Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 30, 2018 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | ARRS | |
Entity Registrant Name | ARRIS INTERNATIONAL PLC | |
Entity Central Index Key | 1,645,494 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 186,263,077 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 506,240 | $ 487,573 |
Short-term investments, at fair value | 36,804 | 23,874 |
Total cash, cash equivalents and short-term investments | 543,044 | 511,447 |
Accounts receivable (net of allowances for doubtful accounts of $10,340 in 2018 and $10,230 in 2017) | 1,008,603 | 1,218,089 |
Other receivables | 169,681 | 157,845 |
Unbilled receivables | 26,005 | |
Inventories (net of reserves of $63,161 in 2018 and $69,459 in 2017) | 849,069 | 825,211 |
Prepaid income taxes | 26,409 | 28,351 |
Prepaids | 36,308 | 26,644 |
Other current assets | 172,993 | 145,953 |
Total current assets | 2,832,112 | 2,913,540 |
Property, plant and equipment (net of accumulated depreciation of $370,609 in 2018 and $367,954 in 2017) | 309,457 | 372,467 |
Goodwill | 2,336,820 | 2,278,512 |
Intangible assets (net of accumulated amortization of $1,716,084 in 2018 and $1,599,573 in 2017) | 1,583,299 | 1,771,362 |
Investments | 69,858 | 71,082 |
Deferred income taxes | 131,417 | 115,436 |
Other assets | 103,525 | 101,858 |
Total assets | 7,366,488 | 7,624,257 |
Current liabilities: | ||
Accounts payable | 1,010,812 | 1,206,656 |
Accrued compensation, benefits and related taxes | 113,029 | 155,966 |
Accrued warranty | 42,434 | 44,507 |
Deferred revenue | 143,740 | 115,224 |
Current portion of long-term debt and financing lease obligation | 83,633 | 83,559 |
Income taxes payable | 4,937 | 6,244 |
Other accrued liabilities | 316,206 | 321,113 |
Total current liabilities | 1,714,791 | 1,933,269 |
Long-term debt and financing lease obligation, net of current portion | 2,095,320 | 2,116,244 |
Accrued pension | 43,443 | 42,637 |
Noncurrent deferred revenue | 56,041 | 54,090 |
Noncurrent income taxes | 159,148 | 144,665 |
Deferred income taxes | 68,825 | 68,888 |
Other noncurrent liabilities | 71,546 | 80,430 |
Total liabilities | 4,209,114 | 4,440,223 |
Stockholders' equity: | ||
Capital in excess of par value | 3,392,415 | 3,387,128 |
Accumulated deficit | (266,264) | (225,881) |
Accumulated other comprehensive income | 12,545 | 4,552 |
Total ARRIS International plc stockholders' equity | 3,141,465 | 3,168,567 |
Stockholders' equity attributable to noncontrolling interest | 15,909 | 15,467 |
Total stockholders' equity | 3,157,374 | 3,184,034 |
Total liabilities and stockholders' equity | 7,366,488 | 7,624,257 |
Ordinary Shares | ||
Stockholders' equity: | ||
Common stock | $ 2,769 | $ 2,768 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) $ in Thousands, shares in Millions | Mar. 31, 2018USD ($)shares | Mar. 31, 2018£ / shares | Dec. 31, 2017USD ($)shares | Dec. 31, 2017£ / shares |
Allowances for doubtful accounts | $ 10,340 | $ 10,230 | ||
Reserves for inventories | 63,161 | 69,459 | ||
Accumulated depreciation of property, plant and equipment | 370,609 | 367,954 | ||
Accumulated amortization of intangible assets | $ 1,716,084 | $ 1,599,573 | ||
Ordinary Shares | ||||
Common stock, nominal value | £ / shares | £ 0.01 | £ 0.01 | ||
Common stock, shares issued | shares | 185.5 | 185.2 | ||
Common stock, shares outstanding | shares | 185.5 | 185.2 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Net sales | $ 1,577,710 | $ 1,483,105 | |
Cost of sales | 1,102,027 | 1,145,848 | |
Gross margin | 475,683 | 337,257 | |
Operating expenses: | |||
Selling, general, and administrative expenses | 161,204 | 104,638 | |
Research and development expenses | 169,797 | 132,962 | |
Amortization of intangible assets | 114,708 | 93,646 | |
Impairment of goodwill | 3,400 | ||
Integration, acquisition, restructuring and other costs | 13,655 | 10,095 | |
Total operating expenses | 462,764 | 341,341 | |
Operating income (loss) | 12,919 | (4,084) | |
Other expense (income): | |||
Interest expense | 22,525 | 19,683 | |
Loss on investments | 527 | 4,530 | |
Loss on foreign currency | 4,833 | 4,740 | |
Interest income | (1,532) | (1,922) | |
Other expense (income), net | 109 | (85) | |
Loss before income taxes | (13,543) | (31,030) | |
Income tax expense | 3,489 | 10,001 | |
Consolidated net loss | (17,032) | (41,031) | |
Net loss attributable to noncontrolling interest | (3,432) | (1,933) | |
Net loss attributable to ARRIS International plc. | $ (13,600) | $ (39,098) | |
Net loss per ordinary share: | |||
Basic | [1] | $ (0.07) | $ (0.21) |
Diluted | [1] | $ (0.07) | $ (0.21) |
Weighted average ordinary shares: | |||
Basic | 184,805 | 189,796 | |
Diluted | 184,805 | 189,796 | |
[1] | Calculated based on net loss attributable to shareowners of ARRIS International plc |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Consolidated net loss | $ (17,032) | $ (41,031) |
Available-for-sale securities: | ||
Unrealized gain (loss) on available-for-sale securities, net of tax of $43 and $(52) in 2018 and 2017, respectively | (136) | 96 |
Reclassification adjustments recognized in net loss, net of tax of $33 and $2 in 2018 and 2017, respectively | (107) | (3) |
Net change in available-for-sale | (243) | 93 |
Derivative instruments: | ||
Unrealized gain on derivative instruments, net of tax of $(1,943) and $(634) in 2018 and 2017, respectively | 7,158 | 1,420 |
Reclassification adjustments recognized in net loss, net of tax of $(65) and $(372) in 2018 and 2017, respectively | 240 | 832 |
Net change in derivative instruments | 7,398 | 2,252 |
Pension obligations: | ||
Reclassification adjustments recognized in net loss | 29 | 11 |
Net change in pension obligations | 29 | 11 |
Cumulative translation adjustments | 782 | 4,981 |
Other comprehensive income net of tax | 7,966 | 7,337 |
Comprehensive loss | (9,066) | (33,694) |
Comprehensive loss attributable to noncontrolling interest | (3,459) | (1,942) |
Comprehensive loss attributable to ARRIS International plc | $ (5,607) | $ (31,752) |
Consolidated Statements of Com6
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Unrealized (gain) loss on available-for-sale securities, tax | $ 43 | $ (52) |
Reclassification adjustments recognized in net loss, tax | 33 | 2 |
Unrealized gain on derivative instruments, tax | (1,943) | (634) |
Reclassification adjustments recognized in net loss, tax | $ (65) | $ (372) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating activities: | ||
Consolidated net loss | $ (17,032) | $ (41,031) |
Depreciation | 22,874 | 21,313 |
Amortization of acquired intangible assets | 116,595 | 95,306 |
Amortization of deferred financing fees and debt discount | 1,215 | 1,903 |
Deferred income tax benefit | (13,327) | (20,783) |
Foreign currency remeasurement of deferred taxes | 3,697 | 3,131 |
Stock compensation expense | 19,256 | 19,415 |
Impairment of goodwill | 3,400 | |
Provision for non-cashwarrants | 2,423 | |
Recovery for doubtful accounts | (292) | (179) |
Loss on disposal of property, plant & equipment and other | 156 | 292 |
Loss on investments and other | 662 | 4,530 |
Changes in operating assets and liabilities, net of effect of acquisitions and dispositions: | ||
Accounts receivable | 209,405 | 292,297 |
Other receivables | (11,836) | 15,739 |
Unbilled receivables | (26,005) | |
Inventories | (24,397) | (3,152) |
Accounts payable and accrued liabilities | (228,234) | (144,640) |
Prepaids and other, net | 39,776 | 3,496 |
Net cash provided by operating activities | 95,913 | 250,060 |
Investing activities: | ||
Purchases of investments | (26,500) | (55,879) |
Sales of investments | 11,000 | 91,885 |
Purchases of property, plant and equipment | (15,196) | (21,867) |
Deposit received for the sale of property, plant and equipment | 10,000 | |
Other, net | 171 | 826 |
Net cash (used in) provided by investing activities | (20,525) | 14,965 |
Financing activities: | ||
Proceeds from issuance of shares, net | 22 | 23 |
Repurchase of shares | (25,000) | (83,110) |
Repurchase of shares to satisfy employee minimum tax withholdings | (13,976) | (13,754) |
Payment of debt obligations | (21,875) | (22,375) |
Payment of financing lease obligation | (190) | (204) |
Contribution from noncontrolling interest | 1,207 | |
Net cash used in financing activities | (59,812) | (119,420) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 3,791 | 597 |
Net increase in cash, cash equivalents and restricted cash | 19,367 | 146,202 |
Cash, cash equivalents and restricted cash at beginning of period | 489,116 | 981,692 |
Cash, cash equivalents and restricted cash at end of period | $ 508,483 | $ 1,127,894 |
Consolidated Statements of Cas8
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2018 | Mar. 31, 2017 |
Cash and cash equivalents | $ 506,240 | $ 1,126,248 |
Total | 508,483 | 1,127,894 |
Other current assets | ||
Restricted cash | 1,491 | 162 |
Other assets | ||
Restricted cash | $ 752 | $ 1,484 |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
Organization and Basis of Presentation | Note 1. Organization and Basis of Presentation ARRIS International plc (together with its consolidated subsidiaries and consolidated venture, except as the context otherwise indicates, “ARRIS” or the “Company”) is a global entertainment, communications, and networking technology and solutions provider, headquartered in Suwanee, Georgia. The Company operates in three business segments, Customer Premises Equipment (“CPE”), Network & Cloud (“N&C”) and Enterprise Networks (“Enterprise”) (See Note 15 Segment Information Wi-Fi set-tops, The consolidated financial statements include the accounts of the Company and its wholly owned foreign and domestic subsidiaries and consolidated venture in which the Company owns more than 50% of the outstanding voting shares of the entity. All intercompany accounts and transactions have been eliminated. The accompanying financial data as of March 31, 2018 and for the three months ended March 31, 2018 and March 31, 2017 has been prepared by the Company, without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. The December 31, 2017 Consolidated Balance Sheet was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and the notes thereto included in the Company’s Annual Report on Form 10-K In the opinion of management, all normal recurring adjustments necessary to present fairly the consolidated balance sheet as of March 31, 2018, the consolidated statements of operations, the statements of comprehensive income (loss), and the statements of cash flows for the three months ended March 31, 2018 and March 31, 2017 as applicable, have been made. Certain prior year amounts in the financial statements and notes have been reclassified to conform to the fiscal year 2018 presentation. The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the operating results for the full fiscal year or any future periods. |
Impact of Recently Adopted Acco
Impact of Recently Adopted Accounting Standards | 3 Months Ended |
Mar. 31, 2018 | |
Impact of Recently Adopted Accounting Standards | Note 2. Impact of Recently Adopted Accounting Standards Adoption of new accounting standards There are two permitted transition methods under the new standard, the full retrospective method or the modified retrospective method. Under the full retrospective method, the standard would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized at the earliest period shown on the face of the financial statements being presented. Under the modified retrospective method, the cumulative effect of applying the standard would be recognized at the date of the initial application of the standard and the effect of the prior periods would be calculated and shown through a cumulative effect change in retained earnings. ARRIS has adopted the standard using the modified retrospective method on January 1, 2018. (See Note 3 Revenue from Contracts with Customers In August 2016, the FASB issued amended guidance on the classification of certain cash receipts and payments in the statement of cash flows. The primary purpose of the amended guidance is to reduce the diversity in practice that has resulted from the lack of consistent principles on this topic. The amended guidance adds or clarifies guidance on eight cash flow issues, including debt prepayment or debt extinguishment costs, settlement of zero-coupon In November 2016, the FASB issued new guidance that requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period end-of-period In March 2017, the FASB issued an accounting standard update that requires entities to disaggregate the service cost component from the other components of net periodic benefit costs and present it with other current compensation costs for related employees in the income statement, and present the other components elsewhere in the income statement and outside of income from operations if that subtotal is presented. The amendments in this update also allow only the service cost component to be eligible for capitalization when applicable. The accounting standard update is effective for the Company in the first quarter of fiscal 2018. ARRIS adopted this update as of January 1, 2018. The adoption of this guidance did not have any material impact on the Company’s consolidated financial position and results of operations. In May 2017, the FASB issued an accounting standard which amends the scope of modification accounting for share-based payment arrangements. The standard provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting. The accounting standard will be applied prospectively to awards modified on or after the effective date. It is effective for interim and annual periods beginning after December 15, 2017 (January 1, 2018 for the Company). ARRIS adopted this update as of January 1, 2018. The adoption of this guidance did not have any impact on the Company’s consolidated financial position and results of operations. Accounting standards issued but not yet effective right-of-use non-lease The Company has established a project management team to analyze the impact of this standard, including its current accounting policies and practices to identify potential impacts that would result from the application of this standard. The Company’s adoption process of the new standard is ongoing, including evaluating and quantifying the impact on its consolidated financial statements, identifying the population of leases (and embedded leases), implementing a selected technology solution and collecting and validating lease data. The Company expects its lease obligations designated as operating leases (as disclosed in Note 23 to the audited consolidated financial statements in its most recent Annual Report on Form 10-K) In January 2017, the FASB issued an accounting standard update that clarifies the definition of a business to help companies evaluate whether acquisition or disposal transactions should be accounted for as asset groups or as businesses. The accounting standard update will be effective for the Company beginning in the first quarter of fiscal 2019 on a prospective basis. The impact of this accounting standard update will be facts and circumstances dependent, but the Company expects, that in some situations, transactions that were previously accounted for as business combinations or disposal transactions will be accounted for as asset purchases or asset sales under the accounting standard update. In August 2017, the FASB issued an accounting standard which eliminates the requirement to separately measure and report hedge ineffectiveness and requires companies to recognize all elements of hedge accounting that impact earnings in the same income statement line item where the hedged item resides. The standard includes new alternatives for measuring the hedged item for fair value hedges of interest rate risk and eases the requirements for effectiveness testing, hedge documentation and applying the critical terms match method. Finally, the standard introduces new alternatives that permit companies to reduce the risk of material error if the shortcut method is misapplied. The accounting standard is effective beginning January 1, 2019 and is required to be applied prospectively. The Company is currently assessing the potential impact of the adoption of this standard on its Consolidated Financial Statements. In February 2018, the FASB issued an accounting standard which allows companies to reclassify stranded tax effects resulting from the U.S. 2017 Tax Cuts and Jobs Act, from accumulated other comprehensive income to retained earnings. The guidance also requires certain new disclosures regardless of the election. The accounting standard is effective in the first quarter of fiscal 2020, and earlier adoption is permitted. The Company is currently assessing the potential impact of the adoption of this standard on its Consolidated Financial Statements. