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