NETGEAR, INC, 10-K filed on 2/19/2016
Annual Report
Document And Entity Information (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Feb. 12, 2016
Jun. 28, 2015
Document And Entity Information [Abstract]
 
 
 
Entity Registrant Name
NETGEAR, INC 
 
 
Entity Central Index Key
0001122904 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Filer Category
Accelerated Filer 
 
 
Document Type
10-K 
 
 
Document Period End Date
Dec. 31, 2015 
 
 
Document Fiscal Year Focus
2015 
 
 
Document Fiscal Period Focus
FY 
 
 
Amendment Flag
false 
 
 
Entity Common Stock, Shares Outstanding
 
32,418,414 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Public Float
 
 
$ 401.9 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
ASSETS
 
 
Cash and cash equivalents
$ 181,945 
$ 141,234 
Short-term investments
96,321 
115,895 
Accounts receivable, net
290,642 
275,689 
Inventories
213,118 
222,883 
Deferred income taxes
0 
29,039 
Prepaid expenses and other current assets
39,117 
38,225 
Total current assets
821,143 
822,965 
Property and equipment, net
22,384 
29,694 
Intangibles, net
48,947 
66,230 
Goodwill
81,721 
81,721 
Other non-current assets
76,374 
48,077 
Total assets
1,050,569 
1,048,687 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
Accounts payable
90,546 
106,357 
Accrued employee compensation
27,868 
21,588 
Other accrued liabilities
166,282 
143,742 
Deferred revenue
29,125 
30,023 
Income taxes payable
1,951 
2,406 
Total current liabilities
315,772 
304,116 
Non-current income taxes payable
14,444 
15,252 
Other non-current liabilities
11,643 
7,754 
Total liabilities
341,859 
327,122 
Stockholders’ equity:
 
 
Preferred stock: $0.001 par value; 5,000,000 shares authorized; none issued or outstanding
0 
0 
Common stock: $0.001 par value; 200,000,000 shares authorized; shared issued and outstanding: 36,839,522 and 38,341,644 at December 31, 2013 and 2012, respectively
33 
35 
Additional paid-in capital
513,047 
454,144 
Cumulative other comprehensive income
3 
38 
Retained earnings
195,627 
267,348 
Total stockholders’ equity
708,710 
721,565 
Total liabilities and stockholders’ equity
$ 1,050,569 
$ 1,048,687 
Consolidated Balance Sheets Consolidated Balance Sheets (Parentheticals) (USD $)
Dec. 31, 2015
Dec. 31, 2014
Statement of Financial Position [Abstract]
 
 
Preferred Stock, Par or Stated Value Per Share
$ 0.001 
$ 0.001 
Preferred Stock, Shares Authorized
5,000,000 
5,000,000 
Preferred Stock, Shares Issued
0 
0 
Preferred Stock, Shares Outstanding
0 
0 
Common Stock, Par or Stated Value Per Share
$ 0.001 
$ 0.001 
Common Stock, Shares Authorized
200,000,000 
200,000,000 
Common Stock, Shares, Issued
32,600,990 
34,709,022 
Common Stock, Shares, Outstanding
32,600,990 
34,709,022 
Consolidated Statements Of Operations (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Net revenue
$ 1,300,695 
$ 1,393,515 
$ 1,369,633 
Cost of revenue
933,016 
995,597 
976,018 
Gross profit
367,679 
397,918 
393,615 
Operating expenses:
 
 
 
Research and development
86,499 
90,902 
85,168 
Sales and marketing
146,794 
157,017 
153,804 
General and administrative
45,313 
46,552 
48,915 
Restructuring and other charges
6,398 
2,209 
5,335 
Litigation reserves, net
(2,682)
(1,011)
5,354 
Goodwill impairment charges
0 
74,196 
0 
Intangibles Impairment charges
0 
0 
2,000 
Total operating expenses
282,322 
369,865 
300,576 
Income from operations
85,357 
28,053 
93,039 
Interest income
295 
253 
400 
Other income (expense), net
(88)
2,455 
(457)
Income before income taxes
85,564 
30,761 
92,982 
Provision for income taxes
36,980 
21,973 
37,765 
Net Income
$ 48,584 
$ 8,788 
$ 55,217 
Net income per share:
 
 
 
Basic net income per share (in dollars per share)
$ 1.47 
$ 0.25 
$ 1.44 
Diluted net income per share (in dollars per share)
$ 1.44 
$ 0.24 
$ 1.42 
Weighted average shares outstanding used to compute net income per share:
 
 
 
Basic (in shares)
33,161 
35,771 
38,379 
Diluted (in shares)
33,788 
36,445 
38,948 
Consolidated Statement of Comprehensive Income (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Net Income
$ 48,584 
$ 8,788 
$ 55,217 
Other comprehensive income (loss), before tax:
 
 
 
Unrealized gain (loss) on derivative instruments
0 
(22)
89 
Unrealized gain (loss) on available-for-sale securities
(56)
(14)
(40)
Other comprehensive income (loss), before tax
(56)
(36)
49 
Tax benefit (expense) related to items of other comprehensive income
21 
5 
16 
Other comprehensive income (loss), net of tax
(35)
(31)
65 
Comprehensive income
$ 48,549 
$ 8,757 
$ 55,282 
Consolidated Statements of Stockholders' Equity Statement (USD $)
In Thousands, unless otherwise specified
Total
Common Stock [Member]
Additional Paid-in Capital [Member]
Cumulative Other Comprehensive Income (Loss) [Member]
Retained Earnings [Member]
Balance at Dec. 31, 2012
$ 754,611 
$ 38 
$ 394,427 
$ 4 
$ 360,142 
Balance,shares at Dec. 31, 2012
 
38,342 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
Change in unrealized gains and losses on available-for-sale Securities, Net of Tax
(24)
 
 
(24)
 
Change in unrealized gains and losses on derivatives, Net of Tax
89 
 
 
89 
 
Net Income
55,217 
 
 
 
55,217 
Share-based Compensation expense
17,419 
 
17,419 
 
 
Stock Repurchased and Retired During Period, Shares
 
(2,018)
 
 
 
Stock Repurchased and Retired During Period, Value
(63,584)
(1)
 
 
(63,583)
Issuance of common stock under stock-based compensation plans, shares
 
516 
 
 
 
Issuance of common stock under stock-based compensation plans
9,626 
0 
9,626 
 
 
Income tax impact associated with stock option exercises
429 
 
429 
 
 
Balance at Dec. 31, 2013
773,783 
37 
421,901 
69 
351,776 
Balance,shares at Dec. 31, 2013
 
36,840 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
Change in unrealized gains and losses on available-for-sale Securities, Net of Tax
(9)
 
 
(9)
 
Change in unrealized gains and losses on derivatives, Net of Tax
(22)
 
 
(22)
 
Net Income
8,788 
 
 
 
8,788 
Share-based Compensation expense
19,983 
 
19,983 
 
 
Stock Repurchased and Retired During Period, Shares
 
(2,908)
 
 
 
Stock Repurchased and Retired During Period, Value
(93,218)
(2)
 
 
(93,216)
Issuance of common stock under stock-based compensation plans, shares
 
777 
 
 
 
Issuance of common stock under stock-based compensation plans
12,741 
0 
12,741 
 
 
Income tax impact associated with stock option exercises
(481)
 
(481)
 
 
Balance at Dec. 31, 2014
721,565 
35 
454,144 
38 
267,348 
Balance,shares at Dec. 31, 2014
 
34,709 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
Change in unrealized gains and losses on available-for-sale Securities, Net of Tax
(35)
 
 
(35)
 
Change in unrealized gains and losses on derivatives, Net of Tax
0 
 
 
0 
 
Net Income
48,584 
 
 
 
48,584 
Share-based Compensation expense
16,813 
 
16,813 
 
 
Stock Repurchased and Retired During Period, Shares
 
(3,855)
 
 
 
Stock Repurchased and Retired During Period, Value
(120,309)
(4)
 
 
(120,305)
Issuance of common stock under stock-based compensation plans, shares
 
1,747 
 
 
 
Issuance of common stock under stock-based compensation plans
44,325 
2 
44,323 
 
 
Income tax impact associated with stock option exercises
(2,233)
 
(2,233)
 
 
Balance at Dec. 31, 2015
$ 708,710 
$ 33 
$ 513,047 
$ 3 
$ 195,627 
Balance,shares at Dec. 31, 2015
 
32,601 
 
 
 
Consolidated Statements Of Cash Flows (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Income Taxes Paid
$ 40,273 
$ 38,938 
$ 45,982 
Cash flows from operating activities:
 
 
 
Net Income
48,584 
8,788 
55,217 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
35,850 
35,590 
32,854 
Purchase premium amortization/discount accretion on investments, net
(57)
11 
1,103 
Non-cash stock-based compensation
16,825 
20,014 
17,462 
Income tax impact associated with stock option exercises
(2,233)
(481)
429 
Excess tax benefit from stock-based compensation
(759)
(485)
(767)
Goodwill impairment charges
0 
74,196 
0 
Intangibles Impairment charges
0 
0 
2,000 
Deferred income taxes
(710)
(20,261)
(7,927)
Changes in assets and liabilities, net of effect of acquisitions:
 
 
 
Accounts receivable
(14,952)
(9,205)
(10,470)
Inventories
9,765 
1,573 
(46,679)
Prepaid expenses and other assets
560 
(7,905)
(4,615)
Accounts payable
(14,990)
(8,236)
36,250 
Accrued employee compensation
6,280 
5,037 
(1,787)
Other accrued liabilities
29,987 
2,574 
15,069 
Deferred revenue
(2,496)
5,188 
(1,211)
Income taxes payable
(1,263)
2,566 
(26)
Net cash provided by operating activities
110,391 
108,964 
86,902 
Cash flows from investing activities:
 
 
 
Purchases of short-term investments
(110,316)
(145,186)
(153,464)
Proceeds from maturities of short-term investments
130,273 
134,827 
275,406 
Purchase of property and equipment
(14,000)
(19,338)
(18,050)
Payments for patents
0 
0 
(275)
Proceeds from sale of cost method investment
0 
0 
3,890 
Payments made in connection with business acquisitions, net of cash acquired
0 
(1,050)
(147,240)
Net cash provided by (used in) investing activities
5,957 
(30,747)
(39,733)
Cash flows from financing activities:
 
 
 
Purchase and retirement of treasury stock
(120,309)
(93,218)
(63,585)
Proceeds from exercise of stock options
40,928 
9,979 
7,487 
Proceeds from issuance of common stock under employee stock purchase plan
2,985 
2,762 
2,139 
Excess tax benefit from stock-based compensation
759 
485 
767 
Net cash used in financing activities
(75,637)
(79,992)
(53,192)
Net increase (decrease) in cash and cash equivalents
40,711 
(1,775)
(6,023)
Cash and cash equivalents, at beginning of period
141,234 
143,009 
149,032 
Cash and cash equivalents, at end of period
$ 181,945 
$ 141,234 
$ 143,009 
The Company and Summary of Significant Accounting Policies (Notes)
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block]
The Company and Summary of Significant Accounting Policies

The Company

NETGEAR, Inc. (“NETGEAR” or the “Company”) was incorporated in Delaware in January 1996. The Company is a global networking company that delivers innovative products to consumers, businesses and service providers. The Company's products are built on a variety of proven technologies such as wireless (WiFi and LTE), Ethernet and powerline, with a focus on reliability and ease-of-use. The product line consists of wired and wireless devices that enable networking, broadband access and network connectivity. These products are available in multiple configurations to address the needs of the end-users in each geographic region in which the Company's products are sold.

The Company operates in three specific business segments: retail, commercial, and service provider. The Company believes this structure enables it to better focus its efforts on the Company's core customer segments and allows it to be more nimble and opportunistic as a company overall. Each business unit contains leadership focused on the product development efforts, both from a product marketing and engineering standpoint, to service the unique needs of these customer segments. The retail business unit is focused on individual consumers and consists of high performance, dependable and easy-to-use home networking, home video security, storage and digital media products. The commercial business unit is focused on small and medium-sized businesses and consists of business networking, storage and security solutions that bring enterprise class functionality at an affordable price. The service provider business unit is focused on the service provider market and consists of made-to-order and retail-proven whole home networking hardware and software solutions, as well as 4G LTE hotspots sold to service providers for sale to their subscribers.

The Company sells networking products through multiple sales channels worldwide, including traditional retailers, online retailers, wholesale distributors, direct market resellers (“DMRs”), value-added resellers (“VARs”), and broadband service providers.

Basis of presentation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All inter-company accounts and transactions have been eliminated in the consolidation of these subsidiaries.

Fiscal periods

The Company's fiscal year begins on January 1 of the year stated and ends on December 31 of the same year. The Company reports its results on a fiscal quarter basis rather than on a calendar quarter basis. Under the fiscal quarter basis, each of the first three fiscal quarters ends on the Sunday closest to the calendar quarter end, with the fourth quarter ending on December 31.

Use of estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates.

Cash and cash equivalents

The Company considers all highly liquid investments with an original maturity at the time of purchase of three months or less to be cash equivalents. The Company deposits cash and cash equivalents with high credit quality financial institutions.

Short-term investments

Short-term investments are partially comprised of marketable securities that consist of government securities with an original maturity or a remaining maturity at the time of purchase, of greater than three months and no more than 12 months. The marketable securities are held in the Company's name with one high quality financial institution, which acts as the Company's custodian and investment manager. These marketable securities are classified as available-for-sale securities in accordance with the provisions of the authoritative guidance for investments and are carried at fair value with unrealized gains and losses reported as a separate component of stockholders' equity.

Short-term investments are also comprised of marketable securities related to deferred compensation under the Company’s Deferred Compensation Plan. Mutual funds are the only investments allowed in the Company's Deferred Compensation Plan and the investments are held in a grantor trust formed by the Company. The Company has classified these investments as trading securities as the grantor trust actively manages the asset allocation to match the participants’ notional fund allocations. These securities are recorded at fair market value with unrealized gains and losses included in other income (expense), net.

Certain risks and uncertainties

The Company's products are concentrated in the networking industry, which is characterized by rapid technological advances, changes in customer requirements and evolving regulatory requirements and industry standards. The success of the Company depends on management's ability to anticipate and/or to respond quickly and adequately to such changes. Any significant delays in the development or introduction of products could have a material adverse effect on the Company's business and operating results.

The Company relies on a limited number of third parties to manufacture all of its products. If any of the Company's third-party manufacturers cannot or will not manufacture its products in required volumes, on a cost-effective basis, in a timely manner, or at all, the Company will have to secure additional manufacturing capacity. Any interruption or delay in manufacturing could have a material adverse effect on the Company's business and operating results.

Derivative financial instruments

The Company uses foreign currency forward contracts to manage the exposures to foreign exchange risk related to expected future cash flows on certain forecasted revenue, costs of revenue, operating expenses, and on certain existing assets and liabilities. Foreign currency forward contracts generally mature within five months of inception. Under its foreign currency risk management strategy, the Company utilizes derivative instruments to reduce the impact of currency exchange rate movements on the Company's operating results by offsetting gains and losses on the forward contracts with increases or decreases in foreign currency transactions. The company does not use derivative financial instruments for speculative purposes.

The Company accounts for its derivative instruments as either assets or liabilities and records them at fair value. Derivatives that are not defined as hedges in the authoritative guidance for derivatives and hedging must be adjusted to fair value through earnings. For derivative instruments that hedge the exposure to variability in expected future cash flows that are designated as cash flow hedges, the effective portion of the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive income in stockholders' equity and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The ineffective portion of the gain or loss on the derivative instrument is recognized in current earnings. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. For derivatives designated as cash flow hedges, changes in the time value are excluded from the assessment of hedge effectiveness and are recognized in earnings.

Concentration of credit risk
    
Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents, short-term investments and accounts receivable. The Company believes that there is minimal credit risk associated with the investment of its cash and cash equivalents and short-term investments, due to the restrictions placed on the type of investment that can be entered into under the Company's investment policy. The Company's short-term investments consist of investment-grade securities, and the Company's cash and investments are held and managed by recognized financial institutions.

The Company's customers are primarily distributors as well as retailers and broadband service providers who sell or distribute the products to a large group of end-users. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of the Company's customers to make required payments. The Company regularly performs credit evaluations of the Company's customers' financial condition and considers factors such as historical experience, credit quality, age of the accounts receivable balances, geographic or country-specific risks and current economic conditions that may affect customers' ability to pay. The Company does not require collateral from its customers. The Company secures credit insurance for certain customers in international and domestic markets.

As of December 31, 2015 and December 31, 2014, Best Buy, Inc. accounted for 37% and 21% of the Company's total accounts receivable, respectively, and no other customers accounted for 10% or greater of the Company's total accounts receivable.

The Company is exposed to credit loss in the event of nonperformance by counterparties to the foreign currency forward contracts used to mitigate the effect of foreign currency exchange rate changes. The Company believes the counterparties for its outstanding contracts are large, financially sound institutions and thus, the Company does not anticipate nonperformance by these counterparties. However, given the recent, unprecedented turbulence in the financial markets, the failure of additional counterparties is possible.

Fair value measurements

The carrying amounts of the Company's financial instruments, including cash equivalents, short-term investments, accounts receivable, and accounts payable approximate their fair values due to their short maturities. Foreign currency forward contracts are recorded at fair value based on observable market data. See Note 13, Fair Value Measurements, of the Notes to Consolidated Financial Statements for disclosures regarding fair value measurements in accordance with the authoritative guidance for fair value measurements and disclosures.

Cost method investments

The Company's cost method investments are included in other non-current assets in the consolidated balance sheets and are carried at cost, adjusted for any impairment, because the Company does not have a controlling interest and does not have the ability to exercise significant influence over these companies. The Company monitors these investments for impairment on a quarterly basis, and adjusts carrying value for any impairment charges recognized. Realized gains and losses on these investments are reported in other income (expense), net in the consolidated statements of operations.

Allowance for doubtful accounts

The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company regularly performs credit evaluations of its customers' financial condition and considers factors such as historical experience, credit quality, age of the accounts receivable balances, and geographic or country-specific risks and economic conditions that may affect a customer's ability to pay. The allowance for doubtful accounts is reviewed quarterly and adjusted if necessary based on the Company's assessments of its customers' ability to pay. If the financial condition of the Company's customers should deteriorate or if actual defaults are higher than the Company's historical experience, additional allowances may be required, which could have an adverse impact on operating expenses.

Inventories

Inventories consist primarily of finished goods which are valued at the lower of cost or market, with cost being determined using the first-in, first-out method. The Company writes down its inventories based on estimated excess and obsolete inventories determined primarily by future demand forecasts. At the point of loss recognition, a new, lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase of the newly established cost basis.

Property and equipment, net

Property and equipment are stated at historical cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows:
Computer equipment
2 years
Furniture and fixtures
5 years
Software
2-5 years
Machinery and equipment
2-3 years
Leasehold improvements
Shorter of the lease term or 5 years


Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. The carrying value of the asset is reviewed on a regular basis for the existence of facts, both internal and external, that may suggest impairment. Charges related to the impairment of property and equipment were insignificant for the years ended December 31, 2015, 2014 and 2013.

Goodwill

Goodwill represents the purchase price over estimated fair value of net assets of businesses acquired in a business combination. Goodwill acquired in a business combination is not amortized, but instead tested for impairment at least annually on the first day of the fourth quarter. Should certain events or indicators of impairment occur between annual impairment tests, the Company performs the impairment test as those events or indicators occur. Examples of such events or circumstances include the following: a significant decline in the Company’s expected future cash flows; a sustained, significant decline in the Company’s stock price and market capitalization; a significant adverse change in the business climate; and slower growth rates.

Goodwill is tested for impairment at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not (that is, a likelihood of more than 50%) that the fair value of the reporting unit is less than its carrying value. The Company identified the reporting units as retail, commercial and service provider reporting units, as this is the lowest level for which discrete financial information is available and segment management regularly reviews the operating results. The qualitative assessment considers the following factors: macroeconomic conditions, industry and market considerations, cost factors, overall company financial performance, events affecting the reporting units, and changes in the Company's share price. If the reporting unit does not pass the qualitative assessment, the Company estimates its fair value and compares the fair value with the carrying value of its net assets. If the fair value is greater than the carrying value of its net assets, no impairment is recorded. If the fair value is less than its carrying value, the Company would determine the fair value of the goodwill by comparing the implied fair value to the carrying value of the goodwill in the same manner as if the reporting unit were being acquired in a business combination. Specifically, the Company would allocate the fair value to all of its assets and liabilities, including any unrecognized intangibles, in a hypothetical analysis that would calculate the implied fair value of goodwill. If the implied fair value of goodwill is less than the recorded goodwill, an impairment charge would be recorded to earnings in the consolidated statements of operations.

We did not recognize any goodwill impairment charges during the years ended December 31, 2015 and 2013 and recorded a goodwill impairment charge of $74.2 million which was the entire goodwill balance related to the service provider reporting unit.

Intangibles, net

Purchased intangibles with finite lives are amortized using the straight-line method over the estimated economic lives of the assets, which range from four to ten years. Finite-lived intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition.

In the fourth quarter of fiscal year 2015, the Company saw a decline in net revenue in the service provider reporting unit. According to its customers, purchase constraints will tighten further in 2016 and for the foreseeable future. Due to the decline in the long-term revenue and profit outlook, the Company performed the recoverability test of the long-lived assets within the service provider reporting unit. The Company estimated the undiscounted future cash flows directly associated with each asset group and compared the amounts to the carrying value of each asset group. Based on the results of the recoverability test, the sum of undiscounted future cash flows was greater than the carrying value of each asset group and therefore no impairment was recorded. The Company also reviewed the depreciation and amortization policies for the long-lived asset groups and ensured the remaining useful lives are appropriate.

Purchased intangibles determined to have indefinite useful lives are not amortized. Indefinite-lived intangibles are reviewed for impairment at least annually during the fourth quarter and whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Measurement of an impairment loss for indefinite-lived assets that management expects to hold and use is based on the fair value of the asset. Indefinite-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. The carrying value of the asset is reviewed on a regular basis for the existence of facts, both internal and external, that may suggest impairment.

In the third quarter of 2013, the Company recorded an impairment charge of $2.0 million related to the abandonment of certain IPR&D projects obtained in the AirCard acquisition in 2013. As of the end of the second quarter of 2014, all of the remaining IPR&D had reached technical feasibility and was reclassified to definite-lived intangibles with an estimated useful life of four years. No other impairments to long-lived assets were recognized in the years ended December 31, 2015, 2014 and 2013.

Warranty obligations

The Company provides for estimated future warranty obligations at the time revenue is recognized. The Company's standard warranty obligation to its direct customers generally provides for a right of return of any product for a full refund in the event that such product is not merchantable or is found to be damaged or defective. At the time revenue is recognized, an estimate of future warranty returns is recorded to reduce revenue in the amount of the expected credit or refund to be provided to its direct customers. At the time the Company records the reduction to revenue related to warranty returns, the Company includes within cost of revenue a write-down to reduce the carrying value of such products to net realizable value. The Company's standard warranty obligation to its end-users provides for replacement of a defective product for one or more years. Factors that affect the warranty obligation include product failure rates, material usage, and service delivery costs incurred in correcting product failures. The estimated cost associated with fulfilling the Company's warranty obligation to end-users is recorded in cost of revenue. Because the Company's products are manufactured by third-party manufacturers, in certain cases the Company has recourse to the third-party manufacturer for replacement or credit for the defective products. The Company gives consideration to amounts recoverable from its third-party manufacturers in determining its warranty liability.

Revenue recognition

Revenue from product sales is generally recognized at the time the product is shipped provided that persuasive evidence of an arrangement exists, title and risk of loss has transferred to the customer, the selling price is fixed or determinable and collection of the related receivable is reasonably assured. Currently, for some of the Company's customers, title passes to the customer upon delivery to the port or country of destination, upon their receipt of the product, or upon the customer's resale of the product. At the end of each fiscal quarter, the Company estimates and defers revenue related to product where title has not transferred. The revenue continues to be deferred until such time that title passes to the customer. The Company assesses collectability based on a number of factors, including general economic and market conditions, past transaction history with the customer, and the creditworthiness of the customer. If the Company determines that collection is not reasonably assured, then revenue is deferred until receipt of the payment from the customer.

The Company has product offerings with multiple elements. The Company's multiple-element product offerings include networking hardware with embedded software, various software subscription services, and support, which are considered separate units of accounting. In general, the networking hardware with embedded software is delivered up front, while the subscription services and support are delivered over the subscription and support period. The Company allocates revenue to the software deliverables and the non-software deliverables (including software deliverables which function together with hardware deliverables to provide the product's essential functionality) based upon their relative selling price. Revenue allocated to each unit of accounting is then recognized when persuasive evidence of an arrangement exists, title and risk of loss has transferred to the customer, the selling price is fixed or determinable and collection of the related receivable is reasonably assured.

When applying the relative selling price method, the Company determines the selling price for each deliverable using vendor-specific objective evidence ("VSOE") of fair value of the deliverable, or when VSOE of fair value is unavailable, its best estimate of selling price (“ESP”), as the Company has determined it is unable to establish third-party evidence of selling price for the deliverables. In determining VSOE, the Company requires that a substantial majority of the selling prices for a deliverable sold on a stand-alone basis fall within a reasonably narrow pricing range, generally evidenced by approximately 80% of such historical stand-alone transactions falling within +/-15% of the median price. The Company determines ESP for a deliverable by considering multiple factors including, but not limited to, market conditions, competitive landscape, internal costs, gross margin objectives and pricing practices. The objective of ESP is to determine the price at which the Company would transact a sale if the deliverable were sold on a stand-alone basis. The determination of ESP is made through consultation with and formal approval by the Company's management, taking into consideration the go-to-market strategy.

Certain distributors and retailers generally have the right to return product for stock rotation purposes. Upon shipment of the product, the Company reduces revenue for an estimate of potential future product warranty and stock rotation returns related to the current period product revenue. Management analyzes historical returns, channel inventory levels, current economic trends and changes in customer demand for the Company's products when evaluating the adequacy of the allowance for sales returns, namely warranty and stock rotation returns. Revenue on shipments is also reduced for estimated price protection and sales incentives deemed to be contra-revenue under the authoritative guidance for revenue recognition.
 
Sales incentives

The Company accrues for sales incentives as a marketing expense if it receives an identifiable benefit in exchange and can reasonably estimate the fair value of the identifiable benefit received; otherwise, it is recorded as a reduction to revenues. As a consequence, the Company records a substantial portion of its channel marketing costs as a reduction of revenue.

The Company records estimated reductions to revenues for sales incentives at the later of when the related revenue is recognized or when the program is offered to the customer or end consumer.

Shipping and handling fees and costs

The Company includes shipping and handling fees billed to customers in net revenue. Shipping and handling costs associated with inbound freight are included in cost of revenue. In cases where the Company gives a freight allowance to the customer for their own inbound freight costs, such costs are appropriately recorded as a reduction in net revenue. Shipping and handling costs associated with outbound freight are included in sales and marketing expenses and totaled $10.4 million, $10.5 million and $11.6 million in the years ended December 31, 2015, 2014 and 2013 respectively.

Research and development

Costs incurred in the research and development of new products are charged to expense as incurred.

Advertising costs

Advertising costs are expensed as incurred. Total advertising and promotional expenses were $19.4 million, $19.1 million, and $18.0 million in the years ended December 31, 2015, 2014 and 2013 respectively.

Income taxes

The Company accounts for income taxes under an asset and liability approach. Under this method, income tax expense is recognized for the amount of taxes payable or refundable for the current year. In addition, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences resulting from different treatment for tax versus accounting for certain items, such as accruals and allowances not currently deductible for tax purposes. These differences result in deferred tax assets and liabilities, which are included within the consolidated balance sheet. The Company must then assess the likelihood that the Company's deferred tax assets will be recovered from future taxable income and to the extent the Company believes that recovery is not more likely than not, the Company must establish a valuation allowance. The Company’s assessment considers the recognition of deferred tax assets on a jurisdictional basis. Accordingly, in assessing its future taxable income on a jurisdictional basis, the Company considers the effect of its transfer pricing policies on that income.

In the ordinary course of business there is inherent uncertainty in assessing the Company's income tax positions. The Company assesses its tax positions and records benefits for all years subject to examination based on management's evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, the Company records the largest amount of tax benefit with a greater than 50 percent likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been recorded in the financial statements. Where applicable, associated interest and penalties have also been recognized as a component of income tax expense.

Net income per share

Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted net income per share reflects the additional dilution from potential issuances of common stock, such as stock issuable pursuant to the exercise of stock options and awards. Potentially dilutive shares are excluded from the computation of diluted net income per share when their effect is anti-dilutive.

Stock-based compensation

The Company measures stock-based compensation at the grant date based on the fair value of the award. The fair value of stock options is estimated using the Black-Scholes option pricing model. Estimated compensation cost relating to restricted stock units (“RSUs”) is based on the closing fair market value of the Company’s common stock on the date of grant. The fair value of Employee Stock Purchase Plan (“ESPP”) is based on the 15% discount at purchase, since the price of the shares is determined at the purchase date.

The compensation expense for equity awards is reduced by an estimate for forfeitures and is recognized over the vesting period of the award under a graded vesting method.  In addition, the Company will recognize an excess benefit from stock-based compensation in equity based on the difference between tax expense computed with consideration of the windfall deduction and without consideration of the windfall deduction. In addition, the Company accounts for the indirect effects of stock-based compensation on the research tax credit and the foreign tax credit in the income statement. See Note 11, Employee Benefit Plans, of the Notes to Consolidated Financial Statements for a further discussion on stock-based compensation.

Comprehensive income

Comprehensive income consists of net income and other gains and losses affecting stockholder's equity that the Company excluded from net income, including gains and losses related to fair value of short-term investments and the effective portion of cash flow hedges that were outstanding as of the end of the year.

Foreign currency translation and re-measurement

The Company's functional currency is the U.S. dollar for all of its international subsidiaries. Foreign currency transactions of international subsidiaries are re-measured into U.S. dollars at the end-of-period exchange rates for monetary assets and liabilities, and historical exchange rates for non-monetary assets. Expenses are re-measured at average exchange rates in effect during each period, except for expenses related to non-monetary assets, which are re-measured at historical exchange rates. Revenue is re-measured at average exchange rates in effect during each period. Gains and losses arising from foreign currency transactions are included in other income (expense), net.

