclosure [Abstract]
Raw materials	$ 38,819	$ 34,831
Work in process	3,489	3,750
Finished goods	57,740	48,129
Total	$ 100,048	$ 86,710

XML

Stockholders' Equity - Cash Dividends (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Dividends Payable [Line Items]
Record Date			Jul. 30, 2015
Payment Date			Aug. 13, 2015
Per Share Amount	$ 0.09	$ 0.09	$ 0.18	$ 0.18
Total Dividend Paid			$ 9,509	$ 10,137
Cash Dividends Paid in February [Member]
Dividends Payable [Line Items]
Record Date			Feb. 05, 2015
Payment Date			Feb. 19, 2015
Per Share Amount			$ 0.09
Total Dividend Paid			$ 4,811
Cash Dividends Paid in May [Member]
Dividends Payable [Line Items]
Record Date			May 07, 2015
Payment Date			May 21, 2015
Per Share Amount			$ 0.09
Total Dividend Paid			$ 4,698

XML

Derivative Instruments and Hedging Activities - Schedule of Fair Values of Hedging Instruments Recorded in Consolidated Balance Sheet (Detail) - Significant Other Observable Inputs (Level 2) [Member] - Foreign Exchange Contracts [Member] - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Other Receivables [Member]
Derivatives Not Designated as Hedging Instruments (Level 2):
Derivatives asset, fair value	$ 447	$ 249
Accounts Payable [Member]
Derivatives Not Designated as Hedging Instruments (Level 2):
Derivatives liability, fair value	$ (832)	$ (10)

XML

Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended	6 Months Ended	12 Months Ended
	Mar. 31, 2015	Jun. 30, 2015	Dec. 31, 2014
Summary of Significant Accounting Policy [Line Items]
Reduction of pre-tax income		$ 0.8
Increase in other expenses	$ 1.3
Other Receivables [Member]
Summary of Significant Accounting Policy [Line Items]
Prior period reclassification adjustment			$ (2.3)
Accounts Receivable [Member]
Summary of Significant Accounting Policy [Line Items]
Prior period reclassification adjustment			$ 2.3

XML

Stockholders' Equity - Reclassifications Out of Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Reclassification Adjustment Out of Accumulated Other Comprehensive Income [Line Items]
Income before provision for income taxes	$ 4,111	$ 21,811	$ 9,621	$ 36,490
Tax (expense) benefit	(1,567)	(7,416)	(3,760)	(12,488)
Total reclassifications for the period, net of tax	2,544	14,395	5,861	24,002
Reclassification Out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment Out of Accumulated Other Comprehensive Income [Line Items]
Defined benefit plan adjustments - actuarial losses	(105)		(203)
Income before provision for income taxes	3,108	2,126	6,064	4,296
Tax (expense) benefit	(1,220)	(829)	(2,381)	(1,676)
Total reclassifications for the period, net of tax	1,888	1,297	3,683	2,620
Unrealized Gains (Losses) on Available-for-Sale Securities [Member] | Reclassification Out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment Out of Accumulated Other Comprehensive Income [Line Items]
Net realized investment gain	3,264	2,160	6,340	4,330
Impairment Expense [Member] | Reclassification Out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment Out of Accumulated Other Comprehensive Income [Line Items]
Net realized investment gain	$ (51)	$ (34)	$ (73)	$ (34)

XML

Investments (Tables)

6 Months Ended

Jun. 30, 2015

Investments, Debt and Equity Securities [Abstract]

Securities and Investments, Recorded at Either Fair Value or Cost

At June 30, 2015, we held the following securities and investments, recorded at either fair value or cost.

(In thousands)	Amortized Cost		Gross Unrealized					Carrying Value
			Gains		Losses
Deferred compensation plan assets	$	14,046	$	2,601	$	(113	)	$	16,534
Corporate bonds		114,446		123		(139	)		114,430
Municipal fixed-rate bonds		67,302		130		(45	)		67,387
Municipal variable rate demand notes		3,695		—		—			3,695
Marketable equity securities		28,901		9,265		(866	)		37,300
Available-for-sale securities held at fair value	$	228,390	$	12,119	$	(1,163	)	$	239,346
Restricted investment held at cost									30,000
Other investments held at cost									1,446
Total carrying value of available-for-sale investments								$	270,792

At December 31, 2014, we held the following securities and investments, recorded at either fair value or cost.

(In thousands)	Amortized Cost		Gross Unrealized					Carrying Value
			Gains		Losses
Deferred compensation plan assets	$	13,897	$	2,409	$	(12	)	$	16,294
Corporate bonds		111,261		186		(186	)		111,261
Municipal fixed-rate bonds		127,341		480		(34	)		127,787
Municipal variable rate demand notes		2,465		—		—			2,465
Marketable equity securities		26,399		12,395		(539	)		38,255
Available-for-sale securities held at fair value	$	281,363	$	15,470	$	(771	)	$	296,062
Restricted investment held at cost									30,000
Other investments held at cost									1,506
Total carrying value of available-for-sale investments								$	327,568

Contractual Maturities of Corporate Bonds and Municipal Fixed-Rate Bonds

As of June 30, 2015, our corporate bonds and municipal fixed-rate bonds had the following contractual maturities:

(In thousands)	Corporate bonds		Municipal fixed-rate bonds
Less than one year	$	32,179	$	18,254
One to two years		42,510		35,462
Two to three years		39,741		12,460
Three to five years		—		1,211
Total	$	114,430	$	67,387

Gross Realized Gains and Losses on Sale of Securities

The following table presents gross realized gains and losses related to our investments.

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2015			2014			2015			2014
Gross realized gains	$	3,459		$	2,407		$	6,604		$	4,635
Gross realized losses	$	(204	)	$	(67	)	$	(234	)	$	(103	)

Fair Value Measurements of Cash Equivalents Held in Money Market Funds and Investments

We have categorized our cash equivalents held in money market funds and our investments held at fair value into a three-level fair value hierarchy based on the priority of the inputs to the valuation technique for the cash equivalents and investments as follows: Level 1—Values based on unadjusted quoted prices for identical assets or liabilities in an active market; Level 2—Values based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly; Level 3—Values based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs include information supplied by investees.

	Fair Value Measurements at June 30, 2015 Using
(In thousands)	Fair Value		Quoted Prices in Active Market for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents
Money market funds	$	1,087	$	1,087	$	—	$	—
Available-for-sale securities
Deferred compensation plan assets		16,534		16,534		—		—
Available-for-sale debt securities
Corporate bonds		114,430		—		114,430		—
Municipal fixed-rate bonds		67,387		—		67,387		—
Municipal variable rate demand notes		3,695		—		3,695		—
Available-for-sale marketable equity securities
Marketable equity securities – technology industry		7,786		7,786		—		—
Marketable equity securities – other		29,514		29,514		—		—
Available-for-sale securities		239,346		53,834		185,512		—
Total	$	240,433	$	54,921	$	185,512	$	—

	Fair Value Measurements at December 31, 2014 Using
(In thousands)	Fair Value		Quoted Prices in Active Market for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents
Money market funds	$	1,163	$	1,163	$	—	$	—
Available-for-sale securities
Deferred compensation plan assets		16,294		16,294		—		—
Available-for-sale debt securities
Corporate bonds		111,261		—		111,261		—
Municipal fixed-rate bonds		127,787		—		127,787		—
Municipal variable rate demand notes		2,465		—		2,465		—
Available-for-sale marketable equity securities
Marketable equity securities – technology industry		9,661		9,661		—		—
Marketable equity securities – other		28,594		28,594		—		—
Available-for-sale securities		296,062		54,549		241,513		—
Total	$	297,225	$	55,712	$	241,513	$	—

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Goodwill and Intangible Assets - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill, relates to acquisition			$ 3,500,000		$ 3,500,000
Impairment losses			0
Amortization expense	$ 500,000	$ 600,000	$ 1,000,000	$ 1,200,000

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Investments - Additional Information (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Schedule of Investments [Line Items]
Restricted certificate of deposit held	$ 30,000	$ 30,000
Identification of potential other-than-temporary impairments	25.00%
Alabama State Industrial Development Authority [Member] | Taxable Revenue Bond [Member] | Significant Other Observable Inputs (Level 2) [Member]
Schedule of Investments [Line Items]
Estimated fair value of bond	$ 29,900
Investment [Member] | Issuer Concentration [Member] | Market Value of Total Investment Portfolio [Member]
Schedule of Investments [Line Items]
Investment concentration risk percentage	5.00%

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Stock-Based Compensation - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options, granted	0	0	2,000
Estimated forfeitures for stock options			3.30%
Compensation expense related to non-vested stock options, RSUs and restricted stock not yet recognized	$ 12,600		$ 12,600
Recognition period of non-vested compensation cost			2 years 6 months
Total pre-tax intrinsic value of options exercised	$ 25		$ 100
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of RSUs and restricted stock grants in period	0	0	0	0
Number of RSUs and restricted stock forfeitures in period			12,000
Number of RSUs and restricted stock vesting in period	0	0	0	0
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of RSUs and restricted stock grants in period	0	0	0	0
Number of RSUs and restricted stock forfeitures in period	0	0	0	0
Number of RSUs and restricted stock vesting in period	2,000
RSUs and Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Forfeiture rate for RSUs and restricted stock			0.00%

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Goodwill and Intangible Assets - Estimated Future Amortization Expense Related to Intangible Assets (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract]
Remainder of 2015	$ 928
2016	1,679
2017	1,164
2018	703
2019	309
Thereafter	1,314
Net Value	$ 6,097	$ 7,488

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Related Party Transactions - Additional Information (Detail) - Jun. 30, 2014 - USD ($) $ in Thousands	Total	Total
Director Emeritus [Member]
Related Party Transaction
Related party legal fees	$ 10	$ 10

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Segment Information - Additional Information (Detail) - 6 months ended Jun. 30, 2015	Segment Product_Category
Segment Reporting [Abstract]
Number of operating reportable segments	2
Number of product categories | Product_Category	3

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Derivative Instruments and Hedging Activities - Schedule of Change in Fair Values of Derivative Instruments Recorded in Consolidated Statements of Income (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Foreign Exchange Contracts [Member] | Other Income (Expense) [Member]
Derivatives Not Designated as Hedging Instruments:
Derivative instrument, gain or loss	$ (1,299)	$ (438)	$ 177	$ (548)

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Pension Benefit Plan

6 Months Ended

Jun. 30, 2015

Compensation and Retirement Disclosure [Abstract]

Pension Benefit Plan

3. PENSION BENEFIT PLAN

We maintain a defined benefit pension plan covering employees in certain foreign countries.

