Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Apr. 30, 2015 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | ARRS | |
Entity Registrant Name | ARRIS GROUP INC | |
Entity Central Index Key | 1141107 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 145,795,167 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $499,482 | $565,790 |
Short-term investments, at fair value | 129,073 | 126,748 |
Total cash, cash equivalents and short-term investments | 628,555 | 692,538 |
Accounts receivable (net of allowances for doubtful accounts of $5,616 in 2015 and $6,392 in 2014) | 819,918 | 598,603 |
Other receivables | 15,054 | 10,640 |
Inventories (net of reserves of $65,731 in 2015 and $62,359 in 2014) | 372,379 | 401,165 |
Prepaid income taxes | 13,380 | 11,023 |
Prepaids | 31,814 | 27,497 |
Current deferred income tax assets | 115,926 | 113,390 |
Other current assets | 80,943 | 61,450 |
Total current assets | 2,077,969 | 1,916,306 |
Property, plant and equipment (net of accumulated depreciation of $282,611 in 2015 and $265,811 in 2014) | 325,727 | 366,431 |
Goodwill | 938,645 | 936,067 |
Intangible assets (net of accumulated amortization of $677,135 in 2015 and $619,283 in 2014) | 919,876 | 943,388 |
Investments | 76,492 | 77,640 |
Noncurrent deferred income tax assets | 88,366 | 71,686 |
Other assets | 45,711 | 54,127 |
Total assets | 4,472,786 | 4,365,645 |
Current liabilities: | ||
Accounts payable | 594,690 | 480,150 |
Accrued compensation, benefits and related taxes | 75,849 | 145,278 |
Accrued warranty | 36,824 | 42,763 |
Deferred revenue | 107,230 | 92,772 |
Current portion of long-term debt and financing lease obligations | 82,787 | 73,956 |
Current income taxes liability | 13,092 | 10,610 |
Other accrued liabilities | 167,430 | 164,341 |
Total current liabilities | 1,077,902 | 1,009,870 |
Long-term debt and financing lease obligations, net of current portion | 1,505,073 | 1,467,370 |
Accrued pension | 68,060 | 64,917 |
Noncurrent income tax liability | 42,282 | 41,082 |
Noncurrent deferred income tax liabilities | 412 | 274 |
Other noncurrent liabilities | 90,428 | 91,371 |
Total liabilities | 2,784,157 | 2,674,884 |
Stockholders' equity: | ||
Preferred stock, par value $1.00 per share, 5.0 million shares authorized; none issued and outstanding | ||
Common stock, par value $0.01 per share, 320.0 million shares authorized; 145.0 million and 145.1 million shares issued and outstanding in 2015 and 2014, respectively | 1,811 | 1,796 |
Capital in excess of par value | 1,745,345 | 1,739,700 |
Treasury stock at cost, 35.1 million and 34.2 million shares in 2015 and 2014, respectively | -331,329 | -306,330 |
Retained earnings | 285,768 | 266,642 |
Accumulated other comprehensive loss | -12,966 | -11,047 |
Total stockholders' equity | 1,688,629 | 1,690,761 |
Liabilities and Equity, Total | $4,472,786 | $4,365,645 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, except Share data in Millions, unless otherwise specified | ||
Allowances for doubtful accounts | $5,616 | $6,392 |
Reserves for inventories | 65,731 | 62,359 |
Accumulated depreciation of property, plant and equipment | 282,611 | 265,811 |
Accumulated amortization of intangible assets | $677,135 | $619,283 |
Preferred stock, par value | $1 | $1 |
Preferred stock, shares authorized | 5 | 5 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 320 | 320 |
Common stock, shares issued | 145 | 145.1 |
Common stock, shares outstanding | 145 | 145.1 |
Treasury stock, shares | 35.1 | 34.2 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Net sales | $1,215,158 | $1,225,017 |
Cost of sales | 878,602 | 878,243 |
Gross margin | 336,556 | 346,774 |
Operating expenses: | ||
Selling, general, and administrative expenses | 100,324 | 99,132 |
Research and development expenses | 132,469 | 134,153 |
Amortization of intangible assets | 57,147 | 64,001 |
Integration, acquisition, restructuring and other costs | 898 | 11,502 |
Total operating expenses | 290,838 | 308,788 |
Operating income | 45,718 | 37,986 |
Other expense (income): | ||
Interest expense | 13,367 | 16,598 |
Loss on investments | 1,709 | 1,674 |
Loss (gain) on foreign currency | 20 | -679 |
Interest income | -721 | -583 |
Other expense, net | 7,063 | 2,172 |
Income before income taxes | 24,280 | 18,804 |
Income tax expense (benefit) | 5,154 | -21,996 |
Net income | $19,126 | $40,800 |
Net income per common share: | ||
Basic | $0.13 | $0.29 |
Diluted | $0.13 | $0.28 |
Weighted average common shares: | ||
Basic | 145,350 | 142,854 |
Diluted | 148,986 | 147,152 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Net income | $19,126 | $40,800 |
Available-for-sale securities: | ||
Unrealized gain (loss) on available-for-sale securities, net of taxes of $(4) in 2015 and $102 in 2014, respectively | 9 | -279 |
Reclassification adjustments recognized in net income | 0 | 0 |
Net change in available-for-sale securities | 9 | -279 |
Derivative instruments: | ||
Unrealized loss on derivative instruments, net of taxes of $1,802 in 2015 and $544 in 2014, respectively | -3,142 | -1,472 |
Reclassification adjustments recognized in net income, net of taxes of $(670) in 2015 and $(500) in 2014, respectively | 1,168 | 1,353 |
Net change in derivative instruments | -1,974 | -119 |
Change related to pension liability | 105 | |
Cumulative translation adjustments | -59 | -76 |
Comprehensive income, net of tax | $17,207 | $40,326 |
Consolidated_Statements_of_Com1
Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Tax (expense) benefit, unrealized gain (loss) on available-for-sale securities | ($4) | $102 |
Tax benefit, unrealized loss on derivatives instruments | 1,802 | 544 |
Tax benefit, reclassification adjustments recognized in net income | ($670) | ($500) |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Operating activities: | ||
Net income | $19,126 | $40,800 |
Depreciation | 19,884 | 19,994 |
Amortization of intangible assets | 57,852 | 64,001 |
Stock compensation expense | 13,974 | 11,033 |
Deferred income tax benefit | -18,188 | -8,385 |
Amortization of deferred finance fees and debt discount | 2,181 | 2,331 |
Loss on investments | 1,709 | 1,674 |
Provision for doubtful accounts | 267 | 7 |
Loss on disposal of property, plant & equipment | 5,877 | 412 |
Excess income tax benefits from stock-based compensation plans | -16,437 | -10,457 |
Changes in operating assets and liabilities, net of effect of acquisitions and dispositions: | ||
Accounts receivable | -221,582 | -94,508 |
Other receivables | -6,995 | -7,254 |
Inventories | 28,786 | 44,071 |
Accounts payable and accrued liabilities | 56,688 | -40,699 |
Prepaids and other, net | -6,405 | 3,973 |
Net cash (used in) provided by operating activities | -63,263 | 26,993 |
Investing activities: | ||
Purchases of property, plant and equipment | -10,919 | -12,924 |
Purchases of investments | -11,063 | -21,240 |
Sales of investments | 10,169 | 11,175 |
Purchase of intangible assets | -34,340 | |
Proceeds from sale-leaseback transaction | 24,960 | |
Other, net | 2,904 | 17 |
Net cash used in investing activities | -18,289 | -22,972 |
Financing activities: | ||
Payment of debt obligations | -13,750 | -13,750 |
Repurchase of common stock | -24,999 | |
Proceeds from sale-leaseback financing transaction | 58,729 | |
Proceeds from issuance of common stock, net | 21 | 3,780 |
Excess income tax benefits from stock-based compensation plans | 16,437 | 10,457 |
Repurchase of shares to satisfy employee minimum tax withholdings | -21,194 | -6,239 |
Net cash provided by (used in) financing activities | 15,244 | -5,752 |
Net decrease in cash and cash equivalents | -66,308 | -1,731 |
Cash and cash equivalents at beginning of period | 565,790 | 442,438 |
Cash and cash equivalents at end of period | $499,482 | $440,707 |
Organization_and_Basis_of_Pres
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2015 | |
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 (“CPE”) and Network & Cloud (“N&C”) (See Note 13 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 (“IPTV”) 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. | |
The consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) that are, in the opinion of management, necessary for a fair presentation of the consolidated financial statements for the periods shown. Certain prior year amounts in the financial statements have been reclassified to conform to fiscal year 2015 presentation. Interim results of operations are not necessarily indicative of results to be expected from a twelve-month period. These financial statements should be read in conjunction with the Company’s most recent audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, as filed with the United States Securities and Exchange Commission (“SEC”). |
Impact_of_Recently_Adopted_Acc
Impact of Recently Adopted Accounting Standards | 3 Months Ended |
Mar. 31, 2015 | |
Impact of Recently Adopted Accounting Standards | Note 2. Impact of Recently Adopted Accounting Standards |
Adoption of new accounting standards — In April 2014, the FASB issued an accounting standard update that changes 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 did not have a material impact on the Company’s consolidated financial position and results of operations. | |
Accounting standards issued but not yet effective — In May 2014, the FASB issued an accounting standard 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. Early adoption is 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 April 2015 the FASB voted to delay the effective date of this standard by one year to reporting periods beginning after December 15, 2017, but permit companies the option to adopt the standard one year earlier (that is, as of the original effective date). | |
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. | |
In January 2015, the FASB issued new guidance simplifying income statement presentation by eliminating the concept of “extraordinary items”. This guidance eliminates from U.S. GAAP the concept of extraordinary items. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity may apply the amendments prospectively. We do not anticipate that this guidance will materially impact our consolidated financial statements | |
In February 2015, the FASB issued new guidance related to consolidations. The new guidance amends certain requirements for determining whether a variable interest entity must be consolidated. The amendments are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. The adoption of the new guidance is not expected to have a material impact on the Company’s consolidated financial statements. | |
