2. Restructuring and Other Charges

On October 24, 2012, management initiated a restructuring plan that is designed to further align expenses with revenue and current market conditions. In order to reduce costs and operating expenses, this plan includes moving certain functions to lower cost geographies. The pretax charges will consist of approximately $9 million for severance-related charges that will affect approximately 200 employees, and $2 million for facility- and asset-related charges. Restructuring expense for this plan for 2012 was $9.4 million, which consists of expense of $9.2 million for severance-related charges and a $0.2 million charge for facility- and asset-related charges. By segment, total charges to date under this plan are $2.6 million for Optical, $3.1 million for Data, $0.9 million for Access, and $2.8 million for Services. Estimated cash payments under this plan are expected to be $9.7 million, of which $0.8 million has been paid through 2012. Other than the cash payments, actions under this plan are expected to be substantially completed by the end of the fourth quarter of 2013.

On January 30, 2012, management initiated a restructuring plan that aligns expenses with revenue. Tellabs stopped new development on the Tellabs^® SMARTCORE 9100 series for mobile packet core and consolidated research and development into fewer locations. The pretax charges for this plan will consist of approximately $23 million for severance-related charges of approximately 500 employees, $38 million for facility- and asset-related charges and $48 million for the accelerated amortization for abandoned intangible assets. Restructuring expense for this plan in 2012 was $108.8 million, which consists of expense of $23.2 million for severance-related charges, $36.7 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 $4.4 million for Optical, $100.7 million for Data, $1.5 million for Access, and $2.2 million for Services. Estimated cash payments under this plan are expected to be $30.6 million, of which $22.9 million has been paid through 2012. 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. Net restructuring expense for this plan in 2012 was $1.5 million, which consists of a $0.9 million charge for facility- and asset-related charges and $0.6 million for severance-related charges. Cumulative restructuring charges for this plan are $21.3 million, which consists of $15.2 million for severance-related charges, $5.5 million for facility- and asset-related charges, and $0.6 million for other obligations. By segment, total charges to date under this plan are $8.6 million for Optical, $7.2 million for Data, $1.8 million for Access and $3.7 million for Services. Estimated cash payments under this plan are expected to be $18.9 million, of which $16.3 million has been paid through 2012. Other than the cash payments, restructuring actions under this plan were substantially completed in the second quarter of 2012.

On January 25, 2010, management initiated a restructuring plan to enable us to shift investment from TDM (Time Division Multiplexing) to Ethernet and IP products, move our supply chain closer to suppliers, and reduce general and administrative expenses. A restructuring credit for 2012 was $0.1 million for severance-related charges. The cumulative pretax restructuring charges for this plan are $9.7 million, which consists of $7.0 million for workforce reductions and $2.7 million for facility- and asset-related charges. By segment, total charges to date under this plan are $3.6 million for Optical, $5.3 million for Data, $0.5 million for Access and $0.3 million for Services. Total cash payments under this plan are $7.2 million which have been paid through 2012. Other than the cash payments, restructuring actions under this plan were completed in the first quarter of 2011.

Restructuring credit for previous restructuring plans for 2012 was $0.6 million for facility- and asset-related charges. These expenses are due to changes in previous estimates related to certain lease obligations.

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 2015.

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


	2012		2011		2010
Severance and other termination benefits	$	32.9	$	15.9	$	6.9
Facility and other exit costs		37.3		3.8		2.6
Accelerated amortization of intangible assets		47.7		—		—
Other obligations		1.1		0.6		—
Total restructuring and other charges	$	119.0	$	20.3	$	9.5

The following table summarizes our restructuring and other charges activity by segment during 2012 and 2011 and the status at year-end:


	Balance at 12/30/11		Restructuring Expense			Cash Payments			Other Activities¹			Balance at 12/28/12
2012 Restructuring Plans
Optical	$	—	$	7.0		$	(2.2	)	$	(0.9	)	$	3.9
Data		—		103.8			(18.6	)		(76.6	)		8.6
Access		—		2.4			(0.7	)		(0.2	)		1.5
Services		—		5.0			(2.2	)		—			2.8
Subtotal 2012 Restructuring Plans		—		118.2			(23.7	)		(77.7	)		16.8
2011 Restructuring Plan
Optical		4.4		1.7			(5.1	)		(0.6	)		0.4
Data		5.5		—			(3.4	)		(0.2	)		1.9
Access		1.1		0.1			(0.9	)		—			0.3
Services		1.6		(0.3	)		(1.3	)		—			—
Subtotal 2011 Restructuring Plan		12.6		1.5			(10.7	)		(0.8	)		2.6
Previous Restructuring Plans
Optical		0.4		(0.1	)		(0.1	)		—			0.2
Data		1.9		—			(0.7	)		—			1.2
Access		2.6		(0.6	)		(0.9	)		—			1.1
Services		0.2		—			(0.2	)		—			—
Subtotal Previous Restructuring Plans		5.1		(0.7	)		(1.9	)		—			2.5
Total All Restructuring Plans	$	17.7	$	119.0		$	(36.3	)	$	(78.5	)	$	21.9


	Balance at 12/31/10		Restructuring Expense			Cash Payments			Other Activities¹			Balance at 12/30/11
2011 Restructuring Plan
Optical	$	—	$	6.8		$	(1.5	)	$	(0.9	)	$	4.4
Data		—		7.2			(1.3	)		(0.4	)		5.5
Access		—		1.7			(0.5	)		(0.1	)		1.1
Services		—		4.0			(2.3	)		(0.1	)		1.6
Subtotal 2011 Restructuring Plan		—		19.7			(5.6	)		(1.5	)		12.6
2010 Restructuring Plans
Optical		1.1		0.2			(1.2	)		—			0.1
Data		0.8		0.4			(1.1	)		—			0.1
Access		0.5		—			(0.4	)		—			0.1
Services		—		0.2			(0.2	)		—			—
Subtotal 2010 Restructuring Plans		2.4		0.8			(2.9	)		—			0.3
Previous Restructuring Plans
Optical		1.8		(1.1	)		(0.4	)		—			0.3
Data		2.9		(0.4	)		(0.6	)		(0.1	)		1.8
Access		3.2		0.8			(1.4	)		(0.1	)		2.5
Services		0.5		0.5			(0.8	)		—			0.2
Subtotal Previous Restructuring Plans		8.4		(0.2	)		(3.2	)		(0.2	)		4.8
Total All Restructuring Plans	$	10.8	$	20.3		$	(11.7	)	$	(1.7	)	$	17.7

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.