Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Oct. 31, 2014 | |
Document Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Trading Symbol | 'ARRS | ' |
Entity Registrant Name | 'ARRIS GROUP INC | ' |
Entity Central Index Key | '0001141107 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 144,777,301 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | |||
Current Assets: | ' | ' | |
Cash and cash equivalents | $526,999 | $442,438 | [1] |
Short-term investments, at fair value | 66,817 | 67,360 | [1] |
Total cash, cash equivalents and short-term investments | 593,816 | 509,798 | [1] |
Restricted cash | 1,022 | 1,079 | [1] |
Accounts receivable (net of allowances for doubtful accounts of $6,390 in 2014 and $1,887 in 2013) | 703,566 | 637,059 | [1] |
Other receivables | 18,227 | 8,366 | [1] |
Inventories (net of reserves of $57,481 in 2014 and $42,408 in 2013) | 368,628 | 330,129 | [1] |
Prepaid income taxes | 4,431 | 13,034 | [1] |
Prepaids | 34,311 | 61,482 | [1] |
Current deferred income taxes | 64,948 | 77,167 | [1] |
Other current assets | 59,439 | 39,930 | [1] |
Total Current Assets | 1,848,388 | 1,678,044 | [1] |
Property, plant and equipment (net of accumulated depreciation of $253,555 in 2014 and $194,830 in 2013) | 371,496 | 396,152 | [1] |
Goodwill | 938,265 | 940,402 | [1] |
Intangible assets (net of accumulated amortization of $606,903 in 2014 and $427,143 in 2013) | 1,000,441 | 1,176,192 | [1] |
Investments | 74,985 | 71,176 | [1] |
Noncurrent deferred income taxes | 12,567 | 7,678 | [1] |
Other assets | 59,102 | 52,363 | [1] |
Total assets | 4,305,244 | 4,322,007 | [1] |
Current Liabilities: | ' | ' | |
Accounts payable | 622,867 | 662,919 | [1] |
Accrued compensation, benefits and related taxes | 130,116 | 116,262 | [1] |
Accrued warranty | 51,277 | 48,755 | [1] |
Deferred revenue | 102,717 | 69,071 | [1] |
Current portion of long-term debt | 67,062 | 53,254 | [1] |
Current income taxes liability | 15,344 | 3,068 | [1] |
Other accrued liabilities | 132,551 | 141,698 | [1] |
Total Current Liabilities | 1,121,934 | 1,095,027 | [1] |
Long-term debt, net of current portion | 1,487,585 | 1,691,034 | [1] |
Accrued pension | 59,667 | 58,657 | [1] |
Noncurrent income tax liability | 31,141 | 21,048 | [1] |
Noncurrent deferred income taxes | 42,926 | 74,791 | [1] |
Other noncurrent liabilities | 71,882 | 62,463 | [1] |
Total Liabilities | 2,815,135 | 3,003,020 | [1] |
Stockholders' Equity: | ' | ' | |
Preferred stock, par value $1.00 per share, 5.0 million shares authorized; none issued and outstanding | ' | ' | [1] |
Common stock, par value $0.01 per share, 320.0 million shares authorized; 144.8 million and 142.1 million shares outstanding in 2014 and 2013, respectively | 1,792 | 1,766 | [1] |
Capital in excess of par value | 1,725,383 | 1,688,782 | [1] |
Treasury stock at cost, 34.2 million shares in 2014 and 2013 | -306,330 | -306,330 | [1] |
Retained earnings (deficit) | 73,881 | -60,569 | [1] |
Unrealized (loss) gain on marketable securities (net of accumulated tax effect of $(44) in 2014 and $154 in 2013) | -77 | 306 | [1] |
Unfunded pension liability (net of accumulated tax effect of $981 in 2014 and 2013) | -2,416 | -2,416 | [1] |
Unrealized loss on derivative instruments (net of accumulated tax effect of $1,131 in 2014 and $1,467 in 2013) | -1,959 | -2,541 | [1] |
Cumulative translation adjustments | -165 | -11 | [1] |
Total Stockholders' Equity | 1,490,109 | 1,318,987 | [1] |
Liabilities and Equity, Total | $4,305,244 | $4,322,007 | [1] |
[1] | Certain amounts for December 31, 2013 have been recast to reflect results for business acquisitions. |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | |
In Thousands, except Share data in Millions, unless otherwise specified | |||
Allowances for doubtful accounts | $6,390 | $1,887 | [1] |
Reserves for inventories | 57,481 | 42,408 | [1] |
Accumulated depreciation of property, plant and equipment | 253,555 | 194,830 | [1] |
Accumulated amortization of intangible assets | 606,903 | 427,143 | [1] |
Preferred stock, par value | $1 | $1 | [1] |
Preferred stock, shares authorized | 5 | 5 | [1] |
Preferred stock, shares issued | 0 | 0 | [1] |
Preferred stock, shares outstanding | 0 | 0 | [1] |
Common stock, par value | $0.01 | $0.01 | [1] |
Common stock, shares authorized | 320 | 320 | [1] |
Common stock, shares outstanding | 144.8 | 142.1 | [1] |
Treasury stock, shares | 34.2 | 34.2 | [1] |
Tax effect on unrealized (loss) gain on marketable securities | -44 | 154 | [1] |
Tax impact on unfunded pension liability | 981 | 981 | [1] |
Tax effect on unrealized loss on derivative instruments | $1,131 | $1,467 | [1] |
[1] | Certain amounts for December 31, 2013 have been recast to reflect results for business acquisitions. |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||
Net sales | $1,405,445 | $1,067,824 | [1] | $4,059,534 | $2,421,835 | [1] |
Cost of sales | 969,711 | 750,929 | [1] | 2,857,613 | 1,765,458 | [1] |
Gross margin | 435,734 | 316,895 | [1] | 1,201,921 | 656,377 | [1] |
Operating expenses: | ' | ' | ' | ' | ||
Selling, general and administrative expenses | 103,497 | 99,666 | [1] | 314,991 | 227,691 | [1] |
Research and development expenses | 142,802 | 128,716 | [1] | 421,077 | 296,354 | [1] |
Amortization of intangible assets | 57,100 | 65,053 | [1] | 179,835 | 128,571 | [1],[2] |
Integration, acquisition, restructuring and other costs | 10,226 | 12,278 | [1] | 34,246 | 71,126 | [1] |
Total operating expenses | 313,625 | 305,713 | [1] | 950,149 | 723,742 | [1] |
Operating income (loss) | 122,109 | 11,182 | [1] | 251,772 | -67,365 | [1] |
Other expense (income): | ' | ' | ' | ' | ||
Interest expense | 14,217 | 25,188 | [1] | 49,041 | 48,431 | [1] |
Loss (gain) on investments | 6,368 | -251 | [1] | 11,278 | -1,544 | [1],[2] |
Interest income | -653 | -832 | [1] | -1,937 | -2,310 | [1] |
Loss (gain) on foreign currency | 3,107 | -3,752 | [1] | 3,760 | -2,725 | [1] |
Other expense (income), net | -63 | 1,676 | [1] | 6,530 | 13,356 | [1] |
Income (loss) before income taxes | 99,133 | -10,847 | [1] | 183,100 | -122,573 | [1] |
Income tax expense (benefit) | 44,507 | -28,016 | [1] | 48,649 | -76,630 | [1] |
Net income (loss) | $54,626 | $17,169 | [1] | $134,451 | ($45,943) | [1],[2] |
Net income (loss) per common share: | ' | ' | ' | ' | ||
Basic | $0.38 | $0.12 | [1] | $0.93 | ($0.35) | [1] |
Diluted | $0.37 | $0.12 | [1] | $0.91 | ($0.35) | [1] |
Weighted average common shares: | ' | ' | ' | ' | ||
Basic | 144,967 | 138,478 | [1] | 144,085 | 129,502 | [1] |
Diluted | 148,753 | 140,605 | [1] | 147,996 | 129,502 | [1] |
[1] | Certain amounts for the three and nine months ended September 30, 2013 have been recast to reflect results for business acquisitions. | |||||
[2] | Certain amounts for the nine months ended September 30, 2013 have been recast to reflect results for business acquisitions. |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (Loss) (USD $) | 3 Months Ended | 9 Months Ended | ||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||
Net income (loss) | $54,626 | $17,169 | [1] | $134,451 | ($45,943) | [1],[2] |
Unrealized (loss) gain on marketable securities, net of (expense) benefit of $131 and $(30) for the three months ended September 30, 2014 and 2013, and $221 and $73 for the nine months ended September 30, 2014 and 2013, respectively | -227 | 104 | [1] | -383 | -121 | [1] |
Unrealized gain (loss) on derivative instruments, net of (expense) benefit of $(1,468) and $2,450 for the three months ended September 30, 2014 and 2013, and $(336) and $2,450 for the nine months ended September 30, 2014 and 2013, respectively | 2,544 | -4,277 | [1] | 582 | -4,277 | [1] |
Cumulative translation adjustment | -285 | -331 | [1] | -154 | 156 | [1] |
Comprehensive income (loss), net of tax | $56,658 | $12,665 | [1] | $134,496 | ($50,185) | [1] |
[1] | Certain amounts for the three and nine months ended September 30, 2013 have been recast to reflect results for business acquisitions. | |||||
[2] | Certain amounts for the nine months ended September 30, 2013 have been recast to reflect results for business acquisitions. |
Consolidated_Statements_of_Com1
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) (USD $) | 3 Months Ended | 9 Months Ended | ||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||
Tax (expense) benefit, Unrealized gain (loss) on marketable securities | $131 | ($30) | [1] | $221 | $73 | [1] |
Tax (expense) benefit, Unrealized gain (loss) on derivatives instruments | ($1,468) | $2,450 | [1] | ($336) | $2,450 | [1] |
[1] | Certain amounts for the three and nine months ended September 30, 2013 have been recast to reflect results for business acquisitions. |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | ||
Operating activities: | ' | ' | ||
Net income (loss) | $134,451 | ($45,943) | [1],[2] | |
Depreciation | 60,213 | 42,567 | [2] | |
Amortization of intangible assets | 179,835 | 128,571 | [1],[2] | |
Stock compensation expense | 39,812 | 24,653 | [2] | |
Deferred income tax benefit | -19,503 | -54,551 | [2] | |
Amortization of deferred finance fees and debt discount | 9,376 | 4,999 | [2] | |
Provision for doubtful accounts | 5,285 | 5 | [2] | |
Loss (gain) on investments | 11,278 | -1,544 | [1],[2] | |
Revenue reduction related to Comcast's investment in ARRIS | ' | 13,182 | [2] | |
Mark-to-market fair value adjustment related to Comcast's investment in ARRIS | ' | 13,189 | [2] | |
Loss (gain) on disposal and write down of fixed assets | 3,128 | 375 | [2] | |
Non-cash restructuring and related charges | ' | 6,761 | [2] | |
Excess income tax benefits from stock-based compensation plans | -14,651 | -6,417 | [2] | |
Non-cash interest expense | ' | 9,926 | [2] | |
Changes in operating assets and liabilities, net of effect of acquisitions and dispositions: | ' | ' | ||
Accounts receivable | -70,627 | 17,793 | [2] | |
Other receivables | -10,465 | 1,095 | [2] | |
Inventories | -38,499 | 60,345 | [2] | |
Accounts payable and accrued liabilities | 2,592 | 155,264 | [2] | |
Prepaids and other, net | 44,866 | 9,928 | [2] | |
Net cash provided by operating activities | 337,091 | 380,198 | [2] | |
Investing activities: | ' | ' | ||
Purchases of property, plant and equipment | -41,759 | -53,383 | [2] | |
Purchases of investments | -40,901 | -104,546 | [2] | |
Sales of investments | 29,319 | 393,234 | [2] | |
Acquisitions, net of cash acquired | 84 | -2,208,114 | [2] | |
Sales of property, plant and equipment | 19 | 90 | [2] | |
Net cash used in investing activities | -53,238 | -1,972,719 | [2] | |
Financing activities: | ' | ' | ||
Excess income tax benefits from stock-based compensation plans | 14,651 | 6,416 | [2] | |
Repurchase of shares to satisfy employee minimum tax withholdings | -29,605 | -12,522 | [2] | |
Proceeds from issuance of common stock | 11,565 | 166,951 | [2] | |
Proceeds from issuance of debt | ' | 1,925,000 | [2] | |
Payment of debt obligations | -195,903 | -31,625 | [2] | |
Cash paid for debt discount | ' | -9,853 | [2] | |
Early redemption of convertible notes | ' | -79 | [2] | |
Deferred financing costs paid | ' | -42,356 | [2] | |
Net cash (used in) provided by financing activities | -199,292 | 2,001,932 | [2] | |
Net increase in cash and cash equivalents | 84,561 | 409,411 | [2] | |
Cash and cash equivalents at beginning of period | 442,438 | [3] | 131,703 | [2] |
Cash and cash equivalents at end of period | $526,999 | $541,114 | [2] | |
[1] | Certain amounts for the three and nine months ended September 30, 2013 have been recast to reflect results for business acquisitions. | |||
[2] | Certain amounts for the nine months ended September 30, 2013 have been recast to reflect results for business acquisitions. | |||
[3] | Certain amounts for December 31, 2013 have been recast to reflect results for business acquisitions. |
Organization_and_Basis_of_Pres
Organization and Basis of Presentation | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
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 14 Segment Information for additional details), specializing in enabling multichannel video programming distributors, 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 distribution systems, broadband access infrastructure platforms, and associated data and voice Customer Premises Equipment. 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. | |||||||||||||
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. Interim results of operations are not necessarily indicative of results to be expected from a twelve-month period. These financial statements should be read in conjunction with the Company’s most recently audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, as filed with the United States Securities and Exchange Commission (“SEC”). | |||||||||||||
On April 17, 2013, the Company completed its acquisition of Motorola Home from General Instrument Holdings, Inc., a subsidiary of Google, Inc. (See Note 3 Business Acquisitions for additional details.) | |||||||||||||
In connection with the acquisition of Motorola Home, the consolidated financial statements as of September 30, 2013 and for the three and nine months then ended have been recast to include retrospective acquisition accounting and other adjustments. The following tables present the effect on the Company’s affected financial statement line items for the period ended September 30, 2013 and three and nine months ended September 30, 2013 (in thousands): | |||||||||||||
As Originally | As Adjusted | Increase (Decrease) | |||||||||||
Reported | |||||||||||||
Balance Sheet: | |||||||||||||
Inventories, net | $ | 350,919 | $ | 343,896 | $ | (7,023 | ) | ||||||
Current deferred income tax assets | 85,373 | 75,875 | (9,498 | ) | |||||||||
Other current assets | 60,171 | 60,111 | (60 | ) | |||||||||
Property, plant and equipment | 410,047 | 398,353 | (11,694 | ) | |||||||||
Goodwill | 926,826 | 943,258 | 16,432 | ||||||||||
Intangible assets | 1,239,178 | 1,241,258 | 2,080 | ||||||||||
Investments | 79,894 | 96,711 | 16,817 | ||||||||||
Noncurrent deferred income tax assets | 12,680 | 6,535 | (6,145 | ) | |||||||||
Accrued warranty | 48,619 | 46,536 | (2,083 | ) | |||||||||
Current income taxes liability | 5,827 | 7,012 | 1,185 | ||||||||||
Other accrued liabilities | 147,195 | 148,282 | 1,087 | ||||||||||
Accrued pension | 61,349 | 65,395 | 4,046 | ||||||||||
Noncurrent deferred income tax liabilities | 76,005 | 74,242 | (1,763 | ) | |||||||||
Accumulated deficit | (56,189 | ) | (57,752 | ) | (1,563 | ) | |||||||
For the three months ended September 30, 2013 | As Originally | As | Increase (Decrease) | ||||||||||
Reported | Adjusted | ||||||||||||
Statements of Operations: | |||||||||||||
Depreciation expense | $ | 19,705 | $ | 20,048 | $ | 343 | |||||||
Amortization expense | 64,606 | 65,053 | 447 | ||||||||||
For the nine months ended September 30, 2013 | As Originally | As | Increase (Decrease) | ||||||||||
Reported | Adjusted | ||||||||||||
Statements of Operations: | |||||||||||||
Depreciation expense | $ | 41,824 | $ | 42,567 | $ | 743 | |||||||
Amortization expense | 127,751 | 128,571 | 820 |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2014 | |
Recent Accounting Pronouncements | ' |
Note 2. Recent Accounting Pronouncements | |