The following table summarizes the components of net periodic pension cost for the three and six months ended June 30, 2015 and 2014:

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2015			2014			2015			2014
Service cost	$	324		$	306		$	664		$	611
Interest cost		152			216			311			431
Expected return on plan assets		(250	)		(280	)		(511	)		(559	)
Amortization of actuarial losses		100			—			205			—
Net periodic pension cost	$	326		$	242		$	669		$	483

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Segment Information - Sales and Gross Profit of Reportable Segments (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Segment Reporting Information [Line Items]
Sales	$ 160,138	$ 176,129	$ 302,973	$ 323,133
Gross Profit	68,246	86,797	133,809	164,587
Carrier Networks [Member]
Segment Reporting Information [Line Items]
Sales	135,397	143,455	251,411	261,617
Gross Profit	54,699	68,053	104,558	129,406
Enterprise Networks [Member]
Segment Reporting Information [Line Items]
Sales	24,741	32,674	51,562	61,516
Gross Profit	$ 13,547	$ 18,744	$ 29,251	$ 35,181

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Investments - Gross Realized Gains and Losses on Sale of Securities (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Investments, Debt and Equity Securities [Abstract]
Gross realized gains	$ 3,459	$ 2,407	$ 6,604	$ 4,635
Gross realized losses	$ (204)	$ (67)	$ (234)	$ (103)

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Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2015

Equity [Abstract]

Summary of Changes in Stockholders' Equity

A summary of the changes in stockholders’ equity for the six months ended June 30, 2015 is as follows:

(In thousands)	Stockholders’ Equity
Balance, December 31, 2014	$	549,013
Net income		5,861
Dividend payments		(9,509	)
Dividends accrued for unvested restricted stock units		10
Net unrealized losses on available-for-sale securities (net of tax)		(2,286	)
Defined benefit plan adjustments		140
Foreign currency translation adjustment		(2,446	)
Proceeds from stock option exercises		833
Purchase of treasury stock		(49,307	)
Income tax benefit from exercise of stock options		(23	)
Stock-based compensation expense		3,114
Balance, June 30, 2015	$	495,400

Cash Dividends

During the six months ended June 30, 2015, we paid cash dividends as follows (in thousands except per share amounts):

Record Date	Payment Date	Per Share Amount		Total Dividend Paid
February 5, 2015	February 19, 2015	$	0.09	$	4,811
May 7, 2015	May 21, 2015	$	0.09	$	4,698

Changes in Accumulated Other Comprehensive Income, Net of Tax by Component

The following tables present changes in accumulated other comprehensive income, net of tax, by component for the three months ended June 30, 2015 and 2014:

	Three Months Ended June 30, 2015
(In thousands)	Unrealized Gains (Losses) on Available- for-Sale Securities			Defined Benefit Plan Adjustments			Foreign Currency Adjustments			Total
Beginning balance	$	8,461		$	(5,689	)	$	(6,600	)	$	(3,828	)
Other comprehensive income (loss) before reclassifications		177			—			872			1,049
Amounts reclassified from accumulated other comprehensive income		(1,960	)		72			—			(1,888	)
Net current period other comprehensive income (loss)		(1,783	)		72			872			(839	)
Ending balance	$	6,678		$	(5,617	)	$	(5,728	)	$	(4,667	)

	Three Months Ended June 30, 2014
(In thousands)	Unrealized Gains (Losses) on Available- for-Sale Securities			Defined Benefit Plan Adjustments			Foreign Currency Adjustments		Total
Beginning balance	$	9,816		$	(891	)	$	1,159	$	10,084
Other comprehensive income (loss) before reclassifications		2,516			—			134		2,650
Amounts reclassified from accumulated other comprehensive income		(1,297	)		—			—		(1,297	)
Net current period other comprehensive income (loss)		1,219			—			134		1,353
Ending balance	$	11,035		$	(891	)	$	1,293	$	11,437

The following tables present changes in accumulated other comprehensive income, net of tax, by component for the six months ended June 30, 2015 and 2014:

	Six Months Ended June 30, 2015
(In thousands)	Unrealized Gains (Losses) on Available- for-Sale Securities			Defined Benefit Plan Adjustments			Foreign Currency Adjustments			Total
Beginning balance	$	8,964		$	(5,757	)	$	(3,282	)	$	(75	)
Other comprehensive income (loss) before reclassifications		1,537			—			(2,446	)		(909	)
Amounts reclassified from accumulated other comprehensive income		(3,823	)		140			—			(3,683	)
Net current period other comprehensive income (loss)		(2,286	)		140			(2,446	)		(4,592	)
Ending balance	$	6,678		$	(5,617	)	$	(5,728	)	$	(4,667	)

	Six Months Ended June 30, 2014
(In thousands)	Unrealized Gains (Losses) on Available- for-Sale Securities			Defined Benefit Plan Adjustments			Foreign Currency Adjustments		Total
Beginning balance	$	10,737		$	(891	)	$	907	$	10,753
Other comprehensive income (loss) before reclassifications		2,918			—			386		3,304
Amounts reclassified from accumulated other comprehensive income		(2,620	)		—			—		(2,620	)
Net current period other comprehensive income (loss)		298			—			386		684
Ending balance	$	11,035		$	(891	)	$	1,293	$	11,437

Reclassifications Out of Accumulated Other Comprehensive Income

The following tables present the details of reclassifications out of accumulated other comprehensive income for the three months ended June 30, 2015 and 2014:

(In thousands)	Three Months Ended June 30, 2015
Details about Accumulated Other Comprehensive Income Components	Amount Reclassified from Accumulated Other Comprehensive Income			Affected Line Item in the Statement Where Net Income Is Presented
Unrealized gains (losses) on available-for-sale securities:
Net realized gain on sales of securities	$	3,264		Net realized investment gain
Impairment expense		(51	)	Net realized investment gain
Defined benefit plan adjustments – actuarial losses		(105	)	(1)
Total reclassifications for the period, before tax		3,108
Tax (expense) benefit		(1,220	)
Total reclassifications for the period, net of tax	$	1,888

⁽¹⁾ Included in the computation of net periodic pension cost. See Note 3 of Notes to Consolidated Financial Statements.

(In thousands)	Three Months Ended June 30, 2014
Details about Accumulated Other Comprehensive Income Components	Amount Reclassified from Accumulated Other Comprehensive Income			Affected Line Item in the Statement Where Net Income Is Presented
Unrealized gains (losses) on available-for-sale securities:
Net realized gain on sales of securities	$	2,160			Net realized investment gain
Impairment expense		(34	)		Net realized investment gain
Total reclassifications for the period, before tax		2,126
Tax (expense) benefit		(829	)
Total reclassifications for the period, net of tax	$	1,297

The following tables present the details of reclassifications out of accumulated other comprehensive income for the six months ended June 30, 2015 and 2014:

(In thousands)	Six Months Ended June 30, 2015
Details about Accumulated Other Comprehensive Income Components	Amount Reclassified from Accumulated Other Comprehensive Income			Affected Line Item in the Statement Where Net Income Is Presented
Unrealized gains (losses) on available-for-sale securities:
Net realized gain on sales of securities	$	6,340		Net realized investment gain
Impairment expense		(73	)	Net realized investment gain
Defined benefit plan adjustments – actuarial losses		(203	)	(1)
Total reclassifications for the period, before tax		6,064
Tax (expense) benefit		(2,381	)
Total reclassifications for the period, net of tax	$	3,683

⁽¹⁾ Included in the computation of net periodic pension cost. See Note 3 of Notes to Consolidated Financial Statements.

(In thousands)	Six Months Ended June 30, 2014
Details about Accumulated Other Comprehensive Income Components	Amount Reclassified from Accumulated Other Comprehensive Income			Affected Line Item in the Statement Where Net Income Is Presented
Unrealized gains (losses) on available-for-sale securities:
Net realized gain on sales of securities	$	4,330		Net realized investment gain
Impairment expense		(34	)	Net realized investment gain
Total reclassifications for the period, before tax		4,296
Tax (expense) benefit		(1,676	)
Total reclassifications for the period, net of tax	$	2,620

Other Comprehensive Income

The following table presents the tax effects related to the change in each component of other comprehensive income for the three months ended June 30, 2015 and 2014:

	Three Months Ended June 30, 2015									Three Months Ended June 30, 2014
(In thousands)	Before-Tax Amount			Tax (Expense) Benefit			Net-of-Tax Amount			Before-Tax Amount			Tax (Expense) Benefit			Net-of-Tax Amount
Unrealized gains (losses) on available-for-sale securities	$	290		$	(113	)	$	177		$	4,125		$	(1,609	)	$	2,516
Reclassification adjustment for amounts included in net income		(3,108	)		1,220			(1,888	)		(2,126	)		829			(1,297	)
Foreign currency translation adjustment		872			—			872			134			—			134
Total Other Comprehensive Income (Loss)	$	(1,946	)	$	1,107		$	(839	)	$	2,133		$	(780	)	$	1,353

The following table presents the tax effects related to the change in each component of other comprehensive income for the six months ended June 30, 2015 and 2014:

	Six Months Ended June 30, 2015									Six Months Ended June 30, 2014
(In thousands)	Before-Tax Amount			Tax (Expense) Benefit			Net-of-Tax Amount			Before-Tax Amount			Tax (Expense) Benefit			Net-of-Tax Amount
Unrealized gains (losses) on available-for-sale securities	$	2,520		$	(983	)	$	1,537		$	4,784		$	(1,866	)	$	2,918
Reclassification adjustment for amounts included in net income		(6,064	)		2,381			(3,683	)		(4,296	)		1,676			(2,620	)
Foreign currency translation adjustment		(2,446	)		—			(2,446	)		386			—			386
Total Other Comprehensive Income (Loss)	$	(5,990	)	$	1,398		$	(4,592	)	$	874		$	(190	)	$	684

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Goodwill and Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Intangible Assets

The following table presents our intangible assets as of June 30, 2015 and December 31, 2014:

(In thousands)	June 30, 2015							December 31, 2014
	Gross Value		Accumulated Amortization			Net Value		Gross Value		Accumulated Amortization			Net Value
Customer relationships	$	5,937	$	(2,350	)	$	3,587	$	6,310	$	(2,136	)	$	4,174
Developed technology		5,784		(3,962	)		1,822		6,005		(3,577	)		2,428
Intellectual property		2,340		(1,687	)		653		2,340		(1,520	)		820
Trade names		270		(235	)		35		270		(205	)		65
Other		11		(11	)		—		12		(11	)		1
Total	$	14,342	$	(8,245	)	$	6,097	$	14,937	$	(7,449	)	$	7,488

Estimated Future Amortization Expense Related to Intangible Asset

As of June 30, 2015, the estimated future amortization expense of our intangible assets is as follows:

(In thousands)	Amount
Remainder of 2015	$	928
2016		1,679
2017		1,164
2018		703
2019		309
Thereafter		1,314
Total	$	6,097

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Stockholders' Equity - Changes in Accumulated Other Comprehensive Income, Net of Tax by Component (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	$ (3,828)	$ 10,084	$ (75)	$ 10,753
Other comprehensive income (loss) before reclassifications	1,049	2,650	(909)	3,304
Amounts reclassified from accumulated other comprehensive income	(1,888)	(1,297)	(3,683)	(2,620)
Other Comprehensive Income (Loss), net of tax	(839)	1,353	(4,592)	684
Ending balance	(4,667)	11,437	(4,667)	11,437
Unrealized Gains (Losses) on Available-for-Sale Securities [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	8,461	9,816	8,964	10,737
Other comprehensive income (loss) before reclassifications	177	2,516	1,537	2,918
Amounts reclassified from accumulated other comprehensive income	(1,960)	(1,297)	(3,823)	(2,620)
Other Comprehensive Income (Loss), net of tax	(1,783)	1,219	(2,286)	298
Ending balance	6,678	11,035	6,678	11,035
Defined Benefit Plan Adjustments [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(5,689)	(891)	(5,757)	(891)
Amounts reclassified from accumulated other comprehensive income	72		140
Other Comprehensive Income (Loss), net of tax	72		140
Ending balance	(5,617)	(891)	(5,617)	(891)
Foreign Currency Adjustments [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(6,600)	1,159	(3,282)	907
Other comprehensive income (loss) before reclassifications	872	134	(2,446)	386
Other Comprehensive Income (Loss), net of tax	872	134	(2,446)	386
Ending balance	$ (5,728)	$ 1,293	$ (5,728)	$ 1,293

