Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Jan. 31, 2014 | Jun. 28, 2013 | |
Document Information [Line Items] | ' | ' | ' |
Document Type | '10-K | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Trading Symbol | 'ARRS | ' | ' |
Entity Registrant Name | 'ARRIS GROUP INC | ' | ' |
Entity Central Index Key | '0001141107 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 142,397,380 | ' |
Entity Public Float | ' | ' | $2,000,000,000 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | |
In Thousands, unless otherwise specified | |||
Current assets: | ' | ' | |
Cash and cash equivalents | $442,438 | $131,703 | |
Short-term investments, at fair value | 67,360 | 398,414 | |
Total cash, cash equivalents and short-term investments | 509,798 | 530,117 | |
Restricted cash | 1,079 | 4,722 | |
Accounts receivable (net of allowances for doubtful accounts of $1,887 in 2013 and $1,630 in 2012) | 637,059 | 188,581 | |
Other receivables | 8,366 | 350 | |
Inventories (net of reserves of $42,408 in 2013 and $9,977 in 2012) | 330,129 | 133,848 | |
Prepaid income taxes | 13,034 | 9,235 | |
Prepaids | 61,482 | 11,682 | |
Current deferred income tax assets | 77,167 | 24,944 | |
Other current assets | 39,930 | 16,413 | |
Total current assets | 1,678,044 | 919,892 | |
Property, plant and equipment (net of accumulated depreciation of $194,830 in 2013 and $151,836 in 2012) | 396,152 | 54,378 | |
Goodwill | 935,579 | 194,115 | [1] |
Intangible assets (net of accumulated amortization of $427,143 in 2013 and $239,668 in 2012) | 1,176,192 | 94,529 | |
Investments | 71,176 | 86,164 | |
Noncurrent deferred income tax assets | 12,501 | 47,431 | |
Other assets | 52,363 | 9,385 | |
Total assets | 4,322,007 | 1,405,894 | |
Current liabilities: | ' | ' | |
Accounts payable | 662,919 | 45,719 | |
Accrued compensation, benefits and related taxes | 116,262 | 29,773 | |
Accrued warranty | 48,755 | 2,882 | |
Deferred revenue | 69,071 | 44,428 | |
Current portion of long-term debt | 53,254 | 222,124 | |
Current income taxes liability | 3,068 | 853 | |
Other accrued liabilities | 141,698 | 24,942 | |
Total current liabilities | 1,095,027 | 370,721 | |
Long-term debt, net of current portion | 1,691,034 | ' | |
Accrued pension | 58,657 | 26,883 | |
Noncurrent income tax liability | 21,048 | 24,389 | |
Noncurrent deferred income tax liabilities | 74,791 | 351 | |
Other noncurrent liabilities | 62,463 | 23,162 | |
Total liabilities | 3,003,020 | 445,506 | |
Stockholders' equity: | ' | ' | |
Preferred stock, par value $1.00 per share, 5.0 million shares authorized; none issued and outstanding | ' | ' | |
Common stock, par value $0.01 per share, 320.0 million shares authorized; 142.1 million and 114.1 million shares issued and outstanding in 2013 and 2012, respectively | 1,766 | 1,488 | |
Capital in excess of par value | 1,688,782 | 1,285,575 | |
Treasury stock at cost, 34.2 million shares in 2013 and 2012 | -306,330 | -306,330 | |
Accumulated deficit | -60,569 | -11,809 | |
Unrealized gain on marketable securities (net of accumulated tax expense of $154 in 2013 and $125 in 2012) | 306 | 206 | |
Unfunded pension liability (net of accumulated tax effect of $981 in 2013 and $2,272 in 2012) | -2,416 | -8,558 | |
Unrealized loss on derivative instruments (net of accumulated tax benefit of $1,467 in 2013) | -2,541 | ' | |
Cumulative translation adjustments | -11 | -184 | |
Total stockholders' equity | 1,318,987 | 960,388 | |
Total liabilities and stockholders' equity | $4,322,007 | $1,405,894 | |
[1] | Reflects retrospective reassignment of goodwill due to reorganization of segments and reporting unit structure. |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, except Share data in Millions, unless otherwise specified | ||
Allowances for doubtful accounts | $1,887 | $1,630 |
Reserves for inventories | 42,408 | 9,977 |
Accumulated depreciation of property, plant and equipment | 194,830 | 151,836 |
Accumulated amortization of intangible assets | 427,143 | 239,668 |
Preferred stock, par value | $1 | $1 |
Preferred stock, shares authorized | 5 | 5 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 320 | 320 |
Common stock, shares issued | 142.1 | 114.1 |
Common stock, shares outstanding | 142.1 | 114.1 |
Treasury stock, shares | 34.2 | 34.2 |
Tax effect on unrealized gain on marketable securities | 154 | 125 |
Tax impact on unfunded pension liability | 981 | 2,272 |
Tax effect on unrealized loss on derivative instruments | $1,467 | ' |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Net sales | $3,620,902 | $1,353,663 | $1,088,685 |
Cost of sales | 2,598,154 | 891,086 | 678,172 |
Gross margin | 1,022,748 | 462,577 | 410,513 |
Operating expenses: | ' | ' | ' |
Selling, general, and administrative expenses | 338,252 | 161,338 | 148,755 |
Research and development expenses | 425,825 | 170,706 | 146,519 |
Acquisition, integration and other costs | 45,471 | 6,207 | 3,205 |
Restructuring charges | 37,576 | 6,761 | 4,360 |
Impairment of goodwill and intangible assets | ' | ' | 88,633 |
Amortization of intangible assets | 193,637 | 30,294 | 33,649 |
Total operating expenses | 1,040,761 | 375,306 | 425,121 |
Operating income (loss) | -18,013 | 87,271 | -14,608 |
Other expense (income): | ' | ' | ' |
Interest expense | 67,888 | 17,797 | 16,939 |
Loss on debt retirement | ' | ' | 19 |
Loss (gain) on investments | 2,698 | -1,404 | 1,570 |
Loss (gain) on foreign currency | -3,502 | 786 | -580 |
Interest income | -2,936 | -3,242 | -3,154 |
Other expense (income), net | 13,989 | -962 | -891 |
Income (loss) before income taxes | -96,150 | 74,296 | -28,511 |
Income tax expense (benefit) | -47,390 | 20,837 | -10,849 |
Net income (loss) | ($48,760) | $53,459 | ($17,662) |
Net income (loss) per common share: | ' | ' | ' |
Basic | ($0.37) | $0.47 | ($0.15) |
Diluted | ($0.37) | $0.46 | ($0.15) |
Weighted average common shares: | ' | ' | ' |
Basic | 131,980 | 114,161 | 120,157 |
Diluted | 131,980 | 116,514 | 120,157 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (Loss) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Net income (loss) | ($48,760) | $53,459 | ($17,662) |
Unrealized gain (loss) on marketable securities, net of tax (expense) benefit of $(29), $(244) and $343 in 2013, 2012 and 2011, respectively | 100 | 473 | -659 |
Unfunded pension liability, net of tax (expense) benefit of $(1,291), $(985) and $2,595 in 2013, 2012 and 2011, respectively | 6,142 | 1,673 | -4,418 |
Unrealized loss on derivative instruments, net of tax benefit of $1,467 in 2013 | -2,541 | ' | ' |
Cumulative translation adjustments, net of tax expense of $(50) in 2013 | 173 | ' | ' |
Comprehensive income (loss), net of tax | ($44,886) | $55,605 | ($22,739) |
Consolidated_Statements_of_Com1
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Tax (expense) benefit, unrealized gain (loss)on marketable securities | ($29) | ($244) | $343 |
Tax (expense) benefit, Unfunded pension liability | -1,291 | -985 | 2,595 |
Tax benefit, unrealized loss on derivatives instruments | 1,467 | ' | ' |
Tax expense, cumulative translation adjustments | ($50) | ' | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Operating activities: | ' | ' | ' |
Net income (loss) | ($48,760) | $53,459 | ($17,662) |
Depreciation | 61,516 | 27,953 | 24,139 |
Amortization of intangible assets | 193,637 | 30,294 | 33,649 |
Amortization of deferred finance fees and debt discount | 9,982 | 639 | 647 |
Impairment of goodwill and intangible assets | ' | ' | 88,633 |
Deferred income tax benefit | -55,763 | -13,989 | -12,144 |
Deferred income tax related to goodwill and intangible assets impairments | ' | ' | -25,584 |
Stock compensation expense | 35,789 | 27,906 | 22,055 |
Provision for doubtful accounts | -658 | 240 | 200 |
Revenue reduction related to Comcast's investment in ARRIS | 13,182 | ' | ' |
Mark-to-market fair value adjustment related to Comcast's investment in ARRIS | 13,189 | ' | ' |
Non-cash restructuring and related charges | 6,761 | ' | ' |
Loss (gain) on debt retirement | ' | ' | 19 |
Non cash interest expense | 9,926 | 12,358 | 11,545 |
Loss on disposal of product line | ' | 337 | ' |
Loss on disposal of fixed assets | 1,657 | 82 | 16 |
Loss (gain) on investments | 2,698 | -1,404 | 1,570 |
Excess income tax benefits from stock-based compensation plans | -7,178 | -3,549 | -3,668 |
Changes in operating assets and liabilities, net of effect of acquisitions and dispositions: | ' | ' | ' |
Accounts receivable | 9,241 | -37,139 | -22,093 |
Other receivables | -2,182 | 8,398 | -1,635 |
Inventories | 74,111 | -21,491 | -7,144 |
Accounts payable and accrued liabilities | 247,301 | -5,675 | 433 |
Prepaids and other, net | 6,397 | 5,982 | 20,177 |
Net cash provided by operating activities | 570,846 | 84,401 | 113,153 |
Investing activities: | ' | ' | ' |
Purchases of investments | -112,756 | -418,956 | -277,937 |
Sales of investments | 479,781 | 286,013 | 296,774 |
Proceeds from equity investments | 14,780 | ' | ' |
Purchases of property, plant and equipment | -71,443 | -21,507 | -23,307 |
Sale of property, plant, and equipment | 120 | 139 | 84 |
Acquisition, net of cash acquired | -2,208,114 | ' | -130,227 |
Sale of product line | ' | 3,249 | ' |
Net cash used in investing activities | -1,897,632 | -151,062 | -134,613 |
Financing activities: | ' | ' | ' |
Proceeds from issuance of common stock, net | 175,072 | 20,304 | 22,985 |
Repurchase of common stock | ' | -51,921 | -109,123 |
Proceeds from issuance of debt | 1,925,000 | ' | ' |
Payment of debt obligations | -404,409 | ' | ' |
Cash paid for debt discount | -9,853 | ' | ' |
Deferred financing cost paid | -42,724 | ' | ' |
Early redemption of convertible notes | -79 | ' | -4,984 |
Excess income tax benefits from stock-based compensation plans | 7,178 | 3,549 | 3,668 |
Repurchase of shares to satisfy employee tax withholdings | -12,664 | -9,443 | -8,332 |
Net cash provided by (used in) financing activities | 1,637,521 | -37,511 | -95,786 |
Net increase (decrease) in cash and cash equivalents | 310,735 | -104,172 | -117,246 |
Cash and cash equivalents at beginning of year | 131,703 | 235,875 | 353,121 |
Cash and cash equivalents at end of year | 442,438 | 131,703 | 235,875 |
Supplemental cash flow information: | ' | ' | ' |
Interest paid during the year | 48,008 | 4,759 | 4,731 |
Income taxes paid during the year | $12,470 | $30,082 | $5,949 |
Consolidated_Statements_of_Cas1
Consolidated Statements of Cash Flows (Parenthetical) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 |
Motorola Home | ' |
Cash received for indemnification on retained litigation | $85 |
Remitted payment as settlement | 85 |
TiVo | ' |
Cash received for indemnification on retained litigation | 196 |
Remitted payment as settlement | $50 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Total | Common Stock | Capital in Excess of Par Value | Treasury Stock | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Cumulative Translation Adjustments |
In Thousands | |||||||
Beginning Balance at Dec. 31, 2010 | $1,009,069 | $1,409 | $1,206,157 | ($145,286) | ($47,606) | ($5,421) | ($184) |
Net income (loss) | -17,662 | ' | ' | ' | -17,662 | ' | ' |
Other comprehensive income (loss), net of tax | -5,077 | ' | ' | ' | ' | -5,077 | ' |
Compensation under stock award plans | 22,055 | ' | 22,055 | ' | ' | ' | ' |
Issuance of common stock and other | 14,934 | 40 | 14,894 | ' | ' | ' | ' |
Repurchase of common stock | -109,123 | ' | ' | -109,123 | ' | ' | ' |
Impact of debt redemption, net of deferred taxes | -604 | ' | -604 | ' | ' | ' | ' |
Income tax benefit related to exercise of stock options | 2,613 | ' | 2,613 | ' | ' | ' | ' |
Ending Balance at Dec. 31, 2011 | 916,205 | 1,449 | 1,245,115 | -254,409 | -65,268 | -10,498 | -184 |
Net income (loss) | 53,459 | ' | ' | ' | 53,459 | ' | ' |
Other comprehensive income (loss), net of tax | 2,146 | ' | ' | ' | ' | 2,146 | ' |
Compensation under stock award plans | 27,906 | ' | 27,906 | ' | ' | ' | ' |
Issuance of common stock and other | 10,861 | 39 | 10,822 | ' | ' | ' | ' |
Repurchase of common stock | -51,921 | ' | ' | -51,921 | ' | ' | ' |
Income tax benefit related to exercise of stock options | 1,732 | ' | 1,732 | ' | ' | ' | ' |
Ending Balance at Dec. 31, 2012 | 960,388 | 1,488 | 1,285,575 | -306,330 | -11,809 | -8,352 | -184 |
Net income (loss) | -48,760 | ' | ' | ' | -48,760 | ' | ' |
Other comprehensive income (loss), net of tax | 3,874 | ' | ' | ' | ' | 3,701 | 173 |
Compensation under stock award plans | 35,787 | ' | 35,789 | ' | ' | ' | ' |
Issuance of common stock and other | 365,288 | 278 | 365,010 | ' | ' | ' | ' |
Income tax benefit related to exercise of stock options | 2,410 | ' | 2,408 | ' | ' | ' | ' |
Ending Balance at Dec. 31, 2013 | $1,318,987 | $1,766 | $1,688,782 | ($306,330) | ($60,569) | ($4,651) | ($11) |
Organization_and_Basis_of_Pres
Organization and Basis of Presentation | 12 Months Ended |
Dec. 31, 2013 | |
Organization and Basis of Presentation | ' |
Note 1. Organization and Basis of Presentation | |
ARRIS Group, Inc. (together with its consolidated subsidiaries, except as the context otherwise indicates, “ARRIS” or the “Company”) is a global media entertainment and data communications solutions provider, headquartered in Suwanee, Georgia. The Company operates in two business segments, Customer Premises Equipment and Network & Cloud (See Note 11 Segment Information for additional details.), specializing in enabling multichannel video programming distributors (“MVPDs”), including cable, telephone, and digital broadcast satellite operators, and media programmers to deliver rich media, voice, and IP data services to end consumer subscribers. ARRIS is a leading developer, manufacturer and supplier of interactive set-top boxes, end-to-end digital video and Internet Protocol Television (“IPTV”) distribution systems, broadband access infrastructure platforms, and associated data and voice Customer Premises Equipment (“CPE”). The Company’s solutions are complemented by a broad array of services and systems integration that bring localized expertise to every touchpoint in the delivery process. This lends a customized approach to serving each of ARRIS’ primary markets. | |
On April 17, 2013, the Company completed its acquisition of Motorola Home from General Instrument Holdings, Inc., a subsidiary of Google, Inc. (See Note 4 Business Acquisitions for additional details.) | |
The consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) that are, in the opinion of management, necessary for a fair presentation of the consolidated financial statements for the periods shown. Certain balance sheet and cash flow line items in prior periods have been reclassified to conform to the current financial statement presentation. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Summary of Significant Accounting Policies | ' | ||||
Note 2. Summary of Significant Accounting Policies | |||||
(a) Consolidation | |||||
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned foreign and domestic subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. | |||||
Investments in companies in which ARRIS has significant influence, or ownership between 20% and 50% of the investee are accounted for in the Consolidated Financial Statements under the equity method of accounting. Under the equity method, the investment is originally recorded at cost and adjusted to recognize the Company’s share of net earnings or losses and any basis differences of the investee. The adjustment is limited to the extent of the Company’s investment in and advances to the investee. As such, consolidated net income includes our equity portion in current earnings of such companies. Investments in which we do not exercise significant influence (generally less than a 20 percent ownership interest) are accounted for under the cost method. | |||||
For 2013, none of the Company’s equity method investments exceeded the 10 percent threshold tests for a significant subsidiary as defined in Rule 1-02(w) of Regulation S-X under the Securities Exchange Act of 1934. | |||||
(b) Use of Estimates | |||||
The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. | |||||
(c) Cash, Cash Equivalents, and Investments | |||||
ARRIS’ cash and cash equivalents (which are highly-liquid investments with an original maturity of three months or less) are primarily held in money market funds that pay taxable interest. The Company holds investments consisting of mutual funds and debt securities classified as available-for-sale, which are stated at estimated fair value. The debt securities consist primarily of commercial paper, certificates of deposits, short term corporate obligations and U.S. government agency financial instruments. These investments are on deposit with major financial institutions. | |||||
From time to time, the Company has held certain investments in the common stock or preferred stock of private companies, which were classified as cost-method investments. | |||||
In connection with the Acquisition, ARRIS acquired certain investments in limited liability companies, and partnerships that are accounted for using the equity method as the Company has significant influence over operating and financial policies of the investee companies. The carrying amount of equity method investments is increased for the Company’s proportionate share of net earnings or losses and any basis differences of the investees, or dividend received. | |||||
The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amount of such investments may not be recoverable. An equity method investment is written down to fair value if there is evidence of a loss in value which is other than temporary. The Company may estimate the fair value of its equity method investments by considering recent investee equity transactions, discounted cash flow analysis, recent operating results, comparable public company operating cash flow multiples. If the fair value of the investment has dropped below the carrying amount, the Company considers several factors when determining whether an other-than temporary decline has occurred, such as; the length of the time and the extent to which the estimated fair value or market value has been below the carrying value, the financial condition and the near-term prospects of the investee, the intent and ability of the Company to retain its investment in the investee for a period of time sufficient to allow for any anticipated recovery in market value and general market conditions. | |||||
The Company has two rabbi trusts that are used as funding vehicles for various deferred compensation plans that were available to certain current and former officers and key executives. The Company also has a deferred retirement salary plan, which was limited to certain current or former officers of C-COR. The present value of the estimated future retirement benefit payments is being accrued over the estimated service period from the date of signed agreements with the employees. ARRIS holds an investment to cover its liability. ARRIS also funds its nonqualified defined benefit plan for certain executives in a rabbi trust. | |||||
(d) Inventories | |||||
Inventories are stated at the lower of average cost, approximating first-in, first-out, or market. The cost of work-in-process and finished goods is comprised of material, labor, and overhead. | |||||
(e) Revenue recognition | |||||
ARRIS generates revenue as a result of varying activities, including the delivery of stand-alone equipment, custom design and installation services, and bundled sales arrangements inclusive of equipment, software and services. The revenue from these activities is recognized in accordance with applicable accounting guidance and their related interpretations. | |||||
Revenue is recognized when all of the following criteria have been met: | |||||
• | When persuasive evidence of an arrangement exists. Contracts and customer purchase orders are used to determine the existence of an arrangement. For professional services evidence that an agreement exists includes information documenting the scope of work to be performed, price, and customer acceptance. These are contained in the signed contract, purchase order, or other documentation that shows scope, price and customer acceptance. | ||||
• | Delivery has occurred. Shipping documents, proof of delivery and customer acceptance (when applicable) are used to verify delivery. | ||||
• | The fee is fixed or determinable. Pricing is considered fixed or determinable at the execution of a customer arrangement, based on specific products and quantities to be delivered at specific prices. This determination includes a review of the payment terms associated with the transaction and whether the sales price is subject to refund or adjustment or future discounts. | ||||
• | Collectability is reasonably assured. The Company assesses the ability to collect from customers based on a number of factors that include information supplied by credit agencies, analyzing customer accounts, reviewing payment history and consulting bank references. Should a circumstance arise where a customer is deemed not creditworthy, all revenue related to the transaction will be deferred until such time that payment is received and all other criteria to allow the Company to recognize revenue have been met. | ||||
Revenue is deferred if any of the above revenue recognition criteria is not met as well as when certain circumstances exist for any of our products or services, including, but not limited to: | |||||
• | When undelivered products or services that are essential to the functionality of the delivered product exist, revenue is deferred until such undelivered products or services are delivered as the customer would not have full use of the delivered elements. | ||||
• | When required acceptance has not occurred. | ||||
• | When trade-in rights are granted at the time of sale, that portion of the sale is deferred until the trade-in right is exercised or the right expires. In determining the deferral amount, management estimates the expected trade-in rate and future value of the product upon trade-in. These factors are periodically reviewed and updated by management, and the updates may result in either an increase or decrease in the deferral. | ||||
Equipment — The Company provides operators with equipment that can be placed within various stages of a broadband system that allows for the delivery of telephony, video and high-speed data as well as outside plant construction and maintenance equipment. For equipment sales, revenue recognition is generally established when the products have been shipped, risk of loss has transferred, objective evidence exists that the product has been accepted, and no significant obligations remain relative to the transaction. Additionally, based on historical experience, ARRIS has established reliable estimates related to sales returns and other allowances for discounts. These estimates are recorded as a reduction to revenue at the time the revenue is initially recorded. | |||||
Software Sold Without Tangible Equipment — ARRIS sells internally developed software as well as software developed by outside third parties that does not require significant production, modification or customization. For arrangements that contain only software and the related post-contract support, the Company recognizes revenue in accordance with the applicable software revenue recognition guidance. If the arrangement includes multiple elements that are software only, then the software revenue recognition guidance is applied and the fee is allocated to the various elements based on vendor-specific objective evidence (“VSOE”) of fair value. If sufficient VSOE of fair value does not exist for the allocation of revenue to all the various elements in a multiple element software arrangement, all revenue from the arrangement is deferred until the earlier of the point at which such sufficient VSOE of fair value is established or all elements within the arrangement are delivered. If VSOE of fair value exists for all undelivered elements, but does not exist for one or more delivered elements, the arrangement consideration is allocated to the various elements of the arrangement using the residual method of accounting. Under the residual method, the amount of the arrangement consideration allocated to the delivered elements is equal to the total arrangement consideration less the aggregate fair value of the undelivered elements. Under the residual method, if VSOE of fair value exists for the undelivered element, generally post contract support (“PCS”), the fair value of the undelivered element is deferred and recognized ratably over the term of the PCS contract, and the remaining portion of the arrangement is recognized as revenue upon delivery. If sufficient VSOE of fair value does not exist for PCS, revenue for the arrangement is recognized ratably over the term of support. | |||||
Standalone Services — Installation, training, and professional services are generally recognized in service revenue when performed or upon completion of the service when the final act is significant in relation to the overall service transaction. The key element for Professional Services in determining when service transaction revenue has been earned is determining the pattern of delivery or performance which determines the extent to which the earnings process is complete and the extent to which customers have received value from services provided. The delivery or performance conditions of our service transactions are typically evaluated under the proportional performance or completed performance model. | |||||
Incentives — Customer incentive programs that include consideration, primarily rebates/credits to be used against future product purchases and certain volume discounts, have been recorded as a reduction of revenue when the shipment of the requisite equipment occurs. | |||||
Value Added Resellers — ARRIS typically employs the sell-in method of accounting for revenue when using a Value Added Reseller (“VAR”) as our channel to market. Because product returns are restricted, revenue under this method is generally recognized at the time of shipment to the VAR provided all criteria for recognition are met. There are occasions, based on facts and circumstances surrounding the VAR transaction, where ARRIS will employ the sell-through method of recognizing revenue and defer that revenue until payment occurs. | |||||
Multiple Element Arrangements — Certain customer transactions may include multiple deliverables based on the bundling of equipment, software and services. When a multiple element arrangement exists, the fee from the arrangement is allocated to the various deliverables, to the extent appropriate, so that the proper amount can be recognized as revenue as each element is delivered. Based on the composition of the arrangement, the Company analyzes the provisions of the accounting guidance to determine the appropriate model that is applied towards accounting for the multiple element arrangement. If the arrangement includes a combination of elements that fall within different applicable guidance, ARRIS follows the provisions of the hierarchal literature to separate those elements from each other and apply the relevant guidance to each. | |||||
For multiple element arrangements that include software or have a software-related element that is more than incidental and does involve significant production, modification or customization, revenue is recognized using the contract accounting guidelines by applying the percentage-of-completion or completed-contract method. The Company recognizes software license and associated professional services revenue for its mobile workforce management software license product installations using the percentage of completion method of accounting as the Company believes that its estimates of costs to complete and extent of progress toward completion of such contracts are reliable. For certain software license arrangements where professional services are being provided and are deemed to be essential to the functionality or are for significant production, modification, or customization of the software product, both the software and the associated professional service revenue are recognized using the completed contract method. The completed-contract method is used for these particular arrangements because they are considered short-term arrangements and the financial position and results of operations would not be materially different from those under the percentage-of-completion method. Under the completed-contract method, revenue is recognized when the contract is complete, and all direct costs and related revenues are deferred until that time. The entire amount of an estimated loss on a contract is accrued at the time a loss on a contract is projected. Actual profits and losses may differ from these estimates. | |||||
For arrangements that fall within the software revenue recognition guidance, the fee is allocated to the various elements based on VSOE of fair value. If sufficient VSOE of fair value does not exist for the allocation of revenue to all the various elements in a multiple element arrangement, all revenue from the arrangement is deferred until the earlier of the point at which such sufficient VSOE of fair value is established or all elements within the arrangement are delivered. If VSOE of fair value exists for all undelivered elements, but does not exist for one or more delivered elements, the arrangement consideration is allocated to the various elements of the arrangement using the residual method of accounting. Under the residual method, the amount of the arrangement consideration allocated to the delivered elements is equal to the total arrangement consideration less the aggregate fair value of the undelivered elements. Using this method, any potential discount on the arrangement is allocated entirely to the delivered elements, which ensures that the amount of revenue recognized at any point in time is not overstated. Under the residual method, if VSOE of fair value exists for the undelivered element, generally PCS, the fair value of the undelivered element is deferred and recognized ratably over the term of the PCS contract, and the remaining portion of the arrangement is recognized as revenue upon delivery, which generally occurs upon delivery of the product or implementation of the system. Many of ARRIS’ products are sold in combination with customer support and maintenance services, which consist of software updates and product support. Software updates provide customers with rights to unspecified software updates that ARRIS chooses to develop and to maintenance releases and patches that the Company chooses to release during the period of the support period. Product support services include telephone support, remote diagnostics, email and web access, access to on-site technical support personnel and repair or replacement of hardware in the event of damage or failure during the term of the support period. Maintenance and support service fees are recognized ratably under the straight-line method over the term of the contract, which is generally one year. The Company does not record receivables associated with maintenance revenues without a firm, non-cancelable order from the customer. VSOE of fair value is determined based on the price charged when the same element is sold separately and based on the prices at which our customers have renewed their customer support and maintenance. For elements that are not yet being sold separately, the price established by management, if it is probable that the price, once established, will not change before the separate introduction of the element into the marketplace is used to measure VSOE of fair value for that element. | |||||
(f) Shipping and Handling Fees | |||||
Shipping and handling costs for the years ended December 31, 2013, 2012, and 2011 were approximately $4.9 million, $3.6 million and $3.3 million, respectively, and are classified in net sales and cost of sales. | |||||
(g) Taxes Collected from Customers and Remitted to Governmental Authorities | |||||
Taxes assessed by a government authority that are both imposed on and concurrent with specific revenue transactions between us and our customers are presented on a net basis in our Consolidated Statements of Operations. | |||||
(h) Depreciation of Property, Plant and Equipment | |||||
The Company provides for depreciation of property, plant and equipment on the straight-line basis over estimated useful lives of 10 to 40 years for buildings and improvements, 2 to 10 years for machinery and equipment, and the shorter of the term of the lease or useful life for leasehold improvements. Included in depreciation expense is the amortization of landlord funded tenant improvements which amounted to $0.2 million in 2013, $0.5 million in 2012 and $0.6 million in 2011. Depreciation expense, including amortization of capital leases, for the years ended December 31, 2013, 2012, and 2011 was approximately $61.5 million, $28.0 million, and $24.1 million, respectively. | |||||
(i) Goodwill and Long-Lived Assets | |||||
Goodwill relates to the excess of consideration transferred over the fair value of net assets resulting from an acquisition. On an annual basis, the Company’s goodwill is tested for impairment or more frequently if events or changes in circumstances indicate that the asset is more likely than not impaired, in which case a test would be performed sooner. Our annual goodwill impairment test is performed in the fourth quarter, with a testing date of October 1. For goodwill, the Company performs a two-step quantitative goodwill impairment test. In the first step, the Company compares the fair value of each reporting unit to its carrying amount. Fair value is determined for each reporting unit using a weighting of fair values derived from an income approach using discounted cash flows and a market approach. Under the income approach, fair value of a reporting unit is calculated based on the present value of estimated future cash flows. The discounted cash flow analysis requires us to make various judgmental assumptions, including assumptions about future cash flows, growth rates and weighted average cost of capital (discount rate). The assumptions about future cash flows and growth rates are based on the current and long-term business plans of each reporting unit. Discount rate assumptions are based on an assessment of the risk inherent in the future cash flows of the respective reporting units. Under the market approach, fair value is estimated based upon Market multiples of revenue and earnings derived from publicly traded companies with similar operating and investment characteristics as the reporting unit. In order to assess the reasonableness of the calculated fair values of our reporting units, the Company also compares the sum of the reporting units’ fair values to its market capitalization and calculates an implied control premium (the excess of the sum of the reporting units’ fair values over the market capitalization). If the fair value of the reporting unit exceeds the carrying amount of the net assets assigned to that unit, goodwill is not impaired, and no further testing is required. If the fair value of the reporting unit is less than the carrying value, the second step of the impairment test is performed to measure the amount of impairment loss, if any. In the second step, the reporting unit’s fair value is assigned to all of the assets and liabilities of the reporting unit, including any unrecognized intangible assets, in a hypothetical analysis that calculates the implied fair value of goodwill in the same manner as if the reporting unit was being acquired in a business combination. If the implied fair value of the reporting unit’s goodwill is less than the carrying amount, the difference is recorded as an impairment loss. | |||||
The annual goodwill impairment tests were performed in the fourth quarters of 2011, 2012, and 2013 with an assessment date of October 1. There was no impairment of goodwill resulting from our annual impairment testing in 2013 and 2012. In 2011, a goodwill-impairment charge of $41.2 million before tax ($33.9 million after tax) was recorded for the former MCS reporting unit (now included in the Cloud Services reporting unit.) | |||||
As of December 31, 2013, the Company had goodwill of $935.6 million, of which $685.0 million related to the CPE reporting unit, $239.7 million related to the Network Infrastructure reporting unit and $10.9 million related to the Cloud Services reporting unit. | |||||
Long-lived assets, such as property, plant, and equipment and purchased intangible assets subject to depreciation and amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount of the asset or asset group, to the future undiscounted cash flows the asset is expected to generate. In determining future undiscounted cash flows, we have made a “policy decision” to use pre-tax cash flows in our evaluation, which is consistently applied. To test for recovery, we group assets (an “asset group”) in a manner that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. | |||||
Other intangible assets represent acquired intangible assets, which include developed technology, in-process research and development, customer relationships, covenants not-to-compete, and order backlog. Amounts assigned to other identifiable intangible assets with finite useful lives are amortized on a straight-line basis over their estimated useful lives as follows: | |||||
Intangibles with finite useful lives: | |||||
Developed technology, patents and licenses | 2 - 10 years | ||||
Customer relationships | 7 - 10 years | ||||
Non-compete agreements | 2 years | ||||
Trademarks and trade names | 2 - 10 years | ||||
Order backlog | 1 - 2 years | ||||
Intangibles with indefinite useful lives: | |||||
In-process research and development | Indefinite | ||||
Acquired in-process research and development assets are initially recognized and measured at fair value and classified as indefinite-lived assets until the successful completion or abandonment of the associated research and development efforts. Accordingly, during the development period after the acquisition date, this asset will not be amortized as charges to earnings; instead these assets will be subject to periodic impairment testing. Completion of the associated research and development efforts would cause the indefinite-lived in-process research and development assets to become a finite-lived asset. As such, prior to commencing amortization the assets will be tested for impairment. | |||||
As of December 31, 2013, the financial statements included intangible assets of $1,176.2 million, net of accumulated amortization of $427.1 million. As of December 31, 2012, the financial statements included intangible assets of $94.5 million, net of accumulated amortization of $239.7 million. | |||||
Our intangible assets with finite lives are tested for impairment when events or changes in circumstances indicate that impairment may exist. Our indefinite-lived assets for in-process research and development were tested for impairment as of October 1, 2013. | |||||
There were no impairment charges related to purchased intangible assets during 2013 and 2012. In 2011, indicators of impairment existed for long-lived assets associated with the former MCS reporting unit (now included as part of the Cloud Services reporting unit) due to changes in projected operating results and cash flows. In the fourth quarter of 2011, an impairment loss of $47.4 million before tax ($29.1 million after tax) related to customer relationships was recorded. | |||||
See Note 5 of Notes to the Consolidated Financial Statements for further information on goodwill and intangible assets. | |||||
(j) Advertising and Sales Promotion | |||||
Advertising and sales promotion costs are expensed as incurred. Advertising expense was approximately $4.1 million, $0.2 million, and $0.6 million for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||
(k) Research and Development | |||||
Research and development (“R&D”) costs are expensed as incurred. ARRIS’ research and development expenditures for the years ended December 31, 2013, 2012 and 2011 were approximately $425.8 million, $170.7 million, and $146.5 million, respectively. The expenditures include compensation costs, materials, other direct expenses, and allocated costs of information technology, telecommunications, and facilities. | |||||
(l) Warranty | |||||
ARRIS provides warranties of various lengths to customers based on the specific product and the terms of individual agreements. For further discussion, see Note 10 of the Notes to the Consolidated Financial Statements, Guarantees for further discussion. | |||||
(m) Income Taxes | |||||
ARRIS uses the liability method of accounting for income taxes, which requires recognition of temporary differences between financial statement and income tax bases of assets and liabilities, measured by enacted tax rates. | |||||
If necessary, the measurement of deferred tax assets is reduced by the amount of any tax benefits that are not expected to be realized based on available evidence. ARRIS reports a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense. | |||||
There is significant uncertainty surrounding how much deferred income tax assets will ultimately arise from the acquisition of Motorola Home and be available for utilization by ARRIS. As of December 31, 2013, the Seller has not completed the preparation and the related filing of the final income tax returns for the income tax year ending with the acquisition by ARRIS on April 16, 2013. At this time, the Company has recorded its best estimate of the deferred income tax assets, given the information that is currently available. | |||||
See Note 17 of Notes to the Consolidated Financial Statements for further discussion. | |||||
(n) Foreign Currency Translation | |||||
A significant portion of the Company’s products are manufactured or assembled in China, Mexico and Taiwan, and we have research and development centers in China, India, Ireland, Israel, Russia and Sweden. Sales into international markets have been and are expected in the future to be an important part of the Company’s business. These foreign operations are subject to the usual risks inherent in conducting business abroad, including risks with respect to currency exchange rates, economic and political destabilization, restrictive actions and taxation by foreign governments, nationalization, the laws and policies of the United States affecting trade, foreign investment and loans, and foreign tax laws. | |||||
ARRIS has certain international customers who are billed in their local currency and certain predictable expenditures for international operations in local currency. Additionally, certain intercompany transactions created in conjunction with the Motorola Home acquisition are denominated in foreign currencies and subject to revaluation. The Company uses a hedging strategy and enters into forward or currency option contracts based on a percentage of expected foreign currency exposures. The percentage can vary, based on the predictability of the exposures denominated in the foreign currency. Currently, the Company has no outstanding foreign currency hedges. | |||||
(o) Israeli Severance Pay | |||||
The Company’s wholly-owned subsidiary located in Israel is required to fund future severance liabilities determined in accordance with Israeli severance pay laws. Under these laws, employees are entitled upon termination to one month’s salary for each year of employment or portion thereof. The Company records compensation expense to accrue for these costs over the employment period, based on the assumption that the benefits to which the employee is entitled, if the employee separates immediately. The Company funds the liability by monthly deposits in insurance policies and severance funds. The value of the severance fund assets are primarily recorded in other non-current assets on the Company’s consolidated balance sheets, which was $3.6 million as of December 31, 2013 and $3.8 million as of December 31, 2012. The liability for long-term severance accrued on the Company’s consolidated balance sheets was $3.9 million as of December 31, 2013 and $4.2 million as of December 31, 2012. | |||||
(p) Stock-Based Compensation | |||||
See Note 19 of Notes to the Consolidated Financial Statements for further discussion of the Company’s significant accounting policies related to stock based compensation. | |||||
(q) Concentrations of Credit Risk | |||||
Financial instruments that potentially subject ARRIS to concentrations of credit risk consist principally of cash, cash equivalents and short-term investments, and accounts receivable. ARRIS places its temporary cash investments with high credit quality financial institutions. Concentrations with respect to accounts receivable occur as the Company sells primarily to large, well-established companies including companies outside of the United States. The Company’s credit policy generally does not require collateral from its customers. ARRIS closely monitors extensions of credit to other parties and, where necessary, utilizes common financial instruments to mitigate risk or requires cash on delivery terms. Overall financial strategies and the effect of using a hedge are reviewed periodically. When deemed uncollectible, accounts receivable balances are written off against the allowance for doubtful accounts. | |||||
The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments: | |||||
• | Cash, cash equivalents, and short-term investments: The carrying amounts reported in the consolidated balance sheets for cash, cash equivalents, and short-term investments approximate their fair values. | ||||
• | Accounts receivable and accounts payable: The carrying amounts reported in the balance sheet for accounts receivable and accounts payable approximate their fair values. The Company establishes a reserve for doubtful accounts based upon its historical experience in collecting accounts receivable. | ||||
• | Marketable securities: The fair values for trading and available-for-sale equity securities are based on quoted market prices or observable prices based on inputs not in active markets but corroborated by market data. | ||||
• | Non-marketable securities: Non-marketable equity securities are subject to a periodic impairment review; however, there are no open-market valuations, and the impairment analysis requires significant judgment. This analysis includes assessment of the investee’s financial condition, the business outlook for its products and technology, its projected results and cash flow, recent rounds of financing, and the likelihood of obtaining subsequent rounds of financing. | ||||
• | Senior secured credit facilities: Comprised of term loans and revolving credit facility. The face value of the Company’s term loans totaled approximately $1,752.6 million at December 31, 2013. | ||||
• | Derivative instruments: The carrying amounts reported in the balance sheet for derivative financial instruments approximate their fair values. The Company has designated these instruments as cash flow hedges and the objective was to manage the variability of cash flows in the interest payments related to the portion of the variable-rate debt designated as being hedged. | ||||
(r) Computer Software | |||||