Adoption of New Accounting Standards — In July 2013, the Financial Accounting Standards Board (“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. This update was adopted by ARRIS beginning in the first quarter of 2014. The adoption of this guidance did not have a material impact on its consolidated financial position and results of operations. | |
Accounting Standards Issued But Not Yet Effective – In April 2014, the FASB issued accounting standards update that change the requirements for reporting discontinued operations. A discontinued operation may include a component of an entity or a group of components of an entity. A disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results and when the component or group of components meets the criteria to be classified as held for sale, is disposed of by sale or is disposed of by other than by sale. This update is effective prospectively for fiscal years, and interim reporting periods within those years, beginning after December 15, 2014, with earlier adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial position and results of operations. | |
In May 2014, FASB issued an Accounting Standards Update, Revenue from Contracts with Customers. The core principle of this amendment is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, with earlier adoption not permitted. It can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is currently assessing the potential impact of this update on its consolidated financial statements. | |
In June 2014, the FASB issued an update to its accounting guidance related to share-based compensation. The guidance requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition, and therefore shall not be reflected in determining the fair value of the award at the grant date. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The guidance will be effective for annual and interim periods beginning after December 15, 2015 and is not expected to have any material effect on the Company’s consolidated financial position and results of operations. |
Business_Acquisitions
Business Acquisitions | 9 Months Ended |
Sep. 30, 2014 | |
Business Acquisitions | ' |
Note 3. Business Acquisitions | |
Acquisition of Motorola Home | |
On April 17, 2013, ARRIS completed its acquisition of Motorola Home from General Instrument Holdings, Inc., 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 research and development capabilities, particularly in the video arena. | |
During the first quarter of 2014, the Company completed the accounting for the aforementioned business combination. | |
Acquisition of SeaWell Networks, Inc. | |
On April 17, 2014, a wholly owned subsidiary of the Company acquired all of the issued and outstanding shares of SeaWell Networks, Inc. (“SeaWell”), a corporation organized under the laws of Canada, which is located in Mississauga, Ontario. Initial consideration for the acquisition was $5.9 million (net of assumed cash) and additional contingent consideration of up to $3.0 million could be paid based upon achievement of certain financial targets, over 30 months from the date of acquisition. | |
Goodwill in the amount of $4.4 million was preliminarily recognized for this acquisition and is calculated as the excess of consideration transferred over the net assets recognized and represents future economic benefits arising from assets acquired that could not be individually identified and separately recognized such as assembled workforce. The goodwill is not deductible for tax purposes. The Company also identified certain customer, marketing and technology related intangible assets which have been preliminarily valued at $2.0 million, with estimated useful lives ranging from 5 to 10 years. | |
This acquisition is expected to further enhance the Company’s IP video delivery capabilities, by integrating SeaWell’s adaptive bit rate streaming technologies and talent into its Network & Cloud business. | |
The Consolidated Financial Statements include the operating results of the business combination from the date of acquisition. The effects of the acquisitions, individually and in the aggregate, were not material to the Company’s financial results. |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 9 Months Ended | ||||||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | ' | ||||||||||||||||||||||||||||||||
Note 4. Goodwill and Intangible Assets | |||||||||||||||||||||||||||||||||
Goodwill | |||||||||||||||||||||||||||||||||
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 September 30, 2014, the Company has recorded goodwill of $938.3 million. The Company has recast goodwill as of December 31, 2013 to appropriately reflect the goodwill arising from the Acquisition. | |||||||||||||||||||||||||||||||||
The changes in the carrying amount of goodwill for the year to date period ended September 30, 2014 are as follows (in thousands): | |||||||||||||||||||||||||||||||||
CPE | Network | Cloud | Total | ||||||||||||||||||||||||||||||
Infrastructure | Services | ||||||||||||||||||||||||||||||||
Goodwill | 688,658 | 497,741 | 132,659 | 1,319,058 | |||||||||||||||||||||||||||||
Accumulated impairment losses | – | (257,053 | ) | (121,603 | ) | (378,656 | ) | ||||||||||||||||||||||||||
Balance as of December 31, 2013 | $ | 688,658 | $ | 240,688 | $ | 11,056 | $ | 940,402 | |||||||||||||||||||||||||
Goodwill acquired in SeaWell acquisition | – | 4,448 | – | 4,448 | |||||||||||||||||||||||||||||
Adjustments | (4,061 | ) | (2,103 | ) | (421 | ) | (6,585 | ) | |||||||||||||||||||||||||
Goodwill | 684,597 | 500,086 | 132,238 | 1,316,921 | |||||||||||||||||||||||||||||
Accumulated impairment losses | – | (257,053 | ) | (121,603 | ) | (378,656 | ) | ||||||||||||||||||||||||||
Balance as of September 30, 2014 | $ | 684,597 | $ | 243,033 | $ | 10,635 | $ | 938,265 | |||||||||||||||||||||||||
Intangibles | |||||||||||||||||||||||||||||||||
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 September 30, 2014 and December 31, 2013 are as follows (in thousands): | |||||||||||||||||||||||||||||||||
September 30, 2014 | December 31, 2013 | ||||||||||||||||||||||||||||||||
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 | $ | 904,035 | $ | 341,416 | $ | 562,619 | 6.3 | $ | 903,409 | $ | 266,323 | $ | 637,086 | 7 | |||||||||||||||||||
Developed technology, patents & licenses | 634,230 | 205,290 | 428,940 | 4.4 | 563,326 | 120,679 | 442,647 | 5 | |||||||||||||||||||||||||
Trademark, trade and domain names | 21,079 | 15,597 | 5,482 | 1.1 | 20,900 | 8,549 | 12,351 | 1.5 | |||||||||||||||||||||||||
Order backlog | 44,600 | 44,600 | – | – | 44,600 | 31,592 | 13,008 | 0.3 | |||||||||||||||||||||||||
In-process R&D | 3,400 | – | 3,400 | – | 71,100 | – | 71,100 | – | |||||||||||||||||||||||||
Total | $ | 1,607,344 | $ | 606,903 | $ | 1,000,441 | $ | 1,603,335 | $ | 427,143 | $ | 1,176,192 | |||||||||||||||||||||
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 (for the remaining three months) | $ | 57,027 | |||||||||||||||||||||||||||||||
2015 | 220,731 | ||||||||||||||||||||||||||||||||
2016 | 190,003 | ||||||||||||||||||||||||||||||||
2017 | 173,068 | ||||||||||||||||||||||||||||||||
2018 | 122,376 | ||||||||||||||||||||||||||||||||
2019 | 100,061 | ||||||||||||||||||||||||||||||||
Thereafter | 133,775 | ||||||||||||||||||||||||||||||||
Amounts reflected in the above table exclude $3.4 million of amortization that would be incurred upon successful completion of in-process research and development projects. |
Investments
Investments | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Investments | ' | ||||||||
Note 5. Investments | |||||||||
ARRIS’ investments as of September 30, 2014 and December 31, 2013 consisted of the following (in thousands): | |||||||||
As of September 30, 2014 | As of December 31, 2013 | ||||||||
Current Assets: | |||||||||
Available-for-sale securities | $ | 66,817 | $ | 67,360 | |||||
Noncurrent Assets: | |||||||||
Available-for-sale securities | 9,109 | 7,004 | |||||||
Equity method investments | 29,237 | 23,803 | |||||||
Cost method investments | 10,342 | 15,250 | |||||||
Other investments | 26,297 | 25,119 | |||||||
74,985 | 71,176 | ||||||||
Total | $ | 141,802 | $ | 138,536 | |||||
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 the Consolidated Balance Sheets as a component of accumulated other comprehensive income (loss). The total (losses) gains included in the accumulated other comprehensive income related to available-for-sale securities were $(77) thousand and $306 thousand, net of tax, as of September 30, 2014 and December 31, 2013, respectively. Realized and unrealized gains and losses in total and by individual investment as of September 30, 2014 and December 31, 2013 were not material. The amortized cost basis of the Company’s investments approximates fair value. | |||||||||
The contractual maturities of the Company’s available-for-sale securities as of September 30, 2014 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): | |||||||||
September 30, | |||||||||
2014 | |||||||||
Within one year | $ | 66,817 | |||||||
After one year through five years | 5,330 | ||||||||
After five years through ten years | – | ||||||||
After ten years | 3,779 | ||||||||
Total | 75,926 | ||||||||
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 $29.2 million and $23.8 million as of September 30, 2014 and December 31, 2013, respectively. The carrying amount of equity method investments is adjusted for the Company’s proportionate share of net earnings or losses adjusted for any basis differences of the investees, or dividends 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. | |||||||||
Cost method investments – ARRIS holds cost method investments in private companies. These investments are recorded at $10.3 million and $15.3 million as of September 30, 2014 and December 31, 2013, respectively. Due to the fact the investments are in private companies, ARRIS is exempt from estimating the fair value on an interim and annual basis. It is not practical 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 September 30, 2014 and December 31, 2013, ARRIS held $26.3 million and $25.1 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. | |||||||||
Investment Other-Than-Temporary Impairments – During the third quarter of 2014, the Company performed an evaluation of its investments for any other-than-temporary impairment, by reviewing the current revenues, bookings and long-term plans of the private companies. ARRIS concluded that two private companies had indicators of impairment that resulted in other-than-temporary impairment charges of $4.0 million during the quarter ended September 30, 2014. For the nine months ended September 30, 2014, ARRIS recognized other-than-temporary impairment charges of $7.0 million. ARRIS concluded that no other-than-temporary impairment losses existed at 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. | |||||||||
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. |
Fair_Value_Measurement
Fair Value Measurement | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Fair Value Measurement | ' | ||||||||||||||||
Note 6. Fair Value Measurement | |||||||||||||||||
Fair value is defined as the amount 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 exit price). 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) and derivatives measured at fair value on a recurring basis as of September 30, 2014 and December 31, 2013 (in thousands): | |||||||||||||||||
September 30, 2014 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Certificates of deposit | $ | – | $ | 3,920 | $ | – | $ | 3,920 | |||||||||
Commercial paper | – | 999 | – | 999 | |||||||||||||
Corporate bonds | – | 37,548 | – | 37,548 | |||||||||||||
Short-term bond fund | 29,679 | — | – | 29,679 | |||||||||||||
Cash surrender value of company owned life insurance | – | 26,270 | – | 26,270 | |||||||||||||
Corporate obligations | – | 21 | – | 21 | |||||||||||||
Money markets | 213 | – | – | 213 | |||||||||||||
Mutual funds | 208 | – | – | 208 | |||||||||||||
Other investments | – | 3,336 | – | 3,336 | |||||||||||||
Interest rate derivatives – asset derivatives | – | 3,766 | – | 3,766 | |||||||||||||
Interest rate derivatives – liability derivatives | – | (6,856 | ) | – | (6,856 | ) | |||||||||||
Foreign currency contracts – asset position | – | 1,789 | – | 1,789 | |||||||||||||
Foreign currency contracts – liability position | – | (184 | ) | – | (184 | ) | |||||||||||
December 31, 2013 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Certificates of deposit | $ | – | $ | 3,814 | $ | – | $ | 3,814 | |||||||||
Commercial paper | – | 2,994 | – | 2,994 | |||||||||||||
Corporate bonds | – | 34,591 | – | 34,591 | |||||||||||||
Short-term bond fund | 29,565 | — | – | 29,565 | |||||||||||||
Cash surrender value of company owned life insurance | – | 25,119 | – | 25,119 | |||||||||||||
Corporate obligations | – | 18 | – | 18 | |||||||||||||
Money markets | 212 | – | – | 212 | |||||||||||||
Mutual funds | 184 | – | – | 184 | |||||||||||||
Other investments | – | 2,986 | – | 2,986 | |||||||||||||
Interest rate derivatives – asset derivatives | – | 3,011 | – | 3,011 | |||||||||||||
Interest rate derivatives – liability derivatives | – | (7,018 | ) | – | (7,018 | ) | |||||||||||
All of the Company’s short-term and long-term investments at September 30, 2014 and 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, government agency bonds 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. | |||||||||||||||||
The Company believes the face value of the debt as of September 30, 2014 approximated the fair value based on recent market conditions, prevailing interest rates, and other Company specific factors. The Company has classified the debt as a Level 2 item within the fair value hierarchy. |
Derivative_Instruments_and_Hed
Derivative Instruments and Hedging Activities | 9 Months Ended | ||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||
Derivative Instruments and Hedging Activities | ' | ||||||||||||||||||
Note 7. Derivative Instruments and Hedging Activities | |||||||||||||||||||
ARRIS is exposed to risks associated with changes in interest rates and foreign currency exchange rates and utilizes a variety of measures to monitor and manage these risks, including the use of derivative financial instruments. The Company 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 million interest rate swap arrangements, which effectively converted $600 million of the Company’s variable-rate debt based on one-month LIBOR to an aggregate fixed rate of approximately 3.15% as of September 30, 2014. This fixed rate could vary up by 75 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 also has U.S. dollar functional currency entities that bill certain international customers in their local currency and foreign functional currency entities that procure in U.S. dollars. Additionally, certain intercompany transactions created in conjunction with the Motorola Home acquisition are denominated in foreign currencies and subject to revaluation. To mitigate the volatility related to fluctuations in the foreign exchange rates, ARRIS has entered into various foreign currency contracts. As of September 30, 2014, the Company had option collars with notional amounts totaling 30 million euros which mature through 2015, a forward with a notional amount of 5 million euros which matures in 2015, and a forward with a notional amount of 10 million pounds sterling which matures in the fourth quarter of 2014. | |||||||||||||||||||