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contracts with Customers | Note 3. Revenue from Contracts with Customers On January 1, 2018, the Company adopted the new accounting standard Revenue from Contracts with Customers Revenue Recognition ARRIS generates revenue as a result of varying activities, including the delivery of stand-alone equipment, custom design and installation services, and bundled sales arrangements inclusive of equipment, software and services. Revenue is recognized when performance obligations in a contract are satisfied through the transfer of control of the good or service at an amount of consideration expected to receive. The following are required before revenue is recognized. • Identify the contract with the customer. A variety of arrangements are considered contracts, however these are usually the Master Purchase Agreement and amendments or customer purchase orders. • Identify the performance obligations in the contract. Performance obligations are identified as promised goods or services in an arrangement that are distinct. • Determine the transaction price. Transaction price is the amount of consideration the Company expects in exchange for transferring the promised goods or services. The consideration may include fixed or variable amounts or both. • Allocate the transaction price to the performance obligations. The transaction price is allocated to the performance obligations on a relative standalone selling price basis. • Recognize revenue as the performance obligations are satisfied. Revenue is recognized when transfer of control of the promised goods or services has occurred. This is either at a point in time or over time. Revenue is deferred for any performance obligations in which payment is received or due prior to the transfer of control of the good or service. Equipment ARRIS’s equipment deliverables typically include proprietary operating system software, which isn’t considered separately identifiable. Therefore, ARRIS’s equipment deliverables are considered one distinct performance obligation. Multiple Performance Obligation Arrangements To determine the standalone selling price (“SSP”), the Company first looks to establish SSP through an observable price when the good or service is sold separately in similar circumstances. If SSP cannot be established through an observable price, the Company will estimate the SSP considering market conditions, customer specific factors, and customer class. The Company usually uses a combination of approaches to estimate SSP. Software Sold Without Tangible Equipment Standalone Services Incentives – Value Added Resellers (VAR) Retail Disaggregation of Revenue The following table summarizes the revenues from contracts with customers by major product line for the three months ended March 31, 2018 (in thousands): CPE: Broadband CPE products $ 323,285 Video CPE products 551,941 Sub-total 875,226 Network & Cloud: Networks products 453,001 Software and services 85,263 Sub-total 538,264 Enterprise Networks: Enterprise Networks products 169,914 Other: Other (5,694 ) Total net revenues $ 1,577,710 Customer Premises Equipment — The CPE segment’s product solutions include Broadband products, such as DSL and DOCSIS gateways and modems, and Video products, such as video gateways, clients and set-tops, Network & Cloud — The N&C segment’s product solutions include cable modem termination system, video infrastructure, distribution and transmission equipment and cloud solutions that enable facility-based service providers to construct a state-of-the-art end-to-end Enterprise Networks — The Enterprise Networks segment focuses on enabling constant, wireless and wired connectivity across complex and varied networking environments. It offers dedicated engineering, sales and marketing resources to serve customers across a spectrum of enterprises—including hospitality, education, smart cities, government, venues, service providers and more. The following table summarizes the revenues from contracts with customers by geographic areas for the three months ended March 31, 2018 (in thousands): CPE N&C Enterprise Other (1) Total Domestic – U.S. $ 473,764 $ 326,973 $ 95,716 $ (3,203 ) $ 893,250 Americas, excluding U.S. 155,863 93,852 5,852 3 255,570 Asia Pacific 22,102 55,755 29,625 — 107,482 EMEA 223,497 61,684 38,721 (2,494 ) 321,408 Total international 401,462 211,291 74,198 (2,491 ) 684,460 Total net revenues $ 875,226 $ 538,264 $ 169,914 $ (5,694 ) $ 1,577,710 (1) Adjustments related acquisition accounting impacts related to deferred revenue and the warrant program Impact of New Revenue Guidance on Financial Statement Line Items The following table compares the reported condensed balance sheet and statement of operations, as of and for the three months ended March 31, 2018, to the pro-forma As reported March 31, 2018 Pro forma – as if Balance Sheets Assets Unbilled receivable $ 26,005 $ 17,572 Other current assets 172,993 172,929 Deferred income taxes 131,417 128,786 Liabilities Deferred revenue (current and non-current) $ 199,781 $ 207,915 As reported for the three March 31, 2018 Pro forma – as if Statements of Operations Revenues Net sales $ 1,577,710 $ 1,561,143 Costs and expenses Cost of sales $ 1,102,027 $ 1,102,091 Income tax expense 3,489 6,120 Consolidated net loss (17,032 ) (36,294 ) Net loss attributable to non-controlling (3,432 ) (3,590 ) Net loss attributable to ARRIS International plc (13,600 ) (32,704 ) Net loss per ordinary share: Basic $ (0.07 ) $ (0.18 ) Diluted $ ( 0.07 ) $ (0.18 ) Pro-forma net sales were $16.5 million lower than actual net sales in the statements of operations, largely due to license revenue that is currently being recognized upon delivery of the license as opposed to recognizing ratably over the license term. Other Contract Assets and Liabilities The following table summarizes the opening and closing balances of the respective consolidated balance sheet accounts and the adjustments that were made to the consolidated balance sheets as of March 31, 2018 (in thousands). Opening balance, as adjusted January 1, 2018 Adjustment Ending balance, March 31, 2018 Unbilled receivables $ 14,837 $ 11,218 $ 26,005 Deferred revenue (current and non-current) $ 168,757 $ 31,024 $ 199,781 Revenue recognized in the period from amounts included in deferred revenue at the beginning of the period $ 43,611 The changes in the contract asset account relate to license revenue is now being recognized upon delivery instead of being recognized ratably over the license term. The other portion of the change resulted in a higher professional service accrual as of March 31, 2018 than as of December 31, 2017, as result of revenue recognition as services are performed as opposed to end of contract. As of the end of the current reporting period, the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied that have a duration of one year or more was $56.0 million. The majority of ARRIS’ contracts that have performance obligations that are unsatisfied are part of contracts have a duration of one year or less. Practical Expedients Sales commissions are incremental contract acquisition costs which are expected to be recovered. The Company has elected to recognize these expenses as incurred due to the amortization period of these costs being one year or less. Costs to obtain or fulfill a contract are incremental costs that are expected to be recovered. The Company has elected to recognize these expenses as incurred due to the amortization period of these costs being one year or less. Costs to obtain a contract that would have been incurred regardless of whether the contract was obtained are recognized in expense when incurred. The Company has elected not to adjust the promised amount of consideration for the effects of a significant financing component as it expects, at contract inception, that the period between when ARRIS transfers a promised good or service to a customer, and when the customer pays will be one year or less. The Company has elected the expedient which states an entity does not need to evaluate whether shipping and handling activities are promised services to its customers. If revenue is recognized for the related good before the shipping and handling activities occur, the related costs of those shipping and handling activities are accrued. The Company has also elected to exclude from the transaction price certain types of taxes collected from a customer and remitted to a third-party (e.g., governmental agency), including sales, use and value-added taxes. As a result, revenue is presented net of these taxes. Additionally, the Company has elected for contracts that were modified before the beginning of the earliest reporting period to reflect the aggregate effect of all modifications when identifying the satisfied and unsatisfied performance obligations, determining the transaction price, and allocating the transaction price. |
Business Acquisition
Business Acquisition | 3 Months Ended |
Mar. 31, 2018 | |
Business Acquisition | Note 4. Business Acquisition Acquisition of Ruckus Wireless and ICX Switch business On December 1, 2017, ARRIS completed the acquisition of Ruckus Wireless and ICX Switch business (“Ruckus Networks”). The total cash paid was approximately $761.0 million (net of estimated adjustments for working capital and noncash settlement of pre-existing With this acquisition, ARRIS expands its leadership in converged wired and wireless networking technologies beyond the home into the education, public venue, enterprise, hospitality, and multi-dwelling unit markets. The preliminary estimated goodwill of $380.1 million arising from the acquisition is attributable to the strategic opportunities and synergies that are expected to arise from the acquisition of Ruckus Networks and the workforce of the acquired business. Goodwill has been preliminarily assigned to our new Enterprise reporting unit as of March 31, 2018. The Company will finalize the assignment during the measurement period. A small portion of the goodwill is expected to be deductible for income tax purposes. The following table summarizes the fair value of consideration transferred for Ruckus Networks (in thousands): Cash consideration $ 779,743 Estimated working capital adjustments (16,371 ) Non-cash (1) (2,359 ) Total consideration transferred $ 761,013 (1) Non-cash Total consideration excludes $61.5 million paid for the cash settlement of stock-based awards for which vesting was accelerated as contemplated in the purchase agreement. This was expensed in the fourth quarter of 2017. The following is a summary of the estimated fair values of the net assets acquired (in thousands): Amounts Recognized as Adjustments Amounts Recognized Total estimated consideration transferred $ 761,013 $ — $ 761,013 Cash and cash equivalents 18,958 — 18,958 Accounts receivable, net 32,940 (293 ) 32,647 Inventories 48,897 (461 ) 48,436 Prepaids & other 4,836 (772 ) 4,064 Property, plant & equipment 33,500 2,014 35,514 Intangible assets 472,500 (71,600 ) 400,900 Other assets 39,528 — 39,528 Accounts payable and accrued liabilities (17,216 ) 2,350 (14,866 ) Other current liabilities (9,666 ) (2,945 ) (12,611 ) Deferred revenue (47,718 ) 970 (46,748 ) Noncurrent deferred income tax liabilities (92,233 ) 7,426 (84,807 ) Other noncurrent liabilities (41,347 ) 1,265 (40,082 ) Net assets acquired 442,979 (62,046 ) 380,933 Goodwill $ 318,034 62,046 $ 380,080 (a) As previously reported as of December 31, 2017 As a result of measurement period changes for intangible assets, the Company recorded a decrease of $1.5 million to previously recorded amortization for the fourth quarter of 2017. These adjustments have been recorded prospectively in the first quarter of 2018. The acquisition was accounted for using the acquisition method of accounting, which requires, among other things, that the assets acquired and liabilities assumed be recognized at their acquisition date fair values, with any excess of the consideration transferred over the estimated fair values of the identifiable net assets acquired recorded as goodwill. The accounting for the business combination is based on currently available information and is considered preliminary. The Company has not received a final valuation report from the independent valuation expert for acquired property, plant and equipment and intangible assets. In addition, the Company is still gathering information about income taxes and deferred income tax assets and liabilities, accounts receivables, warranty obligations, other assets and accrued liabilities based on facts that existed as of the date of the acquisition. The final accounting for the business combination may differ materially from that presented in these unaudited consolidated financial statements. The $400.9 million of acquired intangible assets are comprised of the following (in thousands): Preliminary Fair value Estimated Weighted Average Life (years) Technology and patents $ 192,700 6.0 Customer contracts and relationships 119,300 10.0 In-process 18,000 indefinite Tradenames 39,700 indefinite Trademarks and tradenames 9,600 10.0 Backlog 21,600 0.3 Total estimated fair value of intangible assets $ 400,900 The fair value of trade accounts receivable is $32.6 million with the gross contractual amount being $33.8 million. The Company expects $1.2 million to be uncollectible. The Company incurred acquisition related costs of $0.2 million during the three months ended March 31, 2018. This amount was expensed by the Company as incurred and is included in the Consolidated Statement of Operations in the line item titled “Integration, acquisition, restructuring and other costs”. The Ruckus Networks business contributed revenues of approximately $169.9 million to our consolidated results for the three months ended March 31, 2018. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets | Note 5. Goodwill and Intangible Assets Goodwill As of March 31, 2018, the Company has preliminarily recorded goodwill of $380.1 million related to the Ruckus Networks acquisition. The Company is in the process of assigning the assets and liabilities acquired to each of its identified reporting units and as such, the determination of this goodwill by reporting unit is incomplete as of March 31, 2018. The Company intends to finalize the assignment of the goodwill from the Ruckus Networks acquisition during fiscal year 2018. The changes in the carrying amount of goodwill for the year to date period ended March 31, 2018 are as follows (in thousands): CPE N & C Enterprise Total Goodwill 1,386,680 1,003,654 318,034 2,708,368 Accumulated impairment losses — (429,856 ) — (429,856 ) Balance as of December 31, 2017 $ 1,386,680 $ 573,798 $ 318,034 $ 2,278,512 Changes in year 2018: Goodwill acquired, net — — 62,046 62,046 Impairment — (3,400 ) — (3,400 ) Other (338 ) — — (338 ) Balance as of March 31, 2018 $ 1,386,342 $ 570,398 $ 380,080 $ 2,336,820 Goodwill 1,386,342 1,003,654 380,080 2,770,076 Accumulated impairment losses — (433,256 ) — (433,256 ) Balance as of March 31, 2018 $ 1,386,342 $ 570,398 $ 380,080 $ 2,336,820 During the three months ended March 31, 2018, the Company recorded partial impairment of goodwill of $3.4 million related to our Cloud TV reporting unit, of which $1.2 million is attributable to the noncontrolling interest. This impairment was a result of the indirect effect of a change in accounting principle related to the adoption of new accounting standard Revenue from Contracts with Customers Intangible Assets The gross carrying amount and accumulated amortization of the Company’s acquired intangible assets as of March 31, 2018 and December 31, 2017 are as follows (in thousands): March 31, 2018 December 31, 2017 Gross Amount Accumulated Amortization Net Book Value Gross Amount Accumulated Amortization Net Book Value Definite-lived intangible assets Customer relationships $ 1,691,511 $ 821,766 $ 869,745 $ 1,672,470 $ 780,655 $ 891,815 Developed technology, patents & licenses 1,449,900 825,996 623,904 1,521,893 771,200 750,693 Trademarks, trade and domain names 74,572 47,365 27,207 87,472 41,885 45,587 Backlog 21,600 20,957 643 35,000 5,833 29,167 Sub-total $ 3,237,583 $ 1,716,084 $ 1,521,499 $ 3,316,835 $ 1,599,573 $ 1,717,262 Indefinite-lived intangible assets Tradenames 39,700 — 39,700 — — — In-process 22,100 — 22,100 54,100 — 54,100 Sub-total 61,800 — 61,800 54,100 — 54,100 Total $ 3,299,383 $ 1,716,084 $ 1,583,299 $ 3,370,935 $ 1,599,573 $ 1,771,362 As of March 31, 2018, the Company preliminarily recorded intangible assets (other than goodwill) of $400.9 million related to the Ruckus Networks acquisition. Amortization expense is reported in the consolidated statements of operations within cost of sales and operating expenses. The following table presents the amortization of acquired intangible assets (in thousands): Three Months Ended March 31, 2018 2017 Cost of sales $ 890 $ 711 Selling, general & administrative expense 997 949 Amortization of acquired intangible assets (1) 114,708 93,646 Total $ 116,595 $ 95,306 (1) Reflects amortization expense for the intangible assets acquired through business combinations. The estimated total amortization expense for finite-lived intangibles for each of the next five fiscal years is as follows (in thousands): 2018 (for the remaining nine months) $ 261,272 2019 317,019 2020 305,224 2021 170,437 2022 134,133 Thereafter 333,414 |
Investments
Investments | 3 Months Ended |
Mar. 31, 2018 | |
Investments | Note 6. Investments ARRIS’s investments consisted of the following (in thousands): As of March 31, 2018 As of December 31, 2017 Current Assets: Available-for-sale $ 36,804 $ 23,874 Noncurrent Assets: Available-for-sale 5,570 5,718 Equity method investments 21,515 22,021 Cost method investments 10,092 10,092 Other investments 32,681 33,251 Total classified as non-current 69,858 71,082 Total $ 106,662 $ 94,956 Available-for-sale available-for-sale available-for-sale available-for-sale The amortized costs and fair value of available-for-sale March 31, 2018 December 31, 2017 Amortized Costs Gross Unrealized Gains Gross Unrealized Losses Fair Value Amortized Costs Gross Unrealized Gains Gross Unrealized Losses Fair Value Certificates of deposit (non-U.S.) $ 36,804 $ — $ — $ 36,804 $ 12,809 $ — $ — $ 12,809 Corporate bonds — — — — 11,003 86 (24 ) 11,065 Corporate obligations 13 — — 13 13 — — 13 Money markets 37 — — 37 38 — — 38 Mutual funds 86 — (4 ) 82 65 14 — 79 Other investments 5,757 175 (494 ) 5,438 4,941 744 (97 ) 5,588 Total $ 42,697 $ 175 $ (498 ) $ 42,374 $ 28,869 $ 844 $ (121 ) $ 29,592 The following table represents the breakdown of the available-for-sale March 31, 2018 Less than 12 months 12 months or more Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Certificates of deposit (non-U.S.) $ 36,804 $ — $ — $ — $ 36,804 $ — Corporate obligations 13 — — — 13 — Money markets 37 — — — 37 — Mutual funds 82 (4 ) — — 82 (4 ) Other investments 5,438 (494 ) — — 5,438 (494 ) Total $ 42,374 $ (498 ) $ — $ — $ 42,374 $ (498 ) December 31, 2017 Less than 12 months 12 months or more Total Fair value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Certificates of deposit (non-U.S.) $ 12,809 $ — $ — $ — $ 12,809 $ — Corporate bonds 11,065 (24 ) — — 11,065 (24 ) Corporate obligations 13 — — — 13 — Money markets 38 — — — 38 — Mutual funds 79 — — — 79 — Other investments 5,588 (97 ) — — 5,588 (97 ) Total $ 29,592 $ (121 ) $ — $ — $ 29,592 $ (121 ) As of March 31, 2018, for fixed income securities that were in unrealized loss positions, the Company has determined that (i) it does not have the intent to sell any of these investments, and (ii) it is more likely than not that it will not be required to sell any of these investments before recovery of the entire amortized cost basis. The sale and/or maturity of available-for-sale Three Months Ended March 31, 2018 2017 Proceeds from sales $ 11,000 $ 91,885 Gross gains 5 10 Gross losses — — The contractual maturities of the Company’s available-for-sale March 31, 2018 Amortized Cost Fair Value Within 1 year $ 36,804 $ 36,804 After 1 year through 5 years — — After 5 years through 10 years — — After 10 years 5,893 5,570 Total $ 42,697 $ 42,374 Other-than-temporary investment impairments— near-term For the three months ended March 31, 2017, the Company concluded that one private company had indicators of impairment, as the cost basis exceeded the fair value of the investments resulting in other-than-temporary impairment charges of $2.8 million. These charges are reflected in the Consolidated Statements of Operations. Classification of securities as current or non-current non-current. |