Recent accounting pronouncements

In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customer" (Topic 606). The guidance in this update supersedes the revenue recognition requirements in Topic 605, Revenue Recognition. Under the new guidance, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also specifies the accounting for some costs to obtain or fulfill a contract with a customer. An entity should apply the amendments in the update either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this update recognized at the date of initial application. On July 9, 2015, the FASB concluded to delay the effective date of the new revenue standard by one year. ASU 2014-09 is effective for the Company beginning in the first quarter fiscal 2018. Early adoption is permitted but may not occur earlier than January 1, 2017, the original effective date of the standard for the Company. The Company is in the process of evaluating the available transition methods and the impact of this standard on its financial position, results of operations or cash flows.

In July 2015, the FASB issued ASU 2015-11, "Simplifying the Measurement of Inventory" (Topic 330). The new guidance changes the subsequent measurement of inventory from lower of cost or market to lower of cost and net realizable value. ASU 2015-11 should be applied on a prospective basis and is effective for the Company beginning in the first fiscal quarter of 2017. Early adoption is permitted. The Company does not expect the adoption of this guidance to have a material impact on its financial position, results of operations or cash flows.

In November 2015, the FASB issued ASU 2015-17, "Balance Sheet Classification of Deferred Taxes" (Topic 740), which simplifies the presentation of deferred income taxes. This ASU requires that deferred tax assets and liabilities be classified as non-current in a statement of financial position. ASU 2015-17 may be adopted either prospectively or retrospectively and is effective for reporting periods beginning after December 15, 2016, with early adoption permitted. The Company elected early adoption ASU 2015-17 effective December 31, 2015 on a prospective basis. Adoption of this ASU resulted in a reclassification of our net current deferred tax asset to the net non-current deferred tax asset in our Consolidated Balance Sheet as of December 31, 2015. No prior periods were retrospectively adjusted.

In January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities (Subtopic 825-10). The changes to the current US GAAP financial instruments model primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. The Company is currently evaluating what impact, if any, the adoption of this standard will have on its results of its financial position, results of operations or cash flows.
Business Acquisitions
Business Acquisitions
Business Acquisitions
Arada Systems, Inc.
On June 21, 2013, the Company acquired certain assets and operations of Arada Systems, Inc. (“Arada”), a privately-held company that develops, licenses, and provides solutions for the next generation of uses of Wi-Fi, for total purchase consideration of $5.3 million in cash. The Company believes the acquisition will bolster its wireless product offerings in its commercial business unit and strengthen its position in the small to medium-sized campus wireless LAN market. The Company paid $4.2 million of the aggregate purchase price in the second quarter of 2013, and paid the remaining $1.1 million in the second quarter of 2014.
The acquisition qualified as a business combination and was accounted for using the acquisition method of accounting. The results of Arada have been included in the consolidated financial statements since the date of acquisition. Pro forma results of operations for the acquisition are not presented as the financial impact to the Company's consolidated results of operations is not material.
The allocation of the purchase price was as follows (in thousands):
Property and equipment, net
$
15

Intangibles, net
4,040

Goodwill
1,195

Total purchase price
$
5,250


Of the $1.2 million of goodwill recorded on the acquisition of Arada, approximately $0.7 million and $1.2 million are deductible for U.S. federal and state income tax purposes, respectively. The goodwill recognized, which was assigned to the Company's commercial business unit, is primarily attributable to expected synergies resulting from the acquisition.
The Company designated $4.0 million of the acquired intangibles as technology. The value was calculated based on the present value of the future estimated cash flows derived from estimated savings attributable to the existing technology and discounted at 21.5%. The acquired existing technology is being amortized over an estimated useful life of five years.

AirCard Division of Sierra Wireless, Inc.
On April 2, 2013, the Company completed the acquisition of select assets and operations of the Sierra Wireless, Inc. AirCard business ("AirCard"), including customer relationships, a world-class LTE engineering team, certain intellectual property, inventory and property and equipment. The Company believes this acquisition will accelerate the mobile initiative of the service provider business unit to become a global leader in providing the latest in LTE data networking access devices.
The Company paid $140.0 million of the aggregate purchase price in the second quarter of 2013. The acquisition qualified as a business combination and was accounted for using the acquisition method of accounting. The results of AirCard have been included in the consolidated financial statements since the date of acquisition. Revenue and earnings for AirCard as of the acquisition date are not presented as the business was fully integrated into the service provider business unit subsequent to the acquisition and therefore impracticable for the Company to quantify.
The allocation of the purchase price was as follows (in thousands):
Inventories
$
2,874

Prepaid expenses and other current assets
12,256

Property and equipment, net
7,455

Intangibles, net
69,700

Goodwill
53,841

Liabilities assumed
(6,096
)
Total purchase price
$
140,030


In the third quarter of 2013, the Company made an adjustment of $0.5 million to goodwill related to revised inventory estimates.
Of the $53.8 million of goodwill recorded on the acquisition of AirCard, approximately $35.8 million, $53.8 million and $2.3 million is deductible for U.S. federal, U.S. state and Canadian income tax purposes, respectively. The goodwill recognized, which was assigned to the Company's service provider business unit, is primarily attributable to expected synergies resulting from the acquisition.
The Company designated $16.3 million of the acquired intangibles as technology. The value was calculated based on the present value of the future estimated cash flows derived from estimated savings attributable to the existing technology and discounted at 10.0%. The acquired technology is being amortized over an estimated useful life of four years.
The Company designated $40.5 million of the acquired intangibles as customer relationships. The value was calculated based on the present value of the future estimated cash flows derived from projections of future operations attributable to existing customer relationships and discounted at 12.0%. The acquired customer relationships are being amortized over an estimated useful life of eight years
The Company designated $2.3 million of the acquired intangibles as non-compete agreements. The value was calculated based on the present value of the future estimated cash flows derived from projections of future operations attributable to the non-compete agreements and discounted at 12.0%. The acquired agreements are being amortized over an estimated useful life of five years.
The Company designated $1.1 million of the acquired intangibles as backlog. The value was calculated based on the present value of the future contractual revenue and discounted at 10.0%. The acquired backlog was fully amortized in the second quarter of 2013.
The Company acquired $9.5 million in in-process research and development (“IPR&D”) projects. The value was calculated based on the present value of future estimated cash flows discounted at 13.0%, derived from projections of future revenues attributable to the assets, expected economic life of the assets, and royalty rates. IPR&D acquired is considered indefinite lived intangibles until research and development efforts associated with the projects are completed or abandoned. The most significant of the acquired IPR&D projects relate to multimode LTE technologies, Mobile Hot Spot, USB dongle, and Module form factors. During the third quarter of 2013, the Company recorded an intangibles impairment charge of $2.0 million related to the abandonment of certain IPR&D projects previously acquired. As of the end of the second quarter of 2014, $7.5 million of the acquired IPR&D had reached technical feasibility and was reclassified to definite-lived intangibles and with an estimated useful life of four years.
Pro forma financial information
The unaudited pro forma financial information in the table below summarizes the combined results of our operations and those of AirCard for the periods shown as though the acquisition of AirCard occurred as of the beginning of the fiscal year 2012. The pro forma financial information for the periods presented includes the accounting effects of the business combination, including adjustments to the amortization of intangibles, fair value of acquired inventory, acquisition-related costs, integration expenses and related tax effects of these adjustments, where applicable. This information is for informational purposes only, is subject to a number of estimates, assumptions and other uncertainties, and may not be indicative of the results of operations that would have been achieved if the acquisition had taken place at January 1, 2012.
The unaudited pro forma financial information is as follows (in thousands):
 
Year Ended December 31, 2013
 
(in millions)
Net revenue
$
1,415

Net income
$
57

 
 
Balance Sheet Components
Balance Sheet Components
Balance Sheet Components (in thousands)

Available-for-sale short-term investments
 
As of
 
December 31, 2015
 
December 31, 2014
 
Cost
 
Unrealized Gain
 
Unrealized Loss
 
Estimated Fair Value
 
 Cost
 
Unrealized Gain
 
Unrealized Loss
 
Estimated Fair Value
U.S. treasuries
$
95,057

 
$
1

 
$
(65
)
 
$
94,993

 
$
114,944

 
$
6

 
$
(15
)
 
$
114,935

Certificates of deposits
147

 
—

 
—

 
147

 
158

 
—

 
—

 
158

Total
$
95,204

 
$
1

 
$
(65
)
 
$
95,140

 
$
115,102

 
$
6

 
$
(15
)
 
$
115,093



The Company’s short-term investments are primarily comprised of marketable securities that are classified as available-for-sale and consist of government securities with an original maturity or remaining maturity at the time of purchase of greater than three months and no more than twelve months. Accordingly, none of the available-for-sale securities have unrealized losses greater than 12 months.

Cost method investments

The carrying value of the Company's cost method investments was $0.1 million and $1.3 million for the years ended December 31, 2015 and December 31, 2014. These investments are included in other non-current assets in the consolidated balance sheets and are carried at cost, adjusted for any impairment, because the Company does not have a controlling interest and does not have the ability to exercise significant influence over these companies. The Company monitors these investments for impairment on a quarterly basis, and adjusts carrying value for any impairment charges recognized. There were no impairments recognized in the years ended December 31, 2015, December 31, 2014 and December 31, 2013. Realized gains and losses on these investments are reported in other income (expense), net in the consolidated statements of operations. No material gains or losses were recorded in the years ended December 31, 2015, 2014 and 2013.

Accounts receivable, net
 
As of
 
December 31, 2015
 
December 31, 2014
Gross accounts receivable
$
309,926

 
$
296,239

Allowance for doubtful accounts
(1,255
)
 
(1,255
)
Allowance for sales returns
(15,904
)
 
(17,489
)
Allowance for price protection
(2,125
)
 
(1,806
)
Total allowances
(19,284
)
 
(20,550
)
Total accounts receivable, net
$
290,642

 
$
275,689



Inventories 
 
As of
 
December 31, 2015
 
December 31, 2014
Raw materials
$
4,292

 
$
3,625

Work-in-process
2

 
8

Finished goods
208,824

 
219,250

Total inventories
$
213,118

 
$
222,883



The Company records provisions for excess and obsolete inventory based on forecasts of future demand. While management believes the estimates and assumptions underlying its current forecasts are reasonable, there is risk that additional charges may be necessary if current forecasts are greater than actual demand.

Property and equipment, net 
 
As of
 
December 31, 2015
 
December 31, 2014
Computer equipment
$
11,161

 
$
9,779

Furniture, fixtures and leasehold improvements
18,317

 
19,379

Software
30,396

 
29,294

Machinery and equipment
66,662

 
60,135

Total property and equipment, gross
126,536

 
118,587

Accumulated depreciation and amortization
(104,152
)
 
(88,893
)
Total property and equipment, net
$
22,384

 
$
29,694



Depreciation and amortization expense pertaining to property and equipment was $18.1 million, $17.6 million and $17.3 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Intangibles, net
 
The following tables present details of the Company’s purchased intangibles:
 
Gross
 
Accumulated Amortization
 
Net
December 31, 2015
 
 
 
 
 
Technology
$
61,099

 
$
(48,485
)
 
$
12,614

Customer contracts and relationships
56,500

 
(23,290
)
 
33,210

Other
10,545

 
(7,422
)
 
3,123

Total intangibles, net
128,144

 
(79,197
)
 
48,947


 
Gross
 
Accumulated Amortization
 
Net
December 31, 2014
 
 
 
 
 
Technology
$
61,099

 
$
(39,341
)
 
$
21,758

Customer contracts and relationships
56,500

 
(16,205
)
 
40,295

Other
10,545

 
(6,368
)
 
4,177

Total intangibles, net
$
128,144

 
$
(61,914
)
 
$
66,230



Amortization of purchased intangibles in the years ended December 31, 2015, 2014 and 2013 was $17.3 million, $17.9 million and $15.5 million, respectively. In the year ended December 31, 2013, the Company recorded an impairment charge of $2.0 million due to the abandonment of IPR&D acquired as part of the AirCard acquisition. No impairment charges were recorded in the years ended December 31, 2015 and 2014.

Estimated amortization expense related to finite-lived intangibles for each of the next five years and thereafter is as follows:
Year Ended December 31,
Amount
2016
$
16,921

2017
11,386

2018
7,871

2019
6,028

2020
5,316

Thereafter
1,425

Total expected amortization expense
$
48,947



Goodwill
 
The changes in the carrying amount of goodwill during the years ended December 31, 2015 and 2014 are as follows:
 
 
Retail
 
Commercial
 
Service Provider
 
Total
Goodwill at December 31, 2013
 
$
45,442

 
$
36,279

 
$
74,196

 
$
155,916

      Goodwill impairment charges
 
—

 
—

 
(74,196
)
 
(74,196
)
Goodwill at December 31, 2014
 
45,442

 
$
36,279

 
—

 
81,721

      Goodwill impairment charges
 
—

 
—

 
—

 
—

Goodwill at December 31, 2015
 
$
45,442

 
$
36,279

 
$
—

 
$
81,721



In the fourth fiscal quarter of 2015, the Company completed the annual impairment test of goodwill. The test was performed as of the first day of the fourth quarter.

The Company performed a qualitative test for goodwill impairment of the retail and commercial reporting units as of September 28, 2015. Based upon the results of the qualitative testing, the respective fair values of the retail and commercial reporting units were substantially in excess of these reporting units’ carrying values. The Company believes it is more-likely-than-not that the fair value of these reporting units are greater than their respective carrying values and therefore performing the first step of the two-step impairment test for the retail and commercial reporting units was unnecessary. No goodwill impairment was recognized for the retail and commercial reporting units in the years ended December 31, 2015, 2014 or 2013.

In the fourth quarter of fiscal year 2014, the Company recorded a goodwill impairment charge of $74.2 million related to the service provider reporting unit in the year ended December 31, 2014.

There were no impairments to goodwill in the years ended December 31, 2015 and 2013. Accumulated goodwill impairment charges for the years ended December 31, 2015 and 2014, was $74.2 million and $74.2 million, respectively.

Other non-current assets
 
As of
 
December 31, 2015
 
December 31, 2014
Non-current deferred income taxes
$
68,445

*
$
38,696

Cost method investments
105

 
1,322

Other
7,824

 
8,059

Total other non-current assets
$
76,374

 
$
48,077


* Includes a reclassification of the net current deferred tax asset to the net non-current deferred tax asset in the consolidated Balance Sheet as of December 31, 2015. No prior periods were retrospectively adjusted. Refer to Note 1, The Company and Summary of Significant Accounting Policies, for additional information regarding the early adoption of the ASU 2015-17.

Other accrued liabilities  
 
As of
 
December 31, 2015
 
December 31, 2014
Sales and marketing programs
$
69,693

 
$
54,582

Warranty obligation
56,706

 
44,888

Freight
5,748

 
6,827

Other
34,135

 
37,445

Total other accrued liabilities
$
166,282

 
$
143,742

Restructuring and Other Charges (Notes)
Restructruring and Other Charges [Text Block]
Restructuring and Other Charges

The Company accounts for its restructuring plans under the authoritative guidance for exit or disposal activities. The Company presents expenses related to restructuring and other charges as a separate line item in its consolidated statements of operations.

During the year ended December 31, 2015, the Company incurred restructuring and other charges of $6.4 million. Restructuring charges recognized are primarily related to contract and employee termination charges, as well as other activities attributable to the restructuring actions announced in February 2015. During the year ended December 31, 2014, the Company incurred restructuring charges of $2.2 million. The Company recognized a charge of $1.4 million relating primarily to expenses associated with the early termination of a lease agreement in Canada and $0.8 million relating to one-time separation costs, primarily relating to the departure of the general manager of the retail business unit in the first quarter of 2014.

The following tables provide a summary of accrued restructuring and other charges activity for the years ended December 31, 2015 and 2014:  
 
Restructuring
 
Acquisition transition costs
 
Total
 
(in thousands)
Balance at December 31, 2013
$
1,013

 
$
10

 
$
1,023

Additions
2,228

 
6

 
2,234

Cash payments
(2,901
)
 
(16
)
 
(2,917
)
Adjustments
(24
)
 
—

 
(24
)
Balance at December 31, 2014
316

 
—

 
316

Additions (a)
5,946

 
—

 
5,946

Cash payments
(5,736
)
 
—

 
(5,736
)
Balance at December 31, 2015
$
526

 
$
—

 
$
526

(a) Total restructuring and other charges recognized in the Company's consolidated statement of operations for the year ended December 31, 2015 includes non-cash charges and adjustments, net of $0.5 million. These amounts have been excluded from the table above.
Derivative Financial Instruments
Derivative Financial Instruments
Derivative Financial Instruments

The Company’s subsidiaries have had, and will continue to have material future cash flows, including revenue and expenses, which are denominated in currencies other than the Company’s functional currency. The Company and all its subsidiaries designate the U.S. dollar as the functional currency. Changes in exchange rates between the Company’s functional currency and other currencies in which the Company transacts business will cause fluctuations in cash flow expectations and cash flow realized or settled. Accordingly, the Company uses derivatives to mitigate its business exposure to foreign exchange risk. The Company enters into foreign currency forward contracts in Australian dollars, British pounds, Euros, Canadian dollar, and Japanese yen to manage the exposures to foreign exchange risk related to expected future cash flows on certain forecasted revenue, costs of revenue, operating expenses and existing assets and liabilities. The Company does not enter into derivatives transactions for trading or speculative purposes.

The Company’s foreign currency forward contracts do not contain any credit-risk-related contingent features. The Company is exposed to credit losses in the event of nonperformance by the counter-parties of its forward contracts. The Company enters into derivative contracts with high-quality financial institutions and limits the amount of credit exposure to any one counter-party. In addition, the derivative contracts typically mature in less than six months and the Company continuously evaluates the credit standing of its counter-party financial institutions. The counter-parties to these arrangements are large highly rated financial institutions and the Company does not consider non-performance a material risk.

The Company may choose not to hedge certain foreign exchange exposures for a variety of reasons, including, but not limited to, materiality, accounting considerations and the prohibitive economic cost of hedging particular exposures. There can be no assurance the hedges will offset more than a portion of the financial impact resulting from movements in foreign exchange rates. The Company’s accounting policies for these instruments are based on whether the instruments are designated as hedge or non-hedge instruments in accordance with the authoritative guidance for derivatives and hedging. The Company records all derivatives on the balance sheet at fair value. The effective portions of cash flow hedges are recorded in other comprehensive income ("OCI") until the hedged item is recognized in earnings. Derivatives that are not designated as hedging instruments and the ineffective portions of its designated hedges are adjusted to fair value through earnings in other income (expense), net in the consolidated statement of operations.

The fair values of the Company’s derivative instruments and the line items on the consolidated balance sheet to which they were recorded as of December 31, 2015, and December 31, 2014, are summarized as follows (in thousands):
 
Derivative Assets
 
Balance Sheet
Location
 
Fair value at December 31, 2015
 
Balance Sheet
Location
 
Fair value at December 31, 2014
Derivative assets not designated as hedging instruments
 
Prepaid expenses and other current assets
 
$
3,203

 
Prepaid expenses and other current assets
 
$
2,416

Derivative assets designated as hedging
instruments
 
Prepaid expenses and other current assets
 
2

 
Prepaid expenses and other current assets
 
—

Total
 
 
 
$
3,205

 
 
 
$
2,416


 
Derivative Liabilities
 
Balance Sheet
Location
 
Fair value at December 31, 2015
 
Balance Sheet
Location
 
Fair value at December 31, 2014
Derivative liabilities not designated as hedging instruments
 
Other accrued liabilities
 
$
447

 
Other accrued liabilities
 
$
409

Derivative liabilities designated as hedging instruments
 
Other accrued liabilities
 
4

 
Other accrued liabilities
 
38

Total
 
 
 
$
451

 
 
 
$
447



For details of the Company’s fair value measurements, see Note 13, Fair Value Measurements.

Offsetting Derivative Assets and Liabilities

The Company has entered into master netting arrangements which allow net settlements under certain conditions. Although netting is permitted, it is currently the Company's policy and practice to record all derivative assets and liabilities on a gross basis in the consolidated balance sheets.

The following tables set forth the offsetting of derivative assets as of December 31, 2015 and December 31, 2014 (in thousands):
As of December 31, 2015
 
 
 
 
 
 
 
Gross Amounts Not Offset in the Consolidated Balance Sheets
 
 
 
Gross Amounts of Recognized Assets
 
Gross Amounts Offset in the Consolidated Balance Sheets
 
Net Amounts Of Assets Presented in the Consolidated Balance Sheets
 
Financial Instruments
 
Cash Collateral Pledged
 
Net Amount
Barclays        
 
$
577

 
$
—

 
$
577

 
$
(56
)
 
$
—

 
$
521

Wells Fargo
 
2,628

 
—

 
2,628

 
(395
)
 
—

 
2,233

Total
 
$
3,205

 
$
—

 
$
3,205

 
$
(451
)
 
$
—

 
$
2,754


As of December 31, 2014
 
 
 
 
 
 
 
Gross Amounts Not Offset in the Consolidated Balance Sheets
 
 
 
Gross Amounts of Recognized Assets
 
Gross Amounts Offset in the Consolidated Balance Sheets
 
Net Amounts Of Assets Presented in the Consolidated Balance Sheets
 
Financial Instruments
 
Cash Collateral Pledged
 
Net Amount
Barclays        
 
$
319

 
$
—

 
$
319

 
$
(16
)
 
$
—

 
$
303

Wells Fargo
 
2,097

 
—

 
2,097

 
(431
)
 
—

 
1,666

Total
 
$
2,416

 
$
—

 
$
2,416

 
$
(447
)
 
$
—

 
$
1,969


The following tables set forth the offsetting of derivative liabilities as of December 31, 2015 and December 31, 2014 (in thousands):
As of December 31, 2015
 
 
 
 
 
 
 
Gross Amounts Not Offset in the Consolidated Balance Sheets
 
 
 
Gross Amounts of Recognized Liabilities
 
Gross Amounts Offset in the Consolidated Balance Sheets
 
Net Amounts Of Liabilities Presented in the Consolidated Balance Sheets
 
Financial Instruments
 
Cash Collateral Pledged
 
Net Amount
Barclays        
 
$
56

 
$
—

 
$
56

 
$
(56
)
 
$
—

 
$
—

Wells Fargo
 
395

 
—

 
395

 
(395
)
 
—

 
—

Total
 
$
451

 
$
—

 
$
451

 
$
(451
)
 
$
—

 
$
—


As of December 31, 2014
 
 
 
 
 
 
 
Gross Amounts Not Offset in the Consolidated Balance Sheets
 
 
 
Gross Amounts of Recognized Liabilities
 
Gross Amounts Offset in the Consolidated Balance Sheets
 
Net Amounts Of Liabilities Presented in the Consolidated Balance Sheets
 
Financial Instruments
 
Cash Collateral Pledged
 
Net Amount
Barclays        
 
$
16

 
$
—

 
$
16

 
$
(16
)
 
$
—

 
$
—

Wells Fargo
 
431

 
—

 
431

 
(431
)
 
—

 
—

Total
 
$
447

 
$
—

 
$
447

 
$
(447
)
 
$
—

 
$
—



Cash flow hedges

To help manage the exposure of operating margins to fluctuations in foreign currency exchange rates, the Company hedges a portion of its anticipated foreign currency revenue, costs of revenue and certain operating expenses. These hedges are designated at the inception of the hedge relationship as cash flow hedges under the authoritative guidance for derivatives and hedging. Effectiveness is tested at least quarterly both prospectively and retrospectively using regression analysis to ensure that the hedge relationship has been effective and is likely to remain effective in the future. The Company typically hedges portions of its anticipated foreign currency exposure for three to five months. The Company enters into about five forward contracts per quarter with an average size of approximately $7 million USD equivalent related to its cash flow hedging program.

The Company expects to reclassify to earnings all of the amounts recorded in OCI associated with its cash flow hedges over the next 12 months. OCI associated with cash flow hedges of foreign currency revenue is recognized as a component of net revenue in the same period as the related revenue is recognized. OCI associated with cash flow hedges of foreign currency costs of revenue and operating expenses are recognized as a component of cost of revenue and operating expense in the same period as the related costs of revenue and operating expenses are recognized.

Derivative instruments designated as cash flow hedges must be de-designated as hedges when it is probable the forecasted hedged transaction will not occur within the designated hedge period or if not recognized within 60 days following the end of the hedge period. Deferred gains and losses in OCI associated with such derivative instruments are reclassified immediately into earnings through other income and expense. Any subsequent changes in the fair value of such derivative instruments are reflected in current earnings unless they are re-designated as hedges of other transactions. The Company did not recognize any material net gains or losses related to the loss of hedge designation on discontinued cash flow hedges during the years ended December 31, 2015, 2014 and 2013.

The effects of the Company’s derivative instruments on OCI and the consolidated statement of operations for the years ended December 31, 2015, 2014 and 2013 are summarized as follows (in thousands):
Derivatives Designated as Hedging Instruments
 
Year Ended December 31, 2015
 
Gain (Loss) 
Recognized in
OCI -
Effective
Portion (a)
 
Location of
Gain (Loss)
Reclassified from OCI
into Income - Effective
Portion
 
Gain (Loss)
Reclassified
from
OCI into
Income -
Effective
Portion (a)
 
Location of
Gain (Loss)
Recognized in
Income and
Excluded from
Effectiveness  Testing
 
Amount of Gain (Loss) Recognized in
Income and
Excluded from
Effectiveness  Testing
Cash flow hedges:
 
 
 
 
 
 
 
 
 
 
Foreign currency forward contracts
 
$
453

 
Net revenue
 
$
462

 
Other income (expense), net
 
$
(52
)
Foreign currency forward contracts
 
—

 
Cost of revenue
 
6

 
Other income (expense), net
 
—

Foreign currency forward contracts
 
—

 
Operating expenses
 
(15
)
 
Other income (expense), net
 
—

Total
 
$
453

 
 
 
$
453

 
 
 
$
(52
)

Derivatives Designated as
Hedging Instruments
 
Year Ended December 31, 2014
 
Gain (Loss)
Recognized in
OCI -
Effective
Portion (a)
 
Location of
Gain (Loss)
Reclassified from OCI
into Income - Effective
Portion
 
Gain (Loss)
Reclassified
from
OCI into
Income -
Effective
Portion (a)
 
Location of
Gain (Loss)
Recognized in
Income and
Excluded from
Effectiveness  Testing
 
Amount of Gain (Loss)  Recognized in
Income and
Excluded from
Effectiveness  Testing
Cash flow hedges:
 
 
 
 
 
 
 
 
 
 
Foreign currency forward contracts
 
$
292

 
Net revenue
 
$
459

 
Other income (expense), net
 
$
(144
)
Foreign currency forward contracts
 
—

 
Cost of revenue
 
4

 
Other income (expense), net
 
—

Foreign currency forward contracts
 
—

 
Operating expenses
 
(149
)
 
Other income (expense), net
 
—

Total
 
$
292

 
 
 
$
314

 
 
 
$
(144
)

Derivatives Designated as
Hedging Instruments
 
Year Ended December 31, 2013
 
Gain (Loss)
Recognized in
OCI -
Effective
Portion (a)
 
Location of
Gain (Loss)
Reclassified from OCI
into Income - Effective
Portion
 
Gain (Loss)
Reclassified
from
OCI into
Income -
Effective
Portion (a)
 
Location of
Gain (Loss)
Recognized in
Income and
Excluded from
Effectiveness  Testing
 
Amount of Gain (Loss)  Recognized in
Income and
Excluded from
Effectiveness  Testing
Cash flow hedges:
 
 
 
 
 
 
 
 
 
 
Foreign currency forward contracts
 
$
775

 
Net revenue
 
$
844

 
Other income (expense), net
 
$
(117
)
Foreign currency forward contracts
 
—

 
Cost of revenue
 
(9
)
 
Other income (expense), net
 
—

Foreign currency forward contracts
 
—

 
Operating expenses
 
(149
)
 
Other income (expense), net
 
—

Total
 
$
775

 
 
 
$
686

 
 
 
$
(117
)

(a)
Refer to Note 10, Stockholders' Equity, which summarizes the accumulated other comprehensive income activity related to derivatives.

The Company did not recognize any material net gains or losses related to the loss of hedge designation as there were no discontinued cash flow hedges during the years ended December 31, 2015, 2014 and 2013.

Non-designated hedges

The Company enters into non-designated hedges under the authoritative guidance for derivatives and hedging to manage the exposure of non-functional currency monetary assets and liabilities held on its financial statements to fluctuations in foreign currency exchange rates, as well as to reduce volatility in other income and expense. The non-designated hedges are generally expected to offset the changes in value of its net non-functional currency asset and liability position resulting from foreign exchange rate fluctuations. Foreign currency denominated accounts receivable and payable are hedged with non-designated hedges when the related anticipated foreign revenue and expenses are recognized in the Company’s financial statements. The Company also hedges certain non-functional currency monetary assets and liabilities that may not be incorporated into the cash flow hedge program. The Company adjusts its non-designated hedges monthly and enters into about 15 non-designated derivatives per quarter. The average size of its non-designated hedges is approximately $2 million USD equivalent and these hedges normally range from one to five months in duration.