The Company capitalizes costs associated with internally developed and/or purchased software systems for internal use that have reached the application development stage and meet recoverability tests. Capitalized costs include external direct costs of materials and services utilized in developing or obtaining internal-use software and payroll and payroll-related expenses for employees who are directly associated with and devote time to the internal-use software project. Capitalization of such costs begins when the preliminary project stage is complete and ceases no later than the point at which the project is substantially complete and ready for its intended purpose. These capitalized costs are amortized on a straight-line basis over periods of two to seven years, beginning when the asset is ready for its intended use. Capitalized costs are included in property, plant, and equipment on the consolidated balance sheets. The carrying value of the software is reviewed regularly and impairment is recognized if the value of the estimated undiscounted cash flow benefits related to the asset is less than the remaining unamortized costs. | |||||
Research and development costs are charged to expense as incurred. ARRIS generally has not capitalized any such development costs because the costs incurred between the attainment of technological feasibility for the related software product through the date when the product is available for general release to customers has been insignificant. | |||||
(s) Comprehensive Income (Loss) | |||||
The components of comprehensive income (loss) include net income (loss), unrealized gains (losses) on available-for-sale securities, unrealized gains (losses) on derivative instruments, change in unfunded pension liability, net of tax, if applicable and change in cumulative translation adjustments. Comprehensive income (loss) is presented in the consolidated statements of comprehensive income (loss). |
Impact_of_Recently_Issued_Acco
Impact of Recently Issued Accounting Standards | 12 Months Ended |
Dec. 31, 2013 | |
Impact of Recently Issued Accounting Standards | ' |
Note 3. Impact of Recently Issued Accounting Standards | |
Adoption of New Accounting Standards — In February 2013, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update that adds new disclosure requirements for items reclassified out of accumulated other comprehensive income. This update requires that companies present either in a single note or parenthetically on the face of the financial statements, the effect of significant amounts reclassified from each component of accumulated other comprehensive income based on its source (e.g., the release due to cash flow hedges from interest rate contracts) and the income statement line items affected by the reclassification (e.g., interest income or interest expense). If a component is not required to be reclassified to net income in its entirety (e.g., the net periodic pension cost), companies would instead cross reference to the related footnote for additional information (e.g., the pension footnote). This update was adopted by ARRIS beginning in the first quarter of 2013. The adoption of this guidance did not have a material impact on our consolidated financial position and results of operations. | |
In December 2011, FASB issued guidance that requires entities to disclose both gross and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. In January 2013, the FASB issued guidance to clarify the scope of the disclosures about offsetting assets and liabilities guidance. The guidance is effective for annual periods beginning on or after January 1, 2013. This update was adopted by ARRIS beginning in the first quarter of 2013. The adoption of this guidance did not have a material impact on our consolidated financial position and results of operations. | |
Accounting Standards Issued But Not Yet Effective — In July 2013, the FASB issued an accounting standard update which provides that an unrecognized tax benefit, or a portion thereof, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except to the extent that a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date to settle any additional income taxes that would result from disallowance of a tax position, or the tax law does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, then the unrecognized tax benefit should be presented as a liability. This update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. | |
In December 2013, the FASB issued an accounting standard update which amends the Master Glossary of the FASB Accounting Standards Codification to provide entities with a single definition of a Public Business Entity for use in future financial accounting and reporting guidance beginning in 2014. | |
Accounting pronouncements issued but not in effect until after December 31, 2013 are not expected to have a significant impact on our consolidated financial position or results of operations. |
Business_Acquisitions
Business Acquisitions | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Business Acquisitions | ' | ||||||||||||
Note 4. Business Acquisitions | |||||||||||||
Acquisition of Motorola Home | |||||||||||||
On April 17, 2013, ARRIS completed its acquisition of Motorola Home from General Instrument Holdings, Inc. (“Seller”), a subsidiary of Google, Inc. Consideration for the acquisition consisted of approximately $2,208.1 million in cash, inclusive of working capital adjustments, and 10.6 million shares of ARRIS’ common stock (the “Acquisition”). | |||||||||||||
The Acquisition enhanced the Company’s scale and product breadth in the telecom industry, significantly diversified the Company’s customer base and expanded dramatically the Company’s international presence. Notably, the acquisition brought to ARRIS, Motorola Home’s product scale and scope in end-to-end video processing and delivery, including a full range of QAM and IP set top box products, as well as IP Gateway CPE equipment for data and voice services for broadband service providers. The Acquisition also enhanced the depth and scale of the Company’s R&D capabilities, particularly in the video arena. | |||||||||||||
The following table summarizes the fair value of consideration transferred for Motorola Home, net of cash acquired (in thousands): | |||||||||||||
Cash transferred (1) | $ | 2,208,114 | |||||||||||
Fair Value of shares issued to Seller (2) | 176,410 | ||||||||||||
Total value of consideration | $ | 2,384,524 | |||||||||||
-1 | At closing the actual cash transferred as part of the transaction was $2,159.8 million, net of cash acquired of $78.0 million. During the quarter ended September 30, 2013, an additional $48.3 million of cash was transferred as part of working capital adjustments. The cash portion of the consideration was funded with cash on hand, borrowings under ARRIS’ senior secured credit facilities (see Note 15 Long-Term Indebtedness for additional details) and through the sale by ARRIS of approximately 10.6 million shares of ARRIS’ common stock to a subsidiary of Comcast Corporation for $150 million in cash. | ||||||||||||
-2 | The fair value of the 10.6 million shares issued to Seller was determined based on the opening price of the Company’s common stock at the Acquisition date. | ||||||||||||
The Acquisition has been accounted for using the acquisition method of accounting in accordance with the business combinations guidance, which requires, among other things, that the assets acquired and liabilities assumed be recognized at their acquisition date fair values, with any excess of the consideration transferred over the estimated fair values of the identifiable net assets acquired recorded as goodwill. | |||||||||||||
The following table summarizes the estimated fair values of the net assets acquired as of the acquisition date, as well as measurement period and other adjustments made during 2013 to the amounts initially recorded. The measurement period adjustments have been retrospectively adjusted in our financial statements as if those adjustments occurred on the acquisition date. Certain estimated fair values are not yet finalized (see below) and are subject to change, which could be significant. We will finalize the amounts recognized as we obtain the information necessary to complete the analysis, but no later than one year from the acquisition date. | |||||||||||||
(in thousands) | Amounts | Adjustments | Amounts | ||||||||||
Recognized as | Recognized as | ||||||||||||
of Acquisition | of Acquisition | ||||||||||||
Date (a) | Date (as | ||||||||||||
adjusted) | |||||||||||||
Total consideration transferred, net of cash acquired (b) | $ | 2,336,172 | $ | 48,352 | $ | 2,384,524 | |||||||
Assets acquired and liabilities assumed: | |||||||||||||
Accounts receivable | 462,162 | — | 462,162 | ||||||||||
Inventories | 279,562 | (9,170 | ) | 270,392 | |||||||||
Deferred income tax assets (c) | 370,543 | 3,738 | 374,281 | ||||||||||
Other assets | 153,094 | 14,684 | 167,778 | ||||||||||
Property, plant & equipment (d) | 350,547 | (10,161 | ) | 340,386 | |||||||||
Intangible assets (e) | 1,343,400 | (104,200 | ) | 1,239,200 | |||||||||
Accounts payable | (349,235 | ) | — | (349,235 | ) | ||||||||
Deferred revenue | (27,797 | ) | — | (27,797 | ) | ||||||||
Other liabilities (f) | (324,852 | ) | (21,867 | ) | (346,719 | ) | |||||||
Deferred tax liability (c) | (534,479 | ) | 43,977 | (490,502 | ) | ||||||||
Total net assets acquired | 1,722,945 | (82,999 | ) | 1,639,946 | |||||||||
Goodwill (g) | $ | 613,227 | $ | 131,351 | $ | 744,578 | |||||||
(a) | As previously reported as of June 30, 2013. | ||||||||||||
(b) | Amount represents adjustment for final working capital. | ||||||||||||
(c) | The measurement period and other adjustments for deferred tax assets and liabilities primarily reflect the tax impact of the pre-tax measurement period adjustments and adjustments to certain uncertain tax positions following receipt of additional information about facts and circumstances existing as of the Acquisition date. | ||||||||||||
(d) | The measurement period adjustments for property, plant & equipment costs to reflect updated fair values of acquired personal property that existed as of the acquisition date. | ||||||||||||
(e) | The measurement period adjustments for identifiable intangible assets primarily consists of adjustments recorded to reflect changes in the estimated fair value of certain acquired intangibles, principally customer relationships, developed technology and patents, and in-process research and development based upon facts and circumstances that existed as of the acquisition date. The Company continued to gather further specific information on the Motorola Home intangible assets, such as the timing and risk of cash flows of the intangible assets, including those assets still in the research and development phase. Some of the more significant assumptions inherent in the development of intangible asset values, from the perspective of a market participant, include: the amount and timing of projected future cash flows (including revenue, cost of sales, research and development costs, sales and marketing expenses); working capital; contributory asset charges; the discount rate selected to measure the risks inherent in the future cash flows; and the assessment of the asset’s life cycle and the competitive trends impacting the asset, as well as other factors. These factors were refined in order to further complete the valuation work that impacted (i) the estimated total fair value assigned to intangible assets, (ii) the estimated assignment of fair value between finite-lived and indefinite-lived intangible assets and/or (iii) the estimated weighted-average useful life of each category of intangible assets. | ||||||||||||
(f) | The change primarily relates to an increase in warranty accrual due to a change in estimate of the initial accrued warranty recorded at the acquisition date as a result of additional information arising subsequent to the acquisition that existed as of the Acquisition date, as well as adjustment for certain foreign pension obligations. | ||||||||||||
(g) | Goodwill recognized as of the Acquisition date (as adjusted) totaled $744.6 million and is attributable to the workforce of the acquired business, strategic opportunities and synergies that are expected to arise from the acquisition of Motorola Home. The preliminarily determined goodwill has been assigned to the Company’s three reporting units (see Note 5 Goodwill and Intangible Assets for additional details). These amounts are not yet finalized and are subject to change. With the exception of $77.6 million of goodwill that retains its tax basis after the acquisition, the remaining portion of the $744.6 million of goodwill is not expected to be deductible for income tax purposes. The amount of tax deductible goodwill remains subject to adjustment through the measurement period. | ||||||||||||
The Company recognizes an increase or decrease in the provisional amounts recognized for identifiable asset (liability) by means of a decrease or increase in goodwill. ARRIS performed a careful evaluation of the adjustments made to the provisional amounts recognized to determine whether the potential adjustment is the result of information that existed as of the acquisition date or whether the adjustment is the result of events occurring subsequent to the acquisition date. As such, the Company only adjusted the provisional amounts for facts and circumstances that existed at the acquisition date. | |||||||||||||
As of December 31, 2013, the initial accounting the following item is subject to change: | |||||||||||||
• | Amounts for income tax assets, receivables and liabilities pending the filing of pre-acquisition tax returns, as well as the receipt of information from taxing authorities, which may change certain estimates and assumptions used. | ||||||||||||
During the measurement period, the Company will adjust the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date and will record those adjustments to the financial statements. | |||||||||||||
Certain tax attributes will not likely be known until tax returns of acquired entities are filed. It is possible some tax returns may not be filed until after the measurement period. Therefore, there is likelihood that certain deferred tax assets and/or liabilities related to tax attributes may be recorded outside the measurement period. Additionally, significant uncertainty remains with regard to how much U.S. Federal and State deferred income tax assets will ultimately arise from the acquisition of Motorola Home and be realized by ARRIS. Google, Inc. has not yet filed all income tax returns due for the tax period ending with this acquisition on April 16, 2013, and has yet to finalize certain very complex calculations that materially impact the deferred tax assets that ARRIS could ultimately realize. At this time, the Company believes that it has recorded its best available estimate regarding these deferred income tax assets, given the information that is currently available. However, it is possible that the amount of deferred income tax assets ultimately recorded by ARRIS will be materially different from the amounts recorded today. | |||||||||||||
The $1.2 billion of acquired intangible assets were assigned to the following (in thousands): | |||||||||||||
Fair value | Estimated Weighted | ||||||||||||
Average Life (years) | |||||||||||||
Customer relationships | $ | 653,400 | 8 | ||||||||||
Developed technology and patents | 439,300 | 6 | |||||||||||
In process R&D | 83,100 | indefinite | |||||||||||
Backlog | 44,600 | 1 | |||||||||||
Trademark / trade name | 18,800 | 1 | |||||||||||
Total | $ | 1,239,200 | |||||||||||
As part of the Acquisition, the Company acquired outright 991 technology patents or pending applications (“the “Patents”), the durations are adequate relative to the expected useful lives of our products. | |||||||||||||
The 991 patents acquired increased the number of patents owned by the Company to approximately 2,000. The Company determined that the acquired patents have estimated useful lives similar to the developed technology product lines to which they are associated. As such, the Company has recognized and measured the Patents and developed technology together as one unit of account for each technology product line acquired. A separate estimated useful life was determined for each technology product line, for which amortization will be recognized. It was determined that a small number of patents were associated with discontinued or never deployed technologies for which no revenues are expected. These Patents were assigned a nominal value. ARRIS also obtained a license to certain patents. These patents included: | |||||||||||||
(i) | 2,173 patents that are subject to a broad license that permits us to use the patents in any manner ARRIS deems appropriate with respect to new products developed by ARRIS (the “Broad Use Patents”); and | ||||||||||||
(ii) | approximately 17,000 patents that are subject to a license that only permits us to use the technology in existing products and future products in the same field as the existing business (collectively with the Broad Use Patents, the “Licensed Patents”). | ||||||||||||
The Company determined there was no incremental value in the Licensed Patents apart from that already embedded in the value of the technology. As a result, the value of the Licensed Patents has been captured as part of the technology valuations similar to the acquired patents. | |||||||||||||
In connection with the Acquisition, the Seller agreed to indemnify ARRIS for a portion of certain potential liabilities from certain intellectual property infringement litigation claims. As a result, the Company recorded at the date of acquisition a $70 million liability related to one of these litigation claims and an indemnification asset of $70 million related to this liability. The litigation claim subsequently was settled for $85 million, for which ARRIS was fully indemnified. The Company also recorded a $13.9 million liability at the date of acquisition related to an infringement lawsuit included as part of $50.0 million of potential liability retained by ARRIS pursuant to the acquisition agreement. This lawsuit settled subsequent to the date of Acquisition. See Note 23 Contingencies for additional details. | |||||||||||||
The fair value of accounts receivable was $462.2 million, with the gross contractual amount being $470.9 million. The Company expects $8.7 million to be uncollectible. | |||||||||||||
As a result of the Acquisition, ARRIS acquired investments in two limited liability corporations in which the Company is a party to with Comcast. The investees were determined to be variable interest entities of which ARRIS is not the primary beneficiary, as ARRIS does not have the power to direct the activities of the investee that most significantly impact its economic performance. The limited liability corporations are licensing and research and development companies. The Company’s ownership percentages in the licensing and the research and development corporation are 49% and 50%, respectively, which are accounted for as equity method investments. The purpose of the limited liability corporations are to license, develop, deploy, support, and to gain market acceptance for certain technologies that reside in a cable plant or in a cable device. Subject to agreement on annual statements of work, the Company is providing to one of the ventures, engineering services per year approximating 20% to 30% of the approved venture budget, which is expected to be in the range of approximately $6 million to $8 million per year. The Company is also required to make annual contributions for the purpose of funding development projects identified by the venture. During 2013, the Company made funding contributions to the investment of $8.1 million. | |||||||||||||
(in thousands) | Carrying Value | Maximum Exposure | |||||||||||
to Loss | |||||||||||||
Conditional Access Licensing (“CAL”) | $ | 6,476 | $ | 6,476 | |||||||||
Combined Conditional Access Development (“CCAD”) | 5,886 | 18,000 | |||||||||||
The Company’s future total annual funding contributions to CCAD are expected to be in the range of approximately $16 million to $18 million, and represent the Company’s annual maximum exposure to loss. | |||||||||||||
The Company incurred acquisition related costs of $18.6 million for the year ended December 31, 2013. These amounts were expensed by the Company as incurred and are included in the Consolidated Statement of Operations in the line item titled “Acquisition, integration and other costs”. | |||||||||||||
The Motorola Home business contributed revenues of approximately $2,138 million to our consolidated results from the date of Acquisition through December 31, 2013. | |||||||||||||
The following unaudited pro forma summary presents consolidated information of the Company as if the acquisition of Motorola Home occurred on January 1, 2012, the beginning of the comparable prior annual period. The pro forma adjustments primarily relate to the depreciation expense on stepped up fixed assets, amortization of acquired intangibles, interest expense related to new financing arrangements and the estimated impact on the Company’s income tax provision. The unaudited pro forma combined results of operations are provided for illustrative purposes only and are not indicative of the Company’s actual consolidated results. The unaudited pro forma net loss for the year ended December 31, 2013 was adjusted to exclude $18.6 million of acquisition related costs and $48.4 million of expense related to the fair value adjustment to acquisition-date inventory. Unaudited pro forma net loss for the year ended December 31, 2012 was adjusted to include these charges. In addition, unaudited pro forma net loss for the year ended December 31, 2012 includes $11.0 million reduction in revenue related to the fair value adjustment to deferred revenue. These adjustments exclude the income tax impact. | |||||||||||||
Unaudited Supplemental Pro Forma Information | |||||||||||||
For the years ended December 31, | |||||||||||||
(in thousands, except per share data) | |||||||||||||
2013 | 2012 | ||||||||||||
Net sales | $ | 4,426,576 | $ | 4,685,648 | |||||||||
Net income (loss) | (108,548 | ) | (142,489 | ) | |||||||||
Income (loss) per common share: | |||||||||||||
Basic | $ | (0.79 | ) | $ | (1.05 | ) | |||||||
Diluted | $ | (0.79 | ) | $ | (1.05 | ) | |||||||
These pro forma results are based on estimates and assumptions that the Company believes are reasonable. | |||||||||||||
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | ' | ||||||||||||||||||||||||||||||||
Note 5. Goodwill and Intangible Assets | |||||||||||||||||||||||||||||||||
Goodwill relates to the excess of consideration transferred over the fair value of net assets resulting from an acquisition. Our goodwill is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the asset is more likely than not impaired. Our annual goodwill impairment test is performed in the fourth quarter, with a testing date of October 1. | |||||||||||||||||||||||||||||||||
As of December 31, 2013, the Company has recorded goodwill of $935.6 million. Effective in the second quarter of 2013, the Company changed its operating segments due to a change in its underlying organizational model designed to support the business following the Acquisition (see Note 11 — Segment Information). The Company did not operate under the realigned operating segment structure prior to the second quarter of 2013. This change in segments also resulted in a change in our reporting units resulting in a reassignment of goodwill amongst some of the Company’s reporting units. Prior period segment information has been retrospectively adjusted to reflect this reassignment. For purposes of goodwill and impairment testing, the Company has determined that it has three reporting units based on the organizational structure, the financial information that is provided to and reviewed by segment management and aggregation criteria applicable to component business that are economically similar. For the CPE operating segment, the reporting unit is the same as the operating segment. The Network & Cloud operating segment is comprised of two reporting units, which are Network Infrastructure and Cloud Services. | |||||||||||||||||||||||||||||||||
For goodwill, the Company performs a quantitative two-step impairment test. In the first step, the Company compares the fair value of each reporting unit to its carrying amount. The Company determines the fair value of each reporting unit using a weighting of fair values derived from an income approach using discounted cash flows and a market approach. Under the income approach, the Company calculates the fair value of a reporting unit based on the present value of estimated future cash flows. The discounted cash flow analysis requires us to make various judgmental assumptions, including assumptions about future cash flows, growth rates and weighted average cost of capital (discount rate). The assumptions about future cash flows and growth rates are based on the current and long-term business plans of each reporting unit. Discount rate assumptions are based on an assessment of the risk inherent in the future cash flows of the respective reporting units. Under the market approach, the Company estimates the fair value based upon Market multiples of revenue and earnings derived from publicly traded companies with similar operating and investment characteristics as the reporting unit. The weighting of the fair value derived from the market approach ranges from 0% to 50% depending on the level of comparability of these publicly-traded companies to the reporting unit. When market comparables are not meaningful or not available, the Company may estimate the fair value of a reporting unit using only the income approach. The Company considers the relative strengths and weaknesses inherent in the valuation methodologies utilized in each approach and consults with a third party valuation specialist to assist in determining the appropriate weighting. | |||||||||||||||||||||||||||||||||
In order to assess the reasonableness of the calculated fair values of our reporting units, the Company also compares the sum of the reporting units’ fair values to its market capitalization and calculates an implied control premium (the excess of the sum of the reporting units’ fair values over the market capitalization). The Company evaluates the control premium by comparing it to the fair value estimates of the reporting unit. If the implied control premium is not reasonable in light of the analysis, the Company will reevaluate the fair value estimates of the reporting unit by adjusting the discount rates and/or other assumptions. If the fair value of the reporting unit exceeds the carrying amount of the net assets assigned to that unit, goodwill is not impaired, and no further testing is required. If the fair value of the reporting unit is less than the carrying amount, we must perform the second step of the impairment test to measure the amount of impairment loss, if any. In the second step, the reporting unit’s fair value is assigned to all of the assets and liabilities of the reporting unit, including any unrecognized intangible assets, in a hypothetical analysis that calculates the implied fair value of goodwill in the same manner as if the reporting unit was being acquired in a business combination. If the implied fair value of the reporting unit’s goodwill is less than the carrying amount, the difference is recorded as an impairment loss. | |||||||||||||||||||||||||||||||||
The valuation methodologies described above have been consistently applied for all years presented below. See Part II, Item 7 Critical Accounting Policies for further information regarding the Company’s goodwill impairment testing. | |||||||||||||||||||||||||||||||||
There was no impairment of goodwill resulting from our annual impairment testing in 2013 and 2012. In 2011, a goodwill-impairment charge of $41.2 million before tax ($33.9 million after tax) was recorded for the former MCS reporting unit (now included as part of the Cloud Services reporting unit.) The Company performed a sensitivity analysis for goodwill impairment with respect to each of our respective reporting units and determined that neither a hypothetical 10% decline in the fair value, nor a 100 basis point increase in the discount rate, nor a 100 basis point decrease in the terminal growth rate of each of reporting units as of October 1, 2013 would result in an impairment of goodwill for any reporting unit. | |||||||||||||||||||||||||||||||||
During 2013, the Company recorded additional goodwill of $744.6 million related to the Acquisition. The Company has assigned the assets and liabilities acquired to each of its identified reporting units. | |||||||||||||||||||||||||||||||||
The changes in the carrying amount of goodwill for the year ended December 31, 2013 are as follows (in thousands): | |||||||||||||||||||||||||||||||||
CPE | Network | Cloud | Total | ||||||||||||||||||||||||||||||
Infrastructure | Services | ||||||||||||||||||||||||||||||||
Goodwill | $ | 31,850 | $ | 419,745 | $ | 121,603 | $ | 573,198 | |||||||||||||||||||||||||
Accumulated impairment losses | — | (257,053 | ) | (121,603 | ) | (378,656 | ) | ||||||||||||||||||||||||||
Balance as of December 31, 2011 (1) | 31,850 | 162,692 | — | 194,542 | |||||||||||||||||||||||||||||
Adjustment to net deferred taxes — C-COR | — | (1,188 | ) | — | (1,188 | ) | |||||||||||||||||||||||||||
Adjustment to net deferred taxes — BigBand | — | 761 | — | 761 | |||||||||||||||||||||||||||||
Goodwill | 31,850 | 419,318 | 121,603 | 572,771 | |||||||||||||||||||||||||||||
Accumulated impairment losses | — | (257,053 | ) | (121,603 | ) | (378,656 | ) | ||||||||||||||||||||||||||
Balance as of December 31, 2012 (1) | 31,850 | 162,265 | — | 194,115 | |||||||||||||||||||||||||||||
Goodwill acquired | 653,191 | 80,524 | 10,863 | 744,578 | |||||||||||||||||||||||||||||
Adjustment to net deferred taxes — C-COR | — | (380 | ) | — | (380 | ) | |||||||||||||||||||||||||||
Adjustment to net deferred taxes — BigBand | — | (2,734 | ) | — | (2,734 | ) | |||||||||||||||||||||||||||
Goodwill | 685,041 | 496,728 | 132,466 | 1,314,235 | |||||||||||||||||||||||||||||
Accumulated impairment losses | — | (257,053 | ) | (121,603 | ) | (378,656 | ) | ||||||||||||||||||||||||||
Balance as of December 31, 2013 | $ | 685,041 | $ | 239,675 | $ | 10,863 | $ | 935,579 | |||||||||||||||||||||||||
-1 | Reflects retrospective reassignment of goodwill due to reorganization of segments and reporting unit structure. | ||||||||||||||||||||||||||||||||
Intangibles | |||||||||||||||||||||||||||||||||
The Company makes judgments about the recoverability of purchased intangible assets with finite lives whenever events or changes in circumstances indicate that impairment may exist. Examples of such circumstances include, but are not limited to, operating or cash flow losses from the use of such assets or changes in our intended uses of such assets. Recoverability of purchased intangible assets with finite lives is measured by comparing the carrying amount of the asset to the future undiscounted cash flows the asset is expected to generate. In determining future undiscounted cash flows, we have made a “policy decision” to use pre-tax cash flows in our evaluation, which is consistently applied. To test for recovery, we group assets (an “asset group”) in a manner that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. | |||||||||||||||||||||||||||||||||
The Company reviews indefinite-lived assets for impairment annually or whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Recoverability of indefinite-lived intangible assets is measured by comparing the carrying amount of the asset to the future discounted cash flows the asset is expected to generate. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying amount and the fair value of the indefinite-lived intangible asset. As of December 31, 2013, the carrying amount of in-process research and development was $71.1 million. Completion of the associated research and development efforts would cause the indefinite-lived in-process research and development asset to become a finite-lived asset. As such, prior to commencing amortization the assets will be tested for impairment. Because indefinite-lived intangible assets are initially recognized at fair value, any decrease in the fair value of the intangible asset will result in an impairment charge. The company uses discounted cash flows in the determination of the fair value of its indefinite-lived intangible assets. As such, a decrease in cash flows for the projects, as well as, an increase in interest rate changes affecting the discount rate used in the test without any offsetting increase in cash flows, could cause the discounted cash flows to decrease, resulting in an impairment charge. | |||||||||||||||||||||||||||||||||
In 2013, the Company recognized acquired in-process research and development assets of $83.1 million associated with the Acquisition, which initially is recognized at fair value and classified as indefinite-lived assets until the successful completion or abandonment of the associated research and development efforts. Accordingly, during the development period after the acquisition date, this asset was not amortized as a charge to earnings; instead these assets were subject to periodic impairment testing. During 2013, acquired in-process research and development projects of $12 million were successfully completed. The Company’s impairment testing of these projects determined no impairment existed with regard to the assets. The asset was then considered a finite-lived intangible asset and reclassified as part of developed technology and amortization of the asset commenced. | |||||||||||||||||||||||||||||||||
In 2011, the Company recognized acquired in-process research and development assets of $7.8 million associated with the BigBand acquisition which was initially recognized at fair value and classified as indefinite-lived assets until the successful completion or abandonment of the associated research and development efforts. Accordingly, during the development period after the acquisition date, this asset was not amortized as a charge to earnings; instead these assets were subject to periodic impairment testing. In 2012, upon successful completion of the development process for the acquired in-process research and development projects, the Company determined no impairment existed with regard to the asset. The asset was then considered a finite-lived intangible asset and reclassified as part of developed technology and amortization of the asset commenced. | |||||||||||||||||||||||||||||||||
Assumptions and estimates about future values and remaining useful lives of our purchased intangible assets are complex and subjective. They can be affected by a variety of factors, including external factors such as industry and economic trends and internal factors such as changes in our business strategy and our internal forecasts. | |||||||||||||||||||||||||||||||||
There was no impairment charges related to finite lived purchased intangible assets during 2013 and 2012, as no indicators of impairment existed. In the fourth quarter of 2011, an impairment loss of $47.4 million before tax ($29.1 million after tax) related to customer relationships in the former MCS reporting unit (now included as part of the Cloud Services reporting unit) was recorded. Our ongoing consideration of all the factors described previously could result in additional impairment charges in the future, which could adversely affect our net income. | |||||||||||||||||||||||||||||||||
The Company’s intangible assets have an amortization period of six months to ten years. The gross carrying amount and accumulated amortization of the Company’s intangible assets as of December 31, 2013 and December 31, 2012 are as follows (in thousands): | |||||||||||||||||||||||||||||||||
December 31, 2013 | December 31, 2012 | ||||||||||||||||||||||||||||||||
Gross | Accumulated | Net | Weighted | Gross | Accumulated | Net | Weighted | ||||||||||||||||||||||||||
Amount | Amortization | Book | Average | Amount | Amortization | Book | Average | ||||||||||||||||||||||||||
Value | Remaining | Value | Remaining | ||||||||||||||||||||||||||||||
Life | Life | ||||||||||||||||||||||||||||||||
(Years) | (Years) | ||||||||||||||||||||||||||||||||
Customer relationships | $ | 903,409 | $ | 266,323 | $ | 637,086 | 7 | $ | 250,009 | $ | 190,285 | $ | 59,724 | 4 | |||||||||||||||||||
Developed technology, patents & licenses | 563,326 | 120,679 | 442,647 | 5 | 77,769 | 42,964 | 34,805 | 4.4 | |||||||||||||||||||||||||
Trademarks/trade names | 20,900 | 8,549 | 12,351 | 1.5 | 257 | 257 | — | — | |||||||||||||||||||||||||
Order backlog | 44,600 | 31,592 | 13,008 | 0.3 | 3,000 | 3,000 | — | — | |||||||||||||||||||||||||
Non-compete agreements | — | — | — | — | 3,162 | 3,162 | — | — | |||||||||||||||||||||||||
In-process R&D | 71,100 | — | 71,100 | — | — | — | — | — | |||||||||||||||||||||||||
Total | $ | 1,603,335 | $ | 427,143 | $ | 1,176,192 | $ | 334,197 | $ | 239,668 | $ | 94,529 | |||||||||||||||||||||
Amortization expense recorded on the intangible assets listed in the above table for the years ended December 31, 2013, 2012 and 2011 was $193.6 million, $30.3 million, and $33.6 million, respectively. Amortization expense is reported in the consolidated statements of operations within operating expenses under the caption “Amortization of intangible assets.” The estimated total amortization expense for finite-lived intangibles for each of the next five fiscal years is as follows (in thousands): | |||||||||||||||||||||||||||||||||
2014 | $ | 224,363 | |||||||||||||||||||||||||||||||
2015 | 203,979 | ||||||||||||||||||||||||||||||||
2016 | 173,251 | ||||||||||||||||||||||||||||||||
2017 | 156,316 | ||||||||||||||||||||||||||||||||
2018 | 117,362 | ||||||||||||||||||||||||||||||||
Thereafter | 229,821 | ||||||||||||||||||||||||||||||||
Amounts reflected in the above table exclude $71.1 million of amortization that would be incurred upon successful completion of in-process research and development projects. |
Investments
Investments | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Investments | ' | ||||||||
Note 7. Investments | |||||||||
ARRIS’ investments consisted of the following (in thousands): | |||||||||
As of December 31, | As of December 31, | ||||||||
2013 | 2012 | ||||||||
Current Assets: | |||||||||
Available-for-sale securities | $ | 67,360 | $ | 398,414 | |||||
Noncurrent Assets: | |||||||||
Available-for-sale securities | 7,004 | 59,549 | |||||||
Equity method investments | 23,803 | — | |||||||
Cost method investments | 15,250 | 6,000 | |||||||
Other investments | 25,119 | 20,615 | |||||||
Total classified as non-current assets | 71,176 | 86,164 | |||||||
Total | $ | 138,536 | $ | 484,578 | |||||
Available-for-sale securities — ARRIS’ investments in debt and marketable equity securities are categorized as available-for-sale and are carried at fair value. The Company currently does not hold any held-to-maturity securities. Realized gains and losses on available-for-sale securities are included in net income. Unrealized gains and losses on available-for-sale securities are included in our Consolidated Balance Sheet as a component of accumulated other comprehensive income (loss). The total gains included in the accumulated other comprehensive income related to available-for-sale securities were $0.3 million and $0.2 million, net of tax, as of December 31, 2013 and December 31, 2012, respectively. Realized and unrealized gains and losses in total and by individual investment as of December 31, 2013 and 2012 were not material. The amortized cost basis of the Company’s available-for-sale securities approximates fair value. | |||||||||
The contractual maturities of the Company’s available-for-sale securities as of December 31, 2013 are shown below. Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties. The amortized cost basis of the Company’s investments approximates fair value (in thousands): | |||||||||
December 31, 2013 | |||||||||
Within one year | $ | 67,360 | |||||||
After one year through five years | 3,604 | ||||||||
After five years through ten years | — | ||||||||
After ten years | 3,400 | ||||||||
Total | $ | 74,364 | |||||||
Equity method investments — In connection with the Acquisition, ARRIS acquired certain investments in limited liability companies, and partnerships that are accounted for using the equity method as the Company has significant influence over operating and financial policies of the investee companies. These investments are recorded at $23.8 million and $0 as of December 31, 2013 and 2012, respectively. The carrying amount of equity method investments is increased for the Company’s proportionate share of net earnings or losses and any basis differences of the investees, or dividend received. The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amount of such investments may not be recoverable. An equity method investment is written down to fair value if there is evidence of a loss in value which is other than temporary. | |||||||||
The following table summarizes the ownership structure and ownership percentage of the non-consolidated investments as of December 31, 2013, which are accounted for using the equity method. | |||||||||
Name of Investee | Ownership Structure | % Ownership | |||||||
MPEG LA | Limited Liability Company | 8.40% | |||||||
Music Choice | Limited Liability Partnership | 18.20% | |||||||
Conditional Access Licensing | Limited Liability Company | 49.00% | |||||||
Combined Conditional Access Development | Limited Liability Company | 50.00% | |||||||
Cost method investments — ARRIS holds cost method investments in private companies. These investments are recorded at $15.3 million and $6.0 million as of December 31, 2013 and 2012, respectively. Due to the fact the investments are in private companies, the Company is exempt from estimating the fair value on an interim and annual basis. It is impractical to estimate the fair value since the quoted market price is not available. Furthermore, the cost of obtaining an independent valuation appears excessive considering the materiality of the investments to the Company. However, ARRIS is required to estimate the fair value if there has been an identifiable event or change in circumstance that may have a significant adverse effect on the fair value of the investment. | |||||||||
Other investments — At December 31, 2013 and December 31, 2012, ARRIS held $25.1 million and $20.6 million, respectively, in certain life insurance contracts. This investment is classified as non-current investments in the Consolidated Balance Sheet. The Company determined the fair value to be the amount that could be realized under the insurance contract as of each reporting period. The changes in the fair value of these contracts are included in net income. | |||||||||
Other-Than-Temporary Investment Impairments — ARRIS concluded that no other-than-temporary impairment losses existed as of December 31, 2013. In making this determination, ARRIS evaluates its investments for any other-than-temporary impairment on a quarterly basis considering all available evidence, including changes in general market conditions, specific industry and individual entity data, the financial condition and the near-term prospects of the entity issuing the security, and the Company’s ability and intent to hold the investment until recovery. For the year ended December 31, 2012, ARRIS recognized other-than-temporary impairment charges of $1.5 million in the statements of consolidated income. | |||||||||
Classification of securities as current or non-current is dependent upon management’s intended holding period, the security’s maturity date and liquidity consideration based on market conditions. If management intends to hold the securities for longer than one year as of the balance sheet date, they are classified as non-current. | |||||||||
Comcast and Affiliates | ' | ||||||||
Investments | ' | ||||||||
Note 6. Comcast Investment in ARRIS | |||||||||
In connection with the Acquisition, Comcast Corporation (“Comcast”) was given an opportunity to invest in ARRIS. On January 11, 2013, ARRIS entered into a separate agreement accounted for as a contingent equity forward with a subsidiary of Comcast providing for the purchase of approximately 10.6 million shares of the Company’s common stock for $150 million, or $14.11 per share. The transaction with Comcast was contingent on the closing of the Acquisition. | |||||||||
As provided for in the definitive agreement for the Acquisition, the shares issued to Comcast reduced, on a share-for-share basis, the number of shares of ARRIS stock issued to Google and simultaneously increased the cash consideration paid to Google by $150.0 million. The Comcast transaction was consummated on the same day as the Acquisition. Because the amount of shares issued to Comcast was not fixed when the agreement was executed, but prior thereto, the agreement with Comcast is classified as a liability in accordance with the accounting guidance for derivatives and hedging. | |||||||||
At the time the agreement was executed with Comcast on January 11, 2013, the Company’s stock price was $15.35 per share. However, consistent with earlier negotiations, Comcast agreed to invest in ARRIS at the same price as Google, which was $14.11 per share. The revenue recognition accounting guidance requires that the Company recognize the intrinsic value of the benefit received by Comcast — the entitlement to invest at a price below the market price ($14.11 per share as opposed to the then-market price of $15.35 per share) on the date the agreement with Comcast was executed — as a reduction of revenue. As such, revenue and gross margin were reduced by approximately $13.2 million during the first quarter 2013. | |||||||||
Because the obligation under the agreement was not indexed to the Company’s stock and does not meet the definition of a derivative, the Company elected to subsequently account for the obligation at fair value by electing the fair value option. That is, the Company has marked-to-market the obligation at each reporting period. This resulted in a mark-to-market income adjustment of $13.2 million expense in the first half of 2013. This mark-to-market adjustment is recorded in Other expense (income), net in the Consolidated Statements of Operations. | |||||||||
Upon settlement of the contract in the second quarter of 2013, the Company recorded the issuance of its common stock to Comcast, which is included in stockholders’ equity on the Consolidated Balance Sheets. |
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||
Note 8. Fair Value Measurements | |||||||||||||||||
Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative guidance establishes a fair value hierarchy that is based on the extent and level of judgment used to estimate the fair value of assets and liabilities. In order to increase consistency and comparability in fair value measurements, the FASB has established a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels. An asset or liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the measurement of its fair value. The three levels of input defined by the authoritative guidance are as follows: | |||||||||||||||||
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. | |||||||||||||||||
Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. | |||||||||||||||||
Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. | |||||||||||||||||
The following table presents the Company’s investment assets (excluding equity and cost method investments) measured at fair value on a recurring basis as of December 31, 2013 (in thousands): | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Current Assets: | |||||||||||||||||
Certificates of deposit | $ | — | $ | 3,814 | $ | — | $ | 3,814 | |||||||||
Commercial paper | — | 2,994 | — | 2,994 | |||||||||||||
Corporate bonds | — | 30,987 | — | 30,987 | |||||||||||||