In April 2015, the FASB issued new guidance, which requires the cost of issuing debt to no longer be recorded as a separate asset but rather to be presented on the balance sheet as a direct reduction to the carrying value of the related debt liability, similar to the presentation of debt discounts. This guidance will be effective for interim and annual periods beginning after December 15, 2015 including retrospective conforming presentation of prior periods presented. Early adoption of the standard is permitted. While the adoption of this standard may impact the presentation on the Company’s balance sheet, it will not affect the Company’s results of operations, financial condition or cash flows. As of March 31, 2015 and December 31, 2014, the Company had deferred financing costs of $24.6 million and $25.3 million, respectively. | |
In April 2015, the FASB issued new guidance, in determining whether fees for purchasing cloud computing services (or hosted software solutions) are considered internal-use software or should be considered a service contract. The cloud computing agreement that includes a software license should be accounted for in the same manner as internal-use software if the customer has contractual right to take possession of the software during the hosting period without significant penalty and it is feasible to either run the software on the customer’s hardware or contract with another vendor to host the software. Arrangements that don’t meet the requirements for internal-use software should be accounted for as a service contract. This guidance will be effective for interim and annual periods beginning after December 15, 2015. Early adoption of the standard is permitted. The Company is currently in the process of evaluating the impact that the adoption will have on its consolidated financial statements. | |
Accounting pronouncements issued but not in effect until after March 31, 2015 are not expected to have a significant impact on our consolidated financial position or results of operations. |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Goodwill and Intangible Assets | Note 3. Goodwill and Intangible Assets | ||||||||||||||||
Goodwill | |||||||||||||||||
The changes in the carrying amount of goodwill for the year to date period ended March 31, 2015 are as follows (in thousands): | |||||||||||||||||
CPE | Network | Cloud | Total | ||||||||||||||
Infrastructure | Services | ||||||||||||||||
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 | |||||||||||||
Other | – | 2,578 | – | 2,578 | |||||||||||||
Goodwill | 684,597 | 509,198 | 123,506 | 1,317,301 | |||||||||||||
Accumulated impairment losses | – | (257,053 | ) | (121,603 | ) | (378,656 | ) | ||||||||||
Balance as of March 31, 2015 | $ | 684,597 | $ | 252,145 | $ | 1,903 | $ | 938,645 | |||||||||
Intangible Assets | |||||||||||||||||
During the quarter ended March 31, 2015, we recorded intangible assets of $34.3 million for a non-exclusive license to approximately 4,000 patent assets purchased by RPX, resulting from our agreement 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”). The license assets have a weighted average useful life of nine years at acquisition. |
Investments
Investments | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Investments | Note 4. Investments | ||||||||
ARRIS’s investments as of March 31, 2015 and December 31, 2014 consisted of the following (in thousands): | |||||||||
As of March 31, 2015 | As of December 31, 2014 | ||||||||
Current Assets: | |||||||||
Available-for-sale securities | $ | 129,073 | $ | 126,748 | |||||
Noncurrent Assets: | |||||||||
Available-for-sale securities | 7,078 | 8,631 | |||||||
Equity method investments | 26,896 | 27,355 | |||||||
Cost method investments | 15,511 | 15,161 | |||||||
Other investments | 27,007 | 26,493 | |||||||
76,492 | 77,640 | ||||||||
Total | $ | 205,565 | $ | 204,388 | |||||
Available-for-sale securities – ARRIS’s 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 Sheets as a component of accumulated other comprehensive income (loss). Realized and unrealized gains and losses in total and by individual investment as of March 31, 2015 and December 31, 2014 were not material. The amortized cost basis of the Company’s available-for-sale securities approximates fair value. | |||||||||
The contractual maturities of the Company’s available-for-sale securities as of March 31, 2015 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): | |||||||||
March 31, | |||||||||
2015 | |||||||||
Within one year | $ | 129,073 | |||||||
After one year through five years | 3,054 | ||||||||
After five years through ten years | – | ||||||||
After ten years | 4,024 | ||||||||
Total | $ | 136,151 | |||||||
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. ARRIS concluded that no other-than-temporary impairment losses existed for the periods ended March 31, 2015 and 2014. | |||||||||
Classification of securities as current or non-current is dependent upon management’s intended holding period, the security’s maturity date and liquidity consideration based on market conditions. If management intends to hold the securities for longer than one year as of the balance sheet date, they are classified as non-current. |
Fair_Value_Measurement
Fair Value Measurement | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Fair Value Measurement | Note 5. Fair Value Measurement | ||||||||||||||||
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. | |||||||||||||||||
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 following table presents the Company’s investment assets (excluding equity and cost method investments) measured at fair value on a recurring basis as of March 31, 2015 and December 31, 2014 (in thousands): | |||||||||||||||||
March 31, 2015 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Certificates of deposit | $ | – | $ | 64,197 | $ | – | $ | 64,197 | |||||||||
Corporate bonds | – | 38,083 | – | 38,083 | |||||||||||||
Corporate obligations | – | 47 | – | 47 | |||||||||||||
Money markets | 210 | – | – | 210 | |||||||||||||
Mutual funds | 29,984 | – | – | 29,984 | |||||||||||||
Other investments | – | 3,624 | – | 3,624 | |||||||||||||
Interest rate derivatives – liability derivatives | – | (8,104 | ) | – | (8,104 | ) | |||||||||||
Foreign currency contracts – asset position | – | 10,592 | – | 10,592 | |||||||||||||
Foreign currency contracts – liability position | – | (403 | ) | – | (403 | ) | |||||||||||
31-Dec-14 | |||||||||||||||||
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 | |||||||||||||
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 | ) | |||||||||||
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 March 31, 2015, 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 March 31, 2015 approximated the fair value because of interest-bearing 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 | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Derivative Instruments and Hedging Activities | Note 6. 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’s 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. | |||||||||||||
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 March 31, 2015. 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 March 31, 2015, the Company had option collars with notional amounts totaling 75 million euros which mature throughout 2015 and 2016, forward contracts with a total notional amount of 70 million Australian dollars which mature throughout 2015 and 2016, forward contracts with a notional amount of 25 million euros which mature throughout 2015 and 2016 and a forward contract with a notional amount of 5 million British pounds which matures in the second 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 three months ended March 31, 2015 and 2014, the Company did not have expenses related to hedge ineffectiveness in earnings. | |||||||||||||
Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest accrues on the Company’s variable-rate debt. Over the next 12 months, the Company estimates that an additional $6.3 million may be reclassified as an increase to interest expense. | |||||||||||||
The table below presents the pre-tax impact the Company’s derivative financial instruments had on the Accumulated Other Comprehensive Income and Statement of Operations for the three months ended March 31, 2015 and 2014 (in thousands): | |||||||||||||
Three months ended March 31, | |||||||||||||
2015 | 2014 | ||||||||||||
Loss Recognized in OCI on Derivative (Effective Portion) | $ | (4,944 | ) | $ | (2,016 | ) | |||||||
Location of Loss Reclassified from Accumulated OCI into Income (Effective Portion) | Interest expense | Interest expense | |||||||||||
Amounts Reclassified from Accumulated OCI into Income (Effective Portion) | $ | 1,838 | $ | 1,853 | |||||||||
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 of March 31, 2015 and December 31, 2014 were as follows (in thousands): | |||||||||||||
As of March 31, 2015 | As of December 31, 2014 | ||||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||||
Derivatives not designated as | |||||||||||||
hedging instruments: | |||||||||||||
Foreign exchange contracts | Other current assets | $ | 10,592 | Other current assets | $ | 2,876 | |||||||
– asset derivatives | |||||||||||||
Foreign exchange contracts | Other accrued liabilities | 403 | Other accrued liabilities | 201 | |||||||||
– liability derivatives | |||||||||||||
Derivatives designated as | |||||||||||||
hedging instruments: | |||||||||||||
Interest rate derivatives | Other assets | $ | – | Other assets | $ | 1,416 | |||||||
– asset derivatives | |||||||||||||
Interest rate derivatives | Other accrued liabilities | 6,329 | Other accrued liabilities | $ | 6,414 | ||||||||
– liability derivatives | |||||||||||||
Interest rate derivatives | Other long-term liabilities | 1,775 | Other long-term liabilities | – | |||||||||
– liability derivatives | |||||||||||||
The change in the fair values of ARRIS’s derivative instruments recorded in the Consolidated Statements of Operations during the three months ended March 31, 2015 and 2014 were as follows (in thousands): | |||||||||||||
Three Months Ended | |||||||||||||
March 31, | |||||||||||||
Statement of Operations Location | 2015 | 2014 | |||||||||||
Derivatives not designated | |||||||||||||
as hedging instruments: | |||||||||||||
