Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Billions, except Share data, unless otherwise specified | Dec. 31, 2014 | Jan. 31, 2015 | Jun. 30, 2014 |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | ARRS | ||
Entity Registrant Name | ARRIS GROUP INC | ||
Entity Central Index Key | 1141107 | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 145,161,490 | ||
Entity Public Float | $4.60 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | |||
Current assets: | |||
Cash and cash equivalents | $565,790 | $442,438 | [1] |
Short-term investments, at fair value | 126,748 | 67,360 | [1] |
Total cash, cash equivalents and short-term investments | 692,538 | 509,798 | [1] |
Restricted cash | 966 | 1,079 | [1] |
Accounts receivable (net of allowances for doubtful accounts of $6,392 in 2014 and $1,887 in 2013) | 598,603 | 619,571 | [1] |
Other receivables | 10,640 | 8,366 | [1] |
Inventories (net of reserves of $62,359 in 2014 and $42,408 in 2013) | 401,165 | 330,129 | [1] |
Prepaid income taxes | 11,023 | 13,034 | [1] |
Prepaids | 27,497 | 61,482 | [1] |
Current deferred income tax assets | 113,390 | 77,167 | [1] |
Other current assets | 61,450 | 57,418 | [1] |
Total current assets | 1,917,272 | 1,678,044 | [1] |
Property, plant and equipment (net of accumulated depreciation of $265,811 in 2014 and $194,830 in 2013) | 366,431 | 396,152 | [1] |
Goodwill | 936,067 | 940,402 | [1] |
Intangible assets (net of accumulated amortization of $619,283 in 2014 and $427,143 in 2013) | 943,388 | 1,176,192 | [1] |
Investments | 77,640 | 71,176 | [1] |
Noncurrent deferred income tax assets | 71,686 | 7,678 | [1] |
Other assets | 53,161 | 52,363 | [1] |
Total assets | 4,365,645 | 4,322,007 | [1] |
Current liabilities: | |||
Accounts payable | 480,150 | 606,340 | [1] |
Accrued compensation, benefits and related taxes | 145,278 | 116,262 | [1] |
Accrued warranty | 42,763 | 48,755 | [1] |
Deferred revenue | 92,772 | 69,071 | [1] |
Current portion of long-term debt | 73,956 | 53,254 | [1] |
Income taxes payable | 10,610 | 3,068 | [1] |
Other accrued liabilities | 164,341 | 198,278 | [1] |
Total current liabilities | 1,009,870 | 1,095,028 | [1] |
Long-term debt, net of current portion | 1,467,370 | 1,691,034 | [1] |
Accrued pension | 64,917 | 58,657 | [1] |
Noncurrent income tax liability | 41,082 | 21,048 | [1] |
Noncurrent deferred income tax liabilities | 274 | 74,791 | [1] |
Other noncurrent liabilities | 91,371 | 62,462 | [1] |
Total liabilities | 2,674,884 | 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; 145.1 million and 142.1 million shares issued and outstanding in 2014 and 2013, respectively | 1,796 | 1,766 | [1] |
Capital in excess of par value | 1,739,700 | 1,688,782 | [1] |
Treasury stock at cost, 34.2 million shares in 2014 and 2013 | -306,330 | -306,330 | [1] |
Retained earnings (deficit) | 266,642 | -60,569 | [1] |
Unrealized gain on marketable securities (net of accumulated tax effect of $14 in 2014 and $177 in 2013) | 25 | 306 | [1] |
Unfunded pension liability (net of accumulated tax benefit of $3,428 in 2014 and $981 in 2013) | -7,181 | -2,416 | [1] |
Unrealized loss on derivative instruments (net of accumulated tax benefit of $1,832 in 2014 and $1,467 in 2013) | -3,166 | -2,541 | [1] |
Cumulative translation adjustments | -725 | -11 | [1] |
Total stockholders' equity | 1,690,761 | 1,318,987 | [1] |
Liabilities and Equity, Total | $4,365,645 | $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 $) | Dec. 31, 2014 | Dec. 31, 2013 | |
In Thousands, except Share data in Millions, unless otherwise specified | |||
Allowances for doubtful accounts | $6,392 | $1,887 | [1] |
Reserves for inventories | 62,359 | 42,408 | [1] |
Accumulated depreciation of property, plant and equipment | 265,811 | 194,830 | [1] |
Accumulated amortization of intangible assets | 619,283 | 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 issued | 145.1 | 142.1 | [1] |
Common stock, shares outstanding | 145.1 | 142.1 | [1] |
Treasury stock, shares | 34.2 | 34.2 | [1] |
Tax effect on unrealized gain on marketable securities | 14 | 177 | [1] |
Tax impact on unfunded pension liability | 3,428 | 981 | [1] |
Tax effect on unrealized loss on derivative instruments | $1,832 | $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 $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Net sales | $5,322,921 | $3,620,902 | $1,353,663 |
Cost of sales | 3,740,425 | 2,598,154 | 891,086 |
Gross margin | 1,582,496 | 1,022,748 | 462,577 |
Operating expenses: | |||
Selling, general, and administrative expenses | 410,568 | 338,252 | 161,338 |
Research and development expenses | 556,575 | 425,825 | 170,706 |
Amortization of intangible assets | 236,521 | 193,637 | 30,294 |
Integration, acquisition, restructuring and other costs | 37,498 | 83,047 | 12,968 |
Total operating expenses | 1,241,162 | 1,040,761 | 375,306 |
Operating income | 341,334 | -18,013 | 87,271 |
Other expense (income): | |||
Interest expense | 62,901 | 67,888 | 17,797 |
Loss (gain) on investments | 10,961 | 2,698 | -1,404 |
Loss (gain) on foreign currency | 2,637 | -3,502 | 786 |
Interest income | -2,590 | -2,936 | -3,242 |
Other expense (income), net | 28,195 | 13,989 | -962 |
Income (loss) before income taxes | 239,230 | -96,150 | 74,296 |
Income tax expense (benefit) | -87,981 | -47,390 | 20,837 |
Net income (loss) | $327,211 | ($48,760) | $53,459 |
Net income (loss) per common share: | |||
Basic | $2.27 | ($0.37) | $0.47 |
Diluted | $2.21 | ($0.37) | $0.46 |
Weighted average common shares: | |||
Basic | 144,386 | 131,980 | 114,161 |
Diluted | 148,280 | 131,980 | 116,514 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (Loss) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Net income (loss): | $327,211 | ($48,760) | $53,459 |
Unrealized gain (loss) on marketable securities, net of tax (expense) benefit of $162, $(52) and $(244) in 2014, 2013 and 2012, respectively | -281 | 100 | 473 |
Unfunded pension liability, net of tax (expense) benefit of $2,447, $(1,291) and $(985) in 2014, 2013 and 2012, respectively | -4,765 | 6,142 | 1,673 |
Unrealized loss on derivative instruments, net of tax benefit of $365 and $1,467 in 2014 and 2013, respectively | -625 | -2,541 | |
Cumulative translation adjustments | -714 | 173 | |
Comprehensive income (loss), net of tax | $320,826 | ($44,886) | $55,605 |
Consolidated_Statements_of_Com1
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Tax (benefit) expense, Unrealized gain (loss)on marketable securities | $162 | ($52) | ($244) |
Tax expense (benefit), Unfunded pension liability | 2,447 | -1,291 | -985 |
Tax benefit, unrealized loss on derivatives instruments | $365 | $1,467 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||
Operating activities: | |||||
Net income (loss) | $327,211 | ($48,760) | $53,459 | ||
Depreciation | 78,988 | 61,516 | 27,953 | ||
Amortization of intangible assets | 236,751 | 193,637 | 30,294 | ||
Amortization of deferred finance fees and debt discount | 11,575 | 9,982 | 639 | ||
Deferred income tax benefit | -163,485 | -55,763 | -13,989 | ||
Stock compensation expense | 53,799 | 35,789 | 27,906 | ||
Provision for doubtful accounts | 5,336 | -658 | 240 | ||
Revenue reduction related to Comcast's investment in ARRIS | 13,182 | ||||
Mark-to-market fair value adjustment related to Comcast's investment in ARRIS | 13,189 | ||||
Non-cash restructuring and related charges | 6,761 | ||||
Non cash interest expense on convertible notes | 9,926 | 12,358 | |||
Loss on disposal and write down of assets | 4,247 | 1,657 | 419 | ||
Loss (gain) on investments | 10,961 | 2,698 | -1,404 | ||
Excess income tax benefits from stock-based compensation plans | -8,959 | -7,178 | -3,549 | ||
Changes in operating assets and liabilities, net of effect of acquisitions and dispositions: | |||||
Accounts receivable | 17,400 | 9,241 | -37,139 | ||
Other receivables | -2,997 | -2,182 | 8,398 | ||
Inventories | -71,036 | 74,111 | -21,491 | ||
Accounts payable and accrued liabilities | -115,039 | 247,301 | -5,675 | ||
Prepaids and other, net | 74,529 | -1,733 | 5,982 | ||
Net cash provided by operating activities | 459,281 | 562,716 | 84,401 | ||
Investing activities: | |||||
Purchases of investments | -127,780 | -104,626 | -418,956 | ||
Sales of investments | 59,679 | 479,781 | 286,013 | ||
Proceeds from equity investments | 14,780 | ||||
Purchases of property, plant and equipment | -56,588 | -71,443 | -21,507 | ||
Acquisition, net of cash acquired | -2,208,114 | ||||
Other, net | 103 | 120 | 3,388 | ||
Net cash used in investing activities | -124,586 | -1,889,502 | -151,062 | ||
Financing activities: | |||||
Proceeds from issuance of common stock, net | 19,196 | 175,072 | 20,304 | ||
Repurchase of common stock | -51,921 | ||||
Proceeds from issuance of debt | 1,925,000 | ||||
Payment of debt obligations | -209,653 | -404,488 | |||
Cash paid for debt discount | -9,853 | ||||
Deferred financing cost paid | -42,724 | ||||
Excess income tax benefits from stock-based compensation plans | 8,959 | 7,178 | 3,549 | ||
Repurchase of shares to satisfy employee minimum tax withholdings | -29,845 | -12,664 | -9,443 | ||
Net cash (used in) provided by financing activities | -211,343 | 1,637,521 | -37,511 | ||
Net increase (decrease) in cash and cash equivalents | 123,352 | 310,735 | -104,172 | ||
Cash and cash equivalents at beginning of year | 442,438 | [1] | 131,703 | 235,875 | |
Cash and cash equivalents at end of year | 565,790 | 442,438 | [1] | 131,703 | |
Supplemental cash flow information: | |||||
Interest paid during the year | 51,122 | 48,008 | 4,759 | ||
Income taxes paid during the year | $37,152 | $12,470 | $30,082 | ||
[1] | Certain amounts for December 31, 2013 have been recast to reflect results for business acquisitions. |
Consolidated_Statements_of_Cas1
Consolidated Statements of Cash Flows (Parenthetical) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 |
Motorola Home | |
Supplemental cash flow information: | |
Cash received for indemnification on retained litigation | $85 |
Remitted payment as settlement | 85 |
TiVo | |
Supplemental cash flow information: | |
Cash received for indemnification on retained litigation | 196 |
Remitted payment as settlement | $50 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Total | Common Stock | Capital in Excess of Par Value | Treasury Stock | Accumulated Deficit | Accumulated Other Comprehensive Loss | |
In Thousands | |||||||
Balance at Dec. 31, 2011 | $916,205 | $1,449 | $1,245,115 | ($254,409) | ($65,268) | ($10,682) | |
Net income (loss) | 53,459 | 53,459 | |||||
Other comprehensive income, net of tax | 2,146 | 2,146 | |||||
Compensation under stock award plans | 27,906 | 27,906 | |||||
Issuance of common stock and other | 10,861 | 39 | 10,822 | ||||
Repurchase of common stock | -51,921 | -51,921 | |||||
Income tax benefit related to exercise of stock options | 1,732 | 1,732 | |||||
Balance at Dec. 31, 2012 | 960,388 | 1,488 | 1,285,575 | -306,330 | -11,809 | -8,536 | |
Net income (loss) | -48,760 | -48,760 | |||||
Other comprehensive income, net of tax | 3,874 | 3,874 | |||||
Compensation under stock award plans | 35,789 | 35,789 | |||||
Issuance of common stock and other | 365,288 | 278 | 365,010 | ||||
Income tax benefit related to exercise of stock options | 2,408 | 2,408 | |||||
Balance at Dec. 31, 2013 | 1,318,987 | [1] | 1,766 | 1,688,782 | -306,330 | -60,569 | -4,662 |
Net income (loss) | 327,211 | 327,211 | |||||
Other comprehensive income, net of tax | -6,385 | -6,385 | |||||
Compensation under stock award plans | 53,799 | 53,799 | |||||
Issuance of common stock and other | -10,649 | 30 | -10,679 | ||||
Income tax benefit related to exercise of stock options | 8,959 | 8,959 | |||||
Other | -1,161 | -1,161 | |||||
Balance at Dec. 31, 2014 | $1,690,761 | $1,796 | $1,739,700 | ($306,330) | $266,642 | ($11,047) | |
[1] | 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 | 12 Months Ended |
Dec. 31, 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 10 Segment Information for additional details.), specializing in enabling service providers including cable, telephone, and digital broadcast satellite operators and media programmers to deliver media, voice, and IP data services to their subscribers. ARRIS is a leader in set-tops, 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 including technical support, repair and refurbishment, and systems design and integration. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies | |||
(a) Consolidation | ||||
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned foreign and domestic subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. | ||||
(b) Use of Estimates | ||||
The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. | ||||
(c) Reclassifications | ||||
Certain prior year amounts in the financial statements and notes have been reclassified to conform to the fiscal year 2014 presentation. | ||||
(d) Cash, Cash Equivalents, and Investments | ||||
ARRIS’ cash and cash equivalents (which are highly-liquid investments with an original maturity of three months or less) are primarily held in demand deposit accounts and money market accounts. The Company holds investments consisting of mutual funds and debt securities classified as available-for-sale, which are stated at estimated fair value. The debt securities consist primarily of commercial paper, certificates of deposits, short term corporate obligations and U.S. government agency financial instruments. These investments are on deposit with major financial institutions. | ||||
The Company accounts for investments in companies in which it has significant influence, or ownership between 20% and 50% of the investee under the equity method of accounting. Under the equity method, the investment is originally recorded at cost and adjusted to recognize the Company’s share of net earnings or losses, any basis difference of the investee, and dividends received. | ||||
Investments in which we do not exercise significant influence (generally less than a 20 percent ownership interest) are accounted for under the cost method. | ||||
The Company evaluates its investments for impairment whenever events or changes in circumstances indicate that the carrying amount of such investments may not be recoverable. An investment is written down to fair value if there is evidence of a loss in value which is other than temporary. | ||||
(e) Inventories | ||||
Inventories are stated at the lower of average cost, approximating first-in, first-out, or market. The cost of work-in-process and finished goods is comprised of material, labor, and overhead. | ||||
(f) Revenue recognition | ||||
ARRIS generates revenue as a result of varying activities, including the delivery of stand-alone equipment, custom design and installation services, and bundled sales arrangements inclusive of equipment, software and services. The revenue from these activities is recognized in accordance with applicable accounting guidance and their related interpretations. | ||||
Revenue is recognized when all of the following criteria have been met: | ||||
• | When persuasive evidence of an arrangement exists. Contracts and customer purchase orders are used to determine the existence of an arrangement. For professional services evidence that an agreement exists includes information documenting the scope of work to be performed, price, and customer acceptance. These are contained in the signed contract, purchase order, or other documentation that shows scope, price and customer acceptance. | |||
• | Delivery has occurred. Shipping documents, proof of delivery and customer acceptance (when applicable) are used to verify delivery. | |||
• | The fee is fixed or determinable. Pricing is considered fixed or determinable at the execution of a customer arrangement, based on specific products and quantities to be delivered at specific prices. This determination includes a review of the payment terms associated with the transaction and whether the sales price is subject to refund or adjustment or future discounts. | |||
• | Collectability is reasonably assured. The Company assesses the ability to collect from customers based on a number of factors that include information supplied by credit agencies, analyzing customer accounts, reviewing payment history and consulting bank references. Should a circumstance arise where a customer is deemed not creditworthy, all revenue related to the transaction will be deferred until such time that payment is received and all other criteria to allow the Company to recognize revenue have been met. | |||
Revenue is deferred if any of the above revenue recognition criteria is not met as well as when certain circumstances exist for any of our products or services, including, but not limited to: | ||||
• | When undelivered products or services that are essential to the functionality of the delivered product exist, revenue is deferred until such undelivered products or services are delivered as the customer would not have full use of the delivered elements. | |||
• | When required acceptance has not occurred. | |||
• | When trade-in rights are granted at the time of sale, that portion of the sale is deferred until the trade-in right is exercised or the right expires. In determining the deferral amount, management estimates the expected trade-in rate and future value of the product upon trade-in. These factors are periodically reviewed and updated by management, and the updates may result in either an increase or decrease in the deferral. | |||
Equipment — The Company provides operators with equipment that can be placed within various stages of a broadband system that allows for the delivery of telephony, video and high-speed data as well as outside plant construction and maintenance equipment. For equipment sales, revenue recognition is generally established when the products have been shipped, risk of loss has transferred, objective evidence exists that the product has been accepted, and no significant obligations remain relative to the transaction. Additionally, based on historical experience, ARRIS has established reliable estimates related to sales returns and other allowances for discounts. These estimates are recorded as a reduction to revenue at the time the revenue is initially recorded. | ||||
Software Sold Without Tangible Equipment — ARRIS sells internally developed software as well as software developed by outside third parties that does not require significant production, modification or customization. For arrangements that contain only software and the related post-contract support, the Company recognizes revenue in accordance with the applicable software revenue recognition guidance. If the arrangement includes multiple elements that are software only, then the software revenue recognition guidance is applied and the fee is allocated to the various elements based on vendor-specific objective evidence (“VSOE”) of fair value. If sufficient VSOE of fair value does not exist for the allocation of revenue to all the various elements in a multiple element software arrangement, all revenue from the arrangement is deferred until the earlier of the point at which such sufficient VSOE of fair value is established or all elements within the arrangement are delivered. If VSOE of fair value exists for all undelivered elements, but does not exist for one or more delivered elements, the arrangement consideration is allocated to the various elements of the arrangement using the residual method of accounting. Under the residual method, the amount of the arrangement consideration allocated to the delivered elements is equal to the total arrangement consideration less the aggregate fair value of the undelivered elements. Under the residual method, if VSOE of fair value exists for the undelivered element, generally post contract support (“PCS”), the fair value of the undelivered element is deferred and recognized ratably over the term of the PCS contract, and the remaining portion of the arrangement is recognized as revenue upon delivery. If sufficient VSOE of fair value does not exist for PCS, revenue for the arrangement is recognized ratably over the term of support. | ||||
Standalone Services — Installation, training, and professional services are generally recognized in service revenue when performed or upon completion of the service when the final act is significant in relation to the overall service transaction. The key element for Professional Services in determining when service transaction revenue has been earned is determining the pattern of delivery or performance which determines the extent to which the earnings process is complete and the extent to which customers have received value from services provided. The delivery or performance conditions of our service transactions are typically evaluated under the proportional performance or completed performance model. | ||||
Incentives — Customer incentive programs that include consideration, primarily rebates/credits to be used against future product purchases and certain volume discounts, have been recorded as a reduction of revenue when the shipment of the requisite equipment occurs. | ||||
Value Added Resellers — ARRIS typically employs the sell-in method of accounting for revenue when using a Value Added Reseller (“VAR”) as our channel to market. Because product returns are restricted, revenue under this method is generally recognized at the time of shipment to the VAR provided all criteria for recognition are met. There are occasions, based on facts and circumstances surrounding the VAR transaction, where ARRIS will employ the sell-through method of recognizing revenue and defer that revenue until payment occurs. | ||||
Multiple Element Arrangements — Certain customer transactions may include multiple deliverables based on the bundling of equipment, software and services. When a multiple element arrangement exists, the fee from the arrangement is allocated to the various deliverables, to the extent appropriate, so that the proper amount can be recognized as revenue as each element is delivered. Based on the composition of the arrangement, the Company analyzes the provisions of the accounting guidance to determine the appropriate model that is applied towards accounting for the multiple element arrangement. If the arrangement includes a combination of elements that fall within different applicable guidance, ARRIS follows the provisions of the hierarchal literature to separate those elements from each other and apply the relevant guidance to each. | ||||
For arrangements that fall within the software revenue recognition guidance, the fee is allocated to the various elements based on VSOE of fair value. If sufficient VSOE of fair value does not exist for the allocation of revenue to all the various elements in a multiple element arrangement, all revenue from the arrangement is deferred until the earlier of the point at which such sufficient VSOE of fair value is established or all elements within the arrangement are delivered. If VSOE of fair value exists for all undelivered elements, but does not exist for one or more delivered elements, the arrangement consideration is allocated to the various elements of the arrangement using the residual method of accounting. Under the residual method, the amount of the arrangement consideration allocated to the delivered elements is equal to the total arrangement consideration less the aggregate fair value of the undelivered elements. Using this method, any potential discount on the arrangement is allocated entirely to the delivered elements, which ensures that the amount of revenue recognized at any point in time is not overstated. Under the residual method, if VSOE of fair value exists for the undelivered element, generally PCS, the fair value of the undelivered element is deferred and recognized ratably over the term of the PCS contract, and the remaining portion of the arrangement is recognized as revenue upon delivery, which generally occurs upon delivery of the product or implementation of the system. Many of ARRIS’ products are sold in combination with customer support and maintenance services, which consist of software updates and product support. Software updates provide customers with rights to unspecified software updates that ARRIS chooses to develop and to maintenance releases and patches that the Company chooses to release during the period of the support period. Product support services include telephone support, remote diagnostics, email and web access, access to on-site technical support personnel and repair or replacement of hardware in the event of damage or failure during the term of the support period. Maintenance and support service fees are recognized ratably under the straight-line method over the term of the contract, which is generally one year. The Company does not record receivables associated with maintenance revenues without a firm, non-cancelable order from the customer. VSOE of fair value is determined based on the price charged when the same element is sold separately and based on the prices at which our customers have renewed their customer support and maintenance. For elements that are not yet being sold separately, the price established by management, if it is probable that the price, once established, will not change before the separate introduction of the element into the marketplace is used to measure VSOE of fair value for that element. | ||||
Retail — Some of ARRIS product is sold through retail channels, which may include provisions involving a right of return. Upon shipment of the product, the Company reduces revenue for an estimate of potential future product returns related to the current period product revenue. Management analyzes historical returns, channel inventory levels, and current economic trends related to the Company’s products when evaluating the adequacy of the allowance for sales returns. When applicable, revenue on shipments is reduced for estimated price protection and sales incentives that are deemed to be contra-revenue under the authoritative guidance for revenue recognition. | ||||
(g) Shipping and Handling Fees | ||||
Shipping and handling costs for the years ended December 31, 2014, 2013, and 2012 were approximately $6.9 million, $4.9 million and $3.6 million, respectively, and are classified in net sales and cost of sales. | ||||
(h) Taxes Collected from Customers and Remitted to Governmental Authorities | ||||
Taxes assessed by a government authority that are both imposed on and concurrent with specific revenue transactions between us and our customers are presented on a net basis in our Consolidated Statements of Operations. | ||||
(i) Depreciation of Property, Plant and Equipment | ||||
The Company provides for depreciation of property, plant and equipment on the straight-line basis over estimated useful lives of 10 to 40 years for buildings and improvements, 2 to 10 years for machinery and equipment, and the shorter of the term of the lease or useful life for leasehold improvements. Included in depreciation expense is the amortization of landlord funded tenant improvements which amounted to $4.0 million in 2014, $2.5 million in 2013 and $0.5 million in 2012. Depreciation expense, including amortization of capital leases, for the years ended December 31, 2014, 2013, and 2012 was approximately $79.0 million, $61.5 million, and $28.0 million, respectively. | ||||
(j) Goodwill, Acquired Intangible Assets, and Long-Lived Assets | ||||
Goodwill is tested for impairment on an annual basis during the fourth quarter and, when specific circumstances dictate, between annual tests. When impaired, the carrying amount of goodwill is written down to fair value. The goodwill impairment test involves a two-step process. The first step, identifying a potential impairment, compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, the second step would need to be conducted. If necessary, the second step to measure the impairment loss would be to compare the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill. Any excess of the reporting unit goodwill carrying amount over the respective implied fair value is recognized as an impairment loss. | ||||
The annual goodwill impairment tests were performed in the fourth quarters of 2012, 2013, and 2014 with an assessment date of October 1. There was no impairment of goodwill resulting from our annual impairment testing in 2014, 2013 and 2012. | ||||
As of December 31, 2014, the Company had goodwill of $936.1 million, of which $684.6 million related to the CPE reporting unit, $249.6 million related to the Network Infrastructure reporting unit and $1.9 million related to the Cloud Services reporting unit. | ||||
Acquired intangible assets with finite lives are carried at cost, less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets. Acquired intangible assets with indefinite lives are comprised of in-process research and development assets which are assessed for potential impairment annually or when events or circumstances indicate that their carrying amounts might be impaired. The acquired in-process research and development assets are initially recognized and measured at fair value and classified as indefinite-lived assets until the successful completion or abandonment of the associated research and development efforts. Accordingly, during the development period after acquisition, this asset is not amortized as charges to earnings. Completion of the associated research and development efforts would cause the indefinite-lived in-process research and development assets to become a finite-lived asset. As such, prior to commencing amortization the assets is tested for impairment. There were no impairment charges related to acquired intangible assets during 2014, 2013 and 2012. | ||||
Long-lived assets that are held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability of long-lived assets is based on an estimate of the undiscounted future cash flows resulting from the use of the asset and its eventual disposition. In determining future undiscounted cash flows, we have made a “policy decision” to use pre-tax cash flows in our evaluation, which is consistently applied. To test for recovery, we group assets (an “asset group”) in a manner that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. Measurement of an impairment loss for long-lived assets that management expects to hold and use is based on the difference between the fair value of the asset and its carrying amount. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. | ||||
See Note 5 of Notes to the Consolidated Financial Statements for further information on goodwill and intangible assets. | ||||
(k) Advertising and Sales Promotion | ||||
Advertising and sales promotion costs are expensed as incurred. Advertising expense was approximately $8.2 million, $4.1 million, and $0.2 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||
(l) Research and Development | ||||
Research and development (“R&D”) costs are expensed as incurred. ARRIS’ research and development expenditures for the years ended December 31, 2014, 2013 and 2012 were approximately $556.6 million, $425.8 million, and $170.7 million, respectively. The expenditures include compensation costs, materials, other direct expenses, and allocated costs of information technology, telecommunications, and facilities. | ||||
(m) Warranty | ||||
ARRIS provides warranties of various lengths to customers based on the specific product and the terms of individual agreements. For further discussion, see Note 9 of the Notes to the Consolidated Financial Statements, Guarantees for further discussion. | ||||
(n) Income Taxes | ||||
ARRIS uses the liability method of accounting for income taxes, which requires recognition of temporary differences between financial statement and income tax bases of assets and liabilities, measured by enacted tax rates. | ||||
If necessary, the measurement of deferred tax assets is reduced by the amount of any tax benefits that are not expected to be realized based on available evidence. ARRIS reports a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense. See Note 16 of Notes to the Consolidated Financial Statements for further discussion. | ||||
(o) Foreign Currency Translation | ||||
A significant portion of the Company’s products are manufactured or assembled in China, Mexico and Taiwan, and we have research and development centers in Argentina, China, India, Ireland, Israel and Sweden. Sales into international markets have been and are expected in the future to be an important part of the Company’s business. These foreign operations are subject to the usual risks inherent in conducting business abroad, including risks with respect to currency exchange rates, economic and political destabilization, restrictive actions and taxation by foreign governments, nationalization, the laws and policies of the United States affecting trade, foreign investment and loans, and foreign tax laws. | ||||
ARRIS has certain international customers who are billed in their local currency and certain international operations that procure in U.S. dollars. ARRIS also has certain predictable expenditures for international operations in local currency. Additionally, certain intercompany transactions are denominated in foreign currencies and subject to revaluation. The Company enters into forward or currency option contracts based on a percentage of expected foreign currency exposures. The percentage can vary, based on the predictability of the exposures denominated in the foreign currency. See Note 8 of Notes to the Consolidated Financial Statements for further discussion. | ||||