Fair Value Measurement
Fair Value Measurement | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Measurement | Note 7. 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. U.S GAAP 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 U.S GAAP 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) and derivatives measured at fair value on a recurring basis as of March 31, 2018 and December 31, 2017 (in thousands): March 31, 2018 Level 1 Level 2 Level 3 Total Certificates of deposit (non-U.S.) $ — $ 36,804 $ — $ 36,804 Corporate obligations — 13 — 13 Money markets 37 — — 37 Mutual funds 81 — — 81 Other investments — 5,438 — 5,438 Interest rate derivatives — asset derivatives — 16,890 — 16,890 Interest rate derivatives — liability derivatives — (998 ) — (998 ) Foreign currency contracts — asset position — 1,089 — 1,089 Foreign currency contracts — liability position — (11,991 ) — (11,991 ) December 31, 2017 Level 1 Level 2 Level 3 Total Certificates of deposit (non-U.S.) $ — $ 12,809 $ — $ 12,809 Corporate bonds — 11,065 — 11,065 Corporate obligations — 13 — 13 Money markets 38 — — 38 Mutual funds 79 — — 79 Other investments — 5,588 — 5,588 Interest rate derivatives — asset derivatives — 10,156 — 10,156 Interest rate derivatives — liability derivatives — (4,024 ) — (4,024 ) Foreign currency contracts — asset position — 405 — 405 Foreign currency contracts — liability position — (8,802 ) — (8,802 ) In addition to the financial instruments included in the above table, certain nonfinancial assets and liabilities are 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. During the three months ended March 31, 2018, the Company recorded partial impairment of goodwill of $3.4 million related to our Cloud TV reporting unit, of which $1.2 million is attributable to the noncontrolling interest. During the fourth quarter of 2017, the Company recorded partial impairments of goodwill and indefinite-lived tradenames of $51.2 million and $3.8 million, respectively, acquired in the ActiveVideo acquisition and included as part of the Cloud TV reporting unit, of which $19.3 million is attributable to the noncontrolling interest. See Note 5 Goodwill and Intangible Assets The Company believes the principal amount of debt as of March 31, 2018 approximated 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 Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities | Note 8. Derivative Instruments and Hedging Activities Overview 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. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives also may be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. In accordance with the FASB’s fair value measurement guidance, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. Cash Flow Hedges of Interest Rate Risk The Company’s senior secured credit facilities, which are comprised of (i) a “Term Loan A Facility”, (ii) a “Term Loan A-1 B-3 Indebtedness one-month A-1 one-month The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in Accumulated Other Comprehensive Income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During 2018, such derivatives were used to hedge the variable cash flows associated with debt. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. During the three months ended March 31, 2018, no expense has been recorded related to hedge ineffectiveness by the Company. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. Over the next 12 months, the Company estimates that an additional $4.6 million may be reclassified as a decrease to interest expense. The table below presents the impact the Company’s derivative financial instruments had on Consolidated Statement of Operations (in thousands): Location of Gain(Loss) Reclassified from AOCI into Income Three months ended March 31, 2018 2017 Gain Recognized in OCI on Derivatives (Effective Portion) Interest expense $ 9,101 $ 2,054 Amounts Reclassified from Accumulated OCI into Income (Effective Portion) Interest expense 305 1,204 The following table indicates the location on the Consolidated Balance Sheets in which the Company’s derivative assets and liabilities designated as hedging instruments have been recognized and the related fair values of those derivatives (in thousands): Balance Sheet Location March 31, 2018 December 31, 2017 Derivatives designated as hedging instruments: Interest rate derivatives — asset derivatives Other current assets 5,286 3,590 Interest rate derivatives — asset derivatives Other assets 11,604 6,566 Interest rate derivatives — liability derivatives Other accrued liabilities (870 ) (3,053 ) Interest rate derivatives — liability derivatives Other noncurrent liabilities (128 ) (971 ) Credit-risk-related Contingent Features Each of ARRIS’s agreements with its derivative counterparties contains 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, 2018 and December 31, 2017, the fair value of derivatives, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was a net asset position of $15.9 million and $6.1 million, respectively. As of March 31, 2018, the Company has not posted any collateral related to these agreements nor has it required any of its counterparties to post collateral related to these or any other agreements. Non-designated 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 for certain exposures, ARRIS has entered into various foreign currency contracts. As of March 31, 2018, the Company had forward contracts with notional amounts totaling 50 million euros which mature throughout 2018, forward contracts with a total notional amount of 30 million Australian dollars which mature throughout 2018, forward contracts with notional amounts totaling 35 million Canadian dollars which mature throughout 2018, forward contracts with notional amounts totaling 75 million British pounds which mature throughout 2018 and forward contracts with notional amounts totaling 640.9 million South African rand which mature throughout 2018 and 2019. The Company’s objectives in using foreign currency derivatives are to add stability to foreign currency gains and losses recorded as other expense (income) and to manage its exposure to foreign currency movements. To accomplish this objective, the Company uses foreign currency option and foreign currency forward contracts as part of its foreign currency risk management strategy. The Company’s foreign currency derivative instruments economically hedge certain risk but are not designated as hedges, and accordingly, all changes in the fair value of the instruments are recognized as a loss (gain) on foreign currency in the Consolidated Statements of Operations. The maximum time frame for ARRIS’s derivatives is currently 14 months. The following table indicates the location on the Consolidated Balance Sheets in which the Company’s derivative assets and liabilities not designated as hedging instruments have been recognized and the related fair values of those derivatives (in thousands): Balance Sheet Location March 31, 2018 December 31, 2017 Derivatives not designated as hedging instruments: Foreign exchange contracts — asset derivatives Other current assets $ 1,089 $ 405 Foreign exchange contracts — liability derivatives Other accrued liabilities (11,810 ) (8,202 ) Foreign exchange contracts — liability derivatives Other non-current liabilities (181 ) (600 ) The change in the fair values of ARRIS’s derivatives not designated as hedging instruments recorded in the Consolidated Statements of Operations were as follows (in thousands): Three months ended March 31, Statement of Operations Location 2018 2017 Derivatives not designated as hedging instruments Foreign exchange contracts Loss on foreign currency $ 7,468 $ 6,707 |
Pension Benefits
Pension Benefits | 3 Months Ended |
Mar. 31, 2018 | |
Pension Benefits | Note 9. Pension Benefits Components of Net Periodic Pension Cost (in thousands): U.S. Pension Plans Non-U.S. Three months ended March 31, Three months ended March 31, 2018 2017 2018 2017 Service cost $ — $ — $ 158 $ 154 Interest cost 345 434 101 113 Return on assets (expected) (62 ) (224 ) (68 ) (75 ) Amortization of net actuarial loss(gain) 253 138 — — Net periodic pension cost $ 536 $ 348 $ 191 $ 192 Employer Contributions No minimum funding contributions are required in 2018 under the Company’s U.S. defined benefit plan. During the quarter ended March 31, 2018, the Company made a minimum funding contribution of $1.1 million related to its Taiwan pension plan. In late 2017, the Company commenced the process of terminating our U.S. defined benefit pension plan. Ultimate plan termination is subject to regulatory approval and to prevailing market conditions and other considerations. In the event approvals are received and the Company proceeds with effecting termination, settlement of the plan obligations is expected to occur in 2019. If the settlement occurs as expected in 2019, the plan’s deferred actuarial losses remaining in accumulated other comprehensive income (loss) at that time will be recognized as expense. |
Guarantees
Guarantees | 3 Months Ended |
Mar. 31, 2018 | |
Guarantees | Note 10. Guarantees Warranty ARRIS provides warranties of various lengths to customers based on the specific product and the terms of individual agreements. The Company provides for the estimated cost of product warranties based on historical trends, the embedded base of product in the field, failure rates, and repair costs at the time revenue is recognized. Expenses related to product defects and unusual product warranty problems are recorded in the period that the problem is identified. While the Company engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its suppliers, the estimated warranty obligation could be affected by changes in ongoing product failure rates, material usage and service delivery costs incurred in correcting a product failure, as well as specific product failures outside of ARRIS’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, 2018 was as follows (in thousands): Balance at December 31, 2017 $ 76,089 Accruals related to warranties (including changes in assumptions) 9,043 Settlements made (in cash or in kind) (10,976 ) Balance at March 31, 2018 $ 74,156 |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2018 | |
Inventories | Note 11. Inventories The components of inventory were as follows, net of reserves (in thousands): March 31, 2018 December 31, Raw material $ 157,048 $ 149,328 Work in process 9,497 5,416 Finished goods 682,524 670,467 Total inventories, net $ 849,069 $ 825,211 |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment | Note 12. Property, Plant and Equipment Property, plant and equipment, at cost, consisted of the following (in thousands): March 31, 2018 December 31, 2017 Land $ 26,652 $ 68,562 Buildings and leasehold improvements 200,739 205,534 Machinery and equipment 452,675 466,325 680,066 740,421 Less: Accumulated depreciation (370,609 ) (367,954 ) Total property, plant and equipment, net $ 309,457 $ 372,467 In February 2018, the Company announced an agreement to sell its manufacturing facility in New Taipei City, Taiwan, along with certain manufacturing fixed assets. The aggregate consideration for the acquired assets is $81.3 million ($75.0 million for the facility and land, plus $6.3 million for the manufacturing fixed assets). As a condition of sale, the Company will indemnify the buyer for certain environmental obligations up to $7.0 million. The assets have been reclassified as held for sale and were measured at their carrying amount. Total assets held for sale at March 31, 2018 were $57.2 million, which is reported in the Consolidated Balance Sheets as a component of “Other current assets.” The sale is expected to close in the second half of 2018. |
Restructuring, Acquisition and
Restructuring, Acquisition and Integration | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring, Acquisition and Integration | Note 13. Restructuring, Acquisition and Integration Restructuring The following table represents a summary of and changes to the restructuring accrual, which is primarily composed of accrued severance and other employee costs and contractual obligations that related to excess leased facilities (in thousands): Employee severance & termination benefits Contractual obligations and other Write-off of property, plant and equipment Total Balance at December 31, 2017 $ 4,379 $ 3,302 $ — $ 7,681 Restructuring charges 10,483 95 10 10,588 Cash payments / adjustments (2,480 ) (566 ) — (3,046 ) Non-cash — — (10 ) (10 ) Balance at March 31, 2018 $ 12,382 $ 2,831 $ — $ 15,213 Employee severance and termination benefits In 2017, ARRIS recorded restructuring charges of $13.3 million related to severance and employee termination benefits for 195 employees. This initiative affected all segments. The liability for the plan is expected to be paid in 2018. In first quarter of 2016, ARRIS completed its acquisition of Pace. ARRIS initiated restructuring plans as a result of the combination that focuses on the rationalization of personnel, facilities and systems across the ARRIS organization. The estimated cost recorded during 2016 was approximately $96.3 million. The restructuring plan affected approximately 1,545 employees across the company. The remaining liability is expected to be settled in 2018. This amount is included in the Consolidated Statement of Operations in the line item titled “Integration, acquisition, restructuring and other costs”. Contractual obligations cease-use During the year ended December 31, 2017, the Company exited three facilities and recorded a charge of $5.7 million. Acquisition During the three months ended March 31, 2018 and 2017, acquisition expenses were approximately $0.2 million and $2.3 million, respectively. These expenses related to the acquisition of the Ruckus Networks and consisted of banker and other fees. Integration Integration expenses of approximately $2.9 million and $1.3 million were recorded during the three months ended March 31, 2018 and 2017, respectively, related to integration-related outside services following the Ruckus Networks and Pace acquisitions. |
Indebtedness
Indebtedness | 3 Months Ended |
Mar. 31, 2018 | |
Indebtedness | Note 14. Indebtedness The following is a summary of indebtedness and lease financing obligations (in thousands): As of March 31, 2018 As of December 31, 2017 Current liabilities: Term A loan $ 19,550 $ 19,550 Term A-1 62,500 62,500 Term B-3 5,450 5,450 Lease finance obligation 913 870 Current obligations 88,413 88,370 Current deferred financing fees and debt discount (4,780 ) (4,811 ) 83,633 83,559 Noncurrent liabilities: Term A loan 361,675 366,562 Term A-1 1,156,250 1,171,875 Term B-3 534,100 535,463 Revolver — — Lease finance obligation 60,799 61,032 Noncurrent obligations 2,112,824 2,134,932 Noncurrent deferred financing fees and debt discount (17,504 ) (18,688 ) 2,095,320 2,116,244 Total $ 2,178,953 $ 2,199,803 Senior Secured Credit Facilities On December 20, 2017, the Company entered into a Fourth Amendment (the “Fourth Amendment”) to its Amended and Restated Credit Facility dated June 18, 2015, as previously amended on December 14, 2015, April 26, 2017, and October 17, 2017 (the “Credit Agreement”). The Fourth Amendment provided for a new Term B-3 On October 17, 2017, the Company entered into the Third Amendment and Consent (the “Third Amendment”) to the Credit Agreement. Pursuant to the Third Amendment, ARRIS (i) incurred “Refinancing Term A Loans” of $391 million, (ii) incurred “Refinancing Term A-1 A-1 The Third Amendment extended the maturity date of the Term A Loans and the Revolving Credit Facility to October 17, 2022. Pursuant to the Third Amendment, the Company is subject to a minimum consolidated interest coverage ratio test, which is unchanged from the Credit Agreement. In addition, the Company is subject to a maximum consolidated net leverage ratio test of not more than 4.0:1.0, subject to a step-down to 3.75:1.00 commencing with the fiscal quarter ending March 31, 2019. The amount of unrestricted cash used to offset indebtedness in the calculation of the consolidated net leverage ratio was also increased from $200 million to $500 million. The interest rates under the Third Amendment were not changed. On April 26, 2017, ARRIS entered into a Second Amendment (the “Second Amendment”) to the Credit Agreement. The Second Amendment provided for a new Term B Loan facility in the principal amount of $545 million, the proceeds of which (along with cash on hand) were used to repay the existing Term B Loan facility. Under the terms of the Second Amendment, the new Term B-2 Interest rates on borrowings under the senior secured credit facilities are set forth in the table below. Rate As of March 31, 2018 Term A Loan LIBOR + 1.75 % 3.63 % Term A-1 LIBOR + 1.75 % 3.63 % Term B-3 LIBOR + 2.25 % 4.13 % Revolving Credit Facility (1) LIBOR + 1.75 % Not Applicable (1) Includes unused commitment fee of 0.30% and letter of credit fee of 1.75% not reflected in interest rate above. The Credit Agreement provides for adjustments to the interest rates paid on the Term A Loan, Term A-1 B-3 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 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. As of March 31, 2018, ARRIS was in compliance with all covenants under the Credit Agreement. During the three months ended March 31, 2018, the Company made mandatory payments of approximately $21.9 million related to the senior secured credit facilities. Other As of March 31, 2018, the scheduled maturities of the contractual debt obligations for the next five years are as follows (in thousands): 2018 (for the remaining nine months) $ 65,625 2019 87,500 2020 87,500 2021 87,500 2022 1,297,738 Thereafter 513,662 |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Information | Note 15. 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 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. As of January 1, 2018, the Company has changed the composition of its measurement of segment profit and loss (direct contribution) used by the Company’s chief operating decision maker. Beginning in 2018, we charge bonus, equity compensation and certain other costs which are now directly aligned with each of our segments within our measurement of segment profit and loss (direct contribution). These costs historically were included as part of “Corporate and Unallocated Costs”. Consequently, our segment information for the 2017 period has been restated to reflect such change. Our CODM manages the Company under three segments: • Customer Premises Equipment (“CPE”) set-top • Network & Cloud (“N&C”) – state-of-the-art end-to-end • Enterprise Networks (“Enterprise”) — 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. Direct contribution is defined as gross margin less direct operating expense. The “Corporate and Unallocated Costs” category of expenses include corporate sales and marketing, home office general and administrative expenses. “Corporate and Unallocated Costs” also includes corporate sales and marketing for the CPE and N&C segments. Marketing and sales expense related to the Enterprise segment are considered a direct operating expense for that segment and are not included in the “Corporate and Unallocated Costs.” These expenses are not included in the measure of segment direct contribution and as such are reported as “Corporate and Unallocated Costs” and are included in the reconciliation to income (loss) before income taxes. 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 represents information about the Company’s reportable segments (in thousands): Three months ended March 31, 2018 2017 Net sales to external customers: CPE $ 875,226 $ 1,055,056 N&C 538,264 430,436 Enterprise 169,914 — Other (1) (5,694 ) (2,387 ) Total 1,577,710 1,483,105 Direct contribution: CPE 49,761 108,912 N&C 228,538 112,101 Enterprise 25,528 — Segment total 303,827 221,013 Corporate and unallocated costs (159,145 ) (121,356 ) Amortization of intangible assets (114,708 ) (93,646 ) Impairment of goodwill (3,400 ) — Integration, acquisition, restructuring and other (13,655 ) (10,095 ) Operating income (loss) 12,919 (4,084 ) Interest expense 22,525 19,683 Loss on investments 527 4,530 Loss on foreign currency 4,833 4,740 Interest income (1,532 ) (1,922 ) Other expense (income), net 109 (85 ) Loss before income taxes $ (13,543 ) $ (31,030 ) (1) Adjustments related acquisition accounting impacts related to deferred revenue and the warrant program The compositions of our corporate and unallocated costs that are reflected in the consolidated statement of operations were as follow (in thousands): Three months ended March 31, 2018 2017 Corporate and unallocated costs: Cost of sales $ 36,798 $ 14,473 Selling, general and administrative expenses 93,671 83,656 Research and development expenses 28,676 23,227 Total $ 159,145 $ 121,356 |