The effects of the Company’s derivatives not designated as hedging instruments in other income (expense), net in the consolidated statements of operations for the years ended December 31, 2015, 2014 and 2013, are as follows (in thousands):
 
Derivatives Not Designated as Hedging Instruments
 
Location of Gains (Losses)
Recognized in Income on Derivative
Amount of Gains (Losses)
Recognized in Income on Derivative
Year ended December 31,
2015
2014
 
2013
Foreign currency forward contracts
 
Other income (expense), net
4,956

4,897

 
$
458

Net Income Per Share
Net Income Per Share
Net Income Per Share
Basic net income per share is computed by dividing the net income for the period by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing the net income for the period by the weighted average number of shares of common stock and potentially dilutive common stock outstanding during the period. Potentially dilutive common shares include outstanding stock options and unvested restricted stock awards, which are reflected in diluted net income per share by application of the treasury stock method. Under the treasury stock method, the amount that the employee must pay for exercising stock options, the amount of stock-based compensation cost for future services that the Company has not yet recognized, and the estimated tax benefit that would be recorded in additional paid-in capital upon exercise are assumed to be used to repurchase shares.
Net income per share for the years ended December 31, 2015, 2014 and 2013 are as follows (in thousands, except per share data):
 
 
 
Year Ended
 
 
December 31, 2015
 
December 31, 2014
 
December 31, 2013
Numerator:
 
 
 
 
 
 
Net income
 
$
48,584

 
$
8,788

 
$
55,217

 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
Weighted average common shares - basic
 
33,161

 
35,771

 
38,379

Potentially dilutive common share equivalent
 
627

 
674

 
569

Weighted average common shares - dilutive
 
33,788

 
36,445

 
38,948

 
 
 
 
 
 
 
Basic net income per share
 
$
1.47

 
$
0.25

 
$
1.44

Diluted net income per share
 
$
1.44

 
$
0.24

 
$
1.42

 
 
 
 
 
 
 
Anti-dilutive employee stock-based awards, excluded
 
1,807

 
2,617

 
2,846

Other Income (Expense), Net (Notes)
Other Income and Other Expense Disclosure [Text Block]
Other Income (Expense), Net

Other income (expense), net consisted of the following (in thousands):
 
Year Ended December 31,
 
2015
 
2014
 
2013
Foreign currency transaction loss, net
$
(5,114
)
 
$
(5,642
)
 
$
(1,592
)
Foreign currency contract gain, net
4,904

 
4,753

 
341

Gain on litigation settlements
—

 
2,800

 
—

Other
122

 
544

 
794

Total
$
(88
)
 
$
2,455

 
$
(457
)
Income Taxes Income Taxes (Notes)
Income Tax Disclosure [Text Block]
Income Taxes

Income before income taxes consists of the following (in thousands):
 
Year Ended December 31,
 
2015
 
2014
 
2013
United States
$
88,681

 
$
25,152

 
$
91,318

International
(3,117
)
 
5,609

 
1,664

Total
$
85,564

 
$
30,761

 
$
92,982



 
Year Ended December 31,
 
2015
 
2014
 
2013
Current:
 
 
 
 
 
U.S. Federal
$
30,970

 
$
29,089

 
$
30,989

State
3,139

 
2,873

 
3,751

Foreign
6,105

 
10,930

 
11,224

 
40,214

 
42,892

 
45,964

Deferred:
 
 
 
 
 
U.S. Federal
(2,645
)
 
(20,347
)
 
(6,741
)
State
134

 
(326
)
 
(1,164
)
Foreign
(723
)
 
(246
)
 
(294
)
 
(3,234
)
 
(20,919
)
 
(8,199
)
Total
$
36,980

 
$
21,973

 
$
37,765



Net deferred tax assets consist of the following (in thousands):
 
Year Ended December 31,
 
2015
 
2014
Deferred Tax Assets:
 
 
 
Accruals and allowances
$
29,279

 
$
25,756

Net operating loss carryforwards
5,353

 
6,210

Stock-based compensation
9,895

 
12,416

Deferred rent
2,740

 
2,137

Deferred revenue
1,185

 
1,654

Tax credit carryforwards
2,262

 
1,769

Acquired intangibles
22,778

 
21,916

Other
—

 
142

Total deferred tax assets
73,492

 
72,000

 
 
 
 
Deferred Tax Liabilities:
 
 
 
Depreciation and amortization
(967
)
 
(1,245
)
Other
(438
)
 
—

Total deferred tax liabilities
(1,405
)
 
(1,245
)
 
 
 
 
Valuation Allowance**:
(3,642
)
 
(3,020
)
 
 
 
 
Net deferred tax assets
$
68,445

 
$
67,735

 
 
 
 
Current portion
$
—

 
$
29,039

Non-current portion
68,445

*
38,696

Net deferred tax assets
$
68,445

 
$
67,735


* This includes a reclassification of the net current deferred tax asset to the net non-current deferred tax asset in the consolidated Balance Sheet as of December 31, 2015. No prior periods were retrospectively adjusted. Refer to Note 1, The Company and Summary of Significant Accounting Policies, for additional information regarding the early adoption of the ASU 2015-17.
** Valuation allowance is presented gross. The valuation allowance net of the federal tax effect is ($2,367) and ($1,963) for the years ended December 31, 2015 and December 31, 2014, respectively.


Management's judgment is required in determining the Company's provision for income taxes, its deferred tax assets and any valuation allowance recorded against its deferred tax assets. As of December 31, 2015, a valuation allowance of $3.6 million was placed against California deferred tax assets since the recovery of the assets is uncertain. There was a valuation allowance of $3.0 million placed against deferred tax assets as of December 31, 2014. Accordingly, the valuation allowance increased $0.6 million during 2015. In management's judgment it is more likely than not that the remaining deferred tax assets will be realized in the future as of December 31, 2015, and as such no valuation allowance has been recorded against the remaining deferred tax assets.

The effective tax rate differs from the applicable U.S. statutory federal income tax rate as follows:
 
Year Ended December 31,
 
2015
 
2014
 
2013
Tax at federal statutory rate
35.0
 %
 
35.0
 %
 
35.0
 %
State, net of federal benefit
2.6
 %
 
2.5
 %
 
2.2
 %
Impact of international operations
7.1
 %
 
19.8
 %
 
3.9
 %
Stock-based compensation
(0.4
)%
 
5.5
 %
 
1.8
 %
Tax credits
(1.2
)%
 
(3.8
)%
 
(1.9
)%
Valuation allowance
—
 %
 
3.5
 %
 
—
 %
Goodwill impairment
—
 %
 
7.8
 %
 
—
 %
Others
0.1
 %
 
1.1
 %
 
(0.4
)%
Provision for income taxes
43.2
 %
 
71.4
 %
 
40.6
 %


Income tax benefits (detriments) in the amount of $(2.2) million, $(0.5) million and $0.4 million related to stock options were credited to additional paid-in capital during the years ended December 31, 2015, 2014, and 2013, respectively. As a result of changes in fair value of available for sale securities, income tax benefit of $21,000 , $5,000 and $16,000 were recorded in comprehensive income related to the years ended December 31, 2015, 2014, and 2013, respectively.

As of December 31, 2015, the Company has approximately $15.3 million and $50,000 of acquired federal and state net operating loss carry forwards as well as $2.3 million of California tax credits carryforwards. All of these losses are subject to annual usage limitations under Internal Revenue Code Section 382. The federal losses expire in different years beginning in fiscal 2021. The state loss begins to expire in fiscal 2017. The state tax credit carryforwards have no expiration.

The Company files income tax returns in the U.S. federal jurisdiction and various state, local, and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state, or local income tax examinations for years before 2009. The Company is no longer subject to foreign income tax examinations before 2004. In November 2012, the Italian Tax Authority (ITA) commenced an audit of the Company’s 2004 through 2011 tax years, and has subsequently extended audit procedures to include the 2012 tax year. The Company is currently in litigation with the ITA with respect to all of these years. In April 2015, the German Tax Authority commenced an examination of the Company’s 2008 and 2013 tax years. The examination is ongoing. The Company has limited audit activity in various states and other foreign jurisdictions. Due to the uncertain nature of ongoing tax audits, the Company has recorded its liability for uncertain tax positions as part of its long-term liability as payments cannot be anticipated over the next 12 months. The existing tax positions of the Company continue to generate an increase in the liability for uncertain tax positions. The liability for uncertain tax positions may be reduced for liabilities that are settled with taxing authorities or on which the statute of limitations could expire without assessment from tax authorities. The possible reduction in liabilities for uncertain tax positions resulting from the expiration of statutes of limitation in multiple jurisdictions in the next 12 months is approximately $0.6 million, excluding the interest, penalties and the effect of any related deferred tax assets or liabilities.

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (“UTB”) is as follows (in thousands):

 
Federal, State, and Foreign Tax
Gross UTB Balance at December 31, 2012
$
12,339

Additions based on tax positions related to the current year
1,866

Additions for tax positions of prior years
4,106

Settlements
(3,134
)
Reductions for tax positions of prior years
(1,163
)
Reductions due to lapse of applicable statutes
(1,314
)
Adjustments due to foreign exchange rate movement
43

Gross UTB Balance at December 31, 2013
12,743

Additions based on tax positions related to the current year
1,894

Additions for tax positions of prior years
1,722

Settlements
(503
)
Reductions for tax positions of prior years
(152
)
Reductions due to lapse of applicable statutes
(1,838
)
Adjustments due to foreign exchange rate movement
(502
)
Gross UTB Balance at December 31, 2014
$
13,364

Additions based on tax positions related to the current year
1,608

Additions for tax positions of prior years
228

Settlements
(199
)
Reductions for tax positions of prior years
(302
)
Reductions due to lapse of applicable statutes
(1,053
)
Adjustments due to foreign exchange rate movement
(816
)
Gross UTB Balance at December 31, 2015
12,830



The total amount of net UTB that, if recognized would affect the effective tax rate as of December 31, 2015 is $11.3 million. The ending net UTB results from adjusting the gross balance at December 31, 2015 for items such as U.S. federal and state deferred tax, foreign tax credits, interest, and deductible taxes. The net UTB is included as a component of non-current income taxes payable within the consolidated balance sheet.

The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense. During the years ended December 31, 2015, 2014, and 2013, total interest and penalties expensed were $0.1 million, $1.1 million and $0.4 million, respectively. As of December 31, 2015 and 2014, accrued interest and penalties on a gross basis was $3.1 million and $3.0 million, respectively. Included in accrued interest are amounts related to tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.

With the exception of those foreign sales subsidiaries for which deferred tax has been provided, the Company intends to indefinitely reinvest foreign earnings. These earnings were approximately $136.9 million and $78.3 million as of December 31, 2015 and December 31, 2014, respectively. Because of the availability of U.S. foreign tax credits, it is not practicable to determine the income tax liability that would be payable if such earnings were not indefinitely reinvested.
Commitments And Contingencies
Commitments And Contingencies
Commitments and Contingencies

Leases

The Company leases office space, cars and equipment under non-cancelable operating leases with various expiration dates through December 2026. Rent expense in the years ended, December 31, 2015, 2014, and 2013 was $9.8 million, $10.8 million and $9.9 million, respectively. The terms of some of the Company’s office leases provide for rental payments on a graduated scale. The Company recognizes rent expense on a straight-line basis over the lease period, and has accrued for rent expense incurred but not paid.

Future minimum lease payments under non-cancelable operating leases are as follows (in thousands):
Year Ending December 31,
 
2016
$
8,429

2017
5,761

2018
5,598

2019
5,342

2020
5,404

Thereafter
23,209

Total minimum lease payments
$
53,743



Employment Agreements

The Company has signed various employment agreements with key executives pursuant to which, if their employment is terminated without cause, such employees are entitled to receive their base salary (and commission or bonus, as applicable) for 52 weeks (for the Chief Executive Officer), 39 weeks (for the Senior Vice President of Worldwide Operations and Support) and up to 26 weeks (for other key executives). Such employees will also continue to have stock options vest for up to a one-year period following such termination without cause. If a termination without cause or resignation for good reason occurs within one year of a change in control, such employees are entitled to full acceleration (for the Chief Executive Officer) and up to two years acceleration (for other key executives) of any unvested portion of his or her equity awards. The Company has no liabilities recorded for these agreements as of December 31, 2015.

Purchase Obligations

The Company has entered into various inventory-related purchase agreements with suppliers. Generally, under these agreements, 50% of orders are cancelable by giving notice 46 to 60 days prior to the expected shipment date and 25% of orders are cancelable by giving notice 31 to 45 days prior to the expected shipment date. Orders are non-cancelable within 30 days prior to the expected shipment date. At December 31, 2015, the Company had approximately $133 million in non-cancelable purchase commitments with suppliers. The Company establishes a loss liability for all products it does not expect to sell for which it has committed purchases from suppliers. Such losses have not been material to date. From time to time the Company’s suppliers procure unique complex components on the Company's behalf. If these components do not meet specified technical criteria or are defective, the Company should not be obligated to purchase the materials. However, disputes may arise as a result and significant resources may be spent resolving such disputes.

Warranty obligations

Changes in the Company's warranty liability, which is included as a component of “Other accrued liabilities” in the consolidated balance sheets, are as follows (in thousands):
 
Year Ended December 31,
 
2015
 
2014
 
2013
Balance at the beginning of the year
$
44,888

 
$
48,754

 
$
46,659

Provision for warranty obligations made during the year
80,085

 
62,709

 
69,755

Settlements made during the year
(68,267
)
 
(66,575
)
 
(67,660
)
Balance at the end of year
$
56,706

 
$
44,888

 
$
48,754



Guarantees and Indemnifications

The Company, as permitted under Delaware law and in accordance with its Bylaws, indemnifies its officers and directors for certain events or occurrences, subject to certain limits, while the officer or director is or was serving at the Company’s request in such capacity. The term of the indemnification period is for the officer’s or director’s lifetime. The maximum amount of potential future indemnification is unlimited; however, the Company has a Director and Officer Insurance Policy that limits its exposure and enables it to recover a portion of any future amounts paid. As a result of its insurance policy coverage, the Company believes the fair value of each indemnification agreement is minimal. Accordingly, the Company has no liabilities recorded for these agreements as of December 31, 2015.

In its sales agreements, the Company typically agrees to indemnify its direct customers, distributors and resellers for any expenses or liability resulting from claimed infringements of patents, trademarks or copyrights of third parties. The terms of these indemnification agreements are generally perpetual any time after execution of the agreement. The maximum amount of potential future indemnification is unlimited. The Company believes the estimated fair value of these agreements is minimal. Accordingly, the Company has no liabilities recorded for these agreements as of December 31, 2015.

Litigation and Other Legal Matters

The Company is involved in disputes, litigation, and other legal actions, including, but not limited to, the matters described below. In all cases, at each reporting period, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. In such cases, the Company accrues for the amount, or if a range, the Company accrues the low end of the range, only if there is not a better estimate than any other amount within the range, as a component of legal expense within litigation reserves, net. The Company monitors developments in these legal matters that could affect the estimate the Company had previously accrued. In relation to such matters, the Company currently believes that there are no existing claims or proceedings that are likely to have a material adverse effect on its financial position within the next twelve months, or the outcome of these matters is currently not determinable. There are many uncertainties associated with any litigation, and these actions or other third-party claims against the Company may cause the Company to incur costly litigation and/or substantial settlement charges. In addition, the resolution of any intellectual property litigation may require the Company to make royalty payments, which could have an adverse effect in future periods. If any of those events were to occur, the Company's business, financial condition, results of operations, and cash flows could be adversely affected. The actual liability in any such matters may be materially different from the Company's estimates, which could result in the need to adjust the liability and record additional expenses.

Ericsson v. NETGEAR, Inc.

On September 14, 2010, Ericsson Inc. and Telefonaktiebolaget LM Ericsson (collectively “Ericsson”) filed a patent infringement lawsuit against the Company and defendants D-Link Corporation, D-Link Systems, Inc., Acer, Inc., Acer America Corporation, and Gateway, Inc. in the U.S. District Court, Eastern District of Texas alleging that the defendants infringe certain Ericsson patents. The Company has been accused of infringing eight U.S. patents: 5,790,516 (the “‘516 Patent”); 6,330,435 (the “‘435 Patent”); 6,424,625 (the “‘625 Patent”); 6,519,223 (the “‘223 Patent”); 6,772,215 (the “‘215 Patent”); 5,987,019 (the “‘019 Patent”); 6,466,568 (the “‘568 Patent”); and 5,771,468 (the “'468 Patent"). Ericsson generally alleges that the Company and the other defendants have infringed and continue to infringe the Ericsson patents through the defendants' IEEE 802.11-compliant products. In addition, Ericsson alleged that the Company infringed the claimed methods and apparatuses of the '468 Patent through the Company's PCMCIA routers. The Company filed its answer to the Ericsson complaint on December 17, 2010 where it asserted the affirmative defenses of noninfringement and invalidity of the asserted patents. On June 8, 2011, Ericsson filed an amended complaint that added Dell, Toshiba and Belkin as defendants. At the status conference held on June 9, 2011, the Court set a Markman (claim construction) hearing for June 28, 2012 and trial for June 3, 2013. On June 21, 2012, Ericsson dismissed the '468 Patent (“Multi-purpose base station”) with prejudice and gave the Company a covenant not to sue as to products in the marketplace now or in the past. On June 22, 2012, Intel filed its Complaint in Intervention, meaning that Intel became an official defendant in the Ericsson case. During the exchange of the expert reports, Ericsson dropped the '516 Patent (the OFDM “pulse shaping” patent). In addition, Ericsson dropped the '223 Patent (packet discard patent) against all the defendants' products, except for those products that use Intel chips. Thus, Ericsson has now dropped the '468 Patent (wireless base station), the '516 Patent (OFDM pulse shaping), and the '223 Patent (packet discard patent) for all non-Intel products.

A jury trial in the Ericsson case occurred in the Eastern District of Texas from June 3 through June 13, 2013. After hearing the evidence, the jury found no infringement of the '435 and '223 Patents, and the jury found infringement of claim 1 of the '625 Patent, claims 1 and 5 of the '568 Patent, and claims 1 and 2 of the '215 Patent. The jury also found that there was no willful infringement by any defendant. Additionally, the jury found no invalidity of the asserted claims of the '435 and '625 Patents. The jury assessed the following damages against the defendants: D-Link: $435,000; NETGEAR: $3,555,000; Acer/Gateway: $1,170,000; Dell: $1,920,000; Toshiba: $2,445,000; Belkin: $600,000. The damages awards equated to 15 cents per unit for each accused 802.11 device sold by each defendant (5 cent per patent).

On December 16, 2013, the Company and defendants submitted their appeal brief to the Federal Circuit. Ericsson filed its response brief on February 20, 2014, and the defendants filed their reply brief before on March 24, 2014. The oral arguments before the Federal Circuit took place on June 5, 2014.

On December 4, 2014, the Federal Circuit issued its opinion and order in the Company’s Ericsson appeal. The Federal Circuit vacated the entirety of the $3.6 million jury verdict against the Company and the ongoing 15 cent per unit royalty verdict, and also vacated the entirety of the verdict against the other defendants and their ongoing royalties, finding that the District Court hadn’t properly instructed the jury on royalty rates and Ericsson’s licensing promises. The Federal Circuit held that the lower court had failed to adequately instruct the jury about Ericsson’s actual commitments to license the infringed patents on reasonable and nondiscriminatory (“RAND”) terms. Further, the Federal Circuit stated that the lower court had neglected to inform the jury that a royalty for a patented technology must be removed from the value of the entire standard, and that a RAND royalty rate should be based on the invention’s value, rather than any added value from standardization. The jury’s damages awards were therefore completely vacated, and the case was remanded for further proceedings.

While the Federal Circuit found the district court had inadequate jury instructions, it held that there was enough evidence for the jury to find infringement of two claims of U.S. Patent Number 6,466,568 and two claims of U.S. Patent Number 6,772,215, but reversed the lower court’s decision not to grant a noninfringement judgment as a matter of law regarding the third patent, U.S. Patent Number 6,424,625, finding that no reasonable jury could find that the ‘625 Patent was infringed by the defendants.

In September of 2013, Broadcom filed petitions in the USPTO at the Patent Trial and Appeal Board (PTAB) seeking inter partes review (“IPR”) of Ericsson’s three patents that the jury found were infringed by the Company and other defendants. On March 6, 2015, the PTAB invalidated all the claims of these three patents that were asserted against the Company and other defendants at trial -- claim 1 of the '625 Patent, claims 1 and 5 of the '568 Patent, and claims 1 and 2 of the '215 Patent -- ruling these claims were anticipated or obvious in light of prior art. The PTAB also rejected two motions to amend by Ericsson, which sought to substitute certain proposed claims in the '625 and '568 patents, should they be found unpatentable by the PTAB. This PTAB decision comes on top of the Federal Circuit decision (a) vacating the jury verdict after finding that the district court had not properly instructed the jury on royalty rates and Ericsson’s licensing promises, and (b) ruling that no reasonable jury could have found the ‘625 Patent infringed. Ericsson appealed the PTAB decision to the Federal Circuit and also requested that the PTAB reconsider its decision, but the PTAB denied Ericsson’s request for reconsideration. While Ericsson appeals the PTAB decision the present status of the case is that the Company does not infringe on any valid Ericsson patent, and accordingly the Company reversed the accruals related to this case in the first fiscal quarter of 2015.
Agenzia Entrate Provincial Revenue Office 1 of Milan v. NETGEAR International, Inc.

In November 2012, the Italian tax police began a comprehensive tax audit of NETGEAR International, Inc.’s Italian Branch. The scope of the audit initially was from 2004 through 2011 and was subsequently expanded to include 2012. The tax audit encompasses Corporate Income Tax (IRES), Regional Business Tax (IRAP) and Value-Added Tax (VAT). In December 2013, December 2014, August 2015, and December 2015 an assessment was issued by Inland Revenue Agency, Provincial Head Office No. 1 of Milan-Auditing Department (Milan Tax Office) for the 2004 tax year, the 2005 through 2007 tax years, the 2008 through 2010 tax years, and the 2011 through 2012 tax years, respectively. In May 2014, the Company filed with the Provincial Tax Court of Milan (Tax Court) a Request for Hearing in Open Court and Request for Suspension of the Tax Assessment for the 2004 year. The hearing was held and decision was issued on November 7, 2014. The Tax Court found in favor of the Company and nullified the assessment by the Inland Revenue Agency for 2004. The Inland Revenue Agency appealed the decision of the Tax Court on June 12, 2015. The Company filed its counter appeal with respect to the 2004 year during September 2015. With respect to 2005 through 2007, the Company filed its briefs with the Tax Court in mid-February. In June, 2015, the Company filed with the Provincial Tax Court of Milan (Tax Court) a Request for Hearing in Open Court and Request for Suspension of the Tax Assessment for the 2005 through 2007 tax years. The hearing for suspension was held and the Request for Suspension of payment was granted. The hearing for the validity of the tax assessment was held in December 2015 and we are awaiting a decision from the court. With respect to 2008 through 2010, the Company filed its briefs with the Tax Court in October 2015. With respect to 2011 through 2012, the Company plans to file its briefs with the Tax Court to contest this assessment. It is too early to reasonably estimate any financial impact to the Company resulting from this litigation matter.

Via Vadis v. NETGEAR, Inc.

On August 22, 2014, the Company was sued by Via Vadis, LLC and AC Technologies, S.A. (“Via Vadis”), in the Western District of Texas. The complaint alleges that the Company’s ReadyNAS and Stora products “with built-in BitTorrent software" allegedly infringe three related patents of Via Vadis (U.S. Patent Nos. 7,904,680, RE40, 521, and 8,656,125). Via Vadis filed similar complaints against Belkin, Buffalo, Blizzard, D-Link, and Amazon.

By referring to “built-in BitTorrent software,” the Company believes that the complaint is referring to the BitTorrent Sync application, which was released by BitTorrent Inc. in spring of 2014. At a high-level, the application allows file synchronization across multiple devices by storing the underlying files on multiple local devices, rather than on a centralized server. The Company’s ReadyNAS products do not include BitTorrent software when sold. The BitTorrent application is provided as one of a multitude of potential download options, but the software itself is not included on the Company’s devices when shipped. Therefore, the only viable allegation at this point is an indirect infringement allegation.

On November 10, 2014, the Company answered the complaint denying that it infringes the patents in suit and also asserting the affirmative defenses that the patents in suit are invalid and barred by the equitable doctrines of laches, waiver, and/or estoppel.

On February 5, 2015, the Court set the claim construction hearing for December 4, 2015 and allowed discovery for claim construction purposes to commence. On February 6, 2015, the Company filed its motion to transfer venue from the Western District of Texas to the Northern District of California with the Court; on February 13, 2015, Via Vadis filed its opposition to the Company’s motion to transfer; and on February 20, 2015, the Company filed its reply brief on its motion to transfer. In early April 2015, the Company received the plaintiff’s infringement contentions, and on June 12, 2015, the defendants served invalidity contentions. Discovery in the case was stayed until the Court issues its claim construction order. On July 30, 2015 the Court granted the Company’s motion to transfer venue to the Northern District of California. In addition, the Company learned that Amazon and Blizzard filed petitions for the inter partes reviews (“IPRs”) for the patents in suit. On October 30, 2015, the Company and Via Vadis filed a joint stipulation requesting that the Court vacate all deadlines and enter a stay of all proceedings in the case pending the Patent Trial and Appeal Board’s final non-appealable decision on the IPRs initiated by Amazon and Blizzard. On November 2, 2015 the Court granted the requested stay.

It is too early to reasonably estimate any financial impact to the Company resulting from this litigation matter.

Wetro Lan v. NETGEAR, Inc.

On January 30, 2015, the Company was sued by a non-practicing entity called Wetro Lan LLC (“Wetro Lan”) in United States District Court, Eastern District of Texas, Marshall Division. Wetro Lan alleges direct infringement by the Company of United States Patent No. 6,795,918 (the “'918 Patent”) entitled “Service Level Computer Security” based on the Company’s manufacture and selling of the “NETGEAR WGR614v9 Wireless Router and similarly situated NETGEAR, Inc. Wireless Routers.” On April 13, 2015 the Company answered the complaint. The Company denied that it infringed the patent and asserted several affirmative defenses (counterclaims), including noninfringement, invalidity, limitation of damages, laches, waiver, estoppel, and other equitable defenses, and on May 4, 2015 Wetro Lan answered the Company’s counterclaims.

On July 16, 2015, the Company filed with the Court a motion to transfer venue from the Eastern District of Texas to the Northern District of California. On August 17, 2015, Wetro Lan filed with the Court its opposition to the Company’s motion to transfer venue, and on August 24, 2015 the Company filed its Reply in Support of Transfer as filed. In November 2015, Wetro Lan filed a notice requesting a scheduling conference from which deadlines in the case arise. On January 29, 2016, the Court issued an order consolidating twenty Wetro Lan cases, including the case against the Company for all pretrial issues, except for venue. In the lead case, Wetro Lan v. ADTRAN (No. 2:15-cv-00041), the Court has not yet issued any docket control order or set any scheduling conference. The Court also has not yet ruled on the Company’s transfer motion.

It is too early to reasonably estimate any financial impact to the Company resulting from this litigation matter.
 
Frequency Systems LLC v NETGEAR, Inc.
    
On May 8, 2015, the Company was sued by a non-practicing entity named Frequency Systems LLC (“Frequency Systems”) in the United States District Court, Eastern District of Texas. Frequency Systems alleges direct or indirect infringement by the Company of a single patent, U.S. Pat. No. 8,417,205 (the “'205 Patent”), entitled “Antenna selection scheme for multiple antennae.” Frequency Systems alleges infringement generically by the Company’s “wireless routers and access points product families” without specifying any models.

Frequency Systems also simultaneously sued ADTRAN, TCL Communications, Amped Wireless, ASUS, Belkin, Buffalo, Cisco, D-Link, EnGenius Technologies, Extreme Networks, HP, HTC, Huawei, ATEN Technology, IOGear, Kyocera, LG, Linksys, Motorola Mobility, Novatel Wireless, Sharp, TP-Link, TRENDnet, Western Digital, ZTE, and ZyXEL.

The Company answered the complaint on July 23, 2015 asserting various defenses, including noninfringement and invalidity of the patent in suit.

Recently, it appears that Frequency Systems granted RPX Corporation a license. This is significant because the Company’s products that use WiFi chipsets of licensed companies (i.e. companies that are RPX members) likely will be licensed. The licensed RPX members include Broadcom and QualComm-Atheros.

On September 24, 2015, Frequency Systems served preliminary infringement contentions. Frequency Systems alleges that the Company infringes claims 1, 2 and 4 of the '205 Patent by the sale of products that are compliant with the 802.11n wireless standard, and identifies the following Company models as exemplars: R8000, R7500, R7000, R6400, R6300, R6250, AC1450, R6220, R6200, R6100, R6050, WNDR4700, WNDR4720, WNDR4500, WNDR4300, WNDR3700, WNDR3400, WNR2500, JNR3210, WNR2020, R7900, R6700, D7800, D7000, D6400, D6200, DGND4000, DGND3700, C7000, C6300, C3700, MBR1515, MBR1515A, MVBR1517, MVBR1210C, WNDAP660, EX7000, EX6200, EX6150, EX6100, X3920, EX3700, WN2500RP, WN3000RP, EX2700, A6210, LG2200D, LG6100D, WNDAP620, WND930, WNDAP360, WNDAP350, WN203, WN802T, and D2200D.

The Court held its initial scheduling conference on September 30, 2015. The Company’s invalidity contentions were submitted on November 25, 2015.

Frequency Systems granted RPX Corporation members a license sometime in the fall of 2015. This was significant because the Company’s products that use WiFi chipsets of licensed companies (i.e. companies that are RPX members) became licensed to the ‘205 Patent, and essentially all of the Company’s WiFi chip providers are licensed to the ‘205 patent through their RPX membership.

Accordingly, on November 23, 2015, Frequency Systems submitted an unopposed motion to dismiss its claims for relief against the Company without prejudice and with all attorneys’ fees, costs of Court, and expenses borne by the party incurring same. On December 14, 2015, the Court ordered that Frequency Systems’ claims for relief against the Company be dismissed without prejudice.

There was no material financial impact to the Company resulting from this litigation matter.

Verifire Network Solutions v NETGEAR, Inc.

On June 3, 2015, the Company was sued by a non-practicing entity named Verifire Network Solutions, LLC. (“Verifire”) in the United States District Court, Eastern District of Texas. Verifire alleges direct infringement by the Company of a single patent, US Patent No. 8,463,727 (the “'727 Patent”), entitled “Communication management system and communication management method,” and the complaint targets Netgear’s ProSAFE® business-class VPN Firewall and ProSECURE® UTM Firewall product families. Verifire recently has sued several other companies in the same Court on the same patent, including Fortinet, WatchGuard, Check Point, and Hewlett Packard.

The Company received an extension to answer the complaint and filed its Answer to the on August 26, 2015. On September 22, 2015, Verifire produced its preliminary infringement contentions. Verifire asserted that claims 1 and 3 of the '727 Patent cover all network security equipment, including firewalls such as the ProSAFE and ProSECURE lines manufactured by the Company.

Recently, many defendants settled, as RPX Corporation appears to have signed a settlement agreement with Verifire to settle out RPX members. The remaining defendants are: ADTRAN, Panda Distribution, Inc., and the Company. The Court held its initial scheduling conference on September 30, 2015. The Company’s invalidity contentions were submitted on November 25, 2015. The Company served its initial disclosures on October 21, 2015, and the Company’s invalidity contentions were served on November 25, 2015.

Without admitting any wrongdoing or violation of law and to avoid the distraction and expense of continued litigation and the uncertainty of a jury verdict on the merits, on January 7, 2016, the Company and Verifire settled the lawsuit for a one-time payment from the Company to Verifire in return for a perpetual, worldwide, and fully-paid-up license from Verifire to the Company to all of Verifire’s currently-held patents. The Court dismissed the case with prejudice on January 26, 2016. The settlement did not have a material financial impact to the Company.