(p) Stock-Based Compensation | ||||
See Note 17 of Notes to the Consolidated Financial Statements for further discussion of the Company’s significant accounting policies related to stock based compensation. | ||||
(q) Concentrations of Credit Risk | ||||
Financial instruments that potentially subject ARRIS to concentrations of credit risk consist principally of cash, cash equivalents and short-term investments, and accounts receivable. ARRIS places its temporary cash investments with high credit quality financial institutions. Concentrations with respect to accounts receivable occur as the Company sells primarily to large, well-established companies including companies outside of the United States. The Company’s credit policy generally does not require collateral from its customers. ARRIS closely monitors extensions of credit to other parties and, where necessary, utilizes common financial instruments to mitigate risk or requires cash on delivery terms. Overall financial strategies and the effect of using a hedge are reviewed periodically. When deemed uncollectible, accounts receivable balances are written off against the allowance for doubtful accounts. | ||||
(r) Fair Value | ||||
The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments: | ||||
• | Cash, cash equivalents, and short-term investments: The carrying amounts reported in the consolidated balance sheets for cash, cash equivalents, and short-term investments approximate their fair values. | |||
• | Accounts receivable and accounts payable: The carrying amounts reported in the balance sheet for accounts receivable and accounts payable approximate their fair values. The Company establishes a reserve for doubtful accounts based upon its historical experience in collecting accounts receivable. | |||
• | Marketable securities: The fair values for trading and available-for-sale equity securities are based on quoted market prices or observable prices based on inputs not in active markets but corroborated by market data. | |||
• | Non-marketable securities: Non-marketable equity securities are subject to a periodic impairment review; however, there are no open-market valuations, and the impairment analysis requires significant judgment. This analysis includes assessment of the investee’s financial condition, the business outlook for its products and technology, its projected results and cash flow, recent rounds of financing, and the likelihood of obtaining subsequent rounds of financing. | |||
• | Senior secured credit facilities: Comprised of term loans and revolving credit facility. The face value of the Company’s term loans totaled approximately $1,547.6 million at December 31, 2014. | |||
• | Derivative instruments: The carrying amounts reported in the balance sheet for derivative financial instruments approximate their fair values. The Company has designated interest rate derivatives as cashflow hedges and the objective is to manage the variability of cash flows in the interest payments related to the portion of the variable-rate debt designated as being hedged. The Company’s foreign currency derivative instruments economically hedge certain risk but are not designated as hedges. The objective of these derivatives instruments is to add stability to foreign currency gains and losses recorded as other expense (income) and to manage its exposure to foreign currency movements. | |||
(s) Computer Software | ||||
The Company capitalizes costs associated with internally developed and/or purchased software systems for internal use that have reached the application development stage and meet recoverability tests. Capitalized costs include external direct costs of materials and services utilized in developing or obtaining internal-use software and payroll and payroll-related expenses for employees who are directly associated with and devote time to the internal-use software project. Capitalization of such costs begins when the preliminary project stage is complete and ceases no later than the point at which the project is substantially complete and ready for its intended purpose. These capitalized costs are amortized on a straight-line basis over periods of two to seven years, beginning when the asset is ready for its intended use. Capitalized costs are included in property, plant, and equipment on the consolidated balance sheets. The carrying value of the software is reviewed regularly and impairment is recognized if the value of the estimated undiscounted cash flow benefits related to the asset is less than the remaining unamortized costs. | ||||
Research and development costs are charged to expense as incurred. ARRIS generally has not capitalized any such development costs because the costs incurred between the attainment of technological feasibility for the related software product through the date when the product is available for general release to customers has been insignificant. | ||||
(t) Comprehensive Income (Loss) | ||||
The components of comprehensive income (loss) include net income (loss), unrealized gains (losses) on available-for-sale securities, unrealized gains (losses) on derivative instruments, change in unfunded pension liability, net of tax, if applicable and change in cumulative translation adjustments. |
Impact_of_Recently_Issued_Acco
Impact of Recently Issued Accounting Standards | 12 Months Ended |
Dec. 31, 2014 | |
Impact of Recently Issued Accounting Standards | Note 3. Impact of Recently Issued Accounting Standards |
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 a material effect on the Company’s consolidated financial position and results of operations. | |
In August 2014, the FASB issued new guidance related to the disclosures around going concern. The new standard provides guidance around management’s responsibility to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern, and if those conditions exist to provide related footnote disclosures. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements. | |
Accounting pronouncements issued but not in effect until after December 31, 2014 are not expected to have a significant impact on our consolidated financial position or results of operations. |
Business_Acquisitions
Business Acquisitions | 12 Months Ended |
Dec. 31, 2014 | |
Business Acquisitions | Note 4. Business Acquisitions |
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, and located in Mississauga, Ontario. 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. 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 $1.7 million was 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 valued at $2.0 million, with estimated useful lives ranging from 5 to 10 years. | |
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. | |
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-tops products, as well as IP Gateway CPE equipment for data and voice services for broadband service providers. The Acquisition also enhanced the depth and scale of the Company’s R&D capabilities, particularly in the video arena. | |
During the first quarter of 2014, the Company completed the accounting for the aforementioned business combination. |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Note 5. Goodwill and Intangible Assets | ||||||||||||||||||||||||||||||||
The changes in the carrying amount of goodwill for the three years ended December 31, 2014 are as follows (in thousands): | |||||||||||||||||||||||||||||||||
CPE | Network | Cloud | Total | ||||||||||||||||||||||||||||||
Infrastructure | Services | ||||||||||||||||||||||||||||||||
Goodwill | $ | 31,850 | $ | 419,318 | $ | 121,603 | $ | 572,771 | |||||||||||||||||||||||||
Accumulated impairment losses | — | (257,053 | ) | (121,603 | ) | (378,656 | ) | ||||||||||||||||||||||||||
Balance as of December 31, 2012 | $ | 31,850 | $ | 162,265 | $ | — | $ | 194,115 | |||||||||||||||||||||||||
Goodwill acquired | 656,808 | 81,537 | 11,056 | 749,401 | |||||||||||||||||||||||||||||
Adjustments | — | (3,114 | ) | — | (3,114 | ) | |||||||||||||||||||||||||||
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 | — | 1,682 | — | 1,682 | |||||||||||||||||||||||||||||
Reclassification | — | 8,732 | (8,732 | ) | — | ||||||||||||||||||||||||||||
Adjustments | (4,061 | ) | (1,535 | ) | (421 | ) | (6,017 | ) | |||||||||||||||||||||||||
Goodwill | 684,597 | 506,620 | 123,506 | 1,314,723 | |||||||||||||||||||||||||||||
Accumulated impairment losses | — | (257,053 | ) | (121,603 | ) | (378,656 | ) | ||||||||||||||||||||||||||
Balance as of December 31, 2014 | $ | 684,597 | $ | 249,567 | $ | 1,903 | $ | 936,067 | |||||||||||||||||||||||||
During the fourth quarter of 2014, the Company reorganized its reporting structure in a manner that changed the composition of its Network Infrastructure and Cloud Services reporting units. The changes resulted in $8.7 million in goodwill being reclassified from Cloud Services reporting unit to our Network Infrastructure reporting unit. | |||||||||||||||||||||||||||||||||
Intangibles | |||||||||||||||||||||||||||||||||
The Company makes judgments about the recoverability of acquired intangible assets with finite lives whenever events or changes in circumstances indicate that impairment may exist. Examples of such circumstances include, but are not limited to, operating or cash flow losses from the use of such assets or changes in our intended uses of such assets. Recoverability of acquired intangible assets with finite lives is measured by comparing the carrying amount of the asset to the future undiscounted cash flows the asset is expected to generate. In determining future undiscounted cash flows, we have made a “policy decision” to use pre-tax cash flows in our evaluation, which is consistently applied. To test for recovery, we group assets (an “asset group”) in a manner that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. | |||||||||||||||||||||||||||||||||
The Company reviews indefinite-lived assets for impairment annually or whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Recoverability of indefinite-lived intangible assets is measured by comparing the carrying amount of the asset to the future discounted cash flows the asset is expected to generate. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying amount and the fair value of the indefinite-lived intangible asset. As of December 31, 2014, the carrying amount of in-process research and development was $5.1 million. Completion of the associated research and development efforts would cause the indefinite-lived in-process research and development asset to become a finite-lived asset. As such, prior to commencing amortization the assets will be tested for impairment. Because indefinite-lived intangible assets are initially recognized at fair value, any decrease in the fair value of the intangible asset will result in an impairment charge. The company uses discounted cash flows in the determination of the fair value of its indefinite-lived intangible assets. As such, a decrease in cash flows for the projects, as well as, an increase in interest rate changes affecting the discount rate used in the test without any offsetting increase in cash flows, could cause the discounted cash flows to decrease, resulting in an impairment charge. | |||||||||||||||||||||||||||||||||
In 2013, the Company recognized acquired in-process research and development assets of $83.1 million associated with the Acquisition, which initially was recognized at fair value and classified as indefinite-lived assets until the successful completion or abandonment of the associated research and development efforts. Accordingly, during the development period after the acquisition date, this asset was not amortized as a charge to earnings; instead these assets were subject to periodic impairment testing. During 2014 and 2013, acquired in-process research and development projects of $66 million and $12 million, respectively, were successfully completed. The Company’s impairment testing of these projects determined no impairment existed with regard to the assets. The asset was then considered a finite-lived intangible asset and reclassified as part of developed technology and amortization of the asset commenced. | |||||||||||||||||||||||||||||||||
Assumptions and estimates about future values and remaining useful lives of our acquired intangible assets are complex and subjective. They can be affected by a variety of factors, including external factors such as industry and economic trends and internal factors such as changes in our business strategy and our internal forecasts. | |||||||||||||||||||||||||||||||||
There was no impairment charges related to finite lived acquired intangible assets during 2014, 2013 and 2012, as no indicators of impairment existed. Our ongoing consideration of all the factors described previously could result in additional impairment charges in the future, which could adversely affect our net income. | |||||||||||||||||||||||||||||||||
The Company’s intangible assets have an amortization period of six months to ten years. The gross carrying amount and accumulated amortization of the Company’s intangible assets as of December 31, 2014 and December 31, 2013 are as follows (in thousands): | |||||||||||||||||||||||||||||||||
December 31, 2014 | December 31, 2013 | ||||||||||||||||||||||||||||||||
Gross | Accumulated | Net Book | Weighted | Gross | Accumulated | Net Book | Weighted | ||||||||||||||||||||||||||
Amount | Amortization | Value | Average | Amount | Amortization | Value | Average | ||||||||||||||||||||||||||
Remaining | Remaining | ||||||||||||||||||||||||||||||||
Life | Life | ||||||||||||||||||||||||||||||||
(Years) | (Years) | ||||||||||||||||||||||||||||||||
Customer relationships | $ | 904,012 | $ | 366,452 | $ | 537,560 | 6.1 | $ | 903,409 | $ | 266,323 | $ | 637,086 | 7 | |||||||||||||||||||
Developed technology, patents & licenses | 632,487 | 234,882 | 397,605 | 4.1 | 563,326 | 120,679 | 442,647 | 5 | |||||||||||||||||||||||||
Trademarks, trade and domain names | 21,072 | 17,949 | 3,123 | 1.2 | 20,900 | 8,549 | 12,351 | 1.5 | |||||||||||||||||||||||||
Order backlog | — | — | — | — | 44,600 | 31,592 | 13,008 | 0.3 | |||||||||||||||||||||||||
In-process R&D | $ | 5,100 | — | 5,100 | — | 71,100 | — | 71,100 | — | ||||||||||||||||||||||||
Total | $ | 1,562,671 | $ | 619,283 | $ | 943,388 | $ | 1,603,335 | $ | 427,143 | $ | 1,176,192 | |||||||||||||||||||||
Amortization expense recorded on the intangible assets listed in the above table for the years ended December 31, 2014, 2013 and 2012 was $236.8 million, $193.6 million, and $30.3 million, respectively. The estimated total amortization expense for finite-lived intangibles for each of the next five fiscal years is as follows (in thousands): | |||||||||||||||||||||||||||||||||
2015 | $ | 220,641 | |||||||||||||||||||||||||||||||
2016 | 189,913 | ||||||||||||||||||||||||||||||||
2017 | 172,978 | ||||||||||||||||||||||||||||||||
2018 | 122,286 | ||||||||||||||||||||||||||||||||
2019 | 99,972 | ||||||||||||||||||||||||||||||||
Thereafter | 132,498 | ||||||||||||||||||||||||||||||||
Amounts reflected in the above table exclude $5.1 million of amortization that would be incurred upon successful completion of in-process research and development projects. |
Investments
Investments | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Investments | Note 6. Investments | ||||||||
ARRIS’ investments consisted of the following (in thousands): | |||||||||
As of December 31, | As of December 31, | ||||||||
2014 | 2013 | ||||||||
Current Assets: | |||||||||
Available-for-sale securities | $ | 126,748 | $ | 67,360 | |||||
Noncurrent Assets: | |||||||||
Available-for-sale securities | 8,631 | 7,004 | |||||||
Equity method investments | 27,355 | 23,803 | |||||||
Cost method investments | 15,161 | 15,250 | |||||||
Other investments | 26,493 | 25,119 | |||||||
Total classified as non-current assets | 77,640 | 71,176 | |||||||
Total | $ | 204,388 | $ | 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. Realized gains and losses on available-for-sale securities are included in net income. Unrealized gains and losses on available-for-sale securities are included in our Consolidated Balance Sheet as a component of accumulated other comprehensive income (loss). Realized and unrealized gains and losses in total and by individual investment as of December 31, 2014 and 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 December 31, 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. (in thousands): | |||||||||
December 31, 2014 | |||||||||
Within one year | $ | 126,748 | |||||||
After one year through five years | 4,867 | ||||||||
After five years through ten years | — | ||||||||
After ten years | 3,764 | ||||||||
Total | $ | 135,379 | |||||||
Equity method investments — ARRIS owns 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 $27.4 million and $23.8 as of December 31, 2014 and 2013, respectively. | |||||||||
The following table summarizes the ownership structure and ownership percentage of the non-consolidated investments as of December 31, 2014, which are accounted for using the equity method. | |||||||||
Name of Investee | Ownership Structure | % Ownership | |||||||
MPEG LA | Limited Liability Company | 8.40% | |||||||
Music Choice | Limited Liability Partnership | 18.20% | |||||||
Conditional Access Licensing | Limited Liability Company | 49.00% | |||||||
Combined Conditional Access Development | Limited Liability Company | 50.00% | |||||||
ARRIS owns investments in two limited liability corporations. The investees were determined to be variable interest entities and ARRIS is not the primary beneficiary, as ARRIS does not have the power to direct the activities of the investee that most significantly impact its economic performance. The limited liability corporations are a licensing and a research and development company. The Company’s ownership percentages in the licensing and the research and development companies are 49% and 50%, respectively, which are accounted for as equity method investments. The purpose of the limited liability corporations are to license, develop, deploy, support, and to gain market acceptance for certain technologies that reside in a cable plant or in a cable device. Subject to agreement on annual statements of work, the Company is providing to one of the ventures, engineering services per year approximating 20% to 30% of the approved venture budget, which is expected to be in the range of approximately $6 million to $8 million per year. The Company is also required to make annual contributions for the purpose of funding development projects identified by the venture. During 2014, the Company made funding contributions to the investment of $15.7 million. | |||||||||
(in thousands) | Carrying Amount | Maximum Exposure | |||||||
to Loss | |||||||||
Conditional Access Licensing (“CAL”) | $ | 8,562 | $ | 8,562 | |||||
Combined Conditional Access Development (“CCAD”) | 4,719 | 18,000 | |||||||
The Company’s future total annual funding contributions to CCAD are expected to be in the range of approximately $16 million to $18 million, and represent the Company’s annual maximum exposure to loss. | |||||||||
Cost method investments — ARRIS holds cost method investments in private companies. These investments are recorded at $15.2 million and $15.3 million as of December 31, 2014 and 2013, respectively. Due to the fact the investments are in private companies, the Company is exempt from estimating the fair value on an interim and annual basis. It is impractical to estimate the fair value since the quoted market price is not available. Furthermore, the cost of obtaining an independent valuation appears excessive considering the materiality of the investments to the Company. However, ARRIS is required to estimate the fair value if there has been an identifiable event or change in circumstance that may have a significant adverse effect on the fair value of the investment. | |||||||||
Other investments — At December 31, 2014 and December 31, 2013, ARRIS held $26.5 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. | |||||||||
Other-Than-Temporary Investment Impairments — In making this determination, ARRIS evaluates its investments for any other-than-temporary impairment on a quarterly basis considering all available evidence, including changes in general market conditions, specific industry and individual entity data, the financial condition and the near-term prospects of the entity issuing the security, and the Company’s ability and intent to hold the investment until recovery. For the year ended December 31, 2014, the Company performed an evaluation of its investments for any other-than-temporary impairments, by reviewing the current revenues, bookings and long-term plans of the private companies and concluded that two private companies had indicators of impairment that resulted in other-than-temporary impairment charges of $7.0 million. ARRIS concluded that no other-than-temporary impairment losses existed as of December 31, 2013. For the year ended December 31, 2012, ARRIS recognized other-than-temporary impairment charges of $1.5 million in the statements of consolidated income. | |||||||||
Classification of securities as current or non-current is dependent upon management’s intended holding period, the security’s maturity date and liquidity consideration based on market conditions. If management intends to hold the securities for longer than one year as of the balance sheet date, they are classified as non-current. |
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Fair Value Measurements | Note 7. Fair Value Measurements | ||||||||||||||||
Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative guidance establishes a fair value hierarchy that is based on the extent and level of judgment used to estimate the fair value of assets and liabilities. In order to increase consistency and comparability in fair value measurements, the FASB has established a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels. An asset or liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the measurement of its fair value. The three levels of input defined by the authoritative guidance are as follows: | |||||||||||||||||
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. | |||||||||||||||||
Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. | |||||||||||||||||
Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. | |||||||||||||||||
The following table presents the Company’s investment assets (excluding equity and cost method investments) and derivatives measured at fair value on a recurring basis as of December 31, 2014 and 2013 (in thousands): | |||||||||||||||||
December 31, 2014 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Certificates of deposit | $ | — | $ | 63,171 | $ | — | $ | 63,171 | |||||||||
Commercial paper | — | 1,000 | — | 1,000 | |||||||||||||
Corporate bonds | — | 37,737 | — | 37,737 | |||||||||||||
Short-term bond fund | 29,708 | — | — | 29,708 | |||||||||||||
Cash surrender value of company owned life insurance | — | 26,498 | — | 26,498 | |||||||||||||
Corporate obligations | — | 46 | — | 46 | |||||||||||||
Money markets | 210 | — | — | 210 | |||||||||||||
Mutual funds | 133 | — | — | 133 | |||||||||||||
Other investments | — | 3,369 | — | 3,369 | |||||||||||||
Interest rate derivatives — asset derivatives | — | 1,416 | — | 1,416 | |||||||||||||
Interest rate derivatives — liability derivatives | — | (6,414 | ) | — | (6,414 | ) | |||||||||||
Foreign currency contracts — asset position | — | 2,876 | — | 2,876 | |||||||||||||
Foreign currency contracts — liability position | — | (201 | ) | — | (201 | ) | |||||||||||
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 December 31, 2014 are classified within Level 1 or Level 2 of the fair value hierarchy as they are valued using quoted market prices, market prices for similar securities, or alternative pricing sources with reasonable levels of price transparency. The types of instruments valued based on quoted market prices in active markets include the Company’s investment in money market funds, mutual funds and municipal bonds. Such instruments are generally classified within Level 1 of the fair value hierarchy. The types of instruments valued based on other observable inputs include the Company’s cash surrender value of company owned life insurance, corporate obligations and bonds, commercial paper and certificates of deposit. Such instruments are classified within Level 2 of the fair value hierarchy. | |||||||||||||||||
In determining the value of certain Level 1 and Level 2 instruments, ARRIS has performed steps to verify the accuracy of the valuations provided by ARRIS’ brokerage firms. ARRIS has reviewed the most recent Statement on Standards for Attestation Engagements No. 16 (SSAE report) for each brokerage firm holding investments for ARRIS. The SSAE report for each did not identify any control weakness in the brokerages’ policies and procedures, in particular as they relate to the pricing and valuation of financial instruments. ARRIS has determined the third party pricing source used by each firm to be a reliable recognized source of financial valuations. In addition ARRIS has performed further testing on a large sample of its corporate obligations and commercial paper investments. These tests did not show any material discrepancies in the valuations provided by the brokerage firms. See Note 6 and Note 8 for further information on the Company’s investments and derivative instruments. | |||||||||||||||||
In addition to the financial instruments included in the above table, certain nonfinancial assets and liabilities are to be measured at fair value on a nonrecurring basis in accordance with applicable authoritative guidance. This includes items such as nonfinancial assets and liabilities initially measured at fair value in a business combination (but not measured at fair value in subsequent periods) and nonfinancial long-lived asset groups measured at fair value for an impairment assessment. In general, nonfinancial assets including goodwill, other intangible assets and property and equipment are measured at fair value when there is an indication of impairment and are recorded at fair value only when any impairment is recognized. As of December 31, 2014, the Company had not recorded any impairment related to such assets and had no other material nonfinancial assets or liabilities requiring adjustments or write-downs to their current fair value. | |||||||||||||||||
The Company believes the face value of the debt as of December 31, 2014 approximated the fair value because it bears interest at rates that are adjusted periodically, analysis of 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 | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | |||||||||||||||
Derivative Instruments and Hedging Activities | Note 8. Derivative Instruments and Hedging Activities | ||||||||||||||
ARRIS is exposed to financial market risk, primarily related to foreign currency and interest rates. These exposures are actively monitored by management. To manage the volatility relating to certain of these exposures, the Company enters into a variety of derivative financial instruments. Management’s objective is to reduce, where it is deemed appropriate to do so, fluctuations in earnings and cash flows associated with changes in foreign currency and interest rates. ARRIS’ policies and practices are to use derivative financial instruments only to the extent necessary to manage exposures. ARRIS does not hold or issue derivative financial instruments for trading or speculative purposes. | |||||||||||||||
The Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives also may be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. | |||||||||||||||
In accordance with the FASB’s fair value measurement guidance, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. | |||||||||||||||
In April 2013, ARRIS entered into senior secured credit facilities having variable interest rates with Bank of America, N.A. and various other institutions, which are comprised of (i) a “Term Loan A Facility” of $1.1 billion, (ii) a “Term Loan B Facility” of $825 million and (iii) a “Revolving Credit Facility” of $250 million. In July 2013, ARRIS entered into six $100.0 million interest rate swap arrangements, which effectively converted $600.0 million of the Company’s variable-rate debt based on one-month LIBOR to an aggregate fixed rate of approximately 3.15% as of December 31, 2014. This fixed rate could vary up by 50 basis points based on future changes to the Company’s net leverage ratio. Each of these swaps matures on December 29, 2017. ARRIS has designated these swaps as cash flow hedges, and the objective of these hedges is to manage the variability of cash flows in the interest payments related to the portion of the variable-rate debt designated as being hedged. | |||||||||||||||
The Company 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. ARRIS also has certain predictable expenditures for international operations in local currency. Additionally, certain intercompany transactions 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 December 31, 2014, the Company had option collars with notional amounts totaling 25 million euros which mature throughout 2015, forward contracts with a total notional amount of 15 million euros which mature throughout 2015, and a forward contract with a notional amount of 15 million British pounds which matured in the first quarter of 2015. | |||||||||||||||
The Company’s foreign currency derivative financial instruments economically hedge certain risk but are not designated as hedges, and accordingly, all changes in the fair value of the instruments are recognized as a loss (gain) on foreign currency in the Consolidated Statements of Operations. | |||||||||||||||
Cash Flow Hedges of Interest Rate Risk | |||||||||||||||
The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. | |||||||||||||||
The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in Accumulated Other Comprehensive Income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. During the years ended December 31, 2014 and 2013, the Company did not have expenses related to hedge ineffectiveness in earnings. | |||||||||||||||
Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. Over the next 12 months, the Company estimates that an additional $6.4 million may be reclassified as an increase to interest expense. | |||||||||||||||
As of December 31, 2014, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk: | |||||||||||||||
Interest Rate Derivative | Number of Instruments | Notional | |||||||||||||
Interest Rate Swaps | 6 | $ | 600,000,000 | ||||||||||||
The table below presents the pre-tax impact of the Company’s derivative financial instruments had on the Accumulated Other Comprehensive Income and Statement of Operations for the years ended December 31, 2014 and 2013 (in thousands): | |||||||||||||||
Years Ended December 31, | |||||||||||||||
2014 | 2013 | ||||||||||||||
Loss Recognized in OCI on Derivative (Effective Portion) | $ | (8,541 | ) | $ | (7,140 | ) | |||||||||
Location of Loss Reclassified from Accumulated OCI into Income (Effective Portion) | Interest expense | Interest expense | |||||||||||||
Loss Reclassified from Accumulated OCI into Income (Effective Portion) | (7,550 | ) | (3,132 | ) | |||||||||||
Credit-risk-related Contingent Features | |||||||||||||||
ARRIS has agreements with each of its derivative counterparties that contain a provision where the Company could be declared in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company’s default on the indebtedness. As of December 31, 2014, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $5.1 million. As of December 31, 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 economically hedge certain risk but 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 (in thousands). | |||||||||||||||
The fair values of ARRIS’ derivative instruments recorded in the Consolidated Balance Sheet as of December 31, 2014 and 2013 were as follows (in thousands): | |||||||||||||||
As of December 31, 2014 | As of December 31, 2013 | ||||||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||
Foreign exchange contracts — asset derivatives | Other current assets | $ | 2,876 | Other current assets | $ | — | |||||||||
Foreign exchange contracts — liability derivatives | Other accrued liabilities | $ | 201 | Other accrued liabilities | $ | — | |||||||||
Derivatives designated as hedging instruments: | |||||||||||||||
Interest rate derivatives — asset derivatives | Other assets | $ | 1,416 | Other assets | $ | 3,011 | |||||||||
Interest rate derivatives — liability derivatives | Other accrued liabilities | $ | 6,414 | Other accrued liabilities | $ | 7,018 | |||||||||
The change in the fair values of ARRIS’ derivative instruments recorded in the Consolidated Statements of Operations during the years ended December 31, 2014, 2013, and 2012 were as follows (in thousands): | |||||||||||||||
Years Ended December 31, | |||||||||||||||
Statement of Operations Location | 2014 | 2013 | 2012 | ||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||
Foreign exchange contracts | Gain on foreign currency | $ | 4,527 | $ | 428 | $ | 268 | ||||||||