Foreign exchange contracts | Gain on foreign currency | $ | 10,309 | $ | – | ||||||||
Derivatives designated | |||||||||||||
as hedging instruments: | |||||||||||||
Interest rates derivatives | Interest expense | $ | 1,838 | $ | 1,853 | ||||||||
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 March 31, 2015 and March 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 $8.3 million and $4.2 million, respectively. As of March 31, 2015, 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. |
Pension_Benefits
Pension Benefits | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Pension Benefits | Note 7. Pension Benefits | ||||||||
Components of Net Periodic Pension Cost (in thousands): | |||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Interest cost | $ | 429 | $ | 446 | |||||
Expected return on plan assets | (210 | ) | (219 | ) | |||||
Amortization of net loss | 209 | 76 | |||||||
Net periodic pension cost | $ | 428 | $ | 303 | |||||
Employer Contributions | |||||||||
No minimum funding contributions are required in 2015 under the Company’s defined benefit plan. The Company has established two rabbi trusts to fund the Company’s pension obligations under the non-qualified plan of the Chief Executive Officer and certain executive officers. The balance of these rabbi trust assets as of March 31, 2015 was approximately $20.7 million and is included in Investments on the Consolidated Balance Sheets. |
Product_Warranties
Product Warranties | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Product Warranties | Note 8. Product Warranties | ||||
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’s baseline experience. If actual product failure rates, material usage or service delivery costs differ from estimates, revisions (which could be material) would be recorded to the warranty liability. | |||||
The Company offers extended warranties and support service agreements on certain products. Revenue from these agreements is deferred at the time of the sale and recognized on a straight-line basis over the contract period. Costs of services performed under these types of contracts are charged to expense as incurred, which approximates the timing of the revenue stream. | |||||
Information regarding the changes in ARRIS’s aggregate product warranty liabilities for the three months ended March 31, 2015 was as follows (in thousands): | |||||
Balance at December 31, 2014 | $ | 74,320 | |||
Accruals related to warranties (including changes in assumptions) | 4,851 | ||||
Settlements made (in cash or in-kind) | (14,121 | ) | |||
Balance at March 31, 2015 | $ | 65,050 | |||
Inventories
Inventories | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Inventories | Note 9. Inventories | ||||||||
The components of inventory were as follows, net of reserves (in thousands): | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Raw material | $ | 77,037 | $ | 61,068 | |||||
Work in process | 3,640 | 6,713 | |||||||
Finished goods | 291,702 | 333,384 | |||||||
Total inventories, net | $ | 372,379 | $ | 401,165 | |||||
Property_Plant_and_Equipment
Property, Plant and Equipment | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Property, Plant and Equipment | Note 10. Property, Plant and Equipment | ||||||||
Property, plant and equipment, at cost, consisted of the following (in thousands): | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Land | $ | 68,562 | $ | 87,952 | |||||
Building and leasehold improvements | 134,552 | 141,581 | |||||||
Machinery and equipment | 405,224 | 402,709 | |||||||
608,338 | 632,242 | ||||||||
Less: Accumulated depreciation | (282,611 | ) | (265,811 | ) | |||||
Total property, plant and equipment, net | $ | 325,727 | $ | 366,431 | |||||
During the quarter ended March 31, 2015, the Company recorded proceeds of $25.0 million from the sale of land and building associated with its San Diego campus facilities, resulting in a loss of $5.3 million as of the closing. (See Note 11 – Leases) |
Leases
Leases | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Leases | Note 11. Leases | ||||
Sale-leaseback of San Diego Office Complex: | |||||
As of March 31, 2015, the Company sold its San Diego office complex consisting of land and buildings with a net book value of $71.0 million, for total consideration of $85.5 million. The Company concurrently entered into a leaseback arrangement for two buildings on the San Diego campus (“Building 1” and “Building 2”), with an initial leaseback term of ten years for Building 1 and a maximum term of one year for Building 2. The Company determined that the sale-leaseback of Building 1 did not qualify for sale-leaseback accounting due to continuing involvement that will exist for the 10-year lease term. Accordingly, the carrying amount of Building 1 will remain on the Company’s balance sheet and will be depreciated over its remaining useful life with the proceeds reflected as a financing obligation. | |||||
At March 31, 2015, the minimum lease payments required on the financing obligation were as follows (in thousands): | |||||
2015 (for the remaining nine months) | $ | 2,618 | |||
2016 | 4,016 | ||||
2017 | 4,136 | ||||
2018 | 4,260 | ||||
2019 | 4,388 | ||||
Thereafter through 2025 | 25,277 | ||||
Total minimum lease payments | $ | 44,695 | |||
The Company concluded that Building 2 qualified for sale-leaseback accounting with the subsequent leaseback classified as an operating lease. A loss of $5.3 million was recorded at the closing of the transaction. |
Indebtedness
Indebtedness | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Indebtedness | Note 12. Indebtedness | ||||
Senior Secured Credit Facilities | |||||
In April 2013, ARRIS entered into senior secured credit facilities with Bank of America, N.A. and various other institutions, which are comprised of (i) a “Term Loan A Facility” of $1.1 billion, (ii) a “Term Loan B Facility” of $825 million and (iii) a “Revolving Credit Facility” of $250 million. The Term Loan A Facility and the Revolving Credit Facility have terms of five years. The Term Loan B Facility has a term of seven years. Interest rates on borrowings under the senior secured credit facilities are set forth in the table below. As of March 31, 2015, ARRIS had $1,533.8 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 March 31, 2015 | ||||
Term Loan A | LIBOR + 1.75 % | 1.93% | |||
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 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. 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 interest coverage ratio and a maximum leverage ratio of 3.50:1. As of March 31, 2015, 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 of March 31, 2015, there are no further interest rate decreases available to ARRIS in the current Credit Agreement. | |||||
During the three months ended March 31, 2015, the Company made mandatory prepayments of approximately $13.8 million related to the senior secured credit facilities. | |||||
As of March 31, 2015, the face value of contractual debt obligations for the next five years is as follows (in thousands): | |||||
2015 | $ | 61,875 | |||
2016 | 103,125 | ||||
2017 | 110,000 | ||||
2018 | 715,000 | ||||
2019 | - | ||||
thereafter | 543,813 |
Segment_Information
Segment Information | 3 Months Ended | ||||||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||||||
Segment Information | Note 13. Segment Information | ||||||||||||||||||||||||||||||||
The “management approach” has been used to present the following segment information. This approach is based upon the way the management of the Company organizes segments within an enterprise for making operating decisions and assessing performance. Financial information is reported on the basis that it is used internally by the chief operating decision maker (“CODM”) for evaluating segment performance and deciding how to allocate resources to segments. The Company’s chief executive officer has been identified as the CODM. | |||||||||||||||||||||||||||||||||
Our CODM manages the Company under two segments: | |||||||||||||||||||||||||||||||||
• | Customer Premises Equipment (“CPE”) – The CPE segment’s product solutions include set-top boxes, gateways, and Subscriber Premises equipment that enable service providers to offer Voice, Video and high-speed data services to residential and business subscribers. | ||||||||||||||||||||||||||||||||
• | Network & Cloud (“N&C”) – The N&C segment’s product lines cover all components required by facility-based Service Providers to construct a state-of-the-art residential and metro distribution network. For Cable providers this includes Hybrid Fiber Coax equipment, edge routers, metro Wi-Fi, 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. | |||||||||||||||||||||||||||||||||
The table below presents information about the Company’s reportable segments for the three months ended March 31, 2015 and 2014 (in thousands): | |||||||||||||||||||||||||||||||||
Reportable Segments | |||||||||||||||||||||||||||||||||
Network & Cloud | CPE | Other | Consolidated | ||||||||||||||||||||||||||||||
For the three months ended March 31, | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||||||
Sales | $ | 393,500 | $ | 331,570 | $ | 821,674 | $ | 893,601 | $ | (16 | ) | $ | (154 | ) | $ | 1,215,158 | $ | 1,225,017 | |||||||||||||||
Direct Contribution | 94,203 | 65,364 | 151,452 | 191,787 | (141,892 | ) | (143,662 | ) | 103,763 | 113,489 | |||||||||||||||||||||||
Amortization of intangible assets | 57,147 | 64,001 | 57,147 | 64,001 | |||||||||||||||||||||||||||||
Integration, acquisition, | 898 | 11,502 | 898 | 11,502 | |||||||||||||||||||||||||||||
restructuring & other | |||||||||||||||||||||||||||||||||
Operating income | 45,718 | 37,986 | |||||||||||||||||||||||||||||||
Other expense | 21,438 | 19,182 | |||||||||||||||||||||||||||||||
Income before income taxes | $ | 24,280 | $ | 18,804 | |||||||||||||||||||||||||||||
Sales_Information
Sales Information | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Sales Information | Note 14. Sales Information | ||||||||
ARRIS sells its products primarily in the United States. The Company’s international revenue is generated from Asia Pacific, Canada, Europe and Latin America. Sales to customers outside of United States were approximately 26.7% and 25.7% of total sales for the three months ended March 31, 2015 and 2014, respectively. International sales by region for the three months ended March 31, 2015 and 2014 were as follows (in thousands): | |||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