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Investments - Fair Value Measurements of Cash Equivalents Held in Money Market Funds and Investments (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities	$ 239,346	$ 296,062
Deferred Compensation Plan Assets [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities	16,534	16,294
Corporate Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities	114,430	111,261
Municipal Fixed-Rate Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities	67,387	127,787
Municipal Variable Rate Demand Notes [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities	3,695	2,465
Fair Value, Measurements, Recurring [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities	239,346	296,062
Total	240,433	297,225
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities	53,834	54,549
Total	54,921	55,712
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities	185,512	241,513
Total	185,512	241,513
Fair Value, Measurements, Recurring [Member] | Money Market Funds [Member]
Schedule of Available-for-sale Securities [Line Items]
Cash equivalents	1,087	1,163
Fair Value, Measurements, Recurring [Member] | Money Market Funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Schedule of Available-for-sale Securities [Line Items]
Cash equivalents	1,087	1,163
Fair Value, Measurements, Recurring [Member] | Deferred Compensation Plan Assets [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities	16,534	16,294
Fair Value, Measurements, Recurring [Member] | Deferred Compensation Plan Assets [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities	16,534	16,294
Fair Value, Measurements, Recurring [Member] | Corporate Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities	114,430	111,261
Fair Value, Measurements, Recurring [Member] | Corporate Bonds [Member] | Significant Other Observable Inputs (Level 2) [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities	114,430	111,261
Fair Value, Measurements, Recurring [Member] | Municipal Fixed-Rate Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities	67,387	127,787
Fair Value, Measurements, Recurring [Member] | Municipal Fixed-Rate Bonds [Member] | Significant Other Observable Inputs (Level 2) [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities	67,387	127,787
Fair Value, Measurements, Recurring [Member] | Municipal Variable Rate Demand Notes [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities	3,695	2,465
Fair Value, Measurements, Recurring [Member] | Municipal Variable Rate Demand Notes [Member] | Significant Other Observable Inputs (Level 2) [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities	3,695	2,465
Fair Value, Measurements, Recurring [Member] | Marketable Equity Securities - Technology Industry [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities	7,786	9,661
Fair Value, Measurements, Recurring [Member] | Marketable Equity Securities - Technology Industry [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities	7,786	9,661
Fair Value, Measurements, Recurring [Member] | Marketable Equity Securities - Other [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities	29,514	28,594
Fair Value, Measurements, Recurring [Member] | Marketable Equity Securities - Other [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities	$ 29,514	$ 28,594

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Earnings per Share (Tables)

6 Months Ended

Jun. 30, 2015

Earnings Per Share [Abstract]

Summary of Calculation of Basic and Diluted Earnings Per Share

A summary of the calculation of basic and diluted earnings per share for the three and six months ended June 30, 2015 and 2014 is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands, except per share amounts)	2015		2014		2015		2014
Numerator
Net income	$	2,544	$	14,395	$	5,861	$	24,002
Denominator
Weighted average number of shares – basic		51,822		55,409		52,607		56,077
Effect of dilutive securities
Stock options		72		288		122		459
Restricted stock and restricted stock units		23		32		13		23
Weighted average number of shares – diluted		51,917		55,729		52,742		56,559
Net income per share – basic	$	0.05	$	0.26	$	0.11	$	0.43
Net income per share – diluted	$	0.05	$	0.26	$	0.11	$	0.42

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

Sales and Gross Profit of Reportable Segments

The following tables present information about the reported sales and gross profit of our reportable segments for the three and six months ended June 30, 2015 and 2014. Asset information by reportable segment is not reported, since we do not produce such information internally.

	Three Months Ended
	June 30, 2015				June 30, 2014
(In thousands)	Sales		Gross Profit		Sales		Gross Profit
Carrier Networks	$	135,397	$	54,699	$	143,455	$	68,053
Enterprise Networks		24,741		13,547		32,674		18,744
Total	$	160,138	$	68,246	$	176,129	$	86,797

	Six Months Ended
	June 30, 2015				June 30, 2014
(In thousands)	Sales		Gross Profit		Sales		Gross Profit
Carrier Networks	$	251,411	$	104,558	$	261,617	$	129,406
Enterprise Networks		51,562		29,251		61,516		35,181
Total	$	302,973	$	133,809	$	323,133	$	164,587

Sales Information by Product Category

The table below presents sales information by product category for the three and six months ended June 30, 2015 and 2014:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2015		2014		2015		2014
Carrier Systems	$	119,039	$	128,824	$	219,478	$	228,377
Business Networking		34,210		41,969		69,591		79,888
Loop Access		6,889		5,336		13,904		14,868
Total	$	160,138	$	176,129	$	302,973	$	323,133

Subcategory Revenues

The table below presents subcategory revenues for the three and six months ended June 30, 2015 and 2014:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2015		2014		2015		2014
Core Products
Broadband Access (included in Carrier Systems)	$	100,746	$	108,309	$	185,540	$	189,836
Optical (included in Carrier Systems)		16,432		15,833		28,936		28,622
Internetworking (included in Business Networking)		33,158		40,986		67,317		77,932
Subtotal		150,336		165,128		281,793		296,390
Legacy Products
HDSL (does not include T1) (included in Loop Access)		6,399		4,798		13,102		13,675
Other products (excluding HDSL)		3,403		6,203		8,078		13,068
Subtotal		9,802		11,001		21,180		26,743
Total	$	160,138	$	176,129	$	302,973	$	323,133

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Income Taxes

6 Months Ended

Jun. 30, 2015

Income Tax Disclosure [Abstract]

Income Taxes

2. INCOME TAXES

Our effective tax rate increased from 34.2% in the six months ended June 30, 2014 to 39.1% in the six months ended June 30, 2015. The increase in the effective tax rate between the two periods is primarily attributable to the release of a valuation allowance attributable to a foreign subsidiary in 2014.

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Liability for Warranty Returns (Tables)

6 Months Ended

Jun. 30, 2015

Product Warranties Disclosures [Abstract]

Summary of Warranty Expense and Write-Off Activity

A summary of warranty expense and write-off activity for the six months ended June 30, 2015 and 2014 is as follows:

	Six Months Ended June 30,
	2015			2014
(In thousands)
Balance at beginning of period	$	8,415		$	8,977
Plus: Amounts charged to cost and expenses		1,128			1,339
Less: Deductions		(610	)		(1,999	)
Balance at end of period	$	8,933		$	8,317

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Investments - Securities and Investments, Recorded at Either Fair Value or Cost (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 228,390	$ 281,363
Gross Unrealized Gains	12,119	15,470
Gross Unrealized Losses	(1,163)	(771)
Available-for-sale-securities, Carrying Value	239,346	296,062
Restricted investment held at cost	30,000	30,000
Other investments held at cost	1,446	1,506
Total carrying value of available-for-sale investments	270,792	327,568
Deferred Compensation Plan Assets [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	14,046	13,897
Gross Unrealized Gains	2,601	2,409
Gross Unrealized Losses	(113)	(12)
Available-for-sale-securities, Carrying Value	16,534	16,294
Corporate Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	114,446	111,261
Gross Unrealized Gains	123	186
Gross Unrealized Losses	(139)	(186)
Available-for-sale-securities, Carrying Value	114,430	111,261
Municipal Fixed-Rate Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	67,302	127,341
Gross Unrealized Gains	130	480
Gross Unrealized Losses	(45)	(34)
Available-for-sale-securities, Carrying Value	67,387	127,787
Municipal Variable Rate Demand Notes [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	3,695	2,465
Available-for-sale-securities, Carrying Value	3,695	2,465
Marketable Equity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	28,901	26,399
Gross Unrealized Gains	9,265	12,395
Gross Unrealized Losses	(866)	(539)
Available-for-sale-securities, Carrying Value	$ 37,300	$ 38,255

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Stockholders' Equity - Summary of Changes in Stockholders' Equity (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Equity [Abstract]
Beginning Balance			$ 549,013
Net Income	$ 2,544	$ 14,395	5,861	$ 24,002
Dividend payments			(9,509)
Dividends accrued for unvested restricted stock units			10
Net unrealized losses on available-for-sale securities (net of tax)	(1,783)	1,219	(2,286)	298
Defined benefit plan adjustments	72		140
Foreign currency translation adjustment	872	$ 134	(2,446)	386
Proceeds from stock option exercises			833	$ 1,781
Purchase of treasury stock			(49,307)
Income tax benefit from exercise of stock options			(23)
Stock-based compensation expense			3,114
Ending Balance	$ 495,400		$ 495,400

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Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Current Assets
Cash and cash equivalents	$ 87,215	$ 73,439
Short-term investments	54,127	46,919
Accounts receivable, less allowance for doubtful accounts of $21 and $136 at June 30, 2015 and December 31, 2014, respectively	89,088	88,502
Other receivables	31,442	33,295
Inventory, net	100,048	86,710
Prepaid expenses	5,817	5,129
Deferred tax assets, net	17,038	17,095
Total Current Assets	384,775	351,089
Property, plant and equipment, net	73,347	74,828
Deferred tax assets, net	20,473	17,694
Goodwill	3,492	3,492
Other assets	10,236	10,942
Long-term investments	216,665	280,649
Total Assets	708,988	738,694
Current Liabilities
Accounts payable	85,456	56,414
Unearned revenue	17,495	22,762
Accrued expenses	15,538	11,077
Accrued wages and benefits	15,515	13,855
Income tax payable, net	10,072	14,901
Total Current Liabilities	144,076	119,009
Non-current unearned revenue	9,444	10,948
Other non-current liabilities	31,268	30,924
Bonds payable	28,800	28,800
Total Liabilities	$ 213,588	$ 189,681
Commitments and contingencies (see Note 14)
Stockholders' Equity
Common stock, par value $0.01 per share; 200,000 shares authorized; 79,652 shares issued and 50,573 shares outstanding at June 30, 2015 and 79,652 shares issued and 53,431 shares outstanding at December 31, 2014	$ 797	$ 797
Additional paid-in capital	244,920	241,829
Accumulated other comprehensive loss	(4,667)	(75)
Retained earnings	903,448	907,751
Less treasury stock at cost: 29,079 and 26,221 shares at June 30, 2015 and December 31, 2014, respectively	(649,098)	(601,289)
Total Stockholders' Equity	495,400	549,013
Total Liabilities and Stockholders' Equity	$ 708,988	$ 738,694

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Derivative Instruments and Hedging Activities - Additional Information (Detail) - Jun. 30, 2015	USD ($)	EUR (€)
Derivative [Line Items]
Maximum contractual period for derivatives	12 months
Forward Contracts [Member]
Derivative [Line Items]
Derivative, notional amount	$ 43,400,000	€ 39,000,000
Derivative maturity year	2015