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 debt. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. During the three and nine months ended September 30, 2014, 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 $6.9 million may be reclassified as an increase to interest expense. | |||||||||||||||||||
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 three and nine months ended September 30, 2014 (in thousands): | |||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||
Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | $ | 2,107 | $ | (7,979 | ) | $ | (4,730 | ) | $ | (7,979 | ) | ||||||||
Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Interest expense | Interest expense | Interest expense | Interest expense | |||||||||||||||
Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | (1,905 | ) | (1,253 | ) | (5,647 | ) | (1,253 | ) | |||||||||||
Credit-risk-related Contingent Features | |||||||||||||||||||
ARRIS has agreements with each of its interest rate derivative counterparties that contain a provision where the Company could be declared in default on its interest rate derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company’s default on the indebtedness. As of September 30, 2014, the fair value of interest rate derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $3.1 million. As of September 30, 2014, 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 | |||||||||||||||||||
The Company’s objectives in using foreign currency derivatives are to add stability to foreign currency gains and losses recorded as other expense (income) and to manage its exposure to foreign currency movements. To accomplish this objective, the Company uses foreign currency option and foreign currency forward contracts as part of its foreign currency risk management strategy. The Company’s foreign currency derivative 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. The maximum time frame for ARRIS’ derivatives is currently less than 12 months. | |||||||||||||||||||
The Company does not currently use derivatives for trading or speculative purposes. | |||||||||||||||||||
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. | |||||||||||||||||||
The fair values of ARRIS’ derivative instruments recorded in the Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013 were as follows (in thousands): | |||||||||||||||||||
As of September 30, 2014 | As of December 31, 2013 | ||||||||||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||||||||||
Derivatives designated as | |||||||||||||||||||
hedging instruments: | |||||||||||||||||||
Interest rate derivatives | Other assets | $ | 3,766 | Other assets | $ | 3,011 | |||||||||||||
– asset derivatives | |||||||||||||||||||
Interest rate derivatives | Other accrued liabilities | $ | 6,856 | Other accrued liabilities | $ | 7,018 | |||||||||||||
– liability derivatives | |||||||||||||||||||
Derivatives not designated as | |||||||||||||||||||
hedging instruments: | |||||||||||||||||||
Foreign exchange contracts | Other current assets | $ | 1,789 | Other current assets | $ | – | |||||||||||||
– asset derivatives | |||||||||||||||||||
Foreign exchange contracts | Other accrued liabilities | $ | 184 | Other accrued liabilities | $ | – | |||||||||||||
– liability derivatives | |||||||||||||||||||
The assets and liabilities for the interest rate derivatives and 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 three and nine months ended September 30, 2014 and 2013 were as follows (in thousands): | |||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||
Statement of Operations Location | 2014 | 2013 | 2014 | 2013 | |||||||||||||||
Derivatives Not Designated | |||||||||||||||||||
as Hedging Instruments: | |||||||||||||||||||
Foreign exchange contracts | Loss (gain) on foreign currency | $ | (1,699 | ) | $ | – | $ | (1,699 | ) | $ | 428 | ||||||||
Derivatives Designated | |||||||||||||||||||
as Hedging Instruments: | |||||||||||||||||||
Interest rates derivatives | Interest expense | $ | 1,905 | $ | 1,253 | $ | 5,647 | $ | 1,253 |
Pension_Benefits
Pension Benefits | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Pension Benefits | ' | ||||||||||||||||
Note 8. Pension Benefits | |||||||||||||||||
Components of Net Periodic Pension Cost (in thousands): | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Service cost | $ | – | $ | 310 | $ | – | $ | 637 | |||||||||
Interest cost | 446 | 562 | 1,337 | 1,479 | |||||||||||||
Expected gain on plan assets | (219 | ) | (259 | ) | (656 | ) | (730 | ) | |||||||||
Amortization of net loss | 76 | 355 | 229 | 829 | |||||||||||||
Net periodic pension cost | $ | 303 | $ | 968 | $ | 910 | $ | 2,215 | |||||||||
Employer Contributions | |||||||||||||||||
No minimum funding contributions are required in 2014 under the Company’s defined benefit plan. The Company has established two rabbi trusts to fund the Company’s pension obligations under the non-qualified plan of the Chief Executive Officer and certain executive officers. The balance of these rabbi trust assets as of September 30, 2014 was approximately $20.1 million and is included in Investments on the Consolidated Balance Sheets. |
Guarantees
Guarantees | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Guarantees | ' | ||||
Note 9. 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 to 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. | |||||
Information regarding the changes in ARRIS’ aggregate product warranty liabilities for the nine months ended September 30, 2014 was as follows (in thousands): | |||||
Balance at December 31, 2013 | $ | 81,500 | |||
Accruals related to warranties (including changes in estimates) | 25,741 | ||||
Settlements made (in cash or in kind) | (27,827 | ) | |||
Balance at September 30, 2014 | $ | 79,414 | |||
Restructuring_Charges
Restructuring Charges | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Restructuring Charges | ' | ||||||||||||
Note 10. 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 and contractual obligations that related to excess leased facilities (in thousands): | |||||||||||||
Employee | Contractual | Total | |||||||||||
severance & | obligations and | ||||||||||||
termination | other | ||||||||||||
benefits | |||||||||||||
Balance at December 31, 2013 | $ | 2,674 | $ | 673 | $ | 3,347 | |||||||
Restructuring charges | 2,610 | 32 | 2,642 | ||||||||||
Cash payments | (2,900 | ) | (396 | ) | (3,296 | ) | |||||||
Balance at September 30, 2014 | $ | 2,384 | $ | 309 | $ | 2,693 | |||||||
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 September 30, 2014, the total liability remaining for this restructuring plan was approximately $0.4 million. The remaining liability is expected to be paid by the end of first quarter of 2015. | |||||||||||||
In addition, in the third quarter of 2014, the Company implemented a restructuring initiative to rationalize facilities in which it expects to incur approximately $4.9 million through first quarter of 2015. The Company recorded cumulative restructuring charges of $3.0 million related to severance and employee termination benefits for 150 employees during the third quarter of 2014. This initiative affected all segments. As of September 30, 2014, the total liability remaining for this plan was approximately $2.0 million. | |||||||||||||
Contractual obligations and other - Represent contractual obligations that relate primarily to excess leased facilities. |
Inventories
Inventories | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Inventories | ' | ||||||||
Note 11. Inventories | |||||||||
Inventories are stated at the lower of average cost, approximating first-in, first-out, or market. The components of inventory were as follows, net of reserves (in thousands): | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Raw material | $ | 53,628 | $ | 60,520 | |||||
Work in process | 10,196 | 6,010 | |||||||
Finished goods | 304,804 | 263,599 | |||||||
Total inventories, net | $ | 368,628 | $ | 330,129 | |||||
Property_Plant_and_Equipment
Property, Plant and Equipment | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Property, Plant and Equipment | ' | ||||||||
Note 12. Property, Plant and Equipment | |||||||||
Property, plant and equipment, at cost, consisted of the following (in thousands): | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Land | $ | 87,951 | $ | 88,742 | |||||
Building and leasehold improvements | 137,581 | 133,668 | |||||||
Machinery and equipment | 399,519 | 368,572 | |||||||
625,051 | 590,982 | ||||||||
Less: Accumulated depreciation | (253,555 | ) | (194,830 | ) | |||||
Total property, plant and equipment, net | $ | 371,496 | $ | 396,152 | |||||
During the quarter ended June 30, 2014, the Company entered into a binding letter of intent with a potential buyer for the sale of land and building for $2.9 million which is lower than its carrying amount of $4.8 million. The asset has been reclassified as held for sale and was measured at the lower of its carrying amount or fair value less cost to sell. Total asset held for sale at September 30, 2014 was $2.7 million, which is reported in the Consolidated Balance Sheets as a component of “Other current assets.” The Company has recorded an impairment charge of $2.1 million to reduce the asset’s carrying amount to its estimated fair value less cost to sell during the nine months ended September 30, 2014, which is reported in the Consolidated Statements of Operations under the caption “Other expense (income), net.” The sale is expected to close during the fourth quarter of 2014. |
LongTerm_Indebtedness
Long-Term Indebtedness | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
Long-Term Indebtedness | ' | ||||||||||||||||||||
Note 13. Long-Term Indebtedness | |||||||||||||||||||||
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 September 30, 2014, ARRIS had $1,561.3 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 $2.6 million issued under the Revolving Credit Facility. | |||||||||||||||||||||
Rate | As of September 30, 2014 | ||||||||||||||||||||
Term Loan A | LIBOR + 1.75 % | 1.90% | |||||||||||||||||||
Term Loan B | LIBOR(1) + 2.50 % | 3.25% | |||||||||||||||||||
Revolving Credit Facility(2) | LIBOR + 1.75 % | Not Applicable | |||||||||||||||||||
-1 | Includes LIBOR floor of 0.75% | ||||||||||||||||||||
-2 | Includes unused commitment fee of 0.35% and letter of credit fee of 1.75% 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 3.75:1 (with an additional scheduled decrease to 3.5:1). As of September 30, 2014, ARRIS was in compliance with all covenants under the Credit Agreement. | |||||||||||||||||||||
The Credit Agreement provides for certain step downs in the interest rates paid on the Term Loan A, Term Loan B and Revolving Credit Facility upon achievement of tiered lowered leverage ratios. As a result of ARRIS’ lowered leverage ratio at the end of the second quarter, the interest rate paid on the Term Loan A, Term Loan B and Revolving Credit Facility decreased by 25 basis points. Since inception, the Company has realized a total 50 basis points decrease in the interest rate paid on the Term Loan A and Revolving Credit Facility and 25 basis points decrease in the interest paid rate on the Term Loan B. There are no further interest rate decreases available to ARRIS in the current 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 three and nine months ended September 30, 2014, the Company made mandatory repayments of approximately $13.8 million and $41.2 million, respectively, and optional prepayments of $150.0 million related to the senior secured credit facilities. | |||||||||||||||||||||
Following is a summary of our contractual debt obligations at face value as of September 30, 2014 (in thousands): | |||||||||||||||||||||
Payments due by period | |||||||||||||||||||||
Less than 1 Year | 1-3 Years | 3-5 Years | More than 5 Years | Total | |||||||||||||||||
Credit facilities | $ | 68,750 | $ | 206,250 | $ | 742,500 | $ | 543,813 | $ | 1,561,313 |
Segment_Information
Segment Information | 9 Months Ended | ||||||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||||||
Segment Information | ' | ||||||||||||||||||||||||||||||||
Note 14. 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. | |||||||||||||||||||||||||||||||||
Our 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 and 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 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. | |||||||||||||||||||||||||||||||||
Effective with the acquisition of Motorola Home in 2013, the Company made certain changes to its operating segments. In addition, effective January 1, 2014, the Company changed management responsibility for certain product lines. 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 Company assesses its segment’s operating performance based on 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. | |||||||||||||||||||||||||||||||||
The table below represents information about the Company’s reporting segments for the three and nine months ended September 30, 2014 and 2013 (in thousands): | |||||||||||||||||||||||||||||||||
Reportable Segments | |||||||||||||||||||||||||||||||||
N&C | CPE | Other | Consolidated | ||||||||||||||||||||||||||||||
For the three months ended September 30, | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||||
Sales | $ | 460,837 | $ | 325,471 | $ | 945,386 | $ | 743,890 | $ | (778 | ) | $ | (1,537 | ) | $ | 1,405,445 | $ | 1,067,824 | |||||||||||||||
Direct Contribution | 134,217 | 61,763 | 208,163 | 158,035 | (152,945 | ) | (131,285 | ) | 189,435 | 88,513 | |||||||||||||||||||||||
Amortization of intangible assets | 57,100 | 65,053 | 57,100 | 65,053 | |||||||||||||||||||||||||||||
Integration, acquisition, | 10,226 | 12,278 | 10,226 | 12,278 | |||||||||||||||||||||||||||||
restructuring & other | |||||||||||||||||||||||||||||||||
Operating income | 122,109 | 11,182 | |||||||||||||||||||||||||||||||
Other expense | 22,976 | 22,029 | |||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 99,133 | $ | (10,847 | ) | ||||||||||||||||||||||||||||
Reportable Segments | |||||||||||||||||||||||||||||||||
N&C | CPE | Other | Consolidated | ||||||||||||||||||||||||||||||
For the nine months ended September 30, | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||||
Sales | $ | 1,202,105 | $ | 849,382 | $ | 2,861,912 | $ | 1,589,785 | $ | (4,483 | ) | $ | (17,332 | ) | $ | 4,059,534 | $ | 2,421,835 | |||||||||||||||
Direct Contribution | 304,133 | 187,354 | 624,732 | 315,305 | (463,012 | ) | (370,327 | ) | 465,853 | 132,332 | |||||||||||||||||||||||
Amortization of intangible assets | 179,835 | 128,571 | 179,835 | 128,571 | |||||||||||||||||||||||||||||
Integration, acquisition, | 34,246 | 71,126 | 34,246 | 71,126 | |||||||||||||||||||||||||||||
restructuring & other | |||||||||||||||||||||||||||||||||
Operating income (loss) | 251,772 | (67,365 | ) | ||||||||||||||||||||||||||||||
Other expense | 68,672 | 55,208 | |||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 183,100 | $ | (122,573 | ) | ||||||||||||||||||||||||||||
Sales_Information
Sales Information | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Sales Information | ' | ||||||||||||||||