Americas, excluding U.S. (1) | $ | 204,858 | $ | 213,972 | |||||
Asia Pacific | 33,984 | 32,952 | |||||||
EMEA | 85,561 | 67,445 | |||||||
Total international sales | $ | 324,403 | $ | 314,369 | |||||
-1 | Excludes U.S. sales of $890.8 million and $910.6 million for the three months ended March 31, 2015 and 2014, respectively. |
Earnings_Per_Share
Earnings Per Share | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Earnings Per Share | Note 15. Earnings Per Share | ||||||||
The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share (“EPS”) computations for the periods indicated (in thousands, except per share data): | |||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
Basic: | |||||||||
Net income | $ | 19,126 | $ | 40,800 | |||||
Weighted average shares outstanding | 145,350 | 142,854 | |||||||
Basic earnings per share | $ | 0.13 | $ | 0.29 | |||||
Diluted: | |||||||||
Net income | $ | 19,126 | $ | 40,800 | |||||
Weighted average shares outstanding | 145,350 | 142,854 | |||||||
Net effect of dilutive equity awards | 3,636 | 4,298 | |||||||
Total | 148,986 | 147,152 | |||||||
Diluted earnings per share | $ | 0.13 | $ | 0.28 | |||||
For the three months ended March 31, 2015, all outstanding equity-based awards were anti-dilutive. For the three months ended March 31, 2014, 10 thousand of the equity-based awards 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 three months ended March 31, 2015, the Company issued 0.8 million shares of its common stock related to stock option exercises and the vesting of restricted shares, as compared to 3.1 million shares for the twelve months ended December 31, 2014. | |||||||||
The Company has not paid cash dividends on its common stock since its inception. |
Income_Taxes
Income Taxes | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
Income Taxes | Note 16. Income Taxes | ||||||||||||||||||||||||
Below is a summary of the components of the tax expense (benefit) in each period (in thousands, except for percentages): | |||||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||
Income | Income | Effective | Income | Income | Effective | ||||||||||||||||||||
Before | Tax | Tax Rate | Before | Tax | Tax Rate | ||||||||||||||||||||
Tax | Expense | Tax | Expense | ||||||||||||||||||||||
(Benefit) | (Benefit) | ||||||||||||||||||||||||
Non-discrete items | $ | 24,280 | $ | 8,971 | 37 | % | $ | 30,306 | $ | 10,826 | 35.7 | % | |||||||||||||
Discrete tax events - | |||||||||||||||||||||||||
Integration and acquisition costs | – | – | (11,502 | ) | (4,393 | ) | |||||||||||||||||||
Change in state deferred rates | – | – | – | (5,744 | ) | ||||||||||||||||||||
Change in valuation allowances | – | (3,817 | ) | – | (18,163 | ) | |||||||||||||||||||
Other | – | – | – | (4,522 | ) | ||||||||||||||||||||
Total | $ | 24,280 | $ | 5,154 | 21.2 | % | $ | 18,804 | $ | (21,996 | ) | (117.0 | %) | ||||||||||||
• | The change in the income tax expense (benefit) for the three month period ended March 31, 2015 compared to the three months period ended March 31, 2014, was due to the change in earnings from continuing operations, as a result of the Motorola Home acquisition that occurred on April 17, 2013 and its related significant, infrequent and unusual book charges, which occurred during 2014 and did not recur in 2015. The unusual book charges in 2014 were primarily attributable to restructuring, integration and other acquisition related items. Additionally, a benefit was recorded during the first quarter of 2015 for the release of $3.8 million of valuation allowances on capital loss carryforwards, which were utilized to offset capital gains generated by the taxable sale of real property in San Diego, California. | ||||||||||||||||||||||||
• | For the three month period ended March 31, 2015, the Company did not record any benefits attributed to U.S. federal research and development tax credits, as the tax credit was not reenacted. | ||||||||||||||||||||||||
The earnings from the Company’s non-U.S. subsidiaries are considered to be permanently invested outside of the United States. Accordingly, with the exception of Israel, no provision for U.S. federal and state income taxes on those non-U.S. earnings has been made in the accompanying consolidated financial statements. Any future distribution of these non-U.S. earnings may subject the Company to both U.S. federal and state income taxes, after reduction for foreign taxes credited. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||
Accumulated Other Comprehensive Income | Note 17. Accumulated Other Comprehensive Income | ||||||||||||||||||||
The following table summarizes the changes in accumulated other comprehensive income by component, net of taxes, for the three months ended March 31, 2015 and 2014 (in thousands): | |||||||||||||||||||||
Available-for- | Change | Derivative | Cumulative | Total | |||||||||||||||||
sale securities | related to | instruments | translation | ||||||||||||||||||
pension | adjustments | ||||||||||||||||||||
liability | |||||||||||||||||||||
Balance as of December 31, 2014 | $ | 25 | $ | (7,181 | ) | $ | (3,166 | ) | $ | (725 | ) | $ | (11,047 | ) | |||||||
Other comprehensive (loss) income before reclassifications | 9 | - | (3,142 | ) | (59 | ) | (3,192 | ) | |||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | - | 105 | 1,168 | - | 1,273 | ||||||||||||||||
Net current-period other comprehensive income (loss) | 9 | 105 | (1,974 | ) | (59 | ) | (1,919 | ) | |||||||||||||
Balance as of March 31, 2015 | $ | 34 | $ | (7,076 | ) | $ | (5,140 | ) | $ | (784 | ) | $ | (12,966 | ) | |||||||
Available-for- | Change | Derivative | Cumulative | Total | |||||||||||||||||
sale securities | related to | instruments | translation | ||||||||||||||||||
pension | adjustments | ||||||||||||||||||||
liability | |||||||||||||||||||||
Balance as of December 31, 2013 | $ | 306 | $ | (2,416 | ) | $ | (2,541 | ) | $ | (11 | ) | $ | (4,662 | ) | |||||||
Other comprehensive (loss) income before reclassifications | (279 | ) | - | (1,472 | ) | (76 | ) | (1,827 | ) | ||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | - | - | 1,353 | - | 1,353 | ||||||||||||||||
Net current-period other comprehensive income (loss) | (279 | ) | - | (119 | ) | (76 | ) | (474 | ) | ||||||||||||
Balance as of March 31, 2014 | $ | 27 | $ | (2,416 | ) | $ | (2,660 | ) | $ | (87 | ) | $ | (5,136 | ) | |||||||
Repurchases_of_ARRIS_Common_St
Repurchases of ARRIS Common Stock | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Repurchases of ARRIS Common Stock | Note 18. Repurchases of ARRIS Common Stock | ||||||||||||||||
The table below sets forth the purchases of ARRIS common stock for the quarter ended March 31, 2015: | |||||||||||||||||
Period | Total | Average | Total Number of | Approximate | |||||||||||||
Number of | Price Paid | Shares | Dollar Value of | ||||||||||||||
Shares | Per Share | Purchased as | Shares That May | ||||||||||||||
Purchased | Part of Publicly | Yet Be Purchased | |||||||||||||||
-1 | Announced Plans | Under the Plans | |||||||||||||||
or Programs | or Programs | ||||||||||||||||
(in thousands) | |||||||||||||||||
Jan-15 | 249,918 | $ | 26.31 | - | $ | 169,630 | |||||||||||
Feb-15 | 870,939 | $ | 28.7 | 870,939 | $ | 144,631 | |||||||||||
Mar-15 | 638,684 | $ | 28.48 | - | $ | 144,631 | |||||||||||
-1 | Includes approximately 888,602 shares repurchased to satisfy tax withholding obligations that arose on the vesting of shares of restricted stock and restricted stock units. | ||||||||||||||||
The Company’s Board of Directors previously authorized share repurchase plans, in May 2011 and October 2012, pursuant to which we could purchase up to an aggregate of $300.0 million of our common stock. In connection with our acquisition of Motorola Home in 2013, we suspended making any repurchases under the approved plans, but the plans were not terminated and have not expired. | |||||||||||||||||
During the first quarter of 2015, ARRIS repurchased 0.9 million shares of the Company’s common stock at an average price of $28.70 per share, for an aggregate consideration of approximately $25.0 million. The remaining authorized amount for stock repurchases under this plan was $144.6 million as of March 31, 2015, and will expire when the Company has used all authorized funds for repurchase. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies | Note 19. Commitments and Contingencies |
Bank Guarantees: | |
The Company has outstanding bank guarantees, of which certain amounts are collateralized by restricted cash. As of March 31, 2015, the restricted cash associated with the outstanding bank guarantee was $1.4 million which is reflected in Other Assets on the Consolidated Balance Sheets. | |
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. (See Part II, Item 1 “Legal Proceedings” for additional details) |
Subsequent_Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2015 | |
Subsequent Events | Note 20. Subsequent Events |
Pending Pace plc Acquisition | |
On April 22, 2015, the Company and Pace plc (“Pace”) announced that they have agreed that ARRIS will acquire Pace for aggregate stock and cash consideration valued at $2.1 billion as of April 21, 2015. The cash portion will be funded through a combination of cash on hand and debt. As described below, ARRIS has secured a fully committed facility to meet the funding requirements. The completion of the acquisition remains conditional upon, among other things, the approval of both the ARRIS and Pace stockholders and receipt of necessary regulatory approvals. | |
The transaction will result in the formation of a new holding company, which will be incorporated in the U.K., and its operational and worldwide headquarters will be in Suwanee, GA USA. The stock of the new holding company is expected to be listed on the NASDAQ stock exchange under the ticker ARRS. | |
Credit Facility | |