Short-term bond fund | 29,565 | — | — | 29,565 | |||||||||||||
29,565 | 37,795 | — | 67,360 | ||||||||||||||
Noncurrent Assets: | |||||||||||||||||
Cash surrender value of company owned life insurance | — | 25,119 | — | 25,119 | |||||||||||||
Corporate bonds | — | 3,604 | — | 3,604 | |||||||||||||
Corporate obligations | — | 18 | — | 18 | |||||||||||||
Money markets | 212 | — | — | 212 | |||||||||||||
Mutual funds | 184 | — | — | 184 | |||||||||||||
Other investments | — | 2,986 | — | 2,986 | |||||||||||||
396 | 31,727 | — | 32,123 | ||||||||||||||
Total assets | $ | 29,961 | $ | 69,522 | $ | — | $ | 99,483 | |||||||||
The following table presents the Company’s investment assets (excluding equity and lost method investments) measured at fair value on a recurring basis as of December 31, 2012 (in thousands): | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Current Assets: | |||||||||||||||||
Certificates of deposit | $ | — | $ | 5,416 | $ | — | $ | 5,416 | |||||||||
Commercial paper | — | 18,964 | — | 18,964 | |||||||||||||
Corporate bonds | — | 209,093 | — | 209,093 | |||||||||||||
Municipal bonds | 164,941 | — | — | 164,941 | |||||||||||||
164,941 | 233,473 | — | 398,414 | ||||||||||||||
Noncurrent Assets: | |||||||||||||||||
Cash surrender value of company owned life insurance | — | 20,615 | — | 20,615 | |||||||||||||
Corporate bonds | — | 53,914 | — | 53,914 | |||||||||||||
Corporate obligations | — | 15 | — | 15 | |||||||||||||
Money markets | 226 | — | — | 226 | |||||||||||||
Mutual funds | 179 | — | — | 179 | |||||||||||||
Other investments | — | 5,215 | — | 5,215 | |||||||||||||
405 | 79,759 | — | 80,164 | ||||||||||||||
Total assets | $ | 165,346 | $ | 313,232 | $— | $ | 478,578 | ||||||||||
In addition to the amounts disclosed in the above table, the fair value of the Company’s Israeli severance pay assets, which were almost fully comprised of Level 2 assets, was $3.6 million and $3.8 million as of December 31, 2013 and December 31, 2012, respectively. | |||||||||||||||||
All of the Company’s short-term and long-term investments at December 31, 2013 are classified within Level 1 or Level 2 of the fair value hierarchy as they are valued using quoted market prices, market prices for similar securities, or alternative pricing sources with reasonable levels of price transparency. The types of instruments valued based on quoted market prices in active markets include the Company’s investment in money market funds, mutual funds and municipal bonds. Such instruments are generally classified within Level 1 of the fair value hierarchy. The types of instruments valued based on other observable inputs include the Company’s cash surrender value of company owned life insurance, corporate obligations and bonds, commercial paper and certificates of deposit. Such instruments are classified within Level 2 of the fair value hierarchy. | |||||||||||||||||
In determining the value of certain Level 1 and Level 2 instruments, ARRIS has performed steps to verify the accuracy of the valuations provided by ARRIS’ brokerage firms. ARRIS has reviewed the most recent Statement on Standards for Attestation Engagements No. 16 (SSAE report) for each brokerage firm holding investments for ARRIS. The SSAE report for each did not identify any control weakness in the brokerages’ policies and procedures, in particular as they relate to the pricing and valuation of financial instruments. ARRIS has determined the third party pricing source used by each firm to be a reliable recognized source of financial valuations. In addition ARRIS has performed further testing on a large sample of its corporate obligations and commercial paper investments. These tests did not show any material discrepancies in the valuations provided by the brokerage firms. It is the Company’s intent to continue to verify valuations on a quarterly basis, using one or more reliable recognized third party pricing providers. See Note 7 and Note 9 for further information on the Company’s investments and derivative instruments. | |||||||||||||||||
In addition to the financial instruments included in the above table, certain nonfinancial assets and liabilities are to be measured at fair value on a nonrecurring basis in accordance with applicable authoritative guidance. This includes items such as nonfinancial assets and liabilities initially measured at fair value in a business combination (but not measured at fair value in subsequent periods) and nonfinancial long-lived asset groups measured at fair value for an impairment assessment. In general, nonfinancial assets including goodwill, other intangible assets and property and equipment are measured at fair value when there is an indication of impairment and are recorded at fair value only when any impairment is recognized. As of December 31, 2013, the Company had not recorded any impairment related to such assets and had no other material nonfinancial assets or liabilities requiring adjustments or write-downs to their current fair value. | |||||||||||||||||
The face value of debt as of December 31, 2013 approximated the fair value. |
Derivative_Instruments_and_Hed
Derivative Instruments and Hedging Activities | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Derivative Instruments and Hedging Activities | ' | ||||||||||||||||
Note 9. Derivative Instruments and Hedging Activities | |||||||||||||||||
Risk Management Policies — ARRIS is exposed to financial market risk, primarily related to foreign currency and interest rates. These exposures are actively monitored by management. To manage the volatility relating to certain of these exposures, the Company enters into a variety of derivative financial instruments. Management’s objective is to reduce, where it is deemed appropriate to do so, fluctuations in earnings and cash flows associated with changes in foreign currency and interest rates. ARRIS’ policies and practices are to use derivative financial instruments only to the extent necessary to manage exposures. ARRIS does not hold or issue derivative financial instruments for trading or speculative purposes. | |||||||||||||||||
Accounting Policy for Derivative Instruments — The derivatives and hedging accounting standard provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments. | |||||||||||||||||
As required by derivatives and hedging guidance, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives also may be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. | |||||||||||||||||
In accordance with the FASB’s fair value measurement guidance, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. | |||||||||||||||||
ARRIS recognizes all derivative financial instruments as assets or liabilities in the Consolidated Balance Sheets at fair value. In April 2013, ARRIS entered into senior secured credit facilities having variable interest rates with Bank of America, N.A. and various other institutions, which are comprised of (i) a “Term Loan A Facility” of $1.1 billion, (ii) a “Term Loan B Facility” of $825 million and (iii) a “Revolving Credit Facility” of $250 million. In July 2013, ARRIS entered into six $100.0 million interest rate swap arrangements, which effectively converted $600.0 million of the Company’s variable-rate debt based on one-month LIBOR to an aggregate fixed rate of approximately 3.65%. This fixed rate could vary up by 25 basis points or down by 50 basis points based on future changes to the Company’s net leverage ratio. Each of these swaps matures on December 29, 2017. ARRIS has designated these swaps as cash flow hedges, and the objective of these hedges is to manage the variability of cash flows in the interest payments related to the portion of the variable-rate debt designated as being hedged. | |||||||||||||||||
The Company’s foreign currency derivative financial instruments are not designated as hedges, and accordingly, all changes in the fair value of the instruments are recognized as a loss (gain) on foreign currency in the Consolidated Statements of Operations. | |||||||||||||||||
Cash Flow Hedges of Interest Rate Risk | |||||||||||||||||
The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. | |||||||||||||||||
The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in Accumulated Other Comprehensive Income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During 2013, such derivatives were used to hedge the variable cash flows associated with existing lines of credit. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. During the year ended December 31, 2013, the Company did not have expenses related to hedge ineffectiveness in earnings. | |||||||||||||||||
Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. Over the next 12 months, the Company estimates that an additional $7.0 million may be reclassified as an increase to interest expense. | |||||||||||||||||
As of December 31, 2013, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk: | |||||||||||||||||
Interest Rate Derivative | Number of Instruments | Notional | |||||||||||||||
Interest Rate Swaps | 6 | $ | 600,000,000 | ||||||||||||||
The table below presents the pre-tax impact of the Company’s derivative financial instruments had on the Accumulated Other Comprehensive Income and Statement of Operations for the year ended December 31, 2013 (in thousands): | |||||||||||||||||
Gain or (Loss) | Location of Gain or | Gain or (Loss) Reclassified | Gain or (Loss) Recognized | ||||||||||||||
Recognized in OCI on | (Loss) Reclassified from | from Accumulated OCI into | in Income on Derivative | ||||||||||||||
Derivative (Effective | Accumulated OCI into | Income (Effective Portion) | (Ineffective Portion and | ||||||||||||||
Portion) | Income (Effective | Amount Excluded from | |||||||||||||||
Portion) | Effectiveness Testing) | ||||||||||||||||
Interest rate derivatives | $ | (7,140 | ) | Interest expense | $ | (3,132 | ) | $ | — | ||||||||
Credit-risk-related Contingent Features | |||||||||||||||||
ARRIS has agreements with each of its derivative counterparties that contain a provision where the Company could be declared in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company’s default on the indebtedness. As of December 31, 2013, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $4.1 million. As of December 31, 2013, the Company has not posted any collateral related to these agreements nor has it required any of its counterparties to post collateral related to these or any other agreements. | |||||||||||||||||
Non-designated Hedges | |||||||||||||||||
Additionally, the Company does not currently use derivatives for trading or speculative purposes and currently does not have any derivatives that are not designated as hedges. | |||||||||||||||||
Balance Sheet Recognition and Fair Value Measurements — The following table indicates the location on the Consolidated Balance Sheets in which the Company’s derivative assets and liabilities have been recognized, the fair value hierarchy level applicable to each derivative type and the related fair values of those derivatives (in thousands). | |||||||||||||||||
ARRIS has master netting arrangements with substantially all of ARRIS’ counterparties giving ARRIS the right of offset for ARRIS’ derivative positions. However, ARRIS has not elected to offset the fair value positions of the derivative contracts recorded on ARRIS’ Consolidated Balance Sheets. Although the derivative contracts that the Company has entered into are subject to master netting arrangements, there are no possible offsets as only a single derivative contract has been entered into with each of ARRIS’ counterparties. | |||||||||||||||||
The fair values of ARRIS’ derivative instruments recorded in the Consolidated Balance Sheet as of December 31, 2013 and 2012 were as follows (in thousands): | |||||||||||||||||
As of December 31, 2013 | As of December 31, 2012 | ||||||||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||
Foreign exchange contracts — asset derivatives | Other current assets | $ | — | Other current assets | $ | 590 | |||||||||||
Foreign exchange contracts — liability derivatives | Other accrued liabilities | $ | — | Other accrued liabilities | $ | 513 | |||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||
Interest rate derivatives — asset derivatives | Other assets | $ | 3,011 | Other assets | $ | — | |||||||||||
Interest rate derivatives — liability derivatives | Other accrued liabilities | $ | 7,018 | Other accrued liabilities | $ | — | |||||||||||
The assets and liabilities for the interest rate derivatives were considered as Level 2 under the fair value hierarchy. The assets and liabilities for the foreign exchange contracts were considered as Level 2 under the fair value hierarchy. | |||||||||||||||||
The change in the fair values of ARRIS’ derivative instruments recorded in the Consolidated Statements of Operations during the years ended December 31, 2013, 2012, and 2011 were as follows (in thousands): | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
Statement of Operations Location | 2013 | 2012 | 2011 | ||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||
Foreign exchange contracts | Gain on foreign currency | $ | 428 | $ | 268 | $ | 809 | ||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||
Interest rates derivatives | Interest expense | $ | 3,132 | $ | — | $ | — | ||||||||||
ARRIS performs additional testing, on a quarterly basis, of the valuations provided by the financial institutions who are counter-parties to the derivative positions. This testing, to date, has not shown any material or significant differences to the valuations reported by the counter-party financial institutions. |
Guarantees
Guarantees | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Guarantees | ' | ||||||||
Note 10. Guarantees | |||||||||
Warranty | |||||||||
ARRIS provides warranties of various lengths to customers based on the specific product and the terms of individual agreements. The Company provides for the estimated cost of product warranties based on historical trends, the embedded base of product in the field, failure rates, and repair costs at the time revenue is recognized. Expenses related to product defects and unusual product warranty problems are recorded in the period that the problem is identified. While the Company engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its suppliers, the estimated warranty obligation could be affected by changes in ongoing product failure rates, material usage and service delivery costs incurred in correcting a product failure, as well as specific product failures outside of ARRIS’ baseline experience. If actual product failure rates, material usage or service delivery costs differ from estimates, revisions (which could be material) would be recorded against the warranty liability. | |||||||||
The Company offers extended warranties and support service agreements on certain products. Revenue from these agreements is deferred at the time of the sale and recognized on a straight-line basis over the contract period. Costs of services performed under these types of contracts are charged to expense as incurred, which approximates the timing of the revenue stream. | |||||||||
The Company initially recorded $65.5 million of warranty obligations as a result of the Acquisition, which included $10.2 million of known product defects. During the third and fourth quarter of 2013, the Company recorded an increase of $19.4 million and a decrease of $2.1 million, respectively, in the warranty accrual due to a change in estimate of the initial accrued warranty recorded at the Acquisition date as a result of additional information that arose subsequent to the Acquisition that existed as of the Acquisition date. | |||||||||
Information regarding the changes in ARRIS’ aggregate product warranty liabilities for the years ending December 31, 2013 and 2012 were as follows (in thousands): | |||||||||
2013 | 2012 | ||||||||
January 1, | $ | 6,069 | $ | 6,387 | |||||
Motorola Home warranty reserve at acquisition, | 82,804 | — | |||||||
Accruals related to warranties (including changes in assumptions) | 20,911 | 3,125 | |||||||
Settlements made (in cash or in kind) | (28,284 | ) | (3,443 | ) | |||||
Balance at December 31, | $ | 81,500 | $ | 6,069 | |||||
Segment_Information
Segment Information | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Segment Information | ' | ||||||||||||||||
Note 11. Segment Information | |||||||||||||||||
The “management approach” has been used to present the following segment information. This approach is based upon the way the management of the Company organizes segments within an enterprise for making operating decisions and assessing performance. Financial information is reported on the basis that it is used internally by the chief operating decision maker (“CODM”) for evaluating segment performance and deciding how to allocate resources to segments. The Company’s chief executive officer has been identified as the CODM. | |||||||||||||||||
Prior to the second quarter of 2013, the CODM managed the operating results of the Company as three segments, including Broadband Communications Systems (“BCS”), Access, Transport and Supplies (“ATS”) and Media & Communications Systems (“MCS”). In connection with the Acquisition, the Company changed its operating segments to align with how the CODM expected to evaluate financial information used to allocate resources and assess performance of the Company. As a result, the segment information presented in these financial statements has been conformed to present segments on this revised basis for all prior periods. Under the new organizational structure, the CODM manages the Company under two segments: | |||||||||||||||||
• | Customer Premises Equipment (“CPE”) — The CPE segment’s product solutions include set-top boxes, gateways, and Subscriber Premises equipment that enable service providers to offer Voice, Video and high-speed data services to residential and business subscribers. | ||||||||||||||||
• | Network & Cloud (“N&C”) — The N&C segment’s product lines cover all components required by facility-based Service Providers to construct a state-of-the-art residential and metro distribution network. For Cable providers this includes Hybrid Fiber Coax (“HFC”) equipment, edge routers, metro WiFi, video management, storage, and distribution equipment. For Telco providers this includes fiber-based and copper-based broadband transmission equipment. In addition, the portfolio includes an advanced video headend management system for both legacy MPEG/DVB systems as well as full IP Video systems. Finally, the portfolio also includes full support for advanced multi-screen video management, protection, monetization and delivery, and a suite of products for performance management, configuration, and surveillance. | ||||||||||||||||
These operating segments were determined based on the nature of the products and services offered. The measures that are used to assess the reportable segment’s operating performance are sales and direct contribution. A measure of assets is not applicable, as segment assets are not regularly reviewed by the CODM for evaluating performance or allocating resources. | |||||||||||||||||
In addition, in conjunction with changing operating segments, the Company has changed its measure of assessing segment’s operating performance from gross margin to direct contribution, which is defined as gross margin less direct operating expense. Corporate and other expenses, such as selling and home office G&A, not included in the measure of segment direct contribution are reported in “Other” and are reconciled to income (loss) before income taxes. As a result, the segment information presented in these financial statements has been conformed to present the Company’s segments on this revised basis for all prior periods presented. | |||||||||||||||||
The table below presents information about the Company’s reportable segments for the years ended December 31, 2013, 2012 and 2011 (in thousands): | |||||||||||||||||
Reportable Segments | |||||||||||||||||
Network & | CPE | Other | Consolidated | ||||||||||||||
Cloud | |||||||||||||||||
Year ended December 31, 2013, | |||||||||||||||||
Sales | $ | 1,174,757 | $ | 2,466,618 | $ | (20,473 | ) | $ | 3,620,902 | ||||||||
Direct Contribution | 258,336 | 482,519 | (482,184 | ) | 258,671 | ||||||||||||
Restructuring charges | 37,576 | 37,576 | |||||||||||||||
Acquisition, integration & other costs | 45,471 | 45,471 | |||||||||||||||
Amortization of intangible assets | 193,637 | 193,637 | |||||||||||||||
Operating loss | (18,013 | ) | |||||||||||||||
Other expense | 78,137 | ||||||||||||||||
Income (loss) before income taxes | $ | (96,150 | ) | ||||||||||||||
Reportable Segments | |||||||||||||||||
Network & | CPE | Other | Consolidated | ||||||||||||||
Cloud | |||||||||||||||||
Year ended December 31, 2012, | |||||||||||||||||
Sales | $ | 742,255 | $ | 611,408 | $ | — | $ | 1,353,663 | |||||||||
Direct Contribution | 228,798 | 66,788 | (165,053 | ) | 130,533 | ||||||||||||
Restructuring charges | 6,761 | 6,761 | |||||||||||||||
Acquisition, integration & other costs | 6,207 | 6,207 | |||||||||||||||
Amortization of intangible assets | 30,294 | 30,294 | |||||||||||||||
Operating income | 87,271 | ||||||||||||||||
Other expense | 12,975 | ||||||||||||||||
Income (loss) before income taxes | $ | 74,296 | |||||||||||||||
Reportable Segments | |||||||||||||||||
Network & | CPE | Other | Consolidated | ||||||||||||||
Cloud | |||||||||||||||||
Year ended December 31, 2011, | |||||||||||||||||
Sales | $ | 702,997 | $ | 382,424 | $ | 3,264 | $ | 1,088,685 | |||||||||
Direct Contribution | 244,540 | 12,973 | (142,274 | ) | 115,239 | ||||||||||||
Restructuring charges | 4,360 | 4,360 | |||||||||||||||
Acquisition, integration & other costs | 3,205 | 3,205 | |||||||||||||||
Impairment of goodwill and intangible assets | 88,633 | 88,633 | |||||||||||||||
Amortization of intangible assets | 33,649 | 33,649 | |||||||||||||||
Operating loss | (14,608 | ) | |||||||||||||||
Other expense | 13,903 | ||||||||||||||||
Income (loss) before income taxes | $ | (28,511 | ) | ||||||||||||||
The following table summarizes the Company’s net intangible assets and goodwill by reportable segment as of December 31, 2013 and 2012 (in thousands): | |||||||||||||||||
Network & | CPE | Total | |||||||||||||||
Cloud | |||||||||||||||||
December 31, 2013 | |||||||||||||||||
Goodwill | $ | 250,538 | $ | 685,041 | $ | 935,579 | |||||||||||
Intangible assets, net | 366,844 | 809,348 | 1,176,192 | ||||||||||||||
December 31, 2012 | |||||||||||||||||
Goodwill | $ | 162,265 | $ | 31,850 | $ | 194,115 | |||||||||||
Intangible assets, net | 94,529 | — | 94,529 | ||||||||||||||
The Company’s three largest customers (including their affiliates, as applicable) are Comcast, Time Warner Cable and Verizon. Over the past year, certain customers’ beneficial ownership may have changed as a result of mergers and acquisitions. Therefore the revenue for ARRIS’ customers for prior periods has been adjusted to include the affiliates under common control. The significant changes in the percentages of the total sales primarily result from the greater customer diversification as a result of the Acquisition. A summary of sales to these customers for 2013, 2012 and 2011 is set forth below (in thousands, except percentages): | |||||||||||||||||
Years ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Comcast and affiliates | $ | 674,964 | $ | 421,173 | $ | 286,139 | |||||||||||
% of sales | 18.6 | % | 31.1 | % | 26.4 | % | |||||||||||
Time Warner Cable and affiliates | $ | 359,484 | $ | 243,151 | $ | 180,740 | |||||||||||
% of sales | 9.9 | % | 18 | % | 16.7 | % | |||||||||||
Verizon | $ | 358,653 | $ | 5,219 | $ | 454 | |||||||||||
% of sales | 9.9 | % | 0.4 | % | — | % | |||||||||||
ARRIS sells its products primarily in the United States. The Company’s international revenue is generated from Asia Pacific, Canada, Europe and Latin America. Sales to international customers were approximately 32.1%, 24.6% and 31.3% of total sales for the years ended December 31, 2013, 2012 and 2011, respectively. International sales for the years ended December 31, 2013, 2012 and 2011 were as follows (in thousands): | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Americas, excluding U.S (1) | $ | 746,146 | $ | 202,887 | $ | 195,500 | |||||||||||
Asia Pacific | 153,674 | 65,554 | 59,194 | ||||||||||||||
EMEA | 263,910 | 65,162 | 85,824 | ||||||||||||||
Total international sales | $ | 1,163,730 | $ | 333,603 | $ | 340,518 | |||||||||||
-1 | Excludes U.S. sales of $2,457.2 million, $1,020.1 million and $748.2 million for the years ended December 31, 2013, 2012 and 2011, respectively. | ||||||||||||||||
The following table summarizes ARRIS’ international long-lived assets by geographic region as of December 31, 2013 and 2012 (in thousands): | |||||||||||||||||
As of December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Americas, excluding U.S. | $ | 7,467 | $ | 354 | |||||||||||||
Asia Pacific | 82,495 | 1,847 | |||||||||||||||
EMEA | 10,115 | 2,549 | |||||||||||||||
Total | $ | 100,077 | $ | 4,750 | |||||||||||||
-1 | Excludes U.S. long-lived assets of $296.1 million and $49.6 million for the years ended December 31, 2013 and 2012, respectively. |
Restructuring_Charges
Restructuring Charges | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Restructuring Charges | ' | ||||||||||||||||
Note 12. Restructuring Charges | |||||||||||||||||
The following table represents a summary of and changes to the restructuring accrual, which is primarily composed of accrued severance and other employee costs, contractual obligations that related to excess leased facilities and equipment and write off of property, plant and equipment (in thousands): | |||||||||||||||||
Employee | Contractual | Write-off of | Total | ||||||||||||||
severance & | obligations and | property, plant | |||||||||||||||
termination | other | and equipment | |||||||||||||||
benefits | |||||||||||||||||
Balance at December 31, 2012 | $ | — | $ | 1,163 | $ | — | $ | 1,163 | |||||||||
Balance acquired at Acquisition | — | 155 | — | 155 | |||||||||||||
Restructuring charges | 30,774 | 41 | 6,761 | 37,576 | |||||||||||||
Cash payments | (28,100 | ) | (686 | ) | — | (28,786 | ) | ||||||||||
Non-cash expense | — | — | (6,761 | ) | (6,761 | ) | |||||||||||
Balance at December 31, 2013 | $ | 2,674 | $ | 673 | $ | — | $ | 3,347 | |||||||||
Employee severance and termination benefits — In the second quarter of 2013, ARRIS completed its acquisition of Motorola Home. ARRIS initiated restructuring plans as a result of the Acquisition that focuses on the rationalization of personnel, facilities and systems across multiple segments in the ARRIS organization. | |||||||||||||||||
The total estimated cost of the restructuring plan was approximately $30.8 million and was recorded as severance expense during 2013. As of December 31, 2013, the total liability remaining for this restructuring plan was approximately $2.7 million. The remaining liability is expected to be paid by the end of third quarter 2014. | |||||||||||||||||
Contractual obligations — ARRIS has restructuring accruals representing contractual obligations that relate to excess leased facilities and equipment. | |||||||||||||||||
In the fourth quarter of 2007, ARRIS acquired remaining restructuring accruals of approximately $0.7 million from C-COR. In the fourth quarter of 2009, an adjustment of $1.5 million was made related to the sublease assumption for 2010-2014 given the real estate market conditions. As of December 31, 2013, the total liability remaining for this restructuring plan was approximately $0.4 million. Payments will be made over their remaining lease terms through 2014, unless terminated earlier. This restructuring plan was related to the Network & Cloud segment. | |||||||||||||||||
In the fourth quarter of 2011, the acquisition of BigBand Networks resulted in a restructuring charge of $3.4 million, of which $3.3 million was related to severance and termination benefits and $0.1 million was related to facilities. In 2012, ARRIS recorded an additional restructuring charge of $6.8 million, of which $5.6 million was related to severance and termination benefits and $1.2 million was related to facilities. As of December 30, 2013, the total liability remaining for this restructuring plan was approximately $0.3 million and is related to facilities. This remaining liability will be paid over the remaining lease terms through 2016, unless terminated earlier. This restructuring plan was related to the Network & Cloud segment. | |||||||||||||||||
Additionally, in the second quarter of 2013 as part of the Acquisition, ARRIS acquired remaining restructuring accruals of approximately $0.2 million from Motorola Home. This restructuring plan was completed in the fourth quarter of 2013. This restructuring plan was related to the Customer Premises Equipment segment. | |||||||||||||||||
Write-off of property, plant & equipment — As part of the restructuring plan initiated as a result of the Acquisition, during the third quarter of 2013 the Company recorded restructuring charges of $6.8 million related to the write-off of property, plant and equipment associated with rationalization of product lines and enterprise resource planning system integration activities. This restructuring plan was related to the Network & Cloud segment and Corporate. |
Inventories
Inventories | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Inventories | ' | ||||||||
Note 13. Inventories | |||||||||
Inventories are stated at the lower of average cost, approximating first-in, first-out, or market. The components of inventory are as follows, net of reserves (in thousands): | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Raw material | $ | 60,520 | $ | 24,798 | |||||
Work in process | 6,010 | 2,800 | |||||||
Finished goods | 263,599 | 106,250 | |||||||
Total inventories | $ | 330,129 | $ | 133,848 | |||||
Property_Plant_and_Equipment
Property, Plant and Equipment | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property, Plant and Equipment | ' | ||||||||
Note 14. Property, Plant and Equipment | |||||||||
Property, plant and equipment, at cost, consisted of the following (in thousands): | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Land | $ | 88,742 | $ | 2,562 | |||||
Buildings and leasehold improvements | 133,668 | 25,995 | |||||||
Machinery and equipment | 368,572 | 177,657 | |||||||
590,982 | 206,214 | ||||||||
Less: Accumulated depreciation | (194,830 | ) | (151,836 | ) | |||||
Total property, plant and equipment, net | $ | 396,152 | $ | 54,378 | |||||
LongTerm_Indebtedness
Long-Term Indebtedness | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Long-Term Indebtedness | ' | ||||||||||||||||||||
Note 15. Long-Term Indebtedness | |||||||||||||||||||||
Convertible Senior Notes | |||||||||||||||||||||
In 2006, ARRIS issued $276.0 million of 2% convertible senior notes due 2026 (the “Notes”). The notes may be converted only upon the occurrence of specified events and during specified periods, including (i) from October 15, 2013 to November 15, 2013 and (ii) during any calendar quarter in which the closing price of the Company’s common stock for 20 or more trading days in a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter exceeds 120% of the conversion price in effect on the last trading day of the last calendar quarter (which, based on the current conversion price, would be $19.31). The conversion rate for the Notes, subject to adjustment, is 62.1504 shares per $1,000 principal amount (which represents an initial conversion price of approximately $16.09 per share of the Company’s common stock). Upon conversion, the holder will receive up to the principal amount in cash and may receive, depending on the price of the Company’s common stock, an additional payment, in cash, the Company’s common stock or a combination thereof, at the option of the Company. Each component of the conversion consideration is based on a formula that includes the conversion rate and the market price of the Company’s common stock during a period following the date of the conversion. | |||||||||||||||||||||
As a result of the holding company reorganization undertaken in connection with the Motorola Home acquisition, holders of the senior notes had the right (i) to require ARRIS to repurchase the senior notes for 100% of the principal amount of the senior notes, plus accrued and unpaid interest to, but not including the repurchase date and (ii) to convert the senior notes for the consideration provided for in the indenture governing the senior notes. | |||||||||||||||||||||
In the second quarter of 2013, senior notes in the aggregate principal amount of $68 thousand were tendered in connection with this repurchase right, and $68 thousand of cash-on-hand was used to repurchase these notes. Also in the second quarter of 2013, eleven notes were submitted for conversion, and $11 thousand of cash-on-hand was used to satisfy ARRIS’ obligations on these notes. Following the repurchases and conversions, $232.0 million in aggregate principal amount of the senior notes remain outstanding. | |||||||||||||||||||||
In October 2013, ARRIS notified holders of the senior notes that it would redeem all outstanding notes (the “Redemption”) on November 15, 2013 (the “Redemption Date”) for cash at a price equal to 100% of the outstanding aggregate principal amount of the notes (the “Redemption Price”). The Redemption Price did not include the interest accrued up to November 15, 2013, which was paid to the holders of the notes of record as of November 1, 2013. | |||||||||||||||||||||
The Notes were convertible at the option of the holders from October 15, 2013 until November 15, 2013 for the consideration specified in the Indenture (the “Conversion Option”). Holders of the Notes had an option to require the Company to purchase the Notes for par value on November 15, 2013 (the “Put Option”). Any Notes not surrendered pursuant to the Put Option or the Conversion Option would be redeemed on November 15, 2013 (“Redemption Option”). | |||||||||||||||||||||
During the fourth quarter of 2013, pursuant to the “Put Option” the Company repurchased $30 thousand of the Notes. Pursuant to the “Conversion Option”, the Notes were convertible at the option of the holders from October 15, 2013 to November 15, 2013. Upon conversion, the holders of the converted Notes received the consideration as specified in the Indenture. As of November 15, 2013, Notes of $231.2 million were surrendered for conversion. Pursuant to the Net Share Settlement provision of the Indenture, we redeemed the Notes for $231.2 million in cash consideration and issued 3.1 million shares of common stock to the Note holders. The Company redeemed the remaining Notes pursuant to the “Redemption Option” for $744 thousand. | |||||||||||||||||||||
The Company has not paid cash dividends on its common stock since its inception. | |||||||||||||||||||||
Senior Secured Credit Facilities | |||||||||||||||||||||
In April 2013, ARRIS entered into senior secured credit facilities with Bank of America, N.A. and various other institutions, which are comprised of (i) a “Term Loan A Facility” of $1.1 billion, (ii) a “Term Loan B Facility” of $825 million and (iii) a “Revolving Credit Facility” of $250 million. The Term Loan A Facility and the Revolving Credit Facility have terms of five years. The Term Loan B Facility has a term of seven years. Interest rates on borrowings under the senior credit facilities are set forth in the table below. As of December 31, 2013, ARRIS had $1,752.6 million face value outstanding under the Term Loan A and Term Loan B Facilities, no borrowings under the Revolving Credit Facility and letters of credit totaling $2.5 million issued under the Revolving Credit Facility. | |||||||||||||||||||||
Rate | As of December 31, 2013 | ||||||||||||||||||||
Term Loan A | LIBOR + 2.25% | 2.42 | % | ||||||||||||||||||
Term Loan B | LIBOR(1) + 2.75% | 3.5 | % | ||||||||||||||||||
Revolving Credit Facility (2) | LIBOR + 2.25% | Not Applicable | |||||||||||||||||||
-1 | Includes LIBOR floor of 0.75% | ||||||||||||||||||||
-2 | Includes unused commitment fee of 0.50% and letter of credit fee of 2.25% not reflected in interest rate above. | ||||||||||||||||||||
Borrowings under the senior secured credit facilities are secured by first priority liens on substantially all of the assets of ARRIS and certain of its present and future subsidiaries who are or become parties to, or guarantors under, the credit agreement governing the senior secured credit facilities (the “Credit Agreement”). The Credit Agreement contains usual and customary limitations on indebtedness, liens, restricted payments, acquisitions and asset sales in the form of affirmative, negative and financial covenants, which are customary for financings of this type, including the maintenance of a minimum consolidated interest coverage ratio of not less than 3.5:1 and a maximum consolidated net leverage ratio of 4.25:1 (which decreases to 3.5:1 throughout the first two years of the Credit Agreement). As of December 31, 2013, ARRIS was in compliance with all covenants under the Credit Agreement. | |||||||||||||||||||||
The Credit Agreement provides terms for mandatory prepayments and optional prepayments and commitment reductions. The Credit Agreement also includes events of default, which are customary for facilities of this type (with customary grace periods, as applicable), including provisions under which, upon the occurrence of an event of default, all amounts outstanding under the credit facilities may be accelerated. | |||||||||||||||||||||
During the year ended December 31, 2013, the Company made mandatory prepayments of approximately $47.4 million and optional prepayments of approximately $125.0 million related to the senior secured credit facilities. As of December 31, 2013, the balance for the senior secured credit facilities was $1,752.6 million. | |||||||||||||||||||||
Following is a summary of our contractual debt obligations as of December 31, 2013 (in thousands): | |||||||||||||||||||||
Payments due by period | |||||||||||||||||||||
Less than | 1-3 Years | 3-5 Years | More than | Total | |||||||||||||||||
1 Year | 5 Years | ||||||||||||||||||||
Credit facilities | $ | 55,000 | $ | 178,750 | $ | 825,000 | $ | 693,813 | $ | 1,752,563 |
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Earnings Per Share | ' | ||||||||||||
Note 16. Earnings Per Share | |||||||||||||
The following is a reconciliation of the numerators and denominators of the basic and diluted earnings (loss) per share computations for the periods indicated (in thousands, except per share data): | |||||||||||||
For the Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Basic: | |||||||||||||
Net income (loss) | $ | (48,760 | ) | $ | 53,459 | $ | (17,662 | ) | |||||
Weighted average shares outstanding | 131,980 | 114,161 | 120,157 | ||||||||||
Basic earnings (loss) per share | $ | (0.37 | ) | $ | 0.47 | $ | (0.15 | ) | |||||
Diluted: | |||||||||||||
Net income (loss) | $ | (48,760 | ) | $ | 53,459 | $ | (17,662 | ) | |||||
Weighted average shares outstanding | 131,980 | 114,161 | 120,157 | ||||||||||
Net effect of dilutive shares | — | 2,353 | — | ||||||||||
Total | 131,980 | 116,514 | 120,157 | ||||||||||
Diluted earnings (loss) per share | $ | (0.37 | ) | $ | 0.46 | $ | (0.15 | ) | |||||
As discussed in Note 15 Long-Term Indebtedness, in November 2006, the Company issued $276.0 million of convertible senior notes. Upon conversion, ARRIS is required to satisfy the primary component of the conversion consideration in cash, rather than common stock. The secondary component of the conversion consideration, which is only paid if the trading price of the Company’s common stock is above the conversion price specified in the indenture, is comprised of cash, shares of the Company’s common stock or a combination of both, at the Company’s election. Thus, the potential earnings dilution only relates to the secondary component. The average share price in 2012 and 2011 was less than the conversion price, and consequently, did not result in dilution. During the first quarter of 2013 and pre-conversion period during the fourth quarter of 2013, the average share price was greater than the conversion price. The impact of the dilutive effect of the convertible debt in diluted EPS should be included when the average stock price exceeds the conversion price, even though the market price trigger has not been met. However, the basic shares were used for the year ended December 31, 2013 as a net loss was reported and the inclusion of dilutive shares would be antidilutive. | |||||||||||||
For the year ended December 31, 2013, 2012 and 2011, approximately 1.1 million, 1.7 million and 3.6 million of the equity-based awards, respectively, were excluded from the computation of diluted earnings per share shares because their effect would have been anti-dilutive. These exclusions are made if the exercise price of these equity-based awards is in excess of the average market price of the common stock for the period, or if the Company has net losses, both of which have an anti-dilutive effect. | |||||||||||||
During the twelve months ended December 31, 2013, the Company issued 3.6 million shares of its common stock related to stock option exercises and the vesting of restricted shares, as compared to 1.7 million shares for the twelve months ended December 31, 2012. | |||||||||||||
In connection with the Acquisition, the Seller was issued approximately 10.6 million shares of ARRIS’ common stock as part of the purchase consideration. The fair value of the 10.6 million shares issued, $150 million, was determined based on the 20 trading day trailing average closing price of the Company’s common stock at signing of the definitive agreement. Furthermore, Comcast was given an opportunity to invest in ARRIS, and on January 11, 2013, the Company entered into a separate agreement accounted for as a contingent equity forward with a subsidiary of Comcast providing for the purchase by it from the Company of approximately 10.6 million shares of common stock for $150 million. The Comcast transaction was consummated on the same day as the Acquisition. (See Note 4 Business Acquisitions and Note 6 Comcast Investment in ARRIS for additional details) | |||||||||||||
The Company issued 3.1 million shares of its common stock in the fourth quarter of 2013 in conjunction with redeeming its 2% Convertible Notes. (See Note 15, Long-Term Indebtedness) |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Taxes | ' | ||||||||||||
Note 17. Income Taxes | |||||||||||||
Income before income taxes (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Domestic | $ | (128,588 | ) | $ | 67,620 | $ | (32,759 | ) | |||||
Foreign | 32,438 | 6,676 | 4,248 | ||||||||||
$ | (96,150 | ) | $ | 74,296 | $ | (28,511 | ) | ||||||
Income tax expense (benefit) consisted of the following (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Current — Federal | $ | (5,133 | ) | $ | 26,196 | $ | 20,901 | ||||||
State | (40 | ) | 3,440 | 2,223 | |||||||||
Foreign | 10,624 | 4,855 | 2,406 | ||||||||||
5,451 | 34,491 | 25,530 | |||||||||||
Deferred — Federal | (50,485 | ) | (10,522 | ) | (31,084 | ) | |||||||
State | (2,189 | ) | (2,238 | ) | (6,358 | ) | |||||||
Foreign | (167 | ) | (894 | ) | 1,063 | ||||||||
(52,841 | ) | (13,654 | ) | (36,379 | ) | ||||||||
Income tax expense (benefit) | $ | (47,390 | ) | $ | 20,837 | $ | (10,849 | ) | |||||
A reconciliation of the statutory federal income tax rate of 35% and the effective income tax rates is as follows: | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Statutory federal income tax expense (benefit) | (35.0 | )% | 35 | % | (35.0 | )% | |||||||
Effects of: | |||||||||||||
State income taxes, net of federal benefit | (2.2 | ) | 1.4 | (6.5 | ) | ||||||||
Impairment of goodwill | — | — | 27.4 | ||||||||||
Domestic manufacturing deduction | (1.1 | ) | (4.0 | ) | (9.6 | ) | |||||||
Changes in valuation allowance | — | (0.7 | ) | (8.0 | ) | ||||||||
Comcast Revenue Recognition | 9.6 | — | — | ||||||||||
Non-deductible officer compensation | 0.5 | 1 | 2.4 | ||||||||||
Foreign taxes on U.S. entities less foreign tax credits | (1.3 | ) | (0.4 | ) | 2.5 | ||||||||
Facilitative acquisition costs | 3.5 | — | 4.1 | ||||||||||
Research and development tax credits | (26.8 | ) | (4.8 | ) | (20.0 | ) | |||||||
Other, net | 3.5 | 0.6 | 4.6 | ||||||||||
(49.3 | )% | 28.1 | % | (38.1 | )% | ||||||||
Deferred income taxes reflect the net tax effects of temporary differences between carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of ARRIS’ net deferred income tax assets (liabilities) were as follows (in thousands): | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
Current deferred income tax assets: | |||||||||||||
Inventory costs | $ | 31,068 | $ | 6,407 | |||||||||
Federal research and development credits | 5,472 | 806 | |||||||||||
Federal/state net operating loss carryforwards | 3,336 | 3,876 | |||||||||||
Foreign net operating loss carryforwards | 1,593 | 205 | |||||||||||
Accrued vacation | 7,175 | 1,592 | |||||||||||
Warranty reserve | 18,292 | 781 | |||||||||||
Deferred revenue | 19,988 | 14,938 | |||||||||||
Equity Compensation | 10,243 | — | |||||||||||
Other, principally operating expenses | 24,939 | 3,978 | |||||||||||
Total current deferred income tax assets | 122,106 | 32,583 | |||||||||||
Noncurrent deferred income tax assets: | |||||||||||||
Federal/state net operating loss carryforwards | 159,219 | 21,245 | |||||||||||
Federal capital loss carryforwards | 5,152 | 5,678 | |||||||||||
Investments | — | — | |||||||||||
Foreign net operating loss carryforwards | 8,212 | 7,969 | |||||||||||
Federal research and development credits | 19,409 | 13,041 | |||||||||||
Pension and deferred compensation | 16,187 | 11,440 | |||||||||||
Equity compensation | — | 10,623 | |||||||||||
Warranty reserve | 12,503 | 1,224 | |||||||||||
Capitalized research and development | 281,434 | 9,174 | |||||||||||
Other, principally operating expenses | 8,126 | 5,719 | |||||||||||
Total noncurrent deferred income tax assets | 510,242 | 86,113 | |||||||||||
Total deferred income tax assets | 632,348 | 118,696 | |||||||||||
Current deferred income tax liabilities: | |||||||||||||
Other, principally operating expenses | (2,856 | ) | (1,742 | ) | |||||||||
Total current deferred income tax liabilities | (2,856 | ) | (1,742 | ) | |||||||||
Non-current deferred income tax liabilities: | |||||||||||||
Property, plant and equipment, depreciation and | (39,782 | ) | (1,833 | ) | |||||||||
basis differences | |||||||||||||
Excess tax on future repatriation of foreign earnings | (1,184 | ) | (1,954 | ) | |||||||||
Section 481(a) Adjustment – Deferred Revenue | — | (1,021 | ) | ||||||||||
Other noncurrent liabilities | (9,192 | ) | (7,243 | ) | |||||||||
Convertible debt | — | (3,639 | ) | ||||||||||
Goodwill and Intangibles | (401,060 | ) | (11,266 | ) | |||||||||
Total noncurrent deferred income tax liabilities | (451,218 | ) | (26,956 | ) | |||||||||
Total deferred income tax liabilities | (454,074 | ) | (28,698 | ) | |||||||||
Net deferred income tax assets | 178,274 | 89,998 | |||||||||||
Valuation allowance | (163,745 | ) | (17,974 | ) | |||||||||
Net deferred income tax assets (liabilities) | $ | 14,529 | $ | 72,024 | |||||||||
The valuation allowance for deferred income tax assets of $163.7 million and $18.0 million at December 31, 2013 and 2012, respectively, relates to the uncertainty surrounding the realization of certain deferred income tax assets in various jurisdictions. The $145.7 million net increase in valuation allowances for the year was due primarily to the acquisition of Motorola Home net operating losses which are fully offset by valuation allowances. A valuation allowance should be established and maintained when it is more-likely-than-not that all or a portion of deferred income tax assets will not be realized. The Company continually reviews the adequacy of its valuation allowances by reassessing whether it is more-likely-than-not to realize its various deferred income tax assets. | |||||||||||||