Note 15. Sales Information | |||||||||||||||||
ARRIS sells its products primarily in the United States. The Company’s international revenue is generated from Asia Pacific, Canada, Europe, and Latin America. For the three months ended September 30, 2014 and 2013, sales to international customers were approximately 26.8% and 31.5%, respectively, of total sales. For the nine months ended September 30, 2014 and 2013, sales to international customers were 24.7% and 32.7%, respectively, of total sales. | |||||||||||||||||
International sales by region for the three and nine months ended September 30, 2014 and 2013 were as follows (in thousands): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Americas, excluding U.S. (1) | $ | 246,922 | $ | 217,843 | $ | 661,005 | $ | 501,052 | |||||||||
Asia Pacific | 38,584 | 48,869 | 113,674 | 108,102 | |||||||||||||
EMEA | 90,759 | 69,673 | 226,885 | 181,598 | |||||||||||||
Total international sales | $ | 376,265 | $ | 336,385 | $ | 1,001,564 | $ | 790,752 | |||||||||
-1 | Excludes U.S. sales of $1,029.2 million and $3,058.0 million for the three and nine months ended September 30, 2014, respectively. Excludes U.S. sales of $731.4 million and $1,631.1 million for the three and nine months ended September 30, 2013, respectively. |
Earnings_Per_Share
Earnings Per Share | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Earnings Per Share | ' | ||||||||||||||||
Note 16. Earnings Per Share | |||||||||||||||||
The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share (“EPS”) computations for the periods indicated (in thousands except per share data): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Basic: | |||||||||||||||||
Net income (loss) | $ | 54,626 | $ | 17,169 | $ | 134,451 | $ | (45,943 | ) | ||||||||
Weighted average shares outstanding | 144,967 | 138,478 | 144,085 | 129,502 | |||||||||||||
Basic earnings (loss) per share | $ | 0.38 | $ | 0.12 | $ | 0.93 | $ | (0.35 | ) | ||||||||
Diluted: | |||||||||||||||||
Net income (loss) | $ | 54,626 | $ | 17,169 | $ | 134,451 | $ | (45,943 | ) | ||||||||
Weighted average shares outstanding | 144,967 | 138,478 | 144,085 | 129,502 | |||||||||||||
Net effect of dilutive equity awards | 3,786 | 2,127 | 3,911 | – | |||||||||||||
Total | 148,753 | 140,605 | 147,996 | 129,502 | |||||||||||||
Diluted earnings (loss) per share | $ | 0.37 | $ | 0.12 | $ | 0.91 | $ | (0.35 | ) | ||||||||
For the three months ended and nine months ended September 30, 2014, approximately zero and 4.5 thousand 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. During the same periods in 2013, approximately 2.8 million and 1.4 million of the equity-based awards, respectively, were excluded from the dilutive securities above. 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 nine months ended September 30, 2014, the Company issued 2.7 million shares of its common stock related to stock option exercises and the vesting of restricted shares, as compared to 3.6 million shares for the twelve months ended December 31, 2013. | |||||||||||||||||
In 2013, in connection with the Motorola Home acquisition, Google was issued approximately 10.6 million shares of ARRIS’ common stock as part of the purchase consideration. Furthermore, Comcast was given an opportunity to invest in ARRIS, and 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 Company has not paid cash dividends on its common stock since its inception. |
Income_Taxes
Income Taxes | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
Income Taxes | ' | ||||||||||||||||||||||||
Note 17. Income Taxes | |||||||||||||||||||||||||
For the three months ended September 30, 2014 and 2013, the Company recorded income tax expense (benefit) of $44.5 million and $(28.0) million, respectively. For the nine months ended September 30, 2014 and 2013, the Company recorded income tax expense (benefit) of $48.7 million and $(76.6) million, respectively. | |||||||||||||||||||||||||
Below is a summary of the components of the tax expense (benefit) for the three and nine month periods ended September 30, 2014 and 2013 (in thousands, except for percentages): | |||||||||||||||||||||||||
Three Months Ended September 30, | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
Income | Income | Effective | Income | Income | Effective | ||||||||||||||||||||
(Loss) | Tax | Tax Rate | (Loss) | Tax | Tax Rate | ||||||||||||||||||||
Before | Expense | Before | Expense | ||||||||||||||||||||||
Tax | (Benefit) | Tax | (Benefit) | ||||||||||||||||||||||
Non-discrete items | $ | 109,703 | $ | 39,136 | 35.7 | % | $ | 8,691 | $ | (14,547 | ) | (167.4 | )% | ||||||||||||
Discrete tax events - | |||||||||||||||||||||||||
2012 R&D Credit | – | – | – | – | |||||||||||||||||||||
Loss on asset held for sale | – | – | – | – | |||||||||||||||||||||
Book write down in cost method investment | $ | (4,000 | ) | $ | (1,440 | ) | – | – | |||||||||||||||||
Acquisition costs | $ | (6,570 | ) | $ | (2,367 | ) | $ | (12,277 | ) | $ | (3,818 | ) | |||||||||||||
Return to provision adjustments | – | $ | 4,550 | – | $ | (2,052 | ) | ||||||||||||||||||
Valuation allowances, uncertain tax positions | – | $ | 7,234 | – | $ | (7,599 | ) | ||||||||||||||||||
Comcast’s investment in ARRIS | – | – | – | – | |||||||||||||||||||||
Change in state deferred rates | – | $ | 1,403 | – | – | ||||||||||||||||||||
Gain/(loss) from certain foreign entities acquired | – | – | $ | (7,261 | ) | – | |||||||||||||||||||
Intangible reattribution | – | $ | (4,009 | ) | – | – | |||||||||||||||||||
Total | $ | 99,133 | $ | 44,507 | 44.9 | % | $ | (10,847 | ) | $ | (28,016 | ) | 258.3 | % | |||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
Income | Income | Effective | Income | Income | Effective | ||||||||||||||||||||
(Loss) | Tax | Tax Rate | (Loss) | Tax | Tax Rate | ||||||||||||||||||||
Before Tax | Expense | Before Tax | Expense | ||||||||||||||||||||||
(Benefit) | (Benefit) | ||||||||||||||||||||||||
Non-discrete items | $ | 222,815 | $ | 79,577 | 35.7 | % | $ | (13,521 | ) | $ | (38,736 | ) | 286.5 | % | |||||||||||
Discrete tax events - | |||||||||||||||||||||||||
2012 R&D Credit | – | – | – | – | |||||||||||||||||||||
Loss on asset held for sale | $ | (2,125 | ) | $ | (760 | ) | – | – | |||||||||||||||||
Book write down in cost method investments | $ | (7,000 | ) | $ | (2,502 | ) | – | – | |||||||||||||||||
Acquisition costs | $ | (30,590 | ) | $ | (10,936 | ) | $ | (71,126 | ) | $ | (23,568 | ) | |||||||||||||
Comcast’s investment in ARRIS | – | – | $ | (26,371 | ) | – | |||||||||||||||||||
Change in state deferred rates | – | $ | (3,836 | ) | – | – | |||||||||||||||||||
Net operating losses acquired | – | $ | (18,163 | ) | – | – | |||||||||||||||||||
Gain/(loss) from certain foreign | – | – | $ | (11,555 | ) | – | |||||||||||||||||||
Return to provision adjustments | – | $ | 6,186 | – | $ | (8,552 | ) | ||||||||||||||||||
Valuation allowances, uncertain tax positions | – | $ | 2,582 | – | $ | (5,774 | ) | ||||||||||||||||||
Intangible reattribution | – | $ | (4,009 | ) | – | – | |||||||||||||||||||
Other | – | $ | 510 | – | – | ||||||||||||||||||||
Total | $ | 183,100 | $ | 48,649 | 26.6 | % | $ | (122,573 | ) | $ | (76,630 | ) | 62.5 | % | |||||||||||
• | The change in the income tax expense (benefit) for the three and nine month periods ended September 30, 2014 compared to the three and nine months period ended September 30, 2013, was due to the change in earnings from continuing operations, as a result of the Motorola Home acquisition that occurred on April 17, 2013 and its related significant, infrequent and unusual book charges. The unusual book charges were mostly attributable to restructuring, integration and other acquisition-related costs. For the nine month period ending September 30, 2014, the Company recorded book expenses of an infrequent and unusual nature of approximately $30.6 million relating to the acquisition of the Home business of Motorola, generating a tax benefit of $10.9 million. | ||||||||||||||||||||||||
• | For the nine month periods ended September 30, 2014 and 2013, our estimated effective tax rates were 26.6% and 62.5%, respectively. The rate of 26.6% is based on the Company’s pre-tax book income of approximately $183.1 million and a tax expense of approximately $48.7 million, for the nine months period ending September 30, 2014. The change in the estimated effective tax rate for the nine month period ended September 30, 2014, compared to the nine month period ended September 30, 2013 was due to an increase in earnings from continuing operations, and the impact of certain tax discrete tax events described in the discussion below. | ||||||||||||||||||||||||
• | In conjunction with an agreement executed with Google in January 2014, as of March 31, 2014 the Company recorded net operating losses of $545.5 million arising from the Motorola Home acquisition, of which the Company estimated $493.5 million of the amount would not be realizable and was subject to a valuation allowance. As a result, in the first quarter of 2014 the Company released $18.2 million of valuation allowances related to these acquired net operating losses. The ultimate realization of the remaining net operating losses was dependent upon Google completing and filing their income tax returns and the Company completing analysis and finalizing planning relating to the usage of net operating losses. | ||||||||||||||||||||||||
Google completed and filed their income tax return during the third quarter of 2014, and the Company has determined that $556.8 million of net operating losses are now available to the Company, of which the Company has recorded net operating losses of $51.9 million as of September 30, 2014. Our ability to fully utilize these net operating losses, however, is limited for various reasons, such as under the “Separate Return Loss Year” (“SRLY”) rules which may limit the Company’s ability to utilize carryforward attributes should income attributable to specific subgroup members be insufficient to allow for full utilization. In addition, annual limitations apply under Internal Revenue Code Section 382 with respect to the Company’s ability to utilize its net operating loss carryforwards against future U.S. taxable income. | |||||||||||||||||||||||||
As of September 30, 2014, the Company was analyzing several potential planning alternatives, regarding the limitations discussed above, to determine the ultimate net operating loss carryforward benefit to be realized from the Motorola Home acquisition. Accordingly, the Company expects to complete this analysis in the fourth quarter of 2014. The analysis will determine how much of the remaining $504.9 million of net operating loss, if any, will be realizable, which could result in a significant favorable adjustment to deferred tax assets in the fourth quarter of 2014, if successful. | |||||||||||||||||||||||||
• | As of June 30, 2014, the Company recorded a benefit of $5.2 million from changes in state deferred income tax rates, relating to the integration of the Motorola Home business. For the three month period ended September 30, 2014, this benefit was reduced by $1.4 million, for a total benefit of $3.8 million for the nine month period ended September 30, 2014. | ||||||||||||||||||||||||
• | For the nine month period ended September 30, 2014, the Company recorded $9.1 million of book losses on investments and available for sale assets, which generated income tax benefits of $3.3 million. | ||||||||||||||||||||||||
• | For the nine month period ended September 30, 2014, the Company recorded expense of $6.2 million related to changes in estimates finalized upon the filing of the 2013 income tax returns. During this period, the Company also recorded a benefit of $1.8 million relating to changes in valuation allowances. During the third quarter of 2014, as a result of completing certain analysis associated with the preparation and filing of the 2013 U.S. Federal Income Tax Return, the Company identified and corrected an immaterial error in the accounting for income taxes related to the prior year ended December 31, 2013. The correction related to the Company’s subsequent consideration of certain tax consequences related to a legal entity and tax restructuring completed in the fourth quarter of 2013. The impact of adjusting these amounts had a non-cash effect, increasing income tax expense and noncurrent income tax liabilities by $9.8 million. In accordance with ASC Topic 250, Accounting Changes and Error Corrections, the Company evaluated the impact on its financial statements for the year ended December 31, 2013 and the expected full year results for the year ending December 31, 2014 and concluded that the results of operations for these periods were not materially misstated. In reaching its conclusion the Company considered both quantitative and qualitative factors. The quantitative factors included calculating the impact of the error on the affected financial statements and assessing materiality. The qualitative factors included, but were not limited, to the absences of impact on debt covenants, management compensation and segment reporting. Based on its evaluation, the Company concluded that it is not probable that the judgment of a reasonable person relying on the financial statements would have been changed or influenced by the correction. In addition to the charge of $9.8 million, there were also benefits from audit settlements and expirations of statute, which impacted uncertain tax liabilities. The total discrete tax impact of uncertain tax positions during the nine month period ended September 30, 2014, inclusive of the $9.8 million charge, was an additional tax expense of $4.4 million. | ||||||||||||||||||||||||
• | For the nine month period ended September 30, 2014, the Company did not record any benefits attributed to research and development tax credits, as the tax credit has yet to be reenacted. | ||||||||||||||||||||||||
The earnings from the Company’s non-U.S. subsidiaries are considered to be permanently invested outside of the United States. Accordingly, no provision for U.S. federal and state income taxes on those non-U.S. earnings has been made in the accompanying consolidated financial statements. Any future distribution of these non-U.S. earnings may subject the Company to both U.S. federal and state income taxes, after reduction for foreign taxes credited. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
Accumulated Other Comprehensive Income | ' | ||||||||||||||||||||
Note 18. Accumulated Other Comprehensive Income | |||||||||||||||||||||
The following table summarizes the changes in accumulated other comprehensive income by component, net of taxes, for the nine months ended September 30, 2014 (in thousands): | |||||||||||||||||||||
Unrealized gain | Unfunded | Unrealized | Cumulative | Total | |||||||||||||||||
(loss) on marketable | pension | loss on | translation | ||||||||||||||||||
securities | liability | derivative | adjustments | ||||||||||||||||||
instruments | |||||||||||||||||||||
Balance as of December 31, 2013 | $ | 306 | $ | (2,416 | ) | $ | (2,541 | ) | $ | (11 | ) | $ | (4,662 | ) | |||||||
Other comprehensive (loss) income before reclassifications | (383 | ) | - | 4,162 | (154 | ) | 3,625 | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | - | - | (3,580 | ) | - | (3,580 | ) | ||||||||||||||