Chrimar Systems, Inc. v NETGEAR, Inc.

On July 1, 2015, the Company was sued by a non-practicing entity named Chrimar Systems, Inc., doing business as CMS Technologies and Chrimar Holding Company, LLC (collectively, “CMS”), in the Eastern District of Texas for allegedly infringing four patents-U.S. Patent Nos. 8,155,012 (the “'012 Patent”), entitled “System and method for adapting a piece of terminal equipment”; 8,942,107 (the “'107 Patent”), entitled “Piece of ethernet terminal equipment”; 8,902,760 (the “'760 Patent”), entitled “Network system and optional tethers”; and 9,019,838 (the “'838 Patent”), entitled “Central piece of network equipment” (collectively “patents-in-suit”). 

The patents-in-suit relate to using or embedding an electrical DC current or signal into an existing Ethernet communication link in order to transmit additional data about the devices on the communication link, and the specifications for the patents are identical. It appears that Chrimar has approximately 40 active cases in the Eastern District of Texas, as well as some cases in the Northern District of California on the patents-in-suit and the parent patent to the patents-in-suit.

The Company received an extension until September 15, 2015 to answer the complaint. The Company answered the complaint with a Motion to Dismiss Chrimar’s indirect infringement claims. Chrimar subsequently filed a response to the Company’s motion to dismiss and Chrimar’s First Amended Complaint. Chrimar responded to the Motion to Dismiss by dropping its induced infringement claims and providing supplemental allegations in support of its contributory infringement claims with respect to the '760 Patent. For the '012, '107 and '838 Patents, Chrimar now only alleges direct infringement. Chrimar originally asserted direct and indirect infringement for all four patents-in-suit.

Subsequently, on October 5, 2015, the Company filed a Motion to Dismiss the Direct Infringement Claims Relating to the '760 Patent. Chrimar filed its response to this motion to dismiss on October 15, 2015, and the Company filed its Reply on October 26, 2015. Chrimar filed an Amended Complaint on December 23, 2015 to address the deficiencies in Chrimar’s complaint pointed out by the Company’s Motion to Dismiss the Direct Infringement Claims Relating to the ‘760 Patent, and the Company filed its Answer to the Amended Complaint on January 10, 2016.

On November 24, 2015, Chrimar served its infringement contentions on the Company, and Chrimar is generally attempting to assert that the patents in suit cover the Power over Ethernet standard (802.3af and 802.3at) used by certain of NETGEAR’s products.

On December 3, 2015, the Company filed with the Court a motion to transfer venue to the District Court for the Northern District of California and their memorandum of law in support thereof. On December 23, 2015, Chrimar filed its response to the Company’s motion to transfer, and, on January 8, 2016, the Company filed its reply brief in support of its motion to transfer venue. On January 15, 2016, the Court granted the Company’s motion to transfer venue to the District Court for the Northern District of California.

It is too early to reasonably estimate any financial impact to the Company resulting from this litigation matter.

Wi3, INC. v. NETGEAR, Inc.

On November 12, 2015, a lawsuit was filed against the Company by a company called Wi3, INC. (“Wi3”) in the United States District Court, Western District of New York. The patent No. 6,108,331 (the “'331 Patent”) is entitled “Single Medium Wiring Scheme for Multiple Signal Distribution in Building and Access Port Therefor,” and was filed in 1998, and should expire in July 2018. The complaint alleges direct and indirect infringement, and accuses NETGEAR’s MoCA Network Adapters and/or Network Extenders (including at least model MCA1001 v2) of infringing at least claims 26, 27, 29, and 30. The complaint alleges no pre-suit knowledge of the patent, but seeks enhanced damages. The patent has been asserted in three prior cases, and all three cases were resolved in the early stages. The Company has received an extension until March 11, 2016 to answer the Complaint.

It is too early to reasonably estimate any financial impact to the Company resulting from this litigation matter.

IP Indemnification Claims

In its sales agreements, the Company typically agrees to indemnify its direct customers, distributors and resellers (the “Indemnified Parties”) for any expenses or liability resulting from claimed infringements by the Company's products of patents, trademarks or copyrights of third parties that are asserted against the Indemnified Parties, subject to customary carve outs. The terms of these indemnification agreements are generally perpetual after execution of the agreement. The maximum amount of potential future indemnification is generally unlimited. From time to time, the Company receives requests for indemnity and may choose to assume the defense of such litigation asserted against the Indemnified Parties.

Environmental Regulation

The European Union (“EU”) enacted the Waste Electrical and Electronic Equipment Directive, which makes producers of electrical goods, including home and commercial business networking products, financially responsible for specified collection, recycling, treatment and disposal of past and future covered products. The deadline for the individual member states of the EU to transpose the directive into law in their respective countries was August 13, 2004 (such legislation, together with the directive, the “WEEE Legislation”). Producers participating in the market were financially responsible for implementing these responsibilities under the WEEE Legislation beginning in August 13, 2005. The Company adopted the authoritative guidance for asset retirement and environmental obligations in the third quarter of fiscal 2005 and has determined that its effect did not have a material impact on the Company's consolidated results of operations and financial position. The WEEE Directive was recast on July 24, 2012, published on August 13, 2012, and was implemented by all member states on February 14, 2014. The Company has determined that its effect did not have material impact on its consolidated results of operations and financial positions due to this recasting. Similar WEEE Legislation has been or may be enacted in other jurisdictions, including in the United States, Canada, Mexico, China, India, Australia and Japan. The Company continues to monitor WEEE Legislation and similar legislation in other jurisdictions as individual countries issue their implementation guidance. The Company believes it has met the applicable requirements of current WEEE Legislation and similar legislation in other jurisdictions, to the extent implementation requirements has been published.

Additionally, the EU enacted the Restriction of Hazardous Substances Directive (“RoHS Legislation”), the REACH Regulation, Packaging Directive and the Battery Directive. EU RoHS Legislation, along with similar legislation in China, requires manufacturers to ensure certain substances, including polybrominated biphenyls (“PBD”), polybrominated diphenyl ethers (“PBDE”), mercury, cadmium, hexavalent chromium and lead (except for allowed exempted materials and applications), are below specified maximum concentration values in certain products put on the market after July 1, 2006. The RoHS Directive was recast on July 21, 2011 and went into force on January 3, 2013. The Company has determined that its effect did not have material impact on its consolidated results of operations and financial positions due to this recasting. The REACH Regulation requires manufacturers to ensure the published lists of substances of very high concern in certain products are below specified maximum concentration values. The Battery Directive controls use of certain types of battery technology in certain products and requires mandatory marking. The Company believes it has met the requirements of the RoHS Directive Legislation, the REACH Regulation and the Battery Directive Legislation.

Additionally, the EU enacted the Energy Using Product (“EuP”) Directive, which came into force in August 2007. The EuP Directive required manufacturers of certain products to meet minimum energy efficiency performance requirements. These requirements were documented in EuP implementing measures issued for specific product categories. The implementing measures affecting the Company's products are minimum power supply efficiencies and may include required equipment standby modes, which also reduce energy consumption. The EuP Directive was repealed in November 2009 and replaced by the Energy Related Products ("ErP") Directive, which includes the same implementing measures of the former EuP Directive and new implementing measures applicable to the Company's products. The Company is in compliance with applicable implementing measures of the ErP Directives since it came into force.
Stockholders' Equity
Stockholders' Equity
Stockholders’ Equity

Common Stock Repurchase Programs

On October 21, 2008, October 17, 2014 and July 21, 2015, the Company’s Board of Directors authorized management to repurchase up to 6.0 million, 3.0 million and 3.0 million shares of the Company’s outstanding common stock, respectively, which, at the time of authorization, were incremental to the remaining shares under the share repurchase programs. Under the authorizations, the Company may repurchase shares of its common stock, depending on market conditions, in the open market or through privately negotiated transactions. The timing and actual number of shares subject to repurchase are at the discretion of management and are contingent on a number of factors, such as levels of cash generation from operations, cash requirements for acquisitions and the price of the Company’s common stock. As of December 31, 2015, both share repurchase programs authorized prior to July 2015 have been completed and there were 2.2 million shares remaining in the Company's buyback program. The Company repurchased, reported based on trade date, approximately 3.8 million shares of common stock at a cost of $117.7 million during the year ended December 31, 2015. During the years ended December 31, 2014 and December 31, 2013 , the Company repurchased and retired, reported based on trade date, approximately 2.8 million shares of common stock at a cost of $90.6 million and approximately 2.0 million shares of common stock at a cost of $63.1 million, respectively.

The Company repurchased, as reported based on trade date, approximately 85,000 shares of common stock at a cost of $2.6 million, under a repurchase program to help administratively facilitate the withholding and subsequent remittance of personal income and payroll taxes for individuals receiving RSUs during the year ended December 31, 2015. Similarly, during the years ended December 31, 2014 and December 31, 2013, the Company repurchased approximately 82,000 shares of common stock at a cost of $2.6 million and 14,000 shares of common stock at a cost of $0.5 million, respectively, under the same program to help facilitate tax withholding for RSUs.

These shares were retired upon repurchase. The Company’s policy related to repurchases of its common stock is to charge the excess of cost over par value to retained earnings. All repurchases were made in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended.

Accumulated Other Comprehensive Income (Loss)

The following table sets forth the changes in accumulated other comprehensive income by component, net of tax, during the years ended December 31, 2015, 2014 and 2013 (in thousands):

 
Gains and losses on available for sale securities
 
Gains and losses on derivatives
 
Total
Balance as of December 31, 2012
$
28

 
$
(24
)
 
$
4

      Other comprehensive income (loss) before reclassifications
(24
)
 
775

 
751

      Amounts reclassified from accumulated other comprehensive loss
—

 
(686
)
 
(686
)
      Net current period other comprehensive income (loss)
(24
)
 
89

 
65

Balance as of December 31, 2013
$
4

 
$
65

 
$
69

      Other comprehensive income (loss) before reclassifications
(9
)
 
292

 
283

      Amounts reclassified from accumulated other comprehensive loss
—

 
(314
)
 
(314
)
      Net current period other comprehensive loss
(9
)
 
(22
)
 
(31
)
Balance as of December 31, 2014
$
(5
)
 
$
43

 
$
38

      Other comprehensive income before reclassifications
(35
)
 
453

 
418

      Amounts reclassified from accumulated other comprehensive loss
—

 
(453
)
 
(453
)
      Net current period other comprehensive income
(35
)
 
—

 
(35
)
Balance as of December 31, 2015
$
(40
)
 
$
43

 
$
3



The following tables provide details about significant amounts reclassified out of each component of accumulated other comprehensive income for the years ended December 31, 2015, 2014 and 2013 (in thousands):

Details about Accumulated Other Comprehensive Income Components
 
Year Ended December 31, 2015
 
Year Ended December 31, 2014
 
Year Ended December 31, 2013
 
Amount Reclassified from AOCI
 
Affected Line Item in the Statement of Operations
 
Amount Reclassified from AOCI
 
Affected Line Item in the Statement of Operations
 
Amount Reclassified from AOCI
 
Affected Line Item in the Statement of Operations
Gains and losses on cash flow hedge:
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency forward contracts
 
$
462

 
Net revenue
 
$
459

 
Net revenue
 
$
844

 
Net revenue
Foreign currency forward contracts
 
6

 
Cost of revenue
 
4

 
Cost of revenue
 
(9
)
 
Cost of revenue
Foreign currency forward contracts
 
(15
)
 
Operating expenses
 
(149
)
 
Operating expenses
 
(149
)
 
Operating expenses
 
 
453

 
Total before tax
 
314

 
Total before tax
 
686

 
Total before tax
 
 
—

 
Tax expense (1)
 
—

 
Tax expense (1)
 
—

 
Tax expense (1)
 
 
$
453

 
Total, net of tax
 
$
314

 
Total, net of tax
 
$
686

 
Total, net of tax
(1)
Under our tax structure all hedging gains and losses from derivative contracts are ultimately borne by a legal entity in a jurisdiction with no income tax.
Employee Benefit Plans (Notes)
Employee Benefit Plans
Employee Benefit Plans

2000 Stock Option Plan

In April 2000, the Company adopted the 2000 Stock Option Plan (the “2000 Plan”). The 2000 Plan provided for the granting of stock options to employees and consultants of the Company. Upon the Company's initial public offering in 2003, the 2000 Plan was terminated and all shares that remained reserved but not issued under the 2000 Plan at the time of its termination were transferred to the 2003 Plan. No further equity awards can be granted under the 2000 Plan. Outstanding awards under the 2000 Stock Plan remain subject to the terms and conditions of the 2000 Plan.

2003 Stock Plan

In April 2003, the Company adopted the 2003 Stock Plan (the “2003 Plan”). The 2003 Plan provided for the granting of stock options to employees and consultants of the Company. During the second quarter of 2013, the Company's 2003 Stock Plan expired. No further equity awards can be granted under the 2003 Plan. Outstanding awards under the 2003 Stock Plan remain subject to the terms and conditions of the 2003 plan.

2006 Long Term Incentive Plan

In April 2006, the Company adopted the 2006 Long Term Incentive Plan (the “2006 Plan”). The 2006 Plan provides for the granting of stock options, stock appreciation rights, restricted stock, performance awards and other stock awards, to eligible directors, employees and consultants of the Company. Upon adoption of the 2006 Plan, the Company reserved 2,500,000 shares of common stock for issuance. During the period from 2008 to 2014, the Company adopted amendments which increased the number of shares of the Company’s common stock that may be issued under the 2006 Plan by an additional 8.5 million shares. In addition, RSUs granted under the 2006 Plan on or after June 6, 2012 are counted against shares authorized under the plan as 1.58 shares of common stock for each share subject to such award. As of December 31, 2015, approximately 1.5 million shares were reserved for future grants under the 2006 Plan.

Options granted under the 2006 Plan may be either incentive stock options ("ISOs") or nonqualified stock options ("NSOs"). ISOs may be granted only to Company employees (including officers and directors who are also employees). NSOs may be granted to Company employees, directors and consultants. Options granted generally are exercisable up to ten years provided, however, that (i) the exercise price of the ISO or NSO is not less than the estimated fair value of the underlying stock on the date of grant and (ii) the exercise price of the ISO or NSO granted to a 10% shareholder is not less than 110% of the estimated fair value of the underlying stock on the date of grant. Options granted under the 2006 Plan generally vest over four years, with the first tranche vesting at the end of 12 months and the remaining shares underlying the option vesting monthly over the remaining three years.

Stock appreciation rights may be granted under the 2006 Plan subject to the terms specified by the plan administrator, provided that the term of any such right may not exceed ten (10) years from the date of grant. The exercise price generally cannot be less than the fair market value of the Company’s common stock on the date the stock appreciation right is granted.

Restricted stock awards may be granted under the 2006 Plan subject to the terms specified by the plan administrator. The period over which any restricted award may fully vest is generally no less than three years. Restricted stock awards are non-vested stock awards that may include grants of restricted stock or grants of restricted stock units (“RSUs”). Restricted stock awards are independent of option grants and are generally subject to forfeiture if employment terminates prior to the release of the restrictions. During that period, ownership of the shares cannot be transferred. Restricted stock has the same voting rights as other common stock and is considered to be currently issued and outstanding. RSUs do not have the voting rights of common stock, and the shares underlying the RSUs are not considered issued and outstanding. The Company expenses the cost of the restricted stock awards, which is determined to be the fair market value of the shares at the date of grant, ratably over the period during which the restrictions lapse.

Performance awards may be in the form of performance shares or performance units. Performance shares are awards denominated in shares of Company common stock and a performance unit is an award denominated in units having a dollar value or other currency, as determined by the plan administrator. The plan administrator will determine the number of performance awards that will be granted and will establish the performance goals and other conditions for payment of such performance awards. The period of measuring the achievement of performance goals will be a minimum of twelve months.

Other stock-based awards may be granted under the 2006 Plan subject to the terms specified by the plan administrator. Other stock-based awards may include dividend equivalents, restricted stock awards, or amounts which are equivalent to all or a portion of any federal, state, local, domestic or foreign taxes relating to an award, and may be payable in shares, cash, other securities or any other form of property as the plan administrator may determine.

In the event of a change in control of the Company, all awards under the 2006 Plan vest in full and all outstanding performance shares and performance units will be paid out upon transfer.

Any shares of common stock subject to an award that is forfeited, settled in cash, expires or is otherwise settled without the issuance of shares shall again be available for awards under the 2006 Plan. Additionally, any shares that are tendered by a participant of the 2006 Plan or retained by the Company as full or partial payment to the Company for the purchase of an award or to satisfy tax withholding obligations in connection with an award shall no longer again be made available for issuance under the 2006 Plan.

Employee Stock Purchase Plan

The Company sponsors an Employee Stock Purchase Plan (the “ESPP”), pursuant to which eligible employees may contribute up to 10% of compensation, subject to certain income limits, to purchase shares of the Company’s common stock. Employees may purchase stock semi-annually at a price equal to 85% of the fair market value on the purchase date. Since the price of the shares is determined at the purchase date, the Company recognizes expense based on the 15% discount at purchase. For the years ended December 31, 2015, 2014, and 2013, the Company recognized ESPP compensation expense of $0.5 million, $0.5 million and $0.4 million, respectively. As of December 31, 2015, 0.1 million shares were reserved for future issuance under the ESPP.

Option Activity

Stock option activity during the year ended December 31, 2015 was as follows:

 
Number of
Shares
 
Weighted Average
Exercise Price Per
Share
 
Weighted
Average
Remaining
Contractual
Term
 
Aggregate
Intrinsic
Value
 
(In thousands)
 
(In dollars)
 
(In years)
 
(In thousands)
Outstanding at December 31, 2014
3,939

 
$
30.58

 
 
 
 
Granted
296

 
31.34

 
 
 
 
Exercised
(1,353
)
 
30.55

 
 
 
 
Cancelled
(163
)
 
33.09

 
 
 
 
Expired
(258
)
 
34.78

 
 
 
 
Outstanding at December 31, 2015
2,461

 
$
30.08

 
5.7
 
$
29,109

 
 
 
 
 
 
 
 
As of December 31, 2015:
 
 
 
 
 
 
 
Vested and expected to vest
2,386

 
$
30.02

 
5.6
 
$
28,358

Exercisable Options
1,784

 
$
29.26

 
4.7
 
$
22,562



The aggregate intrinsic values in the table above represent the total pre-tax intrinsic values (the difference between the Company’s closing stock price on the last trading day of 2015 and the exercise price, multiplied by the number of shares underlying the in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2015. This amount changes based on the fair market value of the Company’s stock. Total intrinsic value of options exercised for the year ended December 31, 2015, 2014, and 2013 was $11.4 million, $3.4 million and $4.2 million, respectively.

The total fair value of options vested during the years ended December 31, 2015, 2014, and 2013 was $6.5 million, $10.0 million and $13.0 million, respectively.

The following table summarizes significant ranges of outstanding and exercisable stock options as of December 31, 2015:

 
Options Outstanding
 
Options Exercisable
Range of Exercise Prices
Shares
Outstanding
 
Weighted-
Average
Remaining
Contractual
Life
 
Weighted-
Average
Exercise
Price Per
Share
 
Shares
Exercisable
 
Weighted-
Average
Exercise
Price Per
Share
 
(In thousands)
 
(In years)
 
(In dollars)
 
(In thousands)
 
(In dollars)
$10.69 - $28.79
591

 
3.01
 
$
20.84

 
585

 
$
20.77

$29.23 - $31.31
573

 
6.65
 
30.86

 
274

 
30.39

$31.45 - $32.54
557

 
7.53
 
32.49

 
291

 
32.48

$32.55 - $35.32
583

 
5.70
 
34.24

 
504

 
34.32

$36.80 - $40.01
157

 
5.25
 
38.13

 
130

 
38.36

$10.69 - $40.01
2,461

 
5.66
 
$
30.08

 
1,784

 
$
29.26



RSU Activity

RSU activity during the year ended December 31, 2015 was as follows:

 
Number of
Shares
 
Weighted Average
Grant Date Fair Value Per
Share
 
Weighted
Average
Remaining
Contractual
Term
 
Aggregate
Intrinsic
Value
 
(In thousands)
 
(In dollars)
 
(In years)
 
(In thousands)
Outstanding at December 31, 2014
858

 
$
30.68

 
 
 
 
RSUs granted
525

 
32.16

 
 
 
 
RSUs vested
(285
)
 
31.06

 
 
 
 
RSUs cancelled
(134
)
 
31.52

 
 
 
 
Outstanding at December 31, 2015
964

 
$
31.63

 
1.46
 
$
40,399



Total intrinsic value of RSUs, or the release date fair value of RSUs, vested during the years ended December 31, 2015, 2014 and 2013 was $8.9 million, $9.0 million and $2.9 million, respectively. The total fair value or RSUs, or the grant date fair value of RSUs, vested during the years ended December 31, 2015, 2014 and 2013 was $8.8 million, $8.4 million and $2.3 million, respectively.

Valuation and Expense Information
The Company measures stock-based compensation at the grant date based on the estimated fair value of the award. Estimated compensation cost relating to RSUs is based on the closing fair market value of the Company’s common stock on the date of grant. The fair value of Employee Stock Purchase Plan (“ESPP”) is based on the 15% discount at purchase, since the price of the shares is determined at the purchase date. The fair value of each option award is estimated on the date of grant using a Black-Scholes-Merton option valuation model that uses the assumptions noted in the following table. The estimated expected term of options granted is derived from historical data on employee exercise and post-vesting employment termination behavior. The risk free interest rate is based on the implied yield currently available on U.S. Treasury securities with a remaining term commensurate with the estimated expected term. Expected volatility is based on historical volatility over the most recent period commensurate with the estimated expected term.
The following table sets forth the weighted-average assumptions used to estimate the fair value stock option grants during the years ended December 31, 2015, 2014 and 2013:
 
 
Year Ended December 31,
 
2015
 
2014
 
2013
Expected life (in years)
4.5

 
4.5

 
4.4

Risk-free interest rate
1.44
%
 
1.43
%
 
0.72
%
Expected volatility
39.3
%
 
42.6
%
 
48.05
%
Dividend yield
—

 
—

 
—



The weighted average estimated fair value of options granted during the years ended December 31, 2015, 2014 and 2013 was $10.83, $12.04 and $13.29, respectively.

The following table sets forth stock-based compensation expense resulting from stock options, restricted stock awards, and the Employee Stock Purchase Plan included in the Company’s consolidated statements of operations (in thousands):

 
Year Ended December 31,
 
2015
 
2014
 
2013
Cost of revenue
$
1,566

 
$
2,037

 
$
1,577

Research and development
3,451

 
4,916

 
3,943

Sales and marketing
5,022

 
6,168

 
5,379

General and administrative
6,786

 
6,893

 
6,563

Total
$
16,825

 
$
20,014

 
$
17,462



The Company recognizes these compensation costs net of the estimated forfeitures on a straight-line basis over the requisite service period of the award, which is generally the option vesting term of four years.

Total stock-based compensation cost capitalized in inventory was less than $0.5 million in the year ended December 31, 2015, 2014 and 2013.

As of December 31, 2015, $6.4 million of unrecognized compensation cost related to stock options, adjusted for estimated forfeitures, is expected to be recognized over a weighted-average period of 2.4 years. As of December 31, 2015, $19.6 million of unrecognized compensation cost related to unvested RSUs, adjusted for estimated forfeitures, is expected to be recognized over a weighted-average period of 2.5 years.

401(k) Plan

In April 2000, the Company adopted the NETGEAR 401(k) Plan to which employees may contribute up to 100% of salary subject to the legal maximum. In the first quarter of 2012, the Company began matching 50% of contributions for employees that remain active with the Company through the end of the fiscal year, up to a maximum of $6,000 in employee contributions. During the years ended December 31, 2015, 2014 and 2013 the Company recognized $0.9 million, $1.0 million and $1.0 million, respectively, in expenses related to the 401(k) match.
Segment Information, Operations By Geographic Area And Customer Concentration (Notes)
Segment Information, Operations By Geographic Area And Customer Concentration
Segment Information, Operations by Geographic Area and Customer Concentration

Operating segments are components of an enterprise about which separate financial information is available and is regularly evaluated by management, namely the Chief Operating Decision Maker (“CODM”) of an organization, in order to determine operating and resource allocation decisions. By this definition, the Company has identified its CEO as the CODM and operates in three specific business units: retail, commercial, and service provider. The retail business unit consists of high performance, dependable and easy-to-use home networking, home video security, storage and digital media products. The commercial business unit consists of business networking, storage and security solutions that bring enterprise class functionality down to the small and medium-sized business at an affordable price. The service provider business unit consists of made-to-order and retail proven, whole home networking hardware and software solutions as well as 4G LTE hotspots sold to service providers for sale to their subscribers. Each business unit contains leadership focused on the product development efforts, both from a product marketing and engineering standpoint, to service the unique needs of these customer segments. The Company believes this structure enables it to better focus its efforts on the Company's core customer segments and allows it to be more nimble and opportunistic as a company overall.

The results of the reportable segments are derived directly from the Company’s management reporting system. The results are based on the Company’s method of internal reporting and are not necessarily in conformity with accounting principles generally accepted in the United States. Management measures the performance of each segment based on several metrics, including contribution income. Segment contribution income includes all product line segment revenues less the related cost of sales, research and development and sales and marketing costs. Contribution income is used, in part, to evaluate the performance of, and allocate resources to, each of the segments. Certain operating expenses are not allocated to segments because they are separately managed at the corporate level. These unallocated indirect costs include corporate costs, such as corporate research and development, corporate marketing expense and general and administrative costs, amortization of intangibles, stock-based compensation expense, restructuring and other charges, acquisition-related expense, impact to cost of sales from acquisition accounting adjustments to inventory, litigation reserves, net, impairment charges, and interest and other income (expense), net. The Company does not evaluate operating segments using discrete asset information.

Financial information for each reportable segment and a reconciliation of segment contribution income to income before income taxes is as follows (in thousands, except percentage data):
 
Year Ended December 31,
 
2015
 
2014
 
2013
Net revenue:
 
 
 
 
 
Retail
$
614,367

 
$
508,100

 
$
509,924

Commercial
264,846

 
305,677

 
311,261

Service provider
421,482

 
579,738

 
548,448

Total net revenues
$
1,300,695

 
$
1,393,515

 
$
1,369,633

Contribution income:
 
 
 
 
 
  Retail
$
85,231

 
$
76,266

 
$
73,418

  Retail contribution margin
13.9
%
 
15.0
%
 
14.4
%
  Commercial
53,393

 
70,810

 
66,506

  Commercial contribution margin
20.2
%
 
23.2
%
 
21.4
%
  Service Provider
39,151

 
47,547

 
51,620

  Service Provider contribution margin
9.3
%
 
8.2
%
 
9.4
%
  Total segment contribution income
177,775

 
194,623

 
191,544

Corporate and unallocated costs
(54,501
)
 
(53,581
)
 
(51,629
)
Amortization of intangibles (1)
(16,969
)
 
(17,573
)
 
(15,217
)
Stock-based compensation expense
(16,825
)
 
(20,014
)
 
(17,462
)
Restructuring and other charges
(6,398
)
 
(2,209
)
 
(5,335
)
Acquisition-related expense (2)
—

 
(8
)
 
(940
)
Impact to cost of sales from acquisition accounting adjustments to inventory
(407
)
 
—

 
(568
)
Litigation reserves, net
2,682

 
1,011

 
(5,354
)
Goodwill impairment charges
—

 
(74,196
)
 
—

Intangibles impairment charges
—

 
—

 
(2,000
)
Interest income
295

 
253

 
400

Other income (expense), net
(88
)
 
2,455

 
(457
)
Income before income taxes
$
85,564

 
$
30,761

 
$
92,982

________________________________
(1)
Amount excludes amortization expense related to patents within purchased intangibles in costs of revenues.
(2)
These acquisition-related charges were expensed in the period incurred and reported in the Company's consolidated statements of operations within cost of revenues and operating expense.

The Company conducts business across three geographic regions: Americas; Europe, Middle-East and Africa (“EMEA”) and Asia Pacific ("APAC'). Net revenue by geography comprises gross revenue less such items as end-user customer rebates and other sales incentives deemed to be a reduction of net revenue per the authoritative guidance for revenue recognition, sales returns and price protection. For reporting purposes revenue is attributed to each geographic region based on the location of the customer.

The following table shows net revenue by geography for the periods indicated (in thousands):
 
 
Year Ended December 31,
 
2015
 
2014
 
2013
United States (U.S.)
$
779,361

 
$
750,933

 
$
769,357

Americas (excluding U.S.)
18,385

 
19,957

 
19,961

United Kingdom (U.K.)
103,649

 
154,503

 
142,729

EMEA (excluding U.K.)
218,065

 
267,384

 
269,959

APAC
181,235

 
200,738

 
167,627

Total net revenue
$
1,300,695

 
$
1,393,515

 
$
1,369,633



Best Buy Co., Inc. and Affiliates accounted for 15% of net revenue, wholly within the retail business unit, in the year ended December 31, 2015. No customers accounted for 10% or more of net revenue in the years ended December 31, 2014 and 2013.
Long-lived assets include purchased intangibles, goodwill and property and equipment. The Company's property and equipment are located in the following geographic locations (in thousands):
 
As of
 
December 31, 2015
 
December 31, 2014
United States
$
9,832

 
$
12,453

Canada
3,586

 
4,375

EMEA
468

 
657

China
6,562

 
10,786

APAC (excluding China)
1,936

 
1,423

 
$
22,384

 
$
29,694



Fair Value Measurements
Fair Value Of Financial Instruments
Fair Value Measurements (in thousands)

The Company determines the fair values of its financial instruments based on a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The classification of a financial asset or liability within the hierarchy is based upon the lowest level input that is significant to the fair value measurement. The fair value hierarchy prioritizes the inputs into three levels that may be used to measure fair value:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability;

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

The following tables summarize assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 and 2014:
 
 
As of December 31, 2015
 
Total
 
Quoted market
prices in active
markets
(Level 1)
 
Significant
other
observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
Cash equivalents-money-market funds
$
10,976

 
$
10,976

 
$
—

 
$
—

Available-for-sale securities- U.S. treasuries (1)
94,993

 
94,993

 
—

 
—

Available-for-sale securities-certificates of deposit (1)
147

 
147

 
—

 
—

Trading securities - mutual funds (1)
1,181

 
1,181

 
—

 
—

Foreign currency forward contracts (2)
3,205

 
—

 
3,205

 
—

Total assets measured at fair value
$
110,502

 
$
107,297

 
$
3,205

 
$
—

 
(1)
Included in short-term investments on the Company's consolidated balance sheet.
(2)
Included in prepaid expenses and other current assets on the Company's consolidated balance sheet.