In connection with the announcement of the Pace Acquisition, ARRIS and certain of its subsidiaries entered into a new credit facility (the “New Credit Agreement”) with Bank of America, N.A., as administrative agent, swing line lender and letter of credit lender. The new credit facility, which will provide the funds necessary to complete the Pace acquisition and, if the Pace acquisition is completed, will replace ARRIS’s existing credit agreement dated as of March 27, 2013, as amended (the “Existing Credit Agreement”), is comprised of (i) a Revolving Credit Facility of up to $250 million, (ii) a Term Loan A Facility in an amount equal to the outstanding principal amount of the Term A Loans outstanding under the Existing Credit Agreement on the closing date of the Pace acquisition, (iii) a Term Loan B Facility in an amount equal to the outstanding principal amount of the Term B Loans outstanding under the Existing Credit Agreement on the closing date of the Pace acquisition and (iv) a Term A-1 Loan Facility of up to $800 million. The Revolving Credit Facility and Term Loan A Facility will mature on April 17, 2018. The Term Loan B Facility will mature on April 17, 2020. The Term A-1 Loan Facility has a term of five years. | |
Borrowings under the new credit facility will be secured by first priority liens on substantially all of the assets of ARRIS, the new holding company and certain of its present and future subsidiaries. The New 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, as well as customary events of default. | |
Completion of ActiveVideo Acquisition | |
On April 30, 2015, the Company and Charter Communications, Inc. completed the previously announced acquisition of ActiveVideo Networks, Inc. (“AVN”) through a newly formed joint-venture between ARRIS and Charter. The Company owns 65% of the joint venture. Total consideration for the acquisition was approximately $135 million, which was funded by ARRIS and Charter in proportion to their equity ownership percentage. AVN, headquartered in San Jose, California, is a software company that leverages cloud-based technology to enhance and accelerate the deployment of advanced interactive TV features on a broad range of CPE devices, including cable and IPTV set top boxes, as well as connected consumer electronic devices. |
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the year to date period ended March 31, 2015 are as follows (in thousands): | ||||||||||||||||
CPE | Network | Cloud | Total | ||||||||||||||
Infrastructure | Services | ||||||||||||||||
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 | |||||||||||||
Other | – | 2,578 | – | 2,578 | |||||||||||||
Goodwill | 684,597 | 509,198 | 123,506 | 1,317,301 | |||||||||||||
Accumulated impairment losses | – | (257,053 | ) | (121,603 | ) | (378,656 | ) | ||||||||||
Balance as of March 31, 2015 | $ | 684,597 | $ | 252,145 | $ | 1,903 | $ | 938,645 | |||||||||
Investments_Tables
Investments (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Investments | ARRIS’s investments as of March 31, 2015 and December 31, 2014 consisted of the following (in thousands): | ||||||||
As of March 31, 2015 | As of December 31, 2014 | ||||||||
Current Assets: | |||||||||
Available-for-sale securities | $ | 129,073 | $ | 126,748 | |||||
Noncurrent Assets: | |||||||||
Available-for-sale securities | 7,078 | 8,631 | |||||||
Equity method investments | 26,896 | 27,355 | |||||||
Cost method investments | 15,511 | 15,161 | |||||||
Other investments | 27,007 | 26,493 | |||||||
76,492 | 77,640 | ||||||||
Total | $ | 205,565 | $ | 204,388 | |||||
Contractual Maturities of Available-for-Sale Securities | The contractual maturities of the Company’s available-for-sale securities as of March 31, 2015 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): | ||||||||
March 31, | |||||||||
2015 | |||||||||
Within one year | $ | 129,073 | |||||||
After one year through five years | 3,054 | ||||||||
After five years through ten years | – | ||||||||
After ten years | 4,024 | ||||||||
Total | $ | 136,151 | |||||||
Fair_Value_Measurement_Tables
Fair Value Measurement (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Investment Assets and Interest Rate Swap Positions (Excluding Equity and Lost Method Investments) Measured at Fair Value on Recurring Basis | The following table presents the Company’s investment assets (excluding equity and cost method investments) measured at fair value on a recurring basis as of March 31, 2015 and December 31, 2014 (in thousands): | ||||||||||||||||
March 31, 2015 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Certificates of deposit | $ | – | $ | 64,197 | $ | – | $ | 64,197 | |||||||||
Corporate bonds | – | 38,083 | – | 38,083 | |||||||||||||
Corporate obligations | – | 47 | – | 47 | |||||||||||||
Money markets | 210 | – | – | 210 | |||||||||||||
Mutual funds | 29,984 | – | – | 29,984 | |||||||||||||
Other investments | – | 3,624 | – | 3,624 | |||||||||||||
Interest rate derivatives – liability derivatives | – | (8,104 | ) | – | (8,104 | ) | |||||||||||
Foreign currency contracts – asset position | – | 10,592 | – | 10,592 | |||||||||||||
Foreign currency contracts – liability position | – | (403 | ) | – | (403 | ) | |||||||||||
31-Dec-14 | |||||||||||||||||
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 | |||||||||||||
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 | ) |
Derivative_Instruments_and_Hed1
Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Pre-Tax Impact of Derivative Financial Instruments | The table below presents the pre-tax impact the Company’s derivative financial instruments had on the Accumulated Other Comprehensive Income and Statement of Operations for the three months ended March 31, 2015 and 2014 (in thousands): | ||||||||||||
Three months ended March 31, | |||||||||||||
2015 | 2014 | ||||||||||||
Loss Recognized in OCI on Derivative (Effective Portion) | $ | (4,944 | ) | $ | (2,016 | ) | |||||||
Location of Loss Reclassified from Accumulated OCI into Income (Effective Portion) | Interest expense | Interest expense | |||||||||||
Amounts Reclassified from Accumulated OCI into Income (Effective Portion) | $ | 1,838 | $ | 1,853 | |||||||||
Fair Values of Derivative Instruments Recorded in Consolidated Balance Sheet | 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 of March 31, 2015 and December 31, 2014 were as follows (in thousands): | ||||||||||||
As of March 31, 2015 | As of December 31, 2014 | ||||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||||
Derivatives not designated as | |||||||||||||
hedging instruments: | |||||||||||||
Foreign exchange contracts | Other current assets | $ | 10,592 | Other current assets | $ | 2,876 | |||||||
– asset derivatives | |||||||||||||
Foreign exchange contracts | Other accrued liabilities | 403 | Other accrued liabilities | 201 | |||||||||
– liability derivatives | |||||||||||||
Derivatives designated as | |||||||||||||
hedging instruments: | |||||||||||||
Interest rate derivatives | Other assets | $ | – | Other assets | $ | 1,416 | |||||||
– asset derivatives | |||||||||||||
Interest rate derivatives | Other accrued liabilities | 6,329 | Other accrued liabilities | $ | 6,414 | ||||||||
– liability derivatives | |||||||||||||
Interest rate derivatives | Other long-term liabilities | 1,775 | Other long-term liabilities | – | |||||||||
– liability derivatives | |||||||||||||
Change in Fair Values of Derivative Instruments Recorded in Consolidated Statements of Operations | The change in the fair values of ARRIS’s derivative instruments recorded in the Consolidated Statements of Operations during the three months ended March 31, 2015 and 2014 were as follows (in thousands): | ||||||||||||
Three Months Ended | |||||||||||||
March 31, | |||||||||||||
Statement of Operations Location | 2015 | 2014 | |||||||||||
Derivatives not designated | |||||||||||||
as hedging instruments: | |||||||||||||
Foreign exchange contracts | Gain on foreign currency | $ | 10,309 | $ | – | ||||||||
Derivatives designated | |||||||||||||
as hedging instruments: | |||||||||||||
Interest rates derivatives | Interest expense | $ | 1,838 | $ | 1,853 |
Pension_Benefits_Tables
Pension Benefits (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Components Of Net Periodic Pension Cost | Components of Net Periodic Pension Cost (in thousands): | ||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Interest cost | $ | 429 | $ | 446 | |||||
Expected return on plan assets | (210 | ) | (219 | ) | |||||
Amortization of net loss | 209 | 76 | |||||||
Net periodic pension cost | $ | 428 | $ | 303 | |||||
Product_Warranties_Tables
Product Warranties (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Information Regarding Changes in ARRIS' Aggregate Product Warranty Liabilities | Information regarding the changes in ARRIS’s aggregate product warranty liabilities for the three months ended March 31, 2015 was as follows (in thousands): | ||||
Balance at December 31, 2014 | $ | 74,320 | |||
Accruals related to warranties (including changes in assumptions) | 4,851 | ||||
Settlements made (in cash or in-kind) | (14,121 | ) | |||
Balance at March 31, 2015 | $ | 65,050 | |||
Inventories_Tables
Inventories (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Components of Inventory Net of Reserves | The components of inventory were as follows, net of reserves (in thousands): | ||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Raw material | $ | 77,037 | $ | 61,068 | |||||
Work in process | 3,640 | 6,713 | |||||||
Finished goods | 291,702 | 333,384 | |||||||
Total inventories, net | $ | 372,379 | $ | 401,165 | |||||
Property_Plant_and_Equipment_T
Property, Plant and Equipment (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Property, Plant and Equipment, at Cost | Property, plant and equipment, at cost, consisted of the following (in thousands): | ||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Land | $ | 68,562 | $ | 87,952 | |||||
Building and leasehold improvements | 134,552 | 141,581 | |||||||
Machinery and equipment | 405,224 | 402,709 | |||||||
608,338 | 632,242 | ||||||||
Less: Accumulated depreciation | (282,611 | ) | (265,811 | ) | |||||
Total property, plant and equipment, net | $ | 325,727 | $ | 366,431 | |||||
Leases_Tables
Leases (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Payments Required on Lease Financing Obligations | At March 31, 2015, the minimum lease payments required on the financing obligation were as follows (in thousands): | ||||
2015 (for the remaining nine months) | $ | 2,618 | |||
2016 | 4,016 | ||||
2017 | 4,136 | ||||
2018 | 4,260 | ||||
2019 | 4,388 | ||||
Thereafter through 2025 | 25,277 | ||||
Total minimum lease payments | $ | 44,695 | |||
Indebtedness_Tables
Indebtedness (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Senior Credit Facility Interest Rates | |||||
Rate | As of March 31, 2015 | ||||
Term Loan A | LIBOR + 1.75 % | 1.93% | |||
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 March 31, 2015, the face value of contractual debt obligations for the next five years is as follows (in thousands): | ||||