Sales Information
Sales Information | 3 Months Ended |
Mar. 31, 2018 | |
Sales Information | Note 16. Sales Information Revenues from external customers are attributed to individual countries on an end-customer non-U.S. The table below set forth our sales based on geography of our customers (in thousands): Three months ended March 31, 2018 2017 U.S. $ 893,250 $ 958,477 Non-U.S. Americas, excluding U.S. 255,570 292,601 Asia Pacific 107,482 51,915 EMEA 321,408 180,112 Total non-U.S. $ 684,460 $ 524,628 Total sales $ 1,577,710 $ 1,483,105 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share | Note 17. 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 2018 2017 Basic: Net loss attributable to ARRIS International plc. $ (13,600 ) $ (39,098 ) Weighted average shares outstanding 184,805 189,796 Basic loss per share $ (0.07 ) $ (0.21 ) Diluted: Net loss attributable to ARRIS International plc. $ (13,600 ) $ (39,098 ) Weighted average shares outstanding 184,805 189,796 Net effect of dilutive shares — — Total 184,805 189,796 Diluted loss per share $ (0.07 ) $ (0.21 ) Potential dilutive shares include stock options, unvested restricted and performance awards and warrants. For the three months ended March 31, 2018 and 2017, all of the equity-based awards were excluded from the computation of diluted earnings per share. These exclusions are made if the Company has net losses, of which have an anti-dilutive effect. During the three months ended March 31, 2018, the Company issued 1.1 million ordinary shares related to the vesting of restricted shares, as compared to 2.6 million shares for the twelve months ended December 31, 2017. The warrants have a dilutive effect in those periods in which the average market price of the shares exceeds the current effective conversion price (under the treasury stock method), and are not subject to performance conditions. There is no vesting in the first quarter of 2018. The dilutive effect of these vested shares was immaterial. The Company has not paid cash dividends on its shares since its inception. Any future determination to pay dividends will be at the discretion of the Board of Directors and will be dependent on then-existing conditions, including the Company’s financial condition, results of operations, capital requirements, contractual and legal restrictions, business prospects and other factors that the Board considers relevant. The Credit Agreement governing the Company’s senior secured credit facilities contains restrictions on the Company’s ability to pay dividends on its ordinary shares. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Taxes | Note 18. Income Taxes ARRIS is subject to the U.K. statutory tax rate and a territorial corporate tax system. The U.K. statutory rate for 2018 is 19% as compared to 19.25% in 2017. The statutory rate in the U.K. decreased from 20% to 19% effective April 1, 2017. The Company’s statutory rate for 2017 represented the blended rate that was in effect for the year ended December 31, 2017 based on the 20% statutory rate that was effective for the first quarter of 2017 and the 19% rate effective for the remainder of 2017. Prior to 2016, ARRIS was subject to the U.S. statutory tax rate of 35% and a worldwide corporate tax system. The Tax Cuts and Jobs Act of 2017 (the “Act”) enacted on December 22, 2017 introduced significant changes to U.S. income tax law including, but not limited to, a reduction to the U.S. statutory tax rate from 35% to 21%, creation of new taxes on certain foreign-sourced earnings and certain intercompany payments, introduction of limits on interest deductibility, and increased limitations on certain executive compensation. Since the Act was passed late in the fourth quarter of 2017, and ongoing guidance and accounting interpretation are expected during 2018, ARRIS considers the accounting of the impacts of the Act to be incomplete due to additional work necessary to (1) do a more detailed analysis of historical foreign earnings as well as potential correlative adjustments; (2) determine re-measurement year-end As the Company obtained and analyzed more information, and interprets the Act and any additional guidance issued by the U.S. Treasury Department, the Internal Revenue Service (IRS), and other standard-setting bodies, the Company may adjust the provisional amounts. Those adjustments may materially affect the provision for income taxes and effective tax rate in the period in which the adjustments are made. The only significant adjustments made in the first quarter of 2018 were a direct result of the acquisition accounting adjustments made during the quarter for fair value adjustments. As a result of the change to the fair value of certain assets and liabilities, the gross deferred tax amounts associated with those assets and liabilities also changed. The fair value adjustments are as of the acquisition date, December 1, 2017, resulting in the gross deferred tax impacts being measured at the applicable enacted tax rate of 35% on that date. These deferred tax impacts were then remeasured to 21% to reflect the enacted rate as of December 22, 2017. As a result of these acquisition accounting measurement period adjustments, the Company recorded discrete tax expense of $2.7 million. No other significant adjustments were made during the first quarter of 2018. The Company will complete the analysis within the measurement period in accordance with Staff Accounting Bulletin No. 118. The Company reported the following operating results for the periods presented (in thousands): Three Months Ended March 31, 2018 2017 Income (loss) before income taxes $ (13,543 ) $ (31,030 ) Income tax (benefit) expense 3,489 10,001 Effective income tax rate (25.8 )% (32.2 )% The Company’s effective income tax rate fluctuates based on, among other factors, the level and location of income. The difference between the U.K. federal statutory income tax rate, 19% and 19.25%, respectively, and our effective income tax rate for the 2018 and 2017 periods is primarily due to the benefits of other foreign income tax regimes and the U.S. federal research and development credits . The Company’s effective income tax rate for the three months ended March 31, 2018 was impacted by $1.8 million of expense related to excess book deductions for stock based compensation, $2.3 million of expense related to changes in permanent reinvestment assertions, $2.7 million of expense related to the effects of tax rate changes in the U.S., offset by $1.3 million of benefit related to the release of uncertain tax positions due to settlement of audits, and $4.2 million of benefit related to an internal restructuring to move certain Ruckus Networks intangible property into the U.S. The Company’s effective income tax rate for the three months ended March 31, 2017 was impacted by $8.0 million related to the intra-entity sale of an asset, $1.4 million related to the French change in tax rates, $0.4 million related to the exercise of restricted shares, offset by $4.8 million of benefit related to the reversal of over-accrued interest related to uncertain tax positions. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2018 | |
Shareholders' Equity | Note 19. Shareholders’ Equity The following table provides a reconciliation of the beginning and ending carrying amounts of total equity, equity attributable to shareholders of ARRIS International plc and equity attributable to noncontrolling interest (in thousands): Ordinary Shares Capital in Excess of Par Value Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total ARRIS International plc stockholders’ equity Non- controlling Interest Total stockholders’ equity Balance, December 31, 2017 $ 2,768 $ 3,387,128 $ (225,881 ) $ 4,552 $ 3,168,567 $ 15,467 $ 3,184,034 Net loss — — (13,600 ) — (13,600 ) (3,432 ) (17,032 ) Other comprehensive income, net of tax — — — 7,993 7,993 (27 ) 7,966 Compensation under stock award plans — 19,256 — — 19,256 — 19,256 Issuance of ordinary shares and other 15 (13,969 ) — — (13,954 ) — (13,954 ) Repurchase of ordinary shares, net (14 ) — (24,986 ) — (25,000 ) — (25,000 ) Contribution from noncontrolling interest — — — — — 1,207 1,207 Cumulative effect adjustment to opening balance (1) — — (1,797 ) — (1,797 ) 2,694 897 Balance, March 31, 2018 $ 2,769 $ 3,392,415 $ (266,264 ) $ 12,545 $ 3,141,465 $ 15,909 $ 3,157,374 (1) Cumulative adjustment related to the adoption of accounting standards, see Note 3 Revenue from Contracts with Customers |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss) | Note 20. Accumulated Other Comprehensive Income (Loss) The following table summarizes the changes in accumulated other comprehensive income (loss) by component, net of taxes (in thousands): Available-for sale securities Derivative instruments Pension Cumulative translation adjustments Total Balance as of December 31, 2017 $ 662 $ 5,589 $ (8,993 ) $ 7,243 $ 4,501 Other comprehensive income before reclassifications (136 ) 7,158 — 782 7,804 Amounts reclassified from accumulated other comprehensive income (loss) (107 ) 240 29 — 162 Net current-period other comprehensive income (loss) (243 ) 7,398 29 782 7,966 Balance as of March 31, 2018 $ 419 $ 12,987 $ (8,964 ) $ 8,052 $ 12,467 Available-for sale securities Derivative instruments Pension Cumulative translation adjustments Total Balance as of December 31, 2016 $ 137 $ 671 $ (6,810 ) $ 9,293 $ 3,291 Other comprehensive income before reclassifications 96 1,420 — 4,981 6,497 Amounts reclassified from accumulated other comprehensive income (loss) (3 ) 832 11 — 840 Net current-period other comprehensive income 93 2,252 11 4,981 7,337 Balance as of March 31, 2017 $ 230 $ 2,923 $ (6,799 ) $ 14,274 $ 10,628 |
Repurchases of ARRIS Shares
Repurchases of ARRIS Shares | 3 Months Ended |
Mar. 31, 2018 | |
Repurchases of ARRIS Shares | Note 21. Repurchases of ARRIS Shares The table below sets forth the purchases of ARRIS shares for the quarter ended March 31, 2018: Period Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (in thousands) January 2018 16,673 $ 25.97 — 225,000 February 2018 986,174 $ 25.35 986,174 200,000 March 2018 510,026 $ 26.55 — 500,000 (1) An aggregate of 526,699 shares shown in the table above were subject to equity awards that were cancelled for cash to satisfy employee minimum tax withholding obligations that arose on the vesting of the applicable restricted stock units. Upon completing the combination in connection with the Pace acquisition, ARRIS International plc conducted a court-approved process in accordance with section 641(1)(b) of the U.K. Companies Act 2006, pursuant to which the Company reduced its stated share capital and thereby increased its distributable reserves or excess capital out of which ARRIS may legally pay dividends or repurchase shares. Distributable reserves are not linked to a U.S. GAAP reported amount. In 2016, the Company’s Board of Directors approved a $300 million share repurchase authorization replacing all prior programs. In early 2017, the Board authorized an additional $300 million for share repurchases, and authorized an additional $300 million for repurchases again in March 2018. During the first quarter of 2018, the Company repurchased 1.0 million shares of its ordinary shares for $25.0 million at an average share price of $25.33. The remaining authorized amount for share repurchases under this plan was $500.0 million as of March 31, 2018. Unless terminated earlier by a Board resolution, this new plan will expire when ARRIS has used all authorized funds for repurchase. However, U.K. law also generally prohibits a company from repurchasing its own shares through “off market purchases” without prior approval of shareholders when such company is not traded on a recognized investment exchange in the U.K. This shareholder approval lasts for a maximum period of five years. Prior to and in connection with the Pace combination, the Company obtained approval to purchase its own shares. This authority to repurchase shares terminates in January 2021, unless otherwise reapproved by the Company’s shareholders. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies | Note 22. Commitments and Contingencies 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) |
Revenue from Contracts with C31
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Summary of Revenues from Contracts with Customers by Major Product Line | The following table summarizes the revenues from contracts with customers by major product line for the three months ended March 31, 2018 (in thousands): CPE: Broadband CPE products $ 323,285 Video CPE products 551,941 Sub-total 875,226 Network & Cloud: Networks products 453,001 Software and services 85,263 Sub-total 538,264 Enterprise Networks: Enterprise Networks products 169,914 Other: Other (5,694 ) Total net revenues $ 1,577,710 |
Summary of Revenues from Contracts with Customers by Geographic Areas | The following table summarizes the revenues from contracts with customers by geographic areas for the three months ended March 31, 2018 (in thousands): CPE N&C Enterprise Other (1) Total Domestic – U.S. $ 473,764 $ 326,973 $ 95,716 $ (3,203 ) $ 893,250 Americas, excluding U.S. 155,863 93,852 5,852 3 255,570 Asia Pacific 22,102 55,755 29,625 — 107,482 EMEA 223,497 61,684 38,721 (2,494 ) 321,408 Total international 401,462 211,291 74,198 (2,491 ) 684,460 Total net revenues $ 875,226 $ 538,264 $ 169,914 $ (5,694 ) $ 1,577,710 (1) Adjustments related acquisition accounting impacts related to deferred revenue and the warrant program |
Comparison of Financial Statements to Pro-Forma Amounts had Previous Guidance been in Effect | The following table compares the reported condensed balance sheet and statement of operations, as of and for the three months ended March 31, 2018, to the pro-forma As reported March 31, 2018 Pro forma – as if Balance Sheets Assets Unbilled receivable $ 26,005 $ 17,572 Other current assets 172,993 172,929 Deferred income taxes 131,417 128,786 Liabilities Deferred revenue (current and non-current) $ 199,781 $ 207,915 As reported for the three March 31, 2018 Pro forma – as if Statements of Operations Revenues Net sales $ 1,577,710 $ 1,561,143 Costs and expenses Cost of sales $ 1,102,027 $ 1,102,091 Income tax expense 3,489 6,120 Consolidated net loss (17,032 ) (36,294 ) Net loss attributable to non-controlling (3,432 ) (3,590 ) Net loss attributable to ARRIS International plc (13,600 ) (32,704 ) Net loss per ordinary share: Basic $ (0.07 ) $ (0.18 ) Diluted $ ( 0.07 ) $ (0.18 ) |
Contract with Customer, Asset and Liability | The following table summarizes the opening and closing balances of the respective consolidated balance sheet accounts and the adjustments that were made to the consolidated balance sheets as of March 31, 2018 (in thousands). Opening balance, as adjusted January 1, 2018 Adjustment Ending balance, March 31, 2018 Unbilled receivables $ 14,837 $ 11,218 $ 26,005 Deferred revenue (current and non-current) $ 168,757 $ 31,024 $ 199,781 Revenue recognized in the period from amounts included in deferred revenue at the beginning of the period $ 43,611 |
Business Acquisition (Tables)
Business Acquisition (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Acquired Intangible Assets | The $400.9 million of acquired intangible assets are comprised of the following (in thousands): Preliminary Fair value Estimated Weighted Average Life (years) Technology and patents $ 192,700 6.0 Customer contracts and relationships 119,300 10.0 In-process 18,000 indefinite Tradenames 39,700 indefinite Trademarks and tradenames 9,600 10.0 Backlog 21,600 0.3 Total estimated fair value of intangible assets $ 400,900 |
Ruckus Wireless and ICX Switch business (Ruckus Networks) | |
Summary of Fair Value of Consideration Transferred | The following table summarizes the fair value of consideration transferred for Ruckus Networks (in thousands): Cash consideration $ 779,743 Estimated working capital adjustments (16,371 ) Non-cash (1) (2,359 ) Total consideration transferred $ 761,013 (1) Non-cash |