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Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash flows from operating activities:
Net Income	$ 5,861	$ 24,002
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	7,256	7,467
Amortization of net premium on available-for-sale investments	1,578	2,272
Net realized gain on long-term investments	(6,370)	(4,532)
Net loss on disposal of property, plant and equipment	160	37
Stock-based compensation expense	3,114	4,149
Deferred income taxes	(1,743)	377
Tax benefit from stock option exercises	(23)	67
Excess tax benefits from stock-based compensation arrangements	38	(58)
Changes in operating assets and liabilities:
Accounts receivable, net	(2,003)	(31,583)
Other receivables	(119)	(4,072)
Inventory	(14,254)	841
Prepaid expenses and other assets	(1,433)	(3,103)
Accounts payable	30,938	14,425
Accrued expenses and other liabilities	2,175	8,248
Income tax payable, net	(3,961)	4,442
Net cash provided by operating activities	21,214	22,979
Cash flows from investing activities:
Purchases of property, plant and equipment	(5,392)	(4,919)
Proceeds from disposals of property, plant and equipment	8	1
Proceeds from sales and maturities of available-for-sale investments	120,422	166,518
Purchases of available-for-sale investments	(62,626)	(106,406)
Net cash provided by investing activities	52,412	55,194
Cash flows from financing activities:
Proceeds from stock option exercises	833	1,781
Purchases of treasury stock	(49,307)	(53,091)
Dividend payments	(9,509)	(10,137)
Payments on long-term debt		(16,500)
Excess tax benefits from stock-based compensation arrangements	(38)	58
Net cash used in financing activities	(58,021)	(77,889)
Net increase in cash and cash equivalents	15,605	284
Effect of exchange rate changes	(1,829)	321
Cash and cash equivalents, beginning of period	73,439	58,298
Cash and cash equivalents, end of period	87,215	58,903
Supplemental disclosure of non-cash investing activities:
Purchases of property, plant and equipment included in accounts payable	$ 270	$ 423

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Earnings Per Share - Summary of Calculation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Numerator
Net Income	$ 2,544	$ 14,395	$ 5,861	$ 24,002
Denominator
Weighted average number of shares - basic	51,822	55,409	52,607	56,077
Effect of dilutive securities
Stock options	72	288	122	459
Restricted stock and restricted stock units	23	32	13	23
Weighted average number of shares - diluted	51,917	55,729	52,742	56,559
Net income per share - basic	$ 0.05	$ 0.26	$ 0.11	$ 0.43
Net income per share - diluted	$ 0.05	$ 0.26	$ 0.11	$ 0.42

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Pension Benefit Plan - Summarization of Components of Net Periodic Pension Cost (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
Service cost	$ 324	$ 306	$ 664	$ 611
Interest cost	152	216	311	431
Expected return on plan assets	(250)	(280)	(511)	(559)
Amortization of actuarial losses	100		205
Net periodic pension cost	$ 326	$ 242	$ 669	$ 483

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Liability for Warranty Returns - Additional Information (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Dec. 31, 2014	Jun. 30, 2014	Dec. 31, 2013
Product Warranties Disclosures [Abstract]
Period of warranty for product defects	90 days to ten years
Liability for warranty obligations	$ 8,933	$ 8,415	$ 8,317	$ 8,977

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2015

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited consolidated financial statements of ADTRAN^®, Inc. and its subsidiaries (ADTRAN) have been prepared pursuant to the rules and regulations for reporting on Quarterly Reports on Form 10-Q. Accordingly, certain information and notes required by generally accepted accounting principles for complete financial statements are not included herein. The December 31, 2014 Consolidated Balance Sheet is derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States.

In the opinion of management, all adjustments necessary to fairly state these interim statements have been recorded and are of a normal and recurring nature. The results of operations for an interim period are not necessarily indicative of the results for the full year. The interim statements should be read in conjunction with the financial statements and notes thereto included in ADTRAN’s Annual Report on Form 10-K for the year ended December 31, 2014, filed on February 24, 2015 with the SEC.

Changes in Classifications

Changes in Classifications

We reclassified $2.3 million from other receivables to accounts receivable at December 31, 2014 to conform to the current period presentation.

Out of Period Adjustment

Out of Period Adjustment

In connection with the preparation of our Condensed Consolidated Financial Statements, we recorded corrections of certain out of period, immaterial misstatements that occurred in prior periods, the most significant of which resulted in an increase in Other Expense of $1.3 million in the first quarter of 2015. The aggregate impact of the corrections was a $0.8 million reduction to pre-tax income for the six months ended June 30, 2015 and is not expected to be material to the current year annual results.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. Our more significant estimates include the obsolete and excess inventory reserves, warranty reserves, customer rebates, determination of the deferred revenue components of multiple element sales agreements, estimated costs to complete obligations associated with deferred revenues, estimated income tax provision and income tax contingencies, the fair value of stock-based compensation, impairment of goodwill, valuation and estimated lives of intangible assets, estimated pension liability, fair value of investments, and the evaluation of other-than-temporary declines in the value of investments. Actual amounts could differ significantly from these estimates.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, and early application is not permitted. ASU 2014-09 allows for either full retrospective or modified retrospective adoption. We are currently evaluating the transition method that will be elected and the impact that the adoption of ASU 2014-09 will have on our financial position, results of operations and cash flows.

In April 2015, the FASB issued Accounting Standards Update No. 2015-05, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement (ASU 2015-05), which provides guidance on accounting for fees paid by a customer in a cloud computing arrangement. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. ASU 2015-05 is effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. Early adoption is permitted. The amendments may be applied either prospectively to all arrangements entered into or materially modified after the effective date or retrospectively. We do not believe the adoption of ASU 2015-05 will have a material impact on our financial position, results of operations and cash flows.

In July 2015, the FASB issued Accounting Standards Update No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory (ASU 2015-11). Currently, Topic 330, Inventory, requires an entity to measure inventory at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. ASU 2015-11 does not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost. ASU 2015-11 requires an entity to measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The amendments should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. We do not believe the adoption of ASU 2015-05 will have a material impact on our financial position, results of operations and cash flows.

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Stock-Based Compensation - Stock-Based Compensation Expense Related to Stock Options, Restricted Stock Units (RSUs) and Restricted Stock (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	$ 1,475	$ 2,092	$ 3,114	$ 4,149
Tax benefit for expense associated with non-qualified options	(222)	(296)	(402)	(580)
Total stock-based compensation expense, net of tax	1,253	1,796	2,712	3,569
Cost of Sales [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	53	119	143	235
Selling, General and Administrative Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	723	1,015	1,414	2,041
Research and Development Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	699	958	1,557	1,873
Operating Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	$ 1,422	$ 1,973	$ 2,971	$ 3,914

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation Expense Related to Stock Options, Restricted Stock Units (RSUs) and Restricted Stock

The following table summarizes the stock-based compensation expense related to stock options, restricted stock units (RSUs) and restricted stock for the three and six months ended June 30, 2015 and 2014, which was recognized as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2015			2014			2015			2014
Stock-based compensation expense included in cost of sales	$	53		$	119		$	143		$	235
Selling, general and administrative expense		723			1,015			1,414			2,041
Research and development expense		699			958			1,557			1,873
Stock-based compensation expense included in operating expenses		1,422			1,973			2,971			3,914
Total stock-based compensation expense		1,475			2,092			3,114			4,149
Tax benefit for expense associated with non-qualified options		(222	)		(296	)		(402	)		(580	)
Total stock-based compensation expense, net of tax	$	1,253		$	1,796		$	2,712		$	3,569

Summary of Weighted-Average Assumptions and Value of Options Granted

The weighted-average assumptions and value of options granted for the six months ended June 30, 2015 and 2014 are as follows:

	Six Months Ended
	June 30, 2015			June 30, 2014
Expected volatility		38.75	%		39.57	%
Risk-free interest rate		1.46	%		1.86	%
Expected dividend yield		1.60	%		1.38	%
Expected life (in years)		6.47			6.25
Weighted-average estimated value	$	7.63		$	9.28

Summary of Stock Options Outstanding

The following table is a summary of our stock options outstanding as of December 31, 2014 and June 30, 2015 and the changes that occurred during the six months ended June 30, 2015:

(In thousands, except per share amounts)	Number of Options			Weighted Avg. Exercise Price		Weighted Avg. Remaining Contractual Life In Years		Aggregate Intrinsic Value
Options outstanding, December 31, 2014		6,981		$	23.62		6.45	$	10,625
Options granted		2		$	22.56
Options forfeited		(243	)	$	21.01
Options expired		(157	)	$	26.78
Options exercised		(52	)	$	16.08
Options outstanding, June 30, 2015		6,531		$	23.70		5.92	$	446
Options vested and expected to vest, June 30, 2015		6,440		$	23.75		5.85	$	331
Options exercisable, June 30, 2015		4,190		$	25.21		4.51	$	446

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Commitments and Contingencies - Additional Information (Detail) - Jun. 30, 2015 $ in Millions	USD ($) EquityUnit
Contingencies And Commitments [Line Items]
Aggregate investment committed in private equity funds	$ 7.9
Number of private equity funds | EquityUnit	2
Commitments towards private equity funds	$ 7.7
Private Equity Funds [Member]
Contingencies And Commitments [Line Items]
Contribution to private equity funds	$ 8.4

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2015

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited consolidated financial statements of ADTRAN^®, Inc. and its subsidiaries (ADTRAN) have been prepared pursuant to the rules and regulations for reporting on Quarterly Reports on Form 10-Q. Accordingly, certain information and notes required by generally accepted accounting principles for complete financial statements are not included herein. The December 31, 2014 Consolidated Balance Sheet is derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States.

In the opinion of management, all adjustments necessary to fairly state these interim statements have been recorded and are of a normal and recurring nature. The results of operations for an interim period are not necessarily indicative of the results for the full year. The interim statements should be read in conjunction with the financial statements and notes thereto included in ADTRAN’s Annual Report on Form 10-K for the year ended December 31, 2014, filed on February 24, 2015 with the SEC.

Changes in Classifications

We reclassified $2.3 million from other receivables to accounts receivable at December 31, 2014 to conform to the current period presentation.

Out of Period Adjustment

In connection with the preparation of our Condensed Consolidated Financial Statements, we recorded corrections of certain out of period, immaterial misstatements that occurred in prior periods, the most significant of which resulted in an increase in Other Expense of $1.3 million in the first quarter of 2015. The aggregate impact of the corrections was a $0.8 million reduction to pre-tax income for the six months ended June 30, 2015 and is not expected to be material to the current year annual results.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. Our more significant estimates include the obsolete and excess inventory reserves, warranty reserves, customer rebates, determination of the deferred revenue components of multiple element sales agreements, estimated costs to complete obligations associated with deferred revenues, estimated income tax provision and income tax contingencies, the fair value of stock-based compensation, impairment of goodwill, valuation and estimated lives of intangible assets, estimated pension liability, fair value of investments, and the evaluation of other-than-temporary declines in the value of investments. Actual amounts could differ significantly from these estimates.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, and early application is not permitted. ASU 2014-09 allows for either full retrospective or modified retrospective adoption. We are currently evaluating the transition method that will be elected and the impact that the adoption of ASU 2014-09 will have on our financial position, results of operations and cash flows.

In April 2015, the FASB issued Accounting Standards Update No. 2015-05, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement (ASU 2015-05), which provides guidance on accounting for fees paid by a customer in a cloud computing arrangement. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. ASU 2015-05 is effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. Early adoption is permitted. The amendments may be applied either prospectively to all arrangements entered into or materially modified after the effective date or retrospectively. We do not believe the adoption of ASU 2015-05 will have a material impact on our financial position, results of operations and cash flows.