Derivatives designated as hedging instruments: | |||||||||||||||
Interest rates derivatives | Interest expense | $ | 7,550 | $ | 3,132 | $ | — |
Guarantees
Guarantees | 12 Months Ended | ||||||||
Dec. 31, 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 against the warranty liability. | |||||||||
The Company offers extended warranties and support service agreements on certain products. Revenue from these agreements is deferred at the time of the sale and recognized on a straight-line basis over the contract period. Costs of services performed under these types of contracts are charged to expense as incurred, which approximates the timing of the revenue stream. | |||||||||
Information regarding the changes in ARRIS’ aggregate product warranty liabilities for the years ending December 31, 2014 and 2013 were as follows (in thousands): | |||||||||
2014 | 2013 | ||||||||
Beginning balance | $ | 81,500 | $ | 6,069 | |||||
Motorola Home warranty reserve at acquisition, | — | 82,804 | |||||||
Accruals related to warranties (including changes in assumptions) | 33,320 | 20,911 | |||||||
Settlements made (in cash or in kind) | (40,500 | ) | (28,284 | ) | |||||
Ending balance | $ | 74,320 | $ | 81,500 | |||||
Segment_Information
Segment Information | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Segment Information | Note 10. 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. | |||||||||||||||||
Under our internal organizational structure, the CODM manages the Company under two segments: | |||||||||||||||||
• | Customer Premises Equipment (“CPE”) — The CPE segment’s product solutions include set-tops, gateways, and Subscriber Premises equipment that enable service providers to offer Voice, Video and high-speed data services to residential and business subscribers. | ||||||||||||||||
• | Network & Cloud (“N&C”) — The N&C segment’s product lines cover all components required by facility-based Service Providers to construct a state-of-the-art residential and metro distribution network. For Cable providers this includes Hybrid Fiber Coax (“HFC”) equipment, edge routers, metro WiFi, video management, storage, and distribution equipment. For Telco providers this includes fiber-based and copper-based broadband transmission equipment. In addition, the portfolio includes an advanced video headend management system for both legacy MPEG/DVB systems as well as full IP Video systems. Finally, the portfolio also includes full support for advanced multi-screen video management, protection, monetization and delivery, and a suite of products for performance management, configuration, and surveillance. | ||||||||||||||||
These operating segments were determined based on the nature of the products and services offered. The measures that are used to assess the reportable segment’s operating performance are sales and direct contribution. A measure of assets is not applicable, as segment assets are not regularly reviewed by the CODM for evaluating performance or allocating resources. | |||||||||||||||||
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 table below presents information about the Company’s reportable segments for the years ended December 31, 2014, 2013 and 2012 (in thousands): | |||||||||||||||||
Reportable Segment | |||||||||||||||||
Network & | CPE | Other | Consolidated | ||||||||||||||
Cloud | |||||||||||||||||
Year ended December 31, 2014 | |||||||||||||||||
Sales | $ | 1,637,544 | $ | 3,690,454 | $ | (5,077 | ) | $ | 5,322,921 | ||||||||
Direct Contribution | 430,943 | 791,244 | (606,834 | ) | 615,353 | ||||||||||||
Amortization of intangible assets | 236,521 | 236,521 | |||||||||||||||
Integration, acquisition, restructuring & other cost | 37,498 | 37,498 | |||||||||||||||
Operating income | 341,334 | ||||||||||||||||
Other expense | 102,104 | ||||||||||||||||
Income before income taxes | $ | 239,230 | |||||||||||||||
Reportable Segment | |||||||||||||||||
Network & | CPE | Other | Consolidated | ||||||||||||||
Cloud | |||||||||||||||||
Year ended December 31, 2013 | |||||||||||||||||
Sales | $ | 1,193,001 | $ | 2,448,381 | $ | (20,480 | ) | $ | 3,620,902 | ||||||||
Direct Contribution | 264,589 | 509,473 | (515,391 | ) | 258,671 | ||||||||||||
Amortization of intangible assets | 193,637 | 193,637 | |||||||||||||||
Integration, acquisition, restructuring & other cost | 83,047 | 83,047 | |||||||||||||||
Operating loss | (18,013 | ) | |||||||||||||||
Other expense | 78,137 | ||||||||||||||||
Income (loss) before income taxes | $ | (96,150 | ) | ||||||||||||||
Reportable Segment | |||||||||||||||||
Network & | CPE | Other | Consolidated | ||||||||||||||
Cloud | |||||||||||||||||
Year ended December 31, 2012 | |||||||||||||||||
Sales | $ | 742,255 | $ | 611,408 | $ | — | $ | 1,353,663 | |||||||||
Direct Contribution | 228,798 | 66,788 | (165,053 | ) | 130,533 | ||||||||||||
Amortization of intangible assets | 30,294 | 30,294 | |||||||||||||||
Integration, acquisition, restructuring & other cost | 12,968 | 12,968 | |||||||||||||||
Operating income | 87,271 | ||||||||||||||||
Other expense | 12,975 | ||||||||||||||||
Income before income taxes | $ | 74,296 | |||||||||||||||
The following table summarizes the Company’s net intangible assets and goodwill by reportable segment as of December 31, 2014 and 2013 (in thousands): | |||||||||||||||||
Network & | CPE | Total | |||||||||||||||
Cloud | |||||||||||||||||
December 31, 2014 | |||||||||||||||||
Goodwill | $ | 251,470 | $ | 684,597 | $ | 936,067 | |||||||||||
Intangible assets, net | 298,799 | 644,589 | 943,388 | ||||||||||||||
December 31, 2013 | |||||||||||||||||
Goodwill | $ | 251,744 | $ | 688,658 | $ | 940,402 | |||||||||||
Intangible assets, net | 366,844 | 809,348 | 1,176,192 | ||||||||||||||
The Company’s three largest customers (including their affiliates, as applicable) are Comcast, Time Warner Cable and AT&T. Over the past year, certain customers’ beneficial ownership may have changed as a result of mergers and acquisitions. Therefore the revenue for ARRIS’ customers for prior periods has been adjusted to include the affiliates under common control. The significant changes in the percentages of the total sales primarily result from the greater customer diversification as a result of the Acquisition. A summary of sales to these customers for 2014, 2013 and 2012 is set forth below (in thousands, except percentages): | |||||||||||||||||
Years ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Comcast and affiliates | $ | 1,012,367 | $ | 674,977 | $ | 421,177 | |||||||||||
% of sales | 19 | % | 18.6 | % | 31.1 | % | |||||||||||
Time Warner Cable and affiliates | $ | 693,736 | $ | 359,516 | $ | 243,157 | |||||||||||
% of sales | 13 | % | 9.9 | % | 18 | % | |||||||||||
AT&T and affiliates | $ | 614,601 | $ | 280,225 | $ | 1,661 | |||||||||||
% of sales | 11.5 | % | 7.7 | % | 0.1 | % | |||||||||||
ARRIS sells its products primarily in the United States. The Company’s international revenue is generated from Asia Pacific, Canada, Europe and Latin America. Sales to customers outside of United States were approximately 25.7%, 32.1% and 24.6% of total sales for the years ended December 31, 2014, 2013 and 2012, respectively. International sales for the years ended December 31, 2014, 2013 and 2012 were as follows (in thousands): | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Americas, excluding U.S (1) | $ | 900,822 | $ | 746,146 | $ | 202,887 | |||||||||||
Asia Pacific | 147,921 | 153,674 | 65,554 | ||||||||||||||
EMEA | 316,975 | 263,910 | 65,162 | ||||||||||||||
Total international sales | $ | 1,365,718 | $ | 1,163,730 | $ | 333,603 | |||||||||||
-1 | Excludes U.S. sales of $3,957.2 million, $2,457.2 million and $1,020.1 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||||||
The following table summarizes ARRIS’ international long-lived assets by geographic region as of December 31, 2014 and 2013 (in thousands): | |||||||||||||||||
As of December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Americas, excluding U.S. | $ | 7,303 | $ | 7,467 | |||||||||||||
Asia Pacific | 76,970 | 82,495 | |||||||||||||||
EMEA | 8,129 | 10,115 | |||||||||||||||
Total | $ | 92,402 | $ | 100,077 | |||||||||||||
-1 | Excludes U.S. long-lived assets of $274.0 million and $296.1 million for the years ended December 31, 2014 and 2013, respectively. |
Restructuring_Charges
Restructuring Charges | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Restructuring Charges | Note 11. 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 | 3,335 | 38 | 3,373 | ||||||||||
Cash payments / adjustments | (5,276 | ) | (521 | ) | (5,797 | ) | |||||||
Balance at December 31, 2014 | $ | 733 | $ | 190 | $ | 923 | |||||||
Employee severance and termination benefits — In the second quarter of 2013, ARRIS completed its acquisition of Motorola Home. ARRIS initiated restructuring plans as a result of the Acquisition that focuses on the rationalization of personnel, facilities and systems across multiple segments in the ARRIS organization. | |||||||||||||
The total estimated cost of the restructuring plan was approximately $30.8 million and was recorded as severance expense during 2013. As of December 31, 2014, the total liability remaining for this restructuring plan was approximately $0.2 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 December 31, 2014, the total liability remaining for this plan was approximately $0.5 million. | |||||||||||||
Contractual obligations — ARRIS has restructuring accruals representing contractual obligations that relate to excess leased facilities and equipment. |
Inventories
Inventories | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Inventories | Note 12. Inventories | ||||||||
The components of inventory are as follows, net of reserves (in thousands): | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Raw material | $ | 61,068 | $ | 60,520 | |||||
Work in process | 6,713 | 6,010 | |||||||
Finished goods | 333,384 | 263,599 | |||||||
Total inventories, net | $ | 401,165 | $ | 330,129 | |||||
Property_Plant_and_Equipment
Property, Plant and Equipment | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment | Note 13. Property, Plant and Equipment | ||||||||
Property, plant and equipment, at cost, consisted of the following (in thousands): | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Land | $ | 87,952 | $ | 88,742 | |||||
Buildings and leasehold improvements | 141,581 | 133,668 | |||||||
Machinery and equipment | 402,709 | 368,572 | |||||||
632,242 | 590,982 | ||||||||
Less: Accumulated depreciation | (265,811 | ) | (194,830 | ) | |||||
Total property, plant and equipment, net | $ | 366,431 | $ | 396,152 | |||||
During the second quarter of 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 its fair value less cost to sell and classified as a component of “Other current assets”. The Company 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 2014, which is reported in the Consolidated Statements of Operations under the caption “Other expense (income), net.” The sale is expected to close in the first quarter of 2015. |
LongTerm_Indebtedness
Long-Term Indebtedness | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Long-Term Indebtedness | Note 14. Long-Term Indebtedness | ||||||
Senior Secured Credit Facilities | |||||||
ARRIS has senior secured credit facilities with Bank of America, N.A. and various other institutions, which are comprised of (i) a “Term Loan A Facility” of $1.1 billion, (ii) a “Term Loan B Facility” of $825 million and (iii) a “Revolving Credit Facility” of $250 million. The Term Loan A Facility and the Revolving Credit Facility have terms of five years. The Term Loan B Facility has a term of seven years. Interest rates on borrowings under the senior credit facilities are set forth in the table below. As of December 31, 2014, ARRIS had $1,547.6 million face value outstanding under the Term Loan A and Term Loan B Facilities, no borrowings under the Revolving Credit Facility and letters of credit totaling $2.5 million issued under the Revolving Credit Facility. | |||||||
Rate | As of December 31, 2014 | ||||||
Term Loan A | LIBOR + 1.75% | 1.92 | % | ||||
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 December 31, 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 2014, 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 year ended December 31, 2014, the Company made mandatory prepayments of approximately $55.0 million and optional prepayments of approximately $150.0 million related to the senior secured credit facilities. | |||||||
As of December 31, 2014, the face value of contractual debt obligations for the next five years are as follows (in thousands): | |||||||
2015 | $ | 75,625 | |||||
2016 | 103,125 | ||||||
2017 | 110,000 | ||||||
2018 | 715,000 | ||||||
2019 | — | ||||||
thereafter | 543,813 | ||||||
Redemption of Convertible Senior Notes | |||||||
In 2006, ARRIS issued $276.0 million of 2% convertible senior notes due 2026 (the “Notes”). The notes were convertible only upon the occurrence of specified events and during specified periods, including (i) from October 15, 2013 to November 15, 2013 and (ii) during any calendar quarter in which the closing price of the Company’s common stock for 20 or more trading days in a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter exceeds 120% of the conversion price in effect on the last trading day of the last calendar quarter (which, based on the current conversion price, would be $19.31). The conversion rate for the Notes, subject to adjustment, was 62.1504 shares per $1,000 principal amount (which represented an initial conversion price of approximately $16.09 per share of the Company’s common stock). Upon conversion, the holder received up to the principal amount in cash and could receive, depending on the price of the Company’s common stock, an additional payment, in cash, the Company’s common stock or a combination thereof, at the option of the Company. Each component of the conversion consideration is based on a formula that includes the conversion rate and the market price of the Company’s common stock during a period following the date of the conversion. | |||||||
As a result of the holding company reorganization undertaken in connection with the Motorola Home acquisition, holders of the senior notes had the right (i) to require ARRIS to repurchase the senior notes for 100% of the principal amount of the senior notes, plus accrued and unpaid interest to, but not including the repurchase date and (ii) to convert the senior notes for the consideration provided for in the indenture governing the senior notes. | |||||||
In October 2013, ARRIS notified holders of the senior notes that it would redeem all outstanding notes (the “Redemption”) on November 15, 2013 (the “Redemption Date”) for cash at a price equal to 100% of the outstanding aggregate principal amount of the notes (the “Redemption Price”). The Redemption Price did not include the interest accrued up to November 15, 2013, which was paid to the holders of the notes of record as of November 1, 2013. | |||||||
The Notes were convertible at the option of the holders from October 15, 2013 until November 15, 2013 for the consideration specified in the Indenture (the “Conversion Option”). Holders of the Notes had an option to require the Company to purchase the Notes for par value on November 15, 2013 (the “Put Option”). Any Notes not surrendered pursuant to the Put Option or the Conversion Option would be redeemed on November 15, 2013 (“Redemption Option”). | |||||||
During the fourth quarter of 2013, pursuant to the “Put Option” the Company repurchased $30 thousand of the Notes. Pursuant to the “Conversion Option”, the Notes were convertible at the option of the holders from October 15, 2013 to November 15, 2013. Upon conversion, the holders of the converted Notes received the consideration as specified in the Indenture. As of November 15, 2013, Notes of $231.2 million were surrendered for conversion. Pursuant to the Net Share Settlement provision of the Indenture, we redeemed the Notes for $231.2 million in cash consideration and issued 3.1 million shares of common stock to the Note holders. The Company redeemed the remaining Notes pursuant to the “Redemption Option” for $744 thousand. |
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Earnings Per Share | Note 15. Earnings Per Share | ||||||||||||
The following is a reconciliation of the numerators and denominators of the basic and diluted earnings (loss) per share computations for the periods indicated (in thousands, except per share data): | |||||||||||||
For the Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Basic: | |||||||||||||
Net income (loss) | $ | 327,211 | $ | (48,760 | ) | $ | 53,459 | ||||||
Weighted average shares outstanding | 144,386 | 131,980 | 114,161 | ||||||||||
Basic earnings (loss) per share | $ | 2.27 | $ | (0.37 | ) | $ | 0.47 | ||||||
Diluted: | |||||||||||||
Net income (loss) | $ | 327,211 | $ | (48,760 | ) | $ | 53,459 | ||||||
Weighted average shares outstanding | 144,386 | 131,980 | 114,161 | ||||||||||
Net effect of dilutive shares | 3,894 | — | 2,353 | ||||||||||
Total | 148,280 | 131,980 | 116,514 | ||||||||||
Diluted earnings (loss) per share | $ | 2.21 | $ | (0.37 | ) | $ | 0.46 | ||||||
For the year ended December 31, 2014, 2013 and 2012, approximately 4.3 thousand, 1.1 million and 1.7 million of the equity-based awards, respectively, were excluded from the computation of diluted earnings per share shares because their effect would have been anti-dilutive. These exclusions are made if the exercise price of these equity-based awards is in excess of the average market price of the common stock for the period, or if the Company has net losses, both of which have an anti-dilutive effect. | |||||||||||||
During the twelve months ended December 31, 2014, the Company issued 3.1 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 issued 3.1 million shares of its common stock in the fourth quarter of 2013 in conjunction with redeeming its 2% Convertible Notes. (See Note 14, Long-Term Indebtedness) | |||||||||||||
The Company has not paid cash dividends on its common stock since its inception. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Taxes | Note 16. Income Taxes | ||||||||||||
Income (loss) before income taxes (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Domestic | $ | 180,133 | $ | (128,588 | ) | $ | 67,620 | ||||||
Foreign | 59,097 | 32,438 | 6,676 | ||||||||||
$ | 239,230 | $ | (96,150 | ) | $ | 74,296 | |||||||
Income tax expense (benefit) consisted of the following (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Current — Federal | $ | 45,937 | $ | (5,133 | ) | $ | 26,196 | ||||||
State | 13,260 | (40 | ) | 3,440 | |||||||||
Foreign | 18,136 | 10,624 | 4,855 | ||||||||||
77,333 | 5,451 | 34,491 | |||||||||||
Deferred — Federal | (140,404 | ) | (50,485 | ) | (10,522 | ) | |||||||
State | (19,978 | ) | (2,189 | ) | (2,238 | ) | |||||||
Foreign | (4,932 | ) | (167 | ) | (894 | ) | |||||||
(165,314 | ) | (52,841 | ) | (13,654 | ) | ||||||||
Income tax expense (benefit) | $ | (87,981 | ) | $ | (47,390 | ) | $ | 20,837 | |||||
A reconciliation of the statutory federal income tax rate of 35% and the effective income tax rates is as follows: | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Statutory federal income tax rate | 35 | % | 35 | % | 35 | % | |||||||
Effects of: | |||||||||||||
State income taxes, net of federal benefit | (6.6 | ) | 2.2 | 1.4 | |||||||||
Acquired deferred tax assets | (16.5 | ) | — | — | |||||||||
Domestic manufacturing deduction | (2.1 | ) | 1.1 | (4.0 | ) | ||||||||
Nontaxable Comcast derivative gain | — | (9.6 | ) | — | |||||||||
Facilitative acquisition costs | — | (3.5 | ) | — | |||||||||
Research and development tax credits | (8.7 | ) | 26.8 | (4.8 | ) | ||||||||
Changes in valuation allowance | (44.2 | ) | — | (0.7 | ) | ||||||||
Non-U.S. tax rate differential | (2.6 | ) | 1.3 | (1.0 | ) | ||||||||
Recapture of dual consolidated losses | 4 | — | — | ||||||||||
Other, net | 4.9 | (4.0 | ) | 2.2 | |||||||||
(36.8 | )% | 49.3 | % | 28.1 | % | ||||||||
The U.S. federal research and development credit expired on December 31, 2011. On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law. Under this act, the U.S. federal research and development credit was retroactively extended for amounts paid or incurred after December 31, 2011 and before January 1, 2014. The effects of these changes in the tax law resulted in a tax benefit recognized in the first quarter of 2013, which was the quarter when the law was enacted. The legislation allowing the U.S. federal research and development tax credit was extended in December of 2014, which includes the 2014 tax year. | |||||||||||||
Deferred income taxes reflect the net tax effects of temporary differences between carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of ARRIS’ net deferred income tax assets (liabilities) were as follows (in thousands): | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Current deferred income tax assets: | |||||||||||||
Inventory costs | $ | 34,695 | $ | 31,068 | |||||||||
Federal research and development credits | 24,212 | 5,472 | |||||||||||
Federal/state net operating loss carryforwards | 59,503 | 3,336 | |||||||||||
Foreign net operating loss carryforwards | 209 | 1,593 | |||||||||||
Accrued vacation | 7,980 | 7,175 | |||||||||||
Warranty reserve | 24,207 | 18,292 | |||||||||||
Deferred revenue | 1,001 | 19,988 | |||||||||||
Equity compensation | 14,639 | 10,243 | |||||||||||
Capitalized research and development | 45,513 | 55,164 | |||||||||||
Other | 23,841 | 24,939 | |||||||||||
Total current deferred income tax assets | 235,800 | 177,270 | |||||||||||
Noncurrent deferred income tax assets: | |||||||||||||
Federal/state net operating loss carryforwards | 158,153 | 159,219 | |||||||||||
Federal capital loss carryforwards | 7,701 | 5,152 | |||||||||||
Foreign net operating loss carryforwards | 11,631 | 8,212 | |||||||||||
Federal research and development credits | 38,449 | 19,409 | |||||||||||
Pension and deferred compensation | 18,393 | 16,187 | |||||||||||
Warranty reserve | 1,980 | 12,503 | |||||||||||
Capitalized research and development | 180,757 | 226,270 | |||||||||||
Other | 18,347 | 3,303 | |||||||||||
Total noncurrent deferred income tax assets | 435,411 | 450,255 | |||||||||||
Total deferred income tax assets | 671,211 | 627,525 | |||||||||||
Current deferred income tax liabilities: | |||||||||||||
Other | (3,249 | ) | (2,856 | ) | |||||||||
Total current deferred income tax liabilities | (3,249 | ) | (2,856 | ) | |||||||||
Non-current deferred income tax liabilities: | |||||||||||||
Property, plant and equipment, depreciation and basis differences | (19,744 | ) | (39,782 | ) | |||||||||
Excess tax on future repatriation of foreign earnings | (1,184 | ) | (1,184 | ) | |||||||||
Other noncurrent liabilities | (27,655 | ) | (9,192 | ) | |||||||||
Goodwill and Intangibles | (316,192 | ) | (401,060 | ) | |||||||||
Total noncurrent deferred income tax liabilities | (364,775 | ) | (451,218 | ) | |||||||||
Total deferred income tax liabilities | (368,024 | ) | (454,074 | ) | |||||||||
Net deferred income tax assets | 303,187 | 173,451 | |||||||||||
Valuation allowance | (118,629 | ) | (163,745 | ) | |||||||||
Net deferred income tax assets (liabilities) | $ | 184,558 | $ | 9,706 | |||||||||
As of December 31, 2014 and December 31, 2013, ARRIS had $552.9 million and $435.6 million, respectively, of U.S. federal net operating losses available to offset against future ARRIS taxable income. During 2014, ARRIS utilized approximately $75.2 million of U.S. federal net operating losses against taxable income. The U.S. Federal net operating losses may be carried forward for twenty years. The available acquired U.S. federal net operating losses as of December 31, 2014, will expire between the years 2015 and 2031. A significant portion of the acquired U.S. federal net operating losses expire in 2017. | |||||||||||||
As of December 31, 2014, ARRIS also had $417.3 million of state net operating loss carryforwards in various states. The amounts available for utilization vary by state due to the apportionment of the Company’s taxable income and state law governing the expiration of these net operating losses. State net operating loss carryforwards of approximately $29.4 million relate to the exercise of employee stock options and restricted stock (“equity compensation”). Any future cash benefit resulting from the utilization of these state net operating losses attributable to this portion of equity compensation will be credited directly to paid in capital during the year in which the cash benefit is realized. | |||||||||||||
Additionally, ARRIS has foreign net operating loss carryforwards available, as of December 31, 2014, of approximately $57.8 million with varying expiration dates. Approximately $18.5 million of the total foreign net operating loss carryforwards relate to ARRIS’ Irish subsidiary and have an indefinite life. Approximately $13.7 million of the foreign net operating loss carryforwards relate to the Canadian subsidiary and expire within 20 years. | |||||||||||||
During the tax years ending December 31, 2014, and 2013, we utilized $17.6 million and $5.5 million, respectively, of U.S. federal research and development credits to reduce U.S. federal income tax liabilities. As of December 31, 2014, ARRIS has $54.9 million of available U.S. federal research and development tax credits and $29.4 million of available state research and development tax credits to carry forward to subsequent years. The remaining unutilized U.S. federal research and development tax credits can be carried back one year and carried forward twenty years. The state research and development tax credits carry forward and will expire pursuant to various applicable state rules. | |||||||||||||
ARRIS’ ability to use U.S. federal and state net operating loss carryforwards to reduce future taxable income, or to use U.S. federal and state research and development tax credit and foreign tax credit carryforwards to reduce future income tax liabilities, is subject to restrictions attributable to equity transactions that resulted in a change of ownership during prior tax years, as defined in Internal Revenue Code Sections 382, 383 and the separate return limitation year (“SRLY”) rules. | |||||||||||||
The valuation allowance for deferred income tax assets of $118.6 million and $163.7 million at December 31, 2014 and 2013, respectively, relates to the uncertainty surrounding the realization of certain deferred income tax assets in various jurisdictions. The $45.1 million net reduction in valuation allowances for the year was due primarily to a reduction in the valuation allowance on net operating losses from the Motorola Home acquisition offset by an increase in valuation allowances for acquired U.S. federal and state research and development tax credits. The Company continually reviews the adequacy of its valuation allowances by reassessing whether it is more-likely-than-not to realize its various deferred income tax assets. | |||||||||||||
In general, ARRIS intends to indefinitely reinvest the earnings of its non-U.S. subsidiaries. Accounting rules generally require that the Company record U.S. deferred taxes on any anticipated repatriation of a foreign entity’s earnings as the earnings are recognized for financial reporting purposes. An exception under certain accounting guidance permits the Company to not record U.S. deferred taxes for foreign earnings that the Company expects to reinvest in its foreign operations and for which remittance will be postponed indefinitely. If it becomes apparent that some or all undistributed earnings will be remitted in the foreseeable future, the related deferred taxes are recorded in that period. In determining indefinite reinvestment, ARRIS regularly evaluates the capital needs of its foreign operations considering all available information, including operating and capital plans, regulatory capital requirements, debt requirements and cash flow needs, as well as, the applicable tax laws to which its foreign subsidiaries are subject. ARRIS expects the cash balances of its existing U.S. entities and the availability of U.S. financing sources to be sufficient to fund the operations of its U.S. entities for the foreseeable future. With the exception of approximately $5.4 million (21 million shekels) of earnings associated with its Israeli subsidiary, ARRIS has not recorded any U.S. deferred taxes on the undistributed earnings of its foreign subsidiaries as of December 31, 2014. ARRIS has recorded approximately $1.2 million of deferred tax liability relating to $5.4 million of distributable earnings of the Israeli subsidiary. At December 31, 2014, the Company had not provided for federal income taxes on earnings of approximately $48.4 million from its foreign subsidiaries. Should earnings of the other foreign subsidiaries be distributed in the form of dividends, or otherwise, ARRIS would have additional U.S. taxable income and, depending on the company’s tax posture in the year of repatriation, may have to pay additional U.S. income taxes. Withholding taxes in various international jurisdictions may also apply to the repatriation of foreign earnings. Determination of the amount of unrecognized income tax liability related to these permanently reinvested and undistributed foreign subsidiary earnings is currently not practicable because of the complexities associated with this hypothetical calculation. | |||||||||||||
Tabular Reconciliation of Unrecognized Tax Benefits (in thousands): | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Beginning balance | $ | 28,344 | $ | 25,704 | $ | 26,232 | |||||||
Gross increases — tax positions in prior period | 17,636 | 2,442 | — | ||||||||||
Gross decreases — tax positions in prior period | (4,115 | ) | (21 | ) | — | ||||||||
Gross increases — current-period tax positions | 9,979 | 6,999 | 2,684 | ||||||||||
Increases (decreases) from acquired businesses | (196 | ) | 2,014 | — | |||||||||
Decreases relating to settlements with taxing authorities and other | (2,480 | ) | (1,098 | ) | 100 | ||||||||
Decreases due to lapse of statute of limitations | (1,149 | ) | (7,696 | ) | (3,312 | ) | |||||||
Ending balance | $ | 48,019 | $ | 28,344 | $ | 25,704 | |||||||
The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2010. As of December 31, 2014, the Company and its subsidiaries were under income tax audit in only ten jurisdictions (the state of Georgia, the state of California, the state of New York, the state of Michigan, the state of Ohio, the state of Illinois, the United States, China, Sweden and Portugal) and they have not received notices of any planned or proposed income tax audits. | |||||||||||||
The Company is currently being audited by the Internal Revenue Service in the United States for the years ended December 31, 2011 and 2012. During 2014, the Internal Revenue Service concluded their audit of the 2010 income tax year. As a result of concluding this audit with an income tax assessment less than its related accrual for uncertain tax positions, the Company recorded a net benefit of $3.9 million. ARRIS does not anticipate any audit adjustments in excess of its current accrual for uncertain tax positions. | |||||||||||||
At the end of 2014, the Company’s total tax liability related to uncertain net tax positions totaled approximately $45.7 million, all of which would cause the effective income tax rate to change upon the recognition. The difference between the $48.0 million of unrecognized tax benefits reported in the tabular reconciliation above and the $45.7 million of total tax liability relating to uncertain net tax positions are attributable to interest, penalties and the federal benefit of state deductions. Based on information currently available, the Company anticipates that over the next twelve month period, statutes of limitations may close and audit settlements will occur relating to existing unrecognized tax benefits of approximately $4.6 million primarily arising from U.S. Federal and state tax related items. The Company reported approximately $1.7 million and $2.1 million, respectively, of interest and penalty accrual related to the anticipated payment of these potential tax liabilities as of December 31, 2014 and 2013. The Company classifies interest and penalties recognized on the liability for uncertain tax positions as income tax expense. |
StockBased_Compensation
Stock-Based Compensation | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Stock-Based Compensation | Note 17. Stock-Based Compensation | ||||||||||||||||||||
ARRIS grants stock options under its 2011 Stock Incentive Plan (“SIP”). Upon approval of the 2011 SIP, all shares available for grant under existing stock incentive plans were no longer available. However, all outstanding options granted under the previous plans are still exercisable. The Board of Directors approved the SIP and the prior plans to facilitate the retention and continued motivation of key employees, consultants and directors, and to align more closely their interests with those of the Company and its stockholders. | |||||||||||||||||||||