Summary of Estimated Fair Values of Net Assets Acquired | The following is a summary of the estimated fair values of the net assets acquired (in thousands): Amounts Recognized as Adjustments Amounts Recognized Total estimated consideration transferred $ 761,013 $ — $ 761,013 Cash and cash equivalents 18,958 — 18,958 Accounts receivable, net 32,940 (293 ) 32,647 Inventories 48,897 (461 ) 48,436 Prepaids & other 4,836 (772 ) 4,064 Property, plant & equipment 33,500 2,014 35,514 Intangible assets 472,500 (71,600 ) 400,900 Other assets 39,528 — 39,528 Accounts payable and accrued liabilities (17,216 ) 2,350 (14,866 ) Other current liabilities (9,666 ) (2,945 ) (12,611 ) Deferred revenue (47,718 ) 970 (46,748 ) Noncurrent deferred income tax liabilities (92,233 ) 7,426 (84,807 ) Other noncurrent liabilities (41,347 ) 1,265 (40,082 ) Net assets acquired 442,979 (62,046 ) 380,933 Goodwill $ 318,034 62,046 $ 380,080 (a) As previously reported as of December 31, 2017 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the year to date period ended March 31, 2018 are as follows (in thousands): CPE N & C Enterprise Total Goodwill 1,386,680 1,003,654 318,034 2,708,368 Accumulated impairment losses — (429,856 ) — (429,856 ) Balance as of December 31, 2017 $ 1,386,680 $ 573,798 $ 318,034 $ 2,278,512 Changes in year 2018: Goodwill acquired, net — — 62,046 62,046 Impairment — (3,400 ) — (3,400 ) Other (338 ) — — (338 ) Balance as of March 31, 2018 $ 1,386,342 $ 570,398 $ 380,080 $ 2,336,820 Goodwill 1,386,342 1,003,654 380,080 2,770,076 Accumulated impairment losses — (433,256 ) — (433,256 ) Balance as of March 31, 2018 $ 1,386,342 $ 570,398 $ 380,080 $ 2,336,820 |
Gross Carrying Amount and Accumulated Amortization of Acquired Intangible Assets | The gross carrying amount and accumulated amortization of the Company’s acquired intangible assets as of March 31, 2018 and December 31, 2017 are as follows (in thousands): March 31, 2018 December 31, 2017 Gross Amount Accumulated Amortization Net Book Value Gross Amount Accumulated Amortization Net Book Value Definite-lived intangible assets Customer relationships $ 1,691,511 $ 821,766 $ 869,745 $ 1,672,470 $ 780,655 $ 891,815 Developed technology, patents & licenses 1,449,900 825,996 623,904 1,521,893 771,200 750,693 Trademarks, trade and domain names 74,572 47,365 27,207 87,472 41,885 45,587 Backlog 21,600 20,957 643 35,000 5,833 29,167 Sub-total $ 3,237,583 $ 1,716,084 $ 1,521,499 $ 3,316,835 $ 1,599,573 $ 1,717,262 Indefinite-lived intangible assets Tradenames 39,700 — 39,700 — — — In-process 22,100 — 22,100 54,100 — 54,100 Sub-total 61,800 — 61,800 54,100 — 54,100 Total $ 3,299,383 $ 1,716,084 $ 1,583,299 $ 3,370,935 $ 1,599,573 $ 1,771,362 |
Schedule of Amortization of Acquired Intangible Assets | The following table presents the amortization of acquired intangible assets (in thousands): Three Months Ended March 31, 2018 2017 Cost of sales $ 890 $ 711 Selling, general & administrative expense 997 949 Amortization of acquired intangible assets (1) 114,708 93,646 Total $ 116,595 $ 95,306 (1) Reflects amortization expense for the intangible assets acquired through business combinations. |
Estimated Total Amortization Expense for Finite-Lived Intangibles for Next Five Fiscal Years | The estimated total amortization expense for finite-lived intangibles for each of the next five fiscal years is as follows (in thousands): 2018 (for the remaining nine months) $ 261,272 2019 317,019 2020 305,224 2021 170,437 2022 134,133 Thereafter 333,414 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Investments | ARRIS’s investments consisted of the following (in thousands): As of March 31, 2018 As of December 31, 2017 Current Assets: Available-for-sale $ 36,804 $ 23,874 Noncurrent Assets: Available-for-sale 5,570 5,718 Equity method investments 21,515 22,021 Cost method investments 10,092 10,092 Other investments 32,681 33,251 Total classified as non-current 69,858 71,082 Total $ 106,662 $ 94,956 |
Amortized Costs and Fair Value of Available-for-sale Securities | The amortized costs and fair value of available-for-sale March 31, 2018 December 31, 2017 Amortized Costs Gross Unrealized Gains Gross Unrealized Losses Fair Value Amortized Costs Gross Unrealized Gains Gross Unrealized Losses Fair Value Certificates of deposit (non-U.S.) $ 36,804 $ — $ — $ 36,804 $ 12,809 $ — $ — $ 12,809 Corporate bonds — — — — 11,003 86 (24 ) 11,065 Corporate obligations 13 — — 13 13 — — 13 Money markets 37 — — 37 38 — — 38 Mutual funds 86 — (4 ) 82 65 14 — 79 Other investments 5,757 175 (494 ) 5,438 4,941 744 (97 ) 5,588 Total $ 42,697 $ 175 $ (498 ) $ 42,374 $ 28,869 $ 844 $ (121 ) $ 29,592 |
Unrealized Losses on Available-For-Sale Securities and Fair Value | The following table represents the breakdown of the available-for-sale March 31, 2018 Less than 12 months 12 months or more Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Certificates of deposit (non-U.S.) $ 36,804 $ — $ — $ — $ 36,804 $ — Corporate obligations 13 — — — 13 — Money markets 37 — — — 37 — Mutual funds 82 (4 ) — — 82 (4 ) Other investments 5,438 (494 ) — — 5,438 (494 ) Total $ 42,374 $ (498 ) $ — $ — $ 42,374 $ (498 ) December 31, 2017 Less than 12 months 12 months or more Total Fair value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Certificates of deposit (non-U.S.) $ 12,809 $ — $ — $ — $ 12,809 $ — Corporate bonds 11,065 (24 ) — — 11,065 (24 ) Corporate obligations 13 — — — 13 — Money markets 38 — — — 38 — Mutual funds 79 — — — 79 — Other investments 5,588 (97 ) — — 5,588 (97 ) Total $ 29,592 $ (121 ) $ — $ — $ 29,592 $ (121 ) |
Sale and/or Maturity of Available-for-Sale Securities | The sale and/or maturity of available-for-sale Three Months Ended March 31, 2018 2017 Proceeds from sales $ 11,000 $ 91,885 Gross gains 5 10 Gross losses — — |
Contractual Maturities of Available-for-Sale Securities | The contractual maturities of the Company’s available-for-sale March 31, 2018 Amortized Cost Fair Value Within 1 year $ 36,804 $ 36,804 After 1 year through 5 years — — After 5 years through 10 years — — After 10 years 5,893 5,570 Total $ 42,697 $ 42,374 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Investment Assets (Excluding Equity and Cost Method Investments) and Derivatives Measured at Fair Value on Recurring Basis | The following table presents the Company’s investment assets (excluding equity and cost method investments) and derivatives measured at fair value on a recurring basis as of March 31, 2018 and December 31, 2017 (in thousands): March 31, 2018 Level 1 Level 2 Level 3 Total Certificates of deposit (non-U.S.) $ — $ 36,804 $ — $ 36,804 Corporate obligations — 13 — 13 Money markets 37 — — 37 Mutual funds 81 — — 81 Other investments — 5,438 — 5,438 Interest rate derivatives — asset derivatives — 16,890 — 16,890 Interest rate derivatives — liability derivatives — (998 ) — (998 ) Foreign currency contracts — asset position — 1,089 — 1,089 Foreign currency contracts — liability position — (11,991 ) — (11,991 ) December 31, 2017 Level 1 Level 2 Level 3 Total Certificates of deposit (non-U.S.) $ — $ 12,809 $ — $ 12,809 Corporate bonds — 11,065 — 11,065 Corporate obligations — 13 — 13 Money markets 38 — — 38 Mutual funds 79 — — 79 Other investments — 5,588 — 5,588 Interest rate derivatives — asset derivatives — 10,156 — 10,156 Interest rate derivatives — liability derivatives — (4,024 ) — (4,024 ) Foreign currency contracts — asset position — 405 — 405 Foreign currency contracts — liability position — (8,802 ) — (8,802 ) |
Derivative Instruments and He36
Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Impact of Derivative Financial Instruments | The table below presents the impact the Company’s derivative financial instruments had on Consolidated Statement of Operations (in thousands): Location of Gain(Loss) Reclassified from AOCI into Income Three months ended March 31, 2018 2017 Gain Recognized in OCI on Derivatives (Effective Portion) Interest expense $ 9,101 $ 2,054 Amounts Reclassified from Accumulated OCI into Income (Effective Portion) Interest expense 305 1,204 |
Fair Values of Derivative Instruments Designated as Hedging 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 designated as hedging instruments have been recognized and the related fair values of those derivatives (in thousands): Balance Sheet Location March 31, 2018 December 31, 2017 Derivatives designated as hedging instruments: Interest rate derivatives — asset derivatives Other current assets 5,286 3,590 Interest rate derivatives — asset derivatives Other assets 11,604 6,566 Interest rate derivatives — liability derivatives Other accrued liabilities (870 ) (3,053 ) Interest rate derivatives — liability derivatives Other noncurrent liabilities (128 ) (971 ) |
Fair Values of Derivative Instruments and Change in Fair Values of Derivative Not Designated as Hedging Instruments Recorded in Consolidated Balance Sheet and Consolidated Statements of Operations | The following table indicates the location on the Consolidated Balance Sheets in which the Company’s derivative assets and liabilities not designated as hedging instruments have been recognized and the related fair values of those derivatives (in thousands): Balance Sheet Location March 31, 2018 December 31, 2017 Derivatives not designated as hedging instruments: Foreign exchange contracts — asset derivatives Other current assets $ 1,089 $ 405 Foreign exchange contracts — liability derivatives Other accrued liabilities (11,810 ) (8,202 ) Foreign exchange contracts — liability derivatives Other non-current liabilities (181 ) (600 ) The change in the fair values of ARRIS’s derivatives not designated as hedging instruments recorded in the Consolidated Statements of Operations were as follows (in thousands): Three months ended March 31, Statement of Operations Location 2018 2017 Derivatives not designated as hedging instruments Foreign exchange contracts Loss on foreign currency $ 7,468 $ 6,707 |
Pension Benefits (Tables)
Pension Benefits (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Components of Net Periodic Pension Cost | Components of Net Periodic Pension Cost (in thousands): U.S. Pension Plans Non-U.S. Three months ended March 31, Three months ended March 31, 2018 2017 2018 2017 Service cost $ — $ — $ 158 $ 154 Interest cost 345 434 101 113 Return on assets (expected) (62 ) (224 ) (68 ) (75 ) Amortization of net actuarial loss(gain) 253 138 — — Net periodic pension cost $ 536 $ 348 $ 191 $ 192 |
Guarantees (Tables)
Guarantees (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Information Regarding Changes in ARRIS's Aggregate Product Warranty Liabilities | Information regarding the changes in ARRIS’s aggregate product warranty liabilities for the three months ended March 31, 2018 was as follows (in thousands): Balance at December 31, 2017 $ 76,089 Accruals related to warranties (including changes in assumptions) 9,043 Settlements made (in cash or in kind) (10,976 ) Balance at March 31, 2018 $ 74,156 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Components of Inventory Net of Reserves | The components of inventory were as follows, net of reserves (in thousands): March 31, 2018 December 31, Raw material $ 157,048 $ 149,328 Work in process 9,497 5,416 Finished goods 682,524 670,467 Total inventories, net $ 849,069 $ 825,211 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment, at Cost | Property, plant and equipment, at cost, consisted of the following (in thousands): March 31, 2018 December 31, 2017 Land $ 26,652 $ 68,562 Buildings and leasehold improvements 200,739 205,534 Machinery and equipment 452,675 466,325 680,066 740,421 Less: Accumulated depreciation (370,609 ) (367,954 ) Total property, plant and equipment, net $ 309,457 $ 372,467 |
Restructuring, Acquisition an41
Restructuring, Acquisition and Integration (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Summary of Changes to Restructuring Accrual | The following table represents a summary of and changes to the restructuring accrual, which is primarily composed of accrued severance and other employee costs and contractual obligations that related to excess leased facilities (in thousands): Employee severance & termination benefits Contractual obligations and other Write-off of property, plant and equipment Total Balance at December 31, 2017 $ 4,379 $ 3,302 $ — $ 7,681 Restructuring charges 10,483 95 10 10,588 Cash payments / adjustments (2,480 ) (566 ) — (3,046 ) Non-cash — — (10 ) (10 ) Balance at March 31, 2018 $ 12,382 $ 2,831 $ — $ 15,213 |
Indebtedness (Tables)
Indebtedness (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Summary of Indebtedness and Lease Financing Obligations | The following is a summary of indebtedness and lease financing obligations (in thousands): As of March 31, 2018 As of December 31, 2017 Current liabilities: Term A loan $ 19,550 $ 19,550 Term A-1 62,500 62,500 Term B-3 5,450 5,450 Lease finance obligation 913 870 Current obligations 88,413 88,370 Current deferred financing fees and debt discount (4,780 ) (4,811 ) 83,633 83,559 Noncurrent liabilities: Term A loan 361,675 366,562 Term A-1 1,156,250 1,171,875 Term B-3 534,100 535,463 Revolver — — Lease finance obligation 60,799 61,032 Noncurrent obligations 2,112,824 2,134,932 Noncurrent deferred financing fees and debt discount (17,504 ) (18,688 ) 2,095,320 2,116,244 Total $ 2,178,953 $ 2,199,803 |
Interest Rates on Senior Secured Credit Facilities | Interest rates on borrowings under the senior secured credit facilities are set forth in the table below. Rate As of March 31, 2018 Term A Loan LIBOR + 1.75 % 3.63 % Term A-1 LIBOR + 1.75 % 3.63 % Term B-3 LIBOR + 2.25 % 4.13 % Revolving Credit Facility (1) LIBOR + 1.75 % Not Applicable (1) Includes unused commitment fee of 0.30% and letter of credit fee of 1.75% not reflected in interest rate above. |
Scheduled Maturities of Contractual Debt Obligations | As of March 31, 2018, the scheduled maturities of the contractual debt obligations for the next five years are as follows (in thousands): 2018 (for the remaining nine months) $ 65,625 2019 87,500 2020 87,500 2021 87,500 2022 1,297,738 Thereafter 513,662 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Reportable Segments | The table below represents information about the Company’s reportable segments (in thousands): Three months ended March 31, 2018 2017 Net sales to external customers: CPE $ 875,226 $ 1,055,056 N&C 538,264 430,436 Enterprise 169,914 — Other (1) (5,694 ) (2,387 ) Total 1,577,710 1,483,105 Direct contribution: CPE 49,761 108,912 N&C 228,538 112,101 Enterprise 25,528 — Segment total 303,827 221,013 Corporate and unallocated costs (159,145 ) (121,356 ) Amortization of intangible assets (114,708 ) (93,646 ) Impairment of goodwill (3,400 ) — Integration, acquisition, restructuring and other (13,655 ) (10,095 ) Operating income (loss) 12,919 (4,084 ) Interest expense 22,525 19,683 Loss on investments 527 4,530 Loss on foreign currency 4,833 4,740 Interest income (1,532 ) (1,922 ) Other expense (income), net 109 (85 ) Loss before income taxes $ (13,543 ) $ (31,030 ) (1) Adjustments related acquisition accounting impacts related to deferred revenue and the warrant program |
Composition of Corporate and Unallocated Costs | The compositions of our corporate and unallocated costs that are reflected in the consolidated statement of operations were as follow (in thousands): Three months ended March 31, 2018 2017 Corporate and unallocated costs: Cost of sales $ 36,798 $ 14,473 Selling, general and administrative expenses 93,671 83,656 Research and development expenses 28,676 23,227 Total $ 159,145 $ 121,356 |
Sales Information (Tables)
Sales Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Summary of ARRIS' Sales Based on Geography of Our Customers | The table below set forth our sales based on geography of our customers (in thousands): Three months ended March 31, 2018 2017 U.S. $ 893,250 $ 958,477 Non-U.S. Americas, excluding U.S. 255,570 292,601 Asia Pacific 107,482 51,915 EMEA 321,408 180,112 Total non-U.S. $ 684,460 $ 524,628 Total sales $ 1,577,710 $ 1,483,105 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 2018 2017 Basic: Net loss attributable to ARRIS International plc. $ (13,600 ) $ (39,098 ) Weighted average shares outstanding 184,805 189,796 Basic loss per share $ (0.07 ) $ (0.21 ) Diluted: Net loss attributable to ARRIS International plc. $ (13,600 ) $ (39,098 ) Weighted average shares outstanding 184,805 189,796 Net effect of dilutive shares — — Total 184,805 189,796 Diluted loss per share $ (0.07 ) $ (0.21 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Summary of Operating Results of Income Tax | The Company reported the following operating results for the periods presented (in thousands): Three Months Ended March 31, 2018 2017 Income (loss) before income taxes $ (13,543 ) $ (31,030 ) Income tax (benefit) expense 3,489 10,001 Effective income tax rate (25.8 )% (32.2 )% |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Reconciliation of Equity | The following table provides a reconciliation of the beginning and ending carrying amounts of total equity, equity attributable to shareholders of ARRIS International plc and equity attributable to noncontrolling interest (in thousands): Ordinary Shares Capital in Excess of Par Value Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total ARRIS International plc stockholders’ equity Non- controlling Interest Total stockholders’ equity Balance, December 31, 2017 $ 2,768 $ 3,387,128 $ (225,881 ) $ 4,552 $ 3,168,567 $ 15,467 $ 3,184,034 Net loss — — (13,600 ) — (13,600 ) (3,432 ) (17,032 ) Other comprehensive income, net of tax — — — 7,993 7,993 (27 ) 7,966 Compensation under stock award plans — 19,256 — — 19,256 — 19,256 Issuance of ordinary shares and other 15 (13,969 ) — — (13,954 ) — (13,954 ) Repurchase of ordinary shares, net (14 ) — (24,986 ) — (25,000 ) — (25,000 ) Contribution from noncontrolling interest — — — — — 1,207 1,207 Cumulative effect adjustment to opening balance (1) — — (1,797 ) — (1,797 ) 2,694 897 Balance, March 31, 2018 $ 2,769 $ 3,392,415 $ (266,264 ) $ 12,545 $ 3,141,465 $ 15,909 $ 3,157,374 (1) Cumulative adjustment related to the adoption of accounting standards, see Note 3 Revenue from Contracts with Customers |
Accumulated Other Comprehensi48
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Changes in Accumulated Other Comprehensive Income (loss) by Component Net of Taxes | The following table summarizes the changes in accumulated other comprehensive income (loss) by component, net of taxes (in thousands): Available-for sale securities Derivative instruments Pension Cumulative translation adjustments Total Balance as of December 31, 2017 $ 662 $ 5,589 $ (8,993 ) $ 7,243 $ 4,501 Other comprehensive income before reclassifications (136 ) 7,158 — 782 7,804 Amounts reclassified from accumulated other comprehensive income (loss) (107 ) 240 29 — 162 Net current-period other comprehensive income (loss) (243 ) 7,398 29 782 7,966 Balance as of March 31, 2018 $ 419 $ 12,987 $ (8,964 ) $ 8,052 $ 12,467 Available-for sale securities Derivative instruments Pension Cumulative translation adjustments Total Balance as of December 31, 2016 $ 137 $ 671 $ (6,810 ) $ 9,293 $ 3,291 Other comprehensive income before reclassifications 96 1,420 — 4,981 6,497 Amounts reclassified from accumulated other comprehensive income (loss) (3 ) 832 11 — 840 Net current-period other comprehensive income 93 2,252 11 4,981 7,337 Balance as of March 31, 2017 $ 230 $ 2,923 $ (6,799 ) $ 14,274 $ 10,628 |