Net current-period other comprehensive income (loss) | (383 | ) | - | 582 | (154 | ) | 45 | ||||||||||||||
Balance as of September 30, 2014 | $ | (77 | ) | $ | (2,416 | ) | $ | (1,959 | ) | $ | (165 | ) | $ | (4,617 | ) | ||||||
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2014 | |
Contingencies | ' |
Note 19. 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. (See Part II, Item 1 “Legal Proceedings” for additional details) |
Organization_and_Basis_of_Pres1
Organization and Basis of Presentation (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Acquisition Accounting and Other Adjustments Effect on Affected Balance Sheets and Statements of Operations Line Items | ' | ||||||||||||
The following tables present the effect on the Company’s affected financial statement line items for the period ended September 30, 2013 and three and nine months ended September 30, 2013 (in thousands): | |||||||||||||
As Originally | As Adjusted | Increase (Decrease) | |||||||||||
Reported | |||||||||||||
Balance Sheet: | |||||||||||||
Inventories, net | $ | 350,919 | $ | 343,896 | $ | (7,023 | ) | ||||||
Current deferred income tax assets | 85,373 | 75,875 | (9,498 | ) | |||||||||
Other current assets | 60,171 | 60,111 | (60 | ) | |||||||||
Property, plant and equipment | 410,047 | 398,353 | (11,694 | ) | |||||||||
Goodwill | 926,826 | 943,258 | 16,432 | ||||||||||
Intangible assets | 1,239,178 | 1,241,258 | 2,080 | ||||||||||
Investments | 79,894 | 96,711 | 16,817 | ||||||||||
Noncurrent deferred income tax assets | 12,680 | 6,535 | (6,145 | ) | |||||||||
Accrued warranty | 48,619 | 46,536 | (2,083 | ) | |||||||||
Current income taxes liability | 5,827 | 7,012 | 1,185 | ||||||||||
Other accrued liabilities | 147,195 | 148,282 | 1,087 | ||||||||||
Accrued pension | 61,349 | 65,395 | 4,046 | ||||||||||
Noncurrent deferred income tax liabilities | 76,005 | 74,242 | (1,763 | ) | |||||||||
Accumulated deficit | (56,189 | ) | (57,752 | ) | (1,563 | ) | |||||||
For the three months ended September 30, 2013 | As Originally | As | Increase (Decrease) | ||||||||||
Reported | Adjusted | ||||||||||||
Statements of Operations: | |||||||||||||
Depreciation expense | $ | 19,705 | $ | 20,048 | $ | 343 | |||||||
Amortization expense | 64,606 | 65,053 | 447 | ||||||||||
For the nine months ended September 30, 2013 | As Originally | As | Increase (Decrease) | ||||||||||
Reported | Adjusted | ||||||||||||
Statements of Operations: | |||||||||||||
Depreciation expense | $ | 41,824 | $ | 42,567 | $ | 743 | |||||||
Amortization expense | 127,751 | 128,571 | 820 |
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||||||
Changes in Carrying Amount of Goodwill | ' | ||||||||||||||||||||||||||||||||
The changes in the carrying amount of goodwill for the year to date period ended September 30, 2014 are as follows (in thousands): | |||||||||||||||||||||||||||||||||
CPE | Network | Cloud | Total | ||||||||||||||||||||||||||||||
Infrastructure | Services | ||||||||||||||||||||||||||||||||
Goodwill | 688,658 | 497,741 | 132,659 | 1,319,058 | |||||||||||||||||||||||||||||
Accumulated impairment losses | – | (257,053 | ) | (121,603 | ) | (378,656 | ) | ||||||||||||||||||||||||||
Balance as of December 31, 2013 | $ | 688,658 | $ | 240,688 | $ | 11,056 | $ | 940,402 | |||||||||||||||||||||||||
Goodwill acquired in SeaWell acquisition | – | 4,448 | – | 4,448 | |||||||||||||||||||||||||||||
Adjustments | (4,061 | ) | (2,103 | ) | (421 | ) | (6,585 | ) | |||||||||||||||||||||||||
Goodwill | 684,597 | 500,086 | 132,238 | 1,316,921 | |||||||||||||||||||||||||||||
Accumulated impairment losses | – | (257,053 | ) | (121,603 | ) | (378,656 | ) | ||||||||||||||||||||||||||
Balance as of September 30, 2014 | $ | 684,597 | $ | 243,033 | $ | 10,635 | $ | 938,265 | |||||||||||||||||||||||||
Gross Carrying Amount and Accumulated Amortization of Intangible Assets | ' | ||||||||||||||||||||||||||||||||
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 September 30, 2014 and December 31, 2013 are as follows (in thousands): | |||||||||||||||||||||||||||||||||
September 30, 2014 | December 31, 2013 | ||||||||||||||||||||||||||||||||
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 | $ | 904,035 | $ | 341,416 | $ | 562,619 | 6.3 | $ | 903,409 | $ | 266,323 | $ | 637,086 | 7 | |||||||||||||||||||
Developed technology, patents & licenses | 634,230 | 205,290 | 428,940 | 4.4 | 563,326 | 120,679 | 442,647 | 5 | |||||||||||||||||||||||||
Trademark, trade and domain names | 21,079 | 15,597 | 5,482 | 1.1 | 20,900 | 8,549 | 12,351 | 1.5 | |||||||||||||||||||||||||
Order backlog | 44,600 | 44,600 | – | – | 44,600 | 31,592 | 13,008 | 0.3 | |||||||||||||||||||||||||
In-process R&D | 3,400 | – | 3,400 | – | 71,100 | – | 71,100 | – | |||||||||||||||||||||||||
Total | $ | 1,607,344 | $ | 606,903 | $ | 1,000,441 | $ | 1,603,335 | $ | 427,143 | $ | 1,176,192 | |||||||||||||||||||||
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 (for the remaining three months) | $ | 57,027 | |||||||||||||||||||||||||||||||
2015 | 220,731 | ||||||||||||||||||||||||||||||||
2016 | 190,003 | ||||||||||||||||||||||||||||||||
2017 | 173,068 | ||||||||||||||||||||||||||||||||
2018 | 122,376 | ||||||||||||||||||||||||||||||||
2019 | 100,061 | ||||||||||||||||||||||||||||||||
Thereafter | 133,775 |
Investments_Tables
Investments (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Investments | ' | ||||||||
ARRIS’ investments as of September 30, 2014 and December 31, 2013 consisted of the following (in thousands): | |||||||||
As of September 30, 2014 | As of December 31, 2013 | ||||||||
Current Assets: | |||||||||
Available-for-sale securities | $ | 66,817 | $ | 67,360 | |||||
Noncurrent Assets: | |||||||||
Available-for-sale securities | 9,109 | 7,004 | |||||||
Equity method investments | 29,237 | 23,803 | |||||||
Cost method investments | 10,342 | 15,250 | |||||||
Other investments | 26,297 | 25,119 | |||||||
74,985 | 71,176 | ||||||||
Total | $ | 141,802 | $ | 138,536 | |||||
Contractual Maturities of Available-for-Sale Securities | ' | ||||||||
The contractual maturities of the Company’s available-for-sale securities as of September 30, 2014 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): | |||||||||
September 30, | |||||||||
2014 | |||||||||
Within one year | $ | 66,817 | |||||||
After one year through five years | 5,330 | ||||||||
After five years through ten years | – | ||||||||
After ten years | 3,779 | ||||||||
Total | 75,926 | ||||||||
Fair_Value_Measurement_Tables
Fair Value Measurement (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Investment Assets and Interest Rate Swap Positions (Excluding Equity and Lost Method Investments) and Derivatives Measured at Fair Value on Recurring Basis | ' | ||||||||||||||||
The following table presents the Company’s investment assets (excluding equity and cost method investments) and derivatives measured at fair value on a recurring basis as of September 30, 2014 and December 31, 2013 (in thousands): | |||||||||||||||||
September 30, 2014 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Certificates of deposit | $ | – | $ | 3,920 | $ | – | $ | 3,920 | |||||||||
Commercial paper | – | 999 | – | 999 | |||||||||||||
Corporate bonds | – | 37,548 | – | 37,548 | |||||||||||||
Short-term bond fund | 29,679 | — | – | 29,679 | |||||||||||||
Cash surrender value of company owned life insurance | – | 26,270 | – | 26,270 | |||||||||||||
Corporate obligations | – | 21 | – | 21 | |||||||||||||
Money markets | 213 | – | – | 213 | |||||||||||||
Mutual funds | 208 | – | – | 208 | |||||||||||||
Other investments | – | 3,336 | – | 3,336 | |||||||||||||
Interest rate derivatives – asset derivatives | – | 3,766 | – | 3,766 | |||||||||||||
Interest rate derivatives – liability derivatives | – | (6,856 | ) | – | (6,856 | ) | |||||||||||
Foreign currency contracts – asset position | – | 1,789 | – | 1,789 | |||||||||||||
Foreign currency contracts – liability position | – | (184 | ) | – | (184 | ) | |||||||||||
December 31, 2013 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Certificates of deposit | $ | – | $ | 3,814 | $ | – | $ | 3,814 | |||||||||
Commercial paper | – | 2,994 | – | 2,994 | |||||||||||||
Corporate bonds | – | 34,591 | – | 34,591 | |||||||||||||
Short-term bond fund | 29,565 | — | – | 29,565 | |||||||||||||
Cash surrender value of company owned life insurance | – | 25,119 | – | 25,119 | |||||||||||||
Corporate obligations | – | 18 | – | 18 | |||||||||||||
Money markets | 212 | – | – | 212 | |||||||||||||
Mutual funds | 184 | – | – | 184 | |||||||||||||
Other investments | – | 2,986 | – | 2,986 | |||||||||||||
Interest rate derivatives – asset derivatives | – | 3,011 | – | 3,011 | |||||||||||||
Interest rate derivatives – liability derivatives | – | (7,018 | ) | – | (7,018 | ) |
Derivative_Instruments_and_Hed1
Derivative Instruments and Hedging Activities (Tables) | 9 Months Ended | ||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||
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 three and nine months ended September 30, 2014 (in thousands): | |||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||
Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | $ | 2,107 | $ | (7,979 | ) | $ | (4,730 | ) | $ | (7,979 | ) | ||||||||
Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Interest expense | Interest expense | Interest expense | Interest expense | |||||||||||||||
Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | (1,905 | ) | (1,253 | ) | (5,647 | ) | (1,253 | ) | |||||||||||
Fair Values of Derivative Instruments Recorded in Consolidated Balance Sheet | ' | ||||||||||||||||||
The fair values of ARRIS’ derivative instruments recorded in the Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013 were as follows (in thousands): | |||||||||||||||||||
As of September 30, 2014 | As of December 31, 2013 | ||||||||||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||||||||||
Derivatives designated as | |||||||||||||||||||
hedging instruments: | |||||||||||||||||||
Interest rate derivatives | Other assets | $ | 3,766 | Other assets | $ | 3,011 | |||||||||||||
– asset derivatives | |||||||||||||||||||
Interest rate derivatives | Other accrued liabilities | $ | 6,856 | Other accrued liabilities | $ | 7,018 | |||||||||||||
– liability derivatives | |||||||||||||||||||
Derivatives not designated as | |||||||||||||||||||
hedging instruments: | |||||||||||||||||||
Foreign exchange contracts | Other current assets | $ | 1,789 | Other current assets | $ | – | |||||||||||||
– asset derivatives | |||||||||||||||||||
Foreign exchange contracts | Other accrued liabilities | $ | 184 | Other accrued liabilities | $ | – | |||||||||||||
– liability derivatives | |||||||||||||||||||
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 three and nine months ended September 30, 2014 and 2013 were as follows (in thousands): | |||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||
Statement of Operations Location | 2014 | 2013 | 2014 | 2013 | |||||||||||||||
Derivatives Not Designated | |||||||||||||||||||
as Hedging Instruments: | |||||||||||||||||||
Foreign exchange contracts | Loss (gain) on foreign currency | $ | (1,699 | ) | $ | – | $ | (1,699 | ) | $ | 428 | ||||||||
Derivatives Designated | |||||||||||||||||||
as Hedging Instruments: | |||||||||||||||||||
Interest rates derivatives | Interest expense | $ | 1,905 | $ | 1,253 | $ | 5,647 | $ | 1,253 |
Pension_Benefits_Tables
Pension Benefits (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Components of Net Periodic Pension Cost | ' | ||||||||||||||||
Components of Net Periodic Pension Cost (in thousands): | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Service cost | $ | – | $ | 310 | $ | – | $ | 637 | |||||||||
Interest cost | 446 | 562 | 1,337 | 1,479 | |||||||||||||
Expected gain on plan assets | (219 | ) | (259 | ) | (656 | ) | (730 | ) | |||||||||
Amortization of net loss | 76 | 355 | 229 | 829 | |||||||||||||
Net periodic pension cost | $ | 303 | $ | 968 | $ | 910 | $ | 2,215 | |||||||||
Guarantees_Tables
Guarantees (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Information Regarding Changes in ARRIS' Aggregate Product Warranty Liabilities | ' | ||||
Information regarding the changes in ARRIS’ aggregate product warranty liabilities for the nine months ended September 30, 2014 was as follows (in thousands): | |||||
Balance at December 31, 2013 | $ | 81,500 | |||
Accruals related to warranties (including changes in estimates) | 25,741 | ||||
Settlements made (in cash or in kind) | (27,827 | ) | |||
Balance at September 30, 2014 | $ | 79,414 | |||
Restructuring_Charges_Tables
Restructuring Charges (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
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 and contractual obligations that related to excess leased facilities (in thousands): | |||||||||||||
Employee | Contractual | Total | |||||||||||
severance & | obligations and | ||||||||||||
termination | other | ||||||||||||
benefits | |||||||||||||
Balance at December 31, 2013 | $ | 2,674 | $ | 673 | $ | 3,347 | |||||||
Restructuring charges | 2,610 | 32 | 2,642 | ||||||||||
Cash payments | (2,900 | ) | (396 | ) | (3,296 | ) | |||||||
Balance at September 30, 2014 | $ | 2,384 | $ | 309 | $ | 2,693 | |||||||
Inventories_Tables
Inventories (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Components of Inventory Net of Reserves | ' | ||||||||
The components of inventory were as follows, net of reserves (in thousands): | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Raw material | $ | 53,628 | $ | 60,520 | |||||
Work in process | 10,196 | 6,010 | |||||||
Finished goods | 304,804 | 263,599 | |||||||
Total inventories, net | $ | 368,628 | $ | 330,129 | |||||
Property_Plant_and_Equipment_T
Property, Plant and Equipment (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Property, Plant and Equipment, at Cost | ' | ||||||||
Property, plant and equipment, at cost, consisted of the following (in thousands): | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Land | $ | 87,951 | $ | 88,742 | |||||
Building and leasehold improvements | 137,581 | 133,668 | |||||||
Machinery and equipment | 399,519 | 368,572 | |||||||
625,051 | 590,982 | ||||||||
Less: Accumulated depreciation | (253,555 | ) | (194,830 | ) | |||||
Total property, plant and equipment, net | $ | 371,496 | $ | 396,152 | |||||
LongTerm_Indebtedness_Tables
Long-Term Indebtedness (Tables) | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
Senior Credit Facility Interest Rates | ' | ||||||||||||||||||||
Rate | As of September 30, 2014 | ||||||||||||||||||||
Term Loan A | LIBOR + 1.75 % | 1.90% | |||||||||||||||||||
Term Loan B | LIBOR(1) + 2.50 % | 3.25% | |||||||||||||||||||
Revolving Credit Facility(2) | LIBOR + 1.75 % | Not Applicable | |||||||||||||||||||
-1 | Includes LIBOR floor of 0.75% | ||||||||||||||||||||
-2 | Includes unused commitment fee of 0.35% and letter of credit fee of 1.75% not reflected in interest rate above. | ||||||||||||||||||||
Summary of Contractual Debt Obligations at Face Value | ' | ||||||||||||||||||||
Following is a summary of our contractual debt obligations at face value as of September 30, 2014 (in thousands): | |||||||||||||||||||||