Awards under the SIP may be in the form of stock options, stock grants, stock units, restricted stock, stock appreciation rights, performance shares and units, and dividend equivalent rights. A total of 17,500,000 shares of the Company’s common stock may be issued pursuant to the SIP. The SIP has been designed to allow for flexibility in the form of awards; however, awards denominated in shares of common stock other than stock options and stock appreciation rights will be counted against the SIP limit as 1.87 shares for every one share covered by such an award. The vesting requirements for issuance under the SIP may vary; however, awards generally are required to have a minimum three-year vesting period or term. | |||||||||||||||||||||
In connection with the 2011 acquisition of BigBand Networks, Inc., ARRIS assumed the BigBand Networks, Inc. 2007 Equity Incentive Plan (the “Assumed BigBand Plan”), including the restricted stock units outstanding under the Assumed BigBand Plan at the time of the acquisition. ARRIS may continue to grant awards under the Assumed BigBand Plan in certain circumstances so long as the grants comply with the applicable requirements of NASDAQ. A total of 151,095 shares of the Company’s common stock remain available for issuance under the Assumed BigBand Plan. | |||||||||||||||||||||
Stock Options | |||||||||||||||||||||
ARRIS grants stock options to certain employees. Stock options generally vest over three or four years of service and have either seven or ten year contractual terms. The exercise price of an option is equal to the fair market value of ARRIS’ stock on the date of grant. ARRIS used the Black-Scholes model and engaged an independent third party to assist the Company in determining the Black-Scholes valuation of its equity awards. | |||||||||||||||||||||
There were no new options granted in 2014, 2013 and 2012. The total intrinsic value of options exercised during 2014, 2013 and 2012 was approximately $6.5 million, $9.6 million and $10.2 million, respectively. | |||||||||||||||||||||
A summary of activity of ARRIS’ options granted under its stock incentive plans is presented below: | |||||||||||||||||||||
Options | Weighted | Weighted | Aggregate | ||||||||||||||||||
Average | Average | Intrinsic | |||||||||||||||||||
Exercise Price | Remaining | Value | |||||||||||||||||||
Contractual Term | (in thousands) | ||||||||||||||||||||
(in years) | |||||||||||||||||||||
Beginning balance, January 1, 2014 | 472,691 | $ | 11.6 | ||||||||||||||||||
Grants | — | — | |||||||||||||||||||
Exercised | (402,771 | ) | 11.5 | ||||||||||||||||||
Forfeited | — | — | |||||||||||||||||||
Expired | (31,920 | ) | 12.44 | ||||||||||||||||||
Ending balance, December 31, 2014 | 38,000 | 11.97 | 0.58 | $ | 692 | ||||||||||||||||
Exercisable at December 31, 2014 | 38,000 | 11.97 | 0.58 | $ | 692 | ||||||||||||||||
The following table summarizes ARRIS’ options outstanding as of December 31, 2014: | |||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||
Range of | Number | Weighted Average | Weighted | Number | Weighted | ||||||||||||||||
Exercise Prices | Outstanding | Remaining | Average | Exercisable | Average | ||||||||||||||||
Contractual Life | Exercise Price | Exercise Price | |||||||||||||||||||
$9.00 to $10.99 | 9,196 | 0.81 years | $ | 10.11 | 9,196 | $ | 10.11 | ||||||||||||||
$11.00 to $13.99 | 28,804 | 0.50 years | $ | 12.57 | 28,804 | $ | 12.57 | ||||||||||||||
$9.00 to $13.99 | 38,000 | 0.58 years | $ | 11.97 | 38,000 | $ | 11.97 | ||||||||||||||
Restricted Stock (Non-Performance) and Stock Units | |||||||||||||||||||||
ARRIS grants restricted stock and stock units to certain employees and its non-employee directors. The Company records a fixed compensation expense equal to the fair market value of the shares of restricted stock granted on a straight-line basis over the requisite services period for the restricted shares. The Company applies an estimated forfeiture rate based upon historical rates. Their fair value is the market price of the underlying common stock on the date of grant. | |||||||||||||||||||||
The following table summarizes ARRIS’ unvested restricted stock (excluding performance-related) and stock unit transactions during the year ending December 31, 2014: | |||||||||||||||||||||
Shares | Weighted Average | ||||||||||||||||||||
Grant Date | |||||||||||||||||||||
Fair Value | |||||||||||||||||||||
Unvested at January 1, 2014 | 7,051,880 | $ | 14.29 | ||||||||||||||||||
Granted | 2,650,740 | 27.66 | |||||||||||||||||||
Vested | (2,369,907 | ) | 13.93 | ||||||||||||||||||
Forfeited | (340,924 | ) | 18.36 | ||||||||||||||||||
Unvested at December 31, 2014 | 6,991,789 | 19.29 | |||||||||||||||||||
Restricted Shares — Subject to Comparative Market Performance | |||||||||||||||||||||
ARRIS grants to certain employees restricted shares, in which the number of shares is dependent upon the Company’s total shareholder return as compared to the shareholder return of the NASDAQ composite over a three year period. The number of shares which could potentially be issued ranges from zero to 200% of the target award. For the shares granted in 2012, the three-year measurement period ended on December 31, 2014. This resulted in an achievement of 200.0% of the target award, or 591,660 shares. The remaining grants outstanding that are subject to market performance are 499,455 shares at target; at 200% performance 998,910 would be issued. Compensation expense is recognized on a straight-line basis over the three year measurement period and is based upon the fair market value of the shares estimated to be earned. The fair value of the restricted shares is estimated on the date of grant using a Monte Carlo Simulation model. | |||||||||||||||||||||
The total intrinsic value of restricted shares, including both non-performance and performance-related shares, vested and issued during 2014, 2013 and 2012 was $82.6 million, $36.3 million and $27.1 million, respectively. | |||||||||||||||||||||
Employee Stock Purchase Plan (“ESPP”) | |||||||||||||||||||||
ARRIS offers an ESPP to certain employees. The plan complies with Section 423 of the U.S. Internal Revenue Code, which provides that employees will not be immediately taxed on the difference between the market price of the stock and a discounted purchase price if it meets certain requirements. Participants can request that up to 10% of their base compensation be applied toward the purchase of ARRIS common stock under ARRIS’ ESPP. Purchases by any one participant are limited to $25,000 (based upon the fair market value) in any one year. The exercise price is the lower of 85% of the fair market value of the ARRIS common stock on either the first day of the purchase period or the last day of the purchase period. A plan provision which allows for the more favorable of two exercise prices is commonly referred to as a “look-back” feature. Any discount offered in excess of five percent generally will be considered compensatory and appropriately is recognized as compensation expense. Additionally, any ESPP offering a look-back feature is considered compensatory. ARRIS uses the Black-Scholes option valuation model to value shares issued under the ESPP. The valuation is comprised of two components; the 15% discount of a share of common stock and 85% of a six month option held (related to the look-back feature). The weighted average assumptions used to estimate the fair value of purchase rights granted under the ESPP for 2014, 2013 and 2012, were as follows: risk-free interest rates of 0.1%; a dividend yield of 0%; volatility factor of the expected market price of ARRIS’ common stock of 0.37, 0.26, and 0.33, respectively; and a weighted average expected life of 0.5 year for each. The Company recorded stock compensation expense related to the ESPP of approximately $4.1 million, $1.4 million and $0.9 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||
Unrecognized Compensation Cost | |||||||||||||||||||||
As of December 31, 2014, there was approximately $102.6 million of total unrecognized compensation cost related to unvested share-based awards granted under the Company’s incentive plans. This compensation cost is expected to be recognized over a weighted-average period of 2.7 years. |
Employee_Benefit_Plans
Employee Benefit Plans | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Employee Benefit Plans | Note 18. Employee Benefit Plans | ||||||||||||||||
The Company sponsors a qualified and a non-qualified non-contributory defined benefit pension plan that cover certain U.S. employees. As of January 1, 2000, the Company froze the qualified defined pension plan benefits for its participants. These participants elected to enroll in ARRIS’ enhanced 401(k) plan. | |||||||||||||||||
The U.S. pension plan benefit formulas generally provide for payments to retired employees based upon their length of service and compensation as defined in the plans. ARRIS’ investment policy is to fund the qualified plan as required by the Employee Retirement Income Security Act of 1974 (“ERISA”) and to the extent that such contributions are tax deductible. | |||||||||||||||||
The investment strategies of the plans place a high priority on benefit security. The plans invest conservatively so as not to expose assets to depreciation in adverse markets. The plans’ strategy also places a high priority on earning a rate of return greater than the annual inflation rate along with maintaining average market results. The plan has targeted asset diversification across different asset classes and markets to take advantage of economic environments and to also act as a risk minimizer by dampening the portfolio’s volatility. The following table summarizes the weighted average pension asset allocations as December 31, 2014 and 2013: | |||||||||||||||||
Weighted Average Allocation | |||||||||||||||||
Target | Actual | ||||||||||||||||
2014 | 2014 | 2013 | |||||||||||||||
Equity securities | 42 | % | 43 | % | 43 | % | |||||||||||
Debt securities | 3 | 3 | 3 | ||||||||||||||
Cash and cash equivalents | 55 | 54 | 54 | ||||||||||||||
100 | % | 100 | % | 100 | % | ||||||||||||
The following table summarizes the Company’s U.S. pension plan assets by category and by level (as described in Note 7 of the Notes to the Consolidated Financial Statements) as of December 31, 2014 (in thousands): | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Cash and cash equivalents (1) | $ | — | $ | 7,752 | $ | — | $ | 7,752 | |||||||||
Equity securities (2): | |||||||||||||||||
U.S. large cap | 1,571 | — | — | 1,571 | |||||||||||||
U.S. mid cap | 1,640 | — | — | 1,640 | |||||||||||||
U.S. small cap | 1,367 | — | — | 1,367 | |||||||||||||
International | 2,050 | — | — | 2,050 | |||||||||||||
Fixed income securities (3): | 205 | — | — | 205 | |||||||||||||
Total | $ | 6,833 | $ | 7,752 | $ | — | $ | 14,585 | |||||||||
-1 | Cash and cash equivalents, which are used to pay benefits and administrative expenses, are held in a stable value fund. | ||||||||||||||||
-2 | Equity securities consist of mutual funds and the underlying investments are indexes. Investments in mutual funds are valued at the net asset value per share multiplied by the number of shares held. | ||||||||||||||||
-3 | Fixed income securities consist of bonds securities in mutual funds, and are valued at the net asset value per share multiplied by the number of shares held. | ||||||||||||||||
The Company has established a rabbi trust to fund the pension obligations of the Chief Executive Officer under his Supplemental Retirement Plan including the benefit under the Company’s non-qualified defined benefit plan. In addition, the Company has established a rabbi trust for certain executive officers to fund the Company’s pension liability to those officers under the non-qualified plan. Effective June 30, 2013, the Company amended the Supplemental Retirement Plan. This amendment effectively froze entry of any new participants into the Supplemental Plan and, for existing participants, a freeze on any additional benefit accrual after June 30, 2013. The participant’s benefit will continue to be distributed in accordance with the provisions of the Supplemental Plan but the final benefit accrual was frozen as of June 30, 2013. A curtailment gain of approximately $0.3 million, which represents the difference in the projected benefit obligation and the accumulated benefit obligation at June 30, 2013, offsets the existing plan loss and lowers future pension expense. | |||||||||||||||||
During the fourth quarter of 2012, in an effort to reduce the volatility and administration expense in connection with the Company’s pension obligation, the Company notified eligible employees of a limited opportunity to voluntarily elect an early payout of their pension benefits. These payouts were approximately $7.7 million and was funded from existing pension assets. The Company accounted for the lump-sum payments as a settlement and recorded a noncash pension settlement charge of approximately $3.1 million in the fourth quarter of 2012. | |||||||||||||||||
Summary data for the U.S. non-contributory defined benefit pension plans is as follows (in thousands): | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Change in Projected Benefit Obligation: | |||||||||||||||||
Projected benefit obligation at beginning of year | $ | 40,382 | $ | 42,082 | |||||||||||||
Service cost | — | 122 | |||||||||||||||
Interest cost | 1,783 | 1,619 | |||||||||||||||
Actuarial loss (gain) | 5,692 | (1,813 | ) | ||||||||||||||
Benefit payments | (1,307 | ) | (1,309 | ) | |||||||||||||
Other | — | (319 | ) | ||||||||||||||
Projected benefit obligation at end of year | $ | 46,550 | $ | 40,382 | |||||||||||||
Change in Plan Assets: | |||||||||||||||||
Fair value of plan assets at beginning of year | $ | 15,162 | $ | 14,866 | |||||||||||||
Actual return on plan assets | 575 | 1,421 | |||||||||||||||
Company contributions | 155 | 184 | |||||||||||||||
Expenses and benefits paid from plan assets | (1,307 | ) | (1,309 | ) | |||||||||||||
Other | — | — | |||||||||||||||
Fair value of plan assets at end of year (1) | $ | 14,585 | $ | 15,162 | |||||||||||||
Funded Status: | |||||||||||||||||
Funded status of plan | $ | (31,965 | ) | $ | (25,220 | ) | |||||||||||
Unrecognized actuarial loss | 13,233 | 7,546 | |||||||||||||||
Unamortized prior service cost | — | — | |||||||||||||||
Net amount recognized | $ | (18,732 | ) | $ | (17,674 | ) | |||||||||||
-1 | In addition to the pension plan assets, ARRIS has established two rabbi trusts to further fund the pension obligations of the Chief Executive and certain executive officers of $20.3 million as of December 31, 2014 and $19.3 million as of December 31, 2013, and are included in Investments on the Consolidated Balance Sheets. | ||||||||||||||||
Amounts recognized in the statement of financial position consist of (in thousands): | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Current liabilities | $ | (393 | ) | $ | (364 | ) | |||||||||||
Noncurrent liabilities | (31,572 | ) | (24,856 | ) | |||||||||||||
Accumulated other comprehensive income (1) | 13,233 | 7,546 | |||||||||||||||
Total | $ | (18,732 | ) | $ | (17,674 | ) | |||||||||||
-1 | The accumulated other comprehensive income on the Consolidated Balance Sheets as of December 31, 2014 and 2013 includes balances for plans outside of the U.S. of $10.9 million and $9.4 million, respectively. Also, the accumulated other comprehensive income on the Consolidated Balance Sheets as of December 31, 2014 and 2013 is presented net of income tax effect of $3.4 million and $1.0 million, respectively. | ||||||||||||||||
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) are as follows (in thousands): | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Net gain (loss) | $ | 5,992 | $ | (2,359 | ) | ||||||||||||
Amortization of net loss | (305 | ) | (607 | ) | |||||||||||||
Settlement charge | — | (318 | ) | ||||||||||||||
Total recognized in other comprehensive income (loss) | $ | 5,687 | $ | (3,284 | ) | ||||||||||||
The following table summarizes the amounts in other comprehensive income (loss) expected to be amortized and recognized as a component of net periodic benefit cost in 2015 (in thousands): | |||||||||||||||||
Amortization of net loss | $ | 834 | |||||||||||||||
Information for defined benefit plans with accumulated benefit obligations in excess of plan assets is as follows (in thousands): | |||||||||||||||||
December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Accumulated benefit obligation | $ | 46,550 | $ | 40,382 | |||||||||||||
Projected benefit obligation | $ | 46,550 | $ | 40,382 | |||||||||||||
Plan assets | $ | 14,585 | $ | 15,162 | |||||||||||||
Net periodic pension cost for 2014, 2013 and 2012 for pension and supplemental benefit plans includes the following components (in thousands): | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Service cost | $ | — | $ | 122 | $ | 335 | |||||||||||
Interest cost | 1,783 | 1,619 | 2,085 | ||||||||||||||
Return on assets (expected) | (874 | ) | (876 | ) | (1,260 | ) | |||||||||||
Amortization of net actuarial loss (1) | 305 | 607 | 840 | ||||||||||||||
Settlement charge | — | — | 3,064 | ||||||||||||||
Net periodic pension cost | $ | 1,214 | $ | 1,472 | $ | 5,064 | |||||||||||
-1 | ARRIS uses the allowable 10% corridor approach to determine the amount of gains/losses subject to amortization in the pension cost. Prior service costs and gains/losses are amortized on a straight-line basis over the average future service of members expected to receive benefits | ||||||||||||||||
The weighted-average actuarial assumptions used to determine the benefit obligations for the three years presented are set forth below: | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Assumed discount rate for plan participants | 3.75 | % | 4.5 | % | 3.75 | % | |||||||||||
Rate of compensation increase | N/A | N/A | 3.75 | % | |||||||||||||
The weighted-average actuarial assumptions used to determine the net periodic benefit costs are set forth below: | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Assumed discount rate for plan participants | 4.5 | % | 3.75 | % | 4.5 | % | |||||||||||
Rate of compensation increase | N/A | 3.75 | % | 3.75 | % | ||||||||||||
Expected long-term rate of return on plan assets | 6 | % | 6 | % | 6 | % | |||||||||||
The expected long-term rate of return on assets is derived using the building block approach which includes assumptions for the long term inflation rate, real return, and equity risk premiums. | |||||||||||||||||
No minimum funding contributions are required in 2015 for the plan; however, the Company may make a voluntary contribution. | |||||||||||||||||
As of December 31, 2014, the expected benefit payments related to the Company’s U.S. defined benefit pension plans during the next ten years are as follows (in thousands): | |||||||||||||||||
2015 | $ | 1,567 | |||||||||||||||
2016 | 16,005 | ||||||||||||||||
2017 | 1,596 | ||||||||||||||||
2018 | 1,607 | ||||||||||||||||
2019 | 1,657 | ||||||||||||||||
2020 — 2024 | 9,606 | ||||||||||||||||
Defined Benefits Plans Outside the U.S. | |||||||||||||||||
The Company also provides a non-contributory defined benefit plan which cover employees in Taiwan (“Taiwan Plan”). The Taiwan Plan was acquired in connection with the Company’s acquisition of Motorola Home. Any other benefit plans outside of the U.S. are not material to the Company either individually or in the aggregate. | |||||||||||||||||
Key assumptions used in the valuation of the Taiwan Plan are as follows: | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Assumed discount rate for obligations | 1.9 | % | 1.8 | % | |||||||||||||
Assumed discount rate for expense | 1.8 | % | 1.8 | % | |||||||||||||
Rate of compensation increase for indirect labor | 4.5 | % | 4.5 | % | |||||||||||||
Rate of compensation increase for direct labor | 2 | % | 2 | % | |||||||||||||
Expected long-term rate of return on plan assets (1) | 2 | % | 2 | % | |||||||||||||
-1 | Asset allocation is 100% in money market investments | ||||||||||||||||
The funded status of the Taiwan Plan is as follows (in thousands): | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Funded Status: | |||||||||||||||||
Funded status of plan | $ | (27,523 | ) | $ | (28,128 | ) | |||||||||||
Unrecognized actuarial loss | 9,482 | 9,370 | |||||||||||||||
Net amount recognized | $ | (18,041 | ) | $ | (18,758 | ) | |||||||||||
Other Benefit Plans | |||||||||||||||||
ARRIS has established defined contribution plans pursuant to the Internal Revenue Code Section 401(k) that cover all eligible U.S. employees. ARRIS contributes to these plans based upon the dollar amount of each participant’s contribution. ARRIS made matching contributions to these plans of approximately $15.3 million, $10.9 million and $5.7 million in 2014, 2013 and 2012, respectively. | |||||||||||||||||
The Company has a deferred compensation plan that does not qualify under Section 401(k) of the Internal Revenue Code, and is available to key executives of the Company and certain other employees. Employee compensation deferrals and matching contributions are held in a rabbi trust. The total of net employee deferrals and matching contributions, which is reflected in other long-term liabilities, was $3.3 million and $2.9 million at December 31, 2014 and 2013, respectively. Total expenses included in continuing operations for the matching contributions were approximately $0.1 million in 2014 and 2013. | |||||||||||||||||
The Company previously offered a deferred compensation arrangement, which allowed certain employees to defer a portion of their earnings and defer the related income taxes. As of December 31, 2004, the plan was frozen and no further contributions are allowed. The deferred earnings are invested in a rabbi trust. The total of net employee deferral and matching contributions, which is reflected in other long-term liabilities, was $2.9 million and $2.6 million at December 31, 2014 and 2013, respectively. | |||||||||||||||||
The Company also has a deferred retirement salary plan, which was limited to certain current or former officers of C-COR. The present value of the estimated future retirement benefit payments is being accrued over the estimated service period from the date of signed agreements with the employees. The accrued balance of this plan, the majority of which is included in other long-term liabilities, was $1.8 million at December 31, 2014 and 2013. Total expenses (income) included in continuing operations for the deferred retirement salary plan were approximately $0.1 million and $(0.3) million for 2014 and 2013, respectively. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Note 19. Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||
The following table summarizes the changes in accumulated other comprehensive income (loss) by component, net of taxes, for the year ended December 31, 2014 (in thousands): | |||||||||||||||||||||
Unrealized | Unrealized | Unfunded | Cumulative | Total | |||||||||||||||||
gain on | loss on | pension | translation | ||||||||||||||||||
marketable | derivative | liability | adjustments | ||||||||||||||||||
securities | instruments | ||||||||||||||||||||
Balance as of December 31, 2013 | $ | 306 | $ | (2,541 | ) | $ | (2,416 | ) | $ | (11 | ) | $ | (4,662 | ) | |||||||
Other comprehensive (loss) income before reclassifications | (38 | ) | 4,137 | — | (714 | ) | 3,385 | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | (243 | ) | (4,762 | ) | (4,765 | ) | — | (9,770 | ) | ||||||||||||
Net current-period other comprehensive income (loss) | (281 | ) | (625 | ) | (4,765 | ) | (714 | ) | (6,385 | ) | |||||||||||
Balance as of December 31, 2014 | $ | 25 | $ | (3,166 | ) | $ | (7,181 | ) | $ | (725 | ) | $ | (11,047 | ) | |||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies | Note 20. Commitments and Contingencies | ||||
General Matters | |||||
ARRIS leases office, distribution, and warehouse facilities as well as equipment under long-term leases expiring at various dates through 2023. Included in these operating leases are certain amounts related to restructuring activities; these lease payments and related sublease income are included in restructuring accruals on the consolidated balance sheets. Future minimum operating lease payments under non-cancelable leases at December 31, 2014 were as follows (in thousands): | |||||
Operating Leases | |||||
2015 | $ | 22,654 | |||
2016 | 18,695 | ||||
2017 | 13,613 | ||||
2018 | 9,764 | ||||
2019 | 7,099 | ||||
Thereafter | 20,457 | ||||
Less sublease income | (1,424 | ) | |||
Total minimum lease payments | $ | 90,858 | |||
Total rental expense for all operating leases amounted to approximately $32.0 million, $22.5 million and $12.4 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||
As of December 31, 2014, the Company had approximately $1.0 million of restricted cash. The restricted cash balances are held as cash collateral security for certain bank guarantees. Additionally, the Company had contractual obligations of approximately $598.2 million under agreements with non-cancelable terms to purchase goods or services over the next year. All contractual obligations outstanding at the end of prior years were satisfied within a 12 month period, and the obligations outstanding as of December 31, 2014 are expected to be satisfied by 2016. | |||||
In the fourth quarter of 2014, the Company agreed to participate in a syndicate of approximately 30 companies, including certain customers of ARRIS, to fund RPX Corporation’s (“RPX”) purchase of 4,000 patent assets from Rockstar Consortium and its subsidiaries (“Rockstar”). As part of this transaction, in the first quarter of 2015 the Company contributed $34.3 million to RPX to fund the purchase of the 4,000 Rockstar patent assets and received a non-exclusive license to the 4,000 patent assets purchased by RPX. | |||||
Legal Proceedings | |||||
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. |
Summary_Quarterly_Consolidated
Summary Quarterly Consolidated Financial Information | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Summary Quarterly Consolidated Financial Information | Note 21. Summary Quarterly Consolidated Financial Information (unaudited) | ||||||||||||||||
Certain amounts for the quarters have been recast based on the business combination guidance. That guidance requires us to recognize adjustments to the provisional amounts as if the accounting for the business combinations had been completed at the acquisition date. As a result, the Company revised the comparative information in prior quarters as needed, including making any change in depreciation, amortization, or other income effects recognized in completing the initial accounting for the Motorola Home acquisition. | |||||||||||||||||
The following table summarizes ARRIS’ quarterly consolidated financial information (in thousands, except per share data): | |||||||||||||||||
Quarters in 2014 Ended | |||||||||||||||||
March 31,(1) | June 30, | September 30,(2) | December 31,(3) | ||||||||||||||
Net sales | $ | 1,225,017 | $ | 1,429,071 | $ | 1,405,445 | $ | 1,263,388 | |||||||||
Gross margin | 346,774 | 419,412 | 435,734 | 380,576 | |||||||||||||
Operating income | 37,986 | 91,676 | 122,109 | 89,563 | |||||||||||||
Net income | $ | 40,800 | $ | 39,024 | $ | 54,626 | $ | 192,761 | |||||||||
Net income per basic share | $ | 0.29 | $ | 0.27 | $ | 0.38 | $ | 1.41 | |||||||||
Net income per diluted share | $ | 0.28 | $ | 0.26 | $ | 0.37 | $ | 1.37 | |||||||||
Quarters in 2013 Ended | |||||||||||||||||
March 31, | June 30, | September 30, | December 31, | ||||||||||||||
Net sales | $ | 353,650 | $ | 1,000,362 | $ | 1,067,823 | $ | 1,199,067 | |||||||||
Gross margin | 108,526 | 230,957 | 316,895 | 366,370 | |||||||||||||
Operating income (loss) | 9,516 | (88,062 | ) | 11,182 | 49,351 | ||||||||||||
Net income (loss) | $ | (14,650 | ) | $ | (48,463 | ) | $ | 17,170 | $ | (2,817 | ) | ||||||
Net income (loss) per basic share | $ | (0.13 | ) | $ | (0.36 | ) | $ | 0.12 | $ | (0.02 | ) | ||||||
Net income (loss) per diluted share | $ | (0.13 | ) | $ | (0.36 | ) | $ | 0.12 | $ | (0.02 | ) | ||||||
-1 | The Company recorded a tax benefit from the release of $18.2 million of valuation allowances from deferred tax assets recorded for U.S. federal net operating losses arising from the acquisition of the Motorola Home business from Google. | ||||||||||||||||
-2 | 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 concluded that the results of operations for these periods were not materially misstated. | ||||||||||||||||
-3 | The Company recorded a tax benefit from the release of $134.8 million of valuation allowances from deferred tax assets recorded for U.S. federal net operating losses and U.S. federal tax credits and $9.0 million of valuation allowances from deferred tax assets recorded for state net operating losses and state research and development tax credits arising from the acquisition of the Motorola Home business from Google. In addition, $18.1 million of current tax benefit was recorded when the President signed legislation to approve the extension of the U.S. federal research and development tax credit through December 31, 2014. |
Valuation_and_Qualifying_Accou
Valuation and Qualifying Accounts | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Valuation and Qualifying Accounts | Schedule II — Valuation and Qualifying Accounts | ||||||||||||||||
All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are not applicable, and therefore have been omitted. | |||||||||||||||||
SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS | |||||||||||||||||
Description | Balance at | Charge to | Deductions (2) | Balance at | |||||||||||||
Beginning | Expenses (1) | End of | |||||||||||||||
of Period | Period | ||||||||||||||||
(in thousands) | |||||||||||||||||
YEAR ENDED DECEMBER 31, 2014 | |||||||||||||||||
Reserves and allowance deducted from asset accounts: | |||||||||||||||||
Allowance for doubtful accounts | $ | 1,887 | $ | 5,336 | $ | 831 | $ | 6,392 | |||||||||
Income tax valuation allowance (3) | $ | 163,745 | $ | 37,708 | $ | 82,824 | $ | 118,629 | |||||||||
YEAR ENDED DECEMBER 31, 2013 | |||||||||||||||||
Reserves and allowance deducted from asset accounts: | |||||||||||||||||
Allowance for doubtful accounts | $ | 1,630 | $ | 257 | $ | — | $ | 1,887 | |||||||||
Income tax valuation allowance (3) | $ | 17,973 | $ | 147,349 | (4) | $ | 1,577 | $ | 163,745 | ||||||||
YEAR ENDED DECEMBER 31, 2012 | |||||||||||||||||
Reserves and allowance deducted from asset accounts: | |||||||||||||||||
Allowance for doubtful accounts | $ | 1,443 | $ | 240 | $ | 53 | $ | 1,630 | |||||||||
Income tax valuation allowance (3) | $ | 42,039 | $ | 3,541 | $ | 27,607 | $ | 17,973 | |||||||||
-1 | The charge to expense for the allowance for doubtful accounts primarily represents an adjustment for a change in estimate related to uncollectible accounts. | ||||||||||||||||
-2 | Represents: a) Uncollectible accounts written off, net of recoveries and write-offs, b) Net change in the sales return and allowance account, and c) Release of valuation allowances. | ||||||||||||||||
-3 | The income tax valuation allowance is included in current and noncurrent deferred income tax assets. | ||||||||||||||||
-4 | A significant portion of the increase in valuation allowances, approximately $141.7 million, is attributable to deferred tax assets arising from our acquisition of Motorola Home. These amounts did not impact the income statement. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Consolidation | (a) Consolidation | |||
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned foreign and domestic subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. | ||||
Use of Estimates | (b) Use of Estimates | |||
The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. | ||||
Reclassifications | (c) Reclassifications | |||
Certain prior year amounts in the financial statements and notes have been reclassified to conform to the fiscal year 2014 presentation. | ||||
Cash, Cash Equivalents, and Investments | (d) Cash, Cash Equivalents, and Investments | |||
ARRIS’ cash and cash equivalents (which are highly-liquid investments with an original maturity of three months or less) are primarily held in demand deposit accounts and money market accounts. The Company holds investments consisting of mutual funds and debt securities classified as available-for-sale, which are stated at estimated fair value. The debt securities consist primarily of commercial paper, certificates of deposits, short term corporate obligations and U.S. government agency financial instruments. These investments are on deposit with major financial institutions. | ||||
The Company accounts for investments in companies in which it has significant influence, or ownership between 20% and 50% of the investee under the equity method of accounting. Under the equity method, the investment is originally recorded at cost and adjusted to recognize the Company’s share of net earnings or losses, any basis difference of the investee, and dividends received. | ||||
Investments in which we do not exercise significant influence (generally less than a 20 percent ownership interest) are accounted for under the cost method. | ||||
The Company evaluates its investments for impairment whenever events or changes in circumstances indicate that the carrying amount of such investments may not be recoverable. An investment is written down to fair value if there is evidence of a loss in value which is other than temporary. | ||||
Inventories | (e) Inventories | |||