As of December 31, 2013 and December 31, 2012, ARRIS had $435.6 million and $47.0 million, respectively, of U.S. federal net operating losses available to offset against future ARRIS taxable income. During 2013, ARRIS utilized approximately $3.3 million of U.S. federal net operating losses against taxable income. The U.S. Federal net operating losses may be carried forward for twenty years. The available acquired U.S. Federal net operating losses as of December 31, 2013, will expire between the years 2014 and 2031. | |||||||||||||
As of December 31, 2013, ARRIS also had $174.5 million of U.S. state net operating loss carryforwards in various states. The amounts available for utilization vary by state due to the apportionment of the Company’s taxable income and state law governing the expiration of these net operating losses. U.S. state net operating loss carryforwards of approximately $29.4 million relate to the exercise of employee stock options and restricted stock (“equity compensation”). Any future cash benefit resulting from the utilization of these U.S. state net operating losses attributable to this portion of equity compensation will be credited directly to paid in capital during the year in which the cash benefit is realized. | |||||||||||||
Additionally, ARRIS has foreign net operating loss carryforwards available, as of December 31, 2013, of approximately $47.9 million with varying expiration dates. Approximately $20.9 million of the total foreign net operating loss carryforwards relate to ARRIS’ Irish subsidiary and have an indefinite life. Approximately $7.6 million of the foreign net operating loss carryforwards relate to the Israeli subsidiary and have an indefinite life. | |||||||||||||
ARRIS’ ability to use U.S. federal and state net operating loss carryforwards to reduce future taxable income, or to use research and development tax credit carryforwards to reduce future income tax liabilities, is subject to restrictions attributable to equity transactions that resulted in a change of ownership during prior tax years, as defined in Internal Revenue Code Sections 382 and 383. All of the tax attributes (net operating losses carried forward and tax credits carried forward) acquired from the C-COR Incorporated transaction, the BigBand Networks, Inc. transaction and the Motorola Home transaction are subject to restrictions arising from equity transactions, including transactions that created ownership changes within C-COR, BigBand and Motorola Home prior to their acquisitions by ARRIS. With the exception of $386.5 million federal net operating loss carryforwards, $73.8 million of post-apportioned and $78.7 million of its pre-apportioned U.S. state net operating loss carryforwards and $5.2 million of R&D credit carryforwards, ARRIS does not expect that the limitations placed on its net operating losses and research and development tax credits as a result of applying these and other rules will result in the expiration of its net operating loss and research and development tax credit carryforwards. However, future equity transactions could further limit the utilization of these tax attributes. | |||||||||||||
During the past several years, ARRIS has identified and reported U.S. federal research and development tax credits in the amount of $90.6 million, and domestic state research and development tax credits in the amount of $25.7 million. During the tax years ending December 31, 2013, and 2012, we utilized $5.5 million and $9.4 million, respectively, to offset against U.S. federal and state income tax liabilities. As of December 31, 2013, ARRIS has $17.7 million of available domestic federal research and development tax credits and $20.9 million of available domestic state research and development tax credits to carry forward to subsequent years. The remaining unutilized domestic federal research and development tax credits can be carried back one year and carried forward twenty years. The domestic state research and development tax credits carry forward and will expire pursuant to the various applicable domestic state rules. | |||||||||||||
The federal research and development credit expired on December 31, 2011. On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law. Under this act, the federal research and development credit was retroactively extended for amounts paid or incurred after December 31, 2011 and before January 1, 2014. The effects of these changes in the tax law resulted in a tax benefit which was recognized in the first quarter of 2013, which was the quarter in which the law was enacted. The legislation allowing the tax credit expired on December 31, 2013, and has yet to be extended for future years. | |||||||||||||
As of December 31, 2013, the Company reported $793.7 million of capitalized research and experimentation costs, arising from the acquisition of the Motorola Home business from Google, Inc. These capitalized expenditures are amortized over a ten-year life and can be utilized to offset against U.S. Federal and State taxable income arising in future years | |||||||||||||
For the years ended December 31, 2013, 2012, and 2011, ARRIS reported $32.4 million, $6.7 million, and $4.2 million, respectively, of pre-tax net income from non-U.S. entities operating in foreign jurisdictions. Pre-tax net income (loss) from the worldwide operations of U.S. entities was $(128.6) million, $67.6 million, and $(32.7) million for years ended December 31, 2013, 2012, and 2011. | |||||||||||||
In general, ARRIS intends to indefinitely reinvest the earnings of its non-U.S. subsidiaries. Accounting rules generally require that the Company record U.S. deferred taxes on any anticipated repatriation of a foreign entity’s earnings as the earnings are recognized for financial reporting purposes. An exception under certain accounting guidance permits the Company to not record a U.S. deferred tax liability for foreign earnings that the Company expects to reinvest in its foreign operations and for which remittance will be postponed indefinitely. If it becomes apparent that some or all undistributed earnings will be remitted in the foreseeable future, the related deferred taxes are recorded in that period. In determining indefinite reinvestment, ARRIS regularly evaluates the capital needs of its foreign operations considering all available information, including operating and capital plans, regulatory capital requirements, debt requirements and cash flow needs, as well as, the applicable tax laws to which its foreign subsidiaries are subject. ARRIS expects the cash balances of its existing U.S. entities and the availability of U.S. financing sources to be sufficient to fund the operations of its U.S. entities for the foreseeable future. With the exception of approximately $6.0 million (21 million shekels) of earnings associated with its Israeli subsidiary, ARRIS has not recorded any U.S. deferred taxes on the undistributed earnings of its foreign subsidiaries. ARRIS has recorded approximately $1.2 million of deferred tax liability relating to $6.0 million of distributable earnings of the Israeli subsidiary. If the earnings of the other foreign subsidiaries were distributed to the U.S. in the form of dividends, or otherwise, ARRIS would have additional U.S. taxable income and, depending on the company’s tax posture in the year of repatriation, may have to pay additional U.S. income taxes. Withholding taxes may also apply to the repatriation of foreign earnings. Determination of the amount of unrecognized income tax liability related to these permanently reinvested and undistributed foreign subsidiary earnings is currently not practicable. However, we expect that the income tax liability from a repatriation of these earnings would not be material because the amount of undistributed earnings held by non-U.S. legal entities is not material. | |||||||||||||
Tabular Reconciliation of Unrecognized Tax Benefits (in thousands): | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Beginning balance | $ | 25,704 | $ | 26,232 | $ | 20,495 | |||||||
Gross increases — tax positions in prior period | 2,442 | — | 374 | ||||||||||
Gross decreases — tax positions in prior period | (21 | ) | — | (105 | ) | ||||||||
Gross increases — current-period tax positions | 6,999 | 2,684 | 5,922 | ||||||||||
Increases from acquired businesses | 2,014 | — | 1,719 | ||||||||||
Other | (1,098 | ) | 100 | — | |||||||||
Decreases due to lapse of statute of limitations | (7,696 | ) | (3,312 | ) | (2,173 | ) | |||||||
Ending balance | $ | 28,344 | $ | 25,704 | $ | 26,232 | |||||||
The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2009. As of December 31, 2013, the Company and its subsidiaries were under income tax audit in only eight jurisdictions (the state of Georgia, the state of California, the state of New York, the state of Michigan, the United States, Sweden, Belgium and Israel) and they have not received notices of any planned or proposed income tax audits. In January of 2014, the Israeli income tax audit was settled for an amount less than the accrual for uncertain tax positions. The Company has no outstanding unpaid income tax assessments for prior income tax audits. | |||||||||||||
The Company is currently being audited by the Internal Revenue Service in the United States for the year ended December 31, 2010, and expects the audit to conclude during 2014. ARRIS does not anticipate any audit adjustments in excess of its current accrual for uncertain tax positions. | |||||||||||||
At the end of 2013, the Company’s total tax liability related to uncertain net tax positions totaled approximately $27.5 million, all of which would cause the effective income tax rate to change upon the recognition. The difference between the $28.3 million of unrecognized tax benefits reported in the tabular reconciliation above and the $27.5 million of total tax liability relating to uncertain net tax positions are attributable to interest, penalties and the federal benefit of state deductions. Based on information currently available, the Company anticipates that over the next twelve month period, statutes of limitations may close and audit settlements will occur relating to existing unrecognized tax benefits of approximately $1.8 million primarily arising from U.S. Federal and state tax related items. The Company reported approximately $2.1 million and $2.3 million, respectively, of interest and penalty accrual related to the anticipated payment of these potential tax liabilities as of December 31, 2013 and 2012. The Company classifies interest and penalties recognized on the liability for uncertain tax positions as income tax expense. |
Commitments
Commitments | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments | ' | ||||
Note 18. Commitments | |||||
ARRIS leases office, distribution, and warehouse facilities as well as equipment under long-term leases expiring at various dates through 2023. Included in these operating leases are certain amounts related to restructuring activities; these lease payments and related sublease income are included in restructuring accruals on the consolidated balance sheets. Future minimum operating lease payments under non-cancelable leases at December 31, 2013 were as follows (in thousands): | |||||
Operating Leases | |||||
2014 | $ | 22,803 | |||
2015 | 20,451 | ||||
2016 | 17,041 | ||||
2017 | 12,595 | ||||
2018 | 9,143 | ||||
Thereafter | 26,194 | ||||
Less sublease income | (6,311 | ) | |||
Total minimum lease payments | $ | 101,916 | |||
Total rental expense for all operating leases amounted to approximately $22.5 million, $12.4 million and $10.7 million for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||
As of December 31, 2013, the Company had approximately $1.1 million of restricted cash. The restricted cash balances are held as cash collateral security for certain bank guarantees. Additionally, the Company had contractual obligations of approximately $691.4 million under agreements with non-cancelable terms to purchase goods or services over the next year. All contractual obligations outstanding at the end of prior years were satisfied within a 12 month period, and the obligations outstanding as of December 31, 2013 are expected to be satisfied in 2014. |
StockBased_Compensation
Stock-Based Compensation | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||
Stock-Based Compensation | ' | ||||||||||||||||||
Note 19. Stock-Based Compensation | |||||||||||||||||||
ARRIS grants stock options under its 2011 Stock Incentive Plan (“SIP”). Upon approval of the 2011 SIP, all shares available for grant under existing stock incentive plans were no longer available. However, all outstanding options granted under the previous plans are still exercisable. The Board of Directors approved the SIP and the prior plans to facilitate the retention and continued motivation of key employees, consultants and directors, and to align more closely their interests with those of the Company and its stockholders. | |||||||||||||||||||
Awards under the SIP may be in the form of stock options, stock grants, stock units, restricted stock, stock appreciation rights, performance shares and units, and dividend equivalent rights. A total of 17,500,000 shares of the Company’s common stock may be issued pursuant to the SIP. The SIP has been designed to allow for flexibility in the form of awards; however, awards denominated in shares of common stock other than stock options and stock appreciation rights will be counted against the SIP limit as 1.87 shares for every one share covered by such an award. The vesting requirements for issuance under the SIP may vary; however, awards generally are required to have a minimum three-year vesting period or term. | |||||||||||||||||||
In connection with the 2011 acquisition of BigBand Networks, Inc., ARRIS assumed the BigBand Networks, Inc. 2007 Equity Incentive Plan (the “Assumed BigBand Plan”), including the restricted stock units outstanding under the Assumed BigBand Plan at the time of the acquisition. ARRIS may continue to grant awards under the Assumed BigBand Plan in certain circumstances so long as the grants comply with the applicable requirements of NASDAQ. A total of 97,997 shares of the Company’s common stock remain available for issuance under the Assumed BigBand Plan. | |||||||||||||||||||
Stock Options | |||||||||||||||||||
ARRIS grants stock options to certain employees. Upon stock option exercise the Company issues new shares. Stock options generally vest over three or four years of service and have either seven or ten year contractual terms. The exercise price of an option is equal to the fair market value of ARRIS’ stock on the date of grant. ARRIS uses the Black-Scholes model and engages an independent third party to assist the Company in determining the Black-Scholes valuation of its equity awards. The volatility factors are based upon a combination of historical volatility over a period of time and estimates of implied volatility based on traded option contracts on ARRIS common stock. The expected term of the awards granted are based upon a weighted average life of exercise activity of the grantee population. The risk-free interest rate is based upon the U.S. treasury strip yield at the grant date, using a remaining term equal to the expected life. The expected dividend yield is 0%, as the Company has not paid cash dividends on its common stock since its inception. In calculating the stock compensation expense, ARRIS applies an estimated pre-vesting forfeiture rate based upon historical rates. The stock compensation expense is amortized over the vesting period using the straight-line method. | |||||||||||||||||||
A summary of activity of ARRIS’ options granted under its stock incentive plans is presented below: | |||||||||||||||||||
Options | Weighted | Weighted | Aggregate | ||||||||||||||||
Average | Average | Intrinsic | |||||||||||||||||
Exercise Price | Remaining | Value (in | |||||||||||||||||
Contractual Term | thousands) | ||||||||||||||||||
(in years) | |||||||||||||||||||
Beginning balance, January 1, 2013 | 2,376,449 | $ | 12.24 | ||||||||||||||||
Grants | — | — | |||||||||||||||||
Exercised | (1,869,956 | ) | 12.41 | ||||||||||||||||
Forfeited | — | — | |||||||||||||||||
Expired | (33,802 | ) | 11.88 | ||||||||||||||||
Ending balance, December 31, 2013 | 472,691 | 11.6 | 0.86 | $ | 6,023 | ||||||||||||||
Exercisable at December 31, 2013 | 472,691 | 11.6 | 0.86 | $ | 6,023 | ||||||||||||||
There were no new options granted in 2013, 2012 and 2011. The total intrinsic value of options exercised during 2013, 2012 and 2011 was approximately $9.6 million, $10.2 million and $9.6 million, respectively. | |||||||||||||||||||
The following table summarizes ARRIS’ options outstanding as of December 31, 2013: | |||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||
Range of | Number | Weighted Average | Weighted | Number | Weighted | ||||||||||||||
Exercise Prices | Outstanding | Remaining | Average | Exercisable | Average | ||||||||||||||
Contractual Life | Exercise Price | Exercise Price | |||||||||||||||||
$5.00 to $6.99 | 16,243 | 0.90 years | $ | 6.86 | 16,243 | $ | 6.86 | ||||||||||||
$7.00 to $8.99 | 15,188 | 0.52 years | $ | 8.42 | 15,188 | $ | 8.42 | ||||||||||||
$9.00 to $10.99 | 128,388 | 0.65 years | $ | 9.32 | 128,388 | $ | 9.32 | ||||||||||||
$11.00 to $13.99 | 312,872 | 0.96 years | $ | 12.93 | 312,872 | $ | 12.93 | ||||||||||||
$5.00 to $13.99 | 472,691 | 0.86 years | $ | 11.6 | 472,691 | $ | 11.6 | ||||||||||||
Restricted Stock (Non-Performance) and Stock Units | |||||||||||||||||||
ARRIS grants restricted stock and stock units to certain employees and its non-employee directors. The Company records a fixed compensation expense equal to the fair market value of the shares of restricted stock granted on a straight-line basis over the requisite services period for the restricted shares. The Company applies an estimated forfeiture rate based upon historical rates. | |||||||||||||||||||
The following table summarizes ARRIS’ unvested restricted stock (excluding performance-related) and stock unit transactions during the year ending December 31, 2013: | |||||||||||||||||||
Weighted Average | |||||||||||||||||||
Grant Date | |||||||||||||||||||
Shares | Fair Value | ||||||||||||||||||
Unvested at January 1, 2013 | 5,129,080 | $ | 11.13 | ||||||||||||||||
Granted | 4,567,885 | 16.13 | |||||||||||||||||
Vested | (2,088,781 | ) | 10.73 | ||||||||||||||||
Forfeited | (559,494 | ) | 13.67 | ||||||||||||||||
Unvested at December 31, 2013 | 7,048,690 | 14.29 | |||||||||||||||||
Restricted Shares — Subject to Comparative Market Performance | |||||||||||||||||||
ARRIS grants to certain employees restricted shares, in which the number of shares is dependent upon the Company’s total shareholder return as compared to the shareholder return of the NASDAQ composite over a three year period. The number of shares which could potentially be issued ranges from zero to 200% of the target award. For the shares granted in 2011, the three-year measurement period ended on December 31, 2013. This resulted in an achievement of 200.0% of the target award, or 517,780 shares. The remaining grants outstanding that are subject to market performance are 583,175 shares at target; at 200% performance 1,166,350 would be issued. Compensation expense is recognized on a straight-line basis over the three year measurement period and is based upon the fair market value of the shares estimated to be earned. The fair value of the restricted shares is estimated on the date of grant using a lattice model. | |||||||||||||||||||
The total intrinsic value of restricted shares, including both non-performance and performance-related shares, vested and issued during 2013, 2012 and 2011 was $36.3 million, $27.1 million and $24.1 million, respectively. | |||||||||||||||||||
Employee Stock Purchase Plan (“ESPP”) | |||||||||||||||||||
ARRIS offers an ESPP to certain employees. The plan complies with Section 423 of the U.S. Internal Revenue Code, which provides that employees will not be immediately taxed on the difference between the market price of the stock and a discounted purchase price if it meets certain requirements. Participants can request that up to 10% of their base compensation be applied toward the purchase of ARRIS common stock under ARRIS’ ESPP. Purchases by any one participant are limited to $25,000 (based upon the fair market value) in any one year. The exercise price is the lower of 85% of the fair market value of the ARRIS common stock on either the first day of the purchase period or the last day of the purchase period. A plan provision which allows for the more favorable of two exercise prices is commonly referred to as a “look-back” feature. Any discount offered in excess of five percent generally will be considered compensatory and appropriately is recognized as compensation expense. Additionally, any ESPP offering a look-back feature is considered compensatory. ARRIS uses the Black-Scholes option valuation model to value shares issued under the ESPP. The valuation is comprised of two components; the 15% discount of a share of common stock and 85% of a six month option held (related to the look-back feature). The weighted average assumptions used to estimate the fair value of purchase rights granted under the ESPP for 2013, 2012 and 2011, were as follows: risk-free interest rates of 0.1%; a dividend yield of 0%; volatility factor of the expected market price of ARRIS’ common stock of 0.26, 0.33, and 0.41, respectively; and a weighted average expected life of 0.5 year for each. The Company recorded stock compensation expense related to the ESPP of approximately $1.5 million, $0.9 million and $0.8 million for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||||||||
Unrecognized Compensation Cost | |||||||||||||||||||
As of December 31, 2013, there was approximately $81.2 million of total unrecognized compensation cost related to unvested share-based awards granted under the Company’s incentive plans. This compensation cost is expected to be recognized over a weighted-average period of 4.2 years. | |||||||||||||||||||
Treasury Stock | |||||||||||||||||||
In 2013, ARRIS did not repurchase any shares under the previously adopted share repurchase plan. | |||||||||||||||||||
In 2012, ARRIS repurchased 4.5 million shares of the Company’s common stock at an average price of $11.55 per share for an aggregate consideration of approximately $51.9 million. | |||||||||||||||||||
In 2011, ARRIS repurchased 10.0 million shares of the Company’s common stock at an average price of $10.95 per share for an aggregate consideration of approximately $109.1 million. | |||||||||||||||||||
The repurchased shares are held as treasury stock on the Consolidated Balance Sheet as of December 31, 2013. | |||||||||||||||||||
Employee_Benefit_Plans
Employee Benefit Plans | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Employee Benefit Plans | ' | ||||||||||||||||
Note 20. Employee Benefit Plans | |||||||||||||||||
The Company sponsors a qualified and a non-qualified non-contributory defined benefit pension plan that cover certain U.S. employees. As of January 1, 2000, the Company froze the qualified defined pension plan benefits for its participants. These participants elected to enroll in ARRIS’ enhanced 401(k) plan. Due to the cessation of plan accruals for such a large group of participants, a curtailment was considered to have occurred. | |||||||||||||||||
The U.S. pension plan benefit formulas generally provide for payments to retired employees based upon their length of service and compensation as defined in the plans. ARRIS’ investment policy is to fund the qualified plan as required by the Employee Retirement Income Security Act of 1974 (“ERISA”) and to the extent that such contributions are tax deductible. | |||||||||||||||||
The investment strategies of the plans place a high priority on benefit security. The plans invest conservatively so as not to expose assets to depreciation in adverse markets. The plans’ strategy also places a high priority on earning a rate of return greater than the annual inflation rate along with maintaining average market results. The plan has targeted asset diversification across different asset classes and markets to take advantage of economic environments and to also act as a risk minimizer by dampening the portfolio’s volatility. The following table summarizes the weighted average pension asset allocations as December 31, 2013 and 2012: | |||||||||||||||||
Weighted Average Allocation | |||||||||||||||||
Target | Actual | ||||||||||||||||
2013 | 2013 | 2012 | |||||||||||||||
Equity securities | 39 | % | 43 | % | 61 | % | |||||||||||
Debt securities | 18 | 3 | 39 | ||||||||||||||
Cash and cash equivalents | 43 | 54 | 0 | ||||||||||||||
100 | % | 100 | % | 100 | % | ||||||||||||
The following table summarizes the Company’s pension plan assets by category and by level (as described in Note 8 of the Notes to the Consolidated Financial Statements) as of December 31, 2013 (in thousands): | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Cash and cash equivalents (1) | $ | — | $ | 8,285 | $ | — | $ | 8,285 | |||||||||
Equity securities (2): | |||||||||||||||||
U.S. large cap | 1,435 | — | — | 1,435 | |||||||||||||
U.S. mid cap | 1,435 | — | — | 1,435 | |||||||||||||
U.S. small cap | 1,435 | — | — | 1,435 | |||||||||||||
International | 2,102 | — | — | 2,102 | |||||||||||||
Fixed income securities (3): | 470 | — | — | 470 | |||||||||||||
Total | $ | 6,877 | $ | 8,285 | $ | — | $ | 15,162 | |||||||||
-1 | Cash and cash equivalents, which are used to pay benefits and administrative expenses, are held in a stable value fund. | ||||||||||||||||
-2 | Equity securities consist of mutual funds and the underlying investments are indexes. Investments in mutual funds are valued at the net asset value per share multiplied by the number of shares held. | ||||||||||||||||
-3 | Fixed income securities consist of bonds securities in mutual funds, and are valued at the net asset value per share multiplied by the number of shares held. | ||||||||||||||||
The Company has established a rabbi trust to fund the pension obligations of the Chief Executive Officer under his Supplemental Retirement Plan including the benefit under the Company’s non-qualified defined benefit plan. In addition, the Company has established a rabbi trust for certain executive officers to fund the Company’s pension liability to those officers under the non-qualified plan. Effective June 30, 2013, the Company amended the Supplemental Retirement Plan. This amendment effectively froze entry of any new participants into the Supplemental Plan and, for existing participants, a freeze on any additional benefit accrual after June 30, 2013. The participant’s benefit will continue to be distributed in accordance with the provisions of the Supplemental Plan but the final benefit accrual was frozen as of June 30, 2013. A curtailment gain of approximately $0.3 million, which represents the difference in the projected benefit obligation and the accumulated benefit obligation at June 30, 2013, offsets the existing plan loss and lowers future pension expense. | |||||||||||||||||
During the fourth quarter of 2012, in an effort to reduce the volatility and administration expense in connection with the Company’s pension obligation, the Company notified eligible employees of a limited opportunity to voluntarily elect an early payout of their pension benefits. These payouts were approximately $7.7 million and was funded from existing pension assets. The Company accounted for the lump-sum payments as a settlement and recorded a noncash pension settlement charge of approximately $3.1 million in the fourth quarter of 2012. | |||||||||||||||||
Summary data for the non-contributory defined benefit pension plans is as follows (in thousands): | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Change in Projected Benefit Obligation: | |||||||||||||||||
Projected benefit obligation at beginning of year | $ | 42,082 | $ | 46,912 | |||||||||||||
Service cost | 122 | 335 | |||||||||||||||
Interest cost | 1,619 | 2,085 | |||||||||||||||
Actuarial loss | (1,813 | ) | 1,625 | ||||||||||||||
Benefit payments | (1,309 | ) | (1,167 | ) | |||||||||||||
Other | (319 | ) | (7,708 | ) | |||||||||||||
Projected benefit obligation at end of year | $ | 40,382 | $ | 42,082 | |||||||||||||
Change in Plan Assets: | |||||||||||||||||
Fair value of plan assets at beginning of year | $ | 14,866 | $ | 21,491 | |||||||||||||
Actual return on plan assets | 1,421 | 1,637 | |||||||||||||||
Company contributions | 184 | 613 | |||||||||||||||
Expenses and benefits paid from plan assets | (1,309 | ) | (1,167 | ) | |||||||||||||
Other | — | (7,708 | ) | ||||||||||||||
Fair value of plan assets at end of year (1) | $ | 15,162 | $ | 14,866 | |||||||||||||
Funded Status: | |||||||||||||||||
Funded status of plan | $ | (25,220 | ) | $ | (27,216 | ) | |||||||||||
Unrecognized actuarial loss | 7,546 | 10,830 | |||||||||||||||
Unamortized prior service cost | — | — | |||||||||||||||
Net amount recognized | $ | (17,674 | ) | $ | (16,386 | ) | |||||||||||
-1 | In addition to the pension plan assets, ARRIS has established two rabbi trusts to further fund the pension obligations of the Chief Executive and certain executive officers of $19.3 million as of December 31, 2013 and $17.8 million as of December 31, 2012, and are included in Investments on the Consolidated Balance Sheets. | ||||||||||||||||
Amounts recognized in the statement of financial position consist of (in thousands): | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Current liabilities | $ | (364 | ) | $ | (333 | ) | |||||||||||
Noncurrent liabilities | (24,856 | ) | (26,883 | ) | |||||||||||||
Accumulated other comprehensive income (1) | 7,546 | 10,830 | |||||||||||||||
Total | $ | (17,674 | ) | $ | (16,386 | ) | |||||||||||
-1 | The total unfunded pension liability on the Consolidated Balance Sheets as of December 31, 2013 and 2012 included the Taiwan plan and total income tax effect of $1.0 million and $2.3 million, respectively. | ||||||||||||||||
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) are as follows (in thousands): | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Net loss | $ | (2,359 | ) | $ | 1,247 | ||||||||||||
Amortization of net loss | (607 | ) | (840 | ) | |||||||||||||
Amortization of prior service cost | — | — | |||||||||||||||
Settlement charge | (318 | ) | (3,064 | ) | |||||||||||||
Total recognized in other comprehensive income (loss) | $ | (3,284 | ) | $ | (2,657 | ) | |||||||||||
The following table summarizes the amounts in other comprehensive income (loss) expected to be amortized and recognized as a component of net periodic benefit cost in 2014 (in thousands): | |||||||||||||||||
Amortization of net loss | $ | 305 | |||||||||||||||
Information for defined benefit plans with accumulated benefit obligations in excess of plan assets is as follows (in thousands): | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Accumulated benefit obligation | $ | 40,382 | $ | 41,764 | |||||||||||||
Projected benefit obligation | $ | 40,382 | $ | 42,082 | |||||||||||||
Plan assets | $ | 15,162 | $ | 14,866 | |||||||||||||
Net periodic pension cost for 2013, 2012 and 2011 for pension and supplemental benefit plans includes the following components (in thousands): | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Service cost | $ | 122 | $ | 335 | $ | 312 | |||||||||||
Interest cost | 1,619 | 2,085 | 2,142 | ||||||||||||||
Return on assets (expected) | (876 | ) | (1,260 | ) | (1,624 | ) | |||||||||||
Amortization of net actuarial loss | 607 | 840 | 288 | ||||||||||||||
Settlement charge | — | 3,064 | — | ||||||||||||||
Net periodic pension cost | $ | 1,472 | $ | 5,064 | $ | 1,118 | |||||||||||
-1 | Prior service cost is amortized on a straight-line basis over the average remaining service period of employees expected to receive benefits under the plan. | ||||||||||||||||
The weighted-average actuarial assumptions used to determine the benefit obligations for the three years presented are set forth below: | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Assumed discount rate for plan participants | 4.5 | % | 3.75 | % | 4.5 | % | |||||||||||
Rate of compensation increase | N/A | 3.75 | % | 3.75 | % | ||||||||||||
The weighted-average actuarial assumptions used to determine the net periodic benefit costs are set forth below: | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Assumed discount rate for plan participants | 3.75 | % | 4.5 | % | 5.5 | % | |||||||||||
Rate of compensation increase | 3.75 | % | 3.75 | % | 3.75 | % | |||||||||||
Expected long-term rate of return on plan assets | 6 | % | 6 | % | 7.5 | % | |||||||||||
The expected long-term rate of return on assets is derived using the building block approach which includes assumptions for the long term inflation rate, real return, and equity risk premiums. | |||||||||||||||||
No minimum funding contributions are required in 2014 for the plan; however, the Company may make a voluntary contribution. | |||||||||||||||||
As of December 31, 2013, the expected benefit payments related to the Company’s defined benefit pension plans during the next ten years are as follows (in thousands): | |||||||||||||||||
2014 | $ | 1,544 | |||||||||||||||
2015 | 15,129 | ||||||||||||||||
2016 | 1,538 | ||||||||||||||||
2017 | 1,538 | ||||||||||||||||
2018 | 1,556 | ||||||||||||||||
2019 — 2023 | 8,923 | ||||||||||||||||
Other U.S. Benefit Plans | |||||||||||||||||
ARRIS has established defined contribution plans pursuant to the Internal Revenue Code Section 401(k) that cover all eligible U.S. employees. ARRIS contributes to these plans based upon the dollar amount of each participant’s contribution. ARRIS made matching contributions to these plans of approximately $10.9 million, $5.7 million and $5.0 million in 2013, 2012 and 2011, respectively. | |||||||||||||||||
The Company has a deferred compensation plan that does not qualify under Section 401(k) of the Internal Revenue Code, and is available to key executives of the Company and certain other employees. Employee compensation deferrals and matching contributions are held in a rabbi trust. The total of net employee deferrals and matching contributions, which is reflected in other long-term liabilities, was $2.9 million and $2.7 million at December 31, 2013 and 2012, respectively. Total expenses included in continuing operations for the matching contributions were approximately $0.1 million in both 2013 and 2012. | |||||||||||||||||
The Company previously offered a deferred compensation arrangement, which allowed certain employees to defer a portion of their earnings and defer the related income taxes. As of December 31, 2004, the plan was frozen and no further contributions are allowed. The deferred earnings are invested in a rabbi trust. The total of net employee deferral and matching contributions, which is reflected in other long-term liabilities, was $2.6 million and $2.1 million at December 31, 2013 and 2012, respectively. | |||||||||||||||||
The Company also has a deferred retirement salary plan, which was limited to certain current or former officers of C-COR. The present value of the estimated future retirement benefit payments is being accrued over the estimated service period from the date of signed agreements with the employees. The accrued balance of this plan, the majority of which is included in other long-term liabilities, was $1.8 million and $2.0 million at December 31, 2013 and 2012, respectively. Total expenses (income) included in continuing operations for the deferred retirement salary plan were approximately $(0.3) million and $(0.2) million for 2013 and 2012, respectively. | |||||||||||||||||
Other Benefit Plans Outside of the U.S. | |||||||||||||||||
In connection with the Acquisition, the Company assumed a pension liability related to a defined benefit plans in Taiwan, which had a balance of $28.1 million as of December 31, 2013. | |||||||||||||||||
The Company’s wholly-owned subsidiary located in Israel is required to fund future severance liabilities determined in accordance with Israeli severance pay laws. Under these laws, employees are entitled upon termination to one month’s salary for each year of employment or portion thereof. The Company records compensation expense to accrue for these costs over the employment period, based on the assumption that the benefits to which the employee is entitled, if the employee separates immediately. The Company funds the liability by monthly deposits in insurance policies and severance funds. |
Supplemental_Financial_Informa
Supplemental Financial Information | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Supplemental Financial Information | ' | ||||||||
Note 21. Supplemental Financial Information | |||||||||
Consolidated Balance Sheets Information | |||||||||
Prepaids consist of the following (in thousands): | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Prefunding of accounts payable | $ | 44,975 | $ | — | |||||
Software licenses and maintenance support | 10,717 | 4,540 | |||||||
Other | 5,791 | 7,142 | |||||||
Total | $ | 61,482 | $ | 11,682 | |||||
Other current assets consist of the following (in thousands): | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Deferred cost of sales | $ | 10,100 | $ | 9,537 | |||||
Miscellaneous receivables | 8,712 | 4,095 | |||||||
Deferred financing fees | 7,480 | 559 | |||||||
Sales and other tax receivables | 5,609 | 1,565 | |||||||
Indemnification asset | 1,500 | — | |||||||
Landlord funded tenant improvements | 1,497 | — | |||||||
Other | 5,032 | 657 | |||||||
Total | $ | 39,930 | $ | 16,413 | |||||
Other non-current assets consist of the following (in thousands): | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Deferred financing fees | $ | 27,398 | $ | 400 | |||||
Trade receivables | 10,191 | — | |||||||
Deposits | 4,296 | 1,204 | |||||||
Long-term severance funds | 3,564 | 3,739 | |||||||
Interest rate swap asset | 3,010 | — | |||||||
Other | 3,904 | 4,042 | |||||||
Total | $ | 52,363 | $ | 9,385 | |||||
Other accrued current liabilities consist of the following (in thousands): | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Accrued volume rebates | $ | 26,879 | $ | 3,434 | |||||
Due to Google | 23,273 | — | |||||||
Accrued legal and professional fees | 21,982 | 4,277 | |||||||
Accrued sales, property, payroll and other taxes | 14,613 | 1,540 | |||||||
Supplier liabilities | 11,362 | — | |||||||
Accrued interest and interest rate swap liability | 7,541 | 581 | |||||||
Accrued software licenses liabilities | 6,114 | — | |||||||
Accrued royalties | 4,466 | 1,253 | |||||||
Accrued acquisition and integration costs | 3,980 | 4,361 | |||||||
Accrued restructuring | 3,161 | 527 | |||||||
Accrued commissions | 1,804 | — | |||||||
Other liabilities | 16,523 | 8,969 | |||||||
Total | $ | 141,698 | $ | 24,942 | |||||
Other noncurrent liabilities consist of the following (in thousands): | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Long-term warranty | $ | 32,745 | $ | 3,187 | |||||
Long-term deferred revenue | 8,155 | 4,288 | |||||||
Deferred compensation liabilities | 7,213 | 6,668 | |||||||
Long-term severance liability | 3,814 | 4,119 | |||||||
Long-term accrued rent | 1,584 | 1,413 | |||||||
Long-term tenant improvement obligations | 1,323 | 1,140 | |||||||
Other | 7,629 | 2,347 | |||||||
Total | $ | 62,463 | $ | 23,162 | |||||
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | ' | ||||||||||||||||||||
Note 22. Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||||
The following table summarizes the changes in accumulated other comprehensive income (loss) by component, net of taxes, for the year ended December 31, 2013 (in thousands): | |||||||||||||||||||||
Unrealized | Unrealized | Unfunded | Cumulative | Total | |||||||||||||||||
gain on | loss on | pension | translation | ||||||||||||||||||
marketable | derivative | liability | adjustments | ||||||||||||||||||
securities | instruments | ||||||||||||||||||||
Balance as of December 31, 2012 | $ | 206 | $ | — | $ | (8,558 | ) | $ | (184 | ) | $ | (8,536 | ) | ||||||||
Other comprehensive (loss) income before reclassifications | 55 | (4,527 | ) | — | 173 | (4,299 | ) | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | 45 | 1,986 | 6,142 | — | 8,173 | ||||||||||||||||
Net current-period other comprehensive income (loss) | 100 | (2,541 | ) | 6,142 | 173 | 3,874 | |||||||||||||||
Balance as of December 31, 2013 | $ | 306 | $ | (2,541 | ) | $ | (2,416 | ) | $ | (11 | ) | $ | (4,662 | ) | |||||||
Related_Party
Related Party | 12 Months Ended |
Dec. 31, 2013 | |
Related Party | ' |
Note 23. Related Party | |
As noted in Note 4 Business Acquisitions, the Company is a party to a research and development venture with Comcast. The Company provides engineering services to the venture through a development services arrangement. Subject to agreement on annual statements of work, the venture is required to purchase from the Company, and ARRIS is required to provide to the venture, engineering services per year approximating between 20% and 30% of the approved venture budget. In addition, we are required to provide certain funding to the venture on an annual basis. Funding provided to the venture during 2013 approximated $8.1 million. | |
As a result of the Acquisition, we acquired an investment in MPEG LA, L.L.C. (“MPEG”), which operates primarily as a patent pool licensing administrator for several patent pool programs. As such, MPEG identifies potential licensees, markets and completes licensing agreements and collects, allocates and distributes license royalties. The Company’s ownership percentage in MPEG is 8.4%, and is being accounted for as an equity method investment. The Company paid license fees to MPEG in the amount of $779 thousand during 2013. |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2013 | |
Contingencies | ' |
Note 24. Contingencies | |
The Company accrues a liability for legal contingencies when it believes that it is both probable that a liability has been incurred and that it can reasonably estimate the amount of the loss. The Company reviews these accruals and adjusts them to reflect ongoing negotiations, settlements, rulings, advice of legal counsel and other relevant information. To the extent new information is obtained and the Company’s views on the probable outcomes of claims, suits, assessments, investigations or legal proceedings change, changes in the Company’s accrued liabilities would be recorded in the period in which such determinations are made. Unless noted otherwise, the amount of liability is not probable or the amount cannot be reasonably estimated; and, therefore, accruals have not been made. | |
Due to the nature of the Company’s business, it is subject to patent infringement claims, including current suits against it or one or more of its wholly-owned subsidiaries, or one or more of our customers who may seek indemnification from us, alleging infringement by various Company products and services. The Company believes that it has meritorious defenses to the allegation made in its pending cases and intends to vigorously defend these lawsuits; however, it is currently unable to determine the ultimate outcome of these or similar matters. Accordingly, with respect to these proceedings, we are currently unable to reasonably estimate the possible loss or range of possible losses. In addition, the Company is a defendant in various litigation matters generally arising out of the normal course of business. | |
As part of the Acquisition, a subsidiary of Google Inc., has agreed to indemnify the Company for any losses suffered by the Company related to certain specified retained litigation matters, subject to the Company being responsible for 50% of the first $50 million in respect of past infringement and 50% of the first $50 million in respect of certain future royalty payments related to the specified retained litigation matters, for a total obligation of $50 million. | |
During the third quarter ended September 30, 2013, the Company settled certain of these specified retained litigation matters as follows: | |
TiVo: | |
The Company, Google, Inc. and TiVo settled all claims associated with certain patent infringement litigation for $196 million, which included non-exclusive, worldwide, non-transferable and perpetual license to the patents subject to the litigation. On the date the Settlement Agreement and Release was executed, the Company was legally responsible to TiVo for the liability arising from the litigation, if any. Payment was made in the quarter ended September 30, 2013. Google indemnified the Company for the amount of the payment except for $50 million for which the Company is responsible as described above. | |
Verizon: | |
The Company, Google, Inc. and Verizon Sourcing LLC reached a settlement agreement, whereby the Company paid $85 million to Verizon to settle patent infringement litigation in the quarter ended September 30, 2013. In consideration for this cash payment, the Company will have no further obligation for any indemnification of any claim arising from the Verizon claim. Google indemnified the Company for the full amount of the Company’s payment. | |
During the fourth quarter ended December 31, 2013, the Company accrued approximately $8.0 million for settlements related to certain litigation matters as follows: | |
British Telecom: | |
The Company, Google, Comcast, Cox and British Telecom reached a settlement agreement related to British Telecom’s litigation with Comcast and Charter, whereby the Parties agreed to settle patent claims against Comcast and Cox and provide a cross-license to the Company. In consideration for payment by the parties in accordance with the settlement agreement and cross-license, the Company will have no further obligation for indemnification of any amount arising from the British Telecom litigation. | |
Video Streaming Solutions: | |
The Company settled all claims associated with certain patent infringement assertions made by Video Streaming Solutions. The settlement included a non-exclusive, worldwide, non-transferable license to the patents in suit in the litigation and related patents for the remaining term of such patents, as well as a license to any other patents Video Streaming Solutions acquires or controls in the future. | |
C-Cation: | |
The Company and Comcast reached a settlement agreement related to Comcast’s litigation with C-Cation, whereby the Company agreed to pay Comcast to settle indemnification claims against the Company in the quarter ended December 31, 2013. In consideration for this cash payment, the Company will have no further obligation for any indemnification of any amount arising from the Comcast litigation with C-Cation. |
Summary_Quarterly_Consolidated
Summary Quarterly Consolidated Financial Information | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Summary Quarterly Consolidated Financial Information | ' | ||||||||||||||||
Note 25. Summary Quarterly Consolidated Financial Information (unaudited) | |||||||||||||||||
Certain amounts for the quarters ended June 30, 2013 and September 30, 2013 have been recasted based on the business combination guidance. That guidance requires us to recognize adjustments to the provisional amounts as if the accounting for the business combinations had been completed at the acquisition date. As a result, the Company revised the comparative information in prior quarters as needed, including making any change in depreciation, amortization, or other income effects recognized in the completing the initial accounting for the Motorola Home acquisition. | |||||||||||||||||