Payments due by period | |||||||||||||||||||||
Less than 1 Year | 1-3 Years | 3-5 Years | More than 5 Years | Total | |||||||||||||||||
Credit facilities | $ | 68,750 | $ | 206,250 | $ | 742,500 | $ | 543,813 | $ | 1,561,313 |
Segment_Information_Tables
Segment Information (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||||||
Reporting Segments | ' | ||||||||||||||||||||||||||||||||
The table below represents information about the Company’s reporting segments for the three and nine months ended September 30, 2014 and 2013 (in thousands): | |||||||||||||||||||||||||||||||||
Reportable Segments | |||||||||||||||||||||||||||||||||
N&C | CPE | Other | Consolidated | ||||||||||||||||||||||||||||||
For the three months ended September 30, | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||||
Sales | $ | 460,837 | $ | 325,471 | $ | 945,386 | $ | 743,890 | $ | (778 | ) | $ | (1,537 | ) | $ | 1,405,445 | $ | 1,067,824 | |||||||||||||||
Direct Contribution | 134,217 | 61,763 | 208,163 | 158,035 | (152,945 | ) | (131,285 | ) | 189,435 | 88,513 | |||||||||||||||||||||||
Amortization of intangible assets | 57,100 | 65,053 | 57,100 | 65,053 | |||||||||||||||||||||||||||||
Integration, acquisition, | 10,226 | 12,278 | 10,226 | 12,278 | |||||||||||||||||||||||||||||
restructuring & other | |||||||||||||||||||||||||||||||||
Operating income | 122,109 | 11,182 | |||||||||||||||||||||||||||||||
Other expense | 22,976 | 22,029 | |||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 99,133 | $ | (10,847 | ) | ||||||||||||||||||||||||||||
Reportable Segments | |||||||||||||||||||||||||||||||||
N&C | CPE | Other | Consolidated | ||||||||||||||||||||||||||||||
For the nine months ended September 30, | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||||
Sales | $ | 1,202,105 | $ | 849,382 | $ | 2,861,912 | $ | 1,589,785 | $ | (4,483 | ) | $ | (17,332 | ) | $ | 4,059,534 | $ | 2,421,835 | |||||||||||||||
Direct Contribution | 304,133 | 187,354 | 624,732 | 315,305 | (463,012 | ) | (370,327 | ) | 465,853 | 132,332 | |||||||||||||||||||||||
Amortization of intangible assets | 179,835 | 128,571 | 179,835 | 128,571 | |||||||||||||||||||||||||||||
Integration, acquisition, | 34,246 | 71,126 | 34,246 | 71,126 | |||||||||||||||||||||||||||||
restructuring & other | |||||||||||||||||||||||||||||||||
Operating income (loss) | 251,772 | (67,365 | ) | ||||||||||||||||||||||||||||||
Other expense | 68,672 | 55,208 | |||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 183,100 | $ | (122,573 | ) | ||||||||||||||||||||||||||||
Sales_Information_Tables
Sales Information (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
International Sales by Geographic Region | ' | ||||||||||||||||
International sales by region for the three and nine months ended September 30, 2014 and 2013 were as follows (in thousands): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Americas, excluding U.S. (1) | $ | 246,922 | $ | 217,843 | $ | 661,005 | $ | 501,052 | |||||||||
Asia Pacific | 38,584 | 48,869 | 113,674 | 108,102 | |||||||||||||
EMEA | 90,759 | 69,673 | 226,885 | 181,598 | |||||||||||||
Total international sales | $ | 376,265 | $ | 336,385 | $ | 1,001,564 | $ | 790,752 | |||||||||
-1 | Excludes U.S. sales of $1,029.2 million and $3,058.0 million for the three and nine months ended September 30, 2014, respectively. Excludes U.S. sales of $731.4 million and $1,631.1 million for the three and nine months ended September 30, 2013, respectively. |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
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 per share (“EPS”) computations for the periods indicated (in thousands except per share data): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Basic: | |||||||||||||||||
Net income (loss) | $ | 54,626 | $ | 17,169 | $ | 134,451 | $ | (45,943 | ) | ||||||||
Weighted average shares outstanding | 144,967 | 138,478 | 144,085 | 129,502 | |||||||||||||
Basic earnings (loss) per share | $ | 0.38 | $ | 0.12 | $ | 0.93 | $ | (0.35 | ) | ||||||||
Diluted: | |||||||||||||||||
Net income (loss) | $ | 54,626 | $ | 17,169 | $ | 134,451 | $ | (45,943 | ) | ||||||||
Weighted average shares outstanding | 144,967 | 138,478 | 144,085 | 129,502 | |||||||||||||
Net effect of dilutive equity awards | 3,786 | 2,127 | 3,911 | – | |||||||||||||
Total | 148,753 | 140,605 | 147,996 | 129,502 | |||||||||||||
Diluted earnings (loss) per share | $ | 0.37 | $ | 0.12 | $ | 0.91 | $ | (0.35 | ) | ||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
Components of Income Tax Expense Benefit | ' | ||||||||||||||||||||||||
Below is a summary of the components of the tax expense (benefit) for the three and nine month periods ended September 30, 2014 and 2013 (in thousands, except for percentages): | |||||||||||||||||||||||||
Three Months Ended September 30, | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
Income | Income | Effective | Income | Income | Effective | ||||||||||||||||||||
(Loss) | Tax | Tax Rate | (Loss) | Tax | Tax Rate | ||||||||||||||||||||
Before | Expense | Before | Expense | ||||||||||||||||||||||
Tax | (Benefit) | Tax | (Benefit) | ||||||||||||||||||||||
Non-discrete items | $ | 109,703 | $ | 39,136 | 35.7 | % | $ | 8,691 | $ | (14,547 | ) | (167.4 | )% | ||||||||||||
Discrete tax events - | |||||||||||||||||||||||||
2012 R&D Credit | – | – | – | – | |||||||||||||||||||||
Loss on asset held for sale | – | – | – | – | |||||||||||||||||||||
Book write down in cost method investment | $ | (4,000 | ) | $ | (1,440 | ) | – | – | |||||||||||||||||
Acquisition costs | $ | (6,570 | ) | $ | (2,367 | ) | $ | (12,277 | ) | $ | (3,818 | ) | |||||||||||||
Return to provision adjustments | – | $ | 4,550 | – | $ | (2,052 | ) | ||||||||||||||||||
Valuation allowances, uncertain tax positions | – | $ | 7,234 | – | $ | (7,599 | ) | ||||||||||||||||||
Comcast’s investment in ARRIS | – | – | – | – | |||||||||||||||||||||
Change in state deferred rates | – | $ | 1,403 | – | – | ||||||||||||||||||||
Gain/(loss) from certain foreign entities acquired | – | – | $ | (7,261 | ) | – | |||||||||||||||||||
Intangible reattribution | – | $ | (4,009 | ) | – | – | |||||||||||||||||||
Total | $ | 99,133 | $ | 44,507 | 44.9 | % | $ | (10,847 | ) | $ | (28,016 | ) | 258.3 | % | |||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
Income | Income | Effective | Income | Income | Effective | ||||||||||||||||||||
(Loss) | Tax | Tax Rate | (Loss) | Tax | Tax Rate | ||||||||||||||||||||
Before Tax | Expense | Before Tax | Expense | ||||||||||||||||||||||
(Benefit) | (Benefit) | ||||||||||||||||||||||||
Non-discrete items | $ | 222,815 | $ | 79,577 | 35.7 | % | $ | (13,521 | ) | $ | (38,736 | ) | 286.5 | % | |||||||||||
Discrete tax events - | |||||||||||||||||||||||||
2012 R&D Credit | – | – | – | – | |||||||||||||||||||||
Loss on asset held for sale | $ | (2,125 | ) | $ | (760 | ) | – | – | |||||||||||||||||
Book write down in cost method investments | $ | (7,000 | ) | $ | (2,502 | ) | – | – | |||||||||||||||||
Acquisition costs | $ | (30,590 | ) | $ | (10,936 | ) | $ | (71,126 | ) | $ | (23,568 | ) | |||||||||||||
Comcast’s investment in ARRIS | – | – | $ | (26,371 | ) | – | |||||||||||||||||||
Change in state deferred rates | – | $ | (3,836 | ) | – | – | |||||||||||||||||||
Net operating losses acquired | – | $ | (18,163 | ) | – | – | |||||||||||||||||||
Gain/(loss) from certain foreign | – | – | $ | (11,555 | ) | – | |||||||||||||||||||
Return to provision adjustments | – | $ | 6,186 | – | $ | (8,552 | ) | ||||||||||||||||||
Valuation allowances, uncertain tax positions | – | $ | 2,582 | – | $ | (5,774 | ) | ||||||||||||||||||
Intangible reattribution | – | $ | (4,009 | ) | – | – | |||||||||||||||||||
Other | – | $ | 510 | – | – | ||||||||||||||||||||
Total | $ | 183,100 | $ | 48,649 | 26.6 | % | $ | (122,573 | ) | $ | (76,630 | ) | 62.5 | % | |||||||||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Tables) | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
Changes in Accumulated Other Comprehensive Income (Loss) by Component, Net of Taxes | ' | ||||||||||||||||||||
The following table summarizes the changes in accumulated other comprehensive income by component, net of taxes, for the nine months ended September 30, 2014 (in thousands): | |||||||||||||||||||||
Unrealized gain | Unfunded | Unrealized | Cumulative | Total | |||||||||||||||||
(loss) on marketable | pension | loss on | translation | ||||||||||||||||||
securities | liability | derivative | adjustments | ||||||||||||||||||
instruments | |||||||||||||||||||||
Balance as of December 31, 2013 | $ | 306 | $ | (2,416 | ) | $ | (2,541 | ) | $ | (11 | ) | $ | (4,662 | ) | |||||||
Other comprehensive (loss) income before reclassifications | (383 | ) | - | 4,162 | (154 | ) | 3,625 | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | - | - | (3,580 | ) | - | (3,580 | ) | ||||||||||||||
Net current-period other comprehensive income (loss) | (383 | ) | - | 582 | (154 | ) | 45 | ||||||||||||||
Balance as of September 30, 2014 | $ | (77 | ) | $ | (2,416 | ) | $ | (1,959 | ) | $ | (165 | ) | $ | (4,617 | ) | ||||||
Organization_and_Basis_of_Pres2
Organization and Basis of Presentation - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2014 | |
Segment | |
Geographic Information [Line Items] | ' |
Number of business segments operated | 2 |
Acquisition_Accounting_and_Oth
Acquisition Accounting and Other Adjustments Effect on Affected Balance Sheet Line Items (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
In Thousands, unless otherwise specified | As Originally Reported | As Adjusted | Increase (Decrease) | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ' | ' | ' | ' | ' | |
Inventories, net | $368,628 | $330,129 | [1] | $350,919 | $343,896 | ($7,023) |
Current deferred income tax assets | 64,948 | 77,167 | [1] | 85,373 | 75,875 | -9,498 |
Other current assets | 59,439 | 39,930 | [1] | 60,171 | 60,111 | -60 |
Property, plant and equipment | 371,496 | 396,152 | [1] | 410,047 | 398,353 | -11,694 |
Goodwill | 938,265 | 940,402 | [1] | 926,826 | 943,258 | 16,432 |
Intangible assets | 1,000,441 | 1,176,192 | [1] | 1,239,178 | 1,241,258 | 2,080 |
Investments | 74,985 | 71,176 | [1] | 79,894 | 96,711 | 16,817 |
Noncurrent deferred income tax assets | 12,567 | 7,678 | [1] | 12,680 | 6,535 | -6,145 |
Accrued warranty | 51,277 | 48,755 | [1] | 48,619 | 46,536 | -2,083 |
Current income taxes liability | 15,344 | 3,068 | [1] | 5,827 | 7,012 | 1,185 |
Other accrued liabilities | 132,551 | 141,698 | [1] | 147,195 | 148,282 | 1,087 |
Accrued pension | 59,667 | 58,657 | [1] | 61,349 | 65,395 | 4,046 |
Noncurrent deferred income tax liabilities | 42,926 | 74,791 | [1] | 76,005 | 74,242 | -1,763 |
Accumulated deficit | $73,881 | ($60,569) | [1] | ($56,189) | ($57,752) | ($1,563) |
[1] | Certain amounts for December 31, 2013 have been recast to reflect results for business acquisitions. |
Acquisition_Accounting_and_Oth1
Acquisition Accounting and Other Adjustments Effect on Affected Statements of Operations Line Items (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ' | ' | ' | ' | ||
Depreciation expense | ' | ' | $60,213 | $42,567 | [1] | |
Amortization expense | 57,100 | 65,053 | [2] | 179,835 | 128,571 | [1],[2] |
As Originally Reported | ' | ' | ' | ' | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ' | ' | ' | ' | ||
Depreciation expense | ' | 19,705 | ' | 41,824 | ||
Amortization expense | ' | 64,606 | ' | 127,751 | ||
As Adjusted | ' | ' | ' | ' | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ' | ' | ' | ' | ||
Depreciation expense | ' | 20,048 | ' | 42,567 | ||
Amortization expense | ' | 65,053 | ' | 128,571 | ||
Increase (Decrease) | ' | ' | ' | ' | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ' | ' | ' | ' | ||
Depreciation expense | ' | 343 | ' | 743 | ||
Amortization expense | ' | $447 | ' | $820 | ||
[1] | Certain amounts for the nine months ended September 30, 2013 have been recast to reflect results for business acquisitions. | |||||
[2] | Certain amounts for the three and nine months ended September 30, 2013 have been recast to reflect results for business acquisitions. |
Business_Acquisitions_Addition
Business Acquisitions - Additional Information (Detail) (USD $) | 9 Months Ended | 9 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 0 Months Ended | |||||||
Share data in Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Apr. 17, 2013 | Dec. 31, 2013 | Apr. 17, 2014 | Apr. 17, 2014 | Apr. 17, 2014 | Apr. 17, 2014 | ||
Minimum | Maximum | Motorola Home | Motorola Home | SeaWell Networks, Inc. | SeaWell Networks, Inc. | SeaWell Networks, Inc. | SeaWell Networks, Inc. | ||||||
Minimum | Maximum | ||||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Business acquisition, cash consideration | ($84,000) | $2,208,114,000 | [1] | ' | ' | ' | $2,208,100,000 | ' | $5,900,000 | ' | ' | ' | |
Business acquisition potential stock issue, shares | ' | ' | ' | ' | ' | 10.6 | 10.6 | ' | ' | ' | ' | ||
Additional contingent consideration, maximum | ' | ' | ' | ' | ' | ' | ' | ' | 3,000,000 | ' | ' | ||
Period for achievement of certain financial targets related to contingent consideration | ' | ' | ' | ' | ' | ' | ' | '30 months | ' | ' | ' | ||
Goodwill | 938,265,000 | ' | 940,402,000 | [2] | ' | ' | ' | ' | ' | 4,400,000 | ' | ' | |
Identified intangible assets acquired | ' | ' | ' | ' | ' | ' | ' | ' | $2,000,000 | ' | ' | ||
Finite lived intangible assets, useful life | ' | ' | ' | '6 months | '10 years | ' | ' | ' | ' | '5 years | '10 years | ||
[1] | Certain amounts for the nine months ended September 30, 2013 have been recast to reflect results for business acquisitions. | ||||||||||||
[2] | Certain amounts for December 31, 2013 have been recast to reflect results for business acquisitions. |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets - Additional Information (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | |
In-process R&D | Minimum | Maximum | ||||
Schedule Of Goodwill And Intangible Assets [Line Items] | ' | ' | ' | ' | ' | |
Goodwill | $938,265,000 | $940,402,000 | [1] | ' | ' | ' |
Finite lived intangible assets, useful life | ' | ' | ' | '6 months | '10 years | |
Finite lived intangible assets, amortization expense | ' | ' | $3,400,000 | ' | ' | |
[1] | Certain amounts for December 31, 2013 have been recast to reflect results for business acquisitions. |
Carrying_Amount_of_Goodwill_De
Carrying Amount of Goodwill (Detail) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | |
Goodwill [Line Items] | ' | |
Goodwill, gross, as of beginning of period | $1,319,058 | |
Accumulated impairment losses, as of beginning of period | -378,656 | |
Balance as of beginning of period | 940,402 | [1] |
Goodwill acquired in SeaWell acquisition | 4,448 | |
Adjustments | -6,585 | |
Goodwill, gross, as of end of period | 1,316,921 | |
Accumulated impairment losses, as of end of period | -378,656 | |
Balance as of end of period | 938,265 | |
CPE | ' | |
Goodwill [Line Items] | ' | |
Goodwill, gross, as of beginning of period | 688,658 | |
Balance as of beginning of period | 688,658 | |
Adjustments | -4,061 | |
Goodwill, gross, as of end of period | 684,597 | |
Balance as of end of period | 684,597 | |
Network Infrastructure | ' | |
Goodwill [Line Items] | ' | |
Goodwill, gross, as of beginning of period | 497,741 | |