2015 | $ | 61,875 | |||
2016 | 103,125 | ||||
2017 | 110,000 | ||||
2018 | 715,000 | ||||
2019 | - | ||||
thereafter | 543,813 |
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | ||||||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||||||
Reporting Segments | The table below presents information about the Company’s reportable segments for the three months ended March 31, 2015 and 2014 (in thousands): | ||||||||||||||||||||||||||||||||
Reportable Segments | |||||||||||||||||||||||||||||||||
Network & Cloud | CPE | Other | Consolidated | ||||||||||||||||||||||||||||||
For the three months ended March 31, | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||||||
Sales | $ | 393,500 | $ | 331,570 | $ | 821,674 | $ | 893,601 | $ | (16 | ) | $ | (154 | ) | $ | 1,215,158 | $ | 1,225,017 | |||||||||||||||
Direct Contribution | 94,203 | 65,364 | 151,452 | 191,787 | (141,892 | ) | (143,662 | ) | 103,763 | 113,489 | |||||||||||||||||||||||
Amortization of intangible assets | 57,147 | 64,001 | 57,147 | 64,001 | |||||||||||||||||||||||||||||
Integration, acquisition, | 898 | 11,502 | 898 | 11,502 | |||||||||||||||||||||||||||||
restructuring & other | |||||||||||||||||||||||||||||||||
Operating income | 45,718 | 37,986 | |||||||||||||||||||||||||||||||
Other expense | 21,438 | 19,182 | |||||||||||||||||||||||||||||||
Income before income taxes | $ | 24,280 | $ | 18,804 | |||||||||||||||||||||||||||||
Sales_Information_Tables
Sales Information (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Summary of ARRIS' International Sales by Geographic Region | International sales by region for the three months ended March 31, 2015 and 2014 were as follows (in thousands): | ||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
Americas, excluding U.S. (1) | $ | 204,858 | $ | 213,972 | |||||
Asia Pacific | 33,984 | 32,952 | |||||||
EMEA | 85,561 | 67,445 | |||||||
Total international sales | $ | 324,403 | $ | 314,369 | |||||
-1 | Excludes U.S. sales of $890.8 million and $910.6 million for the three months ended March 31, 2015 and 2014, respectively. |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Reconciliation of Numerators and Denominators of Basic and Diluted Earnings Per Share Computations | The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share (“EPS”) computations for the periods indicated (in thousands, except per share data): | ||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
Basic: | |||||||||
Net income | $ | 19,126 | $ | 40,800 | |||||
Weighted average shares outstanding | 145,350 | 142,854 | |||||||
Basic earnings per share | $ | 0.13 | $ | 0.29 | |||||
Diluted: | |||||||||
Net income | $ | 19,126 | $ | 40,800 | |||||
Weighted average shares outstanding | 145,350 | 142,854 | |||||||
Net effect of dilutive equity awards | 3,636 | 4,298 | |||||||
Total | 148,986 | 147,152 | |||||||
Diluted earnings per share | $ | 0.13 | $ | 0.28 | |||||
Income_Taxes_Tables
Income Taxes (Tables) | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
Components of Income Tax Expense Benefit | Below is a summary of the components of the tax expense (benefit) in each period (in thousands, except for percentages): | ||||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||
Income | Income | Effective | Income | Income | Effective | ||||||||||||||||||||
Before | Tax | Tax Rate | Before | Tax | Tax Rate | ||||||||||||||||||||
Tax | Expense | Tax | Expense | ||||||||||||||||||||||
(Benefit) | (Benefit) | ||||||||||||||||||||||||
Non-discrete items | $ | 24,280 | $ | 8,971 | 37 | % | $ | 30,306 | $ | 10,826 | 35.7 | % | |||||||||||||
Discrete tax events - | |||||||||||||||||||||||||
Integration and acquisition costs | – | – | (11,502 | ) | (4,393 | ) | |||||||||||||||||||
Change in state deferred rates | – | – | – | (5,744 | ) | ||||||||||||||||||||
Change in valuation allowances | – | (3,817 | ) | – | (18,163 | ) | |||||||||||||||||||
Other | – | – | – | (4,522 | ) | ||||||||||||||||||||
Total | $ | 24,280 | $ | 5,154 | 21.2 | % | $ | 18,804 | $ | (21,996 | ) | (117.0 | %) | ||||||||||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Tables) | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||
Changes in Accumulated Other Comprehensive Income (Loss) by Component, Net of Taxes | The following table summarizes the changes in accumulated other comprehensive income by component, net of taxes, for the three months ended March 31, 2015 and 2014 (in thousands): | ||||||||||||||||||||
Available-for- | Change | Derivative | Cumulative | Total | |||||||||||||||||
sale securities | related to | instruments | translation | ||||||||||||||||||
pension | adjustments | ||||||||||||||||||||
liability | |||||||||||||||||||||
Balance as of December 31, 2014 | $ | 25 | $ | (7,181 | ) | $ | (3,166 | ) | $ | (725 | ) | $ | (11,047 | ) | |||||||
Other comprehensive (loss) income before reclassifications | 9 | - | (3,142 | ) | (59 | ) | (3,192 | ) | |||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | - | 105 | 1,168 | - | 1,273 | ||||||||||||||||
Net current-period other comprehensive income (loss) | 9 | 105 | (1,974 | ) | (59 | ) | (1,919 | ) | |||||||||||||
Balance as of March 31, 2015 | $ | 34 | $ | (7,076 | ) | $ | (5,140 | ) | $ | (784 | ) | $ | (12,966 | ) | |||||||
Available-for- | Change | Derivative | Cumulative | Total | |||||||||||||||||
sale securities | related to | instruments | translation | ||||||||||||||||||
pension | adjustments | ||||||||||||||||||||
liability | |||||||||||||||||||||
Balance as of December 31, 2013 | $ | 306 | $ | (2,416 | ) | $ | (2,541 | ) | $ | (11 | ) | $ | (4,662 | ) | |||||||
Other comprehensive (loss) income before reclassifications | (279 | ) | - | (1,472 | ) | (76 | ) | (1,827 | ) | ||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | - | - | 1,353 | - | 1,353 | ||||||||||||||||
Net current-period other comprehensive income (loss) | (279 | ) | - | (119 | ) | (76 | ) | (474 | ) | ||||||||||||
Balance as of March 31, 2014 | $ | 27 | $ | (2,416 | ) | $ | (2,660 | ) | $ | (87 | ) | $ | (5,136 | ) | |||||||
Repurchases_of_ARRIS_Common_St1
Repurchases of ARRIS Common Stock (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Purchases of ARRIS Common Stock | The table below sets forth the purchases of ARRIS common stock for the quarter ended March 31, 2015: | ||||||||||||||||
Period | Total | Average | Total Number of | Approximate | |||||||||||||
Number of | Price Paid | Shares | Dollar Value of | ||||||||||||||
Shares | Per Share | Purchased as | Shares That May | ||||||||||||||
Purchased | Part of Publicly | Yet Be Purchased | |||||||||||||||
-1 | Announced Plans | Under the Plans | |||||||||||||||
or Programs | or Programs | ||||||||||||||||
(in thousands) | |||||||||||||||||
Jan-15 | 249,918 | $ | 26.31 | - | $ | 169,630 | |||||||||||
Feb-15 | 870,939 | $ | 28.7 | 870,939 | $ | 144,631 | |||||||||||
Mar-15 | 638,684 | $ | 28.48 | - | $ | 144,631 | |||||||||||
-1 | Includes approximately 888,602 shares repurchased to satisfy tax withholding obligations that arose on the vesting of shares of restricted stock and restricted stock units. |
Organization_and_Basis_of_Pres1
Organization and Basis of Presentation - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2015 | |
Segment | |
Geographic Information [Line Items] | |
Number of business segments operated | 2 |
Impact_of_Recently_Adopted_Acc1
Impact of Recently Adopted Accounting Standards - Additional Information (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Deferred financing cost | $24.60 | $25.30 |
Carrying_Amount_of_Goodwill_De
Carrying Amount of Goodwill (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Goodwill [Line Items] | ||
Goodwill, gross, as of beginning of period | $1,314,723 | |
Accumulated impairment losses, as of beginning of period | -378,656 | |
Balance as of beginning of period | 936,067 | |
Other | 2,578 | |
Goodwill, gross, as of end of period | 1,317,301 | |
Accumulated impairment losses, as of end of period | -378,656 | |
Balance as of end of period | 938,645 | |
CPE | ||
Goodwill [Line Items] | ||
Goodwill, gross, as of beginning of period | 684,597 | |
Balance as of beginning of period | 684,597 | |
Goodwill, gross, as of end of period | 684,597 | 684,597 |
Balance as of end of period | 684,597 | 684,597 |
Network Infrastructure | ||
Goodwill [Line Items] | ||
Goodwill, gross, as of beginning of period | 506,620 | |
Accumulated impairment losses, as of beginning of period | -257,053 | |
Balance as of beginning of period | 249,567 | |
Other | 2,578 | |
Goodwill, gross, as of end of period | 509,198 | |
Accumulated impairment losses, as of end of period | -257,053 | |
Balance as of end of period | 252,145 | |
Cloud Services | ||
Goodwill [Line Items] | ||
Goodwill, gross, as of beginning of period | 123,506 | |
Accumulated impairment losses, as of beginning of period | -121,603 | |
Balance as of beginning of period | 1,903 | |
Goodwill, gross, as of end of period | 123,506 | 123,506 |
Accumulated impairment losses, as of end of period | -121,603 | -121,603 |
Balance as of end of period | $1,903 | $1,903 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets - Additional Information (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Patent | ||
Schedule Of Goodwill And Intangible Assets [Line Items] | ||
Intangible assets | $919,876 | $943,388 |
Non Exclusive License | ||
Schedule Of Goodwill And Intangible Assets [Line Items] | ||
Intangible assets | $34,300 | |
Number of patents | 4,000 | |
Weighted average useful life, intangible assets | 9 years |
Investments_Detail
Investments (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current Assets: | ||
Available-for-sale securities | $129,073 | $126,748 |
Noncurrent Assets: | ||
Available-for-sale securities | 7,078 | 8,631 |
Equity method investments | 26,896 | 27,355 |
Cost method investments | 15,511 | 15,161 |
Other investments | 27,007 | 26,493 |
Total classified as non-current assets | 76,492 | 77,640 |
Total | $205,565 | $204,388 |
Contractual_Maturities_of_Avai
Contractual Maturities of Available-for-Sale Securities (Detail) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Investment Holdings [Line Items] | |
Within one year | $129,073 |
After one year through five years | 3,054 |
After five years through ten years | 0 |
After ten years | 4,024 |
Total | $136,151 |
Investment_Assets_Excluding_Eq