Inventories are stated at the lower of average cost, approximating first-in, first-out, or market. The cost of work-in-process and finished goods is comprised of material, labor, and overhead. | ||||
Revenue recognition | (f) Revenue recognition | |||
ARRIS generates revenue as a result of varying activities, including the delivery of stand-alone equipment, custom design and installation services, and bundled sales arrangements inclusive of equipment, software and services. The revenue from these activities is recognized in accordance with applicable accounting guidance and their related interpretations. | ||||
Revenue is recognized when all of the following criteria have been met: | ||||
• | When persuasive evidence of an arrangement exists. Contracts and customer purchase orders are used to determine the existence of an arrangement. For professional services evidence that an agreement exists includes information documenting the scope of work to be performed, price, and customer acceptance. These are contained in the signed contract, purchase order, or other documentation that shows scope, price and customer acceptance. | |||
• | Delivery has occurred. Shipping documents, proof of delivery and customer acceptance (when applicable) are used to verify delivery. | |||
• | The fee is fixed or determinable. Pricing is considered fixed or determinable at the execution of a customer arrangement, based on specific products and quantities to be delivered at specific prices. This determination includes a review of the payment terms associated with the transaction and whether the sales price is subject to refund or adjustment or future discounts. | |||
• | Collectability is reasonably assured. The Company assesses the ability to collect from customers based on a number of factors that include information supplied by credit agencies, analyzing customer accounts, reviewing payment history and consulting bank references. Should a circumstance arise where a customer is deemed not creditworthy, all revenue related to the transaction will be deferred until such time that payment is received and all other criteria to allow the Company to recognize revenue have been met. | |||
Revenue is deferred if any of the above revenue recognition criteria is not met as well as when certain circumstances exist for any of our products or services, including, but not limited to: | ||||
• | When undelivered products or services that are essential to the functionality of the delivered product exist, revenue is deferred until such undelivered products or services are delivered as the customer would not have full use of the delivered elements. | |||
• | When required acceptance has not occurred. | |||
• | When trade-in rights are granted at the time of sale, that portion of the sale is deferred until the trade-in right is exercised or the right expires. In determining the deferral amount, management estimates the expected trade-in rate and future value of the product upon trade-in. These factors are periodically reviewed and updated by management, and the updates may result in either an increase or decrease in the deferral. | |||
Equipment — The Company provides operators with equipment that can be placed within various stages of a broadband system that allows for the delivery of telephony, video and high-speed data as well as outside plant construction and maintenance equipment. For equipment sales, revenue recognition is generally established when the products have been shipped, risk of loss has transferred, objective evidence exists that the product has been accepted, and no significant obligations remain relative to the transaction. Additionally, based on historical experience, ARRIS has established reliable estimates related to sales returns and other allowances for discounts. These estimates are recorded as a reduction to revenue at the time the revenue is initially recorded. | ||||
Software Sold Without Tangible Equipment — ARRIS sells internally developed software as well as software developed by outside third parties that does not require significant production, modification or customization. For arrangements that contain only software and the related post-contract support, the Company recognizes revenue in accordance with the applicable software revenue recognition guidance. If the arrangement includes multiple elements that are software only, then the software revenue recognition guidance is applied and the fee is allocated to the various elements based on vendor-specific objective evidence (“VSOE”) of fair value. If sufficient VSOE of fair value does not exist for the allocation of revenue to all the various elements in a multiple element software arrangement, all revenue from the arrangement is deferred until the earlier of the point at which such sufficient VSOE of fair value is established or all elements within the arrangement are delivered. If VSOE of fair value exists for all undelivered elements, but does not exist for one or more delivered elements, the arrangement consideration is allocated to the various elements of the arrangement using the residual method of accounting. Under the residual method, the amount of the arrangement consideration allocated to the delivered elements is equal to the total arrangement consideration less the aggregate fair value of the undelivered elements. Under the residual method, if VSOE of fair value exists for the undelivered element, generally post contract support (“PCS”), the fair value of the undelivered element is deferred and recognized ratably over the term of the PCS contract, and the remaining portion of the arrangement is recognized as revenue upon delivery. If sufficient VSOE of fair value does not exist for PCS, revenue for the arrangement is recognized ratably over the term of support. | ||||
Standalone Services — Installation, training, and professional services are generally recognized in service revenue when performed or upon completion of the service when the final act is significant in relation to the overall service transaction. The key element for Professional Services in determining when service transaction revenue has been earned is determining the pattern of delivery or performance which determines the extent to which the earnings process is complete and the extent to which customers have received value from services provided. The delivery or performance conditions of our service transactions are typically evaluated under the proportional performance or completed performance model. | ||||
Incentives — Customer incentive programs that include consideration, primarily rebates/credits to be used against future product purchases and certain volume discounts, have been recorded as a reduction of revenue when the shipment of the requisite equipment occurs. | ||||
Value Added Resellers — ARRIS typically employs the sell-in method of accounting for revenue when using a Value Added Reseller (“VAR”) as our channel to market. Because product returns are restricted, revenue under this method is generally recognized at the time of shipment to the VAR provided all criteria for recognition are met. There are occasions, based on facts and circumstances surrounding the VAR transaction, where ARRIS will employ the sell-through method of recognizing revenue and defer that revenue until payment occurs. | ||||
Multiple Element Arrangements — Certain customer transactions may include multiple deliverables based on the bundling of equipment, software and services. When a multiple element arrangement exists, the fee from the arrangement is allocated to the various deliverables, to the extent appropriate, so that the proper amount can be recognized as revenue as each element is delivered. Based on the composition of the arrangement, the Company analyzes the provisions of the accounting guidance to determine the appropriate model that is applied towards accounting for the multiple element arrangement. If the arrangement includes a combination of elements that fall within different applicable guidance, ARRIS follows the provisions of the hierarchal literature to separate those elements from each other and apply the relevant guidance to each. | ||||
For arrangements that fall within the software revenue recognition guidance, the fee is allocated to the various elements based on VSOE of fair value. If sufficient VSOE of fair value does not exist for the allocation of revenue to all the various elements in a multiple element arrangement, all revenue from the arrangement is deferred until the earlier of the point at which such sufficient VSOE of fair value is established or all elements within the arrangement are delivered. If VSOE of fair value exists for all undelivered elements, but does not exist for one or more delivered elements, the arrangement consideration is allocated to the various elements of the arrangement using the residual method of accounting. Under the residual method, the amount of the arrangement consideration allocated to the delivered elements is equal to the total arrangement consideration less the aggregate fair value of the undelivered elements. Using this method, any potential discount on the arrangement is allocated entirely to the delivered elements, which ensures that the amount of revenue recognized at any point in time is not overstated. Under the residual method, if VSOE of fair value exists for the undelivered element, generally PCS, the fair value of the undelivered element is deferred and recognized ratably over the term of the PCS contract, and the remaining portion of the arrangement is recognized as revenue upon delivery, which generally occurs upon delivery of the product or implementation of the system. Many of ARRIS’ products are sold in combination with customer support and maintenance services, which consist of software updates and product support. Software updates provide customers with rights to unspecified software updates that ARRIS chooses to develop and to maintenance releases and patches that the Company chooses to release during the period of the support period. Product support services include telephone support, remote diagnostics, email and web access, access to on-site technical support personnel and repair or replacement of hardware in the event of damage or failure during the term of the support period. Maintenance and support service fees are recognized ratably under the straight-line method over the term of the contract, which is generally one year. The Company does not record receivables associated with maintenance revenues without a firm, non-cancelable order from the customer. VSOE of fair value is determined based on the price charged when the same element is sold separately and based on the prices at which our customers have renewed their customer support and maintenance. For elements that are not yet being sold separately, the price established by management, if it is probable that the price, once established, will not change before the separate introduction of the element into the marketplace is used to measure VSOE of fair value for that element. | ||||
Retail — Some of ARRIS product is sold through retail channels, which may include provisions involving a right of return. Upon shipment of the product, the Company reduces revenue for an estimate of potential future product returns related to the current period product revenue. Management analyzes historical returns, channel inventory levels, and current economic trends related to the Company’s products when evaluating the adequacy of the allowance for sales returns. When applicable, revenue on shipments is reduced for estimated price protection and sales incentives that are deemed to be contra-revenue under the authoritative guidance for revenue recognition. | ||||
Shipping and Handling Fees | (g) Shipping and Handling Fees | |||
Shipping and handling costs for the years ended December 31, 2014, 2013, and 2012 were approximately $6.9 million, $4.9 million and $3.6 million, respectively, and are classified in net sales and cost of sales. | ||||
Taxes Collected from Customers and Remitted to Governmental Authorities | (h) Taxes Collected from Customers and Remitted to Governmental Authorities | |||
Taxes assessed by a government authority that are both imposed on and concurrent with specific revenue transactions between us and our customers are presented on a net basis in our Consolidated Statements of Operations. | ||||
Depreciation of Property, Plant and Equipment | (i) Depreciation of Property, Plant and Equipment | |||
The Company provides for depreciation of property, plant and equipment on the straight-line basis over estimated useful lives of 10 to 40 years for buildings and improvements, 2 to 10 years for machinery and equipment, and the shorter of the term of the lease or useful life for leasehold improvements. Included in depreciation expense is the amortization of landlord funded tenant improvements which amounted to $4.0 million in 2014, $2.5 million in 2013 and $0.5 million in 2012. Depreciation expense, including amortization of capital leases, for the years ended December 31, 2014, 2013, and 2012 was approximately $79.0 million, $61.5 million, and $28.0 million, respectively. | ||||
Goodwill, Acquired Intangible Assets, and Long-Lived Assets | (j) Goodwill, Acquired Intangible Assets, and Long-Lived Assets | |||
Goodwill is tested for impairment on an annual basis during the fourth quarter and, when specific circumstances dictate, between annual tests. When impaired, the carrying amount of goodwill is written down to fair value. The goodwill impairment test involves a two-step process. The first step, identifying a potential impairment, compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, the second step would need to be conducted. If necessary, the second step to measure the impairment loss would be to compare the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill. Any excess of the reporting unit goodwill carrying amount over the respective implied fair value is recognized as an impairment loss. | ||||
The annual goodwill impairment tests were performed in the fourth quarters of 2012, 2013, and 2014 with an assessment date of October 1. There was no impairment of goodwill resulting from our annual impairment testing in 2014, 2013 and 2012. | ||||
As of December 31, 2014, the Company had goodwill of $936.1 million, of which $684.6 million related to the CPE reporting unit, $249.6 million related to the Network Infrastructure reporting unit and $1.9 million related to the Cloud Services reporting unit. | ||||
Acquired intangible assets with finite lives are carried at cost, less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets. Acquired intangible assets with indefinite lives are comprised of in-process research and development assets which are assessed for potential impairment annually or when events or circumstances indicate that their carrying amounts might be impaired. The acquired in-process research and development assets are initially recognized and measured at fair value and classified as indefinite-lived assets until the successful completion or abandonment of the associated research and development efforts. Accordingly, during the development period after acquisition, this asset is not amortized as charges to earnings. Completion of the associated research and development efforts would cause the indefinite-lived in-process research and development assets to become a finite-lived asset. As such, prior to commencing amortization the assets is tested for impairment. There were no impairment charges related to acquired intangible assets during 2014, 2013 and 2012. | ||||
Long-lived assets that are held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability of long-lived assets is based on an estimate of the undiscounted future cash flows resulting from the use of the asset and its eventual disposition. In determining future undiscounted cash flows, we have made a “policy decision” to use pre-tax cash flows in our evaluation, which is consistently applied. To test for recovery, we group assets (an “asset group”) in a manner that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. Measurement of an impairment loss for long-lived assets that management expects to hold and use is based on the difference between the fair value of the asset and its carrying amount. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. | ||||
See Note 5 of Notes to the Consolidated Financial Statements for further information on goodwill and intangible assets. | ||||
Advertising and Sales Promotion | (k) Advertising and Sales Promotion | |||
Advertising and sales promotion costs are expensed as incurred. Advertising expense was approximately $8.2 million, $4.1 million, and $0.2 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||
Research and Development | (l) Research and Development | |||
Research and development (“R&D”) costs are expensed as incurred. ARRIS’ research and development expenditures for the years ended December 31, 2014, 2013 and 2012 were approximately $556.6 million, $425.8 million, and $170.7 million, respectively. The expenditures include compensation costs, materials, other direct expenses, and allocated costs of information technology, telecommunications, and facilities. | ||||
Warranty | (m) Warranty | |||
ARRIS provides warranties of various lengths to customers based on the specific product and the terms of individual agreements. For further discussion, see Note 9 of the Notes to the Consolidated Financial Statements, Guarantees for further discussion. | ||||
Income Taxes | (n) Income Taxes | |||
ARRIS uses the liability method of accounting for income taxes, which requires recognition of temporary differences between financial statement and income tax bases of assets and liabilities, measured by enacted tax rates. | ||||
If necessary, the measurement of deferred tax assets is reduced by the amount of any tax benefits that are not expected to be realized based on available evidence. ARRIS reports a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense. See Note 16 of Notes to the Consolidated Financial Statements for further discussion. | ||||
Foreign Currency Translation | (o) Foreign Currency Translation | |||
A significant portion of the Company’s products are manufactured or assembled in China, Mexico and Taiwan, and we have research and development centers in Argentina, China, India, Ireland, Israel and Sweden. Sales into international markets have been and are expected in the future to be an important part of the Company’s business. These foreign operations are subject to the usual risks inherent in conducting business abroad, including risks with respect to currency exchange rates, economic and political destabilization, restrictive actions and taxation by foreign governments, nationalization, the laws and policies of the United States affecting trade, foreign investment and loans, and foreign tax laws. | ||||
ARRIS has certain international customers who are billed in their local currency and certain international operations that procure in U.S. dollars. ARRIS also has certain predictable expenditures for international operations in local currency. Additionally, certain intercompany transactions are denominated in foreign currencies and subject to revaluation. The Company enters into forward or currency option contracts based on a percentage of expected foreign currency exposures. The percentage can vary, based on the predictability of the exposures denominated in the foreign currency. See Note 8 of Notes to the Consolidated Financial Statements for further discussion. | ||||
Stock-Based Compensation | (p) Stock-Based Compensation | |||
See Note 17 of Notes to the Consolidated Financial Statements for further discussion of the Company’s significant accounting policies related to stock based compensation. | ||||
Concentrations of Credit Risk | (q) Concentrations of Credit Risk | |||
Financial instruments that potentially subject ARRIS to concentrations of credit risk consist principally of cash, cash equivalents and short-term investments, and accounts receivable. ARRIS places its temporary cash investments with high credit quality financial institutions. Concentrations with respect to accounts receivable occur as the Company sells primarily to large, well-established companies including companies outside of the United States. The Company’s credit policy generally does not require collateral from its customers. ARRIS closely monitors extensions of credit to other parties and, where necessary, utilizes common financial instruments to mitigate risk or requires cash on delivery terms. Overall financial strategies and the effect of using a hedge are reviewed periodically. When deemed uncollectible, accounts receivable balances are written off against the allowance for doubtful accounts. | ||||
Fair Value | (r) Fair Value | |||
The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments: | ||||
• | Cash, cash equivalents, and short-term investments: The carrying amounts reported in the consolidated balance sheets for cash, cash equivalents, and short-term investments approximate their fair values. | |||
• | Accounts receivable and accounts payable: The carrying amounts reported in the balance sheet for accounts receivable and accounts payable approximate their fair values. The Company establishes a reserve for doubtful accounts based upon its historical experience in collecting accounts receivable. | |||
• | Marketable securities: The fair values for trading and available-for-sale equity securities are based on quoted market prices or observable prices based on inputs not in active markets but corroborated by market data. | |||
• | Non-marketable securities: Non-marketable equity securities are subject to a periodic impairment review; however, there are no open-market valuations, and the impairment analysis requires significant judgment. This analysis includes assessment of the investee’s financial condition, the business outlook for its products and technology, its projected results and cash flow, recent rounds of financing, and the likelihood of obtaining subsequent rounds of financing. | |||
• | Senior secured credit facilities: Comprised of term loans and revolving credit facility. The face value of the Company’s term loans totaled approximately $1,547.6 million at December 31, 2014. | |||
• | Derivative instruments: The carrying amounts reported in the balance sheet for derivative financial instruments approximate their fair values. The Company has designated interest rate derivatives as cashflow hedges and the objective is to manage the variability of cash flows in the interest payments related to the portion of the variable-rate debt designated as being hedged. The Company’s foreign currency derivative instruments economically hedge certain risk but are not designated as hedges. The objective of these derivatives instruments is to add stability to foreign currency gains and losses recorded as other expense (income) and to manage its exposure to foreign currency movements. | |||
Computer Software | (s) Computer Software | |||
The Company capitalizes costs associated with internally developed and/or purchased software systems for internal use that have reached the application development stage and meet recoverability tests. Capitalized costs include external direct costs of materials and services utilized in developing or obtaining internal-use software and payroll and payroll-related expenses for employees who are directly associated with and devote time to the internal-use software project. Capitalization of such costs begins when the preliminary project stage is complete and ceases no later than the point at which the project is substantially complete and ready for its intended purpose. These capitalized costs are amortized on a straight-line basis over periods of two to seven years, beginning when the asset is ready for its intended use. Capitalized costs are included in property, plant, and equipment on the consolidated balance sheets. The carrying value of the software is reviewed regularly and impairment is recognized if the value of the estimated undiscounted cash flow benefits related to the asset is less than the remaining unamortized costs. | ||||
Research and development costs are charged to expense as incurred. ARRIS generally has not capitalized any such development costs because the costs incurred between the attainment of technological feasibility for the related software product through the date when the product is available for general release to customers has been insignificant. | ||||
Comprehensive Income (Loss) | (t) Comprehensive Income (Loss) | |||
The components of comprehensive income (loss) include net income (loss), unrealized gains (losses) on available-for-sale securities, unrealized gains (losses) on derivative instruments, change in unfunded pension liability, net of tax, if applicable and change in cumulative translation adjustments. |
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||
Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the three years ended December 31, 2014 are as follows (in thousands): | ||||||||||||||||||||||||||||||||
CPE | Network | Cloud | Total | ||||||||||||||||||||||||||||||
Infrastructure | Services | ||||||||||||||||||||||||||||||||
Goodwill | $ | 31,850 | $ | 419,318 | $ | 121,603 | $ | 572,771 | |||||||||||||||||||||||||
Accumulated impairment losses | — | (257,053 | ) | (121,603 | ) | (378,656 | ) | ||||||||||||||||||||||||||
Balance as of December 31, 2012 | $ | 31,850 | $ | 162,265 | $ | — | $ | 194,115 | |||||||||||||||||||||||||
Goodwill acquired | 656,808 | 81,537 | 11,056 | 749,401 | |||||||||||||||||||||||||||||
Adjustments | — | (3,114 | ) | — | (3,114 | ) | |||||||||||||||||||||||||||
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 | — | 1,682 | — | 1,682 | |||||||||||||||||||||||||||||
Reclassification | — | 8,732 | (8,732 | ) | — | ||||||||||||||||||||||||||||
Adjustments | (4,061 | ) | (1,535 | ) | (421 | ) | (6,017 | ) | |||||||||||||||||||||||||
Goodwill | 684,597 | 506,620 | 123,506 | 1,314,723 | |||||||||||||||||||||||||||||
Accumulated impairment losses | — | (257,053 | ) | (121,603 | ) | (378,656 | ) | ||||||||||||||||||||||||||
Balance as of December 31, 2014 | $ | 684,597 | $ | 249,567 | $ | 1,903 | $ | 936,067 | |||||||||||||||||||||||||
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 December 31, 2014 and December 31, 2013 are as follows (in thousands): | ||||||||||||||||||||||||||||||||
December 31, 2014 | December 31, 2013 | ||||||||||||||||||||||||||||||||
Gross | Accumulated | Net Book | Weighted | Gross | Accumulated | Net Book | Weighted | ||||||||||||||||||||||||||
Amount | Amortization | Value | Average | Amount | Amortization | Value | Average | ||||||||||||||||||||||||||
Remaining | Remaining | ||||||||||||||||||||||||||||||||
Life | Life | ||||||||||||||||||||||||||||||||
(Years) | (Years) | ||||||||||||||||||||||||||||||||
Customer relationships | $ | 904,012 | $ | 366,452 | $ | 537,560 | 6.1 | $ | 903,409 | $ | 266,323 | $ | 637,086 | 7 | |||||||||||||||||||
Developed technology, patents & licenses | 632,487 | 234,882 | 397,605 | 4.1 | 563,326 | 120,679 | 442,647 | 5 | |||||||||||||||||||||||||
Trademarks, trade and domain names | 21,072 | 17,949 | 3,123 | 1.2 | 20,900 | 8,549 | 12,351 | 1.5 | |||||||||||||||||||||||||
Order backlog | — | — | — | — | 44,600 | 31,592 | 13,008 | 0.3 | |||||||||||||||||||||||||
In-process R&D | $ | 5,100 | — | 5,100 | — | 71,100 | — | 71,100 | — | ||||||||||||||||||||||||
Total | $ | 1,562,671 | $ | 619,283 | $ | 943,388 | $ | 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): | ||||||||||||||||||||||||||||||||
2015 | $ | 220,641 | |||||||||||||||||||||||||||||||
2016 | 189,913 | ||||||||||||||||||||||||||||||||
2017 | 172,978 | ||||||||||||||||||||||||||||||||
2018 | 122,286 | ||||||||||||||||||||||||||||||||
2019 | 99,972 | ||||||||||||||||||||||||||||||||
Thereafter | 132,498 |
Investments_Tables
Investments (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Investments | ARRIS’ investments consisted of the following (in thousands): | ||||||||
As of December 31, | As of December 31, | ||||||||
2014 | 2013 | ||||||||
Current Assets: | |||||||||
Available-for-sale securities | $ | 126,748 | $ | 67,360 | |||||
Noncurrent Assets: | |||||||||
Available-for-sale securities | 8,631 | 7,004 | |||||||
Equity method investments | 27,355 | 23,803 | |||||||
Cost method investments | 15,161 | 15,250 | |||||||
Other investments | 26,493 | 25,119 | |||||||
Total classified as non-current assets | 77,640 | 71,176 | |||||||
Total | $ | 204,388 | $ | 138,536 | |||||
Contractual Maturities of Available-for-Sale Securities | The contractual maturities of the Company’s available-for-sale securities as of December 31, 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. (in thousands): | ||||||||
December 31, 2014 | |||||||||
Within one year | $ | 126,748 | |||||||
After one year through five years | 4,867 | ||||||||
After five years through ten years | — | ||||||||
After ten years | 3,764 | ||||||||
Total | $ | 135,379 | |||||||
Summary of Ownership Structure and Ownership Percentage of Non-consolidated Investments | The following table summarizes the ownership structure and ownership percentage of the non-consolidated investments as of December 31, 2014, which are accounted for using the equity method. | ||||||||
Name of Investee | Ownership Structure | % Ownership | |||||||
MPEG LA | Limited Liability Company | 8.40% | |||||||
Music Choice | Limited Liability Partnership | 18.20% | |||||||
Conditional Access Licensing | Limited Liability Company | 49.00% | |||||||
Combined Conditional Access Development | Limited Liability Company | 50.00% | |||||||
Funding Contributions to Investment | During 2014, the Company made funding contributions to the investment of $15.7 million. | ||||||||
(in thousands) | Carrying Amount | Maximum Exposure | |||||||
to Loss | |||||||||
Conditional Access Licensing (“CAL”) | $ | 8,562 | $ | 8,562 | |||||
Combined Conditional Access Development (“CCAD”) | 4,719 | 18,000 |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 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 December 31, 2014 and 2013 (in thousands): | ||||||||||||||||
December 31, 2014 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Certificates of deposit | $ | — | $ | 63,171 | $ | — | $ | 63,171 | |||||||||
Commercial paper | — | 1,000 | — | 1,000 | |||||||||||||
Corporate bonds | — | 37,737 | — | 37,737 | |||||||||||||
Short-term bond fund | 29,708 | — | — | 29,708 | |||||||||||||
Cash surrender value of company owned life insurance | — | 26,498 | — | 26,498 | |||||||||||||
Corporate obligations | — | 46 | — | 46 | |||||||||||||
Money markets | 210 | — | — | 210 | |||||||||||||
Mutual funds | 133 | — | — | 133 | |||||||||||||
Other investments | — | 3,369 | — | 3,369 | |||||||||||||
Interest rate derivatives — asset derivatives | — | 1,416 | — | 1,416 | |||||||||||||
Interest rate derivatives — liability derivatives | — | (6,414 | ) | — | (6,414 | ) | |||||||||||
Foreign currency contracts — asset position | — | 2,876 | — | 2,876 | |||||||||||||
Foreign currency contracts — liability position | — | (201 | ) | — | (201 | ) | |||||||||||
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) | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | |||||||||||||||
Outstanding Interest Rate Derivatives Designated as Cash Flow Hedges of Interest Rate Risk | As of December 31, 2014, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk: | ||||||||||||||
Interest Rate Derivative | Number of Instruments | Notional | |||||||||||||
Interest Rate Swaps | 6 | $ | 600,000,000 | ||||||||||||
Pre-Tax Impact of Derivative Financial Instruments | The table below presents the pre-tax impact of the Company’s derivative financial instruments had on the Accumulated Other Comprehensive Income and Statement of Operations for the years ended December 31, 2014 and 2013 (in thousands): | ||||||||||||||
Years Ended December 31, | |||||||||||||||
2014 | 2013 | ||||||||||||||
Loss Recognized in OCI on Derivative (Effective Portion) | $ | (8,541 | ) | $ | (7,140 | ) | |||||||||
Location of Loss Reclassified from Accumulated OCI into Income (Effective Portion) | Interest expense | Interest expense | |||||||||||||
Loss Reclassified from Accumulated OCI into Income (Effective Portion) | (7,550 | ) | (3,132 | ) | |||||||||||
Fair Values of Derivative Instruments Recorded in Consolidated Balance Sheet | The fair values of ARRIS’ derivative instruments recorded in the Consolidated Balance Sheet as of December 31, 2014 and 2013 were as follows (in thousands): | ||||||||||||||
As of December 31, 2014 | As of December 31, 2013 | ||||||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||
Foreign exchange contracts — asset derivatives | Other current assets | $ | 2,876 | Other current assets | $ | — | |||||||||
Foreign exchange contracts — liability derivatives | Other accrued liabilities | $ | 201 | Other accrued liabilities | $ | — | |||||||||
Derivatives designated as hedging instruments: | |||||||||||||||
Interest rate derivatives — asset derivatives | Other assets | $ | 1,416 | Other assets | $ | 3,011 | |||||||||
Interest rate derivatives — liability derivatives | Other accrued liabilities | $ | 6,414 | Other accrued liabilities | $ | 7,018 | |||||||||