Accumulated impairment losses, as of beginning of period | -257,053 | |
Balance as of beginning of period | 240,688 | |
Goodwill acquired in SeaWell acquisition | 4,448 | |
Adjustments | -2,103 | |
Goodwill, gross, as of end of period | 500,086 | |
Accumulated impairment losses, as of end of period | -257,053 | |
Balance as of end of period | 243,033 | |
Cloud Services | ' | |
Goodwill [Line Items] | ' | |
Goodwill, gross, as of beginning of period | 132,659 | |
Accumulated impairment losses, as of beginning of period | -121,603 | |
Balance as of beginning of period | 11,056 | |
Adjustments | -421 | |
Goodwill, gross, as of end of period | 132,238 | |
Accumulated impairment losses, as of end of period | -121,603 | |
Balance as of end of period | $10,635 | |
[1] | Certain amounts for December 31, 2013 have been recast to reflect results for business acquisitions. |
Gross_Carrying_Amount_and_Accu
Gross Carrying Amount and Accumulated Amortization of Intangible Assets (Detail) (USD $) | 9 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 | |
Intangible Assets [Line Items] | ' | ' | |
Gross Amount | $1,607,344 | $1,603,335 | |
Accumulated Amortization | 606,903 | 427,143 | [1] |
Net Book Value | 1,000,441 | 1,176,192 | [1] |
Customer relationships | ' | ' | |
Intangible Assets [Line Items] | ' | ' | |
Gross Amount | 904,035 | 903,409 | |
Accumulated Amortization | 341,416 | 266,323 | |
Net Book Value | 562,619 | 637,086 | |
Weighted Average Remaining Life (Years) | '6 years 3 months 18 days | '7 years | |
Developed technology, patents & licenses | ' | ' | |
Intangible Assets [Line Items] | ' | ' | |
Gross Amount | 634,230 | 563,326 | |
Accumulated Amortization | 205,290 | 120,679 | |
Net Book Value | 428,940 | 442,647 | |
Weighted Average Remaining Life (Years) | '4 years 4 months 24 days | '5 years | |
Trademark, trade and domain names | ' | ' | |
Intangible Assets [Line Items] | ' | ' | |
Gross Amount | 21,079 | 20,900 | |
Accumulated Amortization | 15,597 | 8,549 | |
Net Book Value | 5,482 | 12,351 | |
Weighted Average Remaining Life (Years) | '1 year 1 month 6 days | '1 year 6 months | |
Order backlog | ' | ' | |
Intangible Assets [Line Items] | ' | ' | |
Gross Amount | 44,600 | 44,600 | |
Accumulated Amortization | 44,600 | 31,592 | |
Net Book Value | ' | 13,008 | |
Weighted Average Remaining Life (Years) | ' | '3 months 18 days | |
In-process R&D | ' | ' | |
Intangible Assets [Line Items] | ' | ' | |
Gross Amount | 3,400 | 71,100 | |
Net Book Value | $3,400 | $71,100 | |
[1] | Certain amounts for December 31, 2013 have been recast to reflect results for business acquisitions. |
Estimated_Future_Amortization_
Estimated Future Amortization Expenses for Finite-Lived Intangibles (Detail) (USD $) | Sep. 30, 2014 |
In Thousands, unless otherwise specified | |
Finite Lived Intangible Assets Amortization Expense [Line Items] | ' |
2014 (for the remaining three months) | $57,027 |
2015 | 220,731 |
2016 | 190,003 |
2017 | 173,068 |
2018 | 122,376 |
2019 | 100,061 |
Thereafter | $133,775 |
Investments_Detail
Investments (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | |||
Current Assets: | ' | ' | |
Available-for-sale securities | $66,817 | $67,360 | [1] |
Noncurrent Assets: | ' | ' | |
Available-for-sale securities | 9,109 | 7,004 | |
Equity method investments | 29,237 | 23,803 | |
Cost method investments | 10,342 | 15,250 | |
Other investments | 26,297 | 25,119 | |
Total classified as non-current assets | 74,985 | 71,176 | [1] |
Total | $141,802 | $138,536 | |
[1] | Certain amounts for December 31, 2013 have been recast to reflect results for business acquisitions. |
Investments_Additional_Informa
Investments - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | ||
Investment Holdings [Line Items] | ' | ' | ' | |
Total (losses) gains included in the accumulated other comprehensive income | ($77,000) | ($77,000) | $306,000 | [1] |
Equity method investments | 29,237,000 | 29,237,000 | 23,803,000 | |
Cost method investment | 10,342,000 | 10,342,000 | 15,250,000 | |
Other investment | 26,297,000 | 26,297,000 | 25,119,000 | |
Other-than-temporary impairment losses recognized for the period | 4,000,000 | 7,000,000 | ' | |
Other-than-temporary impairment losses | ' | ' | $0 | |
[1] | Certain amounts for December 31, 2013 have been recast to reflect results for business acquisitions. |
Contractual_Maturities_of_Avai
Contractual Maturities of Available-for-Sale Securities (Detail) (USD $) | Sep. 30, 2014 |
In Thousands, unless otherwise specified | |
Investment Holdings [Line Items] | ' |
Within one year | $66,817 |
After one year through five years | 5,330 |
After five years through ten years | ' |
After ten years | 3,779 |
Total | $75,926 |
Investment_Assets_Excluding_Eq
Investment Assets Excluding Equity and Cost Method Investments and Derivatives Measured at Fair Value on Recurring Basis (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Derivative Financial Instruments, Liabilities | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of liabilities, recurring basis | ($6,856) | ($7,018) |
Derivative Financial Instruments, Liabilities | Foreign currency contracts | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of liabilities, recurring basis | -184 | ' |
Cash Surrender Value of Company Owned Life Insurance | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 26,270 | 25,119 |
Derivative Financial Instruments, Assets | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 3,766 | 3,011 |
Derivative Financial Instruments, Assets | Foreign currency contracts | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 1,789 | ' |
Certificates of Deposit | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 3,920 | 3,814 |
Commercial Paper | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 999 | 2,994 |
Corporate bonds | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 37,548 | 34,591 |
Short-Term Bond Fund | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 29,679 | 29,565 |
Corporate Obligations | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 21 | 18 |
Money Market Funds | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 213 | 212 |
Mutual Funds | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 208 | 184 |
Other investments | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 3,336 | 2,986 |
Level 1 | Short-Term Bond Fund | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 29,679 | 29,565 |
Level 1 | Money Market Funds | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 213 | 212 |
Level 1 | Mutual Funds | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 208 | 184 |
Level 2 | Derivative Financial Instruments, Liabilities | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of liabilities, recurring basis | -6,856 | -7,018 |
Level 2 | Derivative Financial Instruments, Liabilities | Foreign currency contracts | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of liabilities, recurring basis | -184 | ' |
Level 2 | Cash Surrender Value of Company Owned Life Insurance | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 26,270 | 25,119 |
Level 2 | Derivative Financial Instruments, Assets | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 3,766 | 3,011 |
Level 2 | Derivative Financial Instruments, Assets | Foreign currency contracts | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 1,789 | ' |
Level 2 | Certificates of Deposit | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 3,920 | 3,814 |
Level 2 | Commercial Paper | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 999 | 2,994 |
Level 2 | Corporate bonds | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 37,548 | 34,591 |
Level 2 | Corporate Obligations | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | 21 | 18 |
Level 2 | Other investments | ' | ' |
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Fair value of assets, recurring basis | $3,336 | $2,986 |
Derivative_Instruments_and_Hed2
Derivative Instruments and Hedging Activities - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | 1 Months Ended | |||||||
Sep. 30, 2014 | Sep. 30, 2014 | Jul. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Apr. 30, 2013 | Apr. 30, 2013 | Apr. 30, 2013 | |
USD ($) | USD ($) | Interest rate swap | Interest rate swap | Option Collars | Forward Contracts | Forward Contracts | Senior Secured Credit Facilities | Senior Secured Credit Facilities | Senior Secured Credit Facilities | |
USD ($) | EUR (€) | EUR (€) | GBP (£) | Term Loan A | Term Loan B | Revolving Credit Facility | ||||
Agreement | USD ($) | USD ($) | USD ($) | |||||||
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 | ' | ' | ' | 3.15% | ' | ' | ' | ' | ' | ' |
Basis point increase in fixed rate based on future changes to the Company's net leverage ratio | ' | ' | 0.75% | ' | ' | ' | ' | ' | ' | ' |
Maturity date | ' | ' | 29-Dec-17 | ' | ' | ' | ' | ' | ' | ' |
Notional amount | ' | ' | ' | ' | 30,000,000 | 5,000,000 | 10,000,000 | ' | ' | ' |
Hedge ineffectiveness in earnings | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' |
Amount estimated reclassified as an increase to interest expense | ' | 6,900,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of derivatives in net liability position | $3,100,000 | $3,100,000 | ' | ' | ' | ' | ' | ' | ' | ' |
PreTax_Impact_of_Derivative_Fi
Pre-Tax Impact of Derivative Financial Instruments (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Derivative [Line Items] | ' | ' | ' | ' |
Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | $2,107 | ($7,979) | ($4,730) | ($7,979) |
Interest Expense | ' | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' | ' |
Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | ($1,905) | ($1,253) | ($5,647) | ($1,253) |
Fair_Values_of_Derivative_Inst
Fair Values of Derivative Instruments Recorded in Consolidated Balance Sheet (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Interest rate derivatives | Derivatives Designated as Hedging Instruments | Other assets | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative Assets, Fair Value | $3,766 | $3,011 |
Interest rate derivatives | Derivatives Designated as Hedging Instruments | Other accrued liabilities | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative Liabilities, Fair Value | 6,856 | 7,018 |
Foreign currency contracts | Derivatives Not Designated as Hedging Instruments | Other current assets | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative Assets, Fair Value | 1,789 | ' |
Foreign currency contracts | Derivatives Not Designated as Hedging Instruments | Other accrued liabilities | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative Liabilities, Fair Value | $184 | ' |
Change_in_Fair_Values_of_Deriv
Change in Fair Values of Derivative Financial Instruments Recorded in Consolidated Statements of Operations (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||
Derivatives, Fair Value [Line Items] | ' | ' | ' | ' | ||
Interest expense | $14,217 | $25,188 | [1] | $49,041 | $48,431 | [1] |
Foreign currency contracts | Loss (gain) on foreign currency | Derivatives Not Designated as Hedging Instruments | ' | ' | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ' | ' | ||
Loss (gain) on foreign currency | -1,699 | ' | -1,699 | 428 | ||
Interest rate derivatives | Derivatives Designated as Hedging Instruments | ' | ' | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ' | ' | ||
Interest expense | $1,905 | $1,253 | $5,647 | $1,253 | ||
[1] | Certain amounts for the three and nine months ended September 30, 2013 have been recast to reflect results for business acquisitions. |
Components_of_Net_Periodic_Pen
Components of Net Periodic Pension Cost (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ' |
Service cost | ' | $310 | ' | $637 |
Interest cost | 446 | 562 | 1,337 | 1,479 |
Expected gain on plan assets | -219 | -259 | -656 | -730 |
Amortization of net loss | 76 | 355 | 229 | 829 |
Net periodic pension cost | $303 | $968 | $910 | $2,215 |
Pension_Benefits_Additional_In
Pension Benefits - Additional Information (Detail) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Trust | |
Retirement Plans [Line Items] | ' |
Number of rabbi trusts established, trust | 2 |
Balance assets held in Rabbi Trust | $20,100,000 |
Minimum | ' |
Retirement Plans [Line Items] | ' |
Funding contributions | $0 |
Information_Regarding_Changes_
Information Regarding Changes in ARRIS' Aggregate Product Warranty Liabilities (Detail) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 |
Product Warranty Disclosure [Line Items] | ' |
Beginning Balance | $81,500 |
Accruals related to warranties (including changes in estimates) | 25,741 |
Settlements made (in cash or in kind) | -27,827 |
Ending Balance | $79,414 |
Summary_of_and_Changes_to_Rest
Summary of and Changes to Restructuring Accrual (Detail) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 |
Restructuring Cost and Reserve [Line Items] | ' |
Beginning Balance | $3,347 |
Restructuring charges | 2,642 |
Cash payments | -3,296 |
Ending Balance | 2,693 |
Employee severance & termination benefits | ' |
Restructuring Cost and Reserve [Line Items] | ' |
Beginning Balance | 2,674 |
Restructuring charges | 2,610 |
Cash payments | -2,900 |
Ending Balance | 2,384 |
Contractual Obligations and other | ' |
Restructuring Cost and Reserve [Line Items] | ' |
Beginning Balance | 673 |
Restructuring charges | 32 |
Cash payments | -396 |
Ending Balance | $309 |
Restructuring_Charges_Addition
Restructuring Charges - Additional Information (Detail) (USD $) | 9 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | |
Employee severance & termination benefits | Employee severance & termination benefits | Second Quarter 2013 Restructuring Plan | Second Quarter 2013 Restructuring Plan | Third Quarter 2014 Restructuring Plan | |||
Employee severance & termination benefits | Employee severance & termination benefits | Employee severance & termination benefits | |||||
Employee | |||||||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Restructuring charges | $2,642,000 | ' | $2,610,000 | ' | $30,800,000 | ' | ' |
Liability remaining for restructuring plan | 2,693,000 | 3,347,000 | 2,384,000 | 2,674,000 | ' | 400,000 | 2,000,000 |
Restructuring charges expected to incur | ' | ' | ' | ' | ' | ' | 4,900,000 |
Cumulative restructuring charges | ' | ' | ' | ' | ' | ' | $3,000,000 |
Number of employees impacted | ' | ' | ' | ' | ' | ' | 150 |
Components_of_Inventory_Net_of
Components of Inventory Net of Reserves (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | |||
Inventory [Line Items] | ' | ' | |
Raw material | $53,628 | $60,520 | |
Work in process | 10,196 | 6,010 | |
Finished goods | 304,804 | 263,599 | |
Total inventories, net | $368,628 | $330,129 | [1] |
[1] | Certain amounts for December 31, 2013 have been recast to reflect results for business acquisitions. |
Property_Plant_and_Equipment_a
Property, Plant and Equipment, at Cost (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | |||
Property, Plant and Equipment [Line Items] | ' | ' | |
Land | $87,951 | $88,742 | |
Building and leasehold improvements | 137,581 | 133,668 | |
Machinery and equipment | 399,519 | 368,572 | |
Total property, plant and equipment, gross | 625,051 | 590,982 | |
Less: Accumulated depreciation | -253,555 | -194,830 | [1] |