Investment Assets Excluding Equity and Cost Method Investments and Derivatives Measured at Fair Value on Recurring Basis (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
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 | ($8,104) | ($6,414) |
Derivative Financial Instruments, Liabilities | Foreign currency contracts | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of liabilities, recurring basis | -403 | -201 |
Derivative Financial Instruments, Assets | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 1,416 | |
Derivative Financial Instruments, Assets | Foreign currency contracts | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 10,592 | 2,876 |
Certificates of Deposit | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 64,197 | 63,171 |
Corporate bonds | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 38,083 | 37,737 |
Corporate Obligations | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 47 | 46 |
Money Market Funds | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 210 | 210 |
Mutual Funds | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 29,984 | 133 |
Other Investments | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 3,624 | 3,369 |
Commercial Paper | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 1,000 | |
Short-Term Bond Fund | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 29,708 | |
Level 1 | Money Market Funds | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 210 | 210 |
Level 1 | Mutual Funds | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 29,984 | 133 |
Level 1 | Short-Term Bond Fund | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 29,708 | |
Level 2 | Derivative Financial Instruments, Liabilities | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of liabilities, recurring basis | -8,104 | -6,414 |
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 | -403 | -201 |
Level 2 | Derivative Financial Instruments, Assets | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 1,416 | |
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 | 10,592 | 2,876 |
Level 2 | Certificates of Deposit | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 64,197 | 63,171 |
Level 2 | Corporate bonds | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 38,083 | 37,737 |
Level 2 | Corporate Obligations | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 47 | 46 |
Level 2 | Other Investments | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 3,624 | 3,369 |
Level 2 | Commercial Paper | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | $1,000 |
Derivative_Instruments_and_Hed2
Derivative Instruments and Hedging Activities - Additional Information (Detail) | 3 Months Ended | 1 Months Ended | 3 Months Ended | ||||||||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Jul. 31, 2013 | Mar. 31, 2015 | Apr. 30, 2013 | Apr. 30, 2013 | Apr. 30, 2013 | |
USD ($) | USD ($) | Option Collars | Forward Contracts | Forward Contracts | Forward Contracts | Interest rate swap | Interest rate swap | Senior Secured Credit Facilities | Senior Secured Credit Facilities | Senior Secured Credit Facilities | |
EUR (€) | AUD | EUR (€) | GBP (£) | USD ($) | Term Loan A | Term Loan B | Revolving Credit Facility | ||||
Agreement | USD ($) | USD ($) | USD ($) | ||||||||
Derivatives, Fair Value [Line Items] | |||||||||||
Line of credit facility | $1,100,000,000 | $825,000,000 | $250,000,000 | ||||||||
Number of interest rate swap arrangements | 6 | ||||||||||
Derivative notional amount | 100,000,000 | ||||||||||
Variable-rate debt upon conversion | 600,000,000 | ||||||||||
Fixed interest rate | 3.15% | ||||||||||
Basis point increase in fixed rate based on future changes to the Company's net leverage ratio | 0.50% | ||||||||||
Maturity date | 29-Dec-17 | ||||||||||
Notional amount | 75,000,000 | 70,000,000 | 25,000,000 | 5,000,000 | |||||||
Hedge ineffectiveness in earnings | 0 | 0 | |||||||||
Amount estimated reclassified as an increase to interest expense | 6,300,000 | ||||||||||
Fair value of derivatives in net liability position | $8,300,000 | $4,200,000 |
PreTax_Impact_of_Derivative_Fi
Pre-Tax Impact of Derivative Financial Instruments (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Derivative [Line Items] | ||
Loss Recognized in OCI on Derivative (Effective Portion) | ($4,944) | ($2,016) |
Interest Expense | ||
Derivative [Line Items] | ||
Amounts Reclassified from Accumulated OCI into Income (Effective Portion) | $1,838 | $1,853 |
Fair_Values_of_Derivative_Inst
Fair Values of Derivative Instruments Recorded in Consolidated Balance Sheet (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
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 | $10,592 | $2,876 |
Foreign currency contracts | Derivatives Not Designated as Hedging Instruments | Other accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities, Fair Value | 403 | 201 |
Interest rate derivatives | Derivatives Designated as Hedging Instruments | Other accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities, Fair Value | 6,329 | 6,414 |
Interest rate derivatives | Derivatives Designated as Hedging Instruments | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets, Fair Value | 1,416 | |
Interest rate derivatives | Derivatives Designated as Hedging Instruments | Other Long Term Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities, Fair Value | $1,775 |
Change_in_Fair_Values_of_Deriv
Change in Fair Values of Derivative Financial Instruments Recorded in Consolidated Statements of Operations (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Derivatives, Fair Value [Line Items] | ||
Interest expense | $13,367 | $16,598 |
Foreign currency contracts | Loss (gain) on foreign currency | Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Gain on foreign currency | 10,309 | |
Interest rate derivatives | Interest Expense | Derivatives Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Interest expense | $1,838 | $1,853 |
Components_of_Net_Periodic_Pen
Components of Net Periodic Pension Cost (Detail) (U.S. Pension Plans, USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
U.S. Pension Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | $429 | $446 |
Expected return on plan assets | -210 | -219 |
Amortization of net loss | 209 | 76 |
Net periodic pension cost | $428 | $303 |
Pension_Benefits_Additional_In
Pension Benefits - Additional Information (Detail) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2015 |
Trust | |
Retirement Plans [Line Items] | |
Number of rabbi trusts established, trust | 2 |
Balance assets held in Rabbi Trust | $20.70 |
Information_Regarding_Changes_
Information Regarding Changes in ARRIS' Aggregate Product Warranty Liabilities (Detail) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
Product Warranty Disclosure [Line Items] | |
Beginning balance | $74,320 |
Accruals related to warranties (including changes in assumptions) | 4,851 |
Settlements made (in cash or in-kind) | -14,121 |
Ending balance | $65,050 |
Components_of_Inventory_Net_of
Components of Inventory Net of Reserves (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Inventory [Line Items] | ||
Raw material | $77,037 | $61,068 |
Work in process | 3,640 | 6,713 |
Finished goods | 291,702 | 333,384 |
Total inventories, net | $372,379 | $401,165 |
Property_Plant_and_Equipment_a
Property, Plant and Equipment, at Cost (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ||
Land | $68,562 | $87,952 |
Building and leasehold improvements | 134,552 | 141,581 |
Machinery and equipment | 405,224 | 402,709 |
Total property, plant and equipment, gross | 608,338 | 632,242 |
Less: Accumulated depreciation | -282,611 | -265,811 |
Total property, plant and equipment, net | $325,727 | $366,431 |
Recovered_Sheet1
Property, Plant and Equipment - Additional Information (Detail) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Property, Plant and Equipment [Line Items] | ||
Loss from sale of land and building | ($5,877,000) | ($412,000) |
San Diego Campus Facilities | ||
Property, Plant and Equipment [Line Items] | ||
Proceeds from sale of land and building | 25,000,000 | |
Loss from sale of land and building | ($5,300,000) |
Leases_Additional_Information_
Leases - Additional Information (Detail) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Schedule of Finance Lease Obligations [Line Items] | ||
Loss from sale of land and building | ($5,877,000) | ($412,000) |
San Diego Office Complex | ||
Schedule of Finance Lease Obligations [Line Items] | ||
Land and buildings, net book value | 71,000,000 | |
Proceeds from sale of assets | 85,500,000 | |
Number of building in sale and leaseback arrangement | 2 | |
Loss from sale of land and building | ($5,300,000) | |
San Diego Office Complex | Building 1 | ||
Schedule of Finance Lease Obligations [Line Items] | ||
Leasing back term | 10 years | |
Leasing back term, description | Building 1 did not qualify for sale-leaseback accounting due to continuing involvement that will exist for the 10-year lease term. Accordingly, the carrying value of Building 1 will remain on the Company's balance sheet and will be depreciated over the ten-year lease period with the proceeds reflected as a financing obligation. | |
San Diego Office Complex | Building 2 | Maximum | ||
Schedule of Finance Lease Obligations [Line Items] | ||
Leasing back term | 1 year |
Payments_Required_on_Lease_Fin
Payments Required on Lease Financing Obligations (Detail) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Schedule of Finance Lease Obligations [Line Items] | |
2015 (for the remaining nine months) | $2,618 |
2016 | 4,016 |
2017 | 4,136 |
2018 | 4,260 |
2019 | 4,388 |
Thereafter through 2025 | 25,277 |
Total minimum lease payments | $44,695 |
Indebtedness_Additional_Inform
Indebtedness - Additional Information (Detail) (Senior Secured Credit Facilities, USD $) | 3 Months Ended | |
Mar. 31, 2015 | Apr. 30, 2013 | |
Debt Instrument [Line Items] | ||
Line of credit facility, amount borrowed | 1,533,800,000 | |
Mandatory repayments related to senior secured credit facilities | 13,800,000 | |
Term Loan A | ||
Debt Instrument [Line Items] | ||
Line of credit facility | 1,100,000,000 | |
Line of credit facility term loan period | 5 years | |
Term Loan B | ||
Debt Instrument [Line Items] | ||
Line of credit facility | 825,000,000 | |
Line of credit facility term loan period | 7 years | |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Line of credit facility | 250,000,000 | |
Line of credit facility term loan period | 5 years | |