Repurchases of ARRIS Shares (Ta
Repurchases of ARRIS Shares (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Purchases of ARRIS Shares | The table below sets forth the purchases of ARRIS shares for the quarter ended March 31, 2018: Period Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (in thousands) January 2018 16,673 $ 25.97 — 225,000 February 2018 986,174 $ 25.35 986,174 200,000 March 2018 510,026 $ 26.55 — 500,000 (1) An aggregate of 526,699 shares shown in the table above were subject to equity awards that were cancelled for cash to satisfy employee minimum tax withholding obligations that arose on the vesting of the applicable restricted stock units. |
Organization and Basis of Pre50
Organization and Basis of Presentation - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2018Segment | |
Organization And Basis Of Presentation [Line Items] | |
Number of business segments operated | 3 |
Minimum | |
Organization And Basis Of Presentation [Line Items] | |
Voting shares percentage | 50.00% |
Revenue from Contracts with C51
Revenue from Contracts with Customers - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
Other Revenues [Line Items] | ||||
Stockholder's equity attributable to noncontrolling interest | $ 15,909 | $ 15,467 | ||
Net sales decreased | (1,577,710) | $ (1,483,105) | ||
Revenue, remaining performance obligation amount | $ 56,000 | |||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year | |||
Difference between Revenue Guidance in Effect before and after Topic 606 | ||||
Other Revenues [Line Items] | ||||
Net sales decreased | $ (16,500) | |||
Accounting Standards Update 2014-09 | ||||
Other Revenues [Line Items] | ||||
Cumulative effect on opening retained accumulated deficit | $ 1,800 | |||
Stockholder's equity attributable to noncontrolling interest | $ 2,700 |
Summary of Revenues from Contra
Summary of Revenues from Contracts with Customers by Major Product Line (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue, Major Customer [Line Items] | ||
Net sales | $ 1,577,710 | $ 1,483,105 |
Operating Segments | CPE | ||
Revenue, Major Customer [Line Items] | ||
Net sales | 875,226 | 1,055,056 |
Operating Segments | CPE | Broadband | ||
Revenue, Major Customer [Line Items] | ||
Net sales | 323,285 | |
Operating Segments | CPE | Video | ||
Revenue, Major Customer [Line Items] | ||
Net sales | 551,941 | |
Operating Segments | N&C | ||
Revenue, Major Customer [Line Items] | ||
Net sales | 538,264 | $ 430,436 |
Operating Segments | N&C | Network & Cloud | ||
Revenue, Major Customer [Line Items] | ||
Net sales | 453,001 | |
Operating Segments | N&C | Software And Services [Member] | ||
Revenue, Major Customer [Line Items] | ||
Net sales | 85,263 | |
Operating Segments | Enterprise | ||
Revenue, Major Customer [Line Items] | ||
Net sales | 169,914 | |
Operating Segments | Other Segments | ||
Revenue, Major Customer [Line Items] | ||
Net sales | $ (5,694) |
Summary of Revenues from Cont53
Summary of Revenues from Contracts with Customers by Geographic Areas (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | $ 1,577,710 | $ 1,483,105 |
UNITED STATES | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 893,250 | |
Americas, excluding U.S. | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 255,570 | |
Asia Pacific | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 107,482 | |
EMEA | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 321,408 | |
Non-US | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 684,460 | |
Operating Segments | CPE | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 875,226 | 1,055,056 |
Operating Segments | CPE | UNITED STATES | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 473,764 | |
Operating Segments | CPE | Americas, excluding U.S. | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 155,863 | |
Operating Segments | CPE | Asia Pacific | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 22,102 | |
Operating Segments | CPE | EMEA | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 223,497 | |
Operating Segments | CPE | Non-US | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 401,462 | |
Operating Segments | N&C | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 538,264 | $ 430,436 |
Operating Segments | N&C | UNITED STATES | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 326,973 | |
Operating Segments | N&C | Americas, excluding U.S. | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 93,852 | |
Operating Segments | N&C | Asia Pacific | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 55,755 | |
Operating Segments | N&C | EMEA | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 61,684 | |
Operating Segments | N&C | Non-US | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 211,291 | |
Operating Segments | Enterprise | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 169,914 | |
Operating Segments | Enterprise | UNITED STATES | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 95,716 | |
Operating Segments | Enterprise | Americas, excluding U.S. | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 5,852 | |
Operating Segments | Enterprise | Asia Pacific | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 29,625 | |
Operating Segments | Enterprise | EMEA | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 38,721 | |
Operating Segments | Enterprise | Non-US | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 74,198 | |
Operating Segments | Other Segments | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | (5,694) | |
Operating Segments | Other Segments | UNITED STATES | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | (3,203) | |
Operating Segments | Other Segments | Americas, excluding U.S. | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 3 | |
Operating Segments | Other Segments | EMEA | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | (2,494) | |
Operating Segments | Other Segments | Non-US | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | $ (2,491) |
Comparison of Financial Stateme
Comparison of Financial Statements to Pro-Forma Amounts had Previous Guidance been in Effect (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | ||
Assets | ||||
Unbilled receivable | $ 26,005 | |||
Other current assets | 172,993 | $ 145,953 | ||
Deferred income taxes | 131,417 | $ 115,436 | ||
Liabilities | ||||
Deferred revenue (current and non-current) | 199,781 | |||
Revenues | ||||
Net sales | 1,577,710 | $ 1,483,105 | ||
Costs and expenses | ||||
Cost of sales | 1,102,027 | 1,145,848 | ||
Income tax expense | 3,489 | 10,001 | ||
Consolidated net loss | (17,032) | (41,031) | ||
Net loss attributable to non-controlling interest | (3,432) | (1,933) | ||
Net loss attributable to ARRIS International plc | $ (13,600) | $ (39,098) | ||
Net loss per ordinary share: | ||||
Basic | [1] | $ (0.07) | $ (0.21) | |
Diluted | [1] | $ (0.07) | $ (0.21) | |
Pro Forma | ||||
Assets | ||||
Unbilled receivable | $ 17,572 | |||
Other current assets | 172,929 | |||
Deferred income taxes | 128,786 | |||
Liabilities | ||||
Deferred revenue (current and non-current) | 207,915 | |||
Revenues | ||||
Net sales | 1,561,143 | |||
Costs and expenses | ||||
Cost of sales | 1,102,091 | |||
Income tax expense | 6,120 | |||
Consolidated net loss | (36,294) | |||
Net loss attributable to non-controlling interest | (3,590) | |||
Net loss attributable to ARRIS International plc | $ (32,704) | |||
Net loss per ordinary share: | ||||
Basic | $ (0.18) | |||
Diluted | $ (0.18) | |||
[1] | Calculated based on net loss attributable to shareowners of ARRIS International plc |
Contract with Customer, Asset a
Contract with Customer, Asset and Liability (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Jan. 01, 2018 | |
Contract with Customer Asset and Liability [Line Items] | ||
Unbilled receivables | $ 26,005 | |
Deferred revenue (current and non-current) | 199,781 | |
Accounting Standards Update 2014-09 | ||
Contract with Customer Asset and Liability [Line Items] | ||
Unbilled receivables | $ 14,837 | |
Deferred revenue (current and non-current) | $ 168,757 | |
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | ||
Contract with Customer Asset and Liability [Line Items] | ||
Unbilled receivables | 11,218 | |
Deferred revenue (current and non-current) | 31,024 | |
Revenue recognized in the period from amounts included in deferred revenue at the beginning of the period | $ 43,611 |
Business Acquisition - Addition
Business Acquisition - Additional information (Detail) - USD ($) $ in Thousands | Dec. 01, 2017 | Mar. 31, 2018 | Dec. 31, 2017 |
Equity, Class of Treasury Stock [Line Items] | |||
Goodwill | $ 2,336,820 | $ 2,278,512 | |
Decrease in amortization as a result of measurement period changes for intangible assets | 1,500 | ||
Ruckus Wireless and ICX Switch business (Ruckus Networks) | |||
Equity, Class of Treasury Stock [Line Items] | |||
Cash paid for acquisition | $ 761,000 | ||
Goodwill | 380,080 | 380,100 | |
Cash settlement of stock-based awards | $ 61,500 | ||
Acquired intangible assets | 400,900 | 400,900 | |
Trade accounts receivable, Fair value | 32,600 | ||
Accounts receivable, gross contractual amount | 33,800 | ||
Accounts receivable, uncollectible receivable amount | $ 1,200 | ||
Acquisition related costs | 200 | ||
Revenue contributed | $ 169,900 |
Summary of Fair Value of Consid
Summary of Fair Value of Consideration Transferred (Detail) - Ruckus Wireless and ICX Switch business (Ruckus Networks) $ in Thousands | Dec. 01, 2017USD ($) | |
Business Acquisition [Line Items] | ||
Cash consideration | $ 779,743 | |
Estimated working capital adjustments | (16,371) | |
Non-cash consideration | (2,359) | [1] |
Total consideration transferred | $ 761,013 | |
[1] | Non-cash consideration represents a $2.4 million settlement of preexisting payables and receivables between Ruckus Networks and ARRIS. |
Summary of Fair Value of Cons58
Summary of Fair Value of Consideration Transferred (Parenthetical) (Detail) $ in Thousands | Dec. 01, 2017USD ($) | |
Ruckus Wireless and ICX Switch business (Ruckus Networks) | ||
Business Acquisition [Line Items] | ||
Business acquisition non-cash consideration | $ 2,359 | [1] |
[1] | Non-cash consideration represents a $2.4 million settlement of preexisting payables and receivables between Ruckus Networks and ARRIS. |
Summary of Estimated Fair Value
Summary of Estimated Fair Values of Net Assets Acquired (Detail) - USD ($) $ in Thousands | Dec. 01, 2017 | Mar. 31, 2018 | Dec. 31, 2017 | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 2,336,820 | $ 2,278,512 | ||
Ruckus Wireless and ICX Switch business (Ruckus Networks) | ||||
Business Acquisition [Line Items] | ||||
Total estimated consideration transferred | $ 761,013 | |||
Cash and cash equivalents | 18,958 | |||
Accounts receivable, net | 32,647 | |||
Inventories | 48,436 | |||
Prepaids & other | 4,064 | |||
Property, plant & equipment | 35,514 | |||
Intangible assets | 400,900 | 400,900 | ||
Other assets | 39,528 | |||
Accounts payable and accrued liabilities | (14,866) | |||
Other current liabilities | (12,611) | |||
Deferred revenue | (46,748) | |||
Noncurrent deferred income tax liabilities | (84,807) | |||
Other noncurrent liabilities | (40,082) | |||
Net assets acquired | 380,933 | |||
Goodwill | 380,080 | $ 380,100 | ||
Ruckus Wireless and ICX Switch business (Ruckus Networks) | As Reported | ||||
Business Acquisition [Line Items] | ||||
Total estimated consideration transferred | [1] | 761,013 | ||
Cash and cash equivalents | [1] | 18,958 | ||
Accounts receivable, net | [1] | 32,940 | ||
Inventories | [1] | 48,897 | ||
Prepaids & other | [1] | 4,836 | ||
Property, plant & equipment | [1] | 33,500 | ||
Intangible assets | [1] | 472,500 | ||
Other assets | [1] | 39,528 | ||
Accounts payable and accrued liabilities | [1] | (17,216) | ||
Other current liabilities | [1] | (9,666) | ||
Deferred revenue | [1] | (47,718) | ||
Noncurrent deferred income tax liabilities | [1] | (92,233) | ||
Other noncurrent liabilities | [1] | (41,347) | ||
Net assets acquired | [1] | 442,979 | ||
Goodwill | [1] | 318,034 | ||
Ruckus Wireless and ICX Switch business (Ruckus Networks) | Adjustments | ||||
Business Acquisition [Line Items] | ||||
Accounts receivable, net | (293) | |||
Inventories | (461) | |||
Prepaids & other | (772) | |||
Property, plant & equipment | 2,014 | |||
Intangible assets | (71,600) | |||
Accounts payable and accrued liabilities | 2,350 | |||
Other current liabilities | (2,945) | |||
Deferred revenue | 970 | |||
Noncurrent deferred income tax liabilities | 7,426 | |||
Other noncurrent liabilities | 1,265 | |||
Net assets acquired | (62,046) | |||
Goodwill | $ 62,046 | |||
[1] | As previously reported as of December 31, 2017 |
Acquired Intangible Assets (Det
Acquired Intangible Assets (Detail) - Ruckus Wireless and ICX Switch business (Ruckus Networks) - USD ($) $ in Thousands | Dec. 01, 2017 | Mar. 31, 2018 |
Business Acquisition [Line Items] | ||
Preliminary Estimated Fair value | $ 400,900 | $ 400,900 |
Technology and Patents | ||
Business Acquisition [Line Items] | ||
Preliminary Estimated Fair value | $ 192,700 | |
Estimated Weighted Average Life (years) | 6 years | |
Customer Contracts & Relationships | ||
Business Acquisition [Line Items] | ||
Preliminary Estimated Fair value | $ 119,300 | |
Estimated Weighted Average Life (years) | 10 years | |
Trademarks and Trade Names | ||
Business Acquisition [Line Items] | ||
Preliminary Estimated Fair value | $ 9,600 | |
Estimated Weighted Average Life (years) | 10 years | |
Backlog | ||
Business Acquisition [Line Items] | ||
Preliminary Estimated Fair value | $ 21,600 | |
Estimated Weighted Average Life (years) | 3 months 19 days | |
In-process Research and Development | ||
Business Acquisition [Line Items] | ||
Preliminary Estimated Fair value | $ 18,000 | |
Trade Names | ||
Business Acquisition [Line Items] | ||
Preliminary Estimated Fair value | $ 39,700 |
Goodwill and Intangible Asset61
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 01, 2017 | |
Schedule Of Goodwill And Intangible Assets [Line Items] | |||
Goodwill | $ 2,336,820 | $ 2,278,512 | |
Goodwill Impairment | 3,400 | ||
Cloud Tv Reporting Unit | |||
Schedule Of Goodwill And Intangible Assets [Line Items] | |||
Goodwill Impairment | 3,400 | $ 51,200 | |
Cloud Tv Reporting Unit | Non-controlling Interest | |||
Schedule Of Goodwill And Intangible Assets [Line Items] | |||
Goodwill Impairment | 1,200 | ||
Ruckus Wireless and ICX Switch business (Ruckus Networks) | |||
Schedule Of Goodwill And Intangible Assets [Line Items] | |||
Goodwill | 380,100 | $ 380,080 | |
Acquired intangible assets | $ 400,900 | $ 400,900 |
Carrying Amount of Goodwill (De
Carrying Amount of Goodwill (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Line Items] | ||
Balance as of beginning of period | $ 2,278,512 | |
Goodwill acquired, net | 62,046 | |
Impairment | (3,400) | |
Other | (338) | |
Balance as of end of period | 2,336,820 | $ 2,278,512 |
Goodwill | 2,770,076 | 2,708,368 |
Accumulated impairment losses | (433,256) | (429,856) |
CPE | ||
Goodwill [Line Items] | ||
Balance as of beginning of period | 1,386,680 | |
Other | (338) | |
Balance as of end of period | 1,386,342 | 1,386,680 |
Goodwill | 1,386,342 | 1,386,680 |
N & C | ||
Goodwill [Line Items] | ||
Balance as of beginning of period | 573,798 | |
Impairment | (3,400) | |
Balance as of end of period | 570,398 | 573,798 |
Goodwill | 1,003,654 | 1,003,654 |
Accumulated impairment losses | (433,256) | (429,856) |
Enterprise | ||
Goodwill [Line Items] | ||
Balance as of beginning of period | 318,034 | |
Goodwill acquired, net | 62,046 | |
Balance as of end of period | 380,080 | 318,034 |
Goodwill | $ 380,080 | $ 318,034 |
Gross Carrying Amount and Accum
Gross Carrying Amount and Accumulated Amortization of Acquired Intangible Assets (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Intangible Assets [Line Items] | ||
Definite-lived intangible assets, Gross Amount | $ 3,237,583 | $ 3,316,835 |
Gross Amount | 3,299,383 | 3,370,935 |
Definite-lived intangible assets, Accumulated Amortization | 1,716,084 | 1,599,573 |
Definite-lived intangible assets, Net Book Value | 1,521,499 | 1,717,262 |
Net Book Value | 1,583,299 | 1,771,362 |
Indefinite-lived intangible assets, Gross Amount | 61,800 | 54,100 |
Indefinite-lived intangible assets | 61,800 | 54,100 |
Trade Names | ||
Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets, Gross Amount | 39,700 | |
Indefinite-lived intangible assets | 39,700 | |
In-process Research and Development | ||
Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets, Gross Amount | 22,100 | 54,100 |
Indefinite-lived intangible assets | 22,100 | 54,100 |
Customer relationships | ||
Intangible Assets [Line Items] | ||
Definite-lived intangible assets, Gross Amount | 1,691,511 | 1,672,470 |
Definite-lived intangible assets, Accumulated Amortization | 821,766 | 780,655 |
Definite-lived intangible assets, Net Book Value | 869,745 | 891,815 |
Developed technology, patents & licenses | ||
Intangible Assets [Line Items] | ||
Definite-lived intangible assets, Gross Amount | 1,449,900 | 1,521,893 |
Definite-lived intangible assets, Accumulated Amortization | 825,996 | 771,200 |
Definite-lived intangible assets, Net Book Value | 623,904 | 750,693 |
Trademarks and Trade Names | ||
Intangible Assets [Line Items] | ||
Definite-lived intangible assets, Gross Amount | 74,572 | 87,472 |
Definite-lived intangible assets, Accumulated Amortization | 47,365 | 41,885 |
Definite-lived intangible assets, Net Book Value | 27,207 | 45,587 |
Backlog | ||
Intangible Assets [Line Items] | ||
Definite-lived intangible assets, Gross Amount | 21,600 | 35,000 |
Definite-lived intangible assets, Accumulated Amortization | 20,957 | 5,833 |
Definite-lived intangible assets, Net Book Value | $ 643 | $ 29,167 |
Schedule of Amortization of Acq
Schedule of Amortization of Acquired Intangible Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of acquired intangible assets | $ 116,595 | $ 95,306 | |
Cost of sales | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of acquired intangible assets | 890 | 711 | |
Selling, general and administrative expenses | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of acquired intangible assets | 997 | 949 | |
Amortization of acquired intangible assets | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of acquired intangible assets | [1] | $ 114,708 | $ 93,646 |
[1] | Reflects amortization expense for the intangible assets acquired through business combinations. |