The following table summarizes ARRIS’ quarterly consolidated financial information (in thousands, except per share data): | |||||||||||||||||
Quarters in 2013 Ended | |||||||||||||||||
March 31, | June 30, | September 30, | December 31, | ||||||||||||||
Net sales | $ | 353,650 | $ | 1,000,362 | $ | 1,067,823 | $ | 1,199,067 | |||||||||
Gross margin | 108,526 | 230,957 | 316,895 | 366,370 | |||||||||||||
Operating income (loss) | 9,516 | (88,062 | ) | 11,182 | 49,351 | ||||||||||||
Net income (loss) | $ | (14,650 | ) | $ | (48,463 | ) | $ | 17,170 | $ | (2,817 | ) | ||||||
Net income (loss) per basic share | $ | (0.13 | ) | $ | (0.36 | ) | $ | 0.12 | $ | (0.02 | ) | ||||||
Net income (loss) per diluted share | $ | (0.13 | ) | $ | (0.36 | ) | $ | 0.12 | $ | (0.02 | ) | ||||||
Quarters in 2012 Ended | |||||||||||||||||
March 31, | June 30, | September 30, | December 31, | ||||||||||||||
Net sales | $ | 302,901 | $ | 349,327 | $ | 357,432 | $ | 344,003 | |||||||||
Gross margin | 108,908 | 118,526 | 111,952 | 123,191 | |||||||||||||
Operating income | 11,691 | 26,925 | 23,123 | 25,531 | |||||||||||||
Net income | $ | 5,799 | $ | 15,001 | $ | 17,864 | $ | 14,795 | |||||||||
Net income per basic share | $ | 0.05 | $ | 0.13 | $ | 0.16 | $ | 0.13 | |||||||||
Net income per diluted share | $ | 0.05 | $ | 0.13 | $ | 0.15 | $ | 0.13 |
Valuation_and_Qualifying_Accou
Valuation and Qualifying Accounts | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Valuation and Qualifying Accounts | ' | ||||||||||||||||
Schedule II — Valuation and Qualifying Accounts | |||||||||||||||||
All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are not applicable, and therefore have been omitted. | |||||||||||||||||
SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS | |||||||||||||||||
Description | Balance at | Charge to | Deductions (2) | Balance at | |||||||||||||
Beginning | Expenses (1) | End of | |||||||||||||||
of Period | Period | ||||||||||||||||
(in thousands) | |||||||||||||||||
YEAR ENDED DECEMBER 31, 2013 | |||||||||||||||||
Reserves and allowance deducted from asset accounts: | |||||||||||||||||
Allowance for doubtful accounts | $ | 1,630 | $ | 257 | $ | — | $ | 1,887 | |||||||||
Income tax valuation allowance (3) | $ | 17,973 | $ | 147,349 | (5) | $ | 1,577 | $ | 163,745 | ||||||||
YEAR ENDED DECEMBER 31, 2012 | |||||||||||||||||
Reserves and allowance deducted from asset accounts: | |||||||||||||||||
Allowance for doubtful accounts | $ | 1,443 | $ | 240 | $ | 53 | $ | 1,630 | |||||||||
Income tax valuation allowance (3) | $ | 42,039 | $ | 3,541 | $ | 27,607 | $ | 17,973 | |||||||||
YEAR ENDED DECEMBER 31, 2011 | |||||||||||||||||
Reserves and allowance deducted from asset accounts: | |||||||||||||||||
Allowance for doubtful accounts | $ | 1,649 | $ | (189 | ) | $ | 17 | $ | 1,443 | ||||||||
Income tax valuation allowance (3) | $ | 16,926 | $ | 31,914 | (4) | $ | 6,801 | $ | 42,039 | ||||||||
-1 | The charge to expense for the allowance for doubtful accounts primarily represents an adjustment for a change in estimate related to uncollectible accounts. | ||||||||||||||||
-2 | Represents: a) Uncollectible accounts written off, net of recoveries and write-offs, b) Net change in the sales return and allowance account, and c) Release of valuation allowances. | ||||||||||||||||
-3 | The income tax valuation allowance is included in current and noncurrent deferred income tax assets. | ||||||||||||||||
-4 | A significant portion of the increase in valuation allowances, approximately $30.8 million, is attributable to deferred tax assets arising from our acquisition of BigBand. These amounts did not impact the income statement. | ||||||||||||||||
-5 | A significant portion of the increase in valuation allowances, approximately $141.7 million, is attributable to deferred tax assets arising from our acquisition of Motorola Home. These amounts did not impact the income statement. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Consolidation | ' | ||||
(a) Consolidation | |||||
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned foreign and domestic subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. | |||||
Investments in companies in which ARRIS has significant influence, or ownership between 20% and 50% of the investee are accounted for in the Consolidated Financial Statements under the equity method of accounting. Under the equity method, the investment is originally recorded at cost and adjusted to recognize the Company’s share of net earnings or losses and any basis differences of the investee. The adjustment is limited to the extent of the Company’s investment in and advances to the investee. As such, consolidated net income includes our equity portion in current earnings of such companies. Investments in which we do not exercise significant influence (generally less than a 20 percent ownership interest) are accounted for under the cost method. | |||||
For 2013, none of the Company’s equity method investments exceeded the 10 percent threshold tests for a significant subsidiary as defined in Rule 1-02(w) of Regulation S-X under the Securities Exchange Act of 1934. | |||||
Use of Estimates | ' | ||||
(b) Use of Estimates | |||||
The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. | |||||
Cash, Cash Equivalents, and Investments | ' | ||||
(c) Cash, Cash Equivalents, and Investments | |||||
ARRIS’ cash and cash equivalents (which are highly-liquid investments with an original maturity of three months or less) are primarily held in money market funds that pay taxable interest. The Company holds investments consisting of mutual funds and debt securities classified as available-for-sale, which are stated at estimated fair value. The debt securities consist primarily of commercial paper, certificates of deposits, short term corporate obligations and U.S. government agency financial instruments. These investments are on deposit with major financial institutions. | |||||
From time to time, the Company has held certain investments in the common stock or preferred stock of private companies, which were classified as cost-method investments. | |||||
In connection with the Acquisition, ARRIS acquired certain investments in limited liability companies, and partnerships that are accounted for using the equity method as the Company has significant influence over operating and financial policies of the investee companies. The carrying amount of equity method investments is increased for the Company’s proportionate share of net earnings or losses and any basis differences of the investees, or dividend received. | |||||
The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amount of such investments may not be recoverable. An equity method investment is written down to fair value if there is evidence of a loss in value which is other than temporary. The Company may estimate the fair value of its equity method investments by considering recent investee equity transactions, discounted cash flow analysis, recent operating results, comparable public company operating cash flow multiples. If the fair value of the investment has dropped below the carrying amount, the Company considers several factors when determining whether an other-than temporary decline has occurred, such as; the length of the time and the extent to which the estimated fair value or market value has been below the carrying value, the financial condition and the near-term prospects of the investee, the intent and ability of the Company to retain its investment in the investee for a period of time sufficient to allow for any anticipated recovery in market value and general market conditions. | |||||
The Company has two rabbi trusts that are used as funding vehicles for various deferred compensation plans that were available to certain current and former officers and key executives. The Company also has a deferred retirement salary plan, which was limited to certain current or former officers of C-COR. The present value of the estimated future retirement benefit payments is being accrued over the estimated service period from the date of signed agreements with the employees. ARRIS holds an investment to cover its liability. ARRIS also funds its nonqualified defined benefit plan for certain executives in a rabbi trust. | |||||
Inventories | ' | ||||
(d) Inventories | |||||
Inventories are stated at the lower of average cost, approximating first-in, first-out, or market. The cost of work-in-process and finished goods is comprised of material, labor, and overhead. | |||||
Revenue recognition | ' | ||||
(e) Revenue recognition | |||||
ARRIS generates revenue as a result of varying activities, including the delivery of stand-alone equipment, custom design and installation services, and bundled sales arrangements inclusive of equipment, software and services. The revenue from these activities is recognized in accordance with applicable accounting guidance and their related interpretations. | |||||
Revenue is recognized when all of the following criteria have been met: | |||||
• | When persuasive evidence of an arrangement exists. Contracts and customer purchase orders are used to determine the existence of an arrangement. For professional services evidence that an agreement exists includes information documenting the scope of work to be performed, price, and customer acceptance. These are contained in the signed contract, purchase order, or other documentation that shows scope, price and customer acceptance. | ||||
• | Delivery has occurred. Shipping documents, proof of delivery and customer acceptance (when applicable) are used to verify delivery. | ||||
• | The fee is fixed or determinable. Pricing is considered fixed or determinable at the execution of a customer arrangement, based on specific products and quantities to be delivered at specific prices. This determination includes a review of the payment terms associated with the transaction and whether the sales price is subject to refund or adjustment or future discounts. | ||||
• | Collectability is reasonably assured. The Company assesses the ability to collect from customers based on a number of factors that include information supplied by credit agencies, analyzing customer accounts, reviewing payment history and consulting bank references. Should a circumstance arise where a customer is deemed not creditworthy, all revenue related to the transaction will be deferred until such time that payment is received and all other criteria to allow the Company to recognize revenue have been met. | ||||
Revenue is deferred if any of the above revenue recognition criteria is not met as well as when certain circumstances exist for any of our products or services, including, but not limited to: | |||||
• | When undelivered products or services that are essential to the functionality of the delivered product exist, revenue is deferred until such undelivered products or services are delivered as the customer would not have full use of the delivered elements. | ||||
• | When required acceptance has not occurred. | ||||
• | When trade-in rights are granted at the time of sale, that portion of the sale is deferred until the trade-in right is exercised or the right expires. In determining the deferral amount, management estimates the expected trade-in rate and future value of the product upon trade-in. These factors are periodically reviewed and updated by management, and the updates may result in either an increase or decrease in the deferral. | ||||
Equipment — The Company provides operators with equipment that can be placed within various stages of a broadband system that allows for the delivery of telephony, video and high-speed data as well as outside plant construction and maintenance equipment. For equipment sales, revenue recognition is generally established when the products have been shipped, risk of loss has transferred, objective evidence exists that the product has been accepted, and no significant obligations remain relative to the transaction. Additionally, based on historical experience, ARRIS has established reliable estimates related to sales returns and other allowances for discounts. These estimates are recorded as a reduction to revenue at the time the revenue is initially recorded. | |||||
Software Sold Without Tangible Equipment — ARRIS sells internally developed software as well as software developed by outside third parties that does not require significant production, modification or customization. For arrangements that contain only software and the related post-contract support, the Company recognizes revenue in accordance with the applicable software revenue recognition guidance. If the arrangement includes multiple elements that are software only, then the software revenue recognition guidance is applied and the fee is allocated to the various elements based on vendor-specific objective evidence (“VSOE”) of fair value. If sufficient VSOE of fair value does not exist for the allocation of revenue to all the various elements in a multiple element software arrangement, all revenue from the arrangement is deferred until the earlier of the point at which such sufficient VSOE of fair value is established or all elements within the arrangement are delivered. If VSOE of fair value exists for all undelivered elements, but does not exist for one or more delivered elements, the arrangement consideration is allocated to the various elements of the arrangement using the residual method of accounting. Under the residual method, the amount of the arrangement consideration allocated to the delivered elements is equal to the total arrangement consideration less the aggregate fair value of the undelivered elements. Under the residual method, if VSOE of fair value exists for the undelivered element, generally post contract support (“PCS”), the fair value of the undelivered element is deferred and recognized ratably over the term of the PCS contract, and the remaining portion of the arrangement is recognized as revenue upon delivery. If sufficient VSOE of fair value does not exist for PCS, revenue for the arrangement is recognized ratably over the term of support. | |||||
Standalone Services — Installation, training, and professional services are generally recognized in service revenue when performed or upon completion of the service when the final act is significant in relation to the overall service transaction. The key element for Professional Services in determining when service transaction revenue has been earned is determining the pattern of delivery or performance which determines the extent to which the earnings process is complete and the extent to which customers have received value from services provided. The delivery or performance conditions of our service transactions are typically evaluated under the proportional performance or completed performance model. | |||||
Incentives — Customer incentive programs that include consideration, primarily rebates/credits to be used against future product purchases and certain volume discounts, have been recorded as a reduction of revenue when the shipment of the requisite equipment occurs. | |||||
Value Added Resellers — ARRIS typically employs the sell-in method of accounting for revenue when using a Value Added Reseller (“VAR”) as our channel to market. Because product returns are restricted, revenue under this method is generally recognized at the time of shipment to the VAR provided all criteria for recognition are met. There are occasions, based on facts and circumstances surrounding the VAR transaction, where ARRIS will employ the sell-through method of recognizing revenue and defer that revenue until payment occurs. | |||||
Multiple Element Arrangements — Certain customer transactions may include multiple deliverables based on the bundling of equipment, software and services. When a multiple element arrangement exists, the fee from the arrangement is allocated to the various deliverables, to the extent appropriate, so that the proper amount can be recognized as revenue as each element is delivered. Based on the composition of the arrangement, the Company analyzes the provisions of the accounting guidance to determine the appropriate model that is applied towards accounting for the multiple element arrangement. If the arrangement includes a combination of elements that fall within different applicable guidance, ARRIS follows the provisions of the hierarchal literature to separate those elements from each other and apply the relevant guidance to each. | |||||
For multiple element arrangements that include software or have a software-related element that is more than incidental and does involve significant production, modification or customization, revenue is recognized using the contract accounting guidelines by applying the percentage-of-completion or completed-contract method. The Company recognizes software license and associated professional services revenue for its mobile workforce management software license product installations using the percentage of completion method of accounting as the Company believes that its estimates of costs to complete and extent of progress toward completion of such contracts are reliable. For certain software license arrangements where professional services are being provided and are deemed to be essential to the functionality or are for significant production, modification, or customization of the software product, both the software and the associated professional service revenue are recognized using the completed contract method. The completed-contract method is used for these particular arrangements because they are considered short-term arrangements and the financial position and results of operations would not be materially different from those under the percentage-of-completion method. Under the completed-contract method, revenue is recognized when the contract is complete, and all direct costs and related revenues are deferred until that time. The entire amount of an estimated loss on a contract is accrued at the time a loss on a contract is projected. Actual profits and losses may differ from these estimates. | |||||
For arrangements that fall within the software revenue recognition guidance, the fee is allocated to the various elements based on VSOE of fair value. If sufficient VSOE of fair value does not exist for the allocation of revenue to all the various elements in a multiple element arrangement, all revenue from the arrangement is deferred until the earlier of the point at which such sufficient VSOE of fair value is established or all elements within the arrangement are delivered. If VSOE of fair value exists for all undelivered elements, but does not exist for one or more delivered elements, the arrangement consideration is allocated to the various elements of the arrangement using the residual method of accounting. Under the residual method, the amount of the arrangement consideration allocated to the delivered elements is equal to the total arrangement consideration less the aggregate fair value of the undelivered elements. Using this method, any potential discount on the arrangement is allocated entirely to the delivered elements, which ensures that the amount of revenue recognized at any point in time is not overstated. Under the residual method, if VSOE of fair value exists for the undelivered element, generally PCS, the fair value of the undelivered element is deferred and recognized ratably over the term of the PCS contract, and the remaining portion of the arrangement is recognized as revenue upon delivery, which generally occurs upon delivery of the product or implementation of the system. Many of ARRIS’ products are sold in combination with customer support and maintenance services, which consist of software updates and product support. Software updates provide customers with rights to unspecified software updates that ARRIS chooses to develop and to maintenance releases and patches that the Company chooses to release during the period of the support period. Product support services include telephone support, remote diagnostics, email and web access, access to on-site technical support personnel and repair or replacement of hardware in the event of damage or failure during the term of the support period. Maintenance and support service fees are recognized ratably under the straight-line method over the term of the contract, which is generally one year. The Company does not record receivables associated with maintenance revenues without a firm, non-cancelable order from the customer. VSOE of fair value is determined based on the price charged when the same element is sold separately and based on the prices at which our customers have renewed their customer support and maintenance. For elements that are not yet being sold separately, the price established by management, if it is probable that the price, once established, will not change before the separate introduction of the element into the marketplace is used to measure VSOE of fair value for that element. | |||||
Shipping and Handling Fees | ' | ||||
(f) Shipping and Handling Fees | |||||
Shipping and handling costs for the years ended December 31, 2013, 2012, and 2011 were approximately $4.9 million, $3.6 million and $3.3 million, respectively, and are classified in net sales and cost of sales. | |||||
Taxes Collected from Customers and Remitted to Governmental Authorities | ' | ||||
(g) Taxes Collected from Customers and Remitted to Governmental Authorities | |||||
Taxes assessed by a government authority that are both imposed on and concurrent with specific revenue transactions between us and our customers are presented on a net basis in our Consolidated Statements of Operations. | |||||
Depreciation of Property, Plant and Equipment | ' | ||||
(h) Depreciation of Property, Plant and Equipment | |||||
The Company provides for depreciation of property, plant and equipment on the straight-line basis over estimated useful lives of 10 to 40 years for buildings and improvements, 2 to 10 years for machinery and equipment, and the shorter of the term of the lease or useful life for leasehold improvements. Included in depreciation expense is the amortization of landlord funded tenant improvements which amounted to $0.2 million in 2013, $0.5 million in 2012 and $0.6 million in 2011. Depreciation expense, including amortization of capital leases, for the years ended December 31, 2013, 2012, and 2011 was approximately $61.5 million, $28.0 million, and $24.1 million, respectively. | |||||
Goodwill and Long-Lived Assets | ' | ||||
(i) Goodwill and Long-Lived Assets | |||||
Goodwill relates to the excess of consideration transferred over the fair value of net assets resulting from an acquisition. On an annual basis, the Company’s goodwill is tested for impairment or more frequently if events or changes in circumstances indicate that the asset is more likely than not impaired, in which case a test would be performed sooner. Our annual goodwill impairment test is performed in the fourth quarter, with a testing date of October 1. For goodwill, the Company performs a two-step quantitative goodwill impairment test. In the first step, the Company compares the fair value of each reporting unit to its carrying amount. Fair value is determined for each reporting unit using a weighting of fair values derived from an income approach using discounted cash flows and a market approach. Under the income approach, fair value of a reporting unit is calculated based on the present value of estimated future cash flows. The discounted cash flow analysis requires us to make various judgmental assumptions, including assumptions about future cash flows, growth rates and weighted average cost of capital (discount rate). The assumptions about future cash flows and growth rates are based on the current and long-term business plans of each reporting unit. Discount rate assumptions are based on an assessment of the risk inherent in the future cash flows of the respective reporting units. Under the market approach, fair value is estimated based upon Market multiples of revenue and earnings derived from publicly traded companies with similar operating and investment characteristics as the reporting unit. In order to assess the reasonableness of the calculated fair values of our reporting units, the Company also compares the sum of the reporting units’ fair values to its market capitalization and calculates an implied control premium (the excess of the sum of the reporting units’ fair values over the market capitalization). If the fair value of the reporting unit exceeds the carrying amount of the net assets assigned to that unit, goodwill is not impaired, and no further testing is required. If the fair value of the reporting unit is less than the carrying value, the second step of the impairment test is performed to measure the amount of impairment loss, if any. In the second step, the reporting unit’s fair value is assigned to all of the assets and liabilities of the reporting unit, including any unrecognized intangible assets, in a hypothetical analysis that calculates the implied fair value of goodwill in the same manner as if the reporting unit was being acquired in a business combination. If the implied fair value of the reporting unit’s goodwill is less than the carrying amount, the difference is recorded as an impairment loss. | |||||
The annual goodwill impairment tests were performed in the fourth quarters of 2011, 2012, and 2013 with an assessment date of October 1. There was no impairment of goodwill resulting from our annual impairment testing in 2013 and 2012. In 2011, a goodwill-impairment charge of $41.2 million before tax ($33.9 million after tax) was recorded for the former MCS reporting unit (now included in the Cloud Services reporting unit.) | |||||
As of December 31, 2013, the Company had goodwill of $935.6 million, of which $685.0 million related to the CPE reporting unit, $239.7 million related to the Network Infrastructure reporting unit and $10.9 million related to the Cloud Services reporting unit. | |||||
Long-lived assets, such as property, plant, and equipment and purchased intangible assets subject to depreciation and amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount of the asset or asset group, to the future undiscounted cash flows the asset is expected to generate. In determining future undiscounted cash flows, we have made a “policy decision” to use pre-tax cash flows in our evaluation, which is consistently applied. To test for recovery, we group assets (an “asset group”) in a manner that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. | |||||
Other intangible assets represent acquired intangible assets, which include developed technology, in-process research and development, customer relationships, covenants not-to-compete, and order backlog. Amounts assigned to other identifiable intangible assets with finite useful lives are amortized on a straight-line basis over their estimated useful lives as follows: | |||||
Intangibles with finite useful lives: | |||||
Developed technology, patents and licenses | 2 - 10 years | ||||
Customer relationships | 7 - 10 years | ||||
Non-compete agreements | 2 years | ||||
Trademarks and trade names | 2 - 10 years | ||||
Order backlog | 1 - 2 years | ||||
Intangibles with indefinite useful lives: | |||||
In-process research and development | Indefinite | ||||
Acquired in-process research and development assets are initially recognized and measured at fair value and classified as indefinite-lived assets until the successful completion or abandonment of the associated research and development efforts. Accordingly, during the development period after the acquisition date, this asset will not be amortized as charges to earnings; instead these assets will be subject to periodic impairment testing. Completion of the associated research and development efforts would cause the indefinite-lived in-process research and development assets to become a finite-lived asset. As such, prior to commencing amortization the assets will be tested for impairment. | |||||
As of December 31, 2013, the financial statements included intangible assets of $1,176.2 million, net of accumulated amortization of $427.1 million. As of December 31, 2012, the financial statements included intangible assets of $94.5 million, net of accumulated amortization of $239.7 million. | |||||
Our intangible assets with finite lives are tested for impairment when events or changes in circumstances indicate that impairment may exist. Our indefinite-lived assets for in-process research and development were tested for impairment as of October 1, 2013. | |||||
There were no impairment charges related to purchased intangible assets during 2013 and 2012. In 2011, indicators of impairment existed for long-lived assets associated with the former MCS reporting unit (now included as part of the Cloud Services reporting unit) due to changes in projected operating results and cash flows. In the fourth quarter of 2011, an impairment loss of $47.4 million before tax ($29.1 million after tax) related to customer relationships was recorded. | |||||
See Note 5 of Notes to the Consolidated Financial Statements for further information on goodwill and intangible assets. | |||||
Advertising and Sales Promotion | ' | ||||
(j) Advertising and Sales Promotion | |||||
Advertising and sales promotion costs are expensed as incurred. Advertising expense was approximately $4.1 million, $0.2 million, and $0.6 million for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||
Research and Development | ' | ||||
(k) Research and Development | |||||
Research and development (“R&D”) costs are expensed as incurred. ARRIS’ research and development expenditures for the years ended December 31, 2013, 2012 and 2011 were approximately $425.8 million, $170.7 million, and $146.5 million, respectively. The expenditures include compensation costs, materials, other direct expenses, and allocated costs of information technology, telecommunications, and facilities. | |||||
Warranty | ' | ||||
(l) Warranty | |||||
ARRIS provides warranties of various lengths to customers based on the specific product and the terms of individual agreements. For further discussion, see Note 10 of the Notes to the Consolidated Financial Statements, Guarantees for further discussion. | |||||
Income Taxes | ' | ||||
(m) Income Taxes | |||||
ARRIS uses the liability method of accounting for income taxes, which requires recognition of temporary differences between financial statement and income tax bases of assets and liabilities, measured by enacted tax rates. | |||||
If necessary, the measurement of deferred tax assets is reduced by the amount of any tax benefits that are not expected to be realized based on available evidence. ARRIS reports a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense. | |||||
There is significant uncertainty surrounding how much deferred income tax assets will ultimately arise from the acquisition of Motorola Home and be available for utilization by ARRIS. As of December 31, 2013, the Seller has not completed the preparation and the related filing of the final income tax returns for the income tax year ending with the acquisition by ARRIS on April 16, 2013. At this time, the Company has recorded its best estimate of the deferred income tax assets, given the information that is currently available. | |||||
See Note 17 of Notes to the Consolidated Financial Statements for further discussion. | |||||
Foreign Currency Translation | ' | ||||
(n) Foreign Currency Translation | |||||
A significant portion of the Company’s products are manufactured or assembled in China, Mexico and Taiwan, and we have research and development centers in China, India, Ireland, Israel, Russia and Sweden. Sales into international markets have been and are expected in the future to be an important part of the Company’s business. These foreign operations are subject to the usual risks inherent in conducting business abroad, including risks with respect to currency exchange rates, economic and political destabilization, restrictive actions and taxation by foreign governments, nationalization, the laws and policies of the United States affecting trade, foreign investment and loans, and foreign tax laws. | |||||
ARRIS has certain international customers who are billed in their local currency and certain predictable expenditures for international operations in local currency. Additionally, certain intercompany transactions created in conjunction with the Motorola Home acquisition are denominated in foreign currencies and subject to revaluation. The Company uses a hedging strategy and enters into forward or currency option contracts based on a percentage of expected foreign currency exposures. The percentage can vary, based on the predictability of the exposures denominated in the foreign currency. Currently, the Company has no outstanding foreign currency hedges. | |||||
Israeli Severance Pay | ' | ||||
(o) Israeli Severance Pay | |||||
The Company’s wholly-owned subsidiary located in Israel is required to fund future severance liabilities determined in accordance with Israeli severance pay laws. Under these laws, employees are entitled upon termination to one month’s salary for each year of employment or portion thereof. The Company records compensation expense to accrue for these costs over the employment period, based on the assumption that the benefits to which the employee is entitled, if the employee separates immediately. The Company funds the liability by monthly deposits in insurance policies and severance funds. The value of the severance fund assets are primarily recorded in other non-current assets on the Company’s consolidated balance sheets, which was $3.6 million as of December 31, 2013 and $3.8 million as of December 31, 2012. The liability for long-term severance accrued on the Company’s consolidated balance sheets was $3.9 million as of December 31, 2013 and $4.2 million as of December 31, 2012. | |||||
Stock-Based Compensation | ' | ||||
(p) Stock-Based Compensation | |||||
See Note 19 of Notes to the Consolidated Financial Statements for further discussion of the Company’s significant accounting policies related to stock based compensation. | |||||
Concentrations of Credit Risk | ' | ||||
(q) Concentrations of Credit Risk | |||||
Financial instruments that potentially subject ARRIS to concentrations of credit risk consist principally of cash, cash equivalents and short-term investments, and accounts receivable. ARRIS places its temporary cash investments with high credit quality financial institutions. Concentrations with respect to accounts receivable occur as the Company sells primarily to large, well-established companies including companies outside of the United States. The Company’s credit policy generally does not require collateral from its customers. ARRIS closely monitors extensions of credit to other parties and, where necessary, utilizes common financial instruments to mitigate risk or requires cash on delivery terms. Overall financial strategies and the effect of using a hedge are reviewed periodically. When deemed uncollectible, accounts receivable balances are written off against the allowance for doubtful accounts. | |||||
The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments: | |||||
• | Cash, cash equivalents, and short-term investments: The carrying amounts reported in the consolidated balance sheets for cash, cash equivalents, and short-term investments approximate their fair values. | ||||
• | Accounts receivable and accounts payable: The carrying amounts reported in the balance sheet for accounts receivable and accounts payable approximate their fair values. The Company establishes a reserve for doubtful accounts based upon its historical experience in collecting accounts receivable. | ||||
• | Marketable securities: The fair values for trading and available-for-sale equity securities are based on quoted market prices or observable prices based on inputs not in active markets but corroborated by market data. | ||||
• | Non-marketable securities: Non-marketable equity securities are subject to a periodic impairment review; however, there are no open-market valuations, and the impairment analysis requires significant judgment. This analysis includes assessment of the investee’s financial condition, the business outlook for its products and technology, its projected results and cash flow, recent rounds of financing, and the likelihood of obtaining subsequent rounds of financing. | ||||
• | Senior secured credit facilities: Comprised of term loans and revolving credit facility. The face value of the Company’s term loans totaled approximately $1,752.6 million at December 31, 2013. | ||||
• | Derivative instruments: The carrying amounts reported in the balance sheet for derivative financial instruments approximate their fair values. The Company has designated these instruments as cash flow hedges and the objective was to manage the variability of cash flows in the interest payments related to the portion of the variable-rate debt designated as being hedged. | ||||
Computer Software | ' | ||||
(r) Computer Software | |||||
The Company capitalizes costs associated with internally developed and/or purchased software systems for internal use that have reached the application development stage and meet recoverability tests. Capitalized costs include external direct costs of materials and services utilized in developing or obtaining internal-use software and payroll and payroll-related expenses for employees who are directly associated with and devote time to the internal-use software project. Capitalization of such costs begins when the preliminary project stage is complete and ceases no later than the point at which the project is substantially complete and ready for its intended purpose. These capitalized costs are amortized on a straight-line basis over periods of two to seven years, beginning when the asset is ready for its intended use. Capitalized costs are included in property, plant, and equipment on the consolidated balance sheets. The carrying value of the software is reviewed regularly and impairment is recognized if the value of the estimated undiscounted cash flow benefits related to the asset is less than the remaining unamortized costs. | |||||
Research and development costs are charged to expense as incurred. ARRIS generally has not capitalized any such development costs because the costs incurred between the attainment of technological feasibility for the related software product through the date when the product is available for general release to customers has been insignificant. | |||||
Comprehensive Income (Loss) | ' | ||||
(s) Comprehensive Income (Loss) | |||||
The components of comprehensive income (loss) include net income (loss), unrealized gains (losses) on available-for-sale securities, unrealized gains (losses) on derivative instruments, change in unfunded pension liability, net of tax, if applicable and change in cumulative translation adjustments. Comprehensive income (loss) is presented in the consolidated statements of comprehensive income (loss). |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Estimated Useful Life of Intangible Assets | ' | ||||
Intangibles with finite useful lives: | |||||
Developed technology, patents and licenses | 2 - 10 years | ||||
Customer relationships | 7 - 10 years | ||||
Non-compete agreements | 2 years | ||||
Trademarks and trade names | 2 - 10 years | ||||
Order backlog | 1 - 2 years | ||||
Intangibles with indefinite useful lives: | |||||
In-process research and development | Indefinite | ||||
Business_Acquisitions_Tables
Business Acquisitions (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Summary of Fair Value of Consideration Transferred on Acquisition, Net of Cash Acquired | ' | ||||||||||||
The following table summarizes the fair value of consideration transferred for Motorola Home, net of cash acquired (in thousands): | |||||||||||||
Cash transferred (1) | $ | 2,208,114 | |||||||||||
Fair Value of shares issued to Seller (2) | 176,410 | ||||||||||||
Total value of consideration | $ | 2,384,524 | |||||||||||
-1 | At closing the actual cash transferred as part of the transaction was $2,159.8 million, net of cash acquired of $78.0 million. During the quarter ended September 30, 2013, an additional $48.3 million of cash was transferred as part of working capital adjustments. The cash portion of the consideration was funded with cash on hand, borrowings under ARRIS’ senior secured credit facilities (see Note 15 Long-Term Indebtedness for additional details) and through the sale by ARRIS of approximately 10.6 million shares of ARRIS’ common stock to a subsidiary of Comcast Corporation for $150 million in cash. | ||||||||||||
-2 | The fair value of the 10.6 million shares issued to Seller was determined based on the opening price of the Company’s common stock at the Acquisition date. | ||||||||||||
Summary of Preliminary Estimated Fair Values of Net Assets Acquired | ' | ||||||||||||
The following table summarizes the estimated fair values of the net assets acquired as of the acquisition date, as well as measurement period and other adjustments made during 2013 to the amounts initially recorded. The measurement period adjustments have been retrospectively adjusted in our financial statements as if those adjustments occurred on the acquisition date. Certain estimated fair values are not yet finalized (see below) and are subject to change, which could be significant. We will finalize the amounts recognized as we obtain the information necessary to complete the analysis, but no later than one year from the acquisition date. | |||||||||||||
(in thousands) | Amounts | Adjustments | Amounts | ||||||||||
Recognized as | Recognized as | ||||||||||||
of Acquisition | of Acquisition | ||||||||||||
Date (a) | Date (as | ||||||||||||
adjusted) | |||||||||||||
Total consideration transferred, net of cash acquired (b) | $ | 2,336,172 | $ | 48,352 | $ | 2,384,524 | |||||||
Assets acquired and liabilities assumed: | |||||||||||||
Accounts receivable | 462,162 | — | 462,162 | ||||||||||
Inventories | 279,562 | (9,170 | ) | 270,392 | |||||||||
Deferred income tax assets (c) | 370,543 | 3,738 | 374,281 | ||||||||||
Other assets | 153,094 | 14,684 | 167,778 | ||||||||||
Property, plant & equipment (d) | 350,547 | (10,161 | ) | 340,386 | |||||||||
Intangible assets (e) | 1,343,400 | (104,200 | ) | 1,239,200 | |||||||||
Accounts payable | (349,235 | ) | — | (349,235 | ) | ||||||||
Deferred revenue | (27,797 | ) | — | (27,797 | ) | ||||||||
Other liabilities (f) | (324,852 | ) | (21,867 | ) | (346,719 | ) | |||||||
Deferred tax liability (c) | (534,479 | ) | 43,977 | (490,502 | ) | ||||||||
Total net assets acquired | 1,722,945 | (82,999 | ) | 1,639,946 | |||||||||
Goodwill (g) | $ | 613,227 | $ | 131,351 | $ | 744,578 | |||||||
(a) | As previously reported as of June 30, 2013. | ||||||||||||
(b) | Amount represents adjustment for final working capital. | ||||||||||||
(c) | The measurement period and other adjustments for deferred tax assets and liabilities primarily reflect the tax impact of the pre-tax measurement period adjustments and adjustments to certain uncertain tax positions following receipt of additional information about facts and circumstances existing as of the Acquisition date. | ||||||||||||
(d) | The measurement period adjustments for property, plant & equipment costs to reflect updated fair values of acquired personal property that existed as of the acquisition date. | ||||||||||||
(e) | The measurement period adjustments for identifiable intangible assets primarily consists of adjustments recorded to reflect changes in the estimated fair value of certain acquired intangibles, principally customer relationships, developed technology and patents, and in-process research and development based upon facts and circumstances that existed as of the acquisition date. The Company continued to gather further specific information on the Motorola Home intangible assets, such as the timing and risk of cash flows of the intangible assets, including those assets still in the research and development phase. Some of the more significant assumptions inherent in the development of intangible asset values, from the perspective of a market participant, include: the amount and timing of projected future cash flows (including revenue, cost of sales, research and development costs, sales and marketing expenses); working capital; contributory asset charges; the discount rate selected to measure the risks inherent in the future cash flows; and the assessment of the asset’s life cycle and the competitive trends impacting the asset, as well as other factors. These factors were refined in order to further complete the valuation work that impacted (i) the estimated total fair value assigned to intangible assets, (ii) the estimated assignment of fair value between finite-lived and indefinite-lived intangible assets and/or (iii) the estimated weighted-average useful life of each category of intangible assets. | ||||||||||||
(f) | The change primarily relates to an increase in warranty accrual due to a change in estimate of the initial accrued warranty recorded at the acquisition date as a result of additional information arising subsequent to the acquisition that existed as of the Acquisition date, as well as adjustment for certain foreign pension obligations. | ||||||||||||
(g) | Goodwill recognized as of the Acquisition date (as adjusted) totaled $744.6 million and is attributable to the workforce of the acquired business, strategic opportunities and synergies that are expected to arise from the acquisition of Motorola Home. The preliminarily determined goodwill has been assigned to the Company’s three reporting units (see Note 5 Goodwill and Intangible Assets for additional details). These amounts are not yet finalized and are subject to change. With the exception of $77.6 million of goodwill that retains its tax basis after the acquisition, the remaining portion of the $744.6 million of goodwill is not expected to be deductible for income tax purposes. The amount of tax deductible goodwill remains subject to adjustment through the measurement period. | ||||||||||||
Acquired Intangible Assets | ' | ||||||||||||
The $1.2 billion of acquired intangible assets were assigned to the following (in thousands): | |||||||||||||
Fair value | Estimated Weighted | ||||||||||||
Average Life (years) | |||||||||||||
Customer relationships | $ | 653,400 | 8 | ||||||||||
Developed technology and patents | 439,300 | 6 | |||||||||||
In process R&D | 83,100 | indefinite | |||||||||||
Backlog | 44,600 | 1 | |||||||||||
Trademark / trade name | 18,800 | 1 | |||||||||||
Total | $ | 1,239,200 | |||||||||||
Summary of Funding Contributions | ' | ||||||||||||
(in thousands) | Carrying Value | Maximum Exposure | |||||||||||
to Loss | |||||||||||||
Conditional Access Licensing (“CAL”) | $ | 6,476 | $ | 6,476 | |||||||||
Combined Conditional Access Development (“CCAD”) | 5,886 | 18,000 | |||||||||||
Business Acquisitions, Pro Forma Results of Operations | ' | ||||||||||||
In addition, unaudited pro forma net loss for the year ended December 31, 2012 includes $11.0 million reduction in revenue related to the fair value adjustment to deferred revenue. These adjustments exclude the income tax impact. | |||||||||||||
Unaudited Supplemental Pro Forma Information | |||||||||||||
For the years ended December 31, | |||||||||||||
(in thousands, except per share data) | |||||||||||||
2013 | 2012 | ||||||||||||