 
As of December 31, 2015
 
Total
 
Quoted market
prices in active
markets
(Level 1)
 
Significant
other
observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
Foreign currency forward contracts (3)
$
451

 
$
—

 
$
451

 
$
—

Total liabilities measured at fair value
$
451

 
$
—

 
$
451

 
$
—


 
(3)
Included in other accrued liabilities on the Company's consolidated balance sheet.

 
As of December 31, 2014
 
Total
 
Quoted market
prices in active
markets
(Level 1)
 
Significant
other
observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
Cash equivalents-money-market funds
$
4,408

 
$
4,408

 
$
—

 
$
—

Available-for-sale securities-U.S. treasuries (1)
114,935

 
114,935

 
—

 
—

Available-for-sale securities-certificates of deposit (1)
158

 
158

 
—

 
—

Trading securities-mutual funds (1)
802

 
802

 
—

 
—

Foreign currency forward contracts (2)
2,416

 
—

 
2,416

 
—

Total assets measured at fair value
$
122,719

 
$
120,303

 
$
2,416

 
$
—

 
(1)
Included in short-term investments on the Company's consolidated balance sheet.
(2)
Included in prepaid expenses and other current assets on the Company's consolidated balance sheet.

 
As of December 31, 2014
 
Total
 
Quoted market
prices in active
markets
(Level 1)
 
Significant
other
observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
Foreign currency forward contracts (3)
$
447

 
$
—

 
$
447

 
$
—

Total liabilities measured at fair value
$
447

 
$
—

 
$
447

 
$
—

(3)
Included in other accrued liabilities on the Company's consolidated balance sheet.

The Company's investments in cash equivalents and available-for-sale securities are classified within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets. The Company enters into foreign currency forward contracts with only those counterparties that have long-term credit ratings of A-/A3 or higher. The Company's foreign currency forward contracts are classified within Level 2 of the fair value hierarchy as they are valued using pricing models that take into account the contract terms as well as currency rates and counterparty credit rates. The Company verifies the reasonableness of these pricing models using observable market data for related inputs into such models. Additionally, the Company includes an adjustment for non-performance risk in the recognized measure of fair value of derivative instruments. At December 31, 2015 and December 31, 2014, the adjustment for non-performance risk did not have a material impact on the fair value of the Company's foreign currency forward contracts. The carrying value of non-financial assets and liabilities measured at fair value in the financial statements on a recurring basis, including accounts receivable and accounts payable, approximate fair value due to their short maturities.
Subsequent Events (Notes)
Subsequent Events [Text Block]
Subsequent Event

In January 2016, the Company went through a restructuring to reduce the cost structure of the service provider business unit and supporting functions, to match the reduced revenue outlook and concentrate resources on long-term and profitable accounts. The Company estimates its cost will be between approximately $1.5 million and $2.5 million. These charges primarily include severance, other one-time termination benefits and other associated costs. The Company expects to record the majority of these charges and complete the restructuring by the end of the first fiscal quarter of 2016.
.
Quarterly Financial Data (Notes)
Quarterly Financial Information [Text Block]
QUARTERLY FINANCIAL DATA
(In thousands, except per share amounts)
(Unaudited)

The following table presents unaudited quarterly financial information for each of the Company’s last eight quarters. This information has been derived from the Company’s unaudited financial statements and has been prepared on the same basis as the audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K. In the opinion of management, all necessary adjustments, consisting only of normal recurring adjustments, have been included to state fairly the quarterly results.
 
December 31,
2015
 
September 27,
2015
June 28,
2015
March 29,
2015
Net revenue
$
360,863

 
$
341,893

$
288,782

$
309,157

Gross profit
$
105,416

 
$
96,327

$
77,656

$
88,280

Provision for income taxes
$
8,927

 
$
10,780

$
7,258

$
10,015

Net income
$
21,807

 
$
15,099

$
3,667

$
8,011

Net income per share—basic
$
0.68

 
$
0.47

$
0.11

$
0.23

Net income per share—diluted
$
0.66

 
$
0.47

$
0.11

$
0.23

 
 
 
 
 
 
 
December 31,
2014
(a)
September 28,
2014
June 29,
2014
March 30,
2014
Net revenue
$
353,182

 
$
353,338

$
337,604

$
349,391

Gross profit
$
100,474

 
$
102,333

$
97,186

$
97,925

Provision (benefit) for income taxes
$
(5,609
)
 
$
8,847

$
9,698

$
9,037

Net income (loss)
$
(40,353
)
 
$
20,025

$
14,705

$
14,411

Net income (loss) per share—basic
$
(1.16
)
 
$
0.56

$
0.41

$
0.39

Net income (loss) per share—diluted
$
(1.16
)
 
$
0.55

$
0.40

$
0.39



(a) Net loss includes a non-cash goodwill impairment charge of $74.2 million relating to the service provider business unit.
Schedule II-Valuation and Qualifying Accounts (Notes)
Schedule of Valuation and Quarterly Financial Information [Text Block]
The following financial statement schedule of NETGEAR, Inc. for the fiscal years ended December 31, 2015, 2014 and 2013 is filed as part of this Form 10-K and should be read in conjunction with the consolidated financial statements of NETGEAR, Inc.

Schedule II—Valuation and Qualifying Accounts
(In thousands)

 
Balance at
Beginning
of Year
 
Additions
 
Deductions
 
Balance
at End of
Year
Allowance for doubtful accounts:
 
 
 
 
 
 
 
Year ended December 31, 2015
$
1,255

 
$
35

 
$
(35
)
 
$
1,255

Year ended December 31, 2014
1,255

 
189

 
(189
)
 
1,255

Year ended December 31, 2013
1,256

 
277

 
(278
)
 
1,255

 
 
 
 
 
 
 
 
Allowance for sales returns and warranty:
 
 
 
 
 
 
 
Year ended December 31, 2015
62,376

 
105,987

 
(95,754
)
 
72,609

Year ended December 31, 2014
66,221

 
97,546

 
(101,391
)
 
62,376

Year ended December 31, 2013
63,690

 
104,810

 
(102,279
)
 
66,221

 
 
 
 
 
 
 
 
Allowance for price protection:
 
 
 
 
 
 
 
Year ended December 31, 2015
1,806

 
7,467

 
(7,148
)
 
2,125

Year ended December 31, 2014
4,273

 
7,534

 
(10,001
)
 
1,806

Year ended December 31, 2013
1,783

 
8,352

 
(5,862
)
 
4,273

The Company and Summary of Significant Accounting Policies (Policies)
Basis of Presentation [Policy Text Block] 
Basis of presentation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All inter-company accounts and transactions have been eliminated in the consolidation of these subsidiaries.
Fiscal Periods [Policy Text Block] 
Fiscal periods

The Company's fiscal year begins on January 1 of the year stated and ends on December 31 of the same year. The Company reports its results on a fiscal quarter basis rather than on a calendar quarter basis. Under the fiscal quarter basis, each of the first three fiscal quarters ends on the Sunday closest to the calendar quarter end, with the fourth quarter ending on December 31.
Use of Estimates [Policy Text Block] 
Use of estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates.

Cash and Cash Equivalents [Policy Text Block] 
Cash and cash equivalents

The Company considers all highly liquid investments with an original maturity at the time of purchase of three months or less to be cash equivalents. The Company deposits cash and cash equivalents with high credit quality financial institutions.
Short-Term Investment [Policy Text Block] 
Short-term investments

Short-term investments are partially comprised of marketable securities that consist of government securities with an original maturity or a remaining maturity at the time of purchase, of greater than three months and no more than 12 months. The marketable securities are held in the Company's name with one high quality financial institution, which acts as the Company's custodian and investment manager. These marketable securities are classified as available-for-sale securities in accordance with the provisions of the authoritative guidance for investments and are carried at fair value with unrealized gains and losses reported as a separate component of stockholders' equity.

Short-term investments are also comprised of marketable securities related to deferred compensation under the Company’s Deferred Compensation Plan. Mutual funds are the only investments allowed in the Company's Deferred Compensation Plan and the investments are held in a grantor trust formed by the Company. The Company has classified these investments as trading securities as the grantor trust actively manages the asset allocation to match the participants’ notional fund allocations. These securities are recorded at fair market value with unrealized gains and losses included in other income (expense), net.
Certain Risks And Uncertainties [Policy Text Block] 
Certain risks and uncertainties

The Company's products are concentrated in the networking industry, which is characterized by rapid technological advances, changes in customer requirements and evolving regulatory requirements and industry standards. The success of the Company depends on management's ability to anticipate and/or to respond quickly and adequately to such changes. Any significant delays in the development or introduction of products could have a material adverse effect on the Company's business and operating results.

The Company relies on a limited number of third parties to manufacture all of its products. If any of the Company's third-party manufacturers cannot or will not manufacture its products in required volumes, on a cost-effective basis, in a timely manner, or at all, the Company will have to secure additional manufacturing capacity. Any interruption or delay in manufacturing could have a material adverse effect on the Company's business and operating results.
Derivatives[Policy Text Block] 
Derivative financial instruments

The Company uses foreign currency forward contracts to manage the exposures to foreign exchange risk related to expected future cash flows on certain forecasted revenue, costs of revenue, operating expenses, and on certain existing assets and liabilities. Foreign currency forward contracts generally mature within five months of inception. Under its foreign currency risk management strategy, the Company utilizes derivative instruments to reduce the impact of currency exchange rate movements on the Company's operating results by offsetting gains and losses on the forward contracts with increases or decreases in foreign currency transactions. The company does not use derivative financial instruments for speculative purposes.

The Company accounts for its derivative instruments as either assets or liabilities and records them at fair value. Derivatives that are not defined as hedges in the authoritative guidance for derivatives and hedging must be adjusted to fair value through earnings. For derivative instruments that hedge the exposure to variability in expected future cash flows that are designated as cash flow hedges, the effective portion of the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive income in stockholders' equity and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The ineffective portion of the gain or loss on the derivative instrument is recognized in current earnings. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. For derivatives designated as cash flow hedges, changes in the time value are excluded from the assessment of hedge effectiveness and are recognized in earnings.
Concentration Risk, Credit Risk [Policy Text Block] 
Concentration of credit risk
    
Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents, short-term investments and accounts receivable. The Company believes that there is minimal credit risk associated with the investment of its cash and cash equivalents and short-term investments, due to the restrictions placed on the type of investment that can be entered into under the Company's investment policy. The Company's short-term investments consist of investment-grade securities, and the Company's cash and investments are held and managed by recognized financial institutions.

The Company's customers are primarily distributors as well as retailers and broadband service providers who sell or distribute the products to a large group of end-users. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of the Company's customers to make required payments. The Company regularly performs credit evaluations of the Company's customers' financial condition and considers factors such as historical experience, credit quality, age of the accounts receivable balances, geographic or country-specific risks and current economic conditions that may affect customers' ability to pay. The Company does not require collateral from its customers. The Company secures credit insurance for certain customers in international and domestic markets.

As of December 31, 2015 and December 31, 2014, Best Buy, Inc. accounted for 37% and 21% of the Company's total accounts receivable, respectively, and no other customers accounted for 10% or greater of the Company's total accounts receivable.

The Company is exposed to credit loss in the event of nonperformance by counterparties to the foreign currency forward contracts used to mitigate the effect of foreign currency exchange rate changes. The Company believes the counterparties for its outstanding contracts are large, financially sound institutions and thus, the Company does not anticipate nonperformance by these counterparties. However, given the recent, unprecedented turbulence in the financial markets, the failure of additional counterparties is possible.

Fair Value of Financial Instruments [Policy Text Block] 
Fair value measurements

The carrying amounts of the Company's financial instruments, including cash equivalents, short-term investments, accounts receivable, and accounts payable approximate their fair values due to their short maturities. Foreign currency forward contracts are recorded at fair value based on observable market data. See Note 13, Fair Value Measurements, of the Notes to Consolidated Financial Statements for disclosures regarding fair value measurements in accordance with the authoritative guidance for fair value measurements and disclosures.
Cost Method Investments [Policy Text Block] 
Cost method investments

The Company's cost method investments are included in other non-current assets in the consolidated balance sheets and are carried at cost, adjusted for any impairment, because the Company does not have a controlling interest and does not have the ability to exercise significant influence over these companies. The Company monitors these investments for impairment on a quarterly basis, and adjusts carrying value for any impairment charges recognized. Realized gains and losses on these investments are reported in other income (expense), net in the consolidated statements of operations.

Allowance for doubtful accounts [Policy Text Block] 
Allowance for doubtful accounts

The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company regularly performs credit evaluations of its customers' financial condition and considers factors such as historical experience, credit quality, age of the accounts receivable balances, and geographic or country-specific risks and economic conditions that may affect a customer's ability to pay. The allowance for doubtful accounts is reviewed quarterly and adjusted if necessary based on the Company's assessments of its customers' ability to pay. If the financial condition of the Company's customers should deteriorate or if actual defaults are higher than the Company's historical experience, additional allowances may be required, which could have an adverse impact on operating expenses.
Inventory, Policy [Policy Text Block] 
Inventories

Inventories consist primarily of finished goods which are valued at the lower of cost or market, with cost being determined using the first-in, first-out method. The Company writes down its inventories based on estimated excess and obsolete inventories determined primarily by future demand forecasts. At the point of loss recognition, a new, lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase of the newly established cost basis.

Property, Plant and Equipment, Policy [Policy Text Block] 
Property and equipment, net

Property and equipment are stated at historical cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows:
Computer equipment
2 years
Furniture and fixtures
5 years
Software
2-5 years
Machinery and equipment
2-3 years
Leasehold improvements
Shorter of the lease term or 5 years


Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. The carrying value of the asset is reviewed on a regular basis for the existence of facts, both internal and external, that may suggest impairment.
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] 
Goodwill

Goodwill represents the purchase price over estimated fair value of net assets of businesses acquired in a business combination. Goodwill acquired in a business combination is not amortized, but instead tested for impairment at least annually on the first day of the fourth quarter. Should certain events or indicators of impairment occur between annual impairment tests, the Company performs the impairment test as those events or indicators occur. Examples of such events or circumstances include the following: a significant decline in the Company’s expected future cash flows; a sustained, significant decline in the Company’s stock price and market capitalization; a significant adverse change in the business climate; and slower growth rates.

Goodwill is tested for impairment at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not (that is, a likelihood of more than 50%) that the fair value of the reporting unit is less than its carrying value. The Company identified the reporting units as retail, commercial and service provider reporting units, as this is the lowest level for which discrete financial information is available and segment management regularly reviews the operating results. The qualitative assessment considers the following factors: macroeconomic conditions, industry and market considerations, cost factors, overall company financial performance, events affecting the reporting units, and changes in the Company's share price. If the reporting unit does not pass the qualitative assessment, the Company estimates its fair value and compares the fair value with the carrying value of its net assets. If the fair value is greater than the carrying value of its net assets, no impairment is recorded. If the fair value is less than its carrying value, the Company would determine the fair value of the goodwill by comparing the implied fair value to the carrying value of the goodwill in the same manner as if the reporting unit were being acquired in a business combination. Specifically, the Company would allocate the fair value to all of its assets and liabilities, including any unrecognized intangibles, in a hypothetical analysis that would calculate the implied fair value of goodwill. If the implied fair value of goodwill is less than the recorded goodwill, an impairment charge would be recorded to earnings in the consolidated statements of operations.

Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block] 
Intangibles, net

Purchased intangibles with finite lives are amortized using the straight-line method over the estimated economic lives of the assets, which range from four to ten years. Finite-lived intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition.

In the fourth quarter of fiscal year 2015, the Company saw a decline in net revenue in the service provider reporting unit. According to its customers, purchase constraints will tighten further in 2016 and for the foreseeable future. Due to the decline in the long-term revenue and profit outlook, the Company performed the recoverability test of the long-lived assets within the service provider reporting unit. The Company estimated the undiscounted future cash flows directly associated with each asset group and compared the amounts to the carrying value of each asset group. Based on the results of the recoverability test, the sum of undiscounted future cash flows was greater than the carrying value of each asset group and therefore no impairment was recorded. The Company also reviewed the depreciation and amortization policies for the long-lived asset groups and ensured the remaining useful lives are appropriate.

Purchased intangibles determined to have indefinite useful lives are not amortized. Indefinite-lived intangibles are reviewed for impairment at least annually during the fourth quarter and whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Measurement of an impairment loss for indefinite-lived assets that management expects to hold and use is based on the fair value of the asset. Indefinite-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. The carrying value of the asset is reviewed on a regular basis for the existence of facts, both internal and external, that may suggest impairment.
Standard Product Warranty, Policy [Policy Text Block] 
Warranty obligations

The Company provides for estimated future warranty obligations at the time revenue is recognized. The Company's standard warranty obligation to its direct customers generally provides for a right of return of any product for a full refund in the event that such product is not merchantable or is found to be damaged or defective. At the time revenue is recognized, an estimate of future warranty returns is recorded to reduce revenue in the amount of the expected credit or refund to be provided to its direct customers. At the time the Company records the reduction to revenue related to warranty returns, the Company includes within cost of revenue a write-down to reduce the carrying value of such products to net realizable value. The Company's standard warranty obligation to its end-users provides for replacement of a defective product for one or more years. Factors that affect the warranty obligation include product failure rates, material usage, and service delivery costs incurred in correcting product failures. The estimated cost associated with fulfilling the Company's warranty obligation to end-users is recorded in cost of revenue. Because the Company's products are manufactured by third-party manufacturers, in certain cases the Company has recourse to the third-party manufacturer for replacement or credit for the defective products. The Company gives consideration to amounts recoverable from its third-party manufacturers in determining its warranty liability.
Revenue Recognition, Policy [Policy Text Block] 
Revenue recognition

Revenue from product sales is generally recognized at the time the product is shipped provided that persuasive evidence of an arrangement exists, title and risk of loss has transferred to the customer, the selling price is fixed or determinable and collection of the related receivable is reasonably assured. Currently, for some of the Company's customers, title passes to the customer upon delivery to the port or country of destination, upon their receipt of the product, or upon the customer's resale of the product. At the end of each fiscal quarter, the Company estimates and defers revenue related to product where title has not transferred. The revenue continues to be deferred until such time that title passes to the customer. The Company assesses collectability based on a number of factors, including general economic and market conditions, past transaction history with the customer, and the creditworthiness of the customer. If the Company determines that collection is not reasonably assured, then revenue is deferred until receipt of the payment from the customer.

The Company has product offerings with multiple elements. The Company's multiple-element product offerings include networking hardware with embedded software, various software subscription services, and support, which are considered separate units of accounting. In general, the networking hardware with embedded software is delivered up front, while the subscription services and support are delivered over the subscription and support period. The Company allocates revenue to the software deliverables and the non-software deliverables (including software deliverables which function together with hardware deliverables to provide the product's essential functionality) based upon their relative selling price. Revenue allocated to each unit of accounting is then recognized when persuasive evidence of an arrangement exists, title and risk of loss has transferred to the customer, the selling price is fixed or determinable and collection of the related receivable is reasonably assured.

When applying the relative selling price method, the Company determines the selling price for each deliverable using vendor-specific objective evidence ("VSOE") of fair value of the deliverable, or when VSOE of fair value is unavailable, its best estimate of selling price (“ESP”), as the Company has determined it is unable to establish third-party evidence of selling price for the deliverables. In determining VSOE, the Company requires that a substantial majority of the selling prices for a deliverable sold on a stand-alone basis fall within a reasonably narrow pricing range, generally evidenced by approximately 80% of such historical stand-alone transactions falling within +/-15% of the median price. The Company determines ESP for a deliverable by considering multiple factors including, but not limited to, market conditions, competitive landscape, internal costs, gross margin objectives and pricing practices. The objective of ESP is to determine the price at which the Company would transact a sale if the deliverable were sold on a stand-alone basis. The determination of ESP is made through consultation with and formal approval by the Company's management, taking into consideration the go-to-market strategy.

Certain distributors and retailers generally have the right to return product for stock rotation purposes. Upon shipment of the product, the Company reduces revenue for an estimate of potential future product warranty and stock rotation returns related to the current period product revenue. Management analyzes historical returns, channel inventory levels, current economic trends and changes in customer demand for the Company's products when evaluating the adequacy of the allowance for sales returns, namely warranty and stock rotation returns. Revenue on shipments is also reduced for estimated price protection and sales incentives deemed to be contra-revenue under the authoritative guidance for revenue recognition.
Revenue Recognition, Incentives [Policy Text Block] 
Sales incentives

The Company accrues for sales incentives as a marketing expense if it receives an identifiable benefit in exchange and can reasonably estimate the fair value of the identifiable benefit received; otherwise, it is recorded as a reduction to revenues. As a consequence, the Company records a substantial portion of its channel marketing costs as a reduction of revenue.

The Company records estimated reductions to revenues for sales incentives at the later of when the related revenue is recognized or when the program is offered to the customer or end consumer.
Shipping and Handling Cost, Policy [Policy Text Block] 
Shipping and handling fees and costs

The Company includes shipping and handling fees billed to customers in net revenue. Shipping and handling costs associated with inbound freight are included in cost of revenue. In cases where the Company gives a freight allowance to the customer for their own inbound freight costs, such costs are appropriately recorded as a reduction in net revenue.
Research and Development Expense, Policy [Policy Text Block] 
Research and development

Costs incurred in the research and development of new products are charged to expense as incurred.
Advertising Costs, Policy [Policy Text Block] 
Advertising costs

Advertising costs are expensed as incurred.
Income Tax, Policy [Policy Text Block] 
Income taxes

The Company accounts for income taxes under an asset and liability approach. Under this method, income tax expense is recognized for the amount of taxes payable or refundable for the current year. In addition, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences resulting from different treatment for tax versus accounting for certain items, such as accruals and allowances not currently deductible for tax purposes. These differences result in deferred tax assets and liabilities, which are included within the consolidated balance sheet. The Company must then assess the likelihood that the Company's deferred tax assets will be recovered from future taxable income and to the extent the Company believes that recovery is not more likely than not, the Company must establish a valuation allowance. The Company’s assessment considers the recognition of deferred tax assets on a jurisdictional basis. Accordingly, in assessing its future taxable income on a jurisdictional basis, the Company considers the effect of its transfer pricing policies on that income.

In the ordinary course of business there is inherent uncertainty in assessing the Company's income tax positions. The Company assesses its tax positions and records benefits for all years subject to examination based on management's evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, the Company records the largest amount of tax benefit with a greater than 50 percent likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been recorded in the financial statements. Where applicable, associated interest and penalties have also been recognized as a component of income tax expense.

Earnings Per Share, Policy [Policy Text Block] 
Net income per share

Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted net income per share reflects the additional dilution from potential issuances of common stock, such as stock issuable pursuant to the exercise of stock options and awards. Potentially dilutive shares are excluded from the computation of diluted net income per share when their effect is anti-dilutive.
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] 
Stock-based compensation

The Company measures stock-based compensation at the grant date based on the fair value of the award. The fair value of stock options is estimated using the Black-Scholes option pricing model. Estimated compensation cost relating to restricted stock units (“RSUs”) is based on the closing fair market value of the Company’s common stock on the date of grant. The fair value of Employee Stock Purchase Plan (“ESPP”) is based on the 15% discount at purchase, since the price of the shares is determined at the purchase date.

The compensation expense for equity awards is reduced by an estimate for forfeitures and is recognized over the vesting period of the award under a graded vesting method.  In addition, the Company will recognize an excess benefit from stock-based compensation in equity based on the difference between tax expense computed with consideration of the windfall deduction and without consideration of the windfall deduction. In addition, the Company accounts for the indirect effects of stock-based compensation on the research tax credit and the foreign tax credit in the income statement. See Note 11, Employee Benefit Plans, of the Notes to Consolidated Financial Statements for a further discussion on stock-based compensation.
Comprehensive Income [Policy Text Block] 
Comprehensive income

Comprehensive income consists of net income and other gains and losses affecting stockholder's equity that the Company excluded from net income, including gains and losses related to fair value of short-term investments and the effective portion of cash flow hedges that were outstanding as of the end of the year.
Foreign Currency Transactions and Translations Policy [Policy Text Block] 
Foreign currency translation and re-measurement

The Company's functional currency is the U.S. dollar for all of its international subsidiaries. Foreign currency transactions of international subsidiaries are re-measured into U.S. dollars at the end-of-period exchange rates for monetary assets and liabilities, and historical exchange rates for non-monetary assets. Expenses are re-measured at average exchange rates in effect during each period, except for expenses related to non-monetary assets, which are re-measured at historical exchange rates. Revenue is re-measured at average exchange rates in effect during each period. Gains and losses arising from foreign currency transactions are included in other income (expense), net.

The Company and Summary of Significant Accounting Policies (Tables)
Schedule Of Estimated Useful Lives Of Property and Equipment, Net [Table Text Block]
Property and equipment are stated at historical cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows:
Computer equipment
2 years
Furniture and fixtures
5 years
Software
2-5 years
Machinery and equipment
2-3 years
Leasehold improvements
Shorter of the lease term or 5 years
Business Acquisitions (Tables)
Schedule of Business Acquisitions, by Acquisition 
The allocation of the purchase price was as follows (in thousands):
Property and equipment, net
$
15

Intangibles, net
4,040

Goodwill
1,195

Total purchase price
$
5,250

Schedule of Business Acquisitions, by Acquisition 
The allocation of the purchase price was as follows (in thousands):
Inventories
$
2,874

Prepaid expenses and other current assets
12,256

Property and equipment, net
7,455

Intangibles, net
69,700

Goodwill
53,841

Liabilities assumed
(6,096
)
Total purchase price
$
140,030

Pro Forma Information 
The unaudited pro forma financial information is as follows (in thousands):
 
Year Ended December 31, 2013
 
(in millions)
Net revenue
$
1,415

Net income
$
57

 
 
Balance Sheet Components (Tables)
Schedule Of Available-For-Sale Short-Term 
 
As of
 
December 31, 2015
 
December 31, 2014
 
Cost
 
Unrealized Gain
 
Unrealized Loss
 
Estimated Fair Value
 
 Cost
 
Unrealized Gain
 
Unrealized Loss
 
Estimated Fair Value
U.S. treasuries
$
95,057

 
$
1

 
$
(65
)
 
$
94,993

 
$
114,944

 
$
6

 
$
(15
)
 
$
114,935

Certificates of deposits
147

 
—

 
—

 
147

 
158

 
—

 
—

 
158

Total
$
95,204

 
$
1

 
$
(65
)
 
$
95,140

 
$
115,102

 
$
6

 
$
(15
)
 
$
115,093

Schedule Of Accounts Receivable And Related Allowances 
Accounts receivable, net
 
As of
 
December 31, 2015
 
December 31, 2014
Gross accounts receivable
$
309,926

 
$
296,239

Allowance for doubtful accounts
(1,255
)
 
(1,255
)
Allowance for sales returns
(15,904
)
 
(17,489
)
Allowance for price protection
(2,125
)
 
(1,806
)
Total allowances
(19,284
)
 
(20,550
)
Total accounts receivable, net
$
290,642

 
$
275,689

Schedule Of Inventories 
Inventories 
 
As of
 
December 31, 2015
 
December 31, 2014
Raw materials
$
4,292

 
$
3,625

Work-in-process
2

 
8

Finished goods
208,824

 
219,250

Total inventories
$
213,118

 
$
222,883

Schedule Of Property And Equipment, Net 
Property and equipment, net 
 
As of
 
December 31, 2015
 
December 31, 2014
Computer equipment
$
11,161

 
$
9,779

Furniture, fixtures and leasehold improvements
18,317

 
19,379

Software
30,396

 
29,294

Machinery and equipment
66,662

 
60,135

Total property and equipment, gross
126,536

 
118,587

Accumulated depreciation and amortization
(104,152
)
 
(88,893
)
Total property and equipment, net
$
22,384

 
$
29,694

Schedule Of Purchased Intangibles, Net 
Intangibles, net
 
The following tables present details of the Company’s purchased intangibles:
 
Gross
 
Accumulated Amortization
 
Net
December 31, 2015
 
 
 
 
 
Technology
$
61,099

 
$
(48,485
)
 
$
12,614

Customer contracts and relationships
56,500

 
(23,290
)
 
33,210

Other
10,545

 
(7,422
)
 
3,123

Total intangibles, net
128,144

 
(79,197
)
 
48,947


 
Gross
 
Accumulated Amortization
 
Net
December 31, 2014
 
 
 
 
 
Technology
$
61,099

 
$
(39,341
)
 
$
21,758

Customer contracts and relationships
56,500

 
(16,205
)
 
40,295

Other
10,545

 
(6,368
)
 
4,177

Total intangibles, net
$
128,144

 
$
(61,914
)
 
$
66,230

Schedule Of Estimated Amortization Expense Related To Intangibles 
Estimated amortization expense related to finite-lived intangibles for each of the next five years and thereafter is as follows:
Year Ended December 31,
Amount
2016
$
16,921

2017
11,386

2018
7,871

2019
6,028

2020
5,316

Thereafter
1,425

Total expected amortization expense
$
48,947

Schedule Of Activity Related To Goodwill 
Goodwill
 
The changes in the carrying amount of goodwill during the years ended December 31, 2015 and 2014 are as follows:
 
 
Retail
 
Commercial
 
Service Provider
 
Total
Goodwill at December 31, 2013
 
$
45,442

 
$
36,279

 
$
74,196

 
$
155,916

      Goodwill impairment charges
 
—

 
—

 
(74,196
)
 
(74,196
)
Goodwill at December 31, 2014
 
45,442

 
$
36,279

 
—

 
81,721

      Goodwill impairment charges
 
—

 
—

 
—

 
—

Goodwill at December 31, 2015
 
$
45,442

 
$
36,279

 
$
—

 
$
81,721

Schedule of Other Assets, Noncurrent 
Other non-current assets
 
As of
 
December 31, 2015
 
December 31, 2014
Non-current deferred income taxes
$
68,445

*
$
38,696

Cost method investments
105

 
1,322

Other
7,824

 
8,059

Total other non-current assets
$
76,374

 
$
48,077


* Includes a reclassification of the net current deferred tax asset to the net non-current deferred tax asset in the consolidated Balance Sheet as of December 31, 2015. No prior periods were retrospectively adjusted. Refer to Note 1, The Company and Summary of Significant Accounting Policies, for additional information regarding the early adoption of the ASU 2015-17.
Schedule Of Other Accrued Liabilities 
Other accrued liabilities  
 