Total property, plant and equipment, net | $371,496 | $396,152 | [1] |
[1] | Certain amounts for December 31, 2013 have been recast to reflect results for business acquisitions. |
Recovered_Sheet1
Property, Plant and Equipment - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | |
In Millions, unless otherwise specified | Jun. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 |
Other expense (income), net | Other current assets | ||
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Sale of land and building | $2.90 | ' | ' |
Carrying amount of land and building | 4.8 | ' | ' |
Total assets held for sale | ' | ' | 2.7 |
Initial impairment charge | ' | $2.10 | ' |
LongTerm_Indebtedness_Addition
Long-Term Indebtedness - Additional Information (Detail) (Senior Secured Credit Facilities, USD $) | 3 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 18 Months Ended | 9 Months Ended | 18 Months Ended | |||||||
Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Apr. 30, 2013 | Sep. 30, 2014 | Apr. 30, 2013 | Sep. 30, 2014 | Apr. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | |
Term Loan A | Term Loan A | Term Loan B | Term Loan B | Revolving Credit Facility | Revolving Credit Facility | Maximum | Minimum | Term Loan B | Term Loan B | Revolving Credit Facility | Revolving Credit Facility | Term Loan A | |||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
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 | 1,561,313,000 | 1,561,313,000 | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' |
Letter of credit facility | ' | ' | ' | ' | ' | ' | 2,600,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Consolidated net leverage ratio | ' | ' | ' | ' | ' | ' | ' | ' | 375.00% | 350.00% | ' | ' | ' | ' | ' |
Decrease in interest paid rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.25% | 0.25% | 0.25% | 0.50% | 0.50% |
Mandatory repayments related to senior secured credit facilities | 13,800,000 | 41,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Optional prepayments related to senior secured credit facilities | $150,000,000 | $150,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Senior_Credit_Facility_Interes
Senior Credit Facility Interest Rates (Detail) | 9 Months Ended | |
Sep. 30, 2014 | ||
Senior Secured Credit Facilities | Term Loan A | ' | |
Credit Facility [Line Items] | ' | |
Debt instrument, interest rate at period end | 1.90% | |
Senior Secured Credit Facilities | Term Loan B | ' | |
Credit Facility [Line Items] | ' | |
Debt instrument, interest rate at period end | 3.25% | |
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 | 1.75% | |
LIBOR floor | Senior Secured Credit Facilities | Term Loan B | ' | |
Credit Facility [Line Items] | ' | |
Debt instrument, basis spread on variable rate | 2.50% | [1] |
LIBOR floor | Senior Secured Credit Facilities | Revolving Credit Facility | ' | |
Credit Facility [Line Items] | ' | |
Debt instrument, basis spread on variable rate | 1.75% | [2] |
[1] | Includes LIBOR floor of 0.75% | |
[2] | Includes unused commitment fee of 0.35% and letter of credit fee of 1.75% not reflected in interest rate above. |
Senior_Credit_Facility_Interes1
Senior Credit Facility Interest Rates (Parenthetical) (Detail) | 9 Months Ended |
Sep. 30, 2014 | |
Credit Facility [Line Items] | ' |
Unused commitment fee | 0.35% |
Letter of credit fee | 1.75% |
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 at Face Value (Detail) (Senior Secured Credit Facilities, USD $) | Sep. 30, 2014 |
Senior Secured Credit Facilities | ' |
Debt Instrument [Line Items] | ' |
Less than 1 Year | $68,750,000 |
1-3 Years | 206,250,000 |
3-5 Years | 742,500,000 |
More than 5 Years | 543,813,000 |
Line of credit facility, amount borrowed | $1,561,313,000 |
Segment_Information_Detail
Segment Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||
Sales | $1,405,445 | $1,067,824 | [1] | $4,059,534 | $2,421,835 | [1] |
Direct Contribution | 189,435 | 88,513 | 465,853 | 132,332 | ||
Amortization of intangible assets | 57,100 | 65,053 | [1] | 179,835 | 128,571 | [1],[2] |
Integration, acquisition, restructuring & other | 10,226 | 12,278 | [1] | 34,246 | 71,126 | [1] |
Operating income (loss) | 122,109 | 11,182 | [1] | 251,772 | -67,365 | [1] |
Other expense | 22,976 | 22,029 | 68,672 | 55,208 | ||
Income (loss) before income taxes | 99,133 | -10,847 | [1] | 183,100 | -122,573 | [1] |
Segment Reconciling Items | ' | ' | ' | ' | ||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||
Amortization of intangible assets | 57,100 | 65,053 | 179,835 | 128,571 | ||
Integration, acquisition, restructuring & other | 10,226 | 12,278 | 34,246 | 71,126 | ||
Operating Segments | Network & Cloud | ' | ' | ' | ' | ||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||
Sales | 460,837 | 325,471 | 1,202,105 | 849,382 | ||
Direct Contribution | 134,217 | 61,763 | 304,133 | 187,354 | ||
Operating Segments | CPE | ' | ' | ' | ' | ||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||
Sales | 945,386 | 743,890 | 2,861,912 | 1,589,785 | ||
Direct Contribution | 208,163 | 158,035 | 624,732 | 315,305 | ||
Intersegment Eliminations | ' | ' | ' | ' | ||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||
Sales | -778 | -1,537 | -4,483 | -17,332 | ||
Direct Contribution | ($152,945) | ($131,285) | ($463,012) | ($370,327) | ||
[1] | Certain amounts for the three and nine months ended September 30, 2013 have been recast to reflect results for business acquisitions. | |||||
[2] | Certain amounts for the nine months ended September 30, 2013 have been recast to reflect results for business acquisitions. |
Sales_Information_Additional_I
Sales Information - Additional Information (Detail) (International Customers, Sales) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
International Customers | Sales | ' | ' | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' | ' | ' |
Percentage of sales | 26.80% | 31.50% | 24.70% | 32.70% |
International_Sales_by_Geograp
International Sales by Geographic Region (Detail) (International sales, USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||||
International Long-Lived Assets by Geographic Region [Line Items] | ' | ' | ' | ' | ||||
Revenues | $376,265 | $336,385 | $1,001,564 | $790,752 | ||||
Americas, excluding U.S. | ' | ' | ' | ' | ||||
International Long-Lived Assets by Geographic Region [Line Items] | ' | ' | ' | ' | ||||
Revenues | 246,922 | [1] | 217,843 | [1] | 661,005 | [1] | 501,052 | [1] |
Asia Pacific | ' | ' | ' | ' | ||||
International Long-Lived Assets by Geographic Region [Line Items] | ' | ' | ' | ' | ||||
Revenues | 38,584 | 48,869 | 113,674 | 108,102 | ||||
EMEA | ' | ' | ' | ' | ||||
International Long-Lived Assets by Geographic Region [Line Items] | ' | ' | ' | ' | ||||
Revenues | $90,759 | $69,673 | $226,885 | $181,598 | ||||
[1] | Excludes U.S. sales of $1,029.2 million and $3,058.0 million for the three and nine months ended September 30, 2014, respectively. Excludes U.S. sales of $731.4 million and $1,631.1 million for the three and nine months ended September 30, 2013, respectively. |
International_Sales_by_Geograp1
International Sales by Geographic Region (Parenthetical) (Detail) (UNITED STATES, USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
UNITED STATES | ' | ' | ' | ' |
International Long-Lived Assets by Geographic Region [Line Items] | ' | ' | ' | ' |
Revenue | $1,029,200 | $731,400 | $3,058,000 | $1,631,100 |
Reconciliation_of_Numerators_a
Reconciliation of Numerators and Denominators of Basic and Diluted Earnings Per Share Computations (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||
Basic: | ' | ' | ' | ' | ||
Net income (loss) | $54,626 | $17,169 | [1] | $134,451 | ($45,943) | [1],[2] |
Weighted average shares outstanding | 144,967 | 138,478 | [1] | 144,085 | 129,502 | [1] |
Basic earnings (loss) per share | $0.38 | $0.12 | [1] | $0.93 | ($0.35) | [1] |
Diluted: | ' | ' | ' | ' | ||
Net income (loss) | $54,626 | $17,169 | [1] | $134,451 | ($45,943) | [1],[2] |
Weighted average shares outstanding | 144,967 | 138,478 | [1] | 144,085 | 129,502 | [1] |
Net effect of dilutive equity awards | 3,786 | 2,127 | 3,911 | ' | ||
Total | 148,753 | 140,605 | [1] | 147,996 | 129,502 | [1] |
Diluted earnings (loss) per share | $0.37 | $0.12 | [1] | $0.91 | ($0.35) | [1] |
[1] | Certain amounts for the three and nine months ended September 30, 2013 have been recast to reflect results for business acquisitions. | |||||
[2] | Certain amounts for the nine months ended September 30, 2013 have been recast to reflect results for business acquisitions. |
Earnings_Per_Share_Additional_
Earnings Per Share - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Apr. 17, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
Motorola Home | Motorola Home | Comcast Corporation | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Anti-dilutive securities excluded from the computation of diluted earnings per share | 0 | 2,800,000 | 4,500 | 1,400,000 | ' | ' | ' | ' |
Common stock related to stock option exercises and the vesting of restricted shares | ' | ' | 2,700,000 | ' | 3,600,000 | ' | ' | ' |
Business acquisition potential stock issue, shares | ' | ' | ' | ' | ' | 10,600,000 | 10,600,000 | 10,600,000 |
Business acquisition potential stock issue, value | ' | ' | ' | ' | ' | ' | ' | $150 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | |||
Change in state deferred rates | Change in state deferred rates | Change in state deferred rates | Motorola Home | ||||||||
Income Tax [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Income tax expense (benefit) | $44,507,000 | ($28,016,000) | [1] | $48,649,000 | ($76,630,000) | [1] | $1,403,000 | ($5,200,000) | ($3,836,000) | ' | ' |
Integration and other acquisition-related costs | ' | ' | ' | ' | ' | ' | ' | 30,600,000 | ' | ||
Income benefit related to infrequent and unusual nature | ' | ' | ' | ' | ' | ' | ' | 10,900,000 | ' | ||
Effective Tax Rate | 44.90% | 258.30% | 26.60% | 62.50% | ' | ' | ' | ' | ' | ||
(Loss) Income Before Tax | 99,133,000 | -10,847,000 | [1] | 183,100,000 | -122,573,000 | [1] | ' | ' | ' | ' | ' |
Net operating loss carry forwards | ' | ' | ' | ' | ' | ' | ' | 545,500,000 | 51,900,000 | ||
Net operating loss carry forwards, subject to valuation allowance | ' | ' | ' | ' | ' | ' | ' | 493,500,000 | 504,900,000 | ||
Valuation allowance released amount | ' | ' | ' | ' | ' | ' | ' | 18,200,000 | ' | ||
Net operating loss carry forwards, before valuation allowance | ' | ' | ' | ' | ' | ' | ' | ' | 556,800,000 | ||
Decrease in income tax benefit | ' | ' | ' | ' | 1,400,000 | ' | ' | ' | ' | ||
Book losses on investments and available for sale assets | ' | ' | 9,100,000 | ' | ' | ' | ' | ' | ' | ||
Income tax expense (benefit) | ' | ' | 3,300,000 | ' | ' | ' | ' | ' | ' | ||
Tax expense related to changes in estimates finalized | ' | ' | 6,200,000 | ' | ' | ' | ' | ' | ' | ||
Benefit from changes in valuation allowances | ' | ' | 1,800,000 | ' | ' | ' | ' | ' | ' | ||
Non-cash tax effect related to corrections | ' | ' | 9,800,000 | ' | ' | ' | ' | ' | ' | ||
Discrete tax impact related to uncertain tax positions | ' | ' | 4,400,000 | ' | ' | ' | ' | ' | ' | ||
Income tax benefits attributed to research and development tax credits | ' | ' | $0 | ' | ' | ' | ' | ' | ' | ||
[1] | Certain amounts for the three and nine months ended September 30, 2013 have been recast to reflect results for business acquisitions. |
Components_of_Income_Tax_Expen
Components of Income Tax Expense Benefit (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||||||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | ||
Gain/(loss) from certain foreign entities acquired | Gain/(loss) from certain foreign entities acquired | Valuation allowances, uncertain tax positions | Valuation allowances, uncertain tax positions | Valuation allowances, uncertain tax positions | Valuation allowances, uncertain tax positions | Book write down in cost method investment | Book write down in cost method investment | Comcast and Affiliates | Assets Held-for-sale | Non Discrete Items | Non Discrete Items | Non Discrete Items | Non Discrete Items | Acquisition Costs | Acquisition Costs | Acquisition Costs | Acquisition Costs | Return to provision adjustments | Return to provision adjustments | Return to provision adjustments | Return to provision adjustments | Change in state deferred rates | Change in state deferred rates | Change in state deferred rates | Intangible reattribution | Intangible reattribution | Net Operating Losses Acquired | Other | |||||||
Income (Loss) Before Tax | $99,133 | ($10,847) | [1] | $183,100 | ($122,573) | [1] | ($7,261) | ($11,555) | ' | ' | ' | ' | ($4,000) | ($7,000) | ($26,371) | ($2,125) | $109,703 | $8,691 | $222,815 | ($13,521) | ($6,570) | ($12,277) | ($30,590) | ($71,126) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income Tax Expense (Benefit) | $44,507 | ($28,016) | [1] | $48,649 | ($76,630) | [1] | ' | ' | $7,234 | ($7,599) | $2,582 | ($5,774) | ($1,440) | ($2,502) | ' | ($760) | $39,136 | ($14,547) | $79,577 | ($38,736) | ($2,367) | ($3,818) | ($10,936) | ($23,568) | $4,550 | ($2,052) | $6,186 | ($8,552) | $1,403 | ($5,200) | ($3,836) | ($4,009) | ($4,009) | ($18,163) | $510 |
Effective Tax Rate | 44.90% | 258.30% | 26.60% | 62.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 35.70% | -167.40% | 35.70% | 286.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
[1] | Certain amounts for the three and nine months ended September 30, 2013 have been recast to reflect results for business acquisitions. |
Changes_in_Accumulated_Other_C
Changes in Accumulated Other Comprehensive Income by Component Net of Taxes (Detail) (USD $) | 9 Months Ended | 9 Months Ended | |||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | |
Unrealized Gain on Marketable Securities | Unfunded Pension Liability | Unfunded Pension Liability | Unrealized loss on derivative instruments | Cumulative Translation Adjustments | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' | ' | ' | ' | |
Unrealized gain (loss) on marketable securities, beginning balance | $306 | [1] | $306 | ' | ' | ' | ' |
Unfunded pension liability, beginning balance | -2,416 | [1] | ' | -2,416 | -2,416 | ' | ' |
Unrealized loss on derivative instruments, beginning balance | -2,541 | [1] | ' | ' | ' | -2,541 | ' |
Cumulative translation adjustments, beginning balance | -11 | [1] | ' | ' | ' | ' | -11 |
Beginning balance | -4,662 | ' | ' | ' | ' | ' | |
Other comprehensive (loss) income before reclassifications | 3,625 | -383 | ' | ' | 4,162 | -154 | |
Amounts reclassified from accumulated other comprehensive income (loss) | -3,580 | ' | ' | ' | -3,580 | ' | |
Net current-period other comprehensive income (loss) | 45 | -383 | ' | ' | 582 | -154 | |
Unrealized gain (loss) on marketable securities, ending balance | -77 | -77 | ' | ' | ' | ' | |
Unfunded pension liability, ending balance | -2,416 | ' | -2,416 | -2,416 | ' | ' | |
Unrealized loss on derivative instruments, ending balance | -1,959 | ' | ' | ' | -1,959 | ' | |
Cumulative translation adjustments, ending balance | -165 | ' | ' | ' | ' | -165 | |
Ending balance | ($4,617) | ' | ' | ' | ' | ' | |
[1] | Certain amounts for December 31, 2013 have been recast to reflect results for business acquisitions. |