(9) Cost Reduction Actions

Wind-Down of Microsatellite Product Line

During fiscal 2013, we completed our fiscal 2012 plan to wind-down our mobile data communications segment's microsatellite product line. In connection with this plan, we recorded a net pre-tax restructuring charge of $822,000 in the three months ended October 31, 2012, almost all of which was recorded in selling, general and administrative expenses in our Condensed Consolidated Statements of Operations. There was no such charge in the three months ended October 31, 2013.

The activity pertaining to the accruals with respect to this plan, since July 31, 2013, is summarized as follows:



	Facility exit costs			Other	Total
Balance as of July 31, 2013	$	413,000		50,000	$	463,000
Additions/(reversals)	—			—	—
Payments made	(39,000		)	—	(39,000		)
Balance as of October 31, 2013	$	374,000		50,000	$	424,000

Of the total remaining microsatellite product line wind-down liabilities of $424,000, $278,000 is included in accrued expenses and other current liabilities and $146,000 is included in other long-term liabilities in our Condensed Consolidated Balance Sheet as of October 31, 2013.

Radyne Acquisition-Related Restructuring Plan

In connection with our August 1, 2008 acquisition of Radyne, we adopted a restructuring plan for which we recorded $2,713,000 of estimated restructuring costs. Of this amount, $613,000 related to severance for Radyne employees which was paid in fiscal 2009. The remaining estimated amounts relate to facility exit costs and were determined as follows:



	At August 1, 2008
Total non-cancelable lease obligations	$	12,741,000
Less: Estimated sublease income	8,600,000
Total net estimated facility exit costs	4,141,000
Less: Interest expense to be accreted	2,041,000
Present value of estimated facility exit costs	$	2,100,000

Our total non-cancelable lease obligations were based on the actual lease term which runs from November 1, 2008 through October 31, 2018. We estimated sublease income based on (i) the terms of a fully executed sublease agreement, whose lease term runs from November 1, 2008 through October 31, 2015 and (ii) our assessment of future uncertainties relating to the commercial real estate market. Based on our assessment of commercial real estate market conditions, we currently believe that it is not probable that we will be able to sublease the facility beyond the current sublease terms. As such, in accordance with grandfathered accounting standards that were not incorporated into the FASB’s ASC, we recorded these costs, at fair value, as assumed liabilities as of August 1, 2008, with a corresponding increase to goodwill.

As of October 31, 2013, the amount of the acquisition-related restructuring reserve is as follows:



	Cumulative Activity Through October 31, 2013
Present value of estimated facility exit costs at August 1, 2008	$	2,100,000
Cash payments made	(5,585,000		)
Cash payments received	6,028,000
Accreted interest recorded	895,000
Net liability as of October 31, 2013	3,438,000
Amount recorded as prepaid expenses in the Condensed Consolidated Balance Sheet	450,000
Amount recorded as other liabilities in the Condensed Consolidated Balance Sheet	$	3,888,000

As of July 31, 2013, the present value of the estimated facility exit costs was $3,331,000. During the three months ended October 31, 2013, we made cash payments of $258,000 and we received cash payments of $306,000. Interest accreted for the three months ended October 31, 2013 and 2012 was $59,000 and $52,000, respectively, and is included in interest expense for each respective fiscal period.

As of October 31, 2013, future cash payments associated with our restructuring plan are summarized below:



	As of
	October 31, 2013
Future lease payments to be made in excess of anticipated sublease payments	$	3,888,000
Less net cash to be received in next twelve months	(450,000		)
Interest expense to be accreted in future periods	1,145,000
Total remaining net cash payments	$	4,583,000