In July 2015, the FASB issued Accounting Standards Update No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory (ASU 2015-11). Currently, Topic 330, Inventory, requires an entity to measure inventory at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. ASU 2015-11 does not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost. ASU 2015-11 requires an entity to measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The amendments should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. We do not believe the adoption of ASU 2015-05 will have a material impact on our financial position, results of operations and cash flows.

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Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 21	$ 136
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	79,652,000	79,652,000
Common stock, shares outstanding	50,573,000	53,431,000
Treasury stock, shares	29,079,000	26,221,000

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Segment Information

6 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

Segment Information

11. SEGMENT INFORMATION

We operate in two reportable segments: (1) the Carrier Networks Division and (2) the Enterprise Networks Division. We evaluate the performance of our segments based on gross profit; therefore, selling, general and administrative expenses, research and development expenses, interest and dividend income, interest expense, net realized investment gain/loss, other income/expense and provision for taxes are reported on an entity-wide basis only. There are no inter-segment revenues.

The following tables present information about the reported sales and gross profit of our reportable segments for the three and six months ended June 30, 2015 and 2014. Asset information by reportable segment is not reported, since we do not produce such information internally.

	Three Months Ended
	June 30, 2015				June 30, 2014
(In thousands)	Sales		Gross Profit		Sales		Gross Profit
Carrier Networks	$	135,397	$	54,699	$	143,455	$	68,053
Enterprise Networks		24,741		13,547		32,674		18,744
Total	$	160,138	$	68,246	$	176,129	$	86,797

	Six Months Ended
	June 30, 2015				June 30, 2014
(In thousands)	Sales		Gross Profit		Sales		Gross Profit
Carrier Networks	$	251,411	$	104,558	$	261,617	$	129,406
Enterprise Networks		51,562		29,251		61,516		35,181
Total	$	302,973	$	133,809	$	323,133	$	164,587

Sales by Product

Our three major product categories are Carrier Systems, Business Networking and Loop Access.

Carrier Systems products are used by communications service providers to provide data, voice, and video services to consumers and enterprises. This category includes the following product areas and related services:

• Broadband Access

• Total Access^® 5000 Series of Multi-Service Access Node (MSAN)

• hiX 5600 Series of MSANs

• Total Access 1100/1200 Series of Fiber to the Node (FTTN) products

• hiX 1100 Series of Fiber to the Node (FTTN) products

• VDSL2 Vectoring based Digital Subscriber Line Access Multiplexer (DSLAM) products

• ADTRAN 500 Series of FTTdp G.fast Distribution Point Units (DPU)

• Optical

• Optical Networking Edge (ONE)

• NetVanta 8000 Series of Fiber Ethernet Access Devices (EAD)

• NetVanta 8400 Series of 10Gig Multi-service Edge Switches

• OPTI-6100 and Total Access 3000 optical Multi-Service Provisioning Platforms (MSPP)

• Pluggable Optical Products, including SFP, XFP, and SFP+

• Time Division Multiplexed (TDM) systems

Business Networking products provide access to communication services and facilitate the delivery of cloud connectivity and enterprise communications to the small and mid-sized enterprise (SME) market. This category includes the following product areas and related services:

• Internetworking products

• Total Access IP Business Gateways

• Optical Network Terminals (ONTs)

• Bluesocket^® virtual Wireless LAN (vWLAN^®)

• NetVanta^®

• Access Routers

• Enterprise Session Border Controllers (eSBC)

• Managed Ethernet Switches

• IP Business Gateways

• Unified Communications (UC) solutions

• Carrier Ethernet Network Terminating Equipment (NTE)

• Carrier Ethernet Routers and Gateways

• Network Management Solutions

Loop Access products are used by carrier and enterprise customers for access to copper-based communications networks. This category includes the following product areas and related services:

• High bit-rate Digital Subscriber Line (HDSL) products

• Digital Data Service (DDS)

• Integrated Services Digital Network (ISDN) products

• T1/E1/T3 Channel Service Units/Data Service Units (CSUs/DSUs)

• TRACER fixed-wireless products

The table below presents sales information by product category for the three and six months ended June 30, 2015 and 2014:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2015		2014		2015		2014
Carrier Systems	$	119,039	$	128,824	$	219,478	$	228,377
Business Networking		34,210		41,969		69,591		79,888
Loop Access		6,889		5,336		13,904		14,868
Total	$	160,138	$	176,129	$	302,973	$	323,133

In addition, we identify subcategories of product revenues, which we divide into core products and legacy products. Our core products consist of Broadband Access and Optical products (included in Carrier Systems), and Internetworking products (included in Business Networking). Our legacy products include HDSL products (included in Loop Access) and other products not included in the aforementioned core products.

The table below presents subcategory revenues for the three and six months ended June 30, 2015 and 2014:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2015		2014		2015		2014
Core Products
Broadband Access (included in Carrier Systems)	$	100,746	$	108,309	$	185,540	$	189,836
Optical (included in Carrier Systems)		16,432		15,833		28,936		28,622
Internetworking (included in Business Networking)		33,158		40,986		67,317		77,932
Subtotal		150,336		165,128		281,793		296,390
Legacy Products
HDSL (does not include T1) (included in Loop Access)		6,399		4,798		13,102		13,675
Other products (excluding HDSL)		3,403		6,203		8,078		13,068
Subtotal		9,802		11,001		21,180		26,743
Total	$	160,138	$	176,129	$	302,973	$	323,133

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Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Jul. 22, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2
Trading Symbol	ADTN
Entity Registrant Name	ADTRAN INC
Entity Central Index Key	0000926282
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		49,928,495

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Liability for Warranty Returns

6 Months Ended

Jun. 30, 2015

Product Warranties Disclosures [Abstract]

Liability for Warranty Returns

12. LIABILITY FOR WARRANTY RETURNS

Our products generally include warranties of 90 days to ten years for product defects. We accrue for warranty returns at the time revenue is recognized based on our estimate of the cost to repair or replace the defective products. We engage in extensive product quality programs and processes, including actively monitoring and evaluating the quality of our component suppliers. Our products continue to become more complex in both size and functionality as many of our product offerings migrate from line card applications to systems products. The increasing complexity of our products will cause warranty incidences, when they arise, to be more costly. Our estimates regarding future warranty obligations may change due to product failure rates, material usage, and other rework costs incurred in correcting a product failure. In addition, from time to time, specific warranty accruals may be recorded if unforeseen problems arise. Should our actual experience relative to these factors be worse than our estimates, we will be required to record additional warranty expense. Alternatively, if we provide for more reserves than we require, we will reverse a portion of such provisions in future periods. The liability for warranty obligations totaled $8.9 million at June 30, 2015 and $8.4 million at December 31, 2014. These liabilities are included in accrued expenses in the accompanying Consolidated Balance Sheets.

A summary of warranty expense and write-off activity for the six months ended June 30, 2015 and 2014 is as follows:

	Six Months Ended June 30,
	2015			2014
(In thousands)
Balance at beginning of period	$	8,415		$	8,977
Plus: Amounts charged to cost and expenses		1,128			1,339
Less: Deductions		(610	)		(1,999	)
Balance at end of period	$	8,933		$	8,317

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Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Income Statement [Abstract]
Sales	$ 160,138	$ 176,129	$ 302,973	$ 323,133
Cost of sales	91,892	89,332	169,164	158,546
Gross Profit	68,246	86,797	133,809	164,587
Selling, general and administrative expenses	32,123	33,788	63,187	67,727
Research and development expenses	35,479	33,670	68,015	66,223
Operating Income	644	19,339	2,607	30,637
Interest and dividend income	908	1,054	1,841	2,348
Interest expense	(149)	(148)	(297)	(375)
Net realized investment gain	3,255	2,340	6,370	4,532
Other expense, net	(547)	(774)	(900)	(652)
Income before provision for income taxes	4,111	21,811	9,621	36,490
Provision for income taxes	(1,567)	(7,416)	(3,760)	(12,488)
Net Income	$ 2,544	$ 14,395	$ 5,861	$ 24,002
Weighted average shares outstanding - basic	51,822	55,409	52,607	56,077
Weighted average shares outstanding - diluted	51,917	55,729	52,742	56,559
Earnings per common share - basic	$ 0.05	$ 0.26	$ 0.11	$ 0.43
Earnings per common share - diluted	0.05	0.26	0.11	0.42
Dividend per share	$ 0.09	$ 0.09	$ 0.18	$ 0.18

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Derivative Instruments and Hedging Activities

6 Months Ended

Jun. 30, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

6. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

We have certain customers and suppliers who are invoiced or pay in a non-functional currency. Changes in the monetary exchange rates may adversely affect our results of operations and financial condition. When appropriate, we enter into various derivative transactions to enhance our ability to manage the volatility relating to these typical business exposures. We do not hold or issue derivative instruments for trading or other speculative purposes. Our derivative instruments are recorded in the Consolidated Balance Sheets at their fair values. Our derivative instruments do not qualify for hedge accounting, and accordingly, all changes in the fair value of the instruments are recognized as other income (expense) in the Consolidated Statements of Income. The maximum contractual period for our derivatives is currently less than twelve months. Our derivative instruments are not subject to master netting arrangements and are not offset in the Consolidated Balance Sheets.

As of June 30, 2015, we had forward contracts outstanding with notional amounts totaling €39.0 million ($43.4 million), which mature at various times throughout 2015.

The fair values of our derivative instruments recorded in the Consolidated Balance Sheet as of June 30, 2015 and December 31, 2014 were as follows:

(In thousands)	Balance Sheet Location	June 30, 2015			December 31, 2014
Derivatives Not Designated as Hedging Instruments (Level 2):
Foreign exchange contracts – asset derivatives	Other receivables	$	447		$	249
Foreign exchange contracts – liability derivatives	Accounts payable	$	(832	)	$	(10	)

The change in the fair values of our derivative instruments recorded in the Consolidated Statements of Income during the three and six months ended June 30, 2015 and 2014 were as follows:

		Three Months Ended						Six Months Ended
	Income Statement Location	June 30,						June 30,
(In thousands)		2015			2014			2015		2014
Derivatives Not Designated as Hedging Instruments:
Foreign exchange contracts	Other income (expense)	$	(1,299	)	$	(438	)	$	177	$	(5

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Investments

6 Months Ended

Jun. 30, 2015

Investments, Debt and Equity Securities [Abstract]

Investments

5. INVESTMENTS

At June 30, 2015, we held the following securities and investments, recorded at either fair value or cost.

(In thousands)	Amortized Cost		Gross Unrealized					Carrying Value
			Gains		Losses
Deferred compensation plan assets	$	14,046	$	2,601	$	(113	)	$	16,534
Corporate bonds		114,446		123		(139	)		114,430
Municipal fixed-rate bonds		67,302		130		(45	)		67,387
Municipal variable rate demand notes		3,695		—		—			3,695
Marketable equity securities		28,901		9,265		(866	)		37,300
Available-for-sale securities held at fair value	$	228,390	$	12,119	$	(1,163	)	$	239,346
Restricted investment held at cost									30,000
Other investments held at cost									1,446
Total carrying value of available-for-sale investments								$	270,792

At December 31, 2014, we held the following securities and investments, recorded at either fair value or cost.