Estimated Total Amortization Ex
Estimated Total Amortization Expense for Finite-Lived Intangibles for Next Five Fiscal Years (Detail) $ in Thousands | Mar. 31, 2018USD ($) |
Finite Lived Intangible Assets Amortization Expense [Line Items] | |
2018 (for the remaining nine months) | $ 261,272 |
2,019 | 317,019 |
2,020 | 305,224 |
2,021 | 170,437 |
2,022 | 134,133 |
Thereafter | $ 333,414 |
Investments (Detail)
Investments (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Available-for-sale securities | $ 36,804 | $ 23,874 |
Noncurrent Assets: | ||
Available-for-sale securities | 5,570 | 5,718 |
Equity method investments | 21,515 | 22,021 |
Cost method investments | 10,092 | 10,092 |
Other investments | 32,681 | 33,251 |
Total classified as non-current assets | 69,858 | 71,082 |
Total | $ 106,662 | $ 94,956 |
Amortized Costs and Fair Value
Amortized Costs and Fair Value of Available-for-sale Securities (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, Amortized Costs | $ 42,697 | $ 28,869 |
Available-for-sale securities, Gross Unrealized Gains | 175 | 844 |
Available-for-sale securities, Gross Unrealized Losses | (498) | (121) |
Available-for-sale securities, Fair Value | 42,374 | 29,592 |
Available-for-sale securities, Less than 12 months, Fair Value | 42,374 | 29,592 |
Available-for-sale securities, Less than 12 months, Unrealized Losses | (498) | (121) |
Available-for-sale securities, 12 months or more, Fair Value | 0 | 0 |
Available-for-sale securities, 12 months or more, Unrealized Losses | 0 | 0 |
Total, Fair Value | 42,374 | 29,592 |
Total, Unrealized Losses | (498) | (121) |
Certificates of deposit (non-U.S.) | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, Amortized Costs | 36,804 | 12,809 |
Available-for-sale securities, Fair Value | 36,804 | 12,809 |
Available-for-sale securities, Less than 12 months, Fair Value | 36,804 | 12,809 |
Available-for-sale securities, 12 months or more, Fair Value | 0 | 0 |
Available-for-sale securities, 12 months or more, Unrealized Losses | 0 | 0 |
Total, Fair Value | 36,804 | 12,809 |
Corporate bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, Amortized Costs | 11,003 | |
Available-for-sale securities, Gross Unrealized Gains | 86 | |
Available-for-sale securities, Gross Unrealized Losses | (24) | |
Available-for-sale securities, Fair Value | 11,065 | |
Available-for-sale securities, Less than 12 months, Fair Value | 11,065 | |
Available-for-sale securities, Less than 12 months, Unrealized Losses | (24) | |
Available-for-sale securities, 12 months or more, Fair Value | 0 | |
Available-for-sale securities, 12 months or more, Unrealized Losses | 0 | |
Total, Fair Value | 11,065 | |
Total, Unrealized Losses | (24) | |
Corporate obligations | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, Amortized Costs | 13 | 13 |
Available-for-sale securities, Fair Value | 13 | 13 |
Available-for-sale securities, Less than 12 months, Fair Value | 13 | 13 |
Available-for-sale securities, 12 months or more, Fair Value | 0 | 0 |
Available-for-sale securities, 12 months or more, Unrealized Losses | 0 | 0 |
Total, Fair Value | 13 | 13 |
Money markets | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, Amortized Costs | 37 | 38 |
Available-for-sale securities, Fair Value | 37 | 38 |
Available-for-sale securities, Less than 12 months, Fair Value | 37 | 38 |
Available-for-sale securities, 12 months or more, Fair Value | 0 | 0 |
Available-for-sale securities, 12 months or more, Unrealized Losses | 0 | 0 |
Total, Fair Value | 37 | 38 |
Mutual funds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, Amortized Costs | 86 | 65 |
Available-for-sale securities, Gross Unrealized Gains | 14 | |
Available-for-sale securities, Gross Unrealized Losses | (4) | |
Available-for-sale securities, Fair Value | 82 | 79 |
Available-for-sale securities, Less than 12 months, Fair Value | 82 | 79 |
Available-for-sale securities, Less than 12 months, Unrealized Losses | (4) | |
Available-for-sale securities, 12 months or more, Fair Value | 0 | 0 |
Available-for-sale securities, 12 months or more, Unrealized Losses | 0 | 0 |
Total, Fair Value | 82 | 79 |
Total, Unrealized Losses | (4) | |
Other investments | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, Amortized Costs | 5,757 | 4,941 |
Available-for-sale securities, Gross Unrealized Gains | 175 | 744 |
Available-for-sale securities, Gross Unrealized Losses | (494) | (97) |
Available-for-sale securities, Fair Value | 5,438 | 5,588 |
Available-for-sale securities, Less than 12 months, Fair Value | 5,438 | 5,588 |
Available-for-sale securities, Less than 12 months, Unrealized Losses | (494) | (97) |
Available-for-sale securities, 12 months or more, Fair Value | 0 | 0 |
Available-for-sale securities, 12 months or more, Unrealized Losses | 0 | 0 |
Total, Fair Value | 5,438 | 5,588 |
Total, Unrealized Losses | $ (494) | $ (97) |
Sale and_or Maturity of Availab
Sale and/or Maturity of Available-for-Sale Securities (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Proceeds from sales | $ 11,000 | $ 91,885 |
Gross gains | 5 | 10 |
Gross losses | $ 0 | $ 0 |
Contractual Maturities of Avail
Contractual Maturities of Available-for-Sale Securities (Detail) $ in Thousands | Mar. 31, 2018USD ($) |
Amortized Cost | |
Within 1 year | $ 36,804 |
After 1 year through 5 years | 0 |
After 5 years through 10 years | 0 |
After 10 years | 5,893 |
Total | 42,697 |
Fair Value | |
Within 1 year | 36,804 |
After 1 year through 5 years | 0 |
After 5 years through 10 years | 0 |
After 10 years | 5,570 |
Total | $ 42,374 |
Investments - Additional Inform
Investments - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Investment Holdings [Line Items] | ||
Other-than-temporary impairment losses recognized for the period | $ 0 | $ 2,800,000 |
Investment Assets (Excluding Eq
Investment Assets (Excluding Equity and Cost Method Investments) and Derivatives Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Derivative Financial Instruments, Liabilities | Interest rate derivatives | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of liabilities, recurring basis | $ (998) | $ (4,024) |
Derivative Financial Instruments, Liabilities | Foreign currency contracts | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of liabilities, recurring basis | (11,991) | (8,802) |
Derivative Financial Instruments, Assets | Interest rate derivatives | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 16,890 | 10,156 |
Derivative Financial Instruments, Assets | Foreign currency contracts | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 1,089 | 405 |
Certificates of deposit (non-U.S.) | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 36,804 | 12,809 |
Corporate bonds | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 11,065 | |
Corporate obligations | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 13 | 13 |
Money markets | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 37 | 38 |
Mutual funds | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 81 | 79 |
Other Investments | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 5,438 | 5,588 |
Level 1 | Money markets | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 37 | 38 |
Level 1 | Mutual funds | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 81 | 79 |
Level 2 | Derivative Financial Instruments, Liabilities | Interest rate derivatives | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of liabilities, recurring basis | (998) | (4,024) |
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 | (11,991) | (8,802) |
Level 2 | Derivative Financial Instruments, Assets | Interest rate derivatives | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 16,890 | 10,156 |
Level 2 | Derivative Financial Instruments, Assets | Foreign currency contracts | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 1,089 | 405 |
Level 2 | Certificates of deposit (non-U.S.) | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 36,804 | 12,809 |
Level 2 | Corporate bonds | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 11,065 | |
Level 2 | Corporate obligations | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | 13 | 13 |
Level 2 | Other Investments | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Fair value of assets, recurring basis | $ 5,438 | $ 5,588 |
Fair Value Measurement - Additi
Fair Value Measurement - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Goodwill Impairment | $ 3,400 | |
Cloud Tv Reporting Unit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Goodwill Impairment | 3,400 | $ 51,200 |
Cloud Tv Reporting Unit | Trade Names | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impairment of intangible assets | 3,800 | |
Non-controlling Interest | Cloud Tv Reporting Unit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Goodwill Impairment | 1,200 | |
Impairment of intangible assets including goodwill | $ 1,200 | $ 19,300 |
Derivative Instruments and He73
Derivative Instruments and Hedging Activities - Additional Information (Detail) € in Millions, £ in Millions, R in Millions, $ in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||
Mar. 31, 2018USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Mar. 31, 2018CAD ($) | Mar. 31, 2018AUD ($) | Mar. 31, 2018GBP (£) | Mar. 31, 2018EUR (€) | Mar. 31, 2018ZAR (R) | Dec. 31, 2017USD ($) | |
Derivatives, Fair Value [Line Items] | |||||||||
Hedge ineffectiveness in earnings | $ 0 | ||||||||
Amount estimated reclassified as an increase to interest expense | 4,600,000 | ||||||||
Fair value of derivatives in net asset position | $ 15,900,000 | $ 6,100,000 | |||||||
Maximum time frame for derivatives | 14 months | ||||||||
2.25% Interest Rate Swaps Matures on March 31, 2020 | Cash Flow Hedging | |||||||||
Derivatives, Fair Value [Line Items] | |||||||||
Variable-rate debt upon conversion | $ 625,000,000 | ||||||||
Fixed interest rate | 2.25% | ||||||||
Maturity date | Mar. 31, 2020 | ||||||||
Interest rate swap | Cash Flow Hedging | |||||||||
Derivatives, Fair Value [Line Items] | |||||||||
Derivative notional amount | $ 1,075,000,000 | ||||||||
2.46% Interest Rate Swaps Matures on June 30, 2022 | Cash Flow Hedging | |||||||||
Derivatives, Fair Value [Line Items] | |||||||||
Variable-rate debt upon conversion | $ 600,000,000 | ||||||||
Fixed interest rate | 2.46% | 2.46% | 2.46% | 2.46% | 2.46% | 2.46% | |||
Maturity date | Jun. 30, 2022 | ||||||||
Inception date | Mar. 31, 2020 | ||||||||
Forward Contracts | Euro Member Countries, Euro | |||||||||
Derivatives, Fair Value [Line Items] | |||||||||
Derivative notional amount | € | € 50 | ||||||||
Forward Contracts | Australia, Dollars | |||||||||
Derivatives, Fair Value [Line Items] | |||||||||
Derivative notional amount | $ 30 | ||||||||
Forward Contracts | Canada, Dollars | |||||||||
Derivatives, Fair Value [Line Items] | |||||||||
Derivative notional amount | $ 35 | ||||||||
Forward Contracts | United Kingdom, Pounds | |||||||||
Derivatives, Fair Value [Line Items] | |||||||||
Derivative notional amount | £ | £ 75 | ||||||||
Forward Contracts | South Africa, Rand | |||||||||
Derivatives, Fair Value [Line Items] | |||||||||
Derivative notional amount | R | R 640.9 | ||||||||
Term Loan A-1 Facility | 0.98% Interest Rate Swaps Matures on March 31, 2020 | Cash Flow Hedging | |||||||||
Derivatives, Fair Value [Line Items] | |||||||||
Variable-rate debt upon conversion | $ 450,000,000 | ||||||||
Fixed interest rate | 0.98% | ||||||||
Maturity date | Mar. 31, 2020 |
Impact of Derivative Financial
Impact of Derivative Financial Instruments (Detail) - Interest Expense - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivative [Line Items] | ||
Gain Recognized in OCI on Derivatives (Effective Portion) | $ 9,101 | $ 2,054 |
Amounts Reclassified from Accumulated OCI into Income (Effective Portion) | $ 305 | $ 1,204 |
Fair Values of Derivative Desig
Fair Values of Derivative Designated as Hedging Instruments Recorded in Consolidated Balance Sheet (Detail) - Interest rate derivatives - Derivatives Designated as Hedging Instruments - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets, Fair Value | $ 5,286 | $ 3,590 |
Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets, Fair Value | 11,604 | 6,566 |
Other accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities, Fair Value | (870) | (3,053) |
Other long-term liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities, Fair Value | $ (128) | $ (971) |
Fair Values of Derivative Not D
Fair Values of Derivative Not Designated as Hedging Instruments Recorded in Consolidated Balance Sheet (Detail) - Foreign currency contracts - Derivatives Not Designated as Hedging Instruments - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets, Fair Value | $ 1,089 | $ 405 |
Other accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities, Fair Value | (11,810) | (8,202) |
Other long-term liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities, Fair Value | $ (181) | $ (600) |
Change in Fair Values of Deriva
Change in Fair Values of Derivative Not Designated as Hedging Instruments Recorded in Consolidated Statements of Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Foreign currency contracts | (Gain)/loss on foreign currency | Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Loss on foreign currency | $ 7,468 | $ 6,707 |
Components of Net Periodic Pens
Components of Net Periodic Pension Cost (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
U.S. Pension Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | $ 345 | $ 434 |
Return on assets (expected) | (62) | (224) |
Amortization of net actuarial loss(gain) | 253 | 138 |
Net periodic pension cost | 536 | 348 |
Non-U.S. Pension Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 158 | 154 |
Interest cost | 101 | 113 |
Return on assets (expected) | (68) | (75) |
Net periodic pension cost | $ 191 | $ 192 |
Pension Benefits - Additional I
Pension Benefits - Additional Information (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Taiwan | Non-U.S. Pension Plans | |
Retirement Plans [Line Items] | |
Contribution by the company | $ 1.1 |
Information Regarding Changes i
Information Regarding Changes in ARRIS's Aggregate Product Warranty Liabilities (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Product Warranty Liability [Line Items] | |
Beginning balance | $ 76,089 |
Accruals related to warranties (including changes in assumptions) | 9,043 |
Settlements made (in cash or in kind) | (10,976) |
Ending balance | $ 74,156 |
Components of Inventory Net of
Components of Inventory Net of Reserves (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Inventory [Line Items] | ||
Raw material | $ 157,048 | $ 149,328 |
Work in process | 9,497 | 5,416 |
Finished goods | 682,524 | 670,467 |
Total inventories, net | $ 849,069 | $ 825,211 |
Property, Plant and Equipment,
Property, Plant and Equipment, at Cost (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment, gross | $ 680,066 | $ 740,421 |
Less: Accumulated depreciation | (370,609) | (367,954) |
Total property, plant and equipment, net | 309,457 | 372,467 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment, gross | 26,652 | 68,562 |
Buildings and Leasehold Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment, gross | 200,739 | 205,534 |
Machinery and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment, gross | $ 452,675 | $ 466,325 |
Property, Plant and Equipment -
Property, Plant and Equipment - Additional Information (Detail) - Manufacturing facility in New Taipei City, Taiwan - Discontinued Operations, Held-for-sale - USD ($) $ in Millions | 1 Months Ended | |
Feb. 28, 2018 | Mar. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Aggregate consideration value | $ 81.3 | |
Environmental obligation | 7 | |
Land and Building | ||
Property, Plant and Equipment [Line Items] | ||
Sell of Facility and equipment | 75 | |
Machinery and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Sell of Facility and equipment | $ 6.3 | |
Other current assets | ||
Property, Plant and Equipment [Line Items] | ||
Total assets held for sale | $ 57.2 |
Summary of Changes to Restructu
Summary of Changes to Restructuring Accrual (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Restructuring Cost and Reserve [Line Items] | |||
Beginning Balance | $ 7,681 | ||
Restructuring charges | 10,588 | ||
Cash payments / adjustments | (3,046) | ||
Non-cash expense | (10) | ||
Ending Balance | 15,213 | $ 7,681 | |
Employee severance & termination benefits | |||
Restructuring Cost and Reserve [Line Items] | |||
Beginning Balance | 4,379 | ||
Restructuring charges | 10,483 | 13,300 | $ 96,300 |
Cash payments / adjustments | (2,480) | ||
Ending Balance | 12,382 | 4,379 | |
Contractual obligations and other | |||
Restructuring Cost and Reserve [Line Items] | |||
Beginning Balance | 3,302 | ||
Restructuring charges | 95 | 5,700 | |
Cash payments / adjustments | (566) | ||
Ending Balance | 2,831 | $ 3,302 | |
Write-off of property, plant and equipment | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 10 | ||
Non-cash expense | $ (10) |
Restructuring, Acquisition an85
Restructuring, Acquisition and Integration - Additional Information (Detail) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018USD ($)Employee | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($)FacilityEmployee | Dec. 31, 2016USD ($)Position | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 10,588 | |||
Integration, acquisition and restructuring | 13,655 | $ 10,095 | ||
Ruckus Wireless and ICX Switch business (Ruckus Networks) | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Acquisition expense | 200 | 2,300 | ||
Employee severance & termination benefits | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 10,483 | $ 13,300 | $ 96,300 | |
Total number of positions affected by the restructuring plan | 850 | 195 | 1,545 | |
Contractual obligations and other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 95 | $ 5,700 | ||
Leased properties, remaining expiration terms | 2,021 | |||
Number of facilities | Facility | 3 | |||
Integration Related | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Integration, acquisition and restructuring | $ 2,900 | $ 1,300 |
Summary of Indebtedness and Lea
Summary of Indebtedness and Lease Financing Obligations (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Debt and Capital Lease Obligations [Line Items] | ||
Current obligations | $ 88,413 | $ 88,370 |
Current deferred financing fees and debt discount | (4,780) | (4,811) |
Current portion of long-term debt and financing lease obligation | 83,633 | 83,559 |
Lease finance obligation | 2,112,824 | 2,134,932 |
Noncurrent deferred financing fees and debt discount | (17,504) | (18,688) |