Change in Fair Values of Derivative Instruments Recorded in Consolidated Statements of Operations | The change in the fair values of ARRIS’ derivative instruments recorded in the Consolidated Statements of Operations during the years ended December 31, 2014, 2013, and 2012 were as follows (in thousands): | ||||||||||||||
Years Ended December 31, | |||||||||||||||
Statement of Operations Location | 2014 | 2013 | 2012 | ||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||
Foreign exchange contracts | Gain on foreign currency | $ | 4,527 | $ | 428 | $ | 268 | ||||||||
Derivatives designated as hedging instruments: | |||||||||||||||
Interest rates derivatives | Interest expense | $ | 7,550 | $ | 3,132 | $ | — |
Guarantees_Tables
Guarantees (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Information Regarding Changes in ARRIS' Aggregate Product Warranty Liabilities | Information regarding the changes in ARRIS’ aggregate product warranty liabilities for the years ending December 31, 2014 and 2013 were as follows (in thousands): | ||||||||
2014 | 2013 | ||||||||
Beginning balance | $ | 81,500 | $ | 6,069 | |||||
Motorola Home warranty reserve at acquisition, | — | 82,804 | |||||||
Accruals related to warranties (including changes in assumptions) | 33,320 | 20,911 | |||||||
Settlements made (in cash or in kind) | (40,500 | ) | (28,284 | ) | |||||
Ending balance | $ | 74,320 | $ | 81,500 | |||||
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Reporting Segments | The table below presents information about the Company’s reportable segments for the years ended December 31, 2014, 2013 and 2012 (in thousands): | ||||||||||||||||
Reportable Segment | |||||||||||||||||
Network & | CPE | Other | Consolidated | ||||||||||||||
Cloud | |||||||||||||||||
Year ended December 31, 2014 | |||||||||||||||||
Sales | $ | 1,637,544 | $ | 3,690,454 | $ | (5,077 | ) | $ | 5,322,921 | ||||||||
Direct Contribution | 430,943 | 791,244 | (606,834 | ) | 615,353 | ||||||||||||
Amortization of intangible assets | 236,521 | 236,521 | |||||||||||||||
Integration, acquisition, restructuring & other cost | 37,498 | 37,498 | |||||||||||||||
Operating income | 341,334 | ||||||||||||||||
Other expense | 102,104 | ||||||||||||||||
Income before income taxes | $ | 239,230 | |||||||||||||||
Reportable Segment | |||||||||||||||||
Network & | CPE | Other | Consolidated | ||||||||||||||
Cloud | |||||||||||||||||
Year ended December 31, 2013 | |||||||||||||||||
Sales | $ | 1,193,001 | $ | 2,448,381 | $ | (20,480 | ) | $ | 3,620,902 | ||||||||
Direct Contribution | 264,589 | 509,473 | (515,391 | ) | 258,671 | ||||||||||||
Amortization of intangible assets | 193,637 | 193,637 | |||||||||||||||
Integration, acquisition, restructuring & other cost | 83,047 | 83,047 | |||||||||||||||
Operating loss | (18,013 | ) | |||||||||||||||
Other expense | 78,137 | ||||||||||||||||
Income (loss) before income taxes | $ | (96,150 | ) | ||||||||||||||
Reportable Segment | |||||||||||||||||
Network & | CPE | Other | Consolidated | ||||||||||||||
Cloud | |||||||||||||||||
Year ended December 31, 2012 | |||||||||||||||||
Sales | $ | 742,255 | $ | 611,408 | $ | — | $ | 1,353,663 | |||||||||
Direct Contribution | 228,798 | 66,788 | (165,053 | ) | 130,533 | ||||||||||||
Amortization of intangible assets | 30,294 | 30,294 | |||||||||||||||
Integration, acquisition, restructuring & other cost | 12,968 | 12,968 | |||||||||||||||
Operating income | 87,271 | ||||||||||||||||
Other expense | 12,975 | ||||||||||||||||
Income before income taxes | $ | 74,296 | |||||||||||||||
Summary of Company's Net Intangible Assets and Goodwill by Reportable Segment | The following table summarizes the Company’s net intangible assets and goodwill by reportable segment as of December 31, 2014 and 2013 (in thousands): | ||||||||||||||||
Network & | CPE | Total | |||||||||||||||
Cloud | |||||||||||||||||
December 31, 2014 | |||||||||||||||||
Goodwill | $ | 251,470 | $ | 684,597 | $ | 936,067 | |||||||||||
Intangible assets, net | 298,799 | 644,589 | 943,388 | ||||||||||||||
December 31, 2013 | |||||||||||||||||
Goodwill | $ | 251,744 | $ | 688,658 | $ | 940,402 | |||||||||||
Intangible assets, net | 366,844 | 809,348 | 1,176,192 | ||||||||||||||
Summary of Sales to Customers | A summary of sales to these customers for 2014, 2013 and 2012 is set forth below (in thousands, except percentages): | ||||||||||||||||
Years ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Comcast and affiliates | $ | 1,012,367 | $ | 674,977 | $ | 421,177 | |||||||||||
% of sales | 19 | % | 18.6 | % | 31.1 | % | |||||||||||
Time Warner Cable and affiliates | $ | 693,736 | $ | 359,516 | $ | 243,157 | |||||||||||
% of sales | 13 | % | 9.9 | % | 18 | % | |||||||||||
AT&T and affiliates | $ | 614,601 | $ | 280,225 | $ | 1,661 | |||||||||||
% of sales | 11.5 | % | 7.7 | % | 0.1 | % | |||||||||||
Summary of ARRIS' International Sales by Geographic Region | International sales for the years ended December 31, 2014, 2013 and 2012 were as follows (in thousands): | ||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Americas, excluding U.S (1) | $ | 900,822 | $ | 746,146 | $ | 202,887 | |||||||||||
Asia Pacific | 147,921 | 153,674 | 65,554 | ||||||||||||||
EMEA | 316,975 | 263,910 | 65,162 | ||||||||||||||
Total international sales | $ | 1,365,718 | $ | 1,163,730 | $ | 333,603 | |||||||||||
-1 | Excludes U.S. sales of $3,957.2 million, $2,457.2 million and $1,020.1 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||||||
Summary of ARRIS' International Long-Lived Assets by Geographic Region | The following table summarizes ARRIS’ international long-lived assets by geographic region as of December 31, 2014 and 2013 (in thousands): | ||||||||||||||||
As of December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Americas, excluding U.S. | $ | 7,303 | $ | 7,467 | |||||||||||||
Asia Pacific | 76,970 | 82,495 | |||||||||||||||
EMEA | 8,129 | 10,115 | |||||||||||||||
Total | $ | 92,402 | $ | 100,077 | |||||||||||||
-1 | Excludes U.S. long-lived assets of $274.0 million and $296.1 million for the years ended December 31, 2014 and 2013, respectively. |
Restructuring_Charges_Tables
Restructuring Charges (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 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 | 3,335 | 38 | 3,373 | ||||||||||
Cash payments / adjustments | (5,276 | ) | (521 | ) | (5,797 | ) | |||||||
Balance at December 31, 2014 | $ | 733 | $ | 190 | $ | 923 | |||||||
Inventories_Tables
Inventories (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Components of Inventory Net of Reserves | The components of inventory are as follows, net of reserves (in thousands): | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Raw material | $ | 61,068 | $ | 60,520 | |||||
Work in process | 6,713 | 6,010 | |||||||
Finished goods | 333,384 | 263,599 | |||||||
Total inventories, net | $ | 401,165 | $ | 330,129 | |||||
Property_Plant_and_Equipment_T
Property, Plant and Equipment (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment, at Cost | Property, plant and equipment, at cost, consisted of the following (in thousands): | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Land | $ | 87,952 | $ | 88,742 | |||||
Buildings and leasehold improvements | 141,581 | 133,668 | |||||||
Machinery and equipment | 402,709 | 368,572 | |||||||
632,242 | 590,982 | ||||||||
Less: Accumulated depreciation | (265,811 | ) | (194,830 | ) | |||||
Total property, plant and equipment, net | $ | 366,431 | $ | 396,152 | |||||
LongTerm_Indebtedness_Tables
Long-Term Indebtedness (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Senior Credit Facility Interest Rates | |||||||
Rate | As of December 31, 2014 | ||||||
Term Loan A | LIBOR + 1.75% | 1.92 | % | ||||
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. | ||||||
Face Value of Contractual Debt Obligations for Next Five Years | As of December 31, 2014, the face value of contractual debt obligations for the next five years are as follows (in thousands): | ||||||
2015 | $ | 75,625 | |||||
2016 | 103,125 | ||||||
2017 | 110,000 | ||||||
2018 | 715,000 | ||||||
2019 | — | ||||||
thereafter | 543,813 |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 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 (loss) per share computations for the periods indicated (in thousands, except per share data): | ||||||||||||
For the Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Basic: | |||||||||||||
Net income (loss) | $ | 327,211 | $ | (48,760 | ) | $ | 53,459 | ||||||
Weighted average shares outstanding | 144,386 | 131,980 | 114,161 | ||||||||||
Basic earnings (loss) per share | $ | 2.27 | $ | (0.37 | ) | $ | 0.47 | ||||||
Diluted: | |||||||||||||
Net income (loss) | $ | 327,211 | $ | (48,760 | ) | $ | 53,459 | ||||||
Weighted average shares outstanding | 144,386 | 131,980 | 114,161 | ||||||||||
Net effect of dilutive shares | 3,894 | — | 2,353 | ||||||||||
Total | 148,280 | 131,980 | 116,514 | ||||||||||
Diluted earnings (loss) per share | $ | 2.21 | $ | (0.37 | ) | $ | 0.46 | ||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income (Loss) Before Income Taxes | Income (loss) before income taxes (in thousands): | ||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Domestic | $ | 180,133 | $ | (128,588 | ) | $ | 67,620 | ||||||
Foreign | 59,097 | 32,438 | 6,676 | ||||||||||
$ | 239,230 | $ | (96,150 | ) | $ | 74,296 | |||||||
Components of Income Tax Expense (Benefit) | Income tax expense (benefit) consisted of the following (in thousands): | ||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Current — Federal | $ | 45,937 | $ | (5,133 | ) | $ | 26,196 | ||||||
State | 13,260 | (40 | ) | 3,440 | |||||||||
Foreign | 18,136 | 10,624 | 4,855 | ||||||||||
77,333 | 5,451 | 34,491 | |||||||||||
Deferred — Federal | (140,404 | ) | (50,485 | ) | (10,522 | ) | |||||||
State | (19,978 | ) | (2,189 | ) | (2,238 | ) | |||||||
Foreign | (4,932 | ) | (167 | ) | (894 | ) | |||||||
(165,314 | ) | (52,841 | ) | (13,654 | ) | ||||||||
Income tax expense (benefit) | $ | (87,981 | ) | $ | (47,390 | ) | $ | 20,837 | |||||
Reconciliation of Statutory Federal Income Tax Rate | A reconciliation of the statutory federal income tax rate of 35% and the effective income tax rates is as follows: | ||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Statutory federal income tax rate | 35 | % | 35 | % | 35 | % | |||||||
Effects of: | |||||||||||||
State income taxes, net of federal benefit | (6.6 | ) | 2.2 | 1.4 | |||||||||
Acquired deferred tax assets | (16.5 | ) | — | — | |||||||||
Domestic manufacturing deduction | (2.1 | ) | 1.1 | (4.0 | ) | ||||||||
Nontaxable Comcast derivative gain | — | (9.6 | ) | — | |||||||||
Facilitative acquisition costs | — | (3.5 | ) | — | |||||||||
Research and development tax credits | (8.7 | ) | 26.8 | (4.8 | ) | ||||||||
Changes in valuation allowance | (44.2 | ) | — | (0.7 | ) | ||||||||
Non-U.S. tax rate differential | (2.6 | ) | 1.3 | (1.0 | ) | ||||||||
Recapture of dual consolidated losses | 4 | — | — | ||||||||||
Other, net | 4.9 | (4.0 | ) | 2.2 | |||||||||
(36.8 | )% | 49.3 | % | 28.1 | % | ||||||||
Significant Components of ARRIS' Net Deferred Income Tax Assets (Liabilities) | Significant components of ARRIS’ net deferred income tax assets (liabilities) were as follows (in thousands): | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Current deferred income tax assets: | |||||||||||||
Inventory costs | $ | 34,695 | $ | 31,068 | |||||||||
Federal research and development credits | 24,212 | 5,472 | |||||||||||
Federal/state net operating loss carryforwards | 59,503 | 3,336 | |||||||||||
Foreign net operating loss carryforwards | 209 | 1,593 | |||||||||||
Accrued vacation | 7,980 | 7,175 | |||||||||||
Warranty reserve | 24,207 | 18,292 | |||||||||||
Deferred revenue | 1,001 | 19,988 | |||||||||||
Equity compensation | 14,639 | 10,243 | |||||||||||
Capitalized research and development | 45,513 | 55,164 | |||||||||||
Other | 23,841 | 24,939 | |||||||||||
Total current deferred income tax assets | 235,800 | 177,270 | |||||||||||
Noncurrent deferred income tax assets: | |||||||||||||
Federal/state net operating loss carryforwards | 158,153 | 159,219 | |||||||||||
Federal capital loss carryforwards | 7,701 | 5,152 | |||||||||||
Foreign net operating loss carryforwards | 11,631 | 8,212 | |||||||||||
Federal research and development credits | 38,449 | 19,409 | |||||||||||
Pension and deferred compensation | 18,393 | 16,187 | |||||||||||
Warranty reserve | 1,980 | 12,503 | |||||||||||
Capitalized research and development | 180,757 | 226,270 | |||||||||||
Other | 18,347 | 3,303 | |||||||||||
Total noncurrent deferred income tax assets | 435,411 | 450,255 | |||||||||||
Total deferred income tax assets | 671,211 | 627,525 | |||||||||||
Current deferred income tax liabilities: | |||||||||||||
Other | (3,249 | ) | (2,856 | ) | |||||||||
Total current deferred income tax liabilities | (3,249 | ) | (2,856 | ) | |||||||||
Non-current deferred income tax liabilities: | |||||||||||||
Property, plant and equipment, depreciation and basis differences | (19,744 | ) | (39,782 | ) | |||||||||
Excess tax on future repatriation of foreign earnings | (1,184 | ) | (1,184 | ) | |||||||||
Other noncurrent liabilities | (27,655 | ) | (9,192 | ) | |||||||||
Goodwill and Intangibles | (316,192 | ) | (401,060 | ) | |||||||||
Total noncurrent deferred income tax liabilities | (364,775 | ) | (451,218 | ) | |||||||||
Total deferred income tax liabilities | (368,024 | ) | (454,074 | ) | |||||||||
Net deferred income tax assets | 303,187 | 173,451 | |||||||||||
Valuation allowance | (118,629 | ) | (163,745 | ) | |||||||||
Net deferred income tax assets (liabilities) | $ | 184,558 | $ | 9,706 | |||||||||
Tabular Reconciliation of Unrecognized Tax Benefits | Tabular Reconciliation of Unrecognized Tax Benefits (in thousands): | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Beginning balance | $ | 28,344 | $ | 25,704 | $ | 26,232 | |||||||
Gross increases — tax positions in prior period | 17,636 | 2,442 | — | ||||||||||
Gross decreases — tax positions in prior period | (4,115 | ) | (21 | ) | — | ||||||||
Gross increases — current-period tax positions | 9,979 | 6,999 | 2,684 | ||||||||||
Increases (decreases) from acquired businesses | (196 | ) | 2,014 | — | |||||||||
Decreases relating to settlements with taxing authorities and other | (2,480 | ) | (1,098 | ) | 100 | ||||||||
Decreases due to lapse of statute of limitations | (1,149 | ) | (7,696 | ) | (3,312 | ) | |||||||
Ending balance | $ | 48,019 | $ | 28,344 | $ | 25,704 | |||||||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Summary of Activity of ARRIS' Options Granted | A summary of activity of ARRIS’ options granted under its stock incentive plans is presented below: | ||||||||||||||||||||
Options | Weighted | Weighted | Aggregate | ||||||||||||||||||
Average | Average | Intrinsic | |||||||||||||||||||
Exercise Price | Remaining | Value | |||||||||||||||||||
Contractual Term | (in thousands) | ||||||||||||||||||||
(in years) | |||||||||||||||||||||
Beginning balance, January 1, 2014 | 472,691 | $ | 11.6 | ||||||||||||||||||
Grants | — | — | |||||||||||||||||||
Exercised | (402,771 | ) | 11.5 | ||||||||||||||||||
Forfeited | — | — | |||||||||||||||||||
Expired | (31,920 | ) | 12.44 | ||||||||||||||||||
Ending balance, December 31, 2014 | 38,000 | 11.97 | 0.58 | $ | 692 | ||||||||||||||||
Exercisable at December 31, 2014 | 38,000 | 11.97 | 0.58 | $ | 692 | ||||||||||||||||
Summary of ARRIS' Options Outstanding | The following table summarizes ARRIS’ options outstanding as of December 31, 2014: | ||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||
Range of | Number | Weighted Average | Weighted | Number | Weighted | ||||||||||||||||
Exercise Prices | Outstanding | Remaining | Average | Exercisable | Average | ||||||||||||||||
Contractual Life | Exercise Price | Exercise Price | |||||||||||||||||||
$9.00 to $10.99 | 9,196 | 0.81 years | $ | 10.11 | 9,196 | $ | 10.11 | ||||||||||||||
$11.00 to $13.99 | 28,804 | 0.50 years | $ | 12.57 | 28,804 | $ | 12.57 | ||||||||||||||
$9.00 to $13.99 | 38,000 | 0.58 years | $ | 11.97 | 38,000 | $ | 11.97 | ||||||||||||||
Summary of ARRIS' Unvested Restricted Stock (Excluding Performance Related) | The following table summarizes ARRIS’ unvested restricted stock (excluding performance-related) and stock unit transactions during the year ending December 31, 2014: | ||||||||||||||||||||
Shares | Weighted Average | ||||||||||||||||||||
Grant Date | |||||||||||||||||||||
Fair Value | |||||||||||||||||||||
Unvested at January 1, 2014 | 7,051,880 | $ | 14.29 | ||||||||||||||||||
Granted | 2,650,740 | 27.66 | |||||||||||||||||||
Vested | (2,369,907 | ) | 13.93 | ||||||||||||||||||
Forfeited | (340,924 | ) | 18.36 | ||||||||||||||||||
Unvested at December 31, 2014 | 6,991,789 | 19.29 | |||||||||||||||||||
Employee_Benefit_Plans_Tables
Employee Benefit Plans (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Defined Benefit Plan, Actual and Target Plan Asset Allocations | The following table summarizes the weighted average pension asset allocations as December 31, 2014 and 2013: | ||||||||||||||||
Weighted Average Allocation | |||||||||||||||||
Target | Actual | ||||||||||||||||
2014 | 2014 | 2013 | |||||||||||||||
Equity securities | 42 | % | 43 | % | 43 | % | |||||||||||
Debt securities | 3 | 3 | 3 | ||||||||||||||
Cash and cash equivalents | 55 | 54 | 54 | ||||||||||||||
100 | % | 100 | % | 100 | % | ||||||||||||
Schedule of Pension Plan Assets By Category and By level | The following table summarizes the Company’s U.S. pension plan assets by category and by level (as described in Note 7 of the Notes to the Consolidated Financial Statements) as of December 31, 2014 (in thousands): | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Cash and cash equivalents (1) | $ | — | $ | 7,752 | $ | — | $ | 7,752 | |||||||||
Equity securities (2): | |||||||||||||||||
U.S. large cap | 1,571 | — | — | 1,571 | |||||||||||||
U.S. mid cap | 1,640 | — | — | 1,640 | |||||||||||||
U.S. small cap | 1,367 | — | — | 1,367 | |||||||||||||
International | 2,050 | — | — | 2,050 | |||||||||||||
Fixed income securities (3): | 205 | — | — | 205 | |||||||||||||
Total | $ | 6,833 | $ | 7,752 | $ | — | $ | 14,585 | |||||||||
-1 | Cash and cash equivalents, which are used to pay benefits and administrative expenses, are held in a stable value fund. | ||||||||||||||||
-2 | Equity securities consist of mutual funds and the underlying investments are indexes. Investments in mutual funds are valued at the net asset value per share multiplied by the number of shares held. | ||||||||||||||||
-3 | Fixed income securities consist of bonds securities in mutual funds, and are valued at the net asset value per share multiplied by the number of shares held. | ||||||||||||||||
Schedule of Non Contributory Defined Benefit Pension Plans | Summary data for the U.S. non-contributory defined benefit pension plans is as follows (in thousands): | ||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Change in Projected Benefit Obligation: | |||||||||||||||||
Projected benefit obligation at beginning of year | $ | 40,382 | $ | 42,082 | |||||||||||||
Service cost | — | 122 | |||||||||||||||
Interest cost | 1,783 | 1,619 | |||||||||||||||
Actuarial loss (gain) | 5,692 | (1,813 | ) | ||||||||||||||
Benefit payments | (1,307 | ) | (1,309 | ) | |||||||||||||
Other | — | (319 | ) | ||||||||||||||
Projected benefit obligation at end of year | $ | 46,550 | $ | 40,382 | |||||||||||||
Change in Plan Assets: | |||||||||||||||||
Fair value of plan assets at beginning of year | $ | 15,162 | $ | 14,866 | |||||||||||||
Actual return on plan assets | 575 | 1,421 | |||||||||||||||
Company contributions | 155 | 184 | |||||||||||||||
Expenses and benefits paid from plan assets | (1,307 | ) | (1,309 | ) | |||||||||||||
Other | — | — | |||||||||||||||
Fair value of plan assets at end of year (1) | $ | 14,585 | $ | 15,162 | |||||||||||||
Funded Status: | |||||||||||||||||
Funded status of plan | $ | (31,965 | ) | $ | (25,220 | ) | |||||||||||
Unrecognized actuarial loss | 13,233 | 7,546 | |||||||||||||||
Unamortized prior service cost | — | — | |||||||||||||||
Net amount recognized | $ | (18,732 | ) | $ | (17,674 | ) | |||||||||||
-1 | In addition to the pension plan assets, ARRIS has established two rabbi trusts to further fund the pension obligations of the Chief Executive and certain executive officers of $20.3 million as of December 31, 2014 and $19.3 million as of December 31, 2013, and are included in Investments on the Consolidated Balance Sheets. | ||||||||||||||||
Schedule of Amounts Recognized in Statement of Financial Position | Amounts recognized in the statement of financial position consist of (in thousands): | ||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Current liabilities | $ | (393 | ) | $ | (364 | ) | |||||||||||
Noncurrent liabilities | (31,572 | ) | (24,856 | ) | |||||||||||||
Accumulated other comprehensive income (1) | 13,233 | 7,546 | |||||||||||||||
Total | $ | (18,732 | ) | $ | (17,674 | ) | |||||||||||
-1 | The accumulated other comprehensive income on the Consolidated Balance Sheets as of December 31, 2014 and 2013 includes balances for plans outside of the U.S. of $10.9 million and $9.4 million, respectively. Also, the accumulated other comprehensive income on the Consolidated Balance Sheets as of December 31, 2014 and 2013 is presented net of income tax effect of $3.4 million and $1.0 million, respectively. | ||||||||||||||||
Schedule of Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss) | Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) are as follows (in thousands): | ||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Net gain (loss) | $ | 5,992 | $ | (2,359 | ) | ||||||||||||
Amortization of net loss | (305 | ) | (607 | ) | |||||||||||||
Settlement charge | — | (318 | ) | ||||||||||||||
Total recognized in other comprehensive income (loss) | $ | 5,687 | $ | (3,284 | ) | ||||||||||||
Schedule of Amounts in Other Comprehensive Income (Loss) Expected to be Amortized | The following table summarizes the amounts in other comprehensive income (loss) expected to be amortized and recognized as a component of net periodic benefit cost in 2015 (in thousands): | ||||||||||||||||
Amortization of net loss | $ | 834 | |||||||||||||||
Schedule of Information for Defined Benefit Plans with Accumulated Benefit Obligations in Excess of Plan Assets | Information for defined benefit plans with accumulated benefit obligations in excess of plan assets is as follows (in thousands): | ||||||||||||||||
December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Accumulated benefit obligation | $ | 46,550 | $ | 40,382 | |||||||||||||
Projected benefit obligation | $ | 46,550 | $ | 40,382 | |||||||||||||
Plan assets | $ | 14,585 | $ | 15,162 | |||||||||||||
Schedule of Pension and Supplemental Benefit Plans | Net periodic pension cost for 2014, 2013 and 2012 for pension and supplemental benefit plans includes the following components (in thousands): | ||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Service cost | $ | — | $ | 122 | $ | 335 | |||||||||||
Interest cost | 1,782 | 1,619 | 2,085 | ||||||||||||||
Return on assets (expected) | (874 | ) | (876 | ) | (1,260 | ) | |||||||||||
Amortization of net actuarial loss (1) | 305 | 607 | 840 | ||||||||||||||
Settlement charge | — | — | 3,064 | ||||||||||||||
Net periodic pension cost | $ | 1,213 | $ | 1,472 | $ | 5,064 | |||||||||||
-1 | ARRIS uses the allowable 10% corridor approach to determine the amount of gains/losses subject to amortization in the pension cost. Prior service costs and gains/losses are amortized on a straight-line basis over the average future service of members expected to receive benefits | ||||||||||||||||
Schedule of Weighted Average Actuarial Assumptions Used to Determine the Benefit Obligations | The weighted-average actuarial assumptions used to determine the benefit obligations for the three years presented are set forth below: | ||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Assumed discount rate for plan participants | 3.75 | % | 4.5 | % | 3.75 | % | |||||||||||
Rate of compensation increase | N/A | N/A | 3.75 | % | |||||||||||||
Schedule of Weighted Average Actuarial Assumptions Used to Determine the Net Periodic Benefit Costs | The weighted-average actuarial assumptions used to determine the net periodic benefit costs are set forth below: | ||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Assumed discount rate for plan participants | 4.5 | % | 3.75 | % | 4.5 | % | |||||||||||
Rate of compensation increase | N/A | 3.75 | % | 3.75 | % | ||||||||||||
Expected long-term rate of return on plan assets | 6 | % | 6 | % | 6 | % | |||||||||||
Expected Benefit Payments Related to Defined Benefit Pension Plans | As of December 31, 2014, the expected benefit payments related to the Company’s U.S. defined benefit pension plans during the next ten years are as follows (in thousands): | ||||||||||||||||
2015 | $ | 1,567 | |||||||||||||||
2016 | 16,005 | ||||||||||||||||
2017 | 1,596 | ||||||||||||||||
2018 | 1,607 | ||||||||||||||||
2019 | 1,657 | ||||||||||||||||
2020 — 2024 | 9,606 | ||||||||||||||||
Key Assumptions Used In Valuation of Taiwan Plan | Key assumptions used in the valuation of the Taiwan Plan are as follows: | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Assumed discount rate for obligations | 1.9 | % | 1.8 | % | |||||||||||||
Assumed discount rate for expense | 1.8 | % | 1.8 | % | |||||||||||||
Rate of compensation increase for indirect labor | 4.5 | % | 4.5 | % | |||||||||||||
Rate of compensation increase for direct labor | 2 | % | 2 | % | |||||||||||||
Expected long-term rate of return on plan assets (1) | 2 | % | 2 | % | |||||||||||||
-1 | Asset allocation is 100% in money market investments | ||||||||||||||||
Funded Status of Taiwan Plan | The funded status of the Taiwan Plan is as follows (in thousands): | ||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Funded Status: | |||||||||||||||||
Funded status of plan | $ | (27,523 | ) | $ | (28,128 | ) | |||||||||||
Unrecognized actuarial loss | 9,482 | 9,370 | |||||||||||||||
Net amount recognized | $ | (18,041 | ) | $ | (18,758 | ) | |||||||||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Changes in Accumulated Other Comprehensive Income (Loss) by Component, Net of Taxes | The following table summarizes the changes in accumulated other comprehensive income (loss) by component, net of taxes, for the year ended December 31, 2014 (in thousands): | ||||||||||||||||||||
Unrealized | Unrealized | Unfunded | Cumulative | Total | |||||||||||||||||
gain on | loss on | pension | translation | ||||||||||||||||||
marketable | derivative | liability | adjustments | ||||||||||||||||||
securities | instruments | ||||||||||||||||||||
Balance as of December 31, 2013 | $ | 306 | $ | (2,541 | ) | $ | (2,416 | ) | $ | (11 | ) | $ | (4,662 | ) | |||||||
Other comprehensive (loss) income before reclassifications | (38 | ) | 4,137 | — | (714 | ) | 3,385 | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | (243 | ) | (4,762 | ) | (4,765 | ) | — | (9,770 | ) | ||||||||||||
Net current-period other comprehensive income (loss) | (281 | ) | (625 | ) | (4,765 | ) | (714 | ) | (6,385 | ) | |||||||||||
Balance as of December 31, 2014 | $ | 25 | $ | (3,166 | ) | $ | (7,181 | ) | $ | (725 | ) | $ | (11,047 | ) | |||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Future Minimum Operating Lease Payments under Non-Cancelable Leases | Future minimum operating lease payments under non-cancelable leases at December 31, 2014 were as follows (in thousands): | ||||
Operating Leases | |||||
2015 | $ | 22,654 | |||
2016 | 18,695 | ||||
2017 | 13,613 | ||||
2018 | 9,764 | ||||
2019 | 7,099 | ||||
Thereafter | 20,457 | ||||
Less sublease income | (1,424 | ) | |||
Total minimum lease payments | $ | 90,858 | |||
Summary_Quarterly_Consolidated1
Summary Quarterly Consolidated Financial Information (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Schedule of Quarterly Consolidated Financial Information | The following table summarizes ARRIS’ quarterly consolidated financial information (in thousands, except per share data): | ||||||||||||||||
Quarters in 2014 Ended | |||||||||||||||||
March 31,(1) | June 30, | September 30,(2) | December 31,(3) | ||||||||||||||
Net sales | $ | 1,225,017 | $ | 1,429,071 | $ | 1,405,445 | $ | 1,263,388 | |||||||||
Gross margin | 346,774 | 419,412 | 435,734 | 380,576 | |||||||||||||
Operating income | 37,986 | 91,676 | 122,109 | 89,563 | |||||||||||||
Net income | $ | 40,800 | $ | 39,024 | $ | 54,626 | $ | 192,761 | |||||||||
Net income per basic share | $ | 0.29 | $ | 0.27 | $ | 0.38 | $ | 1.41 | |||||||||
Net income per diluted share | $ | 0.28 | $ | 0.26 | $ | 0.37 | $ | 1.37 | |||||||||
Quarters in 2013 Ended | |||||||||||||||||
March 31, | June 30, | September 30, | December 31, | ||||||||||||||
Net sales | $ | 353,650 | $ | 1,000,362 | $ | 1,067,823 | $ | 1,199,067 | |||||||||
Gross margin | 108,526 | 230,957 | 316,895 | 366,370 | |||||||||||||
Operating income (loss) | 9,516 | (88,062 | ) | 11,182 | 49,351 | ||||||||||||
Net income (loss) | $ | (14,650 | ) | $ | (48,463 | ) | $ | 17,170 | $ | (2,817 | ) | ||||||
Net income (loss) per basic share | $ | (0.13 | ) | $ | (0.36 | ) | $ | 0.12 | $ | (0.02 | ) | ||||||
Net income (loss) per diluted share | $ | (0.13 | ) | $ | (0.36 | ) | $ | 0.12 | $ | (0.02 | ) | ||||||
-1 | The Company recorded a tax benefit from the release of $18.2 million of valuation allowances from deferred tax assets recorded for U.S. federal net operating losses arising from the acquisition of the Motorola Home business from Google. | ||||||||||||||||
-2 | 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 concluded that the results of operations for these periods were not materially misstated. | ||||||||||||||||
-3 | The Company recorded a tax benefit from the release of $134.8 million of valuation allowances from deferred tax assets recorded for U.S. federal net operating losses and U.S. federal tax credits and $9.0 million of valuation allowances from deferred tax assets recorded for state net operating losses and state research and development tax credits arising from the acquisition of the Motorola Home business from Google. In addition, $18.1 million of current tax benefit was recorded when the President signed legislation to approve the extension of the U.S. federal research and development tax credit through December 31, 2014. |
Organization_and_Basis_of_Pres1
Organization and Basis of Presentation - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
Segment | |
Geographic Information [Line Items] | |
Number of business segments operated | 2 |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||
Summary Of Significant Accounting Policies [Line Items] | ||||
Original maturity period of cash, cash equivalents and investments | Three months or less | |||
Shipping and handling costs | $6,900,000 | $4,900,000 | $3,600,000 | |
Amortization of landlord funded tenant improvements | 4,000,000 | 2,500,000 | 500,000 | |
Depreciation expense, including amortization of capital leases | 79,000,000 | 61,500,000 | 28,000,000 | |
Goodwill | 936,067,000 | 940,402,000 | [1] | 194,115,000 |
Impairment charges related to intangible asset | 0 | 0 | 0 | |
Advertising expense | 8,200,000 | 4,100,000 | 200,000 | |
Research and development expenses | 556,575,000 | 425,825,000 | 170,706,000 | |
CPE | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Goodwill | 684,597,000 | 688,658,000 | 31,850,000 | |
Network Infrastructure | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Goodwill | 249,567,000 | 240,688,000 | 162,265,000 | |
Cloud Services | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Goodwill impairment | 0 | 0 | 0 | |
Goodwill | 1,903,000 | 11,056,000 | ||
Senior Secured Credit Facilities | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Face value of term loans | $1,547,600,000 | |||
Minimum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Equity method investment, ownership percentage | 20.00% | |||
Maximum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Equity method investment, ownership percentage | 50.00% | |||
Building and Improvements | Minimum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property, plant and equipment, useful life | 10 years | |||
Building and Improvements | Maximum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property, plant and equipment, useful life | 40 years | |||
Machinery and Equipment | Minimum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property, plant and equipment, useful life | 2 years | |||
Machinery and Equipment | Maximum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property, plant and equipment, useful life | 10 years | |||
Internally Developed Software | Minimum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property, plant and equipment, useful life | 2 years | |||
Internally Developed Software | Maximum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property, plant and equipment, useful life | 7 years | |||
[1] | Certain amounts for December 31, 2013 have been recast to reflect results for business acquisitions. |
Business_Acquisitions_Addition
Business Acquisitions - Additional Information (Detail) (USD $) | 12 Months Ended | 0 Months Ended | ||||
Share data in Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2014 | Apr. 17, 2013 | Apr. 17, 2014 | Dec. 31, 2012 | |
Business Acquisition [Line Items] | ||||||
Business acquisition, cash consideration | $2,208,114,000 | |||||