As of
 
December 31, 2015
 
December 31, 2014
Sales and marketing programs
$
69,693

 
$
54,582

Warranty obligation
56,706

 
44,888

Freight
5,748

 
6,827

Other
34,135

 
37,445

Total other accrued liabilities
$
166,282

 
$
143,742

Restructuring and Other Charges (Tables)
Restructuring and other charges [Table Text Block]
 
 
Restructuring
 
Acquisition transition costs
 
Total
 
(in thousands)
Balance at December 31, 2013
$
1,013

 
$
10

 
$
1,023

Additions
2,228

 
6

 
2,234

Cash payments
(2,901
)
 
(16
)
 
(2,917
)
Adjustments
(24
)
 
—

 
(24
)
Balance at December 31, 2014
316

 
—

 
316

Additions (a)
5,946

 
—

 
5,946

Cash payments
(5,736
)
 
—

 
(5,736
)
Balance at December 31, 2015
$
526

 
$
—

 
$
526

(a) Total restructuring and other charges recognized in the Company's consolidated statement of operations for the year ended December 31, 2015 includes non-cash charges and adjustments, net of $0.5 million. These amounts have been excluded from the table above.
Derivative Financial Instruments (Tables)
Schedule Of Fair Values Of The Company's Derivative Instruments And The Line Items On The Consolidated Balance Sheets 
The fair values of the Company’s derivative instruments and the line items on the consolidated balance sheet to which they were recorded as of December 31, 2015, and December 31, 2014, are summarized as follows (in thousands):
 
Derivative Assets
 
Balance Sheet
Location
 
Fair value at December 31, 2015
 
Balance Sheet
Location
 
Fair value at December 31, 2014
Derivative assets not designated as hedging instruments
 
Prepaid expenses and other current assets
 
$
3,203

 
Prepaid expenses and other current assets
 
$
2,416

Derivative assets designated as hedging
instruments
 
Prepaid expenses and other current assets
 
2

 
Prepaid expenses and other current assets
 
—

Total
 
 
 
$
3,205

 
 
 
$
2,416


 
Derivative Liabilities
 
Balance Sheet
Location
 
Fair value at December 31, 2015
 
Balance Sheet
Location
 
Fair value at December 31, 2014
Derivative liabilities not designated as hedging instruments
 
Other accrued liabilities
 
$
447

 
Other accrued liabilities
 
$
409

Derivative liabilities designated as hedging instruments
 
Other accrued liabilities
 
4

 
Other accrued liabilities
 
38

Total
 
 
 
$
451

 
 
 
$
447



Schedule of Offsetting of Derivative Assets 
The following tables set forth the offsetting of derivative assets as of December 31, 2015 and December 31, 2014 (in thousands):
As of December 31, 2015
 
 
 
 
 
 
 
Gross Amounts Not Offset in the Consolidated Balance Sheets
 
 
 
Gross Amounts of Recognized Assets
 
Gross Amounts Offset in the Consolidated Balance Sheets
 
Net Amounts Of Assets Presented in the Consolidated Balance Sheets
 
Financial Instruments
 
Cash Collateral Pledged
 
Net Amount
Barclays        
 
$
577

 
$
—

 
$
577

 
$
(56
)
 
$
—

 
$
521

Wells Fargo
 
2,628

 
—

 
2,628

 
(395
)
 
—

 
2,233

Total
 
$
3,205

 
$
—

 
$
3,205

 
$
(451
)
 
$
—

 
$
2,754


As of December 31, 2014
 
 
 
 
 
 
 
Gross Amounts Not Offset in the Consolidated Balance Sheets
 
 
 
Gross Amounts of Recognized Assets
 
Gross Amounts Offset in the Consolidated Balance Sheets
 
Net Amounts Of Assets Presented in the Consolidated Balance Sheets
 
Financial Instruments
 
Cash Collateral Pledged
 
Net Amount
Barclays        
 
$
319

 
$
—

 
$
319

 
$
(16
)
 
$
—

 
$
303

Wells Fargo
 
2,097

 
—

 
2,097

 
(431
)
 
—

 
1,666

Total
 
$
2,416

 
$
—

 
$
2,416

 
$
(447
)
 
$
—

 
$
1,969

Schedule of Offsetting of Derivative Liabilities 
The following tables set forth the offsetting of derivative liabilities as of December 31, 2015 and December 31, 2014 (in thousands):
As of December 31, 2015
 
 
 
 
 
 
 
Gross Amounts Not Offset in the Consolidated Balance Sheets
 
 
 
Gross Amounts of Recognized Liabilities
 
Gross Amounts Offset in the Consolidated Balance Sheets
 
Net Amounts Of Liabilities Presented in the Consolidated Balance Sheets
 
Financial Instruments
 
Cash Collateral Pledged
 
Net Amount
Barclays        
 
$
56

 
$
—

 
$
56

 
$
(56
)
 
$
—

 
$
—

Wells Fargo
 
395

 
—

 
395

 
(395
)
 
—

 
—

Total
 
$
451

 
$
—

 
$
451

 
$
(451
)
 
$
—

 
$
—


As of December 31, 2014
 
 
 
 
 
 
 
Gross Amounts Not Offset in the Consolidated Balance Sheets
 
 
 
Gross Amounts of Recognized Liabilities
 
Gross Amounts Offset in the Consolidated Balance Sheets
 
Net Amounts Of Liabilities Presented in the Consolidated Balance Sheets
 
Financial Instruments
 
Cash Collateral Pledged
 
Net Amount
Barclays        
 
$
16

 
$
—

 
$
16

 
$
(16
)
 
$
—

 
$
—

Wells Fargo
 
431

 
—

 
431

 
(431
)
 
—

 
—

Total
 
$
447

 
$
—

 
$
447

 
$
(447
)
 
$
—

 
$
—

Schedule Of Company's Derivative Instruments On Other Comprehensive Income And The Consolidated Statement Of Operations 
The effects of the Company’s derivative instruments on OCI and the consolidated statement of operations for the years ended December 31, 2015, 2014 and 2013 are summarized as follows (in thousands):
Derivatives Designated as Hedging Instruments
 
Year Ended December 31, 2015
 
Gain (Loss) 
Recognized in
OCI -
Effective
Portion (a)
 
Location of
Gain (Loss)
Reclassified from OCI
into Income - Effective
Portion
 
Gain (Loss)
Reclassified
from
OCI into
Income -
Effective
Portion (a)
 
Location of
Gain (Loss)
Recognized in
Income and
Excluded from
Effectiveness  Testing
 
Amount of Gain (Loss) Recognized in
Income and
Excluded from
Effectiveness  Testing
Cash flow hedges:
 
 
 
 
 
 
 
 
 
 
Foreign currency forward contracts
 
$
453

 
Net revenue
 
$
462

 
Other income (expense), net
 
$
(52
)
Foreign currency forward contracts
 
—

 
Cost of revenue
 
6

 
Other income (expense), net
 
—

Foreign currency forward contracts
 
—

 
Operating expenses
 
(15
)
 
Other income (expense), net
 
—

Total
 
$
453

 
 
 
$
453

 
 
 
$
(52
)

Derivatives Designated as
Hedging Instruments
 
Year Ended December 31, 2014
 
Gain (Loss)
Recognized in
OCI -
Effective
Portion (a)
 
Location of
Gain (Loss)
Reclassified from OCI
into Income - Effective
Portion
 
Gain (Loss)
Reclassified
from
OCI into
Income -
Effective
Portion (a)
 
Location of
Gain (Loss)
Recognized in
Income and
Excluded from
Effectiveness  Testing
 
Amount of Gain (Loss)  Recognized in
Income and
Excluded from
Effectiveness  Testing
Cash flow hedges:
 
 
 
 
 
 
 
 
 
 
Foreign currency forward contracts
 
$
292

 
Net revenue
 
$
459

 
Other income (expense), net
 
$
(144
)
Foreign currency forward contracts
 
—

 
Cost of revenue
 
4

 
Other income (expense), net
 
—

Foreign currency forward contracts
 
—

 
Operating expenses
 
(149
)
 
Other income (expense), net
 
—

Total
 
$
292

 
 
 
$
314

 
 
 
$
(144
)

Derivatives Designated as
Hedging Instruments
 
Year Ended December 31, 2013
 
Gain (Loss)
Recognized in
OCI -
Effective
Portion (a)
 
Location of
Gain (Loss)
Reclassified from OCI
into Income - Effective
Portion
 
Gain (Loss)
Reclassified
from
OCI into
Income -
Effective
Portion (a)
 
Location of
Gain (Loss)
Recognized in
Income and
Excluded from
Effectiveness  Testing
 
Amount of Gain (Loss)  Recognized in
Income and
Excluded from
Effectiveness  Testing
Cash flow hedges:
 
 
 
 
 
 
 
 
 
 
Foreign currency forward contracts
 
$
775

 
Net revenue
 
$
844

 
Other income (expense), net
 
$
(117
)
Foreign currency forward contracts
 
—

 
Cost of revenue
 
(9
)
 
Other income (expense), net
 
—

Foreign currency forward contracts
 
—

 
Operating expenses
 
(149
)
 
Other income (expense), net
 
—

Total
 
$
775

 
 
 
$
686

 
 
 
$
(117
)

(a)
Refer to Note 10, Stockholders' Equity, which summarizes the accumulated other comprehensive income activity related to derivatives.
Schedule Of Derivatives Not Designated As Hedging Instruments 
The effects of the Company’s derivatives not designated as hedging instruments in other income (expense), net in the consolidated statements of operations for the years ended December 31, 2015, 2014 and 2013, are as follows (in thousands):
 
Derivatives Not Designated as Hedging Instruments
 
Location of Gains (Losses)
Recognized in Income on Derivative
Amount of Gains (Losses)
Recognized in Income on Derivative
Year ended December 31,
2015
2014
 
2013
Foreign currency forward contracts
 
Other income (expense), net
4,956

4,897

 
$
458

Net Income Per Share (Tables)
Schedule Of Net Income Per Share
Net income per share for the years ended December 31, 2015, 2014 and 2013 are as follows (in thousands, except per share data):
 
 
 
Year Ended
 
 
December 31, 2015
 
December 31, 2014
 
December 31, 2013
Numerator:
 
 
 
 
 
 
Net income
 
$
48,584

 
$
8,788

 
$
55,217

 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
Weighted average common shares - basic
 
33,161

 
35,771

 
38,379

Potentially dilutive common share equivalent
 
627

 
674

 
569

Weighted average common shares - dilutive
 
33,788

 
36,445

 
38,948

 
 
 
 
 
 
 
Basic net income per share
 
$
1.47

 
$
0.25

 
$
1.44

Diluted net income per share
 
$
1.44

 
$
0.24

 
$
1.42

 
 
 
 
 
 
 
Anti-dilutive employee stock-based awards, excluded
 
1,807

 
2,617

 
2,846

Other Income (Expense), Net (Tables)
Schedule of Other Nonoperating Income (Expense) [Table Text Block]
Other income (expense), net consisted of the following (in thousands):
 
Year Ended December 31,
 
2015
 
2014
 
2013
Foreign currency transaction loss, net
$
(5,114
)
 
$
(5,642
)
 
$
(1,592
)
Foreign currency contract gain, net
4,904

 
4,753

 
341

Gain on litigation settlements
—

 
2,800

 
—

Other
122

 
544

 
794

Total
$
(88
)
 
$
2,455

 
$
(457
)
Income Taxes (Tables)
Schedule of Income Before Income Taxes 
Income before income taxes consists of the following (in thousands):
 
Year Ended December 31,
 
2015
 
2014
 
2013
United States
$
88,681

 
$
25,152

 
$
91,318

International
(3,117
)
 
5,609

 
1,664

Total
$
85,564

 
$
30,761

 
$
92,982

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] 

 
Year Ended December 31,
 
2015
 
2014
 
2013
Current:
 
 
 
 
 
U.S. Federal
$
30,970

 
$
29,089

 
$
30,989

State
3,139

 
2,873

 
3,751

Foreign
6,105

 
10,930

 
11,224

 
40,214

 
42,892

 
45,964

Deferred:
 
 
 
 
 
U.S. Federal
(2,645
)
 
(20,347
)
 
(6,741
)
State
134

 
(326
)
 
(1,164
)
Foreign
(723
)
 
(246
)
 
(294
)
 
(3,234
)
 
(20,919
)
 
(8,199
)
Total
$
36,980

 
$
21,973

 
$
37,765

Schedule of Deferred Tax Assets and Liabilities [Table Text Block] 
Net deferred tax assets consist of the following (in thousands):
 
Year Ended December 31,
 
2015
 
2014
Deferred Tax Assets:
 
 
 
Accruals and allowances
$
29,279

 
$
25,756

Net operating loss carryforwards
5,353

 
6,210

Stock-based compensation
9,895

 
12,416

Deferred rent
2,740

 
2,137

Deferred revenue
1,185

 
1,654

Tax credit carryforwards
2,262

 
1,769

Acquired intangibles
22,778

 
21,916

Other
—

 
142

Total deferred tax assets
73,492

 
72,000

 
 
 
 
Deferred Tax Liabilities:
 
 
 
Depreciation and amortization
(967
)
 
(1,245
)
Other
(438
)
 
—

Total deferred tax liabilities
(1,405
)
 
(1,245
)
 
 
 
 
Valuation Allowance**:
(3,642
)
 
(3,020
)
 
 
 
 
Net deferred tax assets
$
68,445

 
$
67,735

 
 
 
 
Current portion
$
—

 
$
29,039

Non-current portion
68,445

*
38,696

Net deferred tax assets
$
68,445

 
$
67,735

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] 
The effective tax rate differs from the applicable U.S. statutory federal income tax rate as follows:
 
Year Ended December 31,
 
2015
 
2014
 
2013
Tax at federal statutory rate
35.0
 %
 
35.0
 %
 
35.0
 %
State, net of federal benefit
2.6
 %
 
2.5
 %
 
2.2
 %
Impact of international operations
7.1
 %
 
19.8
 %
 
3.9
 %
Stock-based compensation
(0.4
)%
 
5.5
 %
 
1.8
 %
Tax credits
(1.2
)%
 
(3.8
)%
 
(1.9
)%
Valuation allowance
—
 %
 
3.5
 %
 
—
 %
Goodwill impairment
—
 %
 
7.8
 %
 
—
 %
Others
0.1
 %
 
1.1
 %
 
(0.4
)%
Provision for income taxes
43.2
 %
 
71.4
 %
 
40.6
 %
Schedule of Reconciliation of Unrecognized Tax Benefits [Table Text Block] 
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (“UTB”) is as follows (in thousands):

 
Federal, State, and Foreign Tax
Gross UTB Balance at December 31, 2012
$
12,339

Additions based on tax positions related to the current year
1,866

Additions for tax positions of prior years
4,106

Settlements
(3,134
)
Reductions for tax positions of prior years
(1,163
)
Reductions due to lapse of applicable statutes
(1,314
)
Adjustments due to foreign exchange rate movement
43

Gross UTB Balance at December 31, 2013
12,743

Additions based on tax positions related to the current year
1,894

Additions for tax positions of prior years
1,722

Settlements
(503
)
Reductions for tax positions of prior years
(152
)
Reductions due to lapse of applicable statutes
(1,838
)
Adjustments due to foreign exchange rate movement
(502
)
Gross UTB Balance at December 31, 2014
$
13,364

Additions based on tax positions related to the current year
1,608

Additions for tax positions of prior years
228

Settlements
(199
)
Reductions for tax positions of prior years
(302
)
Reductions due to lapse of applicable statutes
(1,053
)
Adjustments due to foreign exchange rate movement
(816
)
Gross UTB Balance at December 31, 2015
12,830

Commitments And Contingencies Commitments and contingencies (Tables)
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]
Future minimum lease payments under non-cancelable operating leases are as follows (in thousands):
Year Ending December 31,
 
2016
$
8,429

2017
5,761

2018
5,598

2019
5,342

2020
5,404

Thereafter
23,209

Total minimum lease payments
$
53,743

Commitments And Contingencies Product Warranties (Tables)
Schedule of Product Warranty Liability [Table Text Block]
Changes in the Company's warranty liability, which is included as a component of “Other accrued liabilities” in the consolidated balance sheets, are as follows (in thousands):
 
Year Ended December 31,
 
2015
 
2014
 
2013
Balance at the beginning of the year
$
44,888

 
$
48,754

 
$
46,659

Provision for warranty obligations made during the year
80,085

 
62,709

 
69,755

Settlements made during the year
(68,267
)
 
(66,575
)
 
(67,660
)
Balance at the end of year
$
56,706

 
$
44,888

 
$
48,754

Stockholders' Equity (Tables)
Schedule Of Accumulated Other Comprehensive Income 
The following table sets forth the changes in accumulated other comprehensive income by component, net of tax, during the years ended December 31, 2015, 2014 and 2013 (in thousands):

 
Gains and losses on available for sale securities
 
Gains and losses on derivatives
 
Total
Balance as of December 31, 2012
$
28

 
$
(24
)
 
$
4

      Other comprehensive income (loss) before reclassifications
(24
)
 
775

 
751

      Amounts reclassified from accumulated other comprehensive loss
—

 
(686
)
 
(686
)
      Net current period other comprehensive income (loss)
(24
)
 
89

 
65

Balance as of December 31, 2013
$
4

 
$
65

 
$
69

      Other comprehensive income (loss) before reclassifications
(9
)
 
292

 
283

      Amounts reclassified from accumulated other comprehensive loss
—

 
(314
)
 
(314
)
      Net current period other comprehensive loss
(9
)
 
(22
)
 
(31
)
Balance as of December 31, 2014
$
(5
)
 
$
43

 
$
38

      Other comprehensive income before reclassifications
(35
)
 
453

 
418

      Amounts reclassified from accumulated other comprehensive loss
—

 
(453
)
 
(453
)
      Net current period other comprehensive income
(35
)
 
—

 
(35
)
Balance as of December 31, 2015
$
(40
)
 
$
43

 
$
3

Schedule of Reclassification out of Accumulated Other Comprehensive Income 
The following tables provide details about significant amounts reclassified out of each component of accumulated other comprehensive income for the years ended December 31, 2015, 2014 and 2013 (in thousands):

Details about Accumulated Other Comprehensive Income Components
 
Year Ended December 31, 2015
 
Year Ended December 31, 2014
 
Year Ended December 31, 2013
 
Amount Reclassified from AOCI
 
Affected Line Item in the Statement of Operations
 
Amount Reclassified from AOCI
 
Affected Line Item in the Statement of Operations
 
Amount Reclassified from AOCI
 
Affected Line Item in the Statement of Operations
Gains and losses on cash flow hedge:
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency forward contracts
 
$
462

 
Net revenue
 
$
459

 
Net revenue
 
$
844

 
Net revenue
Foreign currency forward contracts
 
6

 
Cost of revenue
 
4

 
Cost of revenue
 
(9
)
 
Cost of revenue
Foreign currency forward contracts
 
(15
)
 
Operating expenses
 
(149
)
 
Operating expenses
 
(149
)
 
Operating expenses
 
 
453

 
Total before tax
 
314

 
Total before tax
 
686

 
Total before tax
 
 
—

 
Tax expense (1)
 
—

 
Tax expense (1)
 
—

 
Tax expense (1)
 
 
$
453

 
Total, net of tax
 
$
314

 
Total, net of tax
 
$
686

 
Total, net of tax
(1)
Under our tax structure all hedging gains and losses from derivative contracts are ultimately borne by a legal entity in a jurisdiction with no income tax.
Employee Benefit Plans (Tables)
Schedule Of Stock Option Activity 
Option Activity

Stock option activity during the year ended December 31, 2015 was as follows:

 
Number of
Shares
 
Weighted Average
Exercise Price Per
Share
 
Weighted
Average
Remaining
Contractual
Term
 
Aggregate
Intrinsic
Value
 
(In thousands)
 
(In dollars)
 
(In years)
 
(In thousands)
Outstanding at December 31, 2014
3,939

 
$
30.58

 
 
 
 
Granted
296

 
31.34

 
 
 
 
Exercised
(1,353
)
 
30.55

 
 
 
 
Cancelled
(163
)
 
33.09

 
 
 
 
Expired
(258
)
 
34.78

 
 
 
 
Outstanding at December 31, 2015
2,461

 
$
30.08

 
5.7
 
$
29,109

 
 
 
 
 
 
 
 
As of December 31, 2015:
 
 
 
 
 
 
 
Vested and expected to vest
2,386

 
$
30.02

 
5.6
 
$
28,358

Exercisable Options
1,784

 
$
29.26

 
4.7
 
$
22,562

Schedule of Ranges of Outstanding And Exercisable Stock Options 
The following table summarizes significant ranges of outstanding and exercisable stock options as of December 31, 2015:

 
Options Outstanding
 
Options Exercisable
Range of Exercise Prices
Shares
Outstanding
 
Weighted-
Average
Remaining
Contractual
Life
 
Weighted-
Average
Exercise
Price Per
Share
 
Shares
Exercisable
 
Weighted-
Average
Exercise
Price Per
Share
 
(In thousands)
 
(In years)
 
(In dollars)
 
(In thousands)
 
(In dollars)
$10.69 - $28.79
591

 
3.01
 
$
20.84

 
585

 
$
20.77

$29.23 - $31.31
573

 
6.65
 
30.86

 
274

 
30.39

$31.45 - $32.54
557

 
7.53
 
32.49

 
291

 
32.48

$32.55 - $35.32
583

 
5.70
 
34.24

 
504

 
34.32

$36.80 - $40.01
157

 
5.25
 
38.13

 
130

 
38.36

$10.69 - $40.01
2,461

 
5.66
 
$
30.08

 
1,784

 
$
29.26

Schedule Of RSU Activity 
RSU Activity

RSU activity during the year ended December 31, 2015 was as follows:

 
Number of
Shares
 
Weighted Average
Grant Date Fair Value Per
Share
 
Weighted
Average
Remaining
Contractual
Term
 
Aggregate
Intrinsic
Value
 
(In thousands)
 
(In dollars)
 
(In years)
 
(In thousands)
Outstanding at December 31, 2014
858

 
$
30.68

 
 
 
 
RSUs granted
525

 
32.16

 
 
 
 
RSUs vested
(285
)
 
31.06

 
 
 
 
RSUs cancelled
(134
)
 
31.52

 
 
 
 
Outstanding at December 31, 2015
964

 
$
31.63

 
1.46
 
$
40,399

Schedule Of Valuation And Expense Information 
The following table sets forth the weighted-average assumptions used to estimate the fair value stock option grants during the years ended December 31, 2015, 2014 and 2013:
 
 
Year Ended December 31,
 
2015
 
2014
 
2013
Expected life (in years)
4.5

 
4.5

 
4.4

Risk-free interest rate
1.44
%
 
1.43
%
 
0.72
%
Expected volatility
39.3
%
 
42.6
%
 
48.05
%
Dividend yield
—

 
—

 
—

Schedule Of Total Stock-Based Compensation Expense Resulting From Stock Options, Restricted Stock Awards, And The Employee Stock Purchase Plan 

The following table sets forth stock-based compensation expense resulting from stock options, restricted stock awards, and the Employee Stock Purchase Plan included in the Company’s consolidated statements of operations (in thousands):

 
Year Ended December 31,
 
2015
 
2014
 
2013
Cost of revenue
$
1,566

 
$
2,037

 
$
1,577

Research and development
3,451

 
4,916

 
3,943

Sales and marketing
5,022

 
6,168

 
5,379

General and administrative
6,786

 
6,893

 
6,563

Total
$
16,825

 
$
20,014

 
$
17,462

Segment Information, Operations By Geographic Area And Customer Concentration (Tables)
Schedule Of Reportable Segment And Reconciliation Of Segment Contribution Income To Income Before Income Taxes 
Financial information for each reportable segment and a reconciliation of segment contribution income to income before income taxes is as follows (in thousands, except percentage data):
 
Year Ended December 31,
 
2015
 
2014
 
2013
Net revenue:
 
 
 
 
 
Retail
$
614,367

 
$
508,100

 
$
509,924

Commercial
264,846

 
305,677

 
311,261

Service provider
421,482

 
579,738

 
548,448

Total net revenues
$
1,300,695

 
$
1,393,515

 
$
1,369,633

Contribution income:
 
 
 
 
 
  Retail
$
85,231

 
$
76,266

 
$
73,418

  Retail contribution margin
13.9
%
 
15.0
%
 
14.4
%
  Commercial
53,393

 
70,810

 
66,506

  Commercial contribution margin
20.2
%
 
23.2
%
 
21.4
%
  Service Provider
39,151

 
47,547

 
51,620

  Service Provider contribution margin
9.3
%
 
8.2
%
 
9.4
%
  Total segment contribution income
177,775

 
194,623

 
191,544

Corporate and unallocated costs
(54,501
)
 
(53,581
)
 
(51,629
)
Amortization of intangibles (1)
(16,969
)
 
(17,573
)
 
(15,217
)
Stock-based compensation expense
(16,825
)
 
(20,014
)
 
(17,462
)
Restructuring and other charges
(6,398
)
 
(2,209
)
 
(5,335
)
Acquisition-related expense (2)
—

 
(8
)
 
(940
)
Impact to cost of sales from acquisition accounting adjustments to inventory
(407
)
 
—

 
(568
)
Litigation reserves, net
2,682

 
1,011

 
(5,354
)
Goodwill impairment charges
—

 
(74,196
)
 
—

Intangibles impairment charges
—

 
—

 
(2,000
)
Interest income
295

 
253

 
400

Other income (expense), net
(88
)
 
2,455

 
(457
)
Income before income taxes
$
85,564

 
$
30,761

 
$
92,982

________________________________
(1)
Amount excludes amortization expense related to patents within purchased intangibles in costs of revenues.
(2)
These acquisition-related charges were expensed in the period incurred and reported in the Company's consolidated statements of operations within cost of revenues and operating expense.
Schedule Of Net Revenue By Geography Periods 
The following table shows net revenue by geography for the periods indicated (in thousands):
 
 
Year Ended December 31,
 
2015
 
2014
 
2013
United States (U.S.)
$
779,361

 
$
750,933

 
$
769,357

Americas (excluding U.S.)
18,385

 
19,957

 
19,961

United Kingdom (U.K.)
103,649

 
154,503

 
142,729

EMEA (excluding U.K.)
218,065

 
267,384

 
269,959

APAC
181,235

 
200,738

 
167,627

Total net revenue
$
1,300,695

 
$
1,393,515

 
$
1,369,633

Schedule Of Long-Lived Asset By Geographic Areas 
The Company's property and equipment are located in the following geographic locations (in thousands):
 
As of
 
December 31, 2015
 
December 31, 2014
United States
$
9,832

 
$
12,453

Canada
3,586

 
4,375

EMEA
468

 
657

China
6,562

 
10,786

APAC (excluding China)
1,936

 
1,423

 
$
22,384

 
$
29,694

Fair Value Measurements (Tables)
Fair Value, Assets Measured On Recurring Basis 
 
As of December 31, 2015
 
Total
 
Quoted market
prices in active
markets
(Level 1)
 
Significant
other
observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
Cash equivalents-money-market funds
$
10,976

 
$
10,976

 
$
—

 
$
—

Available-for-sale securities- U.S. treasuries (1)
94,993

 
94,993

 
—

 
—

Available-for-sale securities-certificates of deposit (1)
147

 
147

 
—

 
—

Trading securities - mutual funds (1)
1,181

 
1,181

 
—

 
—

Foreign currency forward contracts (2)
3,205

 
—

 
3,205

 
—

Total assets measured at fair value
$
110,502

 
$
107,297

 
$
3,205

 
$
—

 
(1)
Included in short-term investments on the Company's consolidated balance sheet.
(2)
Included in prepaid expenses and other current assets on the Company's consolidated balance sheet.
 
As of December 31, 2014
 
Total
 
Quoted market
prices in active
markets
(Level 1)
 
Significant
other
observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
Cash equivalents-money-market funds
$
4,408

 
$
4,408

 
$
—

 
$
—

Available-for-sale securities-U.S. treasuries (1)
114,935

 
114,935

 
—

 
—

Available-for-sale securities-certificates of deposit (1)
158

 
158

 
—

 
—

Trading securities-mutual funds (1)
802

 
802

 
—

 
—

Foreign currency forward contracts (2)
2,416

 
—

 
2,416

 
—

Total assets measured at fair value
$
122,719

 
$
120,303

 
$
2,416

 
$
—

 
(1)
Included in short-term investments on the Company's consolidated balance sheet.
(2)
Included in prepaid expenses and other current assets on the Company's consolidated balance sheet.
Fair Value, Liabilities Measured On Recurring Basis 
 
As of December 31, 2014
 
Total
 
Quoted market
prices in active
markets
(Level 1)
 
Significant
other
observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
Foreign currency forward contracts (3)
$
447

 
$
—

 
$
447

 
$
—

Total liabilities measured at fair value
$
447

 
$
—

 
$
447

 
$
—

(3)
Included in other accrued liabilities on the Company's consolidated balance sheet.

 
As of December 31, 2015
 
Total
 
Quoted market
prices in active
markets
(Level 1)
 
Significant
other
observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
Foreign currency forward contracts (3)
$
451

 
$
—

 
$
451

 
$
—

Total liabilities measured at fair value
$
451

 
$
—

 
$
451

 
$
—


 
(3)
Included in other accrued liabilities on the Company's consolidated balance sheet.
Quarterly Financial Data (Tables)
Schedule of Quarterly Financial Information [Table Text Block]
The following table presents unaudited quarterly financial information for each of the Company’s last eight quarters. This information has been derived from the Company’s unaudited financial statements and has been prepared on the same basis as the audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K. In the opinion of management, all necessary adjustments, consisting only of normal recurring adjustments, have been included to state fairly the quarterly results.
 