Long-term debt and financing lease obligation, net of current portion | 2,095,320 | 2,116,244 |
Total | 2,178,953 | 2,199,803 |
Term Loan A | ||
Debt and Capital Lease Obligations [Line Items] | ||
Current obligations | 19,550 | 19,550 |
Noncurrent obligations | 361,675 | 366,562 |
Term Loan A-1 Facility | ||
Debt and Capital Lease Obligations [Line Items] | ||
Current obligations | 62,500 | 62,500 |
Noncurrent obligations | 1,156,250 | 1,171,875 |
Term Loan B3 Facility | ||
Debt and Capital Lease Obligations [Line Items] | ||
Current obligations | 5,450 | 5,450 |
Noncurrent obligations | 534,100 | 535,463 |
Lease Finance obligation | ||
Debt and Capital Lease Obligations [Line Items] | ||
Current obligations | 913 | 870 |
Lease finance obligation | $ 60,799 | $ 61,032 |
Indebtedness - Additional Infor
Indebtedness - Additional Information (Detail) - USD ($) $ in Millions | Dec. 20, 2017 | Oct. 17, 2017 | Apr. 26, 2017 | Mar. 31, 2018 | Oct. 16, 2017 | |
Term Loan B | ||||||
Debt Instrument [Line Items] | ||||||
Loan facility principal amount | $ 545 | |||||
Term Loan B2 Facility | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, maturity date | Apr. 30, 2024 | |||||
Minimum | Term Loan B2 Facility | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 2.25% | |||||
Minimum | Term Loan B2 Facility | Prime Rate | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 1.25% | |||||
Maximum | Term Loan B2 Facility | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 2.50% | |||||
Maximum | Term Loan B2 Facility | Prime Rate | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 1.50% | |||||
Senior Secured Credit Facilities | ||||||
Debt Instrument [Line Items] | ||||||
Mandatory payments related to senior secured credit facilities | $ 21.9 | |||||
Senior Secured Credit Facilities | Term Loan A | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 1.75% | |||||
Senior Secured Credit Facilities | Revolving Facility | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, basis spread on variable rate | [1] | 1.75% | ||||
Senior Secured Credit Facilities | Term Loan B3 Facility | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 2.25% | |||||
Senior Secured Credit Facilities | Third Amendment | ||||||
Debt Instrument [Line Items] | ||||||
Cash that can be used to offset indebtedness | $ 500 | $ 200 | ||||
Senior Secured Credit Facilities | Third Amendment | Term Loan A | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, maturity date | Oct. 17, 2022 | |||||
Senior Secured Credit Facilities | Third Amendment | Revolving Facility | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, maturity date | Oct. 17, 2022 | |||||
Senior Secured Credit Facilities | Third Amendment | Refinancing Term Loan A | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility | $ 391 | |||||
Senior Secured Credit Facilities | Third Amendment | Refinancing Term Loan A1 Facility | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility | 1,250 | |||||
Senior Secured Credit Facilities | Third Amendment | Refinancing Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility | $ 500 | |||||
Senior Secured Credit Facilities | Fourth Amendment | ||||||
Debt Instrument [Line Items] | ||||||
Cash that can be used to offset indebtedness | $ 500 | |||||
Senior Secured Credit Facilities | Fourth Amendment | Term Loan B3 Facility | ||||||
Debt Instrument [Line Items] | ||||||
Loan facility principal amount | $ 542.3 | |||||
Debt instrument, maturity date | Apr. 26, 2024 | |||||
Senior Secured Credit Facilities | Minimum | Fourth Amendment | Term Loan B3 Facility | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 2.00% | |||||
Senior Secured Credit Facilities | Minimum | Fourth Amendment | Term Loan B3 Facility | Prime Rate | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 1.00% | |||||
Senior Secured Credit Facilities | Maximum | Third Amendment | ||||||
Debt Instrument [Line Items] | ||||||
Consolidated net leverage ratio | 400.00% | |||||
Senior Secured Credit Facilities | Maximum | Third Amendment | Fiscal Quarter Ending March 31, 2019 | ||||||
Debt Instrument [Line Items] | ||||||
Consolidated net leverage ratio | 375.00% | |||||
Senior Secured Credit Facilities | Maximum | Fourth Amendment | Term Loan B3 Facility | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 2.25% | |||||
Senior Secured Credit Facilities | Maximum | Fourth Amendment | Term Loan B3 Facility | Prime Rate | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 1.25% | |||||
[1] | Includes unused commitment fee of 0.30% and letter of credit fee of 1.75% not reflected in interest rate above. |
Interes Rates on Senior Secured
Interes Rates on Senior Secured Credit Facilities (Detail) - Senior Secured Credit Facilities | 3 Months Ended | |
Mar. 31, 2018 | ||
Term Loan A | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate at period end | 3.63% | |
Term Loan A-1 Facility | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate at period end | 3.63% | |
Term Loan B3 Facility | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate at period end | 4.13% | |
LIBOR | Term Loan A | ||
Debt Instrument [Line Items] | ||
Debt instrument, basis spread on variable rate | 1.75% | |
LIBOR | Term Loan A-1 Facility | ||
Debt Instrument [Line Items] | ||
Debt instrument, basis spread on variable rate | 1.75% | |
LIBOR | Term Loan B3 Facility | ||
Debt Instrument [Line Items] | ||
Debt instrument, basis spread on variable rate | 2.25% | |
LIBOR | Revolving Facility | ||
Debt Instrument [Line Items] | ||
Debt instrument, basis spread on variable rate | 1.75% | [1] |
[1] | Includes unused commitment fee of 0.30% and letter of credit fee of 1.75% not reflected in interest rate above. |
Interes Rates on Senior Secur89
Interes Rates on Senior Secured Credit Facilities (Parenthetical) (Detail) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Instrument [Line Items] | |
Unused commitment fee | 0.30% |
Letter of credit fee | 1.75% |
Scheduled Maturities of Contrac
Scheduled Maturities of Contractual Debt Obligations (Detail) $ in Thousands | Mar. 31, 2018USD ($) |
Debt Instrument [Line Items] | |
2018 (for the remaining nine months) | $ 65,625 |
2,019 | 87,500 |
2,020 | 87,500 |
2,021 | 87,500 |
2,022 | 1,297,738 |
Thereafter | $ 513,662 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2018Segment | |
Segment Reporting Information [Line Items] | |
Number of segments managed | 3 |
Segment Information (Detail)
Segment Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Segment Reporting Information [Line Items] | |||
Net sales | $ 1,577,710 | $ 1,483,105 | |
Direct Contribution | 303,827 | 221,013 | |
Corporate and unallocated costs | (159,145) | (121,356) | |
Amortization of intangible assets | (114,708) | (93,646) | |
Impairment of goodwill | (3,400) | ||
Integration, acquisition, restructuring and other | (13,655) | (10,095) | |
Operating income (loss) | 12,919 | (4,084) | |
Interest expense | 22,525 | 19,683 | |
Loss on investments | 527 | 4,530 | |
Loss on foreign currency | 4,833 | 4,740 | |
Interest income | (1,532) | (1,922) | |
Other expense (income), net | 109 | (85) | |
Loss before income taxes | (13,543) | (31,030) | |
Operating Segments | CPE | |||
Segment Reporting Information [Line Items] | |||
Net sales | 875,226 | 1,055,056 | |
Direct Contribution | 49,761 | 108,912 | |
Operating Segments | N&C | |||
Segment Reporting Information [Line Items] | |||
Net sales | 538,264 | 430,436 | |
Direct Contribution | 228,538 | 112,101 | |
Operating Segments | Enterprise | |||
Segment Reporting Information [Line Items] | |||
Net sales | 169,914 | ||
Direct Contribution | 25,528 | ||
Intersegment Eliminations | |||
Segment Reporting Information [Line Items] | |||
Net sales | [1] | (5,694) | (2,387) |
Segment Reconciling Items | |||
Segment Reporting Information [Line Items] | |||
Amortization of intangible assets | (114,708) | (93,646) | |
Integration, acquisition, restructuring and other | $ (13,655) | $ (10,095) | |
[1] | Adjustments related acquisition accounting impacts related to deferred revenue and the warrant program |
Composition of Corporate and Un
Composition of Corporate and Unallocated Costs (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Corporate and unallocated costs | $ 159,145 | $ 121,356 |
Cost of sales | ||
Segment Reporting Information [Line Items] | ||
Corporate and unallocated costs | 36,798 | 14,473 |
Selling, general and administrative expenses | ||
Segment Reporting Information [Line Items] | ||
Corporate and unallocated costs | 93,671 | 83,656 |
Research and development expenses | ||
Segment Reporting Information [Line Items] | ||
Corporate and unallocated costs | $ 28,676 | $ 23,227 |
Sales Information - Additional
Sales Information - Additional Information (Detail) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Non-U.S. Customers | Customer Concentration Risk | Sales | ||
Segment Reporting Information [Line Items] | ||
Percentage of sales | 43.40% | 35.40% |
Summary of ARRIS' Sales Based o
Summary of ARRIS' Sales Based on Geography of Our Customers (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | $ 1,577,710 | $ 1,483,105 |
UNITED STATES | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 893,250 | |
Americas, excluding U.S. | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 255,570 | |
Asia Pacific | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 107,482 | |
EMEA | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 321,408 | |
Domestic Operations | UNITED STATES | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 893,250 | 958,477 |
Non-U.S. | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 684,460 | 524,628 |
Non-U.S. | Americas, excluding U.S. | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 255,570 | 292,601 |
Non-U.S. | Asia Pacific | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | 107,482 | 51,915 |
Non-U.S. | EMEA | ||
International Long-Lived Assets by Geographic Region [Line Items] | ||
Net sales | $ 321,408 | $ 180,112 |
Reconciliation of Numerators an
Reconciliation of Numerators and Denominators of Basic and Diluted Earnings Per Share Computations (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Basic: | |||
Net loss attributable to ARRIS International plc. | $ (13,600) | $ (39,098) | |
Weighted average shares outstanding | 184,805 | 189,796 | |
Basic loss per share | [1] | $ (0.07) | $ (0.21) |
Diluted: | |||
Net loss attributable to ARRIS International plc. | $ (13,600) | $ (39,098) | |
Weighted average shares outstanding | 184,805 | 189,796 | |
Net effect of dilutive shares | 0 | 0 | |
Total | 184,805 | 189,796 | |
Diluted loss per share | [1] | $ (0.07) | $ (0.21) |
[1] | Calculated based on net loss attributable to shareowners of ARRIS International plc |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Ordinary shares related to the vesting of restricted stock units | 1,100,000 | 2,600,000 |
Warrants vested | 0 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2015 | |
Income Taxes [Line Items] | |||||
Effective Income Tax Rate | 21.00% | 35.00% | |||
Discrete tax expense | $ 2.7 | ||||
Tax expense related to excess tax deductions for stock-based compensation | 1.8 | $ 0.4 | |||
Tax expense related to changes in permanent reinvestment assertions | 2.3 | ||||
Tax expense related to changes in tax rate | (1.3) | ||||
Tax benefit related to internal restructuring | $ (4.2) | ||||
Tax expense related to intra-entity sale of an asset | 8 | ||||
Tax benefit related to reversal of over-accrued interest on uncertain tax positions | $ (4.8) | ||||
United Kingdom | |||||
Income Taxes [Line Items] | |||||
U.K. statutory income tax rate | 19.00% | 20.00% | 19.00% | 19.25% | |
U.S. | |||||
Income Taxes [Line Items] | |||||
Effective Income Tax Rate | 35.00% | ||||
France | |||||
Income Taxes [Line Items] | |||||
Tax expense related to changes in tax rate | $ 1.4 |
Summary of Operating Results of
Summary of Operating Results of Income Tax (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax Disclosure [Line Items] | ||
Income (loss) before income taxes | $ (13,543) | $ (31,030) |
Income tax (benefit) expense | $ 3,489 | $ 10,001 |
Effective income tax rate | (25.80%) | (32.20%) |
Reconciliation of Equity (Detai
Reconciliation of Equity (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Shareholders Equity [Line Items] | |||
Balance | $ 3,184,034 | ||
Net loss | (17,032) | ||
Other comprehensive income, net of tax | 7,966 | $ 7,337 | |
Compensation under stock award plans | 19,256 | ||
Issuance of ordinary shares and other | (13,954) | ||
Repurchase of ordinary shares, net | (25,000) | ||
Contribution from non-controlling interest | 1,207 | ||
Cumulative effect adjustment to opening balance | [1] | 897 | |
Balance | 3,157,374 | ||
Ordinary Shares | |||
Shareholders Equity [Line Items] | |||
Balance | 2,768 | ||
Issuance of ordinary shares and other | 15 | ||
Repurchase of ordinary shares, net | (14) | ||
Balance | 2,769 | ||
Capital in Excess of Par Value | |||
Shareholders Equity [Line Items] | |||
Balance | 3,387,128 | ||
Compensation under stock award plans | 19,256 | ||
Issuance of ordinary shares and other | (13,969) | ||
Balance | 3,392,415 | ||
Accumulated Deficit | |||
Shareholders Equity [Line Items] | |||
Balance | (225,881) | ||
Net loss | (13,600) | ||
Repurchase of ordinary shares, net | (24,986) | ||
Cumulative effect adjustment to opening balance | [1] | (1,797) | |
Balance | (266,264) | ||
Accumulated Other Comprehensive Income (Loss) | |||
Shareholders Equity [Line Items] | |||
Balance | 4,552 | ||
Other comprehensive income, net of tax | 7,993 | ||
Balance | 12,545 | ||
Total ARRIS International plc stockholders' equity | |||
Shareholders Equity [Line Items] | |||
Balance | 3,168,567 | ||
Net loss | (13,600) | ||
Other comprehensive income, net of tax | 7,993 | ||
Compensation under stock award plans | 19,256 | ||
Issuance of ordinary shares and other | (13,954) | ||
Repurchase of ordinary shares, net | (25,000) | ||
Cumulative effect adjustment to opening balance | [1] | (1,797) | |
Balance | 3,141,465 | ||
Non-controlling Interest | |||
Shareholders Equity [Line Items] | |||
Balance | 15,467 | ||
Net loss | (3,432) | ||
Other comprehensive income, net of tax | (27) | ||
Contribution from non-controlling interest | 1,207 | ||
Cumulative effect adjustment to opening balance | [1] | 2,694 | |
Balance | $ 15,909 | ||
[1] | Cumulative adjustment related to the adoption of accounting standards, see Note 3 Revenue from Contracts with Customers for additional information. |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Income (loss) by Component Net of Taxes (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance | $ 3,184,034 | |
Other comprehensive income net of tax | 7,966 | $ 7,337 |
Balance | 3,157,374 | |
Available-for-sale securities | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance | 662 | 137 |
Other comprehensive income before reclassifications | (136) | 96 |
Amounts reclassified from accumulated other comprehensive income (loss) | (107) | (3) |
Other comprehensive income net of tax | (243) | 93 |
Balance | 419 | 230 |
Derivative instruments | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance | 5,589 | 671 |
Other comprehensive income before reclassifications | 7,158 | 1,420 |
Amounts reclassified from accumulated other comprehensive income (loss) | 240 | 832 |
Other comprehensive income net of tax | 7,398 | 2,252 |
Balance | 12,987 | 2,923 |
Pension obligations | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance | (8,993) | (6,810) |
Amounts reclassified from accumulated other comprehensive income (loss) | 29 | 11 |
Other comprehensive income net of tax | 29 | 11 |
Balance | (8,964) | (6,799) |
Cumulative Translation Adjustments | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance | 7,243 | 9,293 |
Other comprehensive income before reclassifications | 782 | 4,981 |
Other comprehensive income net of tax | 782 | 4,981 |
Balance | 8,052 | 14,274 |
Total | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance | 4,501 | 3,291 |
Other comprehensive income before reclassifications | 7,804 | 6,497 |
Amounts reclassified from accumulated other comprehensive income (loss) | 162 | 840 |
Other comprehensive income net of tax | 7,966 | 7,337 |
Balance | $ 12,467 | $ 10,628 |
Purchases of ARRIS Shares (Deta
Purchases of ARRIS Shares (Detail) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($)$ / sharesshares | ||
Equity, Class of Treasury Stock [Line Items] | ||
Total Number of Shares Purchased | 1,000,000 | |
Average Price Paid Per Share | $ / shares | $ 25.33 | |
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs | $ | $ 500,000 | |
January 2,018 | ||
Equity, Class of Treasury Stock [Line Items] | ||
Total Number of Shares Purchased | 16,673 | [1] |
Average Price Paid Per Share | $ / shares | $ 25.97 | |
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs | $ | $ 225,000 | |
February 2,018 | ||
Equity, Class of Treasury Stock [Line Items] | ||
Total Number of Shares Purchased | 986,174 | [1] |
Average Price Paid Per Share | $ / shares | $ 25.35 | |
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs | $ | $ 200,000 | |
March 2,018 | ||
Equity, Class of Treasury Stock [Line Items] | ||
Total Number of Shares Purchased | 510,026 | [1] |
Average Price Paid Per Share | $ / shares | $ 26.55 | |
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs | $ | $ 500,000 | |
Shares Purchased as Part of Publicly Announced Plans of Programs | February 2018 | ||
Equity, Class of Treasury Stock [Line Items] | ||
Total Number of Shares Purchased | 986,174 | |
[1] | An aggregate of 526,699 shares shown in the table above were subject to equity awards that were cancelled for cash to satisfy employee minimum tax withholding obligations that arose on the vesting of the applicable restricted stock units. |
Purchases of ARRIS Shares (Pare
Purchases of ARRIS Shares (Parenthetical) (Detail) | 3 Months Ended |
Mar. 31, 2018shares | |
Repurchased to satisfy tax withholding obligations on vesting shares | |
Equity, Class of Treasury Stock [Line Items] | |
Shares subject to equity awards cancelled for cash to satisfy minimum tax withholding obligations | 526,699 |
Repurchases of ARRIS Shares - A
Repurchases of ARRIS Shares - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Equity, Class of Treasury Stock [Line Items] | |||
Shares repurchased | 1 | ||
Average price per share | $ 25.33 | ||
Shares repurchased, value | $ 25,000,000 | ||
Remaining authorized amount for stock repurchases | $ 500,000,000 | ||
Maximum period of shareholders approval | 5 years | ||
Maximum | |||
Equity, Class of Treasury Stock [Line Items] | |||
Share repurchase plans, authorized amount | $ 300,000,000 | $ 300,000,000 | $ 300,000,000 |