Goodwill | 940,402,000 | [1] | 936,067,000 | 194,115,000 | ||
Minimum | ||||||
Business Acquisition [Line Items] | ||||||
Finite lived intangible assets, useful life | 6 months | |||||
Maximum | ||||||
Business Acquisition [Line Items] | ||||||
Finite lived intangible assets, useful life | 10 years | |||||
Motorola Home | ||||||
Business Acquisition [Line Items] | ||||||
Business acquisition, cash consideration | 2,208,100,000 | |||||
Business acquisition potential stock issue, shares | 10.6 | 10.6 | ||||
SeaWell Networks, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Business acquisition, cash consideration | 5,900,000 | |||||
Additional contingent consideration, maximum | 3,000,000 | |||||
Period for achievement of certain financial targets related to contingent consideration | 30 months | |||||
Goodwill | 1,700,000 | |||||
Identified intangible assets acquired | $2,000,000 | |||||
SeaWell Networks, Inc. | Minimum | ||||||
Business Acquisition [Line Items] | ||||||
Finite lived intangible assets, useful life | 5 years | |||||
SeaWell Networks, Inc. | Maximum | ||||||
Business Acquisition [Line Items] | ||||||
Finite lived intangible assets, useful life | 10 years | |||||
[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 $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | ||
Goodwill [Line Items] | ||||
Goodwill, gross, as of beginning of period | $1,319,058 | $572,771 | ||
Accumulated impairment losses, as of beginning of period | -378,656 | -378,656 | ||
Balance as of beginning of period | 940,402 | [1] | 194,115 | |
Goodwill acquired | 1,682 | 749,401 | ||
Adjustments | -6,017 | -3,114 | ||
Goodwill, gross, as of end of period | 1,314,723 | 1,319,058 | ||
Accumulated impairment losses, as of end of period | -378,656 | -378,656 | ||
Balance as of end of period | 936,067 | 940,402 | [1] | |
CPE | ||||
Goodwill [Line Items] | ||||
Goodwill, gross, as of beginning of period | 688,658 | 31,850 | ||
Balance as of beginning of period | 688,658 | 31,850 | ||
Goodwill acquired | 656,808 | |||
Adjustments | -4,061 | |||
Goodwill, gross, as of end of period | 684,597 | 688,658 | ||
Balance as of end of period | 684,597 | 688,658 | ||
Network Infrastructure | ||||
Goodwill [Line Items] | ||||
Goodwill, gross, as of beginning of period | 497,741 | 419,318 | ||
Accumulated impairment losses, as of beginning of period | -257,053 | -257,053 | ||
Balance as of beginning of period | 240,688 | 162,265 | ||
Goodwill acquired | 1,682 | 81,537 | ||
Reclassification | 8,732 | |||
Adjustments | -1,535 | -3,114 | ||
Goodwill, gross, as of end of period | 506,620 | 497,741 | ||
Accumulated impairment losses, as of end of period | -257,053 | -257,053 | ||
Balance as of end of period | 249,567 | 240,688 | ||
Cloud Services | ||||
Goodwill [Line Items] | ||||
Goodwill, gross, as of beginning of period | 132,659 | 121,603 | ||
Accumulated impairment losses, as of beginning of period | -121,603 | -121,603 | ||
Balance as of beginning of period | 11,056 | |||
Goodwill acquired | 11,056 | |||
Reclassification | -8,732 | |||
Adjustments | -421 | |||
Goodwill, gross, as of end of period | 123,506 | 132,659 | ||
Accumulated impairment losses, as of end of period | -121,603 | -121,603 | ||
Balance as of end of period | $1,903 | $11,056 | ||
[1] | 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 $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule Of Goodwill And Intangible Assets [Line Items] | |||
Gross Amount | $1,562,671,000 | $1,603,335,000 | |
Impairment charges related to finite lived acquired intangible assets | 0 | 0 | 0 |
Amortization of intangible assets | 236,751,000 | 193,637,000 | 30,294,000 |
Minimum | |||
Schedule Of Goodwill And Intangible Assets [Line Items] | |||
Finite lived intangible assets, useful life | 6 months | ||
Maximum | |||
Schedule Of Goodwill And Intangible Assets [Line Items] | |||
Finite lived intangible assets, useful life | 10 years | ||
In-process R&D | |||
Schedule Of Goodwill And Intangible Assets [Line Items] | |||
Gross Amount | 5,100,000 | 71,100,000 | |
Indefinite-lived assets acquired | 83,100,000 | ||
Impairment of indefinite-lived assets | 66,000,000 | 12,000,000 | |
Finite lived intangible assets, amortization expense | 5,100,000 | ||
Network Infrastructure | |||
Schedule Of Goodwill And Intangible Assets [Line Items] | |||
Reclassification | 8,732,000 | ||
Cloud Services | |||
Schedule Of Goodwill And Intangible Assets [Line Items] | |||
Reclassification | ($8,732,000) |
Gross_Carrying_Amount_and_Accu
Gross Carrying Amount and Accumulated Amortization of Intangible Assets (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | |
Intangible Assets [Line Items] | |||
Gross Amount | $1,562,671 | $1,603,335 | |
Accumulated Amortization | 619,283 | 427,143 | [1] |
Net Book Value | 943,388 | 1,176,192 | [1] |
Customer relationships | |||
Intangible Assets [Line Items] | |||
Gross Amount | 904,012 | 903,409 | |
Accumulated Amortization | 366,452 | 266,323 | |
Net Book Value | 537,560 | 637,086 | |
Weighted Average Remaining Life (Years) | 6 years 1 month 6 days | 7 years | |
Developed technology, patents & licenses | |||
Intangible Assets [Line Items] | |||
Gross Amount | 632,487 | 563,326 | |
Accumulated Amortization | 234,882 | 120,679 | |
Net Book Value | 397,605 | 442,647 | |
Weighted Average Remaining Life (Years) | 4 years 1 month 6 days | 5 years | |
Trademark, trade and domain names | |||
Intangible Assets [Line Items] | |||
Gross Amount | 21,072 | 20,900 | |
Accumulated Amortization | 17,949 | 8,549 | |
Net Book Value | 3,123 | 12,351 | |
Weighted Average Remaining Life (Years) | 1 year 2 months 12 days | 1 year 6 months | |
Order backlog | |||
Intangible Assets [Line Items] | |||
Gross Amount | 44,600 | ||
Accumulated Amortization | 31,592 | ||
Net Book Value | 13,008 | ||
Weighted Average Remaining Life (Years) | 0 years | 3 months 18 days | |
In-process R&D | |||
Intangible Assets [Line Items] | |||
Gross Amount | 5,100 | 71,100 | |
Net Book Value | $5,100 | $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 $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Finite Lived Intangible Assets Amortization Expense [Line Items] | |
2015 | $220,641 |
2016 | 189,913 |
2017 | 172,978 |
2018 | 122,286 |
2019 | 99,972 |
Thereafter | $132,498 |
Investments_Detail
Investments (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | |||
Current Assets: | |||
Available-for-sale securities | $126,748 | $67,360 | [1] |
Noncurrent Assets: | |||
Available-for-sale securities | 8,631 | 7,004 | |
Equity method investments | 27,355 | 23,803 | |
Cost method investments | 15,161 | 15,250 | |
Other investments | 26,493 | 25,119 | |
Total classified as non-current assets | 77,640 | 71,176 | [1] |
Total | $204,388 | $138,536 | |
[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 $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Investment Holdings [Line Items] | |
Within one year | $126,748 |
After one year through five years | 4,867 |
After five years through ten years | 0 |
After ten years | 3,764 |
Total | $135,379 |
Investments_Additional_Informa
Investments - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2012 | Dec. 31, 2013 | |
Investment Holdings [Line Items] | |||
Equity method investments | $27,355,000 | $23,803,000 | |
Future funding contributions | 15,700,000 | ||
Cost method investment | 15,161,000 | 15,250,000 | |
Other investment | 26,493,000 | 25,119,000 | |
Other-than-temporary impairment losses recognized for the period | 7,000,000 | 1,500,000 | |
Other-than-temporary impairment losses | 0 | ||
Minimum | |||
Investment Holdings [Line Items] | |||
Equity method ownership, percentage | 20.00% | ||
Engineering services provided, percentage | 20.00% | ||
Engineering services provided, amount | 6,000,000 | ||
Maximum | |||
Investment Holdings [Line Items] | |||
Equity method ownership, percentage | 50.00% | ||
Engineering services provided, percentage | 30.00% | ||
Engineering services provided, amount | 8,000,000 | ||
Combined Conditional Access Development ("CCAD") | Minimum | |||
Investment Holdings [Line Items] | |||
Future funding contributions | 16,000,000 | ||
Combined Conditional Access Development ("CCAD") | Maximum | |||
Investment Holdings [Line Items] | |||
Future funding contributions | $18,000,000 | ||
Conditional Access Licensing | |||
Investment Holdings [Line Items] | |||
Equity method ownership, percentage | 49.00% | ||
Combined Conditional Access Development | |||
Investment Holdings [Line Items] | |||
Equity method ownership, percentage | 50.00% |
Summary_of_Ownership_Structure
Summary of Ownership Structure and Ownership Percentage of Non-consolidated Investments (Detail) | Dec. 31, 2014 |
MPEG LA | |
Schedule of Equity Method Investments [Line Items] | |
Equity method ownership, percentage | 8.40% |
Music Choice | |
Schedule of Equity Method Investments [Line Items] | |
Equity method ownership, percentage | 18.20% |
Conditional Access Licensing | |
Schedule of Equity Method Investments [Line Items] | |
Equity method ownership, percentage | 49.00% |
Combined Conditional Access Development | |
Schedule of Equity Method Investments [Line Items] | |
Equity method ownership, percentage | 50.00% |
Carrying_Value_and_Maximum_Exp
Carrying Value and Maximum Exposure to Loss (Detail) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Conditional Access Licensing ("CAL") | |
Investment [Line Items] | |
Carrying Amount | $8,562 |
Maximum Exposure to Loss | 8,562 |
Combined Conditional Access Development ("CCAD") | |
Investment [Line Items] | |
Carrying Amount | 4,719 |
Maximum Exposure to Loss | $18,000 |
Investment_Assets_Excluding_Eq
Investment Assets Excluding Equity and Cost Method Investments and Derivatives Measured at Fair Value on Recurring Basis (Detail) (USD $) | Dec. 31, 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 | ($6,414) | ($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 | -201 | |
Cash Surrender Value of Company Owned Life Insurance | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 26,498 | 25,119 |
Derivative Financial Instruments, Assets | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 1,416 | 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 | 2,876 | |
Certificates of Deposit | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 63,171 | 3,814 |
Commercial Paper | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 1,000 | 2,994 |
Corporate bonds | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 37,737 | 34,591 |
Short-Term Bond Fund | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 29,708 | 29,565 |
Corporate Obligations | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 46 | 18 |
Money Market Funds | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 210 | 212 |
Mutual Funds | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 133 | 184 |
Other Investments | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 3,369 | 2,986 |
Level 1 | Short-Term Bond Fund | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 29,708 | 29,565 |
Level 1 | Money Market Funds | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 210 | 212 |
Level 1 | Mutual Funds | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 133 | 184 |
Level 2 | Derivative Financial Instruments, Liabilities | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of liabilities, recurring basis | -6,414 | -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 | -201 | |
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 | 26,498 | 25,119 |
Level 2 | Derivative Financial Instruments, Assets | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 1,416 | 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 | 2,876 | |
Level 2 | Certificates of Deposit | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 63,171 | 3,814 |
Level 2 | Commercial Paper | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 1,000 | 2,994 |
Level 2 | Corporate bonds | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 37,737 | 34,591 |
Level 2 | Corporate Obligations | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 46 | 18 |
Level 2 | Other Investments | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | $3,369 | $2,986 |
Derivative_Instruments_and_Hed2
Derivative Instruments and Hedging Activities - Additional Information (Detail) | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Jul. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Apr. 30, 2013 | Dec. 31, 2014 | Apr. 30, 2013 | Dec. 31, 2014 | Apr. 30, 2013 | |
USD ($) | USD ($) | Interest rate swap | Interest rate swap | Option Collars | Forward Contracts | Forward Contracts | Senior Secured Credit Facilities | Senior Secured Credit Facilities | Senior Secured Credit Facilities | Senior Secured Credit Facilities | Senior Secured Credit Facilities | Senior Secured Credit Facilities | |
USD ($) | USD ($) | EUR (€) | EUR (€) | GBP (£) | Term Loan A | Term Loan A | Term Loan B | Term Loan B | Revolving Credit Facility | Revolving Credit Facility | |||
Agreement | Derivative | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | ||||||
Derivatives, Fair Value [Line Items] | |||||||||||||
Line of credit facility | $1,100,000,000 | $1,100,000,000 | $825,000,000 | $825,000,000 | $250,000,000 | $250,000,000 | |||||||
Number of interest rate swap arrangements | 6 | 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 | 0.50% | ||||||||||||
Maturity date | 29-Dec-17 | ||||||||||||
Notional amount | 600,000,000 | 25,000,000 | 15,000,000 | 15,000,000 | |||||||||
Hedge ineffectiveness in earnings | 0 | 0 | |||||||||||
Amount estimated reclassified as an increase to interest expense | 6,400,000 | ||||||||||||
Fair value of derivatives in net liability position | $5,100,000 |
Outstanding_Interest_Rate_Deri
Outstanding Interest Rate Derivatives Designated as Cash Flow Hedges of Interest Rate Risk (Detail) (Interest rate swap, USD $) | Dec. 31, 2014 | Jul. 31, 2013 |
Derivative | Agreement | |
Interest rate swap | ||
Derivative [Line Items] | ||
Number of Instruments | 6 | 6 |
Notional | $600,000,000 |
PreTax_Impact_of_Derivative_Fi
Pre-Tax Impact of Derivative Financial Instruments (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Derivative [Line Items] | ||
Loss Recognized in OCI on Derivative (Effective Portion) | ($8,541) | ($7,140) |
Interest Expense | ||
Derivative [Line Items] | ||
Loss Reclassified from Accumulated OCI into Income (Effective Portion) | ($7,550) | ($3,132) |
Fair_Values_of_Derivative_Inst
Fair Values of Derivative Instruments Recorded in Consolidated Balance Sheet (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Foreign currency contracts | Derivatives Not Designated as Hedging Instruments | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets, Fair Value | $2,876 | |
Foreign currency contracts | Derivatives Not Designated as Hedging Instruments | Other accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities, Fair Value | 201 | |
Interest rate derivatives | Derivatives Designated as Hedging Instruments | Other accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities, Fair Value | 6,414 | 7,018 |
Interest rate derivatives | Derivatives Designated as Hedging Instruments | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets, Fair Value | $1,416 | $3,011 |
Change_in_Fair_Values_of_Deriv
Change in Fair Values of Derivative Financial Instruments Recorded in Consolidated Statements of Operations (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Derivatives, Fair Value [Line Items] | |||
Interest expense | $62,901 | $67,888 | $17,797 |
Foreign currency contracts | Loss (gain) on foreign currency | Derivatives Not Designated as Hedging Instruments | |||
Derivatives, Fair Value [Line Items] | |||
Loss (gain) on foreign currency | 4,527 | 428 | 268 |
Interest rate derivatives | Interest Expense | Derivatives Designated as Hedging Instruments | |||
Derivatives, Fair Value [Line Items] | |||
Interest expense | $7,550 | $3,132 |
Information_Regarding_Changes_
Information Regarding Changes in ARRIS' Aggregate Product Warranty Liabilities (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Product Warranty Disclosure [Line Items] | ||
Beginning balance | $81,500 | $6,069 |
Accruals related to warranties (including changes in assumptions) | 33,320 | 20,911 |
Settlements made (in cash or in kind) | -40,500 | -28,284 |
Ending balance | 74,320 | 81,500 |
Motorola Home | ||
Product Warranty Disclosure [Line Items] | ||
Warranty reserve at acquisition | $82,804 |
Segment_Information_Detail
Segment Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Segment Reporting Information [Line Items] | ||||||||||||||
Sales | $1,263,388 | [1] | $1,405,445 | [2] | $1,429,071 | $1,225,017 | [3] | $1,199,067 | $1,067,823 | $1,000,362 | $353,650 | $5,322,921 | $3,620,902 | $1,353,663 |
Direct Contribution | 615,353 | 258,671 | 130,533 | |||||||||||
Amortization of intangible assets | 236,521 | 193,637 | 30,294 | |||||||||||
Integration, acquisition, restructuring & other cost | 37,498 | 83,047 | 12,968 | |||||||||||
Operating income | 89,563 | [1] | 122,109 | [2] | 91,676 | 37,986 | [3] | 49,351 | 11,182 | -88,062 | 9,516 | 341,334 | -18,013 | 87,271 |
Other expense | 102,104 | 78,137 | 12,975 | |||||||||||
Income (loss) before income taxes | 239,230 | -96,150 | 74,296 | |||||||||||
Segment Reconciling Items | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Amortization of intangible assets | 236,521 | 193,637 | 30,294 | |||||||||||
Integration, acquisition, restructuring & other cost | 37,498 | 83,047 | 12,968 | |||||||||||
Operating Segments | Network & Cloud | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Sales | 1,637,544 | 1,193,001 | 742,255 | |||||||||||
Direct Contribution | 430,943 | 264,589 | 228,798 | |||||||||||
Operating Segments | CPE | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Sales | 3,690,454 | 2,448,381 | 611,408 | |||||||||||
Direct Contribution | 791,244 | 509,473 | 66,788 | |||||||||||
Intersegment Eliminations | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Sales | -5,077 | -20,480 | ||||||||||||
Direct Contribution | ($606,834) | ($515,391) | ($165,053) | |||||||||||
[1] | The Company recorded a tax benefit from the release of $134.8 million of valuation allowances from deferred tax assets recorded for U.S. federal net operating losses and U.S. federal tax credits and $9.0 million of valuation allowances from deferred tax assets recorded for state net operating losses and state research and development tax credits arising from the acquisition of the Motorola Home business from Google. In addition, $18.1 million of current tax benefit was recorded when the President signed legislation to approve the extension of the U.S. federal research and development tax credit through December 31, 2014. | |||||||||||||
[2] | 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 concluded that the results of operations for these periods were not materially misstated. | |||||||||||||
[3] | The Company recorded a tax benefit from the release of $18.2 million of valuation allowances from deferred tax assets recorded for U.S. federal net operating losses arising from the acquisition of the Motorola Home business from Google. |
Summary_of_Net_Intangible_Asse
Summary of Net Intangible Assets and Goodwill by Reportable Segment (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
In Thousands, unless otherwise specified | ||||
Segment Reporting Information [Line Items] | ||||
Goodwill | $936,067 | $940,402 | [1] | $194,115 |
Intangible assets, net | 943,388 | 1,176,192 | ||
Network & Cloud | ||||
Segment Reporting Information [Line Items] | ||||
Goodwill | 251,470 | 251,744 | ||
Intangible assets, net | 298,799 | 366,844 | ||
CPE | ||||
Segment Reporting Information [Line Items] | ||||
Goodwill | 684,597 | 688,658 | 31,850 | |
Intangible assets, net | $644,589 | $809,348 | ||
[1] | Certain amounts for December 31, 2013 have been recast to reflect results for business acquisitions. |
Summary_of_Sales_to_Customers_
Summary of Sales to Customers (Detail) (Customer Concentration Risk, Sales, USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Comcast and Affiliates | |||
Revenue, Major Customer [Line Items] | |||
Customers and affiliates | $1,012,367 | $674,977 | $421,177 |
Percentage of sales | 19.00% | 18.60% | 31.10% |
Time Warner Cable and Affiliates | |||
Revenue, Major Customer [Line Items] | |||
Customers and affiliates | 693,736 | 359,516 | 243,157 |
Percentage of sales | 13.00% | 9.90% | 18.00% |
AT&T and affliliates | |||
Revenue, Major Customer [Line Items] | |||
Customers and affiliates | $614,601 | $280,225 | $1,661 |
Percentage of sales | 11.50% | 7.70% | 0.10% |
Segment_Information_Additional
Segment Information - Additional Information (Detail) (International Customers, Customer Concentration Risk, Sales) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
International Customers | Customer Concentration Risk | Sales | |||
Revenue, Major Customer [Line Items] | |||
Percentage of sales | 25.70% | 32.10% | 24.60% |
International_Sales_by_Geograp
International Sales by Geographic Region (Detail) (International sales, USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
International Long-Lived Assets by Geographic Region [Line Items] | ||||||
Revenues | $1,365,718 | $1,163,730 | $333,603 | |||
Americas, excluding U.S. | ||||||
International Long-Lived Assets by Geographic Region [Line Items] | ||||||
Revenues | 900,822 | [1] | 746,146 | [1] | 202,887 | [1] |
Asia Pacific | ||||||
International Long-Lived Assets by Geographic Region [Line Items] | ||||||
Revenues | 147,921 | 153,674 | 65,554 | |||
EMEA | ||||||
International Long-Lived Assets by Geographic Region [Line Items] | ||||||
Revenues | $316,975 | $263,910 | $65,162 | |||
[1] | Excludes U.S. sales of $3,957.2 million, $2,457.2 million and $1,020.1 million for the years ended December 31, 2014, 2013 and 2012, respectively. |
International_Sales_by_Geograp1
International Sales by Geographic Region (Parenthetical) (Detail) (UNITED STATES, USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
UNITED STATES | |||
International Long-Lived Assets by Geographic Region [Line Items] | |||
Revenue | $3,957,200 | $2,457,200 | $1,020,100 |
Summary_of_International_Long_
Summary of International Long Lived Assets by Geographic Region (Detail) (International sales, USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Long lived assets | $92,402 | $100,077 |
Americas, excluding U.S. | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Long lived assets | 7,303 | 7,467 |
Asia Pacific | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Long lived assets | 76,970 | 82,495 |
EMEA | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Long lived assets | $8,129 | $10,115 |
Summary_of_International_Long_1
Summary of International Long Lived Assets by Geographic Region (Parenthetical) (Detail) (U.S., USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
U.S. | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Long lived assets | $274,000 | $296,100 |
Summary_of_and_Changes_to_Rest
Summary of and Changes to Restructuring Accrual (Detail) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Restructuring Cost and Reserve [Line Items] | |
Beginning Balance | $3,347 |
Restructuring charges | 3,373 |
Cash payments / adjustments | -5,797 |
Ending Balance | 923 |
Employee severance & termination benefits | |
Restructuring Cost and Reserve [Line Items] | |
Beginning Balance | 2,674 |
Restructuring charges | 3,335 |
Cash payments / adjustments | -5,276 |
Ending Balance | 733 |
Contractual Obligations and other | |
Restructuring Cost and Reserve [Line Items] | |
Beginning Balance | 673 |
Restructuring charges | 38 |
Cash payments / adjustments | -521 |
Ending Balance | $190 |
Restructuring_Charges_Addition
Restructuring Charges - Additional Information (Detail) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $3,373,000 | |
Liability remaining for restructuring plan | 923,000 | 3,347,000 |
Employee severance & termination benefits | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 3,335,000 | |
Liability remaining for restructuring plan | 733,000 | 2,674,000 |
Second Quarter 2013 Restructuring Plan | Employee severance & termination benefits | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 30,800,000 | |
Liability remaining for restructuring plan | 200,000 | |
Third Quarter 2014 Restructuring Plan | Employee severance & termination benefits | ||
Restructuring Cost and Reserve [Line Items] | ||
Liability remaining for restructuring plan | 500,000 | |
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 $) | Dec. 31, 2014 | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | |||
Inventory [Line Items] | |||
Raw material | $61,068 | $60,520 | |
Work in process | 6,713 | 6,010 | |
Finished goods | 333,384 | 263,599 | |
Total inventories, net | $401,165 | $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 $) | Dec. 31, 2014 | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | |||
Property, Plant and Equipment [Line Items] | |||
Land | $87,952 | $88,742 | |
Building and leasehold improvements | 141,581 | 133,668 | |
Machinery and equipment | 402,709 | 368,572 | |
Total property, plant and equipment, gross | 632,242 | 590,982 | |
Less: Accumulated depreciation | -265,811 | -194,830 | [1] |
Total property, plant and equipment, net | $366,431 | $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 | 12 Months Ended |
In Millions, unless otherwise specified | Jun. 30, 2014 | Dec. 31, 2014 |
Property, Plant and Equipment [Line Items] | ||
Sale of land and building | $2.90 | |
Carrying amount of land and building | 4.8 | |
Other expense (income), net | ||
Property, Plant and Equipment [Line Items] | ||
Initial impairment charge | $2.10 |
LongTerm_Indebtedness_Addition
Long-Term Indebtedness - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 12 Months Ended | 21 Months Ended | |||
Oct. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2006 | Dec. 31, 2014 | Nov. 15, 2013 | Apr. 30, 2013 | |
Debt Instrument [Line Items] | |||||||
Convertible senior notes face amount | $276,000,000 | ||||||
Interest rate of convertible senior notes | 2.00% | 2.00% | |||||
Convertible senior notes due date | 2026 | ||||||
Number of shares receivable upon conversion | 62.1504 | ||||||
Convertible base principal amount of conversion | 1,000 | 1,000 | |||||
Initial conversion price | $16.09 | ||||||
Convertible senior notes conversion period description | 20 or more trading days | ||||||
Number of consecutive trading days | 30 days | ||||||
Debt instrument percentage exceeding conversion price | 120.00% | ||||||
Current conversion price | $19.31 | $19.31 | |||||
Percentage price of principal amount for repurchase of senior notes | 100.00% | ||||||
Percentage on outstanding aggregate principal amount of notes | 100.00% | ||||||
Debt instrument redemption description | The Redemption Price did not include the interest accrued up to November 15, 2013, which was paid to the holders of the notes of record as of November 1, 2013. | ||||||
Repurchase of notes | 30,000 | ||||||
Notes available for conversion | 231,200,000 | ||||||
Cash consideration on redemption of notes | 231,200,000 | ||||||
Common stock issued on redemption of notes | 3,100,000 | ||||||
Debt outstanding for redemption | 744,000 | ||||||
Senior Secured Credit Facilities | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, amount borrowed | 1,547,600,000 | 1,547,600,000 | |||||
Mandatory repayments related to senior secured credit facilities | 55,000,000 | ||||||
Optional prepayments related to senior secured credit facilities | 150,000,000 | ||||||
Senior Secured Credit Facilities | Term Loan A | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility | 1,100,000,000 | 1,100,000,000 | 1,100,000,000 | ||||
Line of credit facility term loan period | 5 years | ||||||
Decrease in interest paid rate | 0.50% | ||||||
Senior Secured Credit Facilities | Term Loan B | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility | 825,000,000 | 825,000,000 | 825,000,000 | ||||
Line of credit facility term loan period | 7 years | ||||||
Decrease in interest paid rate | 0.25% | 0.25% | |||||
Senior Secured Credit Facilities | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility | 250,000,000 | 250,000,000 | 250,000,000 | ||||
Line of credit facility term loan period | 5 years | ||||||
Line of credit facility, amount borrowed | 0 | 0 | |||||
Letter of credit facility | $2,500,000 | $2,500,000 | |||||
Decrease in interest paid rate | 0.25% | 0.50% | |||||
Senior Secured Credit Facilities | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Consolidated net leverage ratio | 375.00% | 375.00% | |||||
Senior Secured Credit Facilities | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Consolidated net leverage ratio | 350.00% | 350.00% |
Senior_Credit_Facility_Interes
Senior Credit Facility Interest Rates (Detail) | 12 Months Ended | |
Dec. 31, 2014 | ||
Senior Secured Credit Facilities | Term Loan A | ||
Credit Facility [Line Items] | ||
Debt instrument, interest rate at period end | 1.92% | |
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) | 12 Months Ended |
Dec. 31, 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% |
Face_Value_of_Contractual_Debt
Face Value of Contractual Debt Obligations for Next Five Years (Detail) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Debt Instrument [Line Items] | |
2015 | $75,625 |
2016 | 103,125 |
2017 | 110,000 |
2018 | 715,000 |
2019 | 0 |
thereafter | $543,813 |
Reconciliation_of_Numerators_a
Reconciliation of Numerators and Denominators of Basic and Diluted Earnings Per Share Computations (Detail) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Basic: | ||||||||||||||
Net income (loss) | $192,761 | [1] | $54,626 | [2] | $39,024 | $40,800 | [3] | ($2,817) | $17,170 | ($48,463) | ($14,650) | $327,211 | ($48,760) | $53,459 |
Weighted average shares outstanding | 144,386 | 131,980 | 114,161 | |||||||||||
Basic earnings (loss) per share | $1.41 | [1] | $0.38 | [2] | $0.27 | $0.29 | [3] | ($0.02) | $0.12 | ($0.36) | ($0.13) | $2.27 | ($0.37) | $0.47 |
Diluted: | ||||||||||||||
Net income (loss) | $192,761 | [1] | $54,626 | [2] | $39,024 | $40,800 | [3] | ($2,817) | $17,170 | ($48,463) | ($14,650) | $327,211 | ($48,760) | $53,459 |
Weighted average shares outstanding | 144,386 | 131,980 | 114,161 | |||||||||||
Net effect of dilutive shares | 3,894 | 2,353 | ||||||||||||
Total | 148,280 | 131,980 | 116,514 | |||||||||||
Diluted earnings (loss) per share | $1.37 | [1] | $0.37 | [2] | $0.26 | $0.28 | [3] | ($0.02) | $0.12 | ($0.36) | ($0.13) | $2.21 | ($0.37) | $0.46 |
[1] | The Company recorded a tax benefit from the release of $134.8 million of valuation allowances from deferred tax assets recorded for U.S. federal net operating losses and U.S. federal tax credits and $9.0 million of valuation allowances from deferred tax assets recorded for state net operating losses and state research and development tax credits arising from the acquisition of the Motorola Home business from Google. In addition, $18.1 million of current tax benefit was recorded when the President signed legislation to approve the extension of the U.S. federal research and development tax credit through December 31, 2014. | |||||||||||||
[2] | 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 concluded that the results of operations for these periods were not materially misstated. | |||||||||||||
[3] | The Company recorded a tax benefit from the release of $18.2 million of valuation allowances from deferred tax assets recorded for U.S. federal net operating losses arising from the acquisition of the Motorola Home business from Google. |
Earnings_Per_Share_Additional_
Earnings Per Share - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 17, 2013 | Dec. 31, 2006 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Anti-dilutive securities excluded from the computation of diluted earnings per share | 4,300 | 1,100,000 | 1,700,000 | |||
Common stock related to stock option exercises and the vesting of restricted shares | 3,100,000 | 3,600,000 | ||||
Common stock issued on redemption of notes | 3,100,000 | |||||
Interest rate of convertible senior notes | 2.00% | 2.00% | 2.00% | |||
Motorola Home | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Business acquisition potential stock issue, shares | 10,600,000 | 10,600,000 | ||||
Comcast Corporation | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Business acquisition potential stock issue, shares | 10,600,000 | |||||
Business acquisition potential stock issue, value | 150 | 150 |
Income_Loss_Before_Income_Taxe
Income (Loss) Before Income Taxes (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Before Income Taxes [Line Items] | |||
Domestic | $180,133 | ($128,588) | $67,620 |
Foreign | 59,097 | 32,438 | 6,676 |
Income (loss) before income taxes | $239,230 | ($96,150) | $74,296 |
Components_of_Income_Tax_Expen
Components of Income Tax Expense (Benefit) (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Components Of Income Tax Expense Benefit [Line Items] | |||
Current Federal Tax Expense (Benefit) | $45,937 | ($5,133) | $26,196 |
Current State Tax Expense (Benefit) | 13,260 | -40 | 3,440 |
Current Foreign Tax Expense (Benefit) | 18,136 | 10,624 | 4,855 |
Current Income Tax Expense | 77,333 | 5,451 | 34,491 |
Deferred Federal Income Tax Expense (Benefit) | -140,404 | -50,485 | -10,522 |
Deferred State Tax Expense (Benefit) | -19,978 | -2,189 | -2,238 |