(In thousands)	Amortized Cost		Gross Unrealized					Carrying Value
			Gains		Losses
Deferred compensation plan assets	$	13,897	$	2,409	$	(12	)	$	16,294
Corporate bonds		111,261		186		(186	)		111,261
Municipal fixed-rate bonds		127,341		480		(34	)		127,787
Municipal variable rate demand notes		2,465		—		—			2,465
Marketable equity securities		26,399		12,395		(539	)		38,255
Available-for-sale securities held at fair value	$	281,363	$	15,470	$	(771	)	$	296,062
Restricted investment held at cost									30,000
Other investments held at cost									1,506
Total carrying value of available-for-sale investments								$	327,568

As of June 30, 2015, our corporate bonds and municipal fixed-rate bonds had the following contractual maturities:

(In thousands)	Corporate bonds		Municipal fixed-rate bonds
Less than one year	$	32,179	$	18,254
One to two years		42,510		35,462
Two to three years		39,741		12,460
Three to five years		—		1,211
Total	$	114,430	$	67,387

Actual maturities may differ from contractual maturities because some borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

Our investment policy provides limitations for issuer concentration, which limits, at the time of purchase, the concentration in any one issuer to 5% of the market value of our total investment portfolio.

At June 30, 2015, we held a $30.0 million restricted certificate of deposit, which is carried at cost. This investment serves as a collateral deposit against the principal amount outstanding under loans made to ADTRAN pursuant to an Alabama State Industrial Development Authority revenue bond (the Bond). At June 30, 2015, the estimated fair value of the Bond using a level 2 valuation technique was approximately $29.9 million, based on a debt security with a comparable interest rate and maturity and a Standard and Poor’s credit rating of AAA. For more information on the Bond, see “Debt” under “Liquidity and Capital Resources” in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in Item 2 of Part I of this report.

We review our investment portfolio for potential “other-than-temporary” declines in value on an individual investment basis. We assess, on a quarterly basis, significant declines in value which may be considered other-than-temporary and, if necessary, recognize and record the appropriate charge to write-down the carrying value of such investments. In making this assessment, we take into consideration qualitative and quantitative information, including but not limited to the following: the magnitude and duration of historical declines in market prices, credit rating activity, assessments of liquidity, public filings, and statements made by the issuer. We generally begin our identification of potential other-than-temporary impairments by reviewing any security with a fair value that has declined from its original or adjusted cost basis by 25% or more for six or more consecutive months. We then evaluate the individual security based on the previously identified factors to determine the amount of the write-down, if any. For the three and six months ended June 30, 2015 and 2014, other-than-temporary impairment charges were not significant.

Realized gains and losses on sales of securities are computed under the specific identification method. The following table presents gross realized gains and losses related to our investments.

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2015			2014			2015			2014
Gross realized gains	$	3,459		$	2,407		$	6,604		$	4,635
Gross realized losses	$	(204	)	$	(67	)	$	(234	)	$	(103	)

As of June 30, 2015 and 2014, gross unrealized losses related to individual securities in a continuous loss position for 12 months or longer were not significant.

We have categorized our cash equivalents held in money market funds and our investments held at fair value into a three-level fair value hierarchy based on the priority of the inputs to the valuation technique for the cash equivalents and investments as follows: Level 1—Values based on unadjusted quoted prices for identical assets or liabilities in an active market; Level 2—Values based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly; Level 3—Values based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs include information supplied by investees.

	Fair Value Measurements at June 30, 2015 Using
(In thousands)	Fair Value		Quoted Prices in Active Market for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents
Money market funds	$	1,087	$	1,087	$	—	$	—
Available-for-sale securities
Deferred compensation plan assets		16,534		16,534		—		—
Available-for-sale debt securities
Corporate bonds		114,430		—		114,430		—
Municipal fixed-rate bonds		67,387		—		67,387		—
Municipal variable rate demand notes		3,695		—		3,695		—
Available-for-sale marketable equity securities
Marketable equity securities – technology industry		7,786		7,786		—		—
Marketable equity securities – other		29,514		29,514		—		—
Available-for-sale securities		239,346		53,834		185,512		—
Total	$	240,433	$	54,921	$	185,512	$	—

	Fair Value Measurements at December 31, 2014 Using
(In thousands)	Fair Value		Quoted Prices in Active Market for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents
Money market funds	$	1,163	$	1,163	$	—	$	—
Available-for-sale securities
Deferred compensation plan assets		16,294		16,294		—		—
Available-for-sale debt securities
Corporate bonds		111,261		—		111,261		—
Municipal fixed-rate bonds		127,787		—		127,787		—
Municipal variable rate demand notes		2,465		—		2,465		—
Available-for-sale marketable equity securities
Marketable equity securities – technology industry		9,661		9,661		—		—
Marketable equity securities – other		28,594		28,594		—		—
Available-for-sale securities		296,062		54,549		241,513		—
Total	$	297,225	$	55,712	$	241,513	$	—

The fair value of our Level 2 securities is calculated using a weighted average market price for each security. Market prices are obtained from a variety of industry standard data providers, security master files from large financial institutions, and other third-party sources. These multiple market prices are used as inputs into a distribution-curve-based algorithm to determine the daily market value of each security.

Our municipal variable rate demand notes have a structure that implies a standard expected market price. The frequent interest rate resets make it reasonable to expect the price to stay at par. These securities are priced at the expected market price.

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Pension Benefit Plan (Tables)

6 Months Ended

Jun. 30, 2015

Compensation and Retirement Disclosure [Abstract]

Summarization of Components of Net Periodic Pension Cost

The following table summarizes the components of net periodic pension cost for the three and six months ended June 30, 2015 and 2014:

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2015			2014			2015			2014
Service cost	$	324		$	306		$	664		$	611
Interest cost		152			216			311			431
Expected return on plan assets		(250	)		(280	)		(511	)		(559	)
Amortization of actuarial losses		100			—			205			—
Net periodic pension cost	$	326		$	242		$	669		$	483

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Related Party Transactions

6 Months Ended

Jun. 30, 2015

Related Party Transactions [Abstract]

Related Party Transactions

13. RELATED PARTY TRANSACTIONS

During 2014, we employed the law firm of our director emeritus for legal services. All bills for services rendered by this firm were reviewed and approved by our Chief Financial Officer. We believe that the fees for such services were comparable to those charged by other firms for services rendered to us. The services of our director emeritus ended with his death on September 7, 2014. For the three and six months ended June 30, 2014, we incurred fees of $10 thousand per month for these legal services.

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Stockholders' Equity

6 Months Ended

Jun. 30, 2015

Equity [Abstract]

Stockholders' Equity

9. STOCKHOLDERS’ EQUITY

A summary of the changes in stockholders’ equity for the six months ended June 30, 2015 is as follows:

(In thousands)	Stockholders’ Equity
Balance, December 31, 2014	$	549,013
Net income		5,861
Dividend payments		(9,509	)
Dividends accrued for unvested restricted stock units		10
Net unrealized losses on available-for-sale securities (net of tax)		(2,286	)
Defined benefit plan adjustments		140
Foreign currency translation adjustment		(2,446	)
Proceeds from stock option exercises		833
Purchase of treasury stock		(49,307	)
Income tax benefit from exercise of stock options		(23	)
Stock-based compensation expense		3,114
Balance, June 30, 2015	$	495,400

Stock Repurchase Program

Since 1997, our Board of Directors has approved multiple share repurchase programs that have authorized open market repurchase transactions of up to 45.0 million shares of our common stock. During the six months ended June 30, 2015, we repurchased 2.9 million shares of our common stock at an average price of $16.87 per share. As of June 30, 2015, we have the authority to purchase an additional 1.9 million shares of our common stock under the current plans approved by the Board of Directors.

Stock Option Exercises

We issued 0.1 million shares of treasury stock during the six months ended June 30, 2015 to accommodate employee stock option exercises. The stock options had exercise prices ranging from $15.29 to $22.53. We received proceeds totaling $0.8 million from the exercise of these stock options during the six months ended June 30, 2015.

Dividend Payments

During the six months ended June 30, 2015, we paid cash dividends as follows (in thousands except per share amounts):

Record Date	Payment Date	Per Share Amount		Total Dividend Paid
February 5, 2015	February 19, 2015	$	0.09	$	4,811
May 7, 2015	May 21, 2015	$	0.09	$	4,698

Other Comprehensive Income

Other comprehensive income consists of unrealized gains (losses) on available-for-sale securities, reclassification adjustments for amounts included in net income related to impairments of available-for-sale securities, realized gains (losses) on available-for-sale securities, and amortization of actuarial gains (losses) related to our defined benefit plan, defined benefit plan adjustments, and foreign currency translation adjustments.

The following tables present changes in accumulated other comprehensive income, net of tax, by component for the three months ended June 30, 2015 and 2014:

	Three Months Ended June 30, 2015
(In thousands)	Unrealized Gains (Losses) on Available- for-Sale Securities			Defined Benefit Plan Adjustments			Foreign Currency Adjustments			Total
Beginning balance	$	8,461		$	(5,689	)	$	(6,600	)	$	(3,828	)
Other comprehensive income (loss) before reclassifications		177			—			872			1,049
Amounts reclassified from accumulated other comprehensive income		(1,960	)		72			—			(1,888	)
Net current period other comprehensive income (loss)		(1,783	)		72			872			(839	)
Ending balance	$	6,678		$	(5,617	)	$	(5,728	)	$	(4,667	)

	Three Months Ended June 30, 2014
(In thousands)	Unrealized Gains (Losses) on Available- for-Sale Securities			Defined Benefit Plan Adjustments			Foreign Currency Adjustments		Total
Beginning balance	$	9,816		$	(891	)	$	1,159	$	10,084
Other comprehensive income (loss) before reclassifications		2,516			—			134		2,650
Amounts reclassified from accumulated other comprehensive income		(1,297	)		—			—		(1,297	)
Net current period other comprehensive income (loss)		1,219			—			134		1,353
Ending balance	$	11,035		$	(891	)	$	1,293	$	11,437

The following tables present changes in accumulated other comprehensive income, net of tax, by component for the six months ended June 30, 2015 and 2014:

	Six Months Ended June 30, 2015
(In thousands)	Unrealized Gains (Losses) on Available- for-Sale Securities			Defined Benefit Plan Adjustments			Foreign Currency Adjustments			Total
Beginning balance	$	8,964		$	(5,757	)	$	(3,282	)	$	(75	)
Other comprehensive income (loss) before reclassifications		1,537			—			(2,446	)		(909	)
Amounts reclassified from accumulated other comprehensive income		(3,823	)		140			—			(3,683	)
Net current period other comprehensive income (loss)		(2,286	)		140			(2,446	)		(4,592	)
Ending balance	$	6,678		$	(5,617	)	$	(5,728	)	$	(4,667	)

	Six Months Ended June 30, 2014
(In thousands)	Unrealized Gains (Losses) on Available- for-Sale Securities			Defined Benefit Plan Adjustments			Foreign Currency Adjustments		Total
Beginning balance	$	10,737		$	(891	)	$	907	$	10,753
Other comprehensive income (loss) before reclassifications		2,918			—			386		3,304
Amounts reclassified from accumulated other comprehensive income		(2,620	)		—			—		(2,620	)
Net current period other comprehensive income (loss)		298			—			386		684
Ending balance	$	11,035		$	(891	)	$	1,293	$	11,437

The following tables present the details of reclassifications out of accumulated other comprehensive income for the three months ended June 30, 2015 and 2014:

(In thousands)	Three Months Ended June 30, 2015
Details about Accumulated Other Comprehensive Income Components	Amount Reclassified from Accumulated Other Comprehensive Income			Affected Line Item in the Statement Where Net Income Is Presented
Unrealized gains (losses) on available-for-sale securities:
Net realized gain on sales of securities	$	3,264		Net realized investment gain
Impairment expense		(51	)	Net realized investment gain
Defined benefit plan adjustments – actuarial losses		(105	)	(1)
Total reclassifications for the period, before tax		3,108
Tax (expense) benefit		(1,220	)
Total reclassifications for the period, net of tax	$	1,888

⁽¹⁾ Included in the computation of net periodic pension cost. See Note 3 of Notes to Consolidated Financial Statements.