Line of credit facility, amount borrowed | 0 | |
Letter of credit facility | 2,500,000 | |
Maximum | ||
Debt Instrument [Line Items] | ||
Consolidated net leverage ratio | 350.00% |
Senior_Credit_Facility_Interes
Senior Credit Facility Interest Rates (Detail) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2015 | ||
Senior Secured Credit Facilities | Term Loan A | |||
Credit Facility [Line Items] | |||
Debt instrument, interest rate at period end | 1.93% | ||
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) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 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 $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Debt Instrument [Line Items] | |
2015 | $61,875 |
2016 | 103,125 |
2017 | 110,000 |
2018 | 715,000 |
2019 | 0 |
thereafter | $543,813 |
Segment_Information_Detail
Segment Information (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Segment Reporting Information [Line Items] | ||
Sales | $1,215,158 | $1,225,017 |
Direct Contribution | 103,763 | 113,489 |
Amortization of intangible assets | 57,147 | 64,001 |
Integration, acquisition, restructuring & other | 898 | 11,502 |
Operating income | 45,718 | 37,986 |
Other expense | 21,438 | 19,182 |
Income before income taxes | 24,280 | 18,804 |
Segment Reconciling Items | ||
Segment Reporting Information [Line Items] | ||
Amortization of intangible assets | 57,147 | 64,001 |
Integration, acquisition, restructuring & other | 898 | 11,502 |
Operating Segments | Network & Cloud | ||
Segment Reporting Information [Line Items] | ||
Sales | 393,500 | 331,570 |
Direct Contribution | 94,203 | 65,364 |
Operating Segments | CPE | ||
Segment Reporting Information [Line Items] | ||
Sales | 821,674 | 893,601 |
Direct Contribution | 151,452 | 191,787 |
Intersegment Eliminations | ||
Segment Reporting Information [Line Items] | ||
Sales | -16 | -154 |
Direct Contribution | ($141,892) | ($143,662) |
Sales_Information_Additional_I
Sales Information - Additional Information (Detail) (International Customers, Sales, Customer Concentration Risk) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
International Customers | Sales | Customer Concentration Risk | ||
Revenue, Major Customer [Line Items] | ||
Percentage of sales | 26.70% | 25.70% |
International_Sales_by_Geograp
International Sales by Geographic Region (Detail) (International sales, USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||||
Revenues | $324,403 | $314,369 | ||
Americas, excluding U.S. | ||||
International Long-Lived Assets by Geographic Region [Line Items] | ||||
Revenues | 204,858 | [1] | 213,972 | [1] |
Asia Pacific | ||||
International Long-Lived Assets by Geographic Region [Line Items] | ||||
Revenues | 33,984 | 32,952 | ||
EMEA | ||||
International Long-Lived Assets by Geographic Region [Line Items] | ||||
Revenues | $85,561 | $67,445 | ||
[1] | Excludes U.S. sales of $890.8 million and $910.6 million for the three months ended March 31, 2015 and 2014, respectively. |
International_Sales_by_Geograp1
International Sales by Geographic Region (Parenthetical) (Detail) (UNITED STATES, USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
UNITED STATES | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Revenue | $890,800 | $910,600 |
Reconciliation_of_Numerators_a
Reconciliation of Numerators and Denominators of Basic and Diluted Earnings Per Share Computations (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Basic: | ||
Net income | $19,126 | $40,800 |
Weighted average shares outstanding | 145,350 | 142,854 |
Basic earnings per share | $0.13 | $0.29 |
Diluted: | ||
Net income | $19,126 | $40,800 |
Weighted average shares outstanding | 145,350 | 142,854 |
Net effect of dilutive equity awards | 3,636 | 4,298 |
Total | 148,986 | 147,152 |
Diluted earnings per share | $0.13 | $0.28 |
Earnings_Per_Share_Additional_
Earnings Per Share - Additional Information (Detail) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from the computation of diluted earnings per share | 10,000 | ||
Common stock related to stock option exercises and the vesting of restricted shares | 800,000 | 3,100,000 |
Income_Taxes_Detail
Income Taxes (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
(Loss) Income Before Tax | $24,280 | $18,804 |
Income tax expense (benefit) | 5,154 | -21,996 |
Effective Tax Rate | 21.20% | -117.00% |
Non Discrete Items | ||
(Loss) Income Before Tax | 24,280 | 30,306 |
Income tax expense (benefit) | 8,971 | 10,826 |
Effective Tax Rate | 37.00% | 35.70% |
Acquisition and integration costs | ||
(Loss) Income Before Tax | -11,502 | |
Income tax expense (benefit) | -4,393 | |
Change in state deferred rates | ||
Income tax expense (benefit) | -5,744 | |
Change In Valuation Allowances | ||
Income tax expense (benefit) | -3,817 | -18,163 |
Other | ||
Income tax expense (benefit) | ($4,522) |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Income Tax Disclosure [Line Items] | |
Valuation allowances on capital loss carryforwards | $3,800,000 |
Current tax benefit from research and development tax credits | $0 |
Changes_in_Accumulated_Other_C
Changes in Accumulated Other Comprehensive Income by Component Net of Taxes (Detail) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2013 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | ($11,047) | ($4,662) | |
Other comprehensive (loss) income before reclassifications | -3,192 | -1,827 | |
Amounts reclassified from accumulated other comprehensive income (loss) | 1,273 | 1,353 | |
Net current-period other comprehensive income (loss) | -1,919 | -474 | |
Ending balance | -12,966 | -5,136 | |
Cumulative Translation Adjustments | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Cumulative translation adjustments, beginning balance | -725 | -11 | |
Other comprehensive (loss) income before reclassifications | -59 | -76 | |
Net current-period other comprehensive income (loss) | -59 | -76 | |
Cumulative translation adjustments, ending balance | -784 | -87 | |
Derivative instruments | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Derivative instruments, beginning balance | -3,166 | -2,541 | |
Other comprehensive (loss) income before reclassifications | -3,142 | -1,472 | |
Amounts reclassified from accumulated other comprehensive income (loss) | 1,168 | 1,353 | |
Net current-period other comprehensive income (loss) | -1,974 | -119 | |
Derivative instruments, ending balance | -5,140 | -2,660 | |
Change related to pension liability | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Change related to pension liability, beginning balance | -7,181 | -2,416 | |
Amounts reclassified from accumulated other comprehensive income (loss) | 105 | ||
Net current-period other comprehensive income (loss) | 105 | ||
Change related to pension liability, ending balance | -7,076 | -2,416 | -2,416 |
Available-for-sale securities | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Available-for - sale securities, beginning balance | 25 | 306 | |
Other comprehensive (loss) income before reclassifications | 9 | -279 | |
Net current-period other comprehensive income (loss) | 9 | -279 | |
Available - for-sale securities, ending balance | $34 | $27 |
Purchases_of_ARRIS_Common_Stoc
Purchases of ARRIS Common Stock (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | |
Equity, Class of Treasury Stock [Line Items] | ||
Total Number of Shares Purchased | 900,000 | |
Average Price Paid Per Share | $28.70 | |
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs | $144,600 | |
Jan-15 | ||
Equity, Class of Treasury Stock [Line Items] | ||
Total Number of Shares Purchased | 249,918 | [1] |
Average Price Paid Per Share | $26.31 | |
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs | 169,630 | |
Feb-15 | ||
Equity, Class of Treasury Stock [Line Items] | ||
Total Number of Shares Purchased | 870,939 | [1] |
Average Price Paid Per Share | $28.70 | |
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs | 144,631 | |
Mar-15 | ||
Equity, Class of Treasury Stock [Line Items] | ||
Total Number of Shares Purchased | 638,684 | [1] |
Average Price Paid Per Share | $28.48 | |
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs | $144,631 | |
Shares Purchased as Part of Publicly Announced Plans or Programs | February 2015 | ||
Equity, Class of Treasury Stock [Line Items] | ||
Total Number of Shares Purchased | 870,939 | |
[1] | Includes approximately 888,602 shares repurchased to satisfy tax withholding obligations that arose on the vesting of shares of restricted stock and restricted stock units. |
Purchases_of_ARRIS_Common_Stoc1
Purchases of ARRIS Common Stock (Parenthetical) (Detail) | 3 Months Ended |
Mar. 31, 2015 | |
Equity, Class of Treasury Stock [Line Items] | |
Total Number of Shares Purchased | 900,000 |
Repurchased to satisfy tax withholding obligations on vesting shares | |
Equity, Class of Treasury Stock [Line Items] | |
Total Number of Shares Purchased | 888,602 |
Repurchases_of_ARRIS_Common_St2
Repurchases of ARRIS Common Stock - Additional Information (Detail) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Equity, Class of Treasury Stock [Line Items] | |
Repurchase of the Company's common stock | 900,000 |
Average price per share | $28.70 |
Aggregate consideration amount of shares | $25,000,000 |
Remaining authorized amount for stock repurchases | 144,600,000 |
Previously authorized share repurchase plans, in May 2011 and October 2012 | Maximum | |
Equity, Class of Treasury Stock [Line Items] | |
Share repurchase plans, authorized amount | $300,000,000 |
Commitments_and_Contingencies_
Commitments and Contingencies - Additional Information (Detail) (Other assets, USD $) | Mar. 31, 2015 |
In Millions, unless otherwise specified | |
Other assets | |
Loss Contingencies [Line Items] | |
Restricted cash | $1.40 |
Subsequent_Events_Detail
Subsequent Events (Detail) (Subsequent Event, USD $) | 0 Months Ended | |
In Millions, unless otherwise specified | Apr. 22, 2015 | Apr. 30, 2015 |
Revolving Credit Facility | ||
Subsequent Event [Line Items] | ||
Credit facility | $250 | |
Credit facility maturity date | 17-Apr-18 | |
Term A-1 Loan Facility | ||
Subsequent Event [Line Items] | ||
Credit facility | 800 | |
Credit facility maturity date | 17-Apr-20 | |
Credit facility, term | 5 years | |
Pace Plc | ||
Subsequent Event [Line Items] | ||
Aggregate stock and cash consideration | 2,100 | |
Active Video Networks | ||
Subsequent Event [Line Items] | ||
Aggregate stock and cash consideration | $135 | |
Equity ownership percentage | 65.00% |