December 31,
2015
 
September 27,
2015
June 28,
2015
March 29,
2015
Net revenue
$
360,863

 
$
341,893

$
288,782

$
309,157

Gross profit
$
105,416

 
$
96,327

$
77,656

$
88,280

Provision for income taxes
$
8,927

 
$
10,780

$
7,258

$
10,015

Net income
$
21,807

 
$
15,099

$
3,667

$
8,011

Net income per share—basic
$
0.68

 
$
0.47

$
0.11

$
0.23

Net income per share—diluted
$
0.66

 
$
0.47

$
0.11

$
0.23

 
 
 
 
 
 
 
December 31,
2014
(a)
September 28,
2014
June 29,
2014
March 30,
2014
Net revenue
$
353,182

 
$
353,338

$
337,604

$
349,391

Gross profit
$
100,474

 
$
102,333

$
97,186

$
97,925

Provision (benefit) for income taxes
$
(5,609
)
 
$
8,847

$
9,698

$
9,037

Net income (loss)
$
(40,353
)
 
$
20,025

$
14,705

$
14,411

Net income (loss) per share—basic
$
(1.16
)
 
$
0.56

$
0.41

$
0.39

Net income (loss) per share—diluted
$
(1.16
)
 
$
0.55

$
0.40

$
0.39



(a) Net loss includes a non-cash goodwill impairment charge of $74.2 million relating to the service provider business unit.
The Company and Summary of Significant Accounting Policies Narrative (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Significant Accounting Policies [Line Items]
 
 
 
Cost method investment
$ 105,000 
$ 1,322,000 
 
Goodwill impairment charges
0 
74,196,000 
0 
Standard Warranty Replacement of a Defective Product, Period
1 year 
 
 
Shipping, Handling and Transportation Costs
10,400,000 
10,500,000 
11,600,000 
Marketing and Advertising Expense
19,400,000 
19,100,000 
18,000,000 
Foreign Currency Transaction Gain (loss), net
(5,114,000)
(5,642,000)
(1,592,000)
Intangibles Impairment charges
0 
0 
2,000,000 
Impairment of Intangible Assets (Excluding Goodwill)
0 
0 
 
Service Provider [Member]
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
Goodwill impairment charges
0 
74,196,000 
 
Minimum [Member]
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
Finite-Lived Intangible Asset, Useful Life
4 years 
 
 
Maximum [Member]
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
Finite-Lived Intangible Asset, Useful Life
10 years 
 
 
Accounts Receivable [Member] |
Best Buy Inc [Member] |
Customer Concentration Risk [Member]
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
Concentration Risk, Percentage
37.00% 
21.00% 
 
Sierra Wireless AirCard Business [Member]
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
Intangibles Impairment charges
 
 
$ 2,000,000 
The Company and Summary of Significant Accounting Policies Property and Equipment, Net (Schedule of Estimated Useful Lives) (Details)
12 Months Ended
Dec. 31, 2015
Computer Equipment [Member]
 
Property, Plant and Equipment [Line Items]
 
Property, Plant and Equipment, Useful Life
2 years 
Furniture and Fixtures [Member]
 
Property, Plant and Equipment [Line Items]
 
Property, Plant and Equipment, Useful Life
5 years 
Software [Member] |
Minimum [Member]
 
Property, Plant and Equipment [Line Items]
 
Property, Plant and Equipment, Useful Life
2 years 
Software [Member] |
Maximum [Member]
 
Property, Plant and Equipment [Line Items]
 
Property, Plant and Equipment, Useful Life
5 years 
Machinery and Equipment [Member] |
Minimum [Member]
 
Property, Plant and Equipment [Line Items]
 
Property, Plant and Equipment, Useful Life
2 years 
Machinery and Equipment [Member] |
Maximum [Member]
 
Property, Plant and Equipment [Line Items]
 
Property, Plant and Equipment, Useful Life
3 years 
Leasehold Improvements [Member] |
Minimum [Member]
 
Property, Plant and Equipment [Line Items]
 
Property, Plant and Equipment, Estimated Useful Lives
Shorter of the lease term or 5 years 
Leasehold Improvements [Member] |
Maximum [Member]
 
Property, Plant and Equipment [Line Items]
 
Property, Plant and Equipment, Useful Life
5 years 
Business Acquisitions (Narrative) (Details) (USD $)
12 Months Ended 3 Months Ended 0 Months Ended 3 Months Ended 12 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Jun. 29, 2014
Arada Systems [Member]
Jun. 30, 2013
Arada Systems [Member]
Jun. 21, 2013
Arada Systems [Member]
Jun. 23, 2013
Arada Systems [Member]
Technology [Member]
Jun. 21, 2013
Arada Systems [Member]
Technology [Member]
Jun. 21, 2013
Arada Systems [Member]
US Federal [Member]
Jun. 21, 2013
Arada Systems [Member]
State and Local Jurisdiction [Member]
Sep. 29, 2013
Sierra Wireless AirCard Business [Member]
Jun. 30, 2013
Sierra Wireless AirCard Business [Member]
Dec. 31, 2013
Sierra Wireless AirCard Business [Member]
Apr. 2, 2013
Sierra Wireless AirCard Business [Member]
Apr. 4, 2013
Sierra Wireless AirCard Business [Member]
In-Process Research and Development [Member]
Apr. 2, 2013
Sierra Wireless AirCard Business [Member]
In-Process Research and Development [Member]
Apr. 4, 2013
Sierra Wireless AirCard Business [Member]
Technology [Member]
Jun. 29, 2014
Sierra Wireless AirCard Business [Member]
Technology [Member]
Apr. 2, 2013
Sierra Wireless AirCard Business [Member]
Technology [Member]
Apr. 4, 2013
Sierra Wireless AirCard Business [Member]
Customer Relationships [Member]
Apr. 2, 2013
Sierra Wireless AirCard Business [Member]
Customer Relationships [Member]
Apr. 4, 2013
Sierra Wireless AirCard Business [Member]
Noncompete Agreements [Member]
Apr. 2, 2013
Sierra Wireless AirCard Business [Member]
Noncompete Agreements [Member]
Apr. 4, 2013
Sierra Wireless AirCard Business [Member]
Order Backlog [Member]
Apr. 2, 2013
Sierra Wireless AirCard Business [Member]
Order Backlog [Member]
Apr. 2, 2013
Sierra Wireless AirCard Business [Member]
US Federal [Member]
Apr. 2, 2013
Sierra Wireless AirCard Business [Member]
Canadian [Member]
Apr. 2, 2013
Sierra Wireless AirCard Business [Member]
State and Local Jurisdiction [Member]
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total purchase price
 
 
 
 
$ 5,250,000 
 
 
 
 
 
 
$ 140,030,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill, Purchase Accounting Adjustments
 
 
 
 
 
 
 
 
 
 
500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchase price, cash paid
 
 
 
1,100,000 
4,200,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Intangible assets, net
 
 
 
 
 
4,040,000 
 
4,000,000 
 
 
 
 
 
69,700,000 
 
9,500,000 
 
 
16,300,000 
 
40,500,000 
 
2,300,000 
 
1,100,000 
 
 
 
Goodwill
81,721,000 
81,721,000 
155,916,000 
 
 
1,195,000 
 
 
 
 
 
 
 
53,841,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Acquisition, Goodwill, Expected Tax Deductible Amount
 
 
 
 
 
 
 
 
700,000 
1,200,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
35,800,000 
2,300,000 
53,800,000 
Discount rate used to calculate present value of future cash flows ( in percentage)
 
 
 
 
 
 
21.50% 
 
 
 
 
 
 
 
13.00% 
 
10.00% 
 
 
12.00% 
 
12.00% 
 
10.00% 
 
 
 
 
Acquired intangible assets, estimated useful life ( in years)
 
 
 
 
 
 
5 years 
 
 
 
 
 
 
 
 
 
4 years 
 
 
8 years 
 
5 years 
 
 
 
 
 
 
In Process Research and Development achieving technological feasibility
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7,500,000 
 
 
 
 
 
 
 
 
 
 
Intangibles Impairment charges
0 
0 
2,000,000 
 
 
 
 
 
 
 
 
 
2,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of Intangible Assets
$ 17,300,000 
$ 17,900,000 
$ 15,500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Acquisitions (Schedule Of Allocation Of Purchase Price) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Jun. 21, 2013
Arada Systems [Member]
Apr. 2, 2013
Sierra Wireless AirCard Business [Member]
Business Acquisition [Line Items]
 
 
 
 
 
Inventories
 
 
 
 
$ 2,874 
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets
 
 
 
 
12,256 
Property and equipment, net
 
 
 
15 
7,455 
Intangible assets, net
 
 
 
4,040 
69,700 
Goodwill
81,721 
81,721 
155,916 
1,195 
53,841 
Liabilities assumed
 
 
 
 
(6,096)
Total consideration
 
 
 
$ 5,250 
$ 140,030 
Business Acquisitions (Schedule of ProForma Information (Details) (Sierra Wireless AirCard Business [Member], USD $)
12 Months Ended
Dec. 31, 2013
Sierra Wireless AirCard Business [Member]
 
Business Acquisition [Line Items]
 
Revenue
$ 1,415,000,000 
Net Income
$ 57,000,000 
Balance Sheet Components (Narrative) (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Balance Sheet Components [Line Items]
 
 
 
Goodwill, Impaired, Accumulated Impairment Loss
$ 74,200,000 
$ 74,200,000 
 
Cost method investment
105,000 
1,322,000 
 
Cost-method Investments, Other than Temporary Impairment
0 
0 
0 
Amortization expense
17,300,000 
17,900,000 
15,500,000 
Goodwill impairment charges
0 
74,196,000 
0 
Intangibles Impairment charges
0 
0 
2,000,000 
Minimum [Member]
 
 
 
Balance Sheet Components [Line Items]
 
 
 
Available-for-sale Securities, Maturity Period ( in months)
3 months 
 
 
Maximum [Member]
 
 
 
Balance Sheet Components [Line Items]
 
 
 
Available-for-sale Securities, Maturity Period ( in months)
12 months 
 
 
Service Provider [Member]
 
 
 
Balance Sheet Components [Line Items]
 
 
 
Goodwill impairment charges
$ 0 
$ 74,196,000 
 
Balance Sheet Components (Schedule Of Available-For-Sale Short-Term) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
 
 
Cost
$ 95,204 
$ 115,102 
Unrealized Gain
1 
6 
Unrealized Loss
(65)
(15)
Estimated Fair Value
95,140 
115,093 
Treasuries [Member]
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Cost
95,057 
114,944 
Unrealized Gain
1 
6 
Unrealized Loss
(65)
(15)
Estimated Fair Value
94,993 
114,935 
Certificates Of Deposits [Member]
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Cost
147 
158 
Unrealized Gain
0 
0 
Unrealized Loss
0 
0 
Estimated Fair Value
$ 147 
$ 158 
Balance Sheet Components (Schedule Of Inventories) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Balance Sheet Related Disclosures [Abstract]
 
 
Raw materials
$ 4,292 
$ 3,625 
Work-in-process
2 
8 
Finished Goods
208,824 
219,250 
Total
$ 213,118 
$ 222,883 
Balance Sheet Components (Schedule Of Property And Equipment, Net) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Total property and equipment, gross
$ 126,536 
$ 118,587 
Accumulated depreciation and amortization
(104,152)
(88,893)
Total property and equipment, net
22,384 
29,694 
Computer Equipment [Member]
 
 
Total property and equipment, gross
11,161 
9,779 
Furniture, Fixtures And Leasehold Improvements [Member]
 
 
Total property and equipment, gross
18,317 
19,379 
Software [Member]
 
 
Total property and equipment, gross
30,396 
29,294 
Machinery and Equipment [Member]
 
 
Total property and equipment, gross
$ 66,662 
$ 60,135 
Balance Sheet Components Balance Sheet Components - Property and Equipment, other information (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Property, Plant and Equipment [Line Items]
 
 
 
Depreciation
$ 18.1 
$ 17.6 
$ 17.3 
Balance Sheet Components (Schedule Of Intangibles, Net) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Purchased Intangible Assets [Line Items]
 
 
Gross
$ 128,144 
$ 128,144 
Accumulated Amortization
(79,197)
(61,914)
Finite-lived intangibles, net
48,947 
66,230 
Intangibles, net
48,947 
66,230 
Technology [Member]
 
 
Purchased Intangible Assets [Line Items]
 
 
Gross
61,099 
61,099 
Accumulated Amortization
(48,485)
(39,341)
Finite-lived intangibles, net
12,614 
21,758 
Customer Contracts And Relationships [Member]
 
 
Purchased Intangible Assets [Line Items]
 
 
Gross
56,500 
56,500 
Accumulated Amortization
(23,290)
(16,205)
Finite-lived intangibles, net
33,210 
40,295 
Other [Member]
 
 
Purchased Intangible Assets [Line Items]
 
 
Gross
10,545 
10,545 
Accumulated Amortization
(7,422)
(6,368)
Finite-lived intangibles, net
$ 3,123 
$ 4,177 
Balance Sheet Components (Schedule Of Goodwill By Segment) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Goodwill [Roll Forward]
 
 
 
Goodwill (period start)
$ 81,721 
$ 155,916 
 
Goodwill impairment charges
0 
(74,196)
0 
Goodwill (period end)
81,721 
81,721 
155,916 
Retail [Member]
 
 
 
Goodwill [Roll Forward]
 
 
 
Goodwill (period start)
45,442 
45,442 
 
Goodwill impairment charges
0 
0 
 
Goodwill (period end)
45,442 
45,442 
 
Commercial [Member]
 
 
 
Goodwill [Roll Forward]
 
 
 
Goodwill (period start)
36,279 
36,279 
 
Goodwill impairment charges
0 
0 
 
Goodwill (period end)
36,279 
36,279 
 
Service Provider [Member]
 
 
 
Goodwill [Roll Forward]
 
 
 
Goodwill (period start)
0 
74,196 
 
Goodwill impairment charges
0 
(74,196)
 
Goodwill (period end)
$ 0 
$ 0 
 
Balance Sheet Components Schedule of Other Non-Current Assets (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Balance Sheet Related Disclosures [Abstract]
 
 
Non-current deferred income taxes
$ 68,445 1
$ 38,696 
Cost method investment
105 
1,322 
Other
7,824 
8,059 
Total other non-current assets
$ 76,374 
$ 48,077 
Balance Sheet Components (Schedule Of Other Accrued Liabilities) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Balance Sheet Related Disclosures [Abstract]
 
 
Sales and marketing programs
$ 69,693 
$ 54,582 
Warranty obligation
56,706 
44,888 
Freight
5,748 
6,827 
Other
34,135 
37,445 
Total other accrued liabilities
$ 166,282 
$ 143,742 
Restructuring and Other Charges (Narrative) (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Restructuring Cost and Reserve [Line Items]
 
 
 
Restructuring and other charges
$ 6,398,000 
$ 2,209,000 
$ 5,335,000 
Severance Costs
 
800,000 
 
Office lease exit [Member]
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
Business Exit Costs
 
$ 1,400,000 
 
Restructuring and Other Charges Schedule of Restructuring and Other Charges (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Restructuring Cost and Reserve [Line Items]
 
 
 
Non cash charges and adjustments, net
$ 500,000 
 
 
Restructuring Reserve
526,000 
316,000 
1,013,000 
Acquisition transition cost
0 
0 
10,000 
Total accrual
526,000 
316,000 
1,023,000 
Additions to restructuring cost
5,946,000 
2,228,000 
 
Additions to acquisition transaction costslated Costs
0 
6,000 
 
Total additions
5,946,000 1
2,234,000 
 
Payments for Restructuring
(5,736,000)
(2,901,000)
 
Payments for acquisition transition costs
0 
(16,000)
 
Total payments
(5,736,000)
(2,917,000)
 
Restructuring adjustment
 
(24,000)
 
Acquisition transition costs accrual adjustments
 
0 
 
Total adjustments
 
$ (24,000)
 
Derivative Financial Instruments (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Foreign Currency Forward Contracts [Member] |
Maximum [Member]
 
Derivative [Line Items]
 
Derivative, Term of Contract ( in months)
6 months 
Foreign Currency Forward Contracts [Member] |
Cash Flow Hedges [Member]
 
Derivative [Line Items]
 
Approximate number of derivatives per quarter (in derivatives)
5 
Cash flow hedge
$ 7 
Number of months taken by the company to reclass the amounts recorded in other comprehensive income to earnings (in months)
12 months 
Hedge period of forecasted hedge transaction (in days)
60 days 
Derivatives Designated As Hedging Instruments [Member] |
Cash Flow Hedges [Member] |
Minimum [Member]
 
Derivative [Line Items]
 
Derivative, Term of Contract ( in months)
3 months 
Derivatives Designated As Hedging Instruments [Member] |
Cash Flow Hedges [Member] |
Maximum [Member]
 
Derivative [Line Items]
 
Derivative, Term of Contract ( in months)
5 months 
Derivatives Not Designated As Hedging Instruments [Member] |
Foreign Currency Forward Contracts [Member]
 
Derivative [Line Items]
 
Approximate number of derivatives per quarter (in derivatives)
15 
Cash flow hedge
$ 2 
Derivatives Not Designated As Hedging Instruments [Member] |
Foreign Currency Forward Contracts [Member] |
Minimum [Member]
 
Derivative [Line Items]
 
Derivative, Term of Contract ( in months)
1 month 
Derivatives Not Designated As Hedging Instruments [Member] |
Foreign Currency Forward Contracts [Member] |
Maximum [Member]
 
Derivative [Line Items]
 
Derivative, Term of Contract ( in months)
5 months 
Derivative Financial Instruments (Schedule Of Fair Values Of The Company's Derivative Instruments And The Line Items On The Consolidated Balance Sheets) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Derivatives, Fair Value [Line Items]
 
 
Derivative Assets, Fair Value
$ 3,205 
$ 2,416 
Derivative Liabilities, Fair Value
451 
447 
Other Current Liabilities [Member] |
Derivatives Not Designated As Hedging Instruments [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Liabilities, Fair Value
447 
409 
Other Current Liabilities [Member] |
Derivatives Designated As Hedging Instruments [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Liabilities, Fair Value
4 
38 
Prepaid Expenses And Other Current Assets [Member] |
Derivatives Not Designated As Hedging Instruments [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Assets, Fair Value
3,203 
2,416 
Prepaid Expenses And Other Current Assets [Member] |
Derivatives Designated As Hedging Instruments [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Assets, Fair Value
$ 2 
$ 0 
Derivative Financial Instruments Scheduel of Offsetting of Derivative Assets (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Offsetting of Derivative Assets [Line Items]
 
 
Derivative Assets, Fair Value
$ 3,205 
$ 2,416 
Derivative Asset, Fair Value, Amount Offset Against Collateral
0 
0 
Derivative Asset, Fair Value, Net
3,205 
2,416 
Derivative Asset, Fair Value, Gross Liability
(451)
(447)
Derivative, Collateral, Obligation to Return Cash
0 
0 
Derivative Asset
2,754 
1,969 
Barclays [Member]
 
 
Offsetting of Derivative Assets [Line Items]
 
 
Derivative Assets, Fair Value
577 
319 
Derivative Asset, Fair Value, Amount Offset Against Collateral
0 
0 
Derivative Asset, Fair Value, Net
577 
319 
Derivative Asset, Fair Value, Gross Liability
(56)
(16)
Derivative, Collateral, Obligation to Return Cash
0 
0 
Derivative Asset
521 
303 
Wells Fargo Bank [Member]
 
 
Offsetting of Derivative Assets [Line Items]
 
 
Derivative Assets, Fair Value
2,628 
2,097 
Derivative Asset, Fair Value, Amount Offset Against Collateral
0 
0 
Derivative Asset, Fair Value, Net
2,628 
2,097 
Derivative Asset, Fair Value, Gross Liability
(395)
(431)
Derivative, Collateral, Obligation to Return Cash
0 
0 
Derivative Asset
$ 2,233 
$ 1,666 
Derivative Financial Instruments Schedule of Offsetting of Derivate Liabilities (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Offsetting Liabilities [Line Items]
 
 
Derivative Liabilities, Fair Value
$ 451 
$ 447 
Derivative Liability, Fair Value, Amount Offset Against Collateral
0 
0 
Derivative Liability, Fair Value, Amount Not Offset Against Collateral
451 
447 
Derivative Liability, Fair Value, Gross Asset
(451)
(447)
Derivative, Collateral, Right to Reclaim Cash
0 
0 
Derivative Liability
0 
0 
Barclays [Member]
 
 
Offsetting Liabilities [Line Items]
 
 
Derivative Liabilities, Fair Value
56 
16 
Derivative Liability, Fair Value, Amount Offset Against Collateral
0 
0 
Derivative Liability, Fair Value, Amount Not Offset Against Collateral
56 
16 
Derivative Liability, Fair Value, Gross Asset
(56)
(16)
Derivative, Collateral, Right to Reclaim Cash
0 
0 
Derivative Liability
0 
0 
Wells Fargo Bank [Member]
 
 
Offsetting Liabilities [Line Items]
 
 
Derivative Liabilities, Fair Value
395 
431 
Derivative Liability, Fair Value, Amount Offset Against Collateral
0 
0 
Derivative Liability, Fair Value, Amount Not Offset Against Collateral
395 
431 
Derivative Liability, Fair Value, Gross Asset
(395)
(431)
Derivative, Collateral, Right to Reclaim Cash
0 
0 
Derivative Liability
$ 0 
$ 0 
Derivative Financial Instruments (Schedule Of Company's Derivative Instruments On Other Comprehensive Income And The Consolidated Statement Of Operations) (Details) (Derivatives Designated As Hedging Instruments [Member], Foreign Currency Forward Contracts [Member], USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
Gain or (Loss) Recognized in OCI-Effective Portion
$ 453 
$ 292 
$ 775 
Gain or (Loss) Reclassified from OCI into Income-Effective Portion
453 
314 
686 
Amount of Gain or (Loss) Recognized in Income and Excluded from Effectiveness Testing
(52)
(144)
(117)
Net Revenue [Member]
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
Gain or (Loss) Reclassified from OCI into Income-Effective Portion
462 
459 
844 
Cost Of Revenue [Member]
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
Gain or (Loss) Reclassified from OCI into Income-Effective Portion
6 
4 
(9)
Operating Expenses [Member]
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
Gain or (Loss) Reclassified from OCI into Income-Effective Portion
(15)
(149)
(149)
Other Income (Expense), net [Member]
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
Amount of Gain or (Loss) Recognized in Income and Excluded from Effectiveness Testing
$ (52)
$ (144)
$ (117)
Derivative Financial Instruments (Schedule Of Derivatives Not Designated As Hedging Instruments) (Details) (Other Income (Expense), net [Member], Foreign Currency Forward Contracts [Member], Derivatives Not Designated As Hedging Instruments [Member], USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Other Income (Expense), net [Member] |
Foreign Currency Forward Contracts [Member] |
Derivatives Not Designated As Hedging Instruments [Member]
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
Amount of Gains or (Losses) Recognized in Income on Derivative
$ 4,956 
$ 4,897 
$ 458 
Net Income Per Share (Schedule Of Net Income Per Share) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 27, 2015
Jun. 28, 2015
Mar. 29, 2015
Dec. 31, 2014
Sep. 28, 2014
Jun. 29, 2014
Mar. 30, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Earnings Per Share [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Net Income
$ 21,807 
$ 15,099 
$ 3,667 
$ 8,011 
$ (40,353)1
$ 20,025 
$ 14,705 
$ 14,411 
$ 48,584 
$ 8,788 
$ 55,217 
Weighted average shares outstanding: Basic (in shares)
 
 
 
 
 
 
 
 
33,161 
35,771 
38,379 
Dilutive potential common shares (in shares)
 
 
 
 
 
 
 
 
627 
674 
569 
Weighted average shares outstanding: Total (in shares)
 
 
 
 
 
 
 
 
33,788 
36,445 
38,948 
Basic net income per share (in dollars per share)
$ 0.68 
$ 0.47 
$ 0.11 
$ 0.23 
$ (1.16)
$ 0.56 
$ 0.41 
$ 0.39 
$ 1.47 
$ 0.25 
$ 1.44 
Diluted net income per share (in dollars per share)
$ 0.66 
$ 0.47 
$ 0.11 
$ 0.23 
$ (1.16)
$ 0.55 
$ 0.40 
$ 0.39 
$ 1.44 
$ 0.24 
$ 1.42 
Anti-dilutive common stock options (in shares)
 
 
 
 
 
 
 
 
1,807 
2,617 
2,846 
Other Income (Expense), Net (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Other Income and Expenses [Abstract]
 
 
 
Foreign Currency Transaction Gain (loss), net
$ (5,114)
$ (5,642)
$ (1,592)
Foreign Currency Contract Gain (Loss), Net
4,904 
4,753 
341 
Gain on litigation settlement
0 
2,800 
0 
Other
122 
544 
794 
Total
$ (88)
$ 2,455 
$ (457)
Income Taxes (Narrative) (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Income Tax Disclosure [Line Items]
 
 
 
Income tax impact associated with stock option exercises
$ (2,233,000)
$ (481,000)
$ 429,000 
Deferred Tax Assets, Valuation Allowance
3,642,000 1
3,020,000 1
 
Available-for-sale Securities, Income Tax Expense on Change in Unrealized Holding Gain (Loss)
(21,000)
(5,000)
(16,000)
Unrecognized Tax Benefits that Would Impact Effective Tax Rate
11,300,000 
 
 
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense
100,000 
1,100,000 
446,000 
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued
3,100,000 
3,000,000 
 
Effective Income Tax Rate Reconciliation, Tax Credit, Foreign, Amount
136,900,000 
78,300,000 
 
State and Local Jurisdiction [Member]
 
 
 
Income Tax Disclosure [Line Items]
 
 
 
Deferred Tax Assets, Valuation Allowance
3,600,000 
3,000,000 
 
Operating Loss Carryforwards
50,000 
 
 
Tax Credit Carryforward, Amount
2,300,000 
 
 
Operating Loss Expiration Date, Range Start
2017 
 
 
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount
600,000 
 
 
US Federal [Member]
 
 
 
Income Tax Disclosure [Line Items]
 
 
 
Operating Loss Carryforwards
$ 15,300,000 
 
 
Operating Loss Expiration Date, Range Start
2021 
 
 
Earliest Tax Year [Member] |
ITALY
 
 
 
Income Tax Disclosure [Line Items]
 
 
 
Income Tax Examination, Year under Examination
2004 
 
 
Earliest Tax Year [Member] |
GERMANY
 
 
 
Income Tax Disclosure [Line Items]
 
 
 
Income Tax Examination, Year under Examination
2008 
 
 
Latest Tax Year [Member] |
ITALY
 
 
 
Income Tax Disclosure [Line Items]
 
 
 
Income Tax Examination, Year under Examination
2011 
 
 
Latest Tax Year [Member] |
GERMANY
 
 
 
Income Tax Disclosure [Line Items]
 
 
 
Income Tax Examination, Year under Examination
2013 
 
 
Income Taxes Schedule of Income Before Income Taxes (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Income Tax Disclosure [Abstract]
 
 
 
United States
$ 88,681 
$ 25,152 
$ 91,318 
International
(3,117)
5,609 
1,664 
Income before income taxes
$ 85,564 
$ 30,761 
$ 92,982 
Income Taxes Schedule of Provision For Income Taxes (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 27, 2015
Jun. 28, 2015
Mar. 29, 2015
Dec. 31, 2014
Sep. 28, 2014
Jun. 29, 2014
Mar. 30, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Income Tax Disclosure [Abstract]
 
 
 
 
 
 
 
 
 
 
 
U.S. Federal
 
 
 
 
 
 
 
 
$ 30,970 
$ 29,089 
$ 30,989 
State
 
 
 
 
 
 
 
 
3,139 
2,873 
3,751 
Foreign
 
 
 
 
 
 
 
 
6,105 
10,930 
11,224 
Current, Total
 
 
 
 
 
 
 
 
40,214 
42,892 
45,964 
U.S. Federal
 
 
 
 
 
 
 
 
(2,645)
(20,347)
(6,741)
State
 
 
 
 
 
 
 
 
134 
(326)
(1,164)
Foreign
 
 
 
 
 
 
 
 
(723)
(246)
(294)
Deferred, Total
 
 
 
 
 
 
 
 
(3,234)
(20,919)
(8,199)
Provision for income taxes
$ 8,927 
$ 10,780 
$ 7,258 
$ 10,015 
$ (5,609)
$ 8,847 
$ 9,698 
$ 9,037 
$ 36,980 
$ 21,973 
$ 37,765 
Income Taxes Schedule of Deferred Tax Assets and Liabilities (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Income Tax Disclosure [Abstract]
 
 
Deferred Tax Assets Tax Accruals And Allowance
$ 29,279 
$ 25,756 
Deferred Tax Assets, Operating Loss Carryforwards
5,353 
6,210 
Deferred Tax Assets, Tax Deferred Expense, Compensation and Benefits, Share-based Compensation Cost
9,895 
12,416 
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Deferred Rent
2,740 
2,137 
Deferred Tax Assets, Deferred Income
1,185 
1,654 
Deferred Tax Assets, Tax Credit Carryforwards
2,262 
1,769 
Deferred Tax Assets Intangible Assets
22,778 
21,916 
Deferred Tax Assets, Other
0 
142 
Deferred Tax Assets, Tax Deferred Expense
73,492 
72,000 
Deferred Tax Liabilities Deferred Expense Depreciation And Amortization
967 
1,245 
Other deferred tax liabilities
438 
0 
Deferred Tax Liabilities, Net
1,405 
1,245 
Deferred Tax Assets, Valuation Allowance
(3,642)1
(3,020)1
Deferred income taxes
0 
29,039 
Non-current deferred income taxes
68,445 2
38,696 
Deferred Tax Assets, Net
$ 68,445 
$ 67,735 
Income Taxes Schedule of Effective Income Tax Rate Reconciliation (Details)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Effective Income Tax Rate Reconciliation, Percent [Abstract]
 
 
 
Tax at federal statutory rate
35.00% 
35.00% 
35.00% 
State, net of federal benefit
2.60% 
2.50% 
2.20% 
Impact of international operations
7.10% 
19.80% 
3.90% 
Stock-based compensation
(0.40%)
5.50% 
1.80% 
Tax credits
(1.20%)
(3.80%)
(1.90%)
Valuation allowance
0.00% 
3.50% 
0.00% 
Goodwill impairment
0.00% 
7.80% 
0.00% 
Others
0.10% 
1.10% 
(0.40%)
Provision for income taxes (in percentage)
43.20% 
71.40% 
40.60% 
Income Taxes Schedule of Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
 
 
 