(In thousands)	Three Months Ended June 30, 2014
Details about Accumulated Other Comprehensive Income Components	Amount Reclassified from Accumulated Other Comprehensive Income			Affected Line Item in the Statement Where Net Income Is Presented
Unrealized gains (losses) on available-for-sale securities:
Net realized gain on sales of securities	$	2,160			Net realized investment gain
Impairment expense		(34	)		Net realized investment gain
Total reclassifications for the period, before tax		2,126
Tax (expense) benefit		(829	)
Total reclassifications for the period, net of tax	$	1,297

The following tables present the details of reclassifications out of accumulated other comprehensive income for the six months ended June 30, 2015 and 2014:

(In thousands)	Six Months Ended June 30, 2015
Details about Accumulated Other Comprehensive Income Components	Amount Reclassified from Accumulated Other Comprehensive Income			Affected Line Item in the Statement Where Net Income Is Presented
Unrealized gains (losses) on available-for-sale securities:
Net realized gain on sales of securities	$	6,340		Net realized investment gain
Impairment expense		(73	)	Net realized investment gain
Defined benefit plan adjustments – actuarial losses		(203	)	(1)
Total reclassifications for the period, before tax		6,064
Tax (expense) benefit		(2,381	)
Total reclassifications for the period, net of tax	$	3,683

⁽¹⁾ Included in the computation of net periodic pension cost. See Note 3 of Notes to Consolidated Financial Statements.

(In thousands)	Six Months Ended June 30, 2014
Details about Accumulated Other Comprehensive Income Components	Amount Reclassified from Accumulated Other Comprehensive Income			Affected Line Item in the Statement Where Net Income Is Presented
Unrealized gains (losses) on available-for-sale securities:
Net realized gain on sales of securities	$	4,330		Net realized investment gain
Impairment expense		(34	)	Net realized investment gain
Total reclassifications for the period, before tax		4,296
Tax (expense) benefit		(1,676	)
Total reclassifications for the period, net of tax	$	2,620

The following table presents the tax effects related to the change in each component of other comprehensive income for the three months ended June 30, 2015 and 2014:

	Three Months Ended June 30, 2015									Three Months Ended June 30, 2014
(In thousands)	Before-Tax Amount			Tax (Expense) Benefit			Net-of-Tax Amount			Before-Tax Amount			Tax (Expense) Benefit			Net-of-Tax Amount
Unrealized gains (losses) on available-for-sale securities	$	290		$	(113	)	$	177		$	4,125		$	(1,609	)	$	2,516
Reclassification adjustment for amounts included in net income		(3,108	)		1,220			(1,888	)		(2,126	)		829			(1,297	)
Foreign currency translation adjustment		872			—			872			134			—			134
Total Other Comprehensive Income (Loss)	$	(1,946	)	$	1,107		$	(839	)	$	2,133		$	(780	)	$	1,353

The following table presents the tax effects related to the change in each component of other comprehensive income for the six months ended June 30, 2015 and 2014:

	Six Months Ended June 30, 2015									Six Months Ended June 30, 2014
(In thousands)	Before-Tax Amount			Tax (Expense) Benefit			Net-of-Tax Amount			Before-Tax Amount			Tax (Expense) Benefit			Net-of-Tax Amount
Unrealized gains (losses) on available-for-sale securities	$	2,520		$	(983	)	$	1,537		$	4,784		$	(1,866	)	$	2,918
Reclassification adjustment for amounts included in net income		(6,064	)		2,381			(3,683	)		(4,296	)		1,676			(2,620	)
Foreign currency translation adjustment		(2,446	)		—			(2,446	)		386			—			386
Total Other Comprehensive Income (Loss)	$	(5,990	)	$	1,398		$	(4,592	)	$	874		$	(190	)	$	684

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Earnings Per Share - Additional Information (Detail) - shares shares in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Earnings Per Share [Abstract]
Anti-dilutive options, Total	6.1	4.3	5.7	3.1

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Inventory

6 Months Ended

Jun. 30, 2015

Inventory Disclosure [Abstract]

Inventory

7. INVENTORY

At June 30, 2015 and December 31, 2014, inventory consisted of the following:

(In thousands)	June 30, 2015		December 31, 2014
Raw materials	$	38,819	$	34,831
Work in process		3,489		3,750
Finished goods		57,740		48,129
Total	$	100,048	$	86,710

We establish reserves for estimated excess, obsolete, or unmarketable inventory equal to the difference between the cost of the inventory and the estimated fair value of the inventory based upon assumptions about future demand and market conditions. At June 30, 2015 and December 31, 2014, raw materials reserves totaled $17.6 million and $16.9 million, respectively, and finished goods inventory reserves totaled $7.6 million and $7.8 million, respectively.

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Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

8. GOODWILL AND INTANGIBLE ASSETS

Goodwill, all of which relates to our acquisition of Bluesocket, Inc. and is included in our Enterprise Networks division, was $3.5 million at June 30, 2015 and December 31, 2014. We evaluate the carrying value of goodwill during the fourth quarter of each year and between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. We have elected to first assess the qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit to which the goodwill is assigned is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step impairment test. If we determine that it is more likely than not that its fair value is less than its carrying amount, then the two-step impairment test will be performed. There have been no impairment losses recorded since acquisition.

Intangible assets are included in other assets in the accompanying Consolidated Balance Sheets and include intangibles acquired in conjunction with our acquisitions of Objectworld Communications Corporation on September 15, 2009, Bluesocket, Inc. on August 4, 2011, and the NSN BBA business on May 4, 2012.

The following table presents our intangible assets as of June 30, 2015 and December 31, 2014:

(In thousands)	June 30, 2015							December 31, 2014
	Gross Value		Accumulated Amortization			Net Value		Gross Value		Accumulated Amortization			Net Value
Customer relationships	$	5,937	$	(2,350	)	$	3,587	$	6,310	$	(2,136	)	$	4,174
Developed technology		5,784		(3,962	)		1,822		6,005		(3,577	)		2,428
Intellectual property		2,340		(1,687	)		653		2,340		(1,520	)		820
Trade names		270		(235	)		35		270		(205	)		65
Other		11		(11	)		—		12		(11	)		1
Total	$	14,342	$	(8,245	)	$	6,097	$	14,937	$	(7,449	)	$	7,488

Amortization expense, all of which relates to business acquisitions, was $0.5 million and $0.6 million for the three months ended June 30, 2015 and 2014, respectively, and $1.0 million and $1.2 million for the six months ended June 30, 2015 and 2014, respectively.

As of June 30, 2015, the estimated future amortization expense of our intangible assets is as follows:

(In thousands)	Amount
Remainder of 2015	$	928
2016		1,679
2017		1,164
2018		703
2019		309
Thereafter		1,314
Total	$	6,097

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Earnings per Share

6 Months Ended

Jun. 30, 2015

Earnings Per Share [Abstract]

Earnings per Share

10. EARNINGS PER SHARE

A summary of the calculation of basic and diluted earnings per share for the three and six months ended June 30, 2015 and 2014 is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands, except per share amounts)	2015		2014		2015		2014
Numerator
Net income	$	2,544	$	14,395	$	5,861	$	24,002
Denominator
Weighted average number of shares – basic		51,822		55,409		52,607		56,077
Effect of dilutive securities
Stock options		72		288		122		459
Restricted stock and restricted stock units		23		32		13		23
Weighted average number of shares – diluted		51,917		55,729		52,742		56,559
Net income per share – basic	$	0.05	$	0.26	$	0.11	$	0.43
Net income per share – diluted	$	0.05	$	0.26	$	0.11	$	0.42

Anti-dilutive options to purchase common stock outstanding were excluded from the above calculations. Anti-dilutive options totaled 6.1 million and 4.3 million for the three months ended June 30, 2015 and 2014, respectively, and 5.7 million and 3.1 million for the six months ended June 30, 2015 and 2014, respectively.

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Segment Information - Subcategory Revenues (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Revenue from External Customer [Line Items]
Sales	$ 160,138	$ 176,129	$ 302,973	$ 323,133
Core Products [Member]
Revenue from External Customer [Line Items]
Sales	150,336	165,128	281,793	296,390
Legacy Products [Member]
Revenue from External Customer [Line Items]
Sales	9,802	11,001	21,180	26,743
Broadband Access (Included in Carrier Systems) [Member] | Core Products [Member]
Revenue from External Customer [Line Items]
Sales	100,746	108,309	185,540	189,836
Optical (Included in Carrier Systems) [Member] | Core Products [Member]
Revenue from External Customer [Line Items]
Sales	16,432	15,833	28,936	28,622
Internetworking (Included in Business Networking) [Member] | Core Products [Member]
Revenue from External Customer [Line Items]
Sales	33,158	40,986	67,317	77,932
HDSL (Does not Include T1) (Included in Loop Access) [Member] | Legacy Products [Member]
Revenue from External Customer [Line Items]
Sales	6,399	4,798	13,102	13,675
Other Products (Excluding HDSL) [Member] | Legacy Products [Member]
Revenue from External Customer [Line Items]
Sales	$ 3,403	$ 6,203	$ 8,078	$ 13,068

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Liability for Warranty Returns - Summary of Warranty Expense and Write-Off Activity (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Product Warranties Disclosures [Abstract]
Balance at beginning of period	$ 8,415	$ 8,977
Plus: Amounts charged to cost and expenses	1,128	1,339
Less: Deductions	(610)	(1,999)
Balance at end of period	$ 8,933	$ 8,317

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Segment Information - Sales Information by Product Category (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Revenue from External Customer [Line Items]
Sales	$ 160,138	$ 176,129	$ 302,973	$ 323,133
Carrier Systems [Member]
Revenue from External Customer [Line Items]
Sales	119,039	128,824	219,478	228,377
Business Networking [Member]
Revenue from External Customer [Line Items]
Sales	34,210	41,969	69,591	79,888
Loop Access [Member]
Revenue from External Customer [Line Items]
Sales	$ 6,889	$ 5,336	$ 13,904	$ 14,868

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Income Taxes - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Income Tax Disclosure [Abstract]
Effective tax rate	39.10%	34.20%

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Goodwill and Intangible Assets - Summary of Intangible Assets (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Goodwill [Line Items]
Gross Value	$ 14,342	$ 14,937
Accumulated Amortization	(8,245)	(7,449)
Net Value	6,097	7,488
Customer Relationships [Member]
Goodwill [Line Items]
Gross Value	5,937	6,310
Accumulated Amortization	(2,350)	(2,136)
Net Value	3,587	4,174
Developed Technology [Member]
Goodwill [Line Items]
Gross Value	5,784	6,005
Accumulated Amortization	(3,962)	(3,577)
Net Value	1,822	2,428
Intellectual Property [Member]
Goodwill [Line Items]
Gross Value	2,340	2,340
Accumulated Amortization	(1,687)	(1,520)
Net Value	653	820
Trade Names [Member]
Goodwill [Line Items]
Gross Value	270	270
Accumulated Amortization	(235)	(205)
Net Value	35	65
Other [Member]
Goodwill [Line Items]
Gross Value	11	12
Accumulated Amortization	$ (11)	(11)
Net Value		$ 1

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Subsequent Events

6 Months Ended

Jun. 30, 2015

Subsequent Events [Abstract]

Subsequent Events

15. SUBSEQUENT EVENTS

On July 14, 2015, we announced that our Board of Directors declared a quarterly cash dividend of $0.09 per common share to be paid to stockholders of record at the close of business on July 30, 2015. The payment date will be August 13, 2015. The quarterly dividend payment will be approximately $4.5 million. In July 2003, our Board of Directors elected to begin declaring quarterly dividends on our common stock considering the tax treatment of dividends and adequate levels of Company liquidity.