Net sales | $ | 4,426,576 | $ | 4,685,648 | |||||||||
Net income (loss) | (108,548 | ) | (142,489 | ) | |||||||||
Income (loss) per common share: | |||||||||||||
Basic | $ | (0.79 | ) | $ | (1.05 | ) | |||||||
Diluted | $ | (0.79 | ) | $ | (1.05 | ) |
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||
Changes in Carrying Amount of Goodwill | ' | ||||||||||||||||||||||||||||||||
The changes in the carrying amount of goodwill for the year ended December 31, 2013 are as follows (in thousands): | |||||||||||||||||||||||||||||||||
CPE | Network | Cloud | Total | ||||||||||||||||||||||||||||||
Infrastructure | Services | ||||||||||||||||||||||||||||||||
Goodwill | $ | 31,850 | $ | 419,745 | $ | 121,603 | $ | 573,198 | |||||||||||||||||||||||||
Accumulated impairment losses | — | (257,053 | ) | (121,603 | ) | (378,656 | ) | ||||||||||||||||||||||||||
Balance as of December 31, 2011 (1) | 31,850 | 162,692 | — | 194,542 | |||||||||||||||||||||||||||||
Adjustment to net deferred taxes — C-COR | — | (1,188 | ) | — | (1,188 | ) | |||||||||||||||||||||||||||
Adjustment to net deferred taxes — BigBand | — | 761 | — | 761 | |||||||||||||||||||||||||||||
Goodwill | 31,850 | 419,318 | 121,603 | 572,771 | |||||||||||||||||||||||||||||
Accumulated impairment losses | — | (257,053 | ) | (121,603 | ) | (378,656 | ) | ||||||||||||||||||||||||||
Balance as of December 31, 2012 (1) | 31,850 | 162,265 | — | 194,115 | |||||||||||||||||||||||||||||
Goodwill acquired | 653,191 | 80,524 | 10,863 | 744,578 | |||||||||||||||||||||||||||||
Adjustment to net deferred taxes — C-COR | — | (380 | ) | — | (380 | ) | |||||||||||||||||||||||||||
Adjustment to net deferred taxes — BigBand | — | (2,734 | ) | — | (2,734 | ) | |||||||||||||||||||||||||||
Goodwill | 685,041 | 496,728 | 132,466 | 1,314,235 | |||||||||||||||||||||||||||||
Accumulated impairment losses | — | (257,053 | ) | (121,603 | ) | (378,656 | ) | ||||||||||||||||||||||||||
Balance as of December 31, 2013 | $ | 685,041 | $ | 239,675 | $ | 10,863 | $ | 935,579 | |||||||||||||||||||||||||
-1 | Reflects retrospective reassignment of goodwill due to reorganization of segments and reporting unit structure. | ||||||||||||||||||||||||||||||||
Gross Carrying Amount and Accumulated Amortization of Intangible Assets | ' | ||||||||||||||||||||||||||||||||
The gross carrying amount and accumulated amortization of the Company’s intangible assets as of December 31, 2013 and December 31, 2012 are as follows (in thousands): | |||||||||||||||||||||||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||||||||||||||||||||||
Gross | Accumulated | Net | Weighted | Gross | Accumulated | Net | Weighted | ||||||||||||||||||||||||||
Amount | Amortization | Book | Average | Amount | Amortization | Book | Average | ||||||||||||||||||||||||||
Value | Remaining | Value | Remaining | ||||||||||||||||||||||||||||||
Life | Life | ||||||||||||||||||||||||||||||||
(Years) | (Years) | ||||||||||||||||||||||||||||||||
Customer relationships | $ | 903,409 | $ | 266,323 | $ | 637,086 | 7 | $ | 250,009 | $ | 190,285 | $ | 59,724 | 4 | |||||||||||||||||||
Developed technology, patents & licenses | 563,326 | 120,679 | 442,647 | 0.5 | 77,769 | 42,964 | 34,805 | 4.4 | |||||||||||||||||||||||||
Trademarks/trade names | 20,900 | 8,549 | 12,351 | 1.5 | 257 | 257 | — | — | |||||||||||||||||||||||||
Order backlog | 44,600 | 31,592 | 13,008 | 0.3 | 3,000 | 3,000 | — | — | |||||||||||||||||||||||||
Non-compete agreements | — | — | — | — | 3,162 | 3,162 | — | — | |||||||||||||||||||||||||
In-process R&D | 71,100 | — | 71,100 | — | — | — | — | — | |||||||||||||||||||||||||
Total | $ | 1,603,335 | $ | 427,143 | $ | 1,176,192 | $ | 334,197 | $ | 239,668 | $ | 94,529 | |||||||||||||||||||||
Estimated Total Amortization Expense for Finite-Lived Intangibles for Next Five Fiscal Years | ' | ||||||||||||||||||||||||||||||||
The estimated total amortization expense for finite-lived intangibles for each of the next five fiscal years is as follows (in thousands): | |||||||||||||||||||||||||||||||||
2014 | $ | 224,363 | |||||||||||||||||||||||||||||||
2015 | 203,979 | ||||||||||||||||||||||||||||||||
2016 | 173,251 | ||||||||||||||||||||||||||||||||
2017 | 156,316 | ||||||||||||||||||||||||||||||||
2018 | 117,362 | ||||||||||||||||||||||||||||||||
Thereafter | 229,821 | ||||||||||||||||||||||||||||||||
Investments_Tables
Investments (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Investments | ' | ||||||||
ARRIS’ investments consisted of the following (in thousands): | |||||||||
As of December 31, | As of December 31, | ||||||||
2013 | 2012 | ||||||||
Current Assets: | |||||||||
Available-for-sale securities | $ | 67,360 | $ | 398,414 | |||||
Noncurrent Assets: | |||||||||
Available-for-sale securities | 7,004 | 59,549 | |||||||
Equity method investments | 23,803 | — | |||||||
Cost method investments | 15,250 | 6,000 | |||||||
Other investments | 25,119 | 20,615 | |||||||
Total classified as non-current assets | 71,176 | 86,164 | |||||||
Total | $ | 138,536 | $ | 484,578 | |||||
Contractual Maturities of Available-for-Sale Securities | ' | ||||||||
The contractual maturities of the Company’s available-for-sale securities as of December 31, 2013 are shown below. Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties. The amortized cost basis of the Company’s investments approximates fair value (in thousands): | |||||||||
31-Dec-13 | |||||||||
Within one year | $ | 67,360 | |||||||
After one year through five years | 3,604 | ||||||||
After five years through ten years | — | ||||||||
After ten years | 3,400 | ||||||||
Total | $ | 74,364 | |||||||
Summary of Ownership Structure and Ownership Percentage of Non-consolidated Investments | ' | ||||||||
The following table summarizes the ownership structure and ownership percentage of the non-consolidated investments as of December 31, 2013, which are accounted for using the equity method. | |||||||||
Name of Investee | Ownership Structure | % Ownership | |||||||
MPEG LA | Limited Liability Company | 8.40% | |||||||
Music Choice | Limited Liability Partnership | 18.20% | |||||||
Conditional Access Licensing | Limited Liability Company | 49.00% | |||||||
Combined Conditional Access Development | Limited Liability Company | 50.00% |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Investment Assets and Interest Rate Swap Positions (Excluding Equity and Lost Method Investments) Measured at Fair Value on Recurring Basis | ' | ||||||||||||||||
The following table presents the Company’s investment assets (excluding equity and cost method investments) measured at fair value on a recurring basis as of December 31, 2013 (in thousands): | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Current Assets: | |||||||||||||||||
Certificates of deposit | $ | — | $ | 3,814 | $ | — | $ | 3,814 | |||||||||
Commercial paper | — | 2,994 | — | 2,994 | |||||||||||||
Corporate bonds | — | 30,987 | — | 30,987 | |||||||||||||
Short-term bond fund | 29,565 | — | — | 29,565 | |||||||||||||
29,565 | 37,795 | — | 67,360 | ||||||||||||||
Noncurrent Assets: | |||||||||||||||||
Cash surrender value of company owned life insurance | — | 25,119 | — | 25,119 | |||||||||||||
Corporate bonds | — | 3,604 | — | 3,604 | |||||||||||||
Corporate obligations | — | 18 | — | 18 | |||||||||||||
Money markets | 212 | — | — | 212 | |||||||||||||
Mutual funds | 184 | — | — | 184 | |||||||||||||
Other investments | — | 2,986 | — | 2,986 | |||||||||||||
396 | 31,727 | — | 32,123 | ||||||||||||||
Total assets | $ | 29,961 | $ | 69,522 | $ | — | $ | 99,483 | |||||||||
The following table presents the Company’s investment assets (excluding equity and lost method investments) measured at fair value on a recurring basis as of December 31, 2012 (in thousands): | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Current Assets: | |||||||||||||||||
Certificates of deposit | $ | — | $ | 5,416 | $ | — | $ | 5,416 | |||||||||
Commercial paper | — | 18,964 | — | 18,964 | |||||||||||||
Corporate bonds | — | 209,093 | — | 209,093 | |||||||||||||
Municipal bonds | 164,941 | — | — | 164,941 | |||||||||||||
164,941 | 233,473 | — | 398,414 | ||||||||||||||
Noncurrent Assets: | |||||||||||||||||
Cash surrender value of company owned life insurance | — | 20,615 | — | 20,615 | |||||||||||||
Corporate bonds | — | 53,914 | — | 53,914 | |||||||||||||
Corporate obligations | — | 15 | — | 15 | |||||||||||||
Money markets | 226 | — | — | 226 | |||||||||||||
Mutual funds | 179 | — | — | 179 | |||||||||||||
Other investments | — | 5,215 | — | 5,215 | |||||||||||||
405 | 79,759 | — | 80,164 | ||||||||||||||
Total assets | $ | 165,346 | $ | 313,232 | $— | $ | 478,578 | ||||||||||
Derivative_Instruments_and_Hed1
Derivative Instruments and Hedging Activities (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Outstanding Interest Rate Derivatives Designated as Cash Flow Hedges of Interest Rate Risk | ' | ||||||||||||||||
As of December 31, 2013, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk: | |||||||||||||||||
Interest Rate Derivative | Number of Instruments | Notional | |||||||||||||||
Interest Rate Swaps | 6 | $ | 600,000,000 | ||||||||||||||
Pre-Tax Impact of Derivative Financial Instruments | ' | ||||||||||||||||
The table below presents the pre-tax impact of the Company’s derivative financial instruments had on the Accumulated Other Comprehensive Income and Statement of Operations for the year ended December 31, 2013 (in thousands): | |||||||||||||||||
Gain or (Loss) | Location of Gain or | Gain or (Loss) Reclassified | Gain or (Loss) Recognized | ||||||||||||||
Recognized in OCI on | (Loss) Reclassified from | from Accumulated OCI into | in Income on Derivative | ||||||||||||||
Derivative (Effective | Accumulated OCI into | Income (Effective Portion) | (Ineffective Portion and | ||||||||||||||
Portion) | Income (Effective | Amount Excluded from | |||||||||||||||
Portion) | Effectiveness Testing) | ||||||||||||||||
Interest rate derivatives | $ | (7,140 | ) | Interest expense | $ | (3,132 | ) | $ | — | ||||||||
Fair Values of Derivative Instruments Recorded in Consolidated Balance Sheet | ' | ||||||||||||||||
The fair values of ARRIS’ derivative instruments recorded in the Consolidated Balance Sheet as of December 31, 2013 and 2012 were as follows (in thousands): | |||||||||||||||||
As of December 31, 2013 | As of December 31, 2012 | ||||||||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||
Foreign exchange contracts — asset derivatives | Other current assets | $ | — | Other current assets | $ | 590 | |||||||||||
Foreign exchange contracts — liability derivatives | Other accrued liabilities | $ | — | Other accrued liabilities | $ | 513 | |||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||
Interest rate derivatives — asset derivatives | Other assets | $ | 3,011 | Other assets | $ | — | |||||||||||
Interest rate derivatives — liability derivatives | Other accrued liabilities | $ | 7,018 | Other accrued liabilities | $ | — | |||||||||||
Change in Fair Values of Derivative Instruments Recorded in Consolidated Statements of Operations | ' | ||||||||||||||||
The change in the fair values of ARRIS’ derivative instruments recorded in the Consolidated Statements of Operations during the years ended December 31, 2013, 2012, and 2011 were as follows (in thousands): | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
Statement of Operations Location | 2013 | 2012 | 2011 | ||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||
Foreign exchange contracts | Gain on foreign currency | $ | 428 | $ | 268 | $ | 809 | ||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||
Interest rates derivatives | Interest expense | $ | 3,132 | $ | — | $ | — |
Guarantees_Tables
Guarantees (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Information Regarding Changes in ARRIS' Aggregate Product Warranty Liabilities | ' | ||||||||
Information regarding the changes in ARRIS’ aggregate product warranty liabilities for the years ending December 31, 2013 and 2012 were as follows (in thousands): | |||||||||
2013 | 2012 | ||||||||
January 1, | $ | 6,069 | $ | 6,387 | |||||
Motorola Home warranty reserve at acquisition, | 82,804 | — | |||||||
Accruals related to warranties (including changes in assumptions) | 20,911 | 3,125 | |||||||
Settlements made (in cash or in kind) | (28,284 | ) | (3,443 | ) | |||||
Balance at December 31, | $ | 81,500 | $ | 6,069 | |||||
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Reporting Segments | ' | ||||||||||||||||
The table below presents information about the Company’s reportable segments for the years ended December 31, 2013, 2012 and 2011 (in thousands): | |||||||||||||||||
Reportable Segments | |||||||||||||||||
Network & | CPE | Other | Consolidated | ||||||||||||||
Cloud | |||||||||||||||||
Year ended December 31, 2013, | |||||||||||||||||
Sales | $ | 1,174,757 | $ | 2,466,618 | $ | (20,473 | ) | $ | 3,620,902 | ||||||||
Direct Contribution | 258,336 | 482,519 | (482,184 | ) | 258,671 | ||||||||||||
Restructuring charges | 37,576 | 37,576 | |||||||||||||||
Acquisition, integration & other costs | 45,471 | 45,471 | |||||||||||||||
Amortization of intangible assets | 193,637 | 193,637 | |||||||||||||||
Operating loss | (18,013 | ) | |||||||||||||||
Other expense | 78,137 | ||||||||||||||||
Income (loss) before income taxes | $ | (96,150 | ) | ||||||||||||||
Reportable Segments | |||||||||||||||||
Network & | CPE | Other | Consolidated | ||||||||||||||
Cloud | |||||||||||||||||
Year ended December 31, 2012, | |||||||||||||||||
Sales | $ | 742,255 | $ | 611,408 | $ | — | $ | 1,353,663 | |||||||||
Direct Contribution | 228,798 | 66,788 | (165,053 | ) | 130,533 | ||||||||||||
Restructuring charges | 6,761 | 6,761 | |||||||||||||||
Acquisition, integration & other costs | 6,207 | 6,207 | |||||||||||||||
Amortization of intangible assets | 30,294 | 30,294 | |||||||||||||||
Operating income | 87,271 | ||||||||||||||||
Other expense | 12,975 | ||||||||||||||||
Income (loss) before income taxes | $ | 74,296 | |||||||||||||||
Reportable Segments | |||||||||||||||||
Network & | CPE | Other | Consolidated | ||||||||||||||
Cloud | |||||||||||||||||
Year ended December 31, 2011, | |||||||||||||||||
Sales | $ | 702,997 | $ | 382,424 | $ | 3,264 | $ | 1,088,685 | |||||||||
Direct Contribution | 244,540 | 12,973 | (142,274 | ) | 115,239 | ||||||||||||
Restructuring charges | 4,360 | 4,360 | |||||||||||||||
Acquisition, integration & other costs | 3,205 | 3,205 | |||||||||||||||
Impairment of goodwill and intangible assets | 88,633 | 88,633 | |||||||||||||||
Amortization of intangible assets | 33,649 | 33,649 | |||||||||||||||
Operating loss | (14,608 | ) | |||||||||||||||
Other expense | 13,903 | ||||||||||||||||
Income (loss) before income taxes | $ | (28,511 | ) | ||||||||||||||
Summary of Company's Net Intangible Assets and Goodwill by Reportable Segment | ' | ||||||||||||||||
The following table summarizes the Company’s net intangible assets and goodwill by reportable segment as of December 31, 2013 and 2012 (in thousands): | |||||||||||||||||
Network & | CPE | Total | |||||||||||||||
Cloud | |||||||||||||||||
December 31, 2013 | |||||||||||||||||
Goodwill | $ | 250,538 | $ | 685,041 | $ | 935,579 | |||||||||||
Intangible assets, net | 366,844 | 809,348 | 1,176,192 | ||||||||||||||
December 31, 2012 | |||||||||||||||||
Goodwill | $ | 162,265 | $ | 31,850 | $ | 194,115 | |||||||||||
Intangible assets, net | 94,529 | — | 94,529 | ||||||||||||||
Summary of Sales to Customers | ' | ||||||||||||||||
A summary of sales to these customers for 2013, 2012 and 2011 is set forth below (in thousands, except percentages): | |||||||||||||||||
Years ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Comcast and affiliates | $ | 674,964 | $ | 421,173 | $ | 286,139 | |||||||||||
% of sales | 18.6 | % | 31.1 | % | 26.4 | % | |||||||||||
Time Warner Cable and affiliates | $ | 359,484 | $ | 243,151 | $ | 180,740 | |||||||||||
% of sales | 9.9 | % | 18 | % | 16.7 | % | |||||||||||
Verizon | $ | 358,653 | $ | 5,219 | $ | 454 | |||||||||||
% of sales | 9.9 | % | 0.4 | % | — | % | |||||||||||
Summary of ARRIS' International Sales by Geographic Region | ' | ||||||||||||||||
International sales for the years ended December 31, 2013, 2012 and 2011 were as follows (in thousands): | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Americas, excluding U.S (1) | $ | 746,146 | $ | 202,887 | $ | 195,500 | |||||||||||
Asia Pacific | 153,674 | 65,554 | 59,194 | ||||||||||||||
EMEA | 263,910 | 65,162 | 85,824 | ||||||||||||||
Total international sales | $ | 1,163,730 | $ | 333,603 | $ | 340,518 | |||||||||||
-1 | Excludes U.S. sales of $2,457.2 million, $1,020.1 million and $748.2 million for the years ended December 31, 2013, 2012 and 2011, respectively. | ||||||||||||||||
Summary of ARRIS' International Long-Lived Assets by Geographic Region | ' | ||||||||||||||||
The following table summarizes ARRIS’ international long-lived assets by geographic region as of December 31, 2013 and 2012 (in thousands): | |||||||||||||||||
As of December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Americas, excluding U.S. | $ | 7,467 | $ | 354 | |||||||||||||
Asia Pacific | 82,495 | 1,847 | |||||||||||||||
EMEA | 10,115 | 2,549 | |||||||||||||||
Total | $ | 100,077 | $ | 4,750 | |||||||||||||
-1 | Excludes U.S. long-lived assets of $296.1 million and $49.6 million for the years ended December 31, 2013 and 2012, respectively. |
Restructuring_Charges_Tables
Restructuring Charges (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Summary of and Changes to Restructuring Accrual | ' | ||||||||||||||||
The following table represents a summary of and changes to the restructuring accrual, which is primarily composed of accrued severance and other employee costs, contractual obligations that related to excess leased facilities and equipment and write off of property, plant and equipment (in thousands): | |||||||||||||||||
Employee | Contractual | Write-off of | Total | ||||||||||||||
severance & | obligations and | property, plant | |||||||||||||||
termination | other | and equipment | |||||||||||||||
benefits | |||||||||||||||||
Balance at December 31, 2012 | $ | — | $ | 1,163 | $ | — | $ | 1,163 | |||||||||
Balance acquired at Acquisition | — | 155 | — | 155 | |||||||||||||
Restructuring charges | 30,774 | 41 | 6,761 | 37,576 | |||||||||||||
Cash payments | (28,100 | ) | (686 | ) | — | (28,786 | ) | ||||||||||
Non-cash expense | — | — | (6,761 | ) | (6,761 | ) | |||||||||||
Balance at December 31, 2013 | $ | 2,674 | $ | 673 | $ | — | $ | 3,347 | |||||||||
Inventories_Tables
Inventories (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Components of Inventory Net of Reserves | ' | ||||||||
Inventories are stated at the lower of average cost, approximating first-in, first-out, or market. The components of inventory are as follows, net of reserves (in thousands): | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Raw material | $ | 60,520 | $ | 24,798 | |||||
Work in process | 6,010 | 2,800 | |||||||
Finished goods | 263,599 | 106,250 | |||||||
Total inventories | $ | 330,129 | $ | 133,848 | |||||
Property_Plant_and_Equipment_T
Property, Plant and Equipment (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property, Plant and Equipment, at Cost | ' | ||||||||
Property, plant and equipment, at cost, consisted of the following (in thousands): | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Land | $ | 88,742 | $ | 2,562 | |||||
Buildings and leasehold improvements | 133,668 | 25,995 | |||||||
Machinery and equipment | 368,572 | 177,657 | |||||||
590,982 | 206,214 | ||||||||
Less: Accumulated depreciation | (194,830 | ) | (151,836 | ) | |||||
Total property, plant and equipment, net | $ | 396,152 | $ | 54,378 | |||||
LongTerm_Indebtedness_Tables
Long-Term Indebtedness (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Senior Credit Facility Interest Rates | ' | ||||||||||||||||||||
Rate | As of December 31, 2013 | ||||||||||||||||||||
Term Loan A | LIBOR + 2.25% | 2.42 | % | ||||||||||||||||||
Term Loan B | LIBOR(1) + 2.75% | 3.5 | % | ||||||||||||||||||
Revolving Credit Facility (2) | LIBOR + 2.25% | Not Applicable | |||||||||||||||||||
-1 | Includes LIBOR floor of 0.75% | ||||||||||||||||||||
-2 | Includes unused commitment fee of 0.50% and letter of credit fee of 2.25% not reflected in interest rate above. | ||||||||||||||||||||
Summary of Contractual Debt Obligations | ' | ||||||||||||||||||||
Following is a summary of our contractual debt obligations as of December 31, 2013 (in thousands): | |||||||||||||||||||||
Payments due by period | |||||||||||||||||||||
Less than | 1-3 Years | 3-5 Years | More than | Total | |||||||||||||||||
1 Year | 5 Years | ||||||||||||||||||||
Credit facilities | $ | 55,000 | $ | 178,750 | $ | 825,000 | $ | 693,813 | $ | 1,752,563 |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Reconciliation of Numerators and Denominators of Basic and Diluted Earnings Per Share Computations | ' | ||||||||||||
The following is a reconciliation of the numerators and denominators of the basic and diluted earnings (loss) per share computations for the periods indicated (in thousands, except per share data): | |||||||||||||
For the Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Basic: | |||||||||||||
Net income (loss) | $ | (48,760 | ) | $ | 53,459 | $ | (17,662 | ) | |||||
Weighted average shares outstanding | 131,980 | 114,161 | 120,157 | ||||||||||
Basic earnings (loss) per share | $ | (0.37 | ) | $ | 0.47 | $ | (0.15 | ) | |||||
Diluted: | |||||||||||||
Net income (loss) | $ | (48,760 | ) | $ | 53,459 | $ | (17,662 | ) | |||||
Weighted average shares outstanding | 131,980 | 114,161 | 120,157 | ||||||||||
Net effect of dilutive shares | — | 2,353 | — | ||||||||||
Total | 131,980 | 116,514 | 120,157 | ||||||||||
Diluted earnings (loss) per share | $ | (0.37 | ) | $ | 0.46 | $ | (0.15 | ) | |||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Before Income Taxes | ' | ||||||||||||
Income before income taxes (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Domestic | $ | (128,588 | ) | $ | 67,620 | $ | (32,759 | ) | |||||
Foreign | 32,438 | 6,676 | 4,248 | ||||||||||
$ | (96,150 | ) | $ | 74,296 | $ | (28,511 | ) | ||||||
Components of Income Tax Expense (Benefit) | ' | ||||||||||||
Income tax expense (benefit) consisted of the following (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Current — Federal | $ | (5,133 | ) | $ | 26,196 | $ | 20,901 | ||||||
State | (40 | ) | 3,440 | 2,223 | |||||||||
Foreign | 10,624 | 4,855 | 2,406 | ||||||||||
5,451 | 34,491 | 25,530 | |||||||||||
Deferred — Federal | (50,485 | ) | (10,522 | ) | (31,084 | ) | |||||||
State | (2,189 | ) | (2,238 | ) | (6,358 | ) | |||||||
Foreign | (167 | ) | (894 | ) | 1,063 | ||||||||
(52,841 | ) | (13,654 | ) | (36,379 | ) | ||||||||
Income tax expense (benefit) | $ | (47,390 | ) | $ | 20,837 | $ | (10,849 | ) | |||||
Reconciliation of Statutory Federal Income Tax Rate | ' | ||||||||||||
A reconciliation of the statutory federal income tax rate of 35% and the effective income tax rates is as follows: | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Statutory federal income tax expense (benefit) | (35.0 | )% | 35 | % | (35.0 | )% | |||||||
Effects of: | |||||||||||||
State income taxes, net of federal benefit | (2.2 | ) | 1.4 | (6.5 | ) | ||||||||
Impairment of goodwill | — | — | 27.4 | ||||||||||
Domestic manufacturing deduction | (1.1 | ) | (4.0 | ) | (9.6 | ) | |||||||
Changes in valuation allowance | — | (0.7 | ) | (8.0 | ) | ||||||||
Comcast Revenue Recognition | 9.6 | — | — | ||||||||||
Non-deductible officer compensation | 0.5 | 1 | 2.4 | ||||||||||
Foreign taxes on U.S. entities less foreign tax credits | (1.3 | ) | (0.4 | ) | 2.5 | ||||||||
Facilitative acquisition costs | 3.5 | — | 4.1 | ||||||||||
Research and development tax credits | (26.8 | ) | (4.8 | ) | (20.0 | ) | |||||||
Other, net | 3.5 | 0.6 | 4.6 | ||||||||||
(49.3 | )% | 28.1 | % | (38.1 | )% | ||||||||
Significant Components of ARRIS' Net Deferred Income Tax Assets (Liabilities) | ' | ||||||||||||
Significant components of ARRIS’ net deferred income tax assets (liabilities) were as follows (in thousands): | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
Current deferred income tax assets: | |||||||||||||
Inventory costs | $ | 31,068 | $ | 6,407 | |||||||||
Federal research and development credits | 5,472 | 806 | |||||||||||
Federal/state net operating loss carryforwards | 3,336 | 3,876 | |||||||||||
Foreign net operating loss carryforwards | 1,593 | 205 | |||||||||||
Accrued vacation | 7,175 | 1,592 | |||||||||||
Warranty reserve | 18,292 | 781 | |||||||||||
Deferred revenue | 19,988 | 14,938 | |||||||||||
Equity Compensation | 10,243 | — | |||||||||||
Other, principally operating expenses | 24,939 | 3,978 | |||||||||||
Total current deferred income tax assets | 122,106 | 32,583 | |||||||||||
Noncurrent deferred income tax assets: | |||||||||||||
Federal/state net operating loss carryforwards | 159,219 | 21,245 | |||||||||||
Federal capital loss carryforwards | 5,152 | 5,678 | |||||||||||
Investments | — | — | |||||||||||
Foreign net operating loss carryforwards | 8,212 | 7,969 | |||||||||||
Federal research and development credits | 19,409 | 13,041 | |||||||||||
Pension and deferred compensation | 16,187 | 11,440 | |||||||||||
Equity compensation | — | 10,623 | |||||||||||
Warranty reserve | 12,503 | 1,224 | |||||||||||
Capitalized research and development | 281,434 | 9,174 | |||||||||||
Other, principally operating expenses | 8,126 | 5,719 | |||||||||||
Total noncurrent deferred income tax assets | 510,242 | 86,113 | |||||||||||
Total deferred income tax assets | 632,348 | 118,696 | |||||||||||
Current deferred income tax liabilities: | |||||||||||||
Other, principally operating expenses | (2,856 | ) | (1,742 | ) | |||||||||
Total current deferred income tax liabilities | (2,856 | ) | (1,742 | ) | |||||||||
Non-current deferred income tax liabilities: | |||||||||||||
Property, plant and equipment, depreciation and | (39,782 | ) | (1,833 | ) | |||||||||
basis differences | |||||||||||||
Excess tax on future repatriation of foreign earnings | (1,184 | ) | (1,954 | ) | |||||||||
Section 481(a) Adjustment – Deferred Revenue | — | (1,021 | ) | ||||||||||
Other noncurrent liabilities | (9,192 | ) | (7,243 | ) | |||||||||
Convertible debt | — | (3,639 | ) | ||||||||||
Goodwill and Intangibles | (401,060 | ) | (11,266 | ) | |||||||||
Total noncurrent deferred income tax liabilities | (451,218 | ) | (26,956 | ) | |||||||||
Total deferred income tax liabilities | (454,074 | ) | (28,698 | ) | |||||||||
Net deferred income tax assets | 178,274 | 89,998 | |||||||||||
Valuation allowance | (163,745 | ) | (17,974 | ) | |||||||||
Net deferred income tax assets (liabilities) | $ | 14,529 | $ | 72,024 | |||||||||
Tabular Reconciliation of Unrecognized Tax Benefits | ' | ||||||||||||
Tabular Reconciliation of Unrecognized Tax Benefits (in thousands): | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Beginning balance | $ | 25,704 | $ | 26,232 | $ | 20,495 | |||||||
Gross increases — tax positions in prior period | 2,442 | — | 374 | ||||||||||
Gross decreases — tax positions in prior period | (21 | ) | — | (105 | ) | ||||||||
Gross increases — current-period tax positions | 6,999 | 2,684 | 5,922 | ||||||||||
Increases from acquired businesses | 2,014 | — | 1,719 | ||||||||||
Other | (1,098 | ) | 100 | — | |||||||||
Decreases due to lapse of statute of limitations | (7,696 | ) | (3,312 | ) | (2,173 | ) | |||||||
Ending balance | $ | 28,344 | $ | 25,704 | $ | 26,232 | |||||||
Commitments_Tables
Commitments (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Future Minimum Operating Lease Payments under Non-Cancelable Leases | ' | ||||
Future minimum operating lease payments under non-cancelable leases at December 31, 2013 were as follows (in thousands): | |||||
Operating Leases | |||||
2014 | $ | 22,803 | |||
2015 | 20,451 | ||||
2016 | 17,041 | ||||
2017 | 12,595 | ||||
2018 | 9,143 | ||||
Thereafter | 26,194 | ||||
Less sublease income | (6,311 | ) | |||
Total minimum lease payments | $ | 101,916 | |||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||
Summary of Activity of ARRIS' Options Granted | ' | ||||||||||||||||||
A summary of activity of ARRIS’ options granted under its stock incentive plans is presented below: | |||||||||||||||||||
Options | Weighted | Weighted | Aggregate | ||||||||||||||||
Average | Average | Intrinsic | |||||||||||||||||
Exercise Price | Remaining | Value (in | |||||||||||||||||
Contractual Term | thousands) | ||||||||||||||||||
(in years) | |||||||||||||||||||
Beginning balance, January 1, 2013 | 2,376,449 | $ | 12.24 | ||||||||||||||||
Grants | — | — | |||||||||||||||||
Exercised | (1,869,956 | ) | 12.41 | ||||||||||||||||
Forfeited | — | — | |||||||||||||||||
Expired | (33,802 | ) | 11.88 | ||||||||||||||||
Ending balance, December 31, 2013 | 472,691 | 11.6 | 0.86 | $ | 6,023 | ||||||||||||||
Exercisable at December 31, 2013 | 472,691 | 11.6 | 0.86 | $ | 6,023 | ||||||||||||||
Summary of ARRIS' Options Outstanding | ' | ||||||||||||||||||
The following table summarizes ARRIS’ options outstanding as of December 31, 2013: | |||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||
Range of | Number | Weighted Average | Weighted | Number | Weighted | ||||||||||||||
Exercise Prices | Outstanding | Remaining | Average | Exercisable | Average | ||||||||||||||
Contractual Life | Exercise Price | Exercise Price | |||||||||||||||||
$5.00 to $6.99 | 16,243 | 0.90 years | $ | 6.86 | 16,243 | $ | 6.86 | ||||||||||||
$7.00 to $8.99 | 15,188 | 0.52 years | $ | 8.42 | 15,188 | $ | 8.42 | ||||||||||||
$9.00 to $10.99 | 128,388 | 0.65 years | $ | 9.32 | 128,388 | $ | 9.32 | ||||||||||||
$11.00 to $13.99 | 312,872 | 0.96 years | $ | 12.93 | 312,872 | $ | 12.93 | ||||||||||||
$5.00 to $13.99 | 472,691 | 0.86 years | $ | 11.6 | 472,691 | $ | 11.6 | ||||||||||||
Summary of ARRIS' Unvested Restricted Stock (Excluding Performance Related) | ' | ||||||||||||||||||
The following table summarizes ARRIS’ unvested restricted stock (excluding performance-related) and stock unit transactions during the year ending December 31, 2013: | |||||||||||||||||||
Weighted Average | |||||||||||||||||||
Grant Date | |||||||||||||||||||
Shares | Fair Value | ||||||||||||||||||
Unvested at January 1, 2013 | 5,129,080 | $ | 11.13 | ||||||||||||||||
Granted | 4,567,885 | 16.13 | |||||||||||||||||
Vested | (2,088,781 | ) | 10.73 | ||||||||||||||||
Forfeited | (559,494 | ) | 13.67 | ||||||||||||||||
Unvested at December 31, 2013 | 7,048,690 | 14.29 | |||||||||||||||||
Employee_Benefit_Plans_Tables
Employee Benefit Plans (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Defined Benefit Plan, Actual and Target Plan Asset Allocations | ' | ||||||||||||||||
The following table summarizes the weighted average pension asset allocations as December 31, 2013 and 2012: | |||||||||||||||||
Weighted Average Allocation | |||||||||||||||||
Target | Actual | ||||||||||||||||
2013 | 2013 | 2012 | |||||||||||||||
Equity securities | 39 | % | 43 | % | 61 | % | |||||||||||
Debt securities | 18 | 3 | 39 | ||||||||||||||
Cash and cash equivalents | 43 | 54 | 0 | ||||||||||||||
100 | % | 100 | % | 100 | % | ||||||||||||
Schedule of Pension Plan Assets By Category and By level | ' | ||||||||||||||||
The following table summarizes the Company’s pension plan assets by category and by level (as described in Note 8 of the Notes to the Consolidated Financial Statements) as of December 31, 2013 (in thousands): | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Cash and cash equivalents (1) | $ | — | $ | 8,285 | $ | — | $ | 8,285 | |||||||||
Equity securities (2): | |||||||||||||||||
U.S. large cap | 1,435 | — | — | 1,435 | |||||||||||||
U.S. mid cap | 1,435 | — | — | 1,435 | |||||||||||||
U.S. small cap | 1,435 | — | — | 1,435 | |||||||||||||
International | 2,102 | — | — | 2,102 | |||||||||||||
Fixed income securities (3): | 470 | — | — | 470 | |||||||||||||
Total | $ | 6,877 | $ | 8,285 | $ | — | $ | 15,162 | |||||||||
-1 | Cash and cash equivalents, which are used to pay benefits and administrative expenses, are held in a stable value fund. | ||||||||||||||||
-2 | Equity securities consist of mutual funds and the underlying investments are indexes. Investments in mutual funds are valued at the net asset value per share multiplied by the number of shares held. | ||||||||||||||||
-3 | Fixed income securities consist of bonds securities in mutual funds, and are valued at the net asset value per share multiplied by the number of shares held. | ||||||||||||||||
Schedule of Non Contributory Defined Benefit Pension Plans | ' | ||||||||||||||||
Summary data for the non-contributory defined benefit pension plans is as follows (in thousands): | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Change in Projected Benefit Obligation: | |||||||||||||||||
Projected benefit obligation at beginning of year | $ | 42,082 | $ | 46,912 | |||||||||||||
Service cost | 122 | 335 | |||||||||||||||
Interest cost | 1,619 | 2,085 | |||||||||||||||
Actuarial loss | (1,813 | ) | 1,625 | ||||||||||||||
Benefit payments | (1,309 | ) | (1,167 | ) | |||||||||||||
Other | (319 | ) | (7,708 | ) | |||||||||||||
Projected benefit obligation at end of year | $ | 40,382 | $ | 42,082 | |||||||||||||
Change in Plan Assets: | |||||||||||||||||
Fair value of plan assets at beginning of year | $ | 14,866 | $ | 21,491 | |||||||||||||
Actual return on plan assets | 1,421 | 1,637 | |||||||||||||||
Company contributions | 184 | 613 | |||||||||||||||
Expenses and benefits paid from plan assets | (1,309 | ) | (1,167 | ) | |||||||||||||
Other | — | (7,708 | ) | ||||||||||||||
Fair value of plan assets at end of year (1) | $ | 15,162 | $ | 14,866 | |||||||||||||
Funded Status: | |||||||||||||||||
Funded status of plan | $ | (25,220 | ) | $ | (27,216 | ) | |||||||||||
Unrecognized actuarial loss | 7,546 | 10,830 | |||||||||||||||
Unamortized prior service cost | — | — | |||||||||||||||
Net amount recognized | $ | (17,674 | ) | $ | (16,386 | ) | |||||||||||
-1 | In addition to the pension plan assets, ARRIS has established two rabbi trusts to further fund the pension obligations of the Chief Executive and certain executive officers of $19.3 million as of December 31, 2013 and $17.8 million as of December 31, 2012, and are included in Investments on the Consolidated Balance Sheets. | ||||||||||||||||
Schedule of Amounts Recognized in Statement of Financial Position | ' | ||||||||||||||||
Amounts recognized in the statement of financial position consist of (in thousands): | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Current liabilities | $ | (364 | ) | $ | (333 | ) | |||||||||||
Noncurrent liabilities | (24,856 | ) | (26,883 | ) | |||||||||||||
Accumulated other comprehensive income (1) | 7,546 | 10,830 | |||||||||||||||
Total | $ | (17,674 | ) | $ | (16,386 | ) | |||||||||||
-1 | The total unfunded pension liability on the Consolidated Balance Sheets as of December 31, 2013 and 2012 included the Taiwan plan and total income tax effect of $1.0 million and $2.3 million, respectively. | ||||||||||||||||
Schedule of Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss) | ' | ||||||||||||||||
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) are as follows (in thousands): | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Net loss | $ | (2,359 | ) | $ | 1,247 | ||||||||||||
Amortization of net loss | (607 | ) | (840 | ) | |||||||||||||
Amortization of prior service cost | — | — | |||||||||||||||
Settlement charge | (318 | ) | (3,064 | ) | |||||||||||||
Total recognized in other comprehensive income (loss) | $ | (3,284 | ) | $ | (2,657 | ) | |||||||||||
Schedule of Amounts in Other Comprehensive Income (Loss) Expected to be Amortized | ' | ||||||||||||||||
The following table summarizes the amounts in other comprehensive income (loss) expected to be amortized and recognized as a component of net periodic benefit cost in 2014 (in thousands): | |||||||||||||||||
Amortization of net loss | $ | 305 | |||||||||||||||
Schedule of Information for Defined Benefit Plans with Accumulated Benefit Obligations in Excess of Plan Assets | ' | ||||||||||||||||
Information for defined benefit plans with accumulated benefit obligations in excess of plan assets is as follows (in thousands): | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Accumulated benefit obligation | $ | 40,382 | $ | 41,764 | |||||||||||||
Projected benefit obligation | $ | 40,382 | $ | 42,082 | |||||||||||||
Plan assets | $ | 15,162 | $ | 14,866 | |||||||||||||
Schedule of Pension and Supplemental Benefit Plans | ' | ||||||||||||||||
Net periodic pension cost for 2013, 2012 and 2011 for pension and supplemental benefit plans includes the following components (in thousands): | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Service cost | $ | 122 | $ | 335 | $ | 312 | |||||||||||
Interest cost | 1,619 | 2,085 | 2,142 | ||||||||||||||
Return on assets (expected) | (876 | ) | (1,260 | ) | (1,624 | ) | |||||||||||
Amortization of net actuarial loss | 607 | 840 | 288 | ||||||||||||||
Settlement charge | — | 3,064 | — | ||||||||||||||
Net periodic pension cost | $ | 1,472 | $ | 5,064 | $ | 1,118 | |||||||||||
-1 | Prior service cost is amortized on a straight-line basis over the average remaining service period of employees expected to receive benefits under the plan. | ||||||||||||||||
Schedule of Weighted Average Actuarial Assumptions Used to Determine the Benefit Obligations | ' | ||||||||||||||||
The weighted-average actuarial assumptions used to determine the benefit obligations for the three years presented are set forth below: | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Assumed discount rate for plan participants | 4.5 | % | 3.75 | % | 4.5 | % | |||||||||||
Rate of compensation increase | N/A | 3.75 | % | 3.75 | % | ||||||||||||
Schedule of Weighted Average Actuarial Assumptions Used to Determine the Net Periodic Benefit Costs | ' | ||||||||||||||||
The weighted-average actuarial assumptions used to determine the net periodic benefit costs are set forth below: | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Assumed discount rate for plan participants | 3.75 | % | 4.5 | % | 5.5 | % | |||||||||||
Rate of compensation increase | 3.75 | % | 3.75 | % | 3.75 | % | |||||||||||
Expected long-term rate of return on plan assets | 6 | % | 6 | % | 7.5 | % | |||||||||||
Expected Benefit Payments Related to Defined Benefit Pension Plans | ' | ||||||||||||||||
As of December 31, 2013, the expected benefit payments related to the Company’s defined benefit pension plans during the next ten years are as follows (in thousands): | |||||||||||||||||
2014 | $ | 1,544 | |||||||||||||||
2015 | 15,129 | ||||||||||||||||
2016 | 1,538 | ||||||||||||||||
2017 | 1,538 | ||||||||||||||||
2018 | 1,556 | ||||||||||||||||
2019 — 2023 | 8,923 |
Supplemental_Financial_Informa1
Supplemental Financial Information (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Consolidated Balance Sheets Information | ' | ||||||||
Consolidated Balance Sheets Information | |||||||||
Prepaids consist of the following (in thousands): | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Prefunding of accounts payable | $ | 44,975 | $ | — | |||||
Software licenses and maintenance support | 10,717 | 4,540 | |||||||
Other | 5,791 | 7,142 | |||||||
Total | $ | 61,482 | $ | 11,682 | |||||
Other current assets consist of the following (in thousands): | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Deferred cost of sales | $ | 10,100 | $ | 9,537 | |||||
Miscellaneous receivables | 8,712 | 4,095 | |||||||
Deferred financing fees | 7,480 | 559 | |||||||
Sales and other tax receivables | 5,609 | 1,565 | |||||||
Indemnification asset | 1,500 | — | |||||||
Landlord funded tenant improvements | 1,497 | — | |||||||
Other | 5,032 | 657 | |||||||
Total | $ | 39,930 | $ | 16,413 | |||||
Other non-current assets consist of the following (in thousands): | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Deferred financing fees | $ | 27,398 | $ | 400 | |||||
Trade receivables | 10,191 | — | |||||||
Deposits | 4,296 | 1,204 | |||||||
Long-term severance funds | 3,564 | 3,739 | |||||||
Interest rate swap asset | 3,010 | — | |||||||
Other | 3,904 | 4,042 | |||||||
Total | $ | 52,363 | $ | 9,385 | |||||
Other accrued current liabilities consist of the following (in thousands): | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Accrued volume rebates | $ | 26,879 | $ | 3,434 | |||||
Due to Google | 23,273 | — | |||||||
Accrued legal and professional fees | 21,982 | 4,277 | |||||||
Accrued sales, property, payroll and other taxes | 14,613 | 1,540 | |||||||
Supplier liabilities | 11,362 | — | |||||||
Accrued interest and interest rate swap liability | 7,541 | 581 | |||||||
Accrued software licenses liabilities | 6,114 | — | |||||||
Accrued royalties | 4,466 | 1,253 | |||||||
Accrued acquisition and integration costs | 3,980 | 4,361 | |||||||
Accrued restructuring | 3,161 | 527 | |||||||
Accrued commissions | 1,804 | — | |||||||
Other liabilities | 16,523 | 8,969 | |||||||
Total | $ | 141,698 | $ | 24,942 | |||||
Other noncurrent liabilities consist of the following (in thousands): | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Long-term warranty | $ | 32,745 | $ | 3,187 | |||||
Long-term deferred revenue | 8,155 | 4,288 | |||||||
Deferred compensation liabilities | 7,213 | 6,668 | |||||||
Long-term severance liability | 3,814 | 4,119 | |||||||
Long-term accrued rent | 1,584 | 1,413 | |||||||
Long-term tenant improvement obligations | 1,323 | 1,140 | |||||||
Other | 7,629 | 2,347 | |||||||
Total | $ | 62,463 | $ | 23,162 | |||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Changes in Accumulated Other Comprehensive Income (Loss) by Component, Net of Taxes | ' | ||||||||||||||||||||
The following table summarizes the changes in accumulated other comprehensive income (loss) by component, net of taxes, for the year ended December 31, 2013 (in thousands): | |||||||||||||||||||||
Unrealized | Unrealized | Unfunded | Cumulative | Total | |||||||||||||||||
gain on | loss on | pension | translation | ||||||||||||||||||
marketable | derivative | liability | adjustments | ||||||||||||||||||
securities | instruments | ||||||||||||||||||||
Balance as of December 31, 2012 | $ | 206 | $ | — | $ | (8,558 | ) | $ | (184 | ) | $ | (8,536 | ) | ||||||||
Other comprehensive (loss) income before reclassifications | 55 | (4,527 | ) | — | 173 | (4,299 | ) | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | 45 | 1,986 | 6,142 | — | 8,173 | ||||||||||||||||
Net current-period other comprehensive income (loss) | 100 | (2,541 | ) | 6,142 | 173 | 3,874 | |||||||||||||||
Balance as of December 31, 2013 | $ | 306 | $ | (2,541 | ) | $ | (2,416 | ) | $ | (11 | ) | $ | (4,662 | ) | |||||||
Summary_Quarterly_Consolidated1
Summary Quarterly Consolidated Financial Information (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Schedule of Quarterly Consolidated Financial Information | ' | ||||||||||||||||
The following table summarizes ARRIS’ quarterly consolidated financial information (in thousands, except per share data): | |||||||||||||||||
Quarters in 2013 Ended | |||||||||||||||||
March 31, | June 30, | September 30, | December 31, | ||||||||||||||
Net sales | $ | 353,650 | $ | 1,000,362 | $ | 1,067,823 | $ | 1,199,067 | |||||||||
Gross margin | 108,526 | 230,957 | 316,895 | 366,370 | |||||||||||||
Operating income (loss) | 9,516 | (88,062 | ) | 11,182 | 49,351 | ||||||||||||
Net income (loss) | $ | (14,650 | ) | $ | (48,463 | ) | $ | 17,170 | $ | (2,817 | ) | ||||||
Net income (loss) per basic share | $ | (0.13 | ) | $ | (0.36 | ) | $ | 0.12 | $ | (0.02 | ) | ||||||
Net income (loss) per diluted share | $ | (0.13 | ) | $ | (0.36 | ) | $ | 0.12 | $ | (0.02 | ) | ||||||
Quarters in 2012 Ended | |||||||||||||||||
March 31, | June 30, | September 30, | December 31, | ||||||||||||||
Net sales | $ | 302,901 | $ | 349,327 | $ | 357,432 | $ | 344,003 | |||||||||
Gross margin | 108,908 | 118,526 | 111,952 | 123,191 | |||||||||||||
Operating income | 11,691 | 26,925 | 23,123 | 25,531 | |||||||||||||
Net income | $ | 5,799 | $ | 15,001 | $ | 17,864 | $ | 14,795 | |||||||||
Net income per basic share | $ | 0.05 | $ | 0.13 | $ | 0.16 | $ | 0.13 | |||||||||
Net income per diluted share | $ | 0.05 | $ | 0.13 | $ | 0.15 | $ | 0.13 |
Organization_and_Basis_of_Pres1
Organization and Basis of Presentation - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2013 | |
Segment | |
Geographic Information [Line Items] | ' |
Number of business segments operated | 2 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | |||
Equity method investment, ownership percentage | ' | 8.40% | ' | ' | |||
Original maturity period of cash, cash equivalents and investments | ' | 'Three months or less | ' | ' | |||
Shipping and handling costs | ' | $4,900,000 | $3,600,000 | $3,300,000 | |||
Amortization of landlord funded tenant improvements | ' | 200,000 | 500,000 | 600,000 | |||
Depreciation expense, including amortization of capital leases | ' | 61,500,000 | 28,000,000 | 24,100,000 | |||
Goodwill | 194,542,000 | [1] | 935,579,000 | 194,115,000 | [1] | 194,542,000 | [1] |
Intangible assets | ' | 1,176,192,000 | 94,529,000 | ' | |||
Accumulated amortization of intangible assets | ' | 427,143,000 | 239,668,000 | ' | |||
Impairment charges related to intangible asset | ' | 0 | 0 | ' | |||
Advertising expense | ' | 4,100,000 | 200,000 | 600,000 | |||
Research and development expenses | ' | 425,825,000 | 170,706,000 | 146,519,000 | |||
Severance fund assets, non-current | ' | 3,564,000 | 3,739,000 | ' | |||
Accrued severance cost, non-current | ' | 3,900,000 | 4,200,000 | ' | |||
CPE | ' | ' | ' | ' | |||
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | |||
Goodwill | 31,850,000 | [1] | 685,041,000 | 31,850,000 | [1] | 31,850,000 | [1] |
Network Infrastructure | ' | ' | ' | ' | |||
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | |||
Goodwill | 162,692,000 | [1] | 239,675,000 | 162,265,000 | [1] | 162,692,000 | [1] |
Cloud Services | ' | ' | ' | ' | |||
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | |||
Goodwill impairment | ' | 0 | 0 | 41,200,000 | |||
Goodwill impairment loss net of tax | ' | ' | ' | 33,900,000 | |||
Goodwill | ' | 10,863,000 | ' | ' | |||
Impairment loss before tax | 47,400,000 | ' | ' | ' | |||
Impairment loss after tax | 29,100,000 | ' | ' | ' | |||
Senior Secured Credit Facilities | ' | ' | ' | ' | |||
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | |||
Face value of term loans | ' | $1,752,563,000 | ' | ' | |||
Minimum | ' | ' | ' | ' | |||
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | |||
Equity method investment, ownership percentage | ' | 20.00% | ' | ' | |||
Maximum | ' | ' | ' | ' | |||
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | |||
Equity method investment, ownership percentage | ' | 50.00% | ' | ' | |||
Building and Improvements | Minimum | ' | ' | ' | ' | |||
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | |||
Property, plant and equipment, useful life | ' | '10 years | ' | ' | |||
Building and Improvements | Maximum | ' | ' | ' | ' | |||
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | |||
Property, plant and equipment, useful life | ' | '40 years | ' | ' | |||
Machinery and Equipment | Minimum | ' | ' | ' | ' | |||
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | |||
Property, plant and equipment, useful life | ' | '2 years | ' | ' | |||
Machinery and Equipment | Maximum | ' | ' | ' | ' | |||
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | |||
Property, plant and equipment, useful life | ' | '10 years | ' | ' | |||
Internally Developed Software | Minimum | ' | ' | ' | ' | |||
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | |||
Property, plant and equipment, useful life | ' | '2 years | ' | ' | |||
Internally Developed Software | Maximum | ' | ' | ' | ' | |||