Beginning
$ 13,364 
$ 12,743 
$ 12,339 
Additions based on tax positions related to the current year
1,608 
1,894 
1,866 
Additions for tax positions of prior years
228 
1,722 
4,106 
Settlements
(199)
(503)
(3,134)
Reductions for tax positions of prior years
(302)
(152)
(1,163)
Reductions due to lapse of applicable statutes
(1,053)
(1,838)
(1,314)
Adjustments due to foreign exchange rate movement
(816)
(502)
43 
Ending
$ 12,830 
$ 13,364 
$ 12,743 
Income Taxes Income taxes (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Income Tax Contingency [Line Items]
 
 
 
Adjustment to Additional Paid in Capital, Income Tax Effect from Share-based Compensation, Net
$ 2,233,000 
$ 481,000 
$ (429,000)
Available-for-sale Securities, Income Tax Expense on Change in Unrealized Holding Gain (Loss)
21,000 
5,000 
16,000 
US Federal [Member]
 
 
 
Income Tax Contingency [Line Items]
 
 
 
Operating Loss Carryforwards
15,300,000 
 
 
Operating Loss Expiration Date, Range Start
2021 
 
 
State and Local Jurisdiction [Member]
 
 
 
Income Tax Contingency [Line Items]
 
 
 
Operating Loss Carryforwards
50,000 
 
 
Tax Credit Carryforward, Amount
$ 2,300,000 
 
 
Operating Loss Expiration Date, Range Start
2017 
 
 
Commitments And Contingencies (Narrative) (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Sep. 14, 2010
patents
Commitments And Contingencies [Line Items]
 
 
 
 
2016
$ 8,429,000 
 
 
 
Operating leases expiration date
Dec. 31, 2026 
 
 
 
Operating Leases, Rent Expense
9,800,000 
10,800,000 
9,900,000 
 
Continued vesting period after termination without cause (in years)
1 year 
 
 
 
Number of days for non-cancellation of purchase obligations prior to expected shipment date (in days)
30 days 
 
 
 
Non-cancelable purchase commitments
132,800,000 
 
 
 
Liability for Director and Officer Indemnification Agreements
0 
 
 
 
Liability For Customers, Distributors, and Resellers Indemnification Agreements
0 
 
 
 
Number of patents company is accused of infringing (in patents)
 
 
 
8 
Estimated future RAND royalty rate 2018 through 2020
 
 
0.05 
 
Reasonable and nondiscriminatory (RAND) royalty rate (USD per unit)
 
 
0.15 
 
D-Link [Member] |
Ericsson v. NETGEAR [Member]
 
 
 
 
Commitments And Contingencies [Line Items]
 
 
 
 
Loss Contingency, Damages Awarded, Value
 
 
435,000 
 
NETGEAR [Member] |
Ericsson v. NETGEAR [Member]
 
 
 
 
Commitments And Contingencies [Line Items]
 
 
 
 
Loss Contingency, Damages Awarded, Value
 
 
3,555,000 
 
Toshiba [Member] |
Ericsson v. NETGEAR [Member]
 
 
 
 
Commitments And Contingencies [Line Items]
 
 
 
 
Loss Contingency, Damages Awarded, Value
 
 
2,445,000 
 
Belkin [Member] |
Ericsson v. NETGEAR [Member]
 
 
 
 
Commitments And Contingencies [Line Items]
 
 
 
 
Loss Contingency, Damages Awarded, Value
 
 
600,000 
 
Acer Gateway [Member] |
Ericsson v. NETGEAR [Member]
 
 
 
 
Commitments And Contingencies [Line Items]
 
 
 
 
Loss Contingency, Damages Awarded, Value
 
 
1,170,000 
 
Dell [Member] |
Ericsson v. NETGEAR [Member]
 
 
 
 
Commitments And Contingencies [Line Items]
 
 
 
 
Loss Contingency, Damages Awarded, Value
 
 
$ 1,920,000 
 
46 To 60 Days [Member]
 
 
 
 
Commitments And Contingencies [Line Items]
 
 
 
 
Percentage of cancelable orders
50.00% 
 
 
 
31 To 45 Days [Member]
 
 
 
 
Commitments And Contingencies [Line Items]
 
 
 
 
Percentage of cancelable orders
25.00% 
 
 
 
Chief Executive Officer [Member]
 
 
 
 
Commitments And Contingencies [Line Items]
 
 
 
 
Number of weeks for which salary is payable upon termination of employment without cause (in days)
365 days 
 
 
 
Number of years after change of control to trigger full accelerated vest of unvested portion of stock options (in years)
1 year 
 
 
 
Senior Vice President Of Worldwide Operations And Support [Member]
 
 
 
 
Commitments And Contingencies [Line Items]
 
 
 
 
Number of weeks for which salary is payable upon termination of employment without cause (in days)
273 days 
 
 
 
Other Key Executives [Member]
 
 
 
 
Commitments And Contingencies [Line Items]
 
 
 
 
Number of weeks for which salary is payable upon termination of employment without cause (in days)
182 days 
 
 
 
Maximum number of years covered by accelerated vest for other key executives if term without cause is within one year of change in control (in years)
2 years 
 
 
 
Minimum [Member] |
46 To 60 Days [Member]
 
 
 
 
Commitments And Contingencies [Line Items]
 
 
 
 
Required notice period prior to the expected shipment date (in days)
46 days 
 
 
 
Minimum [Member] |
31 To 45 Days [Member]
 
 
 
 
Commitments And Contingencies [Line Items]
 
 
 
 
Required notice period prior to the expected shipment date (in days)
31 days 
 
 
 
Maximum [Member] |
46 To 60 Days [Member]
 
 
 
 
Commitments And Contingencies [Line Items]
 
 
 
 
Required notice period prior to the expected shipment date (in days)
60 days 
 
 
 
Maximum [Member] |
31 To 45 Days [Member]
 
 
 
 
Commitments And Contingencies [Line Items]
 
 
 
 
Required notice period prior to the expected shipment date (in days)
45 days 
 
 
 
Commitments And Contingencies Schedule of Future Minimum Lease Paynments (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Commitments and Contingencies Disclosure [Abstract]
 
2016
$ 8,429 
2017
5,761 
2018
5,598 
2019
5,342 
2020
5,404 
Thereafter
23,209 
Total Future Minimum Lease Payments
$ 53,743 
Commitments And Contingencies Product Warranty Liability (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Product Warranties Disclosures [Abstract]
 
 
 
Balance at the beginning of the period
$ 44,888 
$ 48,754 
$ 46,659 
Product Warranty Accrual, Warranties Issued
80,085 
62,709 
69,755 
Settlements made during the year
(68,267)
(66,575)
(67,660)
Balance at the end of the period
$ 56,706 
$ 44,888 
$ 48,754 
Stockholders' Equity (Narrative) (Details) (USD $)
12 Months Ended 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2014
Repurchase plan authorized in Oct 2008 [Member]
Dec. 31, 2013
Repurchase plan authorized in Oct 2008 [Member]
Oct. 21, 2008
Repurchase plan authorized in Oct 2008 [Member]
Dec. 31, 2015
Repurchase plan authorized in Oct 2014 [Member]
Oct. 17, 2014
Repurchase plan authorized in Oct 2014 [Member]
Jul. 21, 2015
Repurchase plan approved in Oct 2015 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
Stock Repurchase Program, Number of Shares Authorized to be Repurchased (in shares)
 
 
 
 
 
6,000,000 
 
3,000,000.0 
3,000,000.0 
Stock Repurchased and Retired During Period, Shares
 
 
 
2,800,000 
2,000,000 
 
3,800,000 
 
 
Payments for Repurchase of Common Stock
$ 120,309,000 
$ 93,218,000 
$ 63,585,000 
$ 90,600,000 
$ 63,100,000 
 
$ 117,700,000 
 
 
Remaining Number of Shares Authorized to be Repurchased
2,200,000 
 
 
 
 
 
 
 
 
Shares Paid for Tax Withholding for Share Based Compensation
85,000 
82,000 
14,000 
 
 
 
 
 
 
Payments related to tax withholding for share based compensation (in USD)
$ 2,600,000 
$ 2,600,000 
$ 500,000 
 
 
 
 
 
 
Stockholders' Equity (Schedule Of Changes in Accumulated Other Comprehensive Income by Component Net of Tax) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
 
Beginning balance
$ 38 
$ 69 
$ 4 
Other comprehensive (loss) income before reclassifications
418 
283 
751 
Amounts reclassified from accumulated other comprehensive income (loss)
(453)
(314)
(686)
Net current period other comprehensive loss
(35)
(31)
65 
Ending balance
3 
38 
69 
Gains and losses on available for sale securities [Member]
 
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
 
Beginning balance
(5)
4 
28 
Other comprehensive (loss) income before reclassifications
(35)
(9)
(24)
Amounts reclassified from accumulated other comprehensive income (loss)
0 
0 
0 
Net current period other comprehensive loss
(35)
(9)
(24)
Ending balance
(40)
(5)
4 
Gains and losses on derivatives [Member]
 
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
 
Beginning balance
43 
65 
(24)
Other comprehensive (loss) income before reclassifications
453 
292 
775 
Amounts reclassified from accumulated other comprehensive income (loss)
(453)
(314)
(686)
Net current period other comprehensive loss
0 
(22)
89 
Ending balance
$ 43 
$ 43 
$ 65 
Stockholders' Equity (Schedule of Reclassifications Out Of Accumulated Other Comprehensive Income) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Reclassification Out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
Other Comprehensive Income (Loss), Tax
$ (21)
$ (5)
$ (16)
Derivatives Designated As Hedging Instruments [Member] |
Foreign Currency Forward Contracts [Member]
 
 
 
Reclassification Out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
Gain or (Loss) Reclassified from OCI into Income-Effective Portion
453 
314 
686 
Other Comprehensive Income (Loss), Tax
0 1
0 1
0 1
Derivatives Designated As Hedging Instruments [Member] |
Foreign Currency Forward Contracts [Member] |
Net Revenue [Member]
 
 
 
Reclassification Out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
Gain or (Loss) Reclassified from OCI into Income-Effective Portion
462 
459 
844 
Derivatives Designated As Hedging Instruments [Member] |
Foreign Currency Forward Contracts [Member] |
Cost Of Revenue [Member]
 
 
 
Reclassification Out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
Gain or (Loss) Reclassified from OCI into Income-Effective Portion
6 
4 
(9)
Derivatives Designated As Hedging Instruments [Member] |
Foreign Currency Forward Contracts [Member] |
Operating Expenses [Member]
 
 
 
Reclassification Out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
Gain or (Loss) Reclassified from OCI into Income-Effective Portion
$ (15)
$ (149)
$ (149)
Employee Benefit Plans (Narrative) (Details) (USD $)
12 Months Ended 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2015
Stock Options [Member]
Dec. 31, 2014
Stock Options [Member]
Dec. 31, 2013
Stock Options [Member]
Dec. 31, 2015
RSUs [Member]
Dec. 31, 2015
2006 Long Term Incentive Plan [Member]
Dec. 31, 2014
2006 Long Term Incentive Plan [Member]
Apr. 30, 2006
2006 Long Term Incentive Plan [Member]
Dec. 31, 2015
2006 Long Term Incentive Plan [Member]
First Tranche [Member]
Dec. 31, 2015
2006 Long Term Incentive Plan [Member]
Remaining Tranche [Member]
Dec. 31, 2015
2006 Long Term Incentive Plan [Member]
Minimum [Member]
RSUs [Member]
Dec. 31, 2015
Employee Stock Purchase Plan [Member]
Dec. 31, 2014
Employee Stock Purchase Plan [Member]
Dec. 31, 2013
Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum Amount Of Stock-Based Compensation Cost Capitalized
$ 500,000 
$ 500,000 
$ 500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Grants In Period, Weighted Average Grant Date Fair Value
 
 
 
$ 10.83 
$ 12.04 
$ 13.29 
 
 
 
 
 
 
 
 
 
 
Equity Instruments Other than Options, Vested in Period, Total Intrinsic Value
8,900,000 
9,000,000 
2,900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Options, Exercises in Period, Intrinsic Value
 
 
 
11,400,000 
3,400,000 
4,200,000 
 
 
 
 
 
 
 
 
 
 
Common Stock, Capital Shares Reserved for Future Issuance
 
 
 
 
 
 
 
 
 
2,500,000 
 
 
 
 
 
 
Number of Additional Shares Authorized
 
 
 
 
 
 
 
8,500,000 
 
 
 
 
 
 
 
 
Equity Instruments Other Than Options, Conversion Ratio
 
 
 
 
 
 
 
1.58 
 
 
 
 
 
 
 
 
Minimum Percentage Of Exercise Price Granted To Ten Percentage Of Shareholders
 
 
 
 
 
 
 
110.00% 
 
 
 
 
 
 
 
 
Options granted, vesting term (in years)
4 years 
 
 
 
 
 
 
 
4 years 
 
12 months 
3 years 
3 years 
 
 
 
Number of shares reserved for future grant (in shares)
 
 
 
 
 
 
 
1,500,000 
 
 
 
 
 
100,000 
 
 
Maximum Percentage of compensation contributed by employees (in percentage)
 
 
 
 
 
 
 
 
 
 
 
 
 
10.00% 
 
 
Purchase percentage of stock at fair market value (in percentage)
 
 
 
 
 
 
 
 
 
 
 
 
 
85.00% 
 
 
Total unrecognized compensation
 
 
 
6,400,000 
 
 
19,600,000 
 
 
 
 
 
 
 
 
 
Weighted-average period of recognition of stock based compensation (in days)
 
 
 
2 years 4 months 24 days 
 
 
2 years 6 months 0 days 
 
 
 
 
 
 
 
 
 
Term Of Stock Appreciation Rights From Date Of Grant
 
 
 
 
 
 
 
10 years 
 
 
 
 
 
 
 
 
Period of Measuring the Achievement of Personal Goals
 
 
 
 
 
 
 
 
 
 
 
 
12 months 
 
 
 
discount from Market Price, Purchase Date
 
 
 
 
 
 
 
 
 
 
 
 
 
15.00% 
 
 
Non-cash stock-based compensation
16,825,000 
20,014,000 
17,462,000 
 
 
 
 
 
 
 
 
 
 
539,000 
523,000 
420,000 
Options, Vested in Period, Total Fair Value
 
 
 
6,500,000 
10,000,000 
13,000,000 
 
 
 
 
 
 
 
 
 
 
Equity Instruments Other than Options, Vested in Period, Fair Value
8,800,000 
8,400,000 
2,300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum Percentage Contribution Of Salary By Employees
100.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Employer Matching Contribution, Percent of Employees' Gross Pay
50.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum Contribution By Employer Value
6,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost Recognized
$ 900,000 
$ 1,000,000 
$ 1,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Employee Benefit Plans (Schedule Of Stock Option Activity) (Details) (Stock Options [Member], USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Stock Options [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
 
Number of Shares, Beginning Balance (in shares)
3,939 
Number of Shares, Granted (in shares)
296 
Number of Shares, Exercised (in shares)
(1,353)
Number of Shares, Cancelled (in shares)
(163)
Number of shares, expired (in shares)
(258)
Number of Shares, Ending Balance (in shares)
2,461 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]
 
Beginning Balance (in dollars per share)
$ 30.58 
Grants (in dollars per share)
$ 31.34 
Exercises (in dollars per share)
$ 30.55 
Cancelled (in dollars per share)
$ 33.09 
Expired (in dollars per share)
$ 34.78 
Ending Balance (in dollars per share)
$ 30.08 
Outstanding, Weighted Average Remaining Contractual Term
5 years 8 months 12 days 
Outstanding, Intrinsic Value
$ 29,109 
Vested and Expected to Vest, Number
2,386 
Vested and Expected to Vest, Weighted Average Exercise Price
$ 30.02 
Vested and Expected to Vest, Weighted Average Remaining Contractual Term
5 years 7 months 6 days 
Vested and Expected to Vest, Aggregate Intrinsic Value
28,358 
Exercisable, Number
1,784 
Exercisable, Weighted Average Exercise Price
$ 29.26 
Exercisable, Weighted Average Remaining Contractual Term
4 years 8 months 12 days 
Exercisable, Intrinsic Value
$ 22,562 
Employee Benefit Plans (Schedule of Ranges of Outstanding And Exercisable Stock Optoins) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Number of Outstanding Options
2,461 
Outstanding Options, Weighted Average Remaining Contractual Term
5 years 7 months 27 days 
Outstanding Options, Weighted Average Exercise Price
$ 30.08 
Exercise Price Range, Number of Exercisable Options
1,784 
Exercisable Options, Weighted Average Exercise Price
$ 29.26 
$10.69 - $28.79
 
Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Number of Outstanding Options
591 
Outstanding Options, Weighted Average Remaining Contractual Term
3 years 0 months 3 days 
Outstanding Options, Weighted Average Exercise Price
$ 20.84 
Exercise Price Range, Number of Exercisable Options
585 
Exercisable Options, Weighted Average Exercise Price
$ 20.77 
$29.23 - $31.31
 
Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Number of Outstanding Options
573 
Outstanding Options, Weighted Average Remaining Contractual Term
6 years 7 months 24 days 
Outstanding Options, Weighted Average Exercise Price
$ 30.86 
Exercise Price Range, Number of Exercisable Options
274 
Exercisable Options, Weighted Average Exercise Price
$ 30.39 
$31.45 - $32.54
 
Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Number of Outstanding Options
557 
Outstanding Options, Weighted Average Remaining Contractual Term
7 years 6 months 10 days 
Outstanding Options, Weighted Average Exercise Price
$ 32.49 
Exercise Price Range, Number of Exercisable Options
291 
Exercisable Options, Weighted Average Exercise Price
$ 32.48 
$32.55 - $35.32
 
Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Number of Outstanding Options
583 
Outstanding Options, Weighted Average Remaining Contractual Term
5 years 8 months 12 days 
Outstanding Options, Weighted Average Exercise Price
$ 34.24 
Exercise Price Range, Number of Exercisable Options
504 
Exercisable Options, Weighted Average Exercise Price
$ 34.32 
$36.80 - $40.01
 
Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Number of Outstanding Options
157 
Outstanding Options, Weighted Average Remaining Contractual Term
5 years 3 months 0 days 
Outstanding Options, Weighted Average Exercise Price
$ 38.13 
Exercise Price Range, Number of Exercisable Options
130 
Exercisable Options, Weighted Average Exercise Price
$ 38.36 
Employee Benefit Plans (Schedule Of RSU Activity) (Details) (RSUs [Member], USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2015
RSUs [Member]
 
Equity Instruments Other than Options, Nonvested [Roll Forward]
 
Beginning Balance (in shares)
858 
RSUs granted (in shares)
525 
RSUs vested (in shares)
(285)
RSUs cancelled (in shares)
(134)
Ending Balance (in shares)
964 
Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
 
Beginning Balance (in dollars per share)
$ 30.68 
RSUs granted (in dollars per share)
$ 32.16 
RSUs vested (in dollars per share)
$ 31.06 
RSUs cancelled (in dollars per share)
$ 31.52 
Ending Balance (in dollars per share)
$ 31.63 
Weighted Average Remaining Contractual Terms
1 year 5 months 15 days 
Equity Instruments Other than Options, Nonvested Intrinisc Value
$ 40,399 
Employee Benefit Plans (Schedule Of Valuation And Expense Information) (Details)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Expected Term
4 years 6 months 0 days 
4 years 6 months 0 days 
4 years 4 months 24 days 
Risk Free Interest Rate
1.44% 
1.43% 
0.72% 
Expected Volatility Rate
39.30% 
42.60% 
48.05% 
Dividend yield (in percentage)
0.00% 
0.00% 
0.00% 
Employee Benefit Plans (Schedule Of Total Stock-Based Compensation Expense Resulting) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Stock-based compensation expense
$ 16,825 
$ 20,014 
$ 17,462 
Cost Of Revenue [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Stock-based compensation expense
1,566 
2,037 
1,577 
Research And Development [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Stock-based compensation expense
3,451 
4,916 
3,943 
Sales And Marketing [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Stock-based compensation expense
5,022 
6,168 
5,379 
General And Administrative [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Stock-based compensation expense
$ 6,786 
$ 6,893 
$ 6,563 
Segment Information, Operations By Geographic Area And Customer Concentration (Narrative) (Details)
12 Months Ended
Dec. 31, 2015
business_unit
Dec. 31, 2014
Net Revenue [Member]
None of the customers [Member]
Dec. 31, 2013
Net Revenue [Member]
None of the customers [Member]
Dec. 31, 2015
Retail [Member]
Net Revenue [Member]
Best Buy Company Incorporation And Affiliates [Member]
Concentration Risk, Percentage
 
10.00% 
10.00% 
15.00% 
Number of reportable segments (in segments)
3 
 
 
 
Schedule Of Reportable Segment And Reconciliation Of Segment Contribution Income To Income Before Income Taxes (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 27, 2015
Jun. 28, 2015
Mar. 29, 2015
Dec. 31, 2014
Sep. 28, 2014
Jun. 29, 2014
Mar. 30, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total net revenues
$ 360,863 
$ 341,893 
$ 288,782 
$ 309,157 
$ 353,182 
$ 353,338 
$ 337,604 
$ 349,391 
$ 1,300,695 
$ 1,393,515 
$ 1,369,633 
Total segment contribution income
 
 
 
 
 
 
 
 
177,775 
194,623 
191,544 
Corporate and unallocated costs
 
 
 
 
 
 
 
 
(54,501)
(53,581)
(51,629)
Amortization of intangible assets
 
 
 
 
 
 
 
 
(16,969)1
(17,573)1
(15,217)1
Stock-based compensation expense
 
 
 
 
 
 
 
 
(16,825)
(20,014)
(17,462)
Restructuring and other charges
 
 
 
 
 
 
 
 
(6,398)
(2,209)
(5,335)
Acquisition-related expense
 
 
 
 
 
 
 
 
0 2
(8)2
(940)2
Losses on inventory commitments due to restructuring
 
 
 
 
 
 
 
 
(407)
0 
(568)
Litigation reserves, net
 
 
 
 
 
 
 
 
2,682 
1,011 
(5,354)
Goodwill impairment charges
 
 
 
 
 
 
 
 
0 
(74,196)
0 
Intangibles Impairment charges
 
 
 
 
 
 
 
 
0 
0 
(2,000)
Interest income
 
 
 
 
 
 
 
 
295 
253 
400 
Other income (expense), net
 
 
 
 
 
 
 
 
(88)
2,455 
(457)
Income before income taxes
 
 
 
 
 
 
 
 
85,564 
30,761 
92,982 
Retail [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total net revenues
 
 
 
 
 
 
 
 
614,367 
508,100 
509,924 
Total segment contribution income
 
 
 
 
 
 
 
 
85,231 
76,266 
73,418 
Segment contribution margin (in percentage)
 
 
 
 
 
 
 
 
13.90% 
15.00% 
14.40% 
Goodwill impairment charges
 
 
 
 
 
 
 
 
0 
0 
 
Commercial [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total net revenues
 
 
 
 
 
 
 
 
264,846 
305,677 
311,261 
Total segment contribution income
 
 
 
 
 
 
 
 
53,393 
70,810 
66,506 
Segment contribution margin (in percentage)
 
 
 
 
 
 
 
 
20.20% 
23.20% 
21.40% 
Goodwill impairment charges
 
 
 
 
 
 
 
 
0 
0 
 
Service Provider [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total net revenues
 
 
 
 
 
 
 
 
421,482 
579,738 
548,448 
Total segment contribution income
 
 
 
 
 
 
 
 
39,151 
47,547 
51,620 
Segment contribution margin (in percentage)
 
 
 
 
 
 
 
 
9.30% 
8.20% 
9.40% 
Goodwill impairment charges
 
 
 
 
 
 
 
 
$ 0 
$ (74,196)
 
Schedule Of Net Revenue By Geography Periods (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 27, 2015
Jun. 28, 2015
Mar. 29, 2015
Dec. 31, 2014
Sep. 28, 2014
Jun. 29, 2014
Mar. 30, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total net revenues
$ 360,863 
$ 341,893 
$ 288,782 
$ 309,157 
$ 353,182 
$ 353,338 
$ 337,604 
$ 349,391 
$ 1,300,695 
$ 1,393,515 
$ 1,369,633 
United States [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total net revenues
 
 
 
 
 
 
 
 
779,361 
750,933 
769,357 
Americas Excluding United States [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total net revenues
 
 
 
 
 
 
 
 
18,385 
19,957 
19,961 
United Kingdom [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total net revenues
 
 
 
 
 
 
 
 
103,649 
154,503 
142,729 
EMEA Excluding United Kingdom [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total net revenues
 
 
 
 
 
 
 
 
218,065 
267,384 
269,959 
APAC [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total net revenues
 
 
 
 
 
 
 
 
$ 181,235 
$ 200,738 
$ 167,627 
Schedule Of Long-Lived Asset By Geographic Areas (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
Long-lived assets
$ 22,384 
$ 29,694 
United States [Member]
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
Long-lived assets
9,832 
12,453 
CANADA
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
Long-lived assets
3,586 
4,375 
EMEA [Member]
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
Long-lived assets
468 
657 
China [Member]
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
Long-lived assets
6,562 
10,786 
APAC Excluding China [Member]
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
Long-lived assets
$ 1,936 
$ 1,423 
Fair Value Measurements (Summary Of Valuation Of Company's Financial Instruments By Various Levels) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
$ 110,502 
$ 122,719 
Liabilities, Fair value
451 
447 
Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
107,297 
120,303 
Liabilities, Fair value
0 
0 
Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
3,205 
2,416 
Liabilities, Fair value
451 
447 
Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
0 
0 
Liabilities, Fair value
0 
0 
Foreign Currency Forward Contracts [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
3,205 1
2,416 1
Liabilities, Fair value
451 2
447 2
Foreign Currency Forward Contracts [Member] |
Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
0 
0 
Liabilities, Fair value
0 
0 
Foreign Currency Forward Contracts [Member] |
Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
3,205 
2,416 
Liabilities, Fair value
451 
447 
Foreign Currency Forward Contracts [Member] |
Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
0 
0 
Liabilities, Fair value
0 
0 
Money Market Funds [Member] |
Cash Equivalents [Member] |
Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
10,976 
4,408 
Money Market Funds [Member] |
Cash Equivalents [Member] |
Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
0 
0 
Money Market Funds [Member] |
Cash Equivalents [Member] |
Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
0 
0 
Money Market Funds [Member] |
Available-For-Sale Securities [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
10,976 
4,408 
Treasuries [Member] |
Available-For-Sale Securities [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
94,993 3
114,935 3
Treasuries [Member] |
Available-For-Sale Securities [Member] |
Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
94,993 
114,935 
Treasuries [Member] |
Available-For-Sale Securities [Member] |
Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
0 
0 
Treasuries [Member] |
Available-For-Sale Securities [Member] |
Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
0 
0 
Certificates Of Deposits [Member] |
Available-For-Sale Securities [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
147 3
158 3
Certificates Of Deposits [Member] |
Available-For-Sale Securities [Member] |
Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
147 
158 
Certificates Of Deposits [Member] |
Available-For-Sale Securities [Member] |
Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
0 
0 3
Certificates Of Deposits [Member] |
Available-For-Sale Securities [Member] |
Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
0 
0 3
Mutual Funds [Member] |
Trading Securities [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
1,181 3
802 3
Mutual Funds [Member] |
Trading Securities [Member] |
Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
1,181 
802 
Mutual Funds [Member] |
Trading Securities [Member] |
Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
0 
0 
Mutual Funds [Member] |
Trading Securities [Member] |
Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
$ 0 
$ 0 
Subsequent Events (Narratives) (Details) (USD $)
In Millions, unless otherwise specified
Jan. 31, 2016
Minimum [Member]
 
Subsequent Event [Line Items]
 
Restructuring and Related Cost, Expected Cost
$ 1.5 
Maximum [Member]
 
Subsequent Event [Line Items]
 
Restructuring and Related Cost, Expected Cost
$ 2.5 
Quarterly Financial Data (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 27, 2015
Jun. 28, 2015
Mar. 29, 2015
Dec. 31, 2014
Sep. 28, 2014
Jun. 29, 2014
Mar. 30, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Quarterly Financial Data [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Net revenue
$ 360,863 
$ 341,893 
$ 288,782 
$ 309,157 
$ 353,182 
$ 353,338 
$ 337,604 
$ 349,391 
$ 1,300,695 
$ 1,393,515 
$ 1,369,633 
Gross Profit
105,416 
96,327 
77,656 
88,280 
100,474 
102,333 
97,186 
97,925 
367,679 
397,918 
393,615 
Provision for income taxes
8,927 
10,780 
7,258 
10,015 
(5,609)
8,847 
9,698 
9,037 
36,980 
21,973 
37,765 
Net Income
$ 21,807 
$ 15,099 
$ 3,667 
$ 8,011 
$ (40,353)1
$ 20,025 
$ 14,705 
$ 14,411 
$ 48,584 
$ 8,788 
$ 55,217 
Basic net income per share (in dollars per share)
$ 0.68 
$ 0.47 
$ 0.11 
$ 0.23 
$ (1.16)
$ 0.56 
$ 0.41 
$ 0.39 
$ 1.47 
$ 0.25 
$ 1.44 
Diluted net income per share (in dollars per share)
$ 0.66 
$ 0.47 
$ 0.11 
$ 0.23 
$ (1.16)
$ 0.55 
$ 0.40 
$ 0.39 
$ 1.44 
$ 0.24 
$ 1.42 
Schedule II-Valuation and Qualifying Accounts (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Allowance for Doubtful Accounts [Member]
 
 
 
Movement in Valuation Allowances and Reserves [Roll Forward]
 
 
 
Balance at beginning of year
$ 1,255 
$ 1,255 
$ 1,256 
Additions
35 
189 
277 
Deductions
(35)
(189)
(278)
Balance at end of year
1,255 
1,255 
1,255 
Allowance For Sales Returns And Product Warranty [Member]
 
 
 
Movement in Valuation Allowances and Reserves [Roll Forward]
 
 
 
Balance at beginning of year
62,376 
66,221 
63,690 
Additions
105,987 
97,546 
104,810 
Deductions
(95,754)
(101,391)
(102,279)
Balance at end of year
72,609 
62,376 
66,221 
Allowance For Price Protection [Member]
 
 
 
Movement in Valuation Allowances and Reserves [Roll Forward]
 
 
 
Balance at beginning of year
1,806 
4,273 
1,783 
Additions
7,467 
7,534 
8,352 
Deductions
(7,148)
(10,001)
(5,862)
Balance at end of year
$ 2,125 
$ 1,806 
$ 4,273