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 the terms of a fully executed sublease agreement that expired on October 31, 2015. 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 July 31, 2018, the amount of the acquisition-related restructuring reserve is as follows:



	Cumulative Activity Through July 31, 2018
Present value of estimated facility exit costs at August 1, 2008	$	2,100,000
Cash payments made	(12,211,000		)
Cash payments received	8,600,000
Accreted interest recorded	1,917,000
Liability recorded as of period end as accrued expenses and other current liabilities in the Consolidated Balance Sheet	$	406,000

As of July 31, 2017, the present value of the estimated facility exit costs was $1,941,000. During the fiscal year ended July 31, 2018, we made cash payments of $1,623,000. Interest accreted for the fiscal years ended July 31, 2018, 2017 and 2016 was $88,000, $189,000 and $278,000, respectively, and is included in interest expense for each respective fiscal period.

TCS

In connection with our February 23, 2016 acquisition of TCS, we continue to implement a tactical shift in strategy in our Government Solutions segment and have initiated certain cost reduction actions. To-date, we have incurred an immaterial amount of severance and retention costs related to our shift in strategy.