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | |||
Property, plant and equipment, useful life | ' | '7 years | ' | ' | |||
[1] | Reflects retrospective reassignment of goodwill due to reorganization of segments and reporting unit structure. |
Estimated_Useful_Life_of_Intan
Estimated Useful Life of Intangible Assets (Detail) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Customer relationships | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite lived intangible assets, useful life | '7 years | '4 years |
Non-compete agreements | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite lived intangible assets, useful life | '2 years | ' |
Trademarks and trade names | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite lived intangible assets, useful life | '1 year 6 months | ' |
Order backlog | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite lived intangible assets, useful life | '3 months 18 days | ' |
Minimum | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite lived intangible assets, useful life | '6 months | ' |
Minimum | Developed technology, patents and licenses | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite lived intangible assets, useful life | '2 years | ' |
Minimum | Customer relationships | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite lived intangible assets, useful life | '7 years | ' |
Minimum | Trademarks and trade names | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite lived intangible assets, useful life | '2 years | ' |
Minimum | Order backlog | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite lived intangible assets, useful life | '1 year | ' |
Maximum | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite lived intangible assets, useful life | '10 years | ' |
Maximum | Developed technology, patents and licenses | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite lived intangible assets, useful life | '10 years | ' |
Maximum | Customer relationships | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite lived intangible assets, useful life | '10 years | ' |
Maximum | Trademarks and trade names | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite lived intangible assets, useful life | '10 years | ' |
Maximum | Order backlog | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite lived intangible assets, useful life | '2 years | ' |
Indefinite_Lived_Intangible_As
Indefinite Lived Intangible Assets (Detail) (In-process R&D) | 12 Months Ended |
Dec. 31, 2013 | |
In-process R&D | ' |
Indefinite-lived Intangible Assets [Line Items] | ' |
Estimated useful life | 'Indefinite |
Business_Acquisitions_Addition
Business Acquisitions - Additional Information (Detail) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||||||||||||||||
Share data in Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Apr. 17, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | ||
JointVentures | Minimum | Maximum | Licensing Corporation | Research And Development Corporation | Combined Conditional Access Development ("CCAD") | Combined Conditional Access Development ("CCAD") | Motorola Home | Motorola Home | Motorola Home | Motorola Home | Motorola Home | Patents | Broad Use Patents | Licensed Patents | |||||
Patent | Minimum | Maximum | Acquisition-related Costs | Fair Value Adjustment to Inventory | Fair Value Adjustment to Deferred Revenue | Patent | Patent | Patent | |||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Business acquisition, cash consideration | $2,208,114,000 | ' | $130,227,000 | ' | ' | ' | ' | ' | ' | $2,208,114,000 | [1] | ' | ' | ' | ' | ' | ' | ' | |
Business acquisition potential stock issue, shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.6 | ' | ' | ' | ' | ' | ' | ' | ||
Acquired intangible asset, fair value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,239,200,000 | [2] | ' | ' | ' | ' | ' | ' | |
Number of patents acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 991 | ' | ' | ||
Number of patents | 2,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,173 | 17,000 | ||
Liabilities related to litigation claims | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 70,000,000 | ' | ' | ' | ' | ' | ' | ||
Indemnification assets amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 70,000,000 | ' | ' | ' | ' | ' | ' | ||
Fully indemnified amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 85,000,000 | ' | ' | ' | ' | ' | ' | ||
Infringment lawsuit amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,000,000 | 13,900,000 | ' | ' | ' | ' | ' | ' | ||
Amount limited for potential liability | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,000,000 | ' | ' | ' | ' | ' | ' | ||
Fair value of accounts receivable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 462,162,000 | ' | ' | ' | ' | ' | ' | ||
Business combination gross contractual amount of receivables | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 470,900,000 | ' | ' | ' | ' | ' | ' | ||
Business combination receivables expected to be uncollectable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,700,000 | ' | ' | ' | ' | ' | ' | ||
Number of acquired limited liability corporations | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Company's ownership percentage | ' | ' | ' | ' | ' | 49.00% | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Engineering services provided percentage | ' | ' | ' | 20.00% | 30.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Engineering services provided amount | ' | ' | ' | 6,000,000 | 8,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Funding contributions | 8,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Future funding contributions | ' | ' | ' | ' | ' | ' | ' | 16,000,000 | 18,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ||
Acquisition related cost | 45,471,000 | 6,207,000 | 3,205,000 | ' | ' | ' | ' | ' | ' | ' | 18,600,000 | ' | ' | ' | ' | ' | ' | ||
Revenue contribution of acquisition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,138,000,000 | ' | ' | ' | ' | ' | ' | ||
Pro forma net loss | ($108,548,000) | ($142,489,000) | ' | ' | ' | ' | ' | ' | ' | ' | ' | $18,600,000 | $48,400,000 | $11,000,000 | ' | ' | ' | ||
[1] | At closing the actual cash transferred as part of the transaction was $2,159.8 million, net of cash acquired of $78.0 million. During the quarter ended September 30, 2013, an additional $48.3 million of cash was transferred as part of working capital adjustments. The cash portion of the consideration was funded with cash on hand, borrowings under ARRIS' senior secured credit facilities (see Note 15 Long-Term Indebtedness for additional details) and through the sale by ARRIS of approximately 10.6 million shares of ARRIS' common stock to a subsidiary of Comcast Corporation for $150 million in cash. | ||||||||||||||||||
[2] | The measurement period adjustments for identifiable intangible assets primarily consists of adjustments recorded to reflect changes in the estimated fair value of certain acquired intangibles, principally customer relationships, developed technology and patents, and in-process research and development based upon facts and circumstances that existed as of the acquisition date. The Company continued to gather further specific information on the Motorola Home intangible assets, such as the timing and risk of cash flows of the intangible assets, including those assets still in the research and development phase. Some of the more significant assumptions inherent in the development of intangible asset values, from the perspective of a market participant, include: the amount and timing of projected future cash flows (including revenue, cost of sales, research and development costs, sales and marketing expenses); working capital; contributory asset charges; the discount rate selected to measure the risks inherent in the future cash flows; and the assessment of the asset's life cycle and the competitive trends impacting the asset, as well as other factors. These factors were refined in order to further complete the valuation work that impacted (i) the estimated total fair value assigned to intangible assets, (ii) the estimated assignment of fair value between finite-lived and indefinite-lived intangible assets and/or (iii) the estimated weighted-average useful life of each category of intangible assets. |
Summary_of_Fair_Value_of_Consi
Summary of Fair Value of Consideration Transferred on Acquisition, Net of Cash Acquired (Detail) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2011 | Apr. 17, 2013 | Dec. 31, 2013 | ||
Motorola Home | Motorola Home | |||||
Schedule of Business Acquisitions, Cost of Acquired Entity [Line Items] | ' | ' | ' | ' | ||
Cash transferred | $2,208,114 | $130,227 | $2,208,114 | [1] | ' | |
Fair value of Shares issued to Seller | ' | ' | 176,410 | [2] | ' | |
Total value of consideration | ' | ' | $2,384,524 | $2,384,524 | [3] | |
[1] | At closing the actual cash transferred as part of the transaction was $2,159.8 million, net of cash acquired of $78.0 million. During the quarter ended September 30, 2013, an additional $48.3 million of cash was transferred as part of working capital adjustments. The cash portion of the consideration was funded with cash on hand, borrowings under ARRIS' senior secured credit facilities (see Note 15 Long-Term Indebtedness for additional details) and through the sale by ARRIS of approximately 10.6 million shares of ARRIS' common stock to a subsidiary of Comcast Corporation for $150 million in cash. | |||||
[2] | The fair value of the 10.6 million shares issued to Seller was determined based on the opening price of the Company's common stock at the Acquisition date. | |||||
[3] | Amount represents adjustment for final working capital. |
Summary_of_Fair_Value_of_Consi1
Summary of Fair Value of Consideration Transferred on Acquisition, Net of Cash Acquired (Parenthetical) (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 1 Months Ended | |
In Millions, unless otherwise specified | Apr. 17, 2013 | Sep. 30, 2013 | Jan. 11, 2013 | Apr. 17, 2013 |
Motorola Home | Motorola Home | Comcast Corporation | Comcast Corporation | |
Schedule of Business Acquisitions, Cost of Acquired Entity [Line Items] | ' | ' | ' | ' |
Business acquisition, actual cash transferred | $2,159.80 | $48.30 | ' | ' |
Cash acquired from acquisition | 78 | ' | ' | ' |
Business acquisition potential stock issue, shares | 10.6 | ' | 10.6 | ' |
Business acquisition potential stock issue, value | ' | ' | $150 | $150 |
Summary_of_Preliminary_Estimat
Summary of Preliminary Estimated Fair Values of Net Assets Acquired (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Apr. 17, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |||||
In Thousands, unless otherwise specified | Motorola Home | Motorola Home | Motorola Home | Motorola Home | ||||||||
Previously Reported | Adjustment | |||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | |||||
Total consideration transferred, net of cash acquired | ' | ' | ' | $2,384,524 | $2,384,524 | [1] | $2,336,172 | [1],[2] | $48,352 | [1] | ||
Assets acquired and liabilities assumed: | ' | ' | ' | ' | ' | ' | ' | |||||
Accounts receivable | ' | ' | ' | ' | 462,162 | 462,162 | [2] | ' | ||||
Inventories | ' | ' | ' | ' | 270,392 | 279,562 | [2] | -9,170 | ||||
Deferred income tax assets | ' | ' | ' | ' | 374,281 | [3] | 370,543 | [2],[3] | 3,738 | [3] | ||
Other assets | ' | ' | ' | ' | 167,778 | 153,094 | [2] | 14,684 | ||||
Property, plant & equipment | ' | ' | ' | ' | 340,386 | [4] | 350,547 | [2],[4] | -10,161 | [4] | ||
Intangible assets | ' | ' | ' | ' | 1,239,200 | [5] | 1,343,400 | [2],[5] | -104,200 | [5] | ||
Accounts payable | ' | ' | ' | ' | -349,235 | -349,235 | [2] | ' | ||||
Deferred revenue | ' | ' | ' | ' | -27,797 | -27,797 | [2] | ' | ||||
Other liabilities | ' | ' | ' | ' | -346,719 | [6] | -324,852 | [2],[6] | -21,867 | [6] | ||
Deferred tax liability | ' | ' | ' | ' | -490,502 | [3] | -534,479 | [2],[3] | 43,977 | [3] | ||
Total net assets acquired | ' | ' | ' | ' | 1,639,946 | 1,722,945 | [2] | -82,999 | ||||
Goodwill | $935,579 | $194,115 | [7] | $194,542 | [7] | ' | $744,578 | [8] | $613,227 | [2],[8] | $131,351 | [8] |
[1] | Amount represents adjustment for final working capital. | |||||||||||
[2] | As previously reported as of June 30, 2013. | |||||||||||
[3] | The measurement period and other adjustments for deferred tax assets and liabilities primarily reflect the tax impact of the pre-tax measurement period adjustments and adjustments to certain uncertain tax positions following receipt of additional information about facts and circumstances existing as of the Acquisition date. | |||||||||||
[4] | The measurement period adjustments for property, plant & equipment costs to reflect updated fair values of acquired personal property that existed as of the acquisition date. | |||||||||||
[5] | The measurement period adjustments for identifiable intangible assets primarily consists of adjustments recorded to reflect changes in the estimated fair value of certain acquired intangibles, principally customer relationships, developed technology and patents, and in-process research and development based upon facts and circumstances that existed as of the acquisition date. The Company continued to gather further specific information on the Motorola Home intangible assets, such as the timing and risk of cash flows of the intangible assets, including those assets still in the research and development phase. Some of the more significant assumptions inherent in the development of intangible asset values, from the perspective of a market participant, include: the amount and timing of projected future cash flows (including revenue, cost of sales, research and development costs, sales and marketing expenses); working capital; contributory asset charges; the discount rate selected to measure the risks inherent in the future cash flows; and the assessment of the asset's life cycle and the competitive trends impacting the asset, as well as other factors. These factors were refined in order to further complete the valuation work that impacted (i) the estimated total fair value assigned to intangible assets, (ii) the estimated assignment of fair value between finite-lived and indefinite-lived intangible assets and/or (iii) the estimated weighted-average useful life of each category of intangible assets. | |||||||||||
[6] | The change primarily relates to an increase in warranty accrual due to a change in estimate of the initial accrued warranty recorded at the acquisition date as a result of additional information arising subsequent to the acquisition that existed as of the Acquisition date, as well as adjustment for certain foreign pension obligations. | |||||||||||
[7] | Reflects retrospective reassignment of goodwill due to reorganization of segments and reporting unit structure. | |||||||||||
[8] | Goodwill recognized as of the Acquisition date (as adjusted) totaled $744.6 million and is attributable to the workforce of the acquired business, strategic opportunities and synergies that are expected to arise from the acquisition of Motorola Home. The preliminarily determined goodwill has been assigned to the Company's three reporting units (see Note 5 Goodwill and Intangible Assets for additional details). These amounts are not yet finalized and are subject to change. With the exception of $77.6 million of goodwill that retains its tax basis after the acquisition, the remaining portion of the $744.6 million of goodwill is not expected to be deductible for income tax purposes. The amount of tax deductible goodwill remains subject to adjustment through the measurement period. |
Summary_of_Preliminary_Estimat1
Summary of Preliminary Estimated Fair Values of Net Assets Acquired (Parenthetical) (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Business Acquisition [Line Items] | ' | ' | ' | |||
Goodwill | $935,579,000 | $194,115,000 | [1] | $194,542,000 | [1] | |
Motorola Home | ' | ' | ' | |||
Business Acquisition [Line Items] | ' | ' | ' | |||
Goodwill | 744,578,000 | [2] | ' | ' | ||
Goodwill that retains tax basis after acquisition | $77,600,000 | ' | ' | |||
[1] | Reflects retrospective reassignment of goodwill due to reorganization of segments and reporting unit structure. | |||||
[2] | Goodwill recognized as of the Acquisition date (as adjusted) totaled $744.6 million and is attributable to the workforce of the acquired business, strategic opportunities and synergies that are expected to arise from the acquisition of Motorola Home. The preliminarily determined goodwill has been assigned to the Company's three reporting units (see Note 5 Goodwill and Intangible Assets for additional details). These amounts are not yet finalized and are subject to change. With the exception of $77.6 million of goodwill that retains its tax basis after the acquisition, the remaining portion of the $744.6 million of goodwill is not expected to be deductible for income tax purposes. The amount of tax deductible goodwill remains subject to adjustment through the measurement period. |
Acquired_Intangible_Assets_Det
Acquired Intangible Assets (Detail) (Motorola Home, USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | |
Business Acquisition [Line Items] | ' | |
Acquired intangible asset, fair value | $1,239,200 | [1] |
Customer relationships | ' | |
Business Acquisition [Line Items] | ' | |
Acquired intangible asset, fair value | 653,400 | |
Acquired intangible asset, useful life | '8 years | |
Developed technology, patents & licenses | ' | |
Business Acquisition [Line Items] | ' | |
Acquired intangible asset, fair value | 439,300 | |
Acquired intangible asset, useful life | '6 years | |
In-process R&D | ' | |
Business Acquisition [Line Items] | ' | |
Acquired intangible asset, fair value | 83,100 | |
Acquired intangible asset, useful life | 'indefinite | |
Backlog | ' | |
Business Acquisition [Line Items] | ' | |
Acquired intangible asset, fair value | 44,600 | |
Acquired intangible asset, useful life | '1 year | |
Trademarks and trade names | ' | |
Business Acquisition [Line Items] | ' | |
Acquired intangible asset, fair value | $18,800 | |
Acquired intangible asset, useful life | '1 year | |
[1] | The measurement period adjustments for identifiable intangible assets primarily consists of adjustments recorded to reflect changes in the estimated fair value of certain acquired intangibles, principally customer relationships, developed technology and patents, and in-process research and development based upon facts and circumstances that existed as of the acquisition date. The Company continued to gather further specific information on the Motorola Home intangible assets, such as the timing and risk of cash flows of the intangible assets, including those assets still in the research and development phase. Some of the more significant assumptions inherent in the development of intangible asset values, from the perspective of a market participant, include: the amount and timing of projected future cash flows (including revenue, cost of sales, research and development costs, sales and marketing expenses); working capital; contributory asset charges; the discount rate selected to measure the risks inherent in the future cash flows; and the assessment of the asset's life cycle and the competitive trends impacting the asset, as well as other factors. These factors were refined in order to further complete the valuation work that impacted (i) the estimated total fair value assigned to intangible assets, (ii) the estimated assignment of fair value between finite-lived and indefinite-lived intangible assets and/or (iii) the estimated weighted-average useful life of each category of intangible assets. |
Carrying_Value_and_Maximum_Exp
Carrying Value and Maximum Exposure to Loss (Detail) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Conditional Access Licensing ("CAL") | ' |
Business Combination, Transactions [Line Items] | ' |
Carrying Value | $6,476 |
Maximum Exposure to Loss | 6,476 |
Combined Conditional Access Development ("CCAD") | ' |
Business Combination, Transactions [Line Items] | ' |
Carrying Value | 5,886 |
Maximum Exposure to Loss | $18,000 |
Business_Acquisitions_Pro_Form
Business Acquisitions, Pro Forma Results of Operations (Detail) (USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Business Acquisition, Pro Forma Information [Line Items] | ' | ' |
Net sales | $4,426,576 | $4,685,648 |
Net income (loss) | ($108,548) | ($142,489) |
Income (loss) per common share: | ' | ' |
Basic | ($0.79) | ($1.05) |
Diluted | ($0.79) | ($1.05) |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets - Additional Information (Detail) (USD $) | 12 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | |||||||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Oct. 31, 2013 | Oct. 31, 2013 | Oct. 31, 2013 | Dec. 31, 2011 | ||||
Segment | Minimum | Maximum | In-process R&D | In-process R&D | Market Approach Valuation Technique | Market Approach Valuation Technique | Motorola Home | Network Infrastructure and Cloud Services | Cloud Services | Cloud Services | Cloud Services | Cloud Services | Cloud Services | Cloud Services | MCS segment | ||||||
Minimum | Maximum | Segment | Decline in Fair value | Increase in Discount rate | Decrease in Terminal growth | ||||||||||||||||
Schedule Of Goodwill And Intangible Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Goodwill | $935,579,000 | $194,115,000 | [1] | $194,542,000 | [1] | ' | ' | ' | ' | ' | ' | $744,578,000 | [2] | ' | $10,863,000 | ' | ' | ' | ' | ' | ' |
Number of reporting units tested for impairment | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | |||
Weighting of fair value assumption, percentage | ' | ' | ' | ' | ' | ' | ' | 0.00% | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Goodwill impairment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | 41,200,000 | ' | ' | ' | ' | |||
Goodwill impairment loss net of tax | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 33,900,000 | ' | ' | ' | ' | |||
Sensitivity analysis for goodwill impairment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | 100.00% | 100.00% | ' | |||
Additional goodwill acquired | 744,578,000 | ' | ' | ' | ' | ' | ' | ' | ' | 744,600,000 | ' | 10,863,000 | ' | ' | ' | ' | ' | ' | |||
Gross Amount | 1,603,335,000 | 334,197,000 | ' | ' | ' | 71,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Indefinite-lived assets acquired | ' | ' | ' | ' | ' | 83,100,000 | 7,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Impairment of indefinite-lived assets | ' | ' | ' | ' | ' | 12,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Impairment loss related to MCS customer relationships | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 47,400,000 | |||
Impairment loss related to MCS customer relationships net of tax | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 29,100,000 | |||
Finite lived intangible assets, useful life | ' | ' | ' | '6 months | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Amortization of intangible assets | 193,637,000 | 30,294,000 | 33,649,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Finite lived intangible assets, amortization expense | ' | ' | ' | ' | ' | $71,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
[1] | Reflects retrospective reassignment of goodwill due to reorganization of segments and reporting unit structure. | ||||||||||||||||||||
[2] | Goodwill recognized as of the Acquisition date (as adjusted) totaled $744.6 million and is attributable to the workforce of the acquired business, strategic opportunities and synergies that are expected to arise from the acquisition of Motorola Home. The preliminarily determined goodwill has been assigned to the Company's three reporting units (see Note 5 Goodwill and Intangible Assets for additional details). These amounts are not yet finalized and are subject to change. With the exception of $77.6 million of goodwill that retains its tax basis after the acquisition, the remaining portion of the $744.6 million of goodwill is not expected to be deductible for income tax purposes. The amount of tax deductible goodwill remains subject to adjustment through the measurement period. |
Carrying_Amount_of_Goodwill_De
Carrying Amount of Goodwill (Detail) (USD $) | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2011 | ||||||
C-COR | C-COR | BigBand Networks | BigBand Networks | CPE | CPE | Network Infrastructure | Network Infrastructure | Network Infrastructure | Network Infrastructure | Network Infrastructure | Network Infrastructure | Cloud Services | Cloud Services | |||||||||
C-COR | C-COR | BigBand Networks | BigBand Networks | |||||||||||||||||||
Goodwill [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Goodwill, gross, as of beginning of period | $572,771 | $573,198 | ' | ' | ' | ' | $31,850 | $31,850 | $419,318 | $419,745 | ' | ' | ' | ' | $121,603 | $121,603 | ||||||
Accumulated impairment losses, as of beginning of period | -378,656 | -378,656 | ' | ' | ' | ' | ' | ' | -257,053 | -257,053 | ' | ' | ' | ' | -121,603 | -121,603 | ||||||
Balance as of beginning of period | 194,115 | [1] | 194,542 | [1] | ' | ' | ' | ' | 31,850 | [1] | 31,850 | [1] | 162,265 | [1] | 162,692 | [1] | ' | ' | ' | ' | ' | ' |
Goodwill acquired | 744,578 | ' | ' | ' | ' | ' | 653,191 | ' | 80,524 | ' | ' | ' | ' | ' | 10,863 | ' | ||||||
Adjustment to net deferred taxes | ' | ' | -380 | -1,188 | -2,734 | 761 | ' | ' | ' | ' | -380 | -1,188 | -2,734 | 761 | ' | ' | ||||||
Goodwill, gross, as of end of period | 1,314,235 | 573,198 | ' | ' | ' | ' | 685,041 | 31,850 | 496,728 | 419,745 | ' | ' | ' | ' | 132,466 | 121,603 | ||||||
Accumulated impairment losses, as of end of period | -378,656 | -378,656 | ' | ' | ' | ' | ' | ' | -257,053 | -257,053 | ' | ' | ' | ' | -121,603 | -121,603 | ||||||
Balance as of end of period | $935,579 | $194,542 | [1] | ' | ' | ' | ' | $685,041 | $31,850 | [1] | $239,675 | $162,692 | [1] | ' | ' | ' | ' | $10,863 | ' | |||
[1] | Reflects retrospective reassignment of goodwill due to reorganization of segments and reporting unit structure. |
Gross_Carrying_Amount_and_Accu
Gross Carrying Amount and Accumulated Amortization of Intangible Assets (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Intangible Assets [Line Items] | ' | ' |
Gross Amount | $1,603,335 | $334,197 |
Accumulated Amortization | 427,143 | 239,668 |
Net Book Value | 1,176,192 | 94,529 |
Customer relationships | ' | ' |
Intangible Assets [Line Items] | ' | ' |
Gross Amount | 903,409 | 250,009 |
Accumulated Amortization | 266,323 | 190,285 |
Net Book Value | 637,086 | 59,724 |
Weighted Average Remaining Life (Years) | '7 years | '4 years |
Developed technology, patents & licenses | ' | ' |
Intangible Assets [Line Items] | ' | ' |
Gross Amount | 563,326 | 77,769 |
Accumulated Amortization | 120,679 | 42,964 |
Net Book Value | 442,647 | 34,805 |
Weighted Average Remaining Life (Years) | '5 years | '4 years 4 months 24 days |
Trademarks and trade names | ' | ' |
Intangible Assets [Line Items] | ' | ' |
Gross Amount | 20,900 | 257 |
Accumulated Amortization | 8,549 | 257 |
Net Book Value | 12,351 | ' |
Weighted Average Remaining Life (Years) | '1 year 6 months | ' |
Order backlog | ' | ' |
Intangible Assets [Line Items] | ' | ' |
Gross Amount | 44,600 | 3,000 |
Accumulated Amortization | 31,592 | 3,000 |
Net Book Value | 13,008 | ' |
Weighted Average Remaining Life (Years) | '3 months 18 days | ' |
Non-compete agreements | ' | ' |
Intangible Assets [Line Items] | ' | ' |
Gross Amount | ' | 3,162 |
Accumulated Amortization | ' | 3,162 |
Weighted Average Remaining Life (Years) | '2 years | ' |
In-process R&D | ' | ' |
Intangible Assets [Line Items] | ' | ' |
Gross Amount | 71,100 | ' |
Net Book Value | $71,100 | ' |
Estimated_Future_Amortization_
Estimated Future Amortization Expenses for Finite-Lived Intangibles (Detail) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Finite Lived Intangible Assets Amortization Expense [Line Items] | ' |
2014 | $224,363 |
2015 | 203,979 |
2016 | 173,251 |
2017 | 156,316 |
2018 | 117,362 |
Thereafter | $229,821 |
Comcast_Investment_in_ARRIS_Ad
Comcast Investment in ARRIS - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 1 Months Ended | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2013 | Jun. 30, 2013 | Jan. 11, 2013 | Jan. 11, 2013 | Dec. 31, 2013 | Jan. 11, 2013 |
Comcast Corporation | ||||||
Investment [Line Items] | ' | ' | ' | ' | ' | ' |
Business acquisition potential stock issue, shares | ' | ' | ' | 10.6 | ' | ' |
Business acquisition potential stock issue, value | ' | ' | ' | $150 | ' | ' |
Business acquisition, per share | ' | ' | ' | $14.11 | ' | ' |
Business acquisition, potential cash payment | ' | ' | ' | ' | '150.0 | ' |
Purchase of common stock, per share | ' | ' | $15.35 | ' | ' | $14.11 |
Reduction in revenue | 13.2 | ' | ' | ' | ' | ' |
Other (income) expense | ' | $13.20 | ' | ' | ' | ' |
Investments_Detail
Investments (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current Assets: | ' | ' |
Available-for-sale securities | $67,360 | $398,414 |
Noncurrent Assets: | ' | ' |
Available-for-sale securities | 7,004 | 59,549 |
Equity method investments | 23,803 | ' |
Cost method investments | 15,250 | 6,000 |
Other investments | 25,119 | 20,615 |
Total classified as non-current assets | 71,176 | 86,164 |
Total | $138,536 | $484,578 |
Investments_Additional_Informa
Investments - Additional Information (Detail) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Investment [Line Items] | ' | ' |
Total gains included in the accumulated other comprehensive income | $300,000 | $200,000 |
Equity method investments | 23,803,000 | ' |
Cost method investment | 15,250,000 | 6,000,000 |
Other investment | 25,119,000 | 20,615,000 |
Impairment on investments | ' | $1,500,000 |
Contractual_Maturities_of_Avai
Contractual Maturities of Available-for-Sale Securities (Detail) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Investment Holdings [Line Items] | ' |
Within one year | $67,360 |
After one year through five years | 3,604 |
After five years through ten years | ' |
After ten years | 3,400 |
Total | $74,364 |
Summary_of_Ownership_Structure
Summary of Ownership Structure and Ownership Percentage of Non-consolidated Investments (Detail) | Dec. 31, 2013 |
Schedule of Equity Method Investments [Line Items] | ' |
Equity method ownership, percentage | 8.40% |
MPEG LA | ' |
Schedule of Equity Method Investments [Line Items] | ' |
Equity method ownership, percentage | 8.40% |
Music Choice | ' |
Schedule of Equity Method Investments [Line Items] | ' |
Equity method ownership, percentage | 18.20% |
Conditional Access Licensing | ' |
Schedule of Equity Method Investments [Line Items] | ' |
Equity method ownership, percentage | 49.00% |
Combined Conditional Access Development | ' |
Schedule of Equity Method Investments [Line Items] | ' |
Equity method ownership, percentage | 50.00% |
Investment_Assets_Excluding_Eq
Investment Assets Excluding Equity and Cost Method Investments Measured at Fair Value on Recurring Basis (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | $99,483 | $478,578 |
Current Asset | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 67,360 | 398,414 |
Current Asset | Certificates of Deposit | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 3,814 | 5,416 |
Current Asset | Commercial Paper | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 2,994 | 18,964 |
Current Asset | US Corporate Bonds | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 30,987 | 209,093 |
Current Asset | Short-Term Bond Fund | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 29,565 | ' |
Current Asset | Municipal Bonds | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | ' | 164,941 |
Noncurrent Assets | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 32,123 | 80,164 |
Noncurrent Assets | US Corporate Bonds | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 3,604 | 53,914 |
Noncurrent Assets | Cash Surrender Value of Company Owned Life Insurance | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 25,119 | 20,615 |
Noncurrent Assets | Corporate Obligations | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 18 | 15 |
Noncurrent Assets | Money Market Funds | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 212 | 226 |
Noncurrent Assets | Mutual Funds | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 184 | 179 |
Noncurrent Assets | Other Investments | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 2,986 | 5,215 |
Level 1 | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 29,961 | 165,346 |
Level 1 | Current Asset | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 29,565 | 164,941 |
Level 1 | Current Asset | Short-Term Bond Fund | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 29,565 | ' |
Level 1 | Current Asset | Municipal Bonds | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | ' | 164,941 |
Level 1 | Noncurrent Assets | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 396 | 405 |
Level 1 | Noncurrent Assets | Money Market Funds | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 212 | 226 |
Level 1 | Noncurrent Assets | Mutual Funds | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 184 | 179 |
Level 2 | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 69,522 | 313,232 |
Level 2 | Current Asset | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 37,795 | 233,473 |
Level 2 | Current Asset | Certificates of Deposit | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 3,814 | 5,416 |
Level 2 | Current Asset | Commercial Paper | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 2,994 | 18,964 |
Level 2 | Current Asset | US Corporate Bonds | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 30,987 | 209,093 |
Level 2 | Noncurrent Assets | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 31,727 | 79,759 |
Level 2 | Noncurrent Assets | US Corporate Bonds | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 3,604 | 53,914 |
Level 2 | Noncurrent Assets | Cash Surrender Value of Company Owned Life Insurance | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 25,119 | 20,615 |
Level 2 | Noncurrent Assets | Corporate Obligations | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 18 | 15 |
Level 2 | Noncurrent Assets | Other Investments | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | $2,986 | $5,215 |
Fair_Value_Measurements_Additi
Fair Value Measurements - Additional Information (Detail) (Level 2, USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Level 2 | ' | ' |
Fair Value Measurement [Line Items] | ' | ' |
Fair value of assets | $3.60 | $3.80 |
Derivative_Instruments_and_Hed2
Derivative Instruments and Hedging Activities - Additional Information (Detail) (USD $) | 12 Months Ended | 1 Months Ended | |||
Dec. 31, 2013 | Jul. 31, 2013 | Apr. 30, 2013 | Apr. 30, 2013 | Apr. 30, 2013 | |
Interest rate swap | Senior Secured Credit Facilities | Senior Secured Credit Facilities | Senior Secured Credit Facilities | ||
Agreement | Term Loan A | Term Loan B | Revolving Credit Facility | ||
Derivatives, Fair Value [Line Items] | ' | ' | ' | ' | ' |
Line of credit facility | ' | ' | $1,100,000,000 | $825,000,000 | $250,000,000 |
Number of interest rate swap arrangements | ' | 6 | ' | ' | ' |
Derivative notional amount | ' | 100,000,000 | ' | ' | ' |
Variable-rate debt upon conversion | ' | 600,000,000 | ' | ' | ' |
Fixed interest rate | ' | 3.65% | ' | ' | ' |
Basis point increase in fixed rate based on future changes to the Company's net leverage ratio | ' | 0.25% | ' | ' | ' |
Basis point decrease in fixed rate based on future changes to the Company's net leverage ratio | ' | 0.50% | ' | ' | ' |
Maturity date | ' | 29-Dec-17 | ' | ' | ' |
Hedge ineffectiveness in earnings | 0 | ' | ' | ' | ' |
Amount estimated reclassified as an increase to interest expense | 7,000,000 | ' | ' | ' | ' |
Fair value of derivatives in net liability position | $4,100,000 | ' | ' | ' | ' |
Outstanding_Interest_Rate_Deri
Outstanding Interest Rate Derivatives Designated as Cash Flow Hedges of Interest Rate Risk (Detail) (Interest rate swap, USD $) | Dec. 31, 2013 |
Derivative | |
Interest rate swap | ' |
Derivative [Line Items] | ' |
Number of Instruments | 6 |
Notional | $600,000,000 |
PreTax_Impact_of_Derivative_Fi
Pre-Tax Impact of Derivative Financial Instruments (Detail) (Interest rate derivatives, USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Derivative [Line Items] | ' |
Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | ($7,140) |
Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | ' |
Interest Expense | ' |
Derivative [Line Items] | ' |
Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | ($3,132) |
Fair_Values_of_Derivative_Inst
Fair Values of Derivative Instruments Recorded in Consolidated Balance Sheet (Detail) (USD $) | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | Foreign exchange contract | Foreign exchange contract | Interest rate derivatives | Interest rate derivatives |
Derivatives Not Designated as Hedging Instruments | Derivatives Not Designated as Hedging Instruments | Derivatives Designated as Hedging Instruments | Derivatives Designated as Hedging Instruments | |
Other Current Assets | Other accrued liabilities | Other accrued liabilities | Other assets | |
Derivatives, Fair Value [Line Items] | ' | ' | ' | ' |
Derivative Assets, Fair Value | $590 | ' | ' | $3,011 |
Derivative Liabilities, Fair Value | ' | $513 | $7,018 | ' |
Change_in_Fair_Values_of_Deriv
Change in Fair Values of Derivative Financial Instruments Recorded in Consolidated Statements of Operations (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Derivatives, Fair Value [Line Items] | ' | ' | ' |
Interest expense | $67,888 | $17,797 | $16,939 |
Foreign exchange contract | Loss (gain) on foreign currency | Derivatives Not Designated as Hedging Instruments | ' | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' | ' |
Gain on foreign currency | 428 | 268 | 809 |
Interest rate derivative | Interest Expense | Derivatives Designated as Hedging Instruments | ' | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' | ' |
Interest expense | $3,132 | ' | ' |
Guarantees_Additional_Informat
Guarantees - Additional Information (Detail) (Motorola Home, USD $) | 12 Months Ended | 3 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2013 | |
Previously Reported | Adjustment | Adjustment | ||
Product Warranty Disclosure [Line Items] | ' | ' | ' | ' |
Warranty reserve at acquisition | $82,804,000 | $65,500,000 | ' | ' |
Warranty reserve at acquisition period increase (decrease) | ' | ' | -2,100,000 | 19,400,000 |
Product defect known at acquisition | $10,200,000 | ' | ' | ' |
Information_Regarding_Changes_
Information Regarding Changes in ARRIS' Aggregate Product Warranty Liabilities (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Product Warranty Disclosure [Line Items] | ' | ' |
Beginning Balance | $6,069 | $6,387 |
Accruals related to warranties (including changes in assumptions) | 20,911 | 3,125 |
Settlements made (in cash or in kind) | -28,284 | -3,443 |
Ending Balance | 81,500 | 6,069 |
Motorola Home | ' | ' |
Product Warranty Disclosure [Line Items] | ' | ' |
Warranty reserve at acquisition | $82,804 | ' |
Segment_Information_Detail
Segment Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales | $1,199,067 | $1,067,823 | $1,000,362 | $353,650 | $344,003 | $357,432 | $349,327 | $302,901 | $3,620,902 | $1,353,663 | $1,088,685 |
Direct Contribution | ' | ' | ' | ' | ' | ' | ' | ' | 258,671 | 130,533 | 115,239 |
Restructuring charges | ' | ' | ' | ' | ' | ' | ' | ' | 37,576 | 6,761 | 4,360 |
Acquisition , integration & other costs | ' | ' | ' | ' | ' | ' | ' | ' | 45,471 | 6,207 | 3,205 |
Impairment of goodwill and intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 88,633 |
Amortization of intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | 193,637 | 30,294 | 33,649 |
Operating income (loss) | 49,351 | 11,182 | -88,062 | 9,516 | 25,531 | 23,123 | 26,925 | 11,691 | -18,013 | 87,271 | -14,608 |
Other expense | ' | ' | ' | ' | ' | ' | ' | ' | 78,137 | 12,975 | 13,903 |
Income (loss) before income taxes | ' | ' | ' | ' | ' | ' | ' | ' | -96,150 | 74,296 | -28,511 |
Network & Cloud | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales | ' | ' | ' | ' | ' | ' | ' | ' | 1,174,757 | 742,255 | 702,997 |
Direct Contribution | ' | ' | ' | ' | ' | ' | ' | ' | 258,336 | 228,798 | 244,540 |
CPE | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales | ' | ' | ' | ' | ' | ' | ' | ' | 2,466,618 | 611,408 | 382,424 |
Direct Contribution | ' | ' | ' | ' | ' | ' | ' | ' | 482,519 | 66,788 | 12,973 |
Other | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales | ' | ' | ' | ' | ' | ' | ' | ' | -20,473 | ' | 3,264 |
Direct Contribution | ' | ' | ' | ' | ' | ' | ' | ' | -482,184 | -165,053 | -142,274 |
Restructuring charges | ' | ' | ' | ' | ' | ' | ' | ' | 37,576 | 6,761 | 4,360 |
Acquisition , integration & other costs | ' | ' | ' | ' | ' | ' | ' | ' | 45,471 | 6,207 | 3,205 |
Impairment of goodwill and intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 88,633 |
Amortization of intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | $193,637 | $30,294 | $33,649 |
Summary_of_Net_Intangible_Asse
Summary of Net Intangible Assets and Goodwill by Reportable Segment (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||
In Thousands, unless otherwise specified | |||||
Segment Reporting Information [Line Items] | ' | ' | ' | ||
Goodwill | $935,579 | $194,115 | [1] | $194,542 | [1] |
Intangible assets, net | 1,176,192 | 94,529 | ' | ||
Network & Cloud | ' | ' | ' | ||
Segment Reporting Information [Line Items] | ' | ' | ' | ||
Goodwill | 250,538 | 162,265 | ' | ||
Intangible assets, net | 366,844 | 94,529 | ' | ||
CPE | ' | ' | ' | ||
Segment Reporting Information [Line Items] | ' | ' | ' | ||
Goodwill | 685,041 | 31,850 | [1] | 31,850 | [1] |
Intangible assets, net | $809,348 | ' | ' | ||
[1] | Reflects retrospective reassignment of goodwill due to reorganization of segments and reporting unit structure. |
Summary_of_Sales_to_Customers_
Summary of Sales to Customers (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenue, Major Customer [Line Items] | ' | ' | ' |
Customers and affiliates | $1,163,730 | $333,603 | $340,518 |
Comcast and Affiliates | ' | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' | ' |
Customers and affiliates | 674,964 | 421,173 | 286,139 |
Percentage of sales | 18.60% | 31.10% | 26.40% |
Time Warner Cable and Affiliates | ' | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' | ' |
Customers and affiliates | 359,484 | 243,151 | 180,740 |
Percentage of sales | 9.90% | 18.00% | 16.70% |
Verizon | ' | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' | ' |
Customers and affiliates | $358,653 | $5,219 | $454 |
Percentage of sales | 9.90% | 0.40% | ' |
Segment_Information_Additional
Segment Information - Additional Information (Detail) (International Customers) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
International Customers | ' | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' | ' |
Percentage of sales | 32.10% | 24.60% | 31.30% |
International_Sales_by_Geograp
International Sales by Geographic Region (Detail) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
International Long-Lived Assets by Geographic Region [Line Items] | ' | ' | ' | |||
Revenues | $1,163,730 | $333,603 | $340,518 | |||
Americas, excluding U.S. | ' | ' | ' | |||
International Long-Lived Assets by Geographic Region [Line Items] | ' | ' | ' | |||
Revenues | 746,146 | [1] | 202,887 | [1] | 195,500 | [1] |
Asia Pacific | ' | ' | ' | |||
International Long-Lived Assets by Geographic Region [Line Items] | ' | ' | ' | |||
Revenues | 153,674 | 65,554 | 59,194 | |||
EMEA | ' | ' | ' | |||
International Long-Lived Assets by Geographic Region [Line Items] | ' | ' | ' | |||
Revenues | $263,910 | $65,162 | $85,824 | |||
[1] | Excludes U.S. sales of $2,457.2 million, $1,020.1 million and $748.2 million for the years ended December 31, 2013, 2012 and 2011, respectively. |
International_Sales_by_Geograp1
International Sales by Geographic Region (Parenthetical) (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
International Long-Lived Assets by Geographic Region [Line Items] | ' | ' | ' |
Revenue | $1,163,730 | $333,603 | $340,518 |
U.S. | ' | ' | ' |
International Long-Lived Assets by Geographic Region [Line Items] | ' | ' | ' |
Revenue | $2,457,200 | $1,020,100 | $748,200 |
Summary_of_International_Long_
Summary of International Long Lived Assets by Geographic Region (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
International Long-Lived Assets by Geographic Region [Line Items] | ' | ' |
Long lived assets | $100,077 | $4,750 |
Americas, excluding U.S. | ' | ' |
International Long-Lived Assets by Geographic Region [Line Items] | ' | ' |
Long lived assets | 7,467 | 354 |
Asia Pacific | ' | ' |
International Long-Lived Assets by Geographic Region [Line Items] | ' | ' |
Long lived assets | 82,495 | 1,847 |
EMEA | ' | ' |
International Long-Lived Assets by Geographic Region [Line Items] | ' | ' |
Long lived assets | $10,115 | $2,549 |
Summary_of_International_Long_1
Summary of International Long Lived Assets by Geographic Region (Parenthetical) (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
International Long-Lived Assets by Geographic Region [Line Items] | ' | ' |
Long lived assets | $100,077 | $4,750 |
U.S. | ' | ' |
International Long-Lived Assets by Geographic Region [Line Items] | ' | ' |
Long lived assets | $296,100 | $49,600 |
Summary_of_and_Changes_to_Rest
Summary of and Changes to Restructuring Accrual (Detail) (USD $) | 12 Months Ended | 9 Months Ended | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2013 |
Employee severance & termination benefits | Contractual Obligations and other | Write-off of property, plant and equipment | Write-off of property, plant and equipment | ||||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Beginning Balance | $1,163 | ' | ' | ' | $1,163 | ' | ' |
Balance acquired at Acquisition | 155 | ' | ' | ' | 155 | ' | ' |
Restructuring charges | 37,576 | 6,761 | 4,360 | 30,774 | 41 | 6,800 | 6,761 |
Cash payments | -28,786 | ' | ' | -28,100 | -686 | ' | ' |
Non-cash expense | -6,761 | ' | ' | ' | ' | ' | -6,761 |
Ending Balance | $3,347 | $1,163 | ' | $2,674 | $673 | ' | ' |
Restructuring_Charges_Addition
Restructuring Charges - Additional Information (Detail) (USD $) | 12 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | 3 Months Ended | 12 Months Ended | |||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2013 | Dec. 31, 2009 | Dec. 31, 2013 | Dec. 31, 2007 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 30, 2013 | |
Employee severance & termination benefits | Write-off of property, plant and equipment | Write-off of property, plant and equipment | Motorola Home | C-COR | C-COR | C-COR | BigBand Networks | BigBand Networks | BigBand Networks | ||||
Employee severance & termination benefits | |||||||||||||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Restructuring charges | $37,576,000 | $6,761,000 | $4,360,000 | $30,774,000 | $6,800,000 | $6,761,000 | ' | ' | ' | ' | $3,400,000 | $6,800,000 | ' |
Liability remaining for restructuring plan | 3,347,000 | 1,163,000 | ' | 2,674,000 | ' | ' | ' | ' | 400,000 | ' | ' | ' | 300,000 |
Restructuring accruals | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | 700,000 | ' | ' | ' |
Adjustment related to sublease assumption | ' | ' | ' | ' | ' | ' | ' | 1,500,000 | ' | ' | ' | ' | ' |
Restructuring charges related to severance and termination benefits | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,300,000 | 5,600,000 | ' |
Restructuring costs related to facilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $100,000 | $1,200,000 | ' |
Components_of_Inventory_Net_of