Deferred Foreign Income Tax Expense (Benefit) | -4,932 | -167 | -894 |
Deferred Income Tax Expense (Benefit), Total | -165,314 | -52,841 | -13,654 |
Income tax expense (benefit) | ($87,981) | ($47,390) | $20,837 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | |
USD ($) | USD ($) | USD ($) | USD ($) | Earliest Tax Year | Latest Tax Year | ISRAEL | ISRAEL | U.S. Federal | U.S. Federal | U.S. State | Foreign Country | Foreign Country | Foreign Country | Domestic Federal Research and Development | Domestic State Research and Development | |
USD ($) | ILS | USD ($) | USD ($) | USD ($) | USD ($) | Irish | Canadian | USD ($) | USD ($) | |||||||
USD ($) | USD ($) | |||||||||||||||
Income Taxes [Line Items] | ||||||||||||||||
Statutory federal income tax expense (benefit) | 35.00% | 35.00% | 35.00% | |||||||||||||
Net operating loss carryforwards | $552,900,000 | $435,600,000 | $417,300,000 | $57,800,000 | ||||||||||||
Net operating losses available to offset against future taxable income | 75,200,000 | |||||||||||||||
Expiry of federal net operating losses | The available acquired U.S. Federal net operating losses as of December 31, 2014, will expire between the years 2015 and 2031. | |||||||||||||||
Operating loss carryforwards, expiration period | 20 years | |||||||||||||||
Net operating loss carryforwards related to employee stock options and restricted stock | 29,400,000 | |||||||||||||||
Net operating loss carry forwards related to subsidiary | 18,500,000 | 13,700,000 | ||||||||||||||
Net operating loss carry forwards related to subsidiary, expiration period | 20 years | |||||||||||||||
Amount offset against U.S Federal and state income tax liabilities | 17,600,000 | 5,500,000 | ||||||||||||||
Available tax credits of research and development, Carry forward | 54,900,000 | 29,400,000 | ||||||||||||||
Carry Back and Carry Forward of Research and Development Tax Credits | Carried back one year and carried forward twenty years | |||||||||||||||
Valuation allowance | 118,629,000 | 163,745,000 | ||||||||||||||
Net decrease in valuation allowance | -45,100,000 | |||||||||||||||
Earnings exempted associated with foreign subsidiary | 48,400,000 | 5,400,000 | 21,000,000 | |||||||||||||
Deferred tax liability relating to distributable earnings of subsidiary | 1,200,000 | |||||||||||||||
Number of jurisdictions under income tax audit | 10 | |||||||||||||||
Tax benefits recorded due to reduction in accrual for uncertain tax positions | 3,900,000 | |||||||||||||||
Income Tax Examination, Year under Examination | 2011 | 2012 | ||||||||||||||
Company's total tax liability related to uncertain net tax positions | 45,700,000 | |||||||||||||||
Unrecognized tax benefits | 48,019,000 | 28,344,000 | 25,704,000 | 26,232,000 | ||||||||||||
Unrecognized tax benefits arising from U.S. Federal and state tax | 4,600,000 | |||||||||||||||
Anticipated payment of tax liabilities related to interest and penalty accrual | $1,700,000 | $2,100,000 |
Reconciliation_of_Statutory_Fe
Reconciliation of Statutory Federal Income Tax Rate and Effective Income Tax Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Reconciliation of Statutory Federal Tax Rate [Line Items] | |||
Statutory federal income tax rate | 35.00% | 35.00% | 35.00% |
Effects of: | |||
State income taxes, net of federal benefit | -6.60% | 2.20% | 1.40% |
Acquired deferred tax assets | -16.50% | ||
Domestic manufacturing deduction | -2.10% | 1.10% | -4.00% |
Nontaxable Comcast derivative gain | -9.60% | ||
Facilitative acquisition costs | -3.50% | ||
Research and development tax credits | -8.70% | 26.80% | -4.80% |
Changes in valuation allowance | -44.20% | -0.70% | |
Non-U.S. tax rate differential | -2.60% | 1.30% | -1.00% |
Recapture of dual consolidated losses | 4.00% | ||
Other, net | 4.90% | -4.00% | 2.20% |
Effective Income Tax Rate Reconciliation, Percent, Total | -36.80% | 49.30% | 28.10% |
Significant_Components_of_Net_
Significant Components of Net Deferred Income Tax Assets (Liabilities) (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | |||
Components of deferred tax assets | |||
Total deferred income tax assets | $671,211 | $627,525 | |
Components of deferred tax liabilities | |||
Total noncurrent deferred income tax liabilities | -274 | -74,791 | [1] |
Total deferred income tax liabilities | -368,024 | -454,074 | |
Net deferred income tax assets | 303,187 | 173,451 | |
Valuation allowance | -118,629 | -163,745 | |
Net deferred income tax assets (liabilities) | 184,558 | 9,706 | |
Current deferred income tax assets | |||
Components of deferred tax assets | |||
Inventory costs | 34,695 | 31,068 | |
Federal research and development credits | 24,212 | 5,472 | |
Federal/state net operating loss carryforwards | 59,503 | 3,336 | |
Foreign net operating loss carryforwards | 209 | 1,593 | |
Accrued vacation | 7,980 | 7,175 | |
Warranty reserve | 24,207 | 18,292 | |
Deferred revenue | 1,001 | 19,988 | |
Equity compensation | 14,639 | 10,243 | |
Capitalized research and development | 45,513 | 55,164 | |
Other | 23,841 | 24,939 | |
Total current deferred income tax assets | 235,800 | 177,270 | |
Noncurrent deferred income tax assets | |||
Components of deferred tax assets | |||
Federal research and development credits | 38,449 | 19,409 | |
Federal/state net operating loss carryforwards | 158,153 | 159,219 | |
Federal capital loss carryforwards | 7,701 | 5,152 | |
Foreign net operating loss carryforwards | 11,631 | 8,212 | |
Pension and deferred compensation | 18,393 | 16,187 | |
Warranty reserve | 1,980 | 12,503 | |
Capitalized research and development | 180,757 | 226,270 | |
Other | 18,347 | 3,303 | |
Total noncurrent deferred income tax assets | 435,411 | 450,255 | |
Current deferred income tax liabilities | |||
Components of deferred tax liabilities | |||
Other | -3,249 | -2,856 | |
Total current deferred income tax liabilities | -3,249 | -2,856 | |
Non-current deferred income tax liabilities | |||
Components of deferred tax liabilities | |||
Property, plant and equipment, depreciation and basis differences | -19,744 | -39,782 | |
Excess tax on future repatriation of foreign earnings | -1,184 | -1,184 | |
Other noncurrent liabilities | -27,655 | -9,192 | |
Goodwill and Intangibles | -316,192 | -401,060 | |
Total noncurrent deferred income tax liabilities | ($364,775) | ($451,218) | |
[1] | Certain amounts for December 31, 2013 have been recast to reflect results for business acquisitions. |
Reconciliation_of_Unrecognized
Reconciliation of Unrecognized Tax Benefits (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Contingency [Line Items] | |||
Beginning balance | $28,344 | $25,704 | $26,232 |
Gross increases - tax positions in prior period | 17,636 | 2,442 | |
Gross decreases - tax positions in prior period | -4,115 | -21 | |
Gross increases - current-period tax positions | 9,979 | 6,999 | 2,684 |
Increases (decreases) from acquired businesses | -196 | 2,014 | |
Decreases relating to settlements with taxing authorities and other | -2,480 | -1,098 | 100 |
Decreases due to lapse of statute of limitations | -1,149 | -7,696 | -3,312 |
Ending balance | $48,019 | $28,344 | $25,704 |
StockBased_Compensation_Additi
Stock-Based Compensation - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares issued | 17,500,000 | ||
Allowance for flexibility in awards for every one share | $1.87 | ||
Number of common stock available under plan for future issuances | 151,095 | ||
New options granted | 0 | 0 | 0 |
Intrinsic value of options exercised | $6,500,000 | $9,600,000 | $10,200,000 |
Term in which the returns are compared to determine number of shares | 3 years | ||
Minimum percentage of shares issued under comparative market performance restricted stock units awards | 0.00% | ||
Maximum percentage of shares issued under comparative market performance restricted stock units awards | 200.00% | ||
Percentage of shares achieved under comparative market performance restricted stock units awards | 200.00% | ||
Compensation expense measurement period | 3 year | ||
Unrecognized compensation cost | 102,600,000 | ||
Weighted average period of compensation cost | 2 years 8 months 12 days | ||
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares in target award | 591,660 | ||
Number of shares in target award outstanding | 499,455 | ||
Modified percentage in performance | 200.00% | ||
Number of shares issued at twice the performance percentage | 998,910 | ||
Intrinsic value of restricted shares | 82,600,000 | 36,300,000 | 27,100,000 |
Employee Stock Purchase Plan (ESPP) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum Percentage of base compensation applied towards purchase of common stock | 10.00% | ||
Maximum amount of purchase allowed for a participant | 25,000 | ||
Percentage of fair market value of exercise price | 85.00% | ||
Number of exercise price | 2 | ||
Minimum percentage of discount not recognized as compensation expense | 5.00% | ||
Percentage of discount on common stock | 15.00% | ||
Percentage of option held | 85.00% | ||
Risk free interest rate | 0.10% | 0.10% | 0.10% |
Volatility Factor | 37.00% | 26.00% | 33.00% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Compensation expense related to ESPP | $4,100,000 | $1,400,000 | $900,000 |
Weighted average expected life | 6 months | 6 months | 6 months |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Requisite service period | 3 years | ||
Share based Compensation, contractual term | 7 years | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Requisite service period | 4 years | ||
Share based Compensation, contractual term | 10 years |
Summary_of_Activity_of_Options
Summary of Activity of Options Granted under Stock Incentive Plans (Detail) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Options | |||
Options, beginning Balance | 472,691 | ||
Options, exercised | -402,771 | ||
Options, expired | -31,920 | ||
Options, ending Balance | 38,000 | 472,691 | |
Options, grants | 0 | 0 | 0 |
Options, forfeited | 0 | ||
Options, exercisable | 38,000 | ||
Weighted Average Exercise Price | |||
Weighted average exercise price, beginning balance | $11.60 | ||
Weighted average exercise price, grants | $0 | ||
Weighted average exercise price, exercised | $11.50 | ||
Weighted average exercise price, forfeited | $0 | ||
Weighted average exercise price, expired | $12.44 | ||
Weighted average exercise price, ending Balance | $11.97 | $11.60 | |
Weighted average exercise price, exercisable | $11.97 | ||
Weighted Average Remaining Contractual Term (in years) | |||
Weighted average remaining contractual term , options outstanding | 6 months 29 days | ||
Weighted average remaining contractual term , exercisable | 6 months 29 days | ||
Aggregate Intrinsic Value | |||
Aggregate intrinsic value | $692 | ||
Aggregate intrinsic value, exercisable | $692 |
Summary_of_Options_Outstanding
Summary of Options Outstanding (Detail) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Options outstanding, Number | 38,000 | 472,691 |
Options outstanding, Weighted average remaining contractual life | 6 months 29 days | |
Options outstanding, Weighted average exercise price | $11.97 | $11.60 |
Options exercisable, Number | 38,000 | |
Options exercisable, Weighted average exercise price | $11.97 | |
$9.00 to $10.99 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Exercise price range, lower range limit | $9 | |
Exercise price range, upper range limit | $10.99 | |
Options outstanding, Number | 9,196 | |
Options outstanding, Weighted average remaining contractual life | 9 months 22 days | |
Options outstanding, Weighted average exercise price | $10.11 | |
Options exercisable, Number | 9,196 | |
Options exercisable, Weighted average exercise price | $10.11 | |
$11.00 to $13.99 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Exercise price range, lower range limit | $11 | |
Exercise price range, upper range limit | $13.99 | |
Options outstanding, Number | 28,804 | |
Options outstanding, Weighted average remaining contractual life | 6 months | |
Options outstanding, Weighted average exercise price | $12.57 | |
Options exercisable, Number | 28,804 | |
Options exercisable, Weighted average exercise price | $12.57 | |
$9.00 to $13.99 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Exercise price range, lower range limit | $9 | |
Exercise price range, upper range limit | $13.99 | |
Options outstanding, Number | 38,000 | |
Options outstanding, Weighted average remaining contractual life | 6 months 29 days | |
Options outstanding, Weighted average exercise price | $11.97 | |
Options exercisable, Number | 38,000 | |
Options exercisable, Weighted average exercise price | $11.97 |
Summary_of_Unvested_Restricted
Summary of Unvested Restricted Stock and Stock Unit Transactions (Detail) (Restricted Stock, USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Restricted Stock | |
Shares | |
Unvested, beginning balance | 7,051,880 |
Granted, shares | 2,650,740 |
Vested, shares | -2,369,907 |
Forfeited, shares | -340,924 |
Unvested, ending balance | 6,991,789 |
Weighted average grant date fair value | |
Weighted average grant date fair value, beginning balance | $14.29 |
Weighted average grant date fair value, granted | $27.66 |
Weighted average grant date fair value, vested | $13.93 |
Weighted average grant date fair value, forfeited | $18.36 |
Weighted average grant date fair value, ending Balance | $19.29 |
Weighted_Average_Pension_Asset
Weighted Average Pension Asset Allocations (Detail) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Target plan asset allocations | 100.00% | |
Actual plan asset allocations | 100.00% | 100.00% |
Equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target plan asset allocations | 42.00% | |
Actual plan asset allocations | 43.00% | 43.00% |
Debt securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target plan asset allocations | 3.00% | |
Actual plan asset allocations | 3.00% | 3.00% |
Cash and cash equivalents | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target plan asset allocations | 55.00% | |
Actual plan asset allocations | 54.00% | 54.00% |
Pension_Plan_Asset_by_Category
Pension Plan Asset by Category and Level (Detail) (U.S. Pension Plans, USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | $14,585 | [1] | $15,162 | [1] | $14,866 |
Cash and cash equivalents | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 7,752 | [2] | |||
U.S. large cap | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 1,571 | [3] | |||
U.S. mid cap | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 1,640 | [3] | |||
U.S. small cap | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 1,367 | [3] | |||
International | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 2,050 | [3] | |||
Fixed Income Securities | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 205 | [4] | |||
Level 1 | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 6,833 | ||||
Level 1 | U.S. large cap | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 1,571 | [3] | |||
Level 1 | U.S. mid cap | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 1,640 | [3] | |||
Level 1 | U.S. small cap | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 1,367 | [3] | |||
Level 1 | International | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 2,050 | [3] | |||
Level 1 | Fixed Income Securities | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 205 | [4] | |||
Level 2 | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 7,752 | ||||
Level 2 | Cash and cash equivalents | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | $7,752 | [2] | |||
[1] | In addition to the pension plan assets, ARRIS has established two rabbi trusts to further fund the pension obligations of the Chief Executive and certain executive officers of $20.3 million as of December 31, 2014 and $19.3 million as of December 31, 2013, and are included in Investments on the Consolidated Balance Sheets. | ||||
[2] | Cash and cash equivalents, which are used to pay benefits and administrative expenses, are held in a stable value fund. | ||||
[3] | Equity securities consist of mutual funds and the underlying investments are indexes. Investments in mutual funds are valued at the net asset value per share multiplied by the number of shares held. | ||||
[4] | Fixed income securities consist of bonds securities in mutual funds, and are valued at the net asset value per share multiplied by the number of shares held. |
Employee_Benefit_Plans_Additio
Employee Benefit Plans - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Defined Benefit Plan Disclosure [Line Items] | |||||
Benefit obligation, Curtailment gain | $300,000 | ||||
Early payout pension obligation | 7,700,000 | ||||
Matching contribution made by the company | 15,300,000 | 10,900,000 | 5,700,000 | ||
Expenses included in continuing operations for the matching contributions | 100,000 | 100,000 | |||
Accrued balances of deferred retirement salary plan | 1,800,000 | 1,800,000 | |||
Total expenses (income) included in continuing operations for the deferred retirement salary plan | 100,000 | -300,000 | |||
Other Long Term Liabilities | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Employee deferrals and matching contributions, net | 2,900,000 | 2,600,000 | |||
Non-Qualified Deferred Compensation Plan | Other Long Term Liabilities | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Employee deferrals and matching contributions, net | 3,300,000 | 2,900,000 | |||
Non Cash | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Pension settlement | $3,100,000 |
Non_Contributory_Defined_Benef
Non Contributory Defined Benefit Pension Plans (Detail) (U.S. Pension Plans, USD $) | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||
U.S. Pension Plans | |||||
Change in Projected Benefit Obligation: | |||||
Projected benefit obligation at beginning of year | $40,382 | $42,082 | |||
Service cost | 122 | 335 | |||
Interest cost | 1,783 | 1,619 | 2,085 | ||
Actuarial loss (gain) | 5,692 | -1,813 | |||
Benefit payments | -1,307 | -1,309 | |||
Other | -319 | ||||
Projected benefit obligation at end of year | 46,550 | 40,382 | 42,082 | ||
Change in Plan Assets: | |||||
Fair value of plan assets at beginning of year | 15,162 | [1] | 14,866 | ||
Actual return on plan assets | 575 | 1,421 | |||
Company contributions | 155 | 184 | |||
Expenses and benefits paid from plan assets | -1,307 | -1,309 | |||
Other | 0 | 0 | |||
Fair value of plan assets at end of year | 14,585 | [1] | 15,162 | [1] | 14,866 |
Funded Status: | |||||
Funded status of plan | -31,965 | -25,220 | |||
Unrecognized actuarial loss | 13,233 | 7,546 | |||
Unamortized prior service cost | 0 | 0 | |||
Net amount recognized | ($18,732) | ($17,674) | |||
[1] | In addition to the pension plan assets, ARRIS has established two rabbi trusts to further fund the pension obligations of the Chief Executive and certain executive officers of $20.3 million as of December 31, 2014 and $19.3 million as of December 31, 2013, and are included in Investments on the Consolidated Balance Sheets. |
Non_Contributory_Defined_Benef1
Non Contributory Defined Benefit Pension Plans (Parenthetical) (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Balance assets held in rabbi trust | $20.30 | $19.30 |
Amounts_Recognized_in_Statemen
Amounts Recognized in Statement of Financial Position (Detail) (U.S. Pension Plans, USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
U.S. Pension Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Current liabilities | ($393) | ($364) | ||
Noncurrent liabilities | -31,572 | -24,856 | ||
Accumulated other comprehensive income | 13,233 | [1] | 7,546 | [1] |
Total | ($18,732) | ($17,674) | ||
[1] | The accumulated other comprehensive income on the Consolidated Balance Sheets as of December 31, 2014 and 2013 includes balances for plans outside of the U.S. of $10.9 million and $9.4 million, respectively. Also, the accumulated other comprehensive income on the Consolidated Balance Sheets as of December 31, 2014 and 2013 is presented net of income tax effect of $3.4 million and $1.0 million, respectively. |
Amounts_Recognized_in_Statemen1
Amounts Recognized in Statement of Financial Position (Parenthetical) (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Tax impact on unfunded pension liability | $3,428 | $981 | [1] |
Foreign Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated other comprehensive income | $10,900 | $9,400 | |
[1] | Certain amounts for December 31, 2013 have been recast to reflect results for business acquisitions. |
Other_Changes_in_Plan_Assets_a
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss) (Detail) (U.S. Pension Plans, USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
U.S. Pension Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Net gain (loss) | $5,992 | ($2,359) |
Amortization of net loss | -305 | -607 |
Settlement charge | -318 | |
Total recognized in other comprehensive income (loss) | $5,687 | ($3,284) |
Amounts_in_Other_Comprehensive
Amounts in Other Comprehensive Income (Loss) Expected to Amortized and Recognized (Detail) (U.S. Pension Plans, USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
U.S. Pension Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Amortization of net loss | $834 |
Information_for_Defined_Benefi
Information for Defined Benefit Plans with Accumulated Benefit Obligation in Excess of Plan Assets (Detail) (U.S. Pension Plans, USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
U.S. Pension Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Accumulated benefit obligation | $46,550 | $40,382 |
Projected benefit obligation | 46,550 | 40,382 |
Plan assets | $14,585 | $15,162 |
Components_of_Net_Periodic_Pen
Components of Net Periodic Pension Cost (Detail) (U.S. Pension Plans, USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
U.S. Pension Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | $122 | $335 | |
Interest cost | 1,783 | 1,619 | 2,085 |
Return on assets (expected) | -874 | -876 | -1,260 |
Amortization of net actuarial loss | 305 | 607 | 840 |
Settlement charge | 3,064 | ||
Net periodic pension cost | $1,214 | $1,472 | $5,064 |
Components_of_Net_Periodic_Pen1
Components of Net Periodic Pension Cost (Parenthetical) (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | |
Actuarial gains losses amortization percentage | 10.00% |
Weighted_Average_Actuarial_Ass
Weighted Average Actuarial Assumptions Used to Determine Benefit Obligations (Detail) (U.S. Pension Plans) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
U.S. Pension Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assumed discount rate for plan participants | 3.75% | 4.50% | 3.75% |
Rate of compensation increase | 3.75% |
Weighted_Average_Actuarial_Ass1
Weighted Average Actuarial Assumption Used to Determine Net Periodic Benefit (Detail) (U.S. Pension Plans) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
U.S. Pension Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assumed discount rate for plan participants | 4.50% | 3.75% | 4.50% |
Rate of compensation increase | 3.75% | 3.75% | |
Expected long-term rate of return on plan assets | 6.00% | 6.00% | 6.00% |
Expected_Benefit_Payments_Rela
Expected Benefit Payments Related to Defined Benefit Pension Plans (Detail) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Defined Benefit Plan Disclosure [Line Items] | |
2015 | $1,567 |
2016 | 16,005 |
2017 | 1,596 |
2018 | 1,607 |
2019 | 1,657 |
2020 - 2024 | $9,606 |
Key_Assumptions_Used_In_Valuat
Key Assumptions Used In Valuation (Detail) (Taiwan Plan) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | |||
Taiwan Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Assumed discount rate for obligations | 1.90% | 1.80% | ||
Assumed discount rate for expense | 1.80% | 1.80% | ||
Rate of compensation increase for indirect labor | 4.50% | 4.50% | ||
Rate of compensation increase for direct labor | 2.00% | 2.00% | ||
Expected long-term rate of return on plan assets | 2.00% | [1] | 2.00% | [1] |
[1] | Asset allocation is 100% in money market investments |
Key_Assumptions_Used_In_Valuat1
Key Assumptions Used In Valuation (Parenthetical) (Detail) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Asset allocation | 100.00% | |
Money Market Funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Asset allocation | 100.00% | 100.00% |
Funded_Status_Detail
Funded Status (Detail) (Taiwan Plan, USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Taiwan Plan | ||
Funded Status: | ||
Funded status of plan | ($27,523) | ($28,128) |
Unrecognized actuarial loss | 9,482 | 9,370 |
Net amount recognized | ($18,041) | ($18,758) |
Changes_in_Accumulated_Other_C
Changes in Accumulated Other Comprehensive Income by Component Net of Taxes (Detail) (USD $) | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Unrealized gain (loss) on marketable securities, beginning balance | $306 | [1] | |||
Unrealized loss on derivative instruments, beginning balance | -2,541 | [1] | |||
Unfunded pension liability, beginning balance | -2,416 | [1] | |||
Cumulative translation adjustments, beginning balance | -11 | [1] | |||
Beginning balance | -4,662 | ||||
Other comprehensive (loss) income before reclassifications | 3,385 | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | -9,770 | ||||
Net current-period other comprehensive income (loss) | -6,385 | 3,874 | 2,146 | ||
Unrealized gain (loss) on marketable securities, ending balance | 25 | 306 | [1] | ||
Unrealized loss on derivative instruments, ending balance | -3,166 | -2,541 | [1] | ||
Unfunded pension liability, ending balance | -7,181 | -2,416 | [1] | ||
Cumulative translation adjustments, ending balance | -725 | -11 | [1] | ||
Ending balance | -11,047 | -4,662 | |||
Cumulative Translation Adjustments | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Cumulative translation adjustments, beginning balance | -11 | ||||
Other comprehensive (loss) income before reclassifications | -714 | ||||
Net current-period other comprehensive income (loss) | -714 | ||||
Cumulative translation adjustments, ending balance | -725 | ||||
Unfunded Pension Liability | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Unfunded pension liability, beginning balance | -2,416 | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | -4,765 | ||||
Net current-period other comprehensive income (loss) | -4,765 | ||||
Unfunded pension liability, ending balance | -7,181 | ||||
Unrealized loss on derivative instruments | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Unrealized loss on derivative instruments, beginning balance | -2,541 | ||||
Other comprehensive (loss) income before reclassifications | 4,137 | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | -4,762 | ||||
Net current-period other comprehensive income (loss) | -625 | ||||
Unrealized loss on derivative instruments, ending balance | -3,166 | ||||
Unrealized Gain on Marketable Securities | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Unrealized gain (loss) on marketable securities, beginning balance | 306 | ||||
Other comprehensive (loss) income before reclassifications | -38 | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | -243 | ||||
Net current-period other comprehensive income (loss) | -281 | ||||
Unrealized gain (loss) on marketable securities, ending balance | $25 | ||||
[1] | Certain amounts for December 31, 2013 have been recast to reflect results for business acquisitions. |
Future_Minimum_Operating_Lease
Future Minimum Operating Lease Payments Under Non-Cancelable Leases (Detail) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Operating Leased Assets [Line Items] | |
2015 | $22,654 |
2016 | 18,695 |
2017 | 13,613 |
2018 | 9,764 |
2019 | 7,099 |
Thereafter | 20,457 |
Less sublease income | -1,424 |
Total minimum lease payments | $90,858 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Additional Information (Detail) (USD $) | 12 Months Ended | 3 Months Ended | 2 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Feb. 27, 2015 | ||
Patent | Patent | |||||
Entity | ||||||
Commitments [Line Items] | ||||||
Operating leases rent expense net | $32,000,000 | $22,500,000 | $12,400,000 | |||
Restricted cash | 966,000 | 1,079,000 | [1] | 966,000 | ||
Contractual obligations under agreements with non cancelable terms to purchase goods or services | 598,200,000 | |||||
RPX | ||||||
Commitments [Line Items] | ||||||
Number of companies participated to fund purchase of patent assets | 30 | 30 | ||||
Number of patent assets purchased | 4,000 | |||||
Subsequent Event | RPX | ||||||
Commitments [Line Items] | ||||||
Contribution made for patent assets purchased | $34,300,000 | |||||
Number of patent non-exclusive license received | 4,000 | |||||
[1] | Certain amounts for December 31, 2013 have been recast to reflect results for business acquisitions. |
Summary_Quarterly_Consolidated2
Summary Quarterly Consolidated Financial Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Quarterly Financial Information [Line Items] | ||||||||||||||
Net sales | $1,263,388 | [1] | $1,405,445 | [2] | $1,429,071 | $1,225,017 | [3] | $1,199,067 | $1,067,823 | $1,000,362 | $353,650 | $5,322,921 | $3,620,902 | $1,353,663 |
Gross margin | 380,576 | [1] | 435,734 | [2] | 419,412 | 346,774 | [3] | 366,370 | 316,895 | 230,957 | 108,526 | 1,582,496 | 1,022,748 | 462,577 |
Operating income (loss) | 89,563 | [1] | 122,109 | [2] | 91,676 | 37,986 | [3] | 49,351 | 11,182 | -88,062 | 9,516 | 341,334 | -18,013 | 87,271 |
Net income (loss) | $192,761 | [1] | $54,626 | [2] | $39,024 | $40,800 | [3] | ($2,817) | $17,170 | ($48,463) | ($14,650) | $327,211 | ($48,760) | $53,459 |
Net income (loss) per basic share | $1.41 | [1] | $0.38 | [2] | $0.27 | $0.29 | [3] | ($0.02) | $0.12 | ($0.36) | ($0.13) | $2.27 | ($0.37) | $0.47 |
Net income (loss) per diluted share | $1.37 | [1] | $0.37 | [2] | $0.26 | $0.28 | [3] | ($0.02) | $0.12 | ($0.36) | ($0.13) | $2.21 | ($0.37) | $0.46 |
[1] | The Company recorded a tax benefit from the release of $134.8 million of valuation allowances from deferred tax assets recorded for U.S. federal net operating losses and U.S. federal tax credits and $9.0 million of valuation allowances from deferred tax assets recorded for state net operating losses and state research and development tax credits arising from the acquisition of the Motorola Home business from Google. In addition, $18.1 million of current tax benefit was recorded when the President signed legislation to approve the extension of the U.S. federal research and development tax credit through December 31, 2014. | |||||||||||||
[2] | 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 concluded that the results of operations for these periods were not materially misstated. | |||||||||||||
[3] | The Company recorded a tax benefit from the release of $18.2 million of valuation allowances from deferred tax assets recorded for U.S. federal net operating losses arising from the acquisition of the Motorola Home business from Google. |
Summary_Quarterly_Consolidated3
Summary Quarterly Consolidated Financial Information (Parenthetical) (Detail) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Mar. 31, 2014 |
Quarterly Financial Information [Line Items] | |||
Income taxes related to the prior year | $9.80 | ||
Current tax benefit from research and development tax credits | 18.1 | ||
U.S. Federal | |||
Quarterly Financial Information [Line Items] | |||
Tax benefit from release of valuation allowances from deferred tax assets | 134.8 | 18.2 | |
U.S. State | |||
Quarterly Financial Information [Line Items] | |||
Tax benefit from release of valuation allowances from deferred tax assets | $9 |
Valuation_and_Qualifying_Accou1
Valuation and Qualifying Accounts (Detail) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Allowance for doubtful accounts | ||||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||||
Balance at beginning of period | $1,887 | $1,630 | $1,443 | |||
Charges to expenses | 5,336 | [1] | 257 | [1] | 240 | [1] |
Deductions | 831 | [2] | 53 | [2] | ||
Balance at end of period | 6,392 | 1,887 | 1,630 | |||
Income tax valuation allowance | ||||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||||
Balance at beginning of period | 163,745 | [3] | 17,973 | [3] | 42,039 | [3] |
Charges to expenses | 37,708 | [1],[3] | 147,349 | [1],[3],[4] | 3,541 | [1],[3] |
Deductions | 82,824 | [2],[3] | 1,577 | [2],[3] | 27,607 | [2],[3] |
Balance at end of period | $118,629 | [3] | $163,745 | [3] | $17,973 | [3] |
[1] | The charge to expense for the allowance for doubtful accounts primarily represents an adjustment for a change in estimate related to uncollectible accounts. | |||||
[2] | Represents: a) Uncollectible accounts written off, net of recoveries and write-offs, b) Net change in the sales return and allowance account, and c) Release of valuation allowances. | |||||
[3] | The income tax valuation allowance is included in current and noncurrent deferred income tax assets. | |||||
[4] | A significant portion of the increase in valuation allowances, approximately $141.7 million, is attributable to deferred tax assets arising from our acquisition of Motorola Home. These amounts did not impact the income statement. |
Valuation_and_Qualifying_Accou2
Valuation and Qualifying Accounts (Parenthetical) (Detail) (Motorola Home, Deferred Tax Assets, USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
Motorola Home | Deferred Tax Assets | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Increase in valuation allowance | $141.70 |