2. Restructuring and Other Charges

On January 30, 2012, management initiated a restructuring plan that aligns expenses with revenue. Tellabs is stopping new development on the Tellabs^® SMARTCORE 9100 series for mobile packet core and consolidating research and development into fewer locations. The pretax charges for this plan will consist of $21 million for severance-related charges of approximately 490 employees, $37 million for facility- and asset-related charges and $48 million for the accelerated amortization for abandoned intangible assets. Restructuring expense for this plan for the second quarter of 2012 was $0.8 million, which consists of a reduction of $1.6 million for severance-related charges and a $2.4 million charge for facility- and asset-related charges. Restructuring expense for this plan for the first six months of 2012 was $105.3 million, which consists of $21.3 million for severance-related charges, $35.1 million for facility- and asset-related charges, $47.7 million for the accelerated amortization of abandoned intangible assets, and $1.2 million for other obligations. By segment, total charges to date under this plan are $4.0 million for Optical, $98.2 million for Data, $1.3 million for Access, and $1.8 million for Services. Estimated cash payments under this plan are expected to be $29.6 million through 2017. Other than the cash payments, actions under this plan are expected to be substantially completed by the end of the first quarter of 2013.

On July 25, 2011, management initiated a restructuring plan to align our cost structure to business conditions at that time. Restructuring expense for this plan for the second quarter of 2012 was $0.1 million, which consists of a reduction of $0.4 million for severance-related charges and a $0.5 million charge for facility- and asset-related charges. Restructuring expense for this plan for the first six months of 2012 was $1.7 million, which consists of $0.9 million for severance-related charges and $0.8 million for facility- and asset-related charges. Cumulative restructuring charges for this plan are $21.4 million, which consists of $15.4 million for severance-related charges, $5.4 million for facility- and asset-related charges, and $0.6 million for other obligations. By segment, total charges to date under this plan are $8.4 million for Optical, $7.3 million for Data, $1.7 million for Access and $4.0 million for Services. Estimated cash payments under this plan are expected to be $18.5 million through the third quarter of 2014. Other than the cash payments, restructuring actions under this plan were substantially completed in the second quarter of 2012.

A net restructuring credit for previous restructuring plans for the first six months of 2012 was $0.1 million for severance-related charges.

The balance for restructuring plans relates to net lease obligations that expire through 2017 and cash severance that we expect to pay through the first quarter of 2014.

The following table summarizes restructuring and other charges recorded for the plans mentioned above, as well as adjustments to reserves recorded for prior restructurings:


	Second Quarter					Six Months
	6/29/12			7/1/11		6/29/12		7/1/11
Severance and other termination benefits	$	(2.0	)	$	—	$	22.1	$	1.2
Facility and other exit costs		2.9			—		35.9		(0.2	)
Accelerated amortization of intangible assets		—			—		47.7		—
Other obligations		—			—		1.2		—

Total restructuring and other charges	$	0.9		$	—	$	106.9	$	1.0

The following table summarizes restructuring and other charges activity by segment for the second quarter and the first six months of 2012 and the status of the reserves at June 29, 2012:


			Second Quarter Activity
	Balance at 3/30/12		Restructuring Expense			Cash Payments			Other Activities¹			Balance at 6/29/12
2012 Restructuring Plan
Optical	$	3.0	$	(0.3	)	$	(0.7	)	$	(0.1	)	$	1.9
Data		16.7		1.9			(7.5	)		(2.4	)		8.7
Access		1.1		(0.1	)		(0.2	)		—			0.8
Services		2.0		(0.7	)		(0.6	)		—			0.7

Subtotal 2012 Restructuring Plan		22.8		0.8			(9.0	)		(2.5	)		12.1


2011 Restructuring Plan
Optical		2.8		1.5			(1.8	)		(0.5	)		2.0
Data		4.2		—			(1.3	)		(0.1	)		2.8
Access		0.9		(0.1	)		(0.3	)		—			0.5
Services		1.7		(1.3	)		0.1			—			0.5

Subtotal 2011 Restructuring Plan		9.6		0.1			(3.3	)		(0.6	)		5.8


Previous Restructuring Plans
Optical		0.3		—			(0.1	)		—			0.2
Data		1.7		—			(0.2	)		—			1.5
Access		2.3		—			(0.1	)		—			2.2
Services		0.1		—			—			—			0.1

Subtotal Previous Restructuring Plans		4.4		—			(0.4	)		—			4.0


Total Restructuring Plans	$	36.8	$	0.9		$	(12.7	)	$	(3.1	)	$	21.9


			Six Months Activity
	Balance at 12/30/11		Restructuring Expense			Cash Payments			Other Activities¹			Balance at 6/29/12
2012 Restructuring Plan
Optical	$	—	$	4.0		$	(1.2	)	$	(0.9	)	$	1.9
Data		—		98.2			(15.2	)		(74.3	)		8.7
Access		—		1.3			(0.4	)		(0.1	)		0.8
Services		—		1.8			(1.1	)		—			0.7

Subtotal 2012 Restructuring Plan		—		105.3			(17.9	)		(75.3	)		12.1


2011 Restructuring Plan
Optical		4.4		1.6			(3.4	)		(0.6	)		2.0
Data		5.5		—			(2.5	)		(0.2	)		2.8
Access		1.1		—			(0.6	)		—			0.5
Services		1.6		0.1			(1.2	)		—			0.5

Subtotal 2011 Restructuring Plan		12.6		1.7			(7.7	)		(0.8	)		5.8


Previous Restructuring Plans
Optical		0.4		(0.1	)		(0.1	)		—			0.2
Data		1.9		—			(0.4	)		—			1.5
Access		2.6		—			(0.4	)		—			2.2
Services		0.2		—			(0.1	)		—			0.1

Subtotal Previous Restructuring Plans		5.1		(0.1	)		(1.0	)		—			4.0


Total Restructuring Plans	$	17.7	$	106.9		$	(26.6	)	$	(76.1	)	$	21.9

¹ Other activities include accelerated amortization related to abandoned intangible assets, accelerated depreciation of property, plant and equipment to be disposed, the effects of currency translation as well as other changes that do not flow through restructuring expense.