Components of Inventory Net of Reserves (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Inventory [Line Items] | ' | ' |
Raw material | $60,520 | $24,798 |
Work in process | 6,010 | 2,800 |
Finished goods | 263,599 | 106,250 |
Total inventories | $330,129 | $133,848 |
Property_Plant_and_Equipment_a
Property, Plant and Equipment, at Cost (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ' | ' |
Land | $88,742 | $2,562 |
Buildings and leasehold improvements | 133,668 | 25,995 |
Machinery and equipment | 368,572 | 177,657 |
Total property, plant and equipment, gross | 590,982 | 206,214 |
Less: Accumulated depreciation | -194,830 | -151,836 |
Total property, plant and equipment, net | $396,152 | $54,378 |
LongTerm_Indebtedness_Addition
Long-Term Indebtedness - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||
Oct. 31, 2013 | Dec. 31, 2013 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2011 | Nov. 15, 2013 | Sep. 30, 2013 | Dec. 31, 2006 | Jun. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Apr. 30, 2013 | Dec. 31, 2013 | Apr. 30, 2013 | Dec. 31, 2013 | Apr. 30, 2013 | Dec. 31, 2013 | |
Loan | Repurchase right | Conversions of Notes | Senior Secured Credit Facilities | Senior Secured Credit Facilities | Senior Secured Credit Facilities | Senior Secured Credit Facilities | Senior Secured Credit Facilities | Senior Secured Credit Facilities | Senior Secured Credit Facilities | Senior Secured Credit Facilities | Senior Secured Credit Facilities | Senior Secured Credit Facilities | Senior Secured Credit Facilities | Senior Secured Credit Facilities | ||||||||
Maximum | Minimum | Mandatory prepayments | Optional prepayments | Term Loan A | Term Loan A | Term Loan B | Term Loan B | Revolving Credit Facility | Revolving Credit Facility | Term Loan A and B | ||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible senior notes face amount | ' | ' | ' | ' | ' | ' | ' | $276,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate of convertible senior notes | ' | 2.00% | ' | 2.00% | ' | ' | ' | 2.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible senior notes due date | ' | ' | ' | ' | ' | ' | ' | '2026 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares receivable upon conversion | ' | ' | ' | 62.1504 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible base principal amount of conversion | ' | 1,000 | ' | 1,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Initial conversion price | ' | ' | ' | $16.09 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible senior notes conversion period description | ' | ' | ' | '20 or more trading days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of consecutive trading days | ' | '30 days | ' | '30 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument percentage exceeding conversion price | ' | ' | ' | 120.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current conversion price | ' | $19.31 | ' | $19.31 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage price of principal amount for repurchase of senior notes | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principal amount of senior notes to repurchase | ' | ' | 68,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash paid to purchase senior notes | ' | ' | ' | ' | ' | ' | ' | ' | 68,000 | 11,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of notes converted | ' | ' | 11 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Senior note outstanding principal amount | ' | ' | ' | ' | ' | ' | 232,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage on outstanding aggregate principal amount of notes | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument redemption description | 'The Redemption Price did not include the interest accrued up to November 15, 2013, which was paid to the holders of the notes of record as of November 1, 2013. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repurchase of notes | ' | 30,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notes available for conversion | ' | ' | ' | ' | ' | 231,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash consideration on redemption of notes | ' | ' | ' | ' | ' | 231,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock issued on redemption of notes | ' | 3,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt outstanding for redemption | ' | ' | ' | ' | ' | 744,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of credit facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,100,000,000 | ' | 825,000,000 | ' | 250,000,000 | ' |
Line of credit facility term loan period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | '7 years | ' | '5 years | ' | ' |
Line of credit facility, amount borrowed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,752,563,000 | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | 1,752,600,000 |
Letter of credit facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,500,000 | ' |
Consolidated net leverage ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 425.00% | 350.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Prepayments related to senior secured credit facilities | ' | ' | ' | 79,000 | 4,984,000 | ' | ' | ' | ' | ' | ' | ' | ' | 47,400,000 | 125,000,000 | ' | ' | ' | ' | ' | ' | ' |
Senior secured credit facilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,752,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Senior_Credit_Facility_Interes
Senior Credit Facility Interest Rates (Detail) | 12 Months Ended | |
Dec. 31, 2013 | ||
Senior Secured Credit Facilities | Term Loan A | ' | |
Credit Facility [Line Items] | ' | |
Debt instrument, interest rate at period end | 2.42% | |
Senior Secured Credit Facilities | Term Loan B | ' | |
Credit Facility [Line Items] | ' | |
Debt instrument, interest rate at period end | 3.50% | |
LIBOR floor | ' | |
Credit Facility [Line Items] | ' | |
Debt instrument, basis spread on variable rate | 0.75% | |
LIBOR floor | Senior Secured Credit Facilities | Term Loan A | ' | |
Credit Facility [Line Items] | ' | |
Debt instrument, basis spread on variable rate | 2.25% | |
LIBOR floor | Senior Secured Credit Facilities | Term Loan B | ' | |
Credit Facility [Line Items] | ' | |
Debt instrument, basis spread on variable rate | 2.75% | [1] |
LIBOR floor | Senior Secured Credit Facilities | Revolving Credit Facilities | ' | |
Credit Facility [Line Items] | ' | |
Debt instrument, basis spread on variable rate | 2.25% | [2] |
[1] | Includes LIBOR floor of 0.75% | |
[2] | Includes unused commitment fee of 0.50% and letter of credit fee of 2.25% not reflected in interest rate above. |
Senior_Credit_Facility_Interes1
Senior Credit Facility Interest Rates (Parenthetical) (Detail) | 12 Months Ended |
Dec. 31, 2013 | |
Credit Facility [Line Items] | ' |
Unused commitment fee | 0.50% |
Letter of credit fee | 2.25% |
LIBOR floor | ' |
Credit Facility [Line Items] | ' |
Debt instrument, basis spread on variable rate | 0.75% |
Summary_of_Contractual_Debt_Ob
Summary of Contractual Debt Obligations (Detail) (Senior Secured Credit Facilities, USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Senior Secured Credit Facilities | ' |
Debt Instrument [Line Items] | ' |
Less than 1 Year | $55,000 |
1-3 Years | 178,750 |
3-5 Years | 825,000 |
More than 5 Years | 693,813 |
Face value of term loans | $1,752,563 |
Reconciliation_of_Numerators_a
Reconciliation of Numerators and Denominators of Basic and Diluted Earnings Per Share Computations (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Basic: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) | ($2,817) | $17,170 | ($48,463) | ($14,650) | $14,795 | $17,864 | $15,001 | $5,799 | ($48,760) | $53,459 | ($17,662) |
Weighted average shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | 131,980 | 114,161 | 120,157 |
Basic earnings (loss) per share | ($0.02) | $0.12 | ($0.36) | ($0.13) | $0.13 | $0.16 | $0.13 | $0.05 | ($0.37) | $0.47 | ($0.15) |
Diluted: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) | ($2,817) | $17,170 | ($48,463) | ($14,650) | $14,795 | $17,864 | $15,001 | $5,799 | ($48,760) | $53,459 | ($17,662) |
Weighted average shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | 131,980 | 114,161 | 120,157 |
Net effect of dilutive shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,353 | ' |
Total | ' | ' | ' | ' | ' | ' | ' | ' | 131,980 | 116,514 | 120,157 |
Diluted earnings (loss) per share | ($0.02) | $0.12 | ($0.36) | ($0.13) | $0.13 | $0.15 | $0.13 | $0.05 | ($0.37) | $0.46 | ($0.15) |
Earnings_Per_Share_Additional_
Earnings Per Share - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | 1 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2006 | Nov. 30, 2006 | Jan. 11, 2013 | Apr. 17, 2013 |
Comcast Corporation | Comcast Corporation | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible senior notes issued | ' | ' | ' | ' | ' | $276 | ' | ' |
Anti-dilutive securities excluded from the computation of diluted earnings per share | ' | 1.1 | 1.7 | 3.6 | ' | ' | ' | ' |
Common stock related to stock option exercises and the vesting of restricted shares | ' | 3.6 | 1.7 | ' | ' | ' | ' | ' |
Business acquisition potential stock issue, shares | ' | ' | ' | ' | ' | ' | 10.6 | ' |
Business acquisition potential stock issue, value | ' | ' | ' | ' | ' | ' | $150 | $150 |
Business acquisition non cash consideration fair value based on share price based of trading days | ' | ' | ' | ' | ' | ' | '20 days | ' |
Common stock issued on redemption of notes | 3.1 | ' | ' | ' | ' | ' | ' | ' |
Interest rate of convertible senior notes | 2.00% | 2.00% | ' | ' | 2.00% | ' | ' | ' |
Income_Before_Income_Taxes_Det
Income Before Income Taxes (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income Before Income Taxes [Line Items] | ' | ' | ' |
Domestic | ($128,588) | $67,620 | ($32,759) |
Foreign | 32,438 | 6,676 | 4,248 |
Income (loss) before income taxes | ($96,150) | $74,296 | ($28,511) |
Components_of_Income_Tax_Expen
Components of Income Tax Expense (Benefit) (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Components Of Income Tax Expense Benefit [Line Items] | ' | ' | ' |
Current Federal Tax Expense (Benefit) | ($5,133) | $26,196 | $20,901 |
Current State Tax Expense (Benefit) | -40 | 3,440 | 2,223 |
Current Foreign Tax Expense (Benefit) | 10,624 | 4,855 | 2,406 |
Current Income Tax Expense | 5,451 | 34,491 | 25,530 |
Deferred Federal Income Tax Expense (Benefit) | -50,485 | -10,522 | -31,084 |
Deferred State Tax Expense (Benefit) | -2,189 | -2,238 | -6,358 |
Deferred Foreign Income Tax Expense (Benefit) | -167 | -894 | 1,063 |
Deferred Income Tax Expense (Benefit), Total | -52,841 | -13,654 | -36,379 |
Income tax expense (benefit) | ($47,390) | $20,837 | ($10,849) |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) | 12 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
USD ($) | USD ($) | USD ($) | ILS | USD ($) | Research | Foreign Country | Foreign Country | Foreign Country | U.S. State | U.S. State | U.S. Federal | U.S. Federal | U.S. Federal | U.S. Federal Research and Development | Domestic State Research and Development | Domestic Federal Research and Development | |
USD ($) | USD ($) | Irish | Israeli | USD ($) | BigBand Networks | USD ($) | USD ($) | BigBand Networks | USD ($) | USD ($) | USD ($) | ||||||
USD ($) | USD ($) | USD ($) | USD ($) | ||||||||||||||
Income Taxes [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Statutory federal income tax expense (benefit) | -35.00% | 35.00% | -35.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Valuation allowance | $163,745,000 | $17,974,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net increase in valuation allowance | 145,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Federal net operating loss carryforwards | 386,500,000 | ' | ' | ' | ' | ' | 47,900,000 | ' | ' | 174,500,000 | ' | 435,600,000 | 47,000,000 | ' | ' | ' | ' |
Net operating losses available to offset against future taxable income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,300,000 | ' | ' | ' | ' | ' |
Expiry of federal net operating losses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'The available acquired U.S. Federal net operating losses as of December 31, 2013, will expire between the years 2014 and 2031. | ' | ' | ' | ' | ' |
Operating loss carryforwards, expiration period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '20 years | ' | ' | ' | ' | ' |
Net operating loss carryforwards related to employee stock options and restricted stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | 29,400,000 | ' | ' | ' | ' | ' | ' | ' |
Net operating loss carry forwards related to subsidiary | ' | ' | ' | ' | ' | ' | ' | 20,900,000 | 7,600,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Amount except net operating loss carryforwards | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 78,700,000 | ' | ' | 73,800,000 | ' | ' | ' |
R&D credit carryforwards | ' | ' | ' | ' | ' | 5,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Carry forwards of Research and Development Tax credits | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 90,600,000 | 25,700,000 | ' |
Amount offset against U.S Federal and state income tax liabilities | 5,500,000 | 9,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Available tax credits of research and development, Carry forward | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,900,000 | 17,700,000 |
Carry Back and Carry Forward of Research and Development Tax Credits | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'Carried back one year and carried forward twenty years |
Capitalized costs arising from the acquisition | 793,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Capitalized expenditure amortization period | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Pre-tax net income from non-U.S | 32,438,000 | 6,676,000 | 4,248,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Pre-tax net income (loss) from U.S | -128,588,000 | 67,620,000 | -32,759,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Earnings exempted associated with Israeli subsidiary | 6,000,000 | ' | ' | 21,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred tax liability relating to distributable earnings of subsidiary | 1,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred income taxes recorded for the difference between financial and tax basis investment in other foreign subsidiaries | 6,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of jurisdictions under income tax audit | 8 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Company's total tax liability related to uncertain net tax positions | 27,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unrecognized tax benefits | 28,344,000 | 25,704,000 | 26,232,000 | ' | 20,495,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unrecognized tax benefits arising from U.S. Federal and state tax | 1,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Anticipated payment of tax liabilities related to interest and penalty accrual | $2,100,000 | $2,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reconciliation_of_Statutory_Fe
Reconciliation of Statutory Federal Income Tax Rate and Effective Income Tax Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Reconciliation of Statutory Federal Tax Rate [Line Items] | ' | ' | ' |
Statutory federal income tax expense (benefit) | -35.00% | 35.00% | -35.00% |
Effects of: | ' | ' | ' |
State income taxes, net of federal benefit | -2.20% | 1.40% | -6.50% |
Impairment of goodwill | ' | ' | 27.40% |
Domestic manufacturing deduction | -1.10% | -4.00% | -9.60% |
Changes in valuation allowance | ' | -0.70% | -8.00% |
Comcast Revenue Recognition | 9.60% | ' | ' |
Non-deductible officer compensation | 0.50% | 1.00% | 2.40% |
Foreign taxes on U.S. entities less foreign tax credits | -1.30% | -0.40% | 2.50% |
Facilitative acquisition costs | 3.50% | ' | 4.10% |
Research and development tax credits | -26.80% | -4.80% | -20.00% |
Other, net | 3.50% | 0.60% | 4.60% |
Effective Income Tax Rate Reconciliation, Percent, Total | -49.30% | 28.10% | -38.10% |
Significant_Components_of_Net_
Significant Components of Net Deferred Income Tax Assets (Liabilities) (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Components of deferred tax assets | ' | ' |
Total deferred income tax assets | $632,348 | $118,696 |
Components of deferred tax liabilities | ' | ' |
Excess tax on future repatriation of foreign earnings | -1,200 | ' |
Total noncurrent deferred income tax liabilities | -74,791 | -351 |
Total deferred income tax liabilities | -454,074 | -28,698 |
Net deferred income tax assets | 178,274 | 89,998 |
Valuation allowance | -163,745 | -17,974 |
Net deferred income tax assets (liabilities) | 14,529 | 72,024 |
Current deferred income tax assets | ' | ' |
Components of deferred tax assets | ' | ' |
Federal/state net operating loss carryforwards | 3,336 | 3,876 |
Inventory costs | 31,068 | 6,407 |
Foreign net operating loss carryforwards | 1,593 | 205 |
Federal research and development credits | 5,472 | 806 |
Accrued vacation | 7,175 | 1,592 |
Equity compensation | 10,243 | ' |
Warranty reserve | 18,292 | 781 |
Deferred revenue | 19,988 | 14,938 |
Other, principally operating expenses | 24,939 | 3,978 |
Total current deferred income tax assets | 122,106 | 32,583 |
Noncurrent deferred income tax assets | ' | ' |
Components of deferred tax assets | ' | ' |
Federal/state net operating loss carryforwards | 159,219 | 21,245 |
Federal capital loss carryforwards | 5,152 | 5,678 |
Investments | ' | ' |
Foreign net operating loss carryforwards | 8,212 | 7,969 |
Federal research and development credits | 19,409 | 13,041 |
Pension and deferred compensation | 16,187 | 11,440 |
Equity compensation | ' | 10,623 |
Warranty reserve | 12,503 | 1,224 |
Capitalized research and development | 281,434 | 9,174 |
Other, principally operating expenses | 8,126 | 5,719 |
Total noncurrent deferred income tax assets | 510,242 | 86,113 |
Current deferred income tax liabilities | ' | ' |
Components of deferred tax liabilities | ' | ' |
Other, principally operating expenses | -2,856 | -1,742 |
Total current deferred income tax liabilities | -2,856 | -1,742 |
Non-current deferred income tax liabilities | ' | ' |
Components of deferred tax liabilities | ' | ' |
Property, plant and equipment, depreciation and basis differences | -39,782 | -1,833 |
Excess tax on future repatriation of foreign earnings | -1,184 | -1,954 |
Deferred Revenue | ' | -1,021 |
Other noncurrent liabilities | -9,192 | -7,243 |
Convertible debt | ' | -3,639 |
Goodwill and Intangibles | -401,060 | -11,266 |
Total noncurrent deferred income tax liabilities | ($451,218) | ($26,956) |
Reconciliation_of_Unrecognized
Reconciliation of Unrecognized Tax Benefits (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income Tax Contingency [Line Items] | ' | ' | ' |
Beginning balance | $25,704 | $26,232 | $20,495 |
Gross increases - tax positions in prior period | 2,442 | ' | 374 |
Gross decreases - tax positions in prior period | -21 | ' | -105 |
Gross increases - current-period tax positions | 6,999 | 2,684 | 5,922 |
Increases from acquired businesses | 2,014 | ' | 1,719 |
Other | -1,098 | 100 | ' |
Decreases due to lapse of statute of limitations | -7,696 | -3,312 | -2,173 |
Ending balance | $28,344 | $25,704 | $26,232 |
Future_Minimum_Operating_Lease
Future Minimum Operating Lease Payments Under Non-Cancelable Leases (Detail) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Operating Leased Assets [Line Items] | ' |
2014 | $22,803 |
2015 | 20,451 |
2016 | 17,041 |
2017 | 12,595 |
2018 | 9,143 |
Thereafter | 26,194 |
Less sublease income | -6,311 |
Total minimum lease payments | $101,916 |
Commitments_Additional_Informa
Commitments - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Commitments [Line Items] | ' | ' | ' |
Operating leases rent expense net | $22,500,000 | $12,400,000 | $10,700,000 |
Restricted cash | 1,079,000 | 4,722,000 | ' |
Contractual obligations under agreements with non cancelable terms to purchase goods or services | $691,400,000 | ' | ' |
StockBased_Compensation_Additi
Stock-Based Compensation - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Number of shares issued | 17,500,000 | ' | ' |
Allowance for flexibility in awards for every one share | $1.87 | ' | ' |
Number of common stock available under plan for future issuances | 97,997 | ' | ' |
Minimum contractual term | '7 years | ' | ' |
Maximum contractual term | '10 years | ' | ' |
Expected dividend yield | 0.00% | ' | ' |
New options granted | ' | 0 | 0 |
Intrinsic value of options exercised | $9,600,000 | $10,200,000 | $9,600,000 |
Term in which the returns are compared to determine number of shares | '3 year | ' | ' |
Compensation expense measurement period | '3 year | ' | ' |
Unrecognized compensation cost | 81,200,000 | ' | ' |
Weighted average period of compensation cost | '4 years 2 months 12 days | ' | ' |
Repurchase of the Company's common stock | ' | 4,500,000 | 10,000,000 |
Average price per share | ' | $11.55 | $10.95 |
Aggregate consideration amount of shares | ' | 51,921,000 | 109,123,000 |
Restricted Stock | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Minimum percentage of shares issued under comparative market performance restricted stock units awards | 0.00% | ' | ' |
Maximum percentage of shares issued under comparative market performance restricted stock units awards | 200.00% | ' | ' |
Percentage of shares achieved under comparative market performance restricted stock units awards | 200.00% | ' | ' |
Number of shares in target award | 517,780 | ' | ' |
Number of shares in target award outstanding | 583,175 | ' | ' |
Modified percentage in performance | 200.00% | ' | ' |
Number of shares issued at twice the performance percentage | 1,166,350 | ' | ' |
Intrinsic value of restricted shares | 36,300,000 | 27,100,000 | 24,100,000 |
Employee Stock Purchase Plan (ESPP) | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Expected dividend yield | 0.00% | ' | ' |
Maximum Percentage of base compensation applied towards purchase of common stock | 10.00% | ' | ' |
Maximum amount of purchase allowed for a participant | 25,000 | ' | ' |
Percentage of fair market value of exercise price | 85.00% | ' | ' |
Number of exercise price | 2 | ' | ' |
Minimum percentage of discount not recognized as compensation expense | 5.00% | ' | ' |
Percentage of discount on common stock | 15.00% | ' | ' |
Percentage of option held | 85.00% | ' | ' |
Risk free interest rate | 0.10% | 0.10% | 0.10% |
Volatility Factor | 0.26% | 0.33% | 0.41% |
Compensation expense related to ESPP | $1,500,000 | $900,000 | $800,000 |
Weighted average expected life | 0.5 | 0.5 | 0.5 |
Minimum | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Minimum vesting period | '3 years | ' | ' |
Requisite service period | '3 years | ' | ' |
Maximum | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Requisite service period | '4 years | ' | ' |
Summary_of_Activity_of_Options
Summary of Activity of Options Granted under Stock Incentive Plans (Detail) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Options | ' | ' | ' |
Options, beginning Balance | 2,376,449 | ' | ' |
Options, grants | ' | 0 | 0 |
Options, exercised | -1,869,956 | ' | ' |
Options, forfeited | ' | ' | ' |
Options, expired | -33,802 | ' | ' |
Options, ending Balance | 472,691 | 2,376,449 | ' |
Options, exercisable | 472,691 | ' | ' |
Weighted Average Exercise Price | ' | ' | ' |
Weighted average exercise price, beginning balance | $12.24 | ' | ' |
Weighted average exercise price, grants | ' | ' | ' |
Weighted average exercise price, exercised | $12.41 | ' | ' |
Weighted average exercise price, forfeited | ' | ' | ' |
Weighted average exercise price, expired | $11.88 | ' | ' |
Weighted average exercise price, ending Balance | $11.60 | $12.24 | ' |
Weighted average exercise price, exercisable | $11.60 | ' | ' |
Weighted Average Remaining Contractual Term (in years) | ' | ' | ' |
Weighted average remaining contractual term , options outstanding | '10 months 10 days | ' | ' |
Weighted average remaining contractual term , exercisable | '10 months 10 days | ' | ' |
Aggregate Intrinsic Value | ' | ' | ' |
Aggregate intrinsic value | $6,023 | ' | ' |
Aggregate intrinsic value, exercisable | $6,023 | ' | ' |
Summary_of_Options_Outstanding
Summary of Options Outstanding (Detail) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' | ' |
Options outstanding, Number | 472,691 | 2,376,449 |
Options outstanding, Weighted average remaining contractual life | '10 months 10 days | ' |
Options outstanding, Weighted average exercise price | $11.60 | $12.24 |
Options exercisable, Number | 472,691 | ' |
Options exercisable, Weighted average exercise price | $11.60 | ' |
$5.00 to $6.99 | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' | ' |
Exercise price range, lower range limit | $5 | ' |
Exercise price range, upper range limit | $6.99 | ' |
Options outstanding, Number | 16,243 | ' |
Options outstanding, Weighted average remaining contractual life | '10 months 24 days | ' |
Options outstanding, Weighted average exercise price | $6.86 | ' |
Options exercisable, Number | 16,243 | ' |
Options exercisable, Weighted average exercise price | $6.86 | ' |
$7.00 to $8.99 | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' | ' |
Exercise price range, lower range limit | $7 | ' |
Exercise price range, upper range limit | $8.99 | ' |
Options outstanding, Number | 15,188 | ' |
Options outstanding, Weighted average remaining contractual life | '6 months 7 days | ' |
Options outstanding, Weighted average exercise price | $8.42 | ' |
Options exercisable, Number | 15,188 | ' |
Options exercisable, Weighted average exercise price | $8.42 | ' |
$9.00 to $10.99 | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' | ' |
Exercise price range, lower range limit | $9 | ' |
Exercise price range, upper range limit | $10.99 | ' |
Options outstanding, Number | 128,388 | ' |
Options outstanding, Weighted average remaining contractual life | '7 months 24 days | ' |
Options outstanding, Weighted average exercise price | $9.32 | ' |
Options exercisable, Number | 128,388 | ' |
Options exercisable, Weighted average exercise price | $9.32 | ' |
$11.00 to $13.99 | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' | ' |
Exercise price range, lower range limit | $11 | ' |
Exercise price range, upper range limit | $13.99 | ' |
Options outstanding, Number | 312,872 | ' |
Options outstanding, Weighted average remaining contractual life | '11 months 16 days | ' |
Options outstanding, Weighted average exercise price | $12.93 | ' |
Options exercisable, Number | 312,872 | ' |
Options exercisable, Weighted average exercise price | $12.93 | ' |
$5.00 to $13.99 | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' | ' |
Exercise price range, lower range limit | $5 | ' |
Exercise price range, upper range limit | $13.99 | ' |
Options outstanding, Number | 472,691 | ' |
Options outstanding, Weighted average remaining contractual life | '10 months 10 days | ' |
Options outstanding, Weighted average exercise price | $11.60 | ' |
Options exercisable, Number | 472,691 | ' |
Options exercisable, Weighted average exercise price | $11.60 | ' |
Summary_of_Unvested_Restricted
Summary of Unvested Restricted Stock and Stock Unit Transactions (Detail) (Restricted Stock, USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Restricted Stock | ' |
Shares | ' |
Unvested, beginning balance | 5,129,080 |
Granted, shares | 4,567,885 |
Vested, shares | -2,088,781 |
Forfeited, shares | -559,494 |
Unvested, ending balance | 7,048,690 |
Weighted average grant date fair value | ' |
Weighted average grant date fair value, beginning balance | $11.13 |
Weighted average grant date fair value, granted | $16.13 |
Weighted average grant date fair value, vested | $10.73 |
Weighted average grant date fair value, forfeited | $13.67 |
Weighted average grant date fair value, ending Balance | $14.29 |
Weighted_Average_Pension_Asset
Weighted Average Pension Asset Allocations (Detail) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Target plan asset allocations | 100.00% | ' |
Actual plan asset allocations | 100.00% | 100.00% |
Equity securities | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Target plan asset allocations | 39.00% | ' |
Actual plan asset allocations | 43.00% | 61.00% |
Debt securities | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Target plan asset allocations | 18.00% | ' |
Actual plan asset allocations | 3.00% | 39.00% |
Cash and cash equivalents | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Target plan asset allocations | 43.00% | ' |
Actual plan asset allocations | 54.00% | 0.00% |
Pension_Plan_Asset_by_Category
Pension Plan Asset by Category and Level (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||
In Thousands, unless otherwise specified | |||||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Fair value of plan assets | $15,162 | [1] | $14,866 | [1] | $21,491 |
Cash and cash equivalents | ' | ' | ' | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Fair value of plan assets | 8,285 | [2] | ' | ' | |
U.S. large cap | ' | ' | ' | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Fair value of plan assets | 1,435 | [3] | ' | ' | |
U.S. mid cap | ' | ' | ' | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Fair value of plan assets | 1,435 | [3] | ' | ' | |
U.S. small cap | ' | ' | ' | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Fair value of plan assets | 1,435 | [3] | ' | ' | |
International | ' | ' | ' | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Fair value of plan assets | 2,102 | [3] | ' | ' | |
Fixed Income Securities | ' | ' | ' | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Fair value of plan assets | 470 | [4] | ' | ' | |
Level 1 | ' | ' | ' | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Fair value of plan assets | 6,877 | ' | ' | ||
Level 1 | U.S. large cap | ' | ' | ' | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Fair value of plan assets | 1,435 | [3] | ' | ' | |
Level 1 | U.S. mid cap | ' | ' | ' | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Fair value of plan assets | 1,435 | [3] | ' | ' | |
Level 1 | U.S. small cap | ' | ' | ' | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Fair value of plan assets | 1,435 | [3] | ' | ' | |
Level 1 | International | ' | ' | ' | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Fair value of plan assets | 2,102 | [3] | ' | ' | |
Level 1 | Fixed Income Securities | ' | ' | ' | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Fair value of plan assets | 470 | [4] | ' | ' | |
Level 2 | ' | ' | ' | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Fair value of plan assets | 8,285 | ' | ' | ||
Level 2 | Cash and cash equivalents | ' | ' | ' | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ||
Fair value of plan assets | $8,285 | [2] | ' | ' | |
[1] | In addition to the pension plan assets, ARRIS has established two rabbi trusts to further fund the pension obligations of the Chief Executive and certain executive officers of $19.3 million as of December 31, 2013 and $17.8 million as of December 31, 2012, and are included in Investments on the Consolidated Balance Sheets. | ||||
[2] | Cash and cash equivalents, which are used to pay benefits and administrative expenses, are held in a stable value fund. | ||||
[3] | Equity securities consist of mutual funds and the underlying investments are indexes. Investments in mutual funds are valued at the net asset value per share multiplied by the number of shares held. | ||||
[4] | Fixed income securities consist of bonds securities in mutual funds, and are valued at the net asset value per share multiplied by the number of shares held. |
Employee_Benefit_Plans_Additio
Employee Benefit Plans - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ' | ' |
Benefit obligation, Curtailment gain | $300,000 | ' | ' | ' | ' |
Early payout pension obligation | ' | 7,700,000 | ' | ' | ' |
Pension settlement | ' | ' | ' | 3,064,000 | ' |
Matching contribution made by the company | ' | ' | 10,900,000 | 5,700,000 | 5,000,000 |
Expenses included in continuing operations for the matching contributions | ' | ' | 100,000 | 100,000 | ' |
Accrued balances of deferred retirement salary plan | ' | 2,000,000 | 1,800,000 | 2,000,000 | ' |
Total expenses (income) included in continuing operations for the deferred retirement salary plan | ' | ' | -300,000 | -200,000 | ' |
Other Long Term Liabilities | ' | ' | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ' | ' |
Employee deferrals and matching contributions, net | ' | 2,100,000 | 2,600,000 | 2,100,000 | ' |
Non-Qualified Deferred Compensation Plan | Other Long Term Liabilities | ' | ' | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ' | ' |
Employee deferrals and matching contributions, net | ' | 2,700,000 | 2,900,000 | 2,700,000 | ' |
Taiwan | ' | ' | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ' | ' |
Defined benefit plan, pension liability | ' | ' | 28,100,000 | ' | ' |
Non Cash | ' | ' | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ' | ' |
Pension settlement | ' | $3,100,000 | ' | ' | ' |
Non_Contributory_Defined_Benef
Non Contributory Defined Benefit Pension Plans (Detail) (USD $) | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||
Change in Projected Benefit Obligation: | ' | ' | ' | ||
Projected benefit obligation at beginning of year | $42,082 | $46,912 | ' | ||
Service cost | 122 | 335 | 312 | ||
Interest cost | 1,619 | 2,085 | 2,142 | ||
Actuarial loss | -1,813 | 1,625 | ' | ||
Benefit payments | -1,309 | -1,167 | ' | ||
Other | -319 | -7,708 | ' | ||
Projected benefit obligation at end of year | 40,382 | 42,082 | 46,912 | ||
Change in Plan Assets: | ' | ' | ' | ||
Fair value of plan assets at beginning of year | 14,866 | [1] | 21,491 | ' | |
Actual return on plan assets | 1,421 | 1,637 | ' | ||
Company contributions | 184 | 613 | ' | ||
Expenses and benefits paid from plan assets | -1,309 | -1,167 | ' | ||
Other | ' | -7,708 | ' | ||
Fair value of plan assets at end of year | 15,162 | [1] | 14,866 | [1] | 21,491 |
Funded Status: | ' | ' | ' | ||
Funded status of plan | -25,220 | -27,216 | ' | ||
Unrecognized actuarial loss | 7,546 | 10,830 | ' | ||
Unamortized prior service cost | ' | ' | ' | ||
Net amount recognized | ($17,674) | ($16,386) | ' | ||
[1] | In addition to the pension plan assets, ARRIS has established two rabbi trusts to further fund the pension obligations of the Chief Executive and certain executive officers of $19.3 million as of December 31, 2013 and $17.8 million as of December 31, 2012, and are included in Investments on the Consolidated Balance Sheets. |
Non_Contributory_Defined_Benef1
Non Contributory Defined Benefit Pension Plans (Parenthetical) (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Balance assets held in rabbi trust | $19.30 | $17.80 |
Amounts_Recognized_in_Statemen
Amounts Recognized in Statement of Financial Position (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ||
Current liabilities | ($364) | ($333) | ||
Noncurrent liabilities | -24,856 | -26,883 | ||
Accumulated other comprehensive income | 7,546 | [1] | 10,830 | [1] |
Total | ($17,674) | ($16,386) | ||
[1] | The total unfunded pension liability on the Consolidated Balance Sheets as of December 31, 2013 and 2012 included the Taiwan plan and total income tax effect of $1.0 million and $2.3 million, respectively. |
Amounts_Recognized_in_Statemen1
Amounts Recognized in Statement of Financial Position (Parenthetical) (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Tax impact on unfunded pension liability | $981 | $2,272 |
Other_Changes_in_Plan_Assets_a
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss) (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Net loss | ($2,359) | $1,247 |
Amortization of net loss | -607 | -840 |
Amortization of prior service cost | ' | ' |
Settlement charge | -318 | -3,064 |
Total recognized in other comprehensive income (loss) | ($3,284) | ($2,657) |
Amounts_in_Other_Comprehensive
Amounts in Other Comprehensive Income (Loss) Expected to Amortized and Recognized (Detail) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Defined Benefit Plan Disclosure [Line Items] | ' |
Amortization of net loss | $305 |
Information_for_Defined_Benefi
Information for Defined Benefit Plans with Accumulated Benefit Obligation in Excess of Plan Assets (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' |
Accumulated benefit obligation | $40,382 | $41,764 |
Projected benefit obligation | 40,382 | 42,082 |
Plan assets | $15,162 | $14,866 |
Pension_and_Supplemental_Benef
Pension and Supplemental Benefit Plans (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Service cost | $122 | $335 | $312 |
Interest cost | 1,619 | 2,085 | 2,142 |
Return on assets (expected) | -876 | -1,260 | -1,624 |
Amortization of net actuarial loss | 607 | 840 | 288 |
Settlement charge | ' | 3,064 | ' |
Net periodic pension cost | $1,472 | $5,064 | $1,118 |
Weighted_Average_Actuarial_Ass
Weighted Average Actuarial Assumptions Used to Determine Benefit Obligations (Detail) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Assumed discount rate for plan participants | 4.50% | 3.75% | 4.50% |
Rate of compensation increase | ' | 3.75% | 3.75% |
Weighted_Average_Actuarial_Ass1
Weighted Average Actuarial Assumption Used to Determine Net Periodic Benefit (Detail) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Assumed discount rate for plan participants | 3.75% | 4.50% | 5.50% |
Rate of compensation increase | 3.75% | 3.75% | 3.75% |
Expected long-term rate of return on plan assets | 6.00% | 6.00% | 7.50% |
Expected_Benefit_Payments_Rela
Expected Benefit Payments Related to Defined Benefit Pension Plans (Detail) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Defined Benefit Plan Disclosure [Line Items] | ' |
2014 | $1,544 |
2015 | 15,129 |
2016 | 1,538 |
2017 | 1,538 |
2018 | 1,556 |
2019 - 2023 | $8,923 |
Prepaid_Expenses_Detail
Prepaid Expenses (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Supplemental Balance Sheet Information [Line Items] | ' | ' |
Other | $5,791 | $7,142 |
Prepaids | 61,482 | 11,682 |
Prefunding of accounts payable | ' | ' |
Supplemental Balance Sheet Information [Line Items] | ' | ' |
Prepaids | 44,975 | ' |
Software licenses and maintenance support | ' | ' |
Supplemental Balance Sheet Information [Line Items] | ' | ' |
Prepaids | $10,717 | $4,540 |
Other_Current_Assets_Detail
Other Current Assets (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Other Current Assets [Line Items] | ' | ' |
Deferred cost of sales | $10,100 | $9,537 |
Miscellaneous receivables | 8,712 | 4,095 |
Deferred financing fees | 7,480 | 559 |
Sales and other tax receivables | 5,609 | 1,565 |
Indemnification asset | 1,500 | ' |
Landlord funded tenant improvements | 1,497 | ' |
Other | 5,032 | 657 |
Total | $39,930 | $16,413 |
Other_NonCurrent_Assets_Detail
Other Non-Current Assets (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Other Noncurrent Assets [Line Items] | ' | ' |
Deferred financing fees | $27,398 | $400 |
Trade receivables | 10,191 | ' |
Deposits | 4,296 | 1,204 |
Long-term severance funds | 3,564 | 3,739 |
Interest rate swap asset | 3,010 | ' |
Other | 3,904 | 4,042 |
Total | $52,363 | $9,385 |
Other_Accrued_Current_Liabilit
Other Accrued Current Liabilities (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Other Current Liabilities [Line Items] | ' | ' |
Accrued volume rebates | $26,879 | $3,434 |
Due to Google | 23,273 | ' |
Accrued legal and professional fees | 21,982 | 4,277 |
Accrued sales, property, payroll and other taxes | 14,613 | 1,540 |
Supplier liabilities | 11,362 | ' |
Accrued interest and interest rate swap liability | 7,541 | 581 |
Accrued software licenses liabilities | 6,114 | ' |
Accrued royalties | 4,466 | 1,253 |
Accrued acquisition and integration costs | 3,980 | 4,361 |
Accrued restructuring | 3,161 | 527 |
Accrued commissions | 1,804 | ' |
Other liabilities | 16,523 | 8,969 |
Total | $141,698 | $24,942 |
Other_NonCurrent_Liabilities_D
Other Non-Current Liabilities (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Other Non Current Liabilities [Line Items] | ' | ' |
Long-term warranty | $32,745 | $3,187 |
Long-term deferred revenue | 8,155 | 4,288 |
Deferred compensation liabilities | 7,213 | 6,668 |
Long-term severance liability | 3,814 | 4,119 |
Long-term accrued rent | 1,584 | 1,413 |
Long-term tenant improvement obligations | 1,323 | 1,140 |
Other | 7,629 | 2,347 |
Total | $62,463 | $23,162 |
Changes_in_Accumulated_Other_C
Changes in Accumulated Other Comprehensive Income by Component Net of Taxes (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' |
Unrealized gain (loss) on marketable securities, beginning balance | $206 | ' | ' |
Unfunded pension liability, beginning balance | -8,558 | ' | ' |
Cumulative translation adjustments, beginning balance | -184 | ' | ' |
Beginning balance | -8,536 | ' | ' |
Other comprehensive (loss) income before reclassifications | -4,299 | ' | ' |
Amounts reclassified from accumulated other comprehensive income (loss) | 8,173 | ' | ' |
Net current-period other comprehensive income (loss) | 3,874 | 2,146 | -5,077 |
Unrealized gain (loss) on marketable securities, ending balance | 306 | 206 | ' |
Unrealized loss on derivative instruments, ending balance | -2,541 | ' | ' |
Unfunded pension liability, ending balance | -2,416 | -8,558 | ' |
Cumulative translation adjustments, ending balance | -11 | -184 | ' |
Ending balance | -4,662 | -8,536 | ' |
Cumulative Translation Adjustments | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' |
Cumulative translation adjustments, beginning balance | -184 | ' | ' |
Other comprehensive (loss) income before reclassifications | 173 | ' | ' |
Net current-period other comprehensive income (loss) | 173 | ' | ' |
Cumulative translation adjustments, ending balance | -11 | ' | ' |
Unfunded Pension Liability | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' |
Unfunded pension liability, beginning balance | -8,558 | ' | ' |
Amounts reclassified from accumulated other comprehensive income (loss) | 6,142 | ' | ' |
Net current-period other comprehensive income (loss) | 6,142 | ' | ' |
Unfunded pension liability, ending balance | -2,416 | ' | ' |
Unrealized loss on derivative instruments | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' |
Other comprehensive (loss) income before reclassifications | -4,527 | ' | ' |
Amounts reclassified from accumulated other comprehensive income (loss) | 1,986 | ' | ' |
Net current-period other comprehensive income (loss) | -2,541 | ' | ' |
Unrealized loss on derivative instruments, ending balance | -2,541 | ' | ' |
Unrealized Gain on Marketable Securities | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' |
Unrealized gain (loss) on marketable securities, beginning balance | 206 | ' | ' |
Other comprehensive (loss) income before reclassifications | 55 | ' | ' |
Amounts reclassified from accumulated other comprehensive income (loss) | 45 | ' | ' |
Net current-period other comprehensive income (loss) | 100 | ' | ' |
Unrealized gain (loss) on marketable securities, ending balance | $306 | ' | ' |
Related_Party_Additional_Infor
Related Party - Additional Information (Detail) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Related Party Transaction [Line Items] | ' |
Funding contributions | $8,100,000 |
Equity method ownership, percentage | 8.40% |
License fee paid | $779,000 |
Minimum | ' |
Related Party Transaction [Line Items] | ' |
Engineering services provided percentage | 20.00% |
Equity method ownership, percentage | 20.00% |
Maximum | ' |
Related Party Transaction [Line Items] | ' |
Engineering services provided percentage | 30.00% |
Equity method ownership, percentage | 50.00% |
Contingencies_Additional_Infor
Contingencies - Additional Information (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2013 | Apr. 17, 2013 | Apr. 17, 2013 | Apr. 17, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
In Millions, unless otherwise specified | Motorola Home | Motorola Home | Motorola Home | Motorola Home | TiVo | Verizon | |
Past Infringement | Future Royalty Payments | ||||||
Contingencies [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Amount limited for potential liability | ' | $50 | ' | $50 | $50 | ' | ' |
Percentage of amount limited for potential liability | ' | ' | ' | 50.00% | 50.00% | ' | ' |
Total obligation | ' | 13.9 | 50 | ' | ' | ' | ' |
Contingent consideration settlement amount | ' | ' | ' | ' | ' | 196 | 85 |
Preacquisition contingency settlement amount | ' | ' | ' | ' | ' | 50 | ' |
Accrued amount related to litigation | $8 | ' | ' | ' | ' | ' | ' |
Summary_Quarterly_Consolidated2
Summary Quarterly Consolidated Financial Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Quarterly Financial Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | $1,199,067 | $1,067,823 | $1,000,362 | $353,650 | $344,003 | $357,432 | $349,327 | $302,901 | $3,620,902 | $1,353,663 | $1,088,685 |
Gross margin | 366,370 | 316,895 | 230,957 | 108,526 | 123,191 | 111,952 | 118,526 | 108,908 | 1,022,748 | 462,577 | 410,513 |
Operating income | 49,351 | 11,182 | -88,062 | 9,516 | 25,531 | 23,123 | 26,925 | 11,691 | -18,013 | 87,271 | -14,608 |
Net income | ($2,817) | $17,170 | ($48,463) | ($14,650) | $14,795 | $17,864 | $15,001 | $5,799 | ($48,760) | $53,459 | ($17,662) |
Net income (loss) per basic share | ($0.02) | $0.12 | ($0.36) | ($0.13) | $0.13 | $0.16 | $0.13 | $0.05 | ($0.37) | $0.47 | ($0.15) |
Net income (loss) per diluted share | ($0.02) | $0.12 | ($0.36) | ($0.13) | $0.13 | $0.15 | $0.13 | $0.05 | ($0.37) | $0.46 | ($0.15) |
Valuation_and_Qualifying_Accou1
Valuation and Qualifying Accounts (Detail) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Allowance for doubtful accounts | ' | ' | ' | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | ' | ' | ' | |||
Balance at beginning of period | $1,630 | $1,443 | $1,649 | |||
Charges to expenses | 257 | [1] | 240 | [1] | -189 | [1] |
Deductions | ' | 53 | [2] | 17 | [2] | |
Balance at end of period | 1,887 | 1,630 | 1,443 | |||
Income tax valuation allowance | ' | ' | ' | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | ' | ' | ' | |||
Balance at beginning of period | 17,973 | [3] | 42,039 | [3] | 16,926 | [3] |
Charges to expenses | 147,349 | [1],[3],[4] | 3,541 | [1],[3] | 31,914 | [1],[3],[5] |
Deductions | 1,577 | [2],[3] | 27,607 | [2],[3] | 6,801 | [2],[3] |
Balance at end of period | $163,745 | [3] | $17,973 | [3] | $42,039 | [3] |
[1] | The charge to expense for the allowance for doubtful accounts primarily represents an adjustment for a change in estimate related to uncollectible accounts. | |||||
[2] | Represents: a) Uncollectible accounts written off, net of recoveries and write-offs, b) Net change in the sales return and allowance account, and c) Release of valuation allowances. | |||||
[3] | The income tax valuation allowance is included in current and noncurrent deferred income tax assets. | |||||
[4] | A significant portion of the increase in valuation allowances, approximately $141.7 million, is attributable to deferred tax assets arising from our acquisition of Motorola Home. These amounts did not impact the income statement. | |||||
[5] | A significant portion of the increase in valuation allowances, approximately $30.8 million, is attributable to deferred tax assets arising from our acquisition of BigBand. These amounts did not impact the income statement. |
Valuation_and_Qualifying_Accou2
Valuation and Qualifying Accounts (Parenthetical) (Detail) (Deferred Tax Assets, USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
BigBand Networks | ' |
Valuation and Qualifying Accounts Disclosure [Line Items] | ' |
Increase in valuation allowance | $30.80 |
Motorola Home | ' |
Valuation and Qualifying Accounts Disclosure [Line Items] | ' |
Increase in valuation allowance | $141.70 |