Note 3 — Restructuring, Asset Impairment Charges and Other Items

In 2012, 2011 and 2010, management initiated restructuring plans designed to focus the Company’s business on targeted end markets and to improve operational efficiency and financial results. These plans primarily involved the termination of employees and consolidation of facilities. The restructuring charges recorded in conjunction with these plans primarily represented severance and costs related to the continuation of certain employee benefits, exit costs for facility consolidations and closures, contract termination costs, research and development program cancellations and asset impairment charges. Other items included expenses related to acquisitions and dispositions as well as certain other non-recurring items described below.

The following table summarizes items included in restructuring of operations and other items, net:


	Year Ended December 31,
	2012			2011			2010
	(In thousands)
Lease and contract terminations	$	10,306	(a)	$	6,162	(a)	$	3,678	(a)
Employee severance and benefits		8,145			11,326			8,264
Other exit costs		4,541	(b)		(1,033	)(c)		—

Total restructuring expenses		22,992			16,455			11,942
Other items, net		26,099	(d)		7,264	(e)		(2,741	)(f)

Total restructuring of operations and other items, net	$	49,091		$	23,719		$	9,201

(a)	Includes lease obligation costs for facilities that the Company ceased to use, changes in estimates, changes in time value and on-going expenditures related to previously vacated facilities. The 2012 amount includes $6.2 million related to the Company’s former headquarters.

(b)	Consists of a $2.7 million loss on the sale of property in the U.S. and $1.8 million of other asset impairment and exit costs.

(c)	Includes a $6.4 million gain on the sale of land in Gresham, Oregon, substantially offset by a $5.5 million write-off of intellectual property in connection with the restructuring actions.

(d)	Primarily consists of $9.3 million in litigation settlements, $8.4 million of SandForce acquisition-related costs, and $6.8 million of costs related to the transition service agreements associated with the sale of the external storage systems business.

(e)

Primarily consists of $12.2 million of transition service agreement costs associated with the sale of the external storage systems business, a $4.5 million intellectual property write-off, $3.4 million of litigation settlements and a $2.2 million loss on the disposition of fixed assets, substantially offset by a $15.5 million reversal of a sales and use tax related liability.

(f)	Primarily consists of a $4.4 million reversal of litigation accruals due to a favorable court ruling, offset in part by $1.6 million of depreciation for assets reclassified from held for sale to held and used.

Late in 2010, in response to the changing external storage systems market, the Company changed some of its business strategies for its external storage systems business. In 2011, the Company decided to exit the external storage systems business. In connection with these actions, the Company terminated employees, closed several office locations, terminated certain contracts, discontinued various development projects and wrote off intangible assets and software due to the cancellation of the development programs.

The results of those actions are included in discontinued operations and are summarized below:


	Year Ended December 31,
	2011		2010
	(In thousands)
Lease and contract terminations	$	2,141	$	1,951
Employee severance and benefits		15,428		3,626
Other exit costs		23,294		44,107

Total restructuring of operations and other items, net	$	40,863	$	49,684

No restructuring expenses were incurred in 2012 related to discontinued operations.

The following table summarizes the significant activity within, and components of, the Company’s restructuring obligations:


	Lease and Contract Terminations			Employee Severance and Benefits			Other Exit Costs			Total
	(In thousands)
Balance at December 31, 2010	$	20,905		$	4,951		$	—		$	25,856
Expense		8,303			26,754			22,261			57,318
Utilized		(17,456	)(a)		(21,261	)(a)		(22,261	)		(60,978	)

Balance at December 31, 2011	$	11,752		$	10,444		$	—		$	22,196
Expense		10,306			8,145			4,541			22,992
Utilized		(9,067	)(a)		(13,586	)(a)		(4,541	)		(27,194	)

Balance at December 31, 2012	$	12,991	(b)	$	5,003	(b)	$	—		$	17,994

(a)	Represents cash payments.

(b)	The balance remaining for the lease terminations is expected to be paid during the remaining terms of the leases, which extend through 2014. The majority of the balance remaining for employee severance and benefits is expected to be paid by the first quarter of 2013.