On July 14, 2015, our Board of Directors authorized the repurchase of an additional 5.0 million shares of our common stock (bringing the total shares authorized for repurchase to 50.0 million), which will commence upon completion of the repurchase plan announced May 14, 2014. This new authorization will be implemented through open market or private purchases from time to time as conditions warrant.

During the third quarter and as of August 5, 2015, we have repurchased 0.8 million shares of our common stock through open market purchases at an average cost of $16.31 per share. We currently have the authority to purchase an additional 6.0 million shares of our common stock under the current plan approved by the Board of Directors.

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Derivative Instruments and Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Fair Values of Hedging Instruments Recorded in Consolidated Balance Sheet

The fair values of our derivative instruments recorded in the Consolidated Balance Sheet as of June 30, 2015 and December 31, 2014 were as follows:

(In thousands)	Balance Sheet Location	June 30, 2015			December 31, 2014
Derivatives Not Designated as Hedging Instruments (Level 2):
Foreign exchange contracts – asset derivatives	Other receivables	$	447		$	249
Foreign exchange contracts – liability derivatives	Accounts payable	$	(832	)	$	(10	)

Schedule of Change in Fair Values of Derivative Instruments Recorded in Consolidated Statements of Income

The change in the fair values of our derivative instruments recorded in the Consolidated Statements of Income during the three and six months ended June 30, 2015 and 2014 were as follows:

		Three Months Ended						Six Months Ended
	Income Statement Location	June 30,						June 30,
(In thousands)		2015			2014			2015		2014
Derivatives Not Designated as Hedging Instruments:
Foreign exchange contracts	Other income (expense)	$	(1,299	)	$	(438	)	$	177	$	(548	)

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Inventory - Additional Information (Detail) - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Raw Materials [Member]
Inventory [Line Items]
Inventory valuation reserves	$ 17.6	$ 16.9
Finished Goods [Member]
Inventory [Line Items]
Inventory valuation reserves	$ 7.6	$ 7.8

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Investments - Contractual Maturities of Corporate Bonds and Municipal Fixed-Rate Bonds (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale-securities, Fair Value/Carrying Value	$ 239,346	$ 296,062
Corporate Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than one year	32,179
One to two years	42,510
Two to three years	39,741
Available-for-sale-securities, Fair Value/Carrying Value	114,430	111,261
Municipal Fixed-Rate Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than one year	18,254
One to two years	35,462
Two to three years	12,460
Three to five years	1,211
Available-for-sale-securities, Fair Value/Carrying Value	$ 67,387	$ 127,787

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Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Statement of Comprehensive Income [Abstract]
Net Income	$ 2,544	$ 14,395	$ 5,861	$ 24,002
Other Comprehensive Income (Loss), net of tax:
Net unrealized gains (losses) on available-for-sale securities	(1,783)	1,219	(2,286)	298
Defined benefit plan adjustments	72		140
Foreign currency translation	872	134	(2,446)	386
Other Comprehensive Income (Loss), net of tax	(839)	1,353	(4,592)	684
Comprehensive Income, net of tax	$ 1,705	$ 15,748	$ 1,269	$ 24,686

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

4. STOCK-BASED COMPENSATION

The following table summarizes the stock-based compensation expense related to stock options, restricted stock units (RSUs) and restricted stock for the three and six months ended June 30, 2015 and 2014, which was recognized as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2015			2014			2015			2014
Stock-based compensation expense included in cost of sales	$	53		$	119		$	143		$	235
Selling, general and administrative expense		723			1,015			1,414			2,041
Research and development expense		699			958			1,557			1,873
Stock-based compensation expense included in operating expenses		1,422			1,973			2,971			3,914
Total stock-based compensation expense		1,475			2,092			3,114			4,149
Tax benefit for expense associated with non-qualified options		(222	)		(296	)		(402	)		(580	)
Total stock-based compensation expense, net of tax	$	1,253		$	1,796		$	2,712		$	3,569

The fair value of our stock options is estimated using the Black-Scholes model. The determination of the fair value of stock options on the date of grant using the Black-Scholes model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables that may have a significant impact on the fair value estimate.

There were no options granted during the three months ended June 30, 2015 and 2014. The weighted-average assumptions and value of options granted for the six months ended June 30, 2015 and 2014 are as follows:

	Six Months Ended
	June 30, 2015			June 30, 2014
Expected volatility		38.75	%		39.57	%
Risk-free interest rate		1.46	%		1.86	%
Expected dividend yield		1.60	%		1.38	%
Expected life (in years)		6.47			6.25
Weighted-average estimated value	$	7.63		$	9.28

The fair value of our RSUs is calculated using a Monte Carlo Simulation valuation method. No RSUs were granted or vested during the three and six months ended June 30, 2015 and 2014. Twelve thousand RSUs were forfeited during the six months ended June 30, 2015.

The fair value of restricted stock is equal to the closing price of our stock on the date of grant. No restricted stock was granted or forfeited during the three and six months ended June 30, 2015 and 2014. Two thousand shares of restricted stock vested during the three months ended June 30, 2015.

Stock-based compensation expense recognized in our Consolidated Statements of Income for the three and six months ended June 30, 2015 and 2014 is based on options, RSUs and restricted stock ultimately expected to vest, and has been reduced for estimated forfeitures. Estimated forfeitures for stock options are based upon historical experience and approximate 3.3% annually. We estimated a 0% forfeiture rate for our RSUs and restricted stock due to the limited number of recipients and historical experience for these awards.

As of June 30, 2015, total compensation expense related to non-vested stock options, RSUs and restricted stock not yet recognized was approximately $12.6 million, which is expected to be recognized over an average remaining recognition period of 2.5 years.

The following table is a summary of our stock options outstanding as of December 31, 2014 and June 30, 2015 and the changes that occurred during the six months ended June 30, 2015:

(In thousands, except per share amounts)	Number of Options			Weighted Avg. Exercise Price		Weighted Avg. Remaining Contractual Life In Years		Aggregate Intrinsic Value
Options outstanding, December 31, 2014		6,981		$	23.62		6.45	$	10,625
Options granted		2		$	22.56
Options forfeited		(243	)	$	21.01
Options expired		(157	)	$	26.78
Options exercised		(52	)	$	16.08
Options outstanding, June 30, 2015		6,531		$	23.70		5.92	$	446
Options vested and expected to vest, June 30, 2015		6,440		$	23.75		5.85	$	331
Options exercisable, June 30, 2015		4,190		$	25.21		4.51	$	446

The aggregate intrinsic values in the table above represent the total pre-tax intrinsic value (the difference between the closing price of our stock on the last trading day of the quarter and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on June 30, 2015. The aggregate intrinsic value will change based on the fair market value of our stock.

The total pre-tax intrinsic value of options exercised during the three and six months ended June 30, 2015 was $25 thousand and $0.1 million, respectively.

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Stockholders' Equity - Other Comprehensive Income (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Equity [Abstract]
Unrealized gains (losses) on available-for-sale securities, Before-Tax Amount	$ 290	$ 4,125	$ 2,520	$ 4,784
Reclassification adjustment for amounts included in net income, Before-Tax Amount	(3,108)	(2,126)	(6,064)	(4,296)
Foreign currency translation adjustment, Before-Tax Amount	872	134	(2,446)	386
Total Other Comprehensive Income (Loss), Before-Tax Amount	(1,946)	2,133	(5,990)	874
Unrealized gains (losses) on available-for-sale securities, Tax (Expense) Benefit	(113)	(1,609)	(983)	(1,866)
Reclassification adjustment for amounts included in net income, Tax Benefit	1,220	829	2,381	1,676
Foreign currency translation adjustment, Tax Benefit	0	0	0	0
Total Other Comprehensive Income (Loss), Tax (Expense) Benefit	1,107	(780)	1,398	(190)
Unrealized gains (losses) on available-for-sale securities, Net-of-Tax Amount	177	2,516	1,537	2,918
Reclassification adjustment for amounts included in net income, Net-of-Tax Amount	(1,888)	(1,297)	(3,683)	(2,620)
Foreign currency translation adjustment, Net-of-Tax Amount	872	134	(2,446)	386
Other Comprehensive Income (Loss), net of tax	$ (839)	$ 1,353	$ (4,592)	$ 684

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Subsequent Events - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions			6 Months Ended
	Aug. 05, 2015	Jul. 14, 2015	Jun. 30, 2015	Aug. 13, 2015
Subsequent Event [Line Items]
Dividend declaration date			Jul. 14, 2015
Dividend record date			Jul. 30, 2015
Dividend payment date			Aug. 13, 2015
Stock repurchased, shares			2,900,000
Shares repurchased, average price per share			$ 16.87
Additional shares authorized for purchase			1,900,000
Subsequent Events [Member]
Subsequent Event [Line Items]
Cash dividend per common share		$ 0.09
Cash dividend				$ 4.5
Number of shares authorized to be repurchased		5,000,000
Stock repurchased, shares	800,000
Shares repurchased, average price per share	$ 16.31
Additional shares authorized for purchase	6,000,000
Subsequent Events [Member] | Maximum [Member]
Subsequent Event [Line Items]
Number of shares authorized to be repurchased		50,000,000

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Inventory (Tables)

6 Months Ended

Jun. 30, 2015

Inventory Disclosure [Abstract]

Components of Inventory

At June 30, 2015 and December 31, 2014, inventory consisted of the following:

(In thousands)	June 30, 2015		December 31, 2014
Raw materials	$	38,819	$	34,831
Work in process		3,489		3,750
Finished goods		57,740		48,129
Total	$	100,048	$	86,710

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Stock-Based Compensation - Summary of Weighted-Average Assumptions and Value of Options Granted (Detail) - Stock Options [Member] - $ / shares	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility	38.75%	39.57%
Risk-free interest rate	1.46%	1.86%
Expected dividend yield	1.60%	1.38%
Expected life (in years)	6 years 5 months 19 days	6 years 3 months
Weighted-average estimated value	$ 7.63	$ 9.28

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

14. COMMITMENTS AND CONTINGENCIES

In the ordinary course of business, we may be subject to various legal proceedings and claims, including employment disputes, patent claims, disputes over contract agreements and other commercial disputes. In some cases, claimants seek damages or other relief, such as royalty payments related to patents, which, if granted, could require significant expenditures. Although the outcome of any claim or litigation can never be certain, it is our opinion that the outcome of all contingencies of which we are currently aware will not materially affect our business, operations, financial condition or cash flows.

We have committed to invest up to an aggregate of $7.9 million in two private equity funds, and we have contributed $8.4 million as of June 30, 2015, of which $7.7 million has been applied to these commitments.