RESTRUCTURING ACTIVITIES

Fiscal year 2015:

Summary of Restructuring Plans

The Company has accruals for severance and restructuring payments as well as expected losses relating to lease terminations.

The Company’s restructuring activities during the fiscal year ending June 27, 2015 were as follows:



	Balance, June 28, 2014		Fiscal 2015								Balance, June 27, 2015		As of June 27, 2015
	Balance, June 28, 2014		Charges		Cash Payments			Change in Estimates			Balance, June 27, 2015		Costs Incurred to Date		Expected Costs to be Incurred
	(in thousands)
San Jose Fab Shutdown
Severance (1)	$	—	$	6,725	$	—		$	—		$	6,725	$	6,725	$	857
Accelerated depreciation (2)	—		51,494		—			—			51,494		51,494		32,766
Total San Jose Fab Shutdown	—		58,219		—			—			58,219		58,219		33,623

Other Plans
Severance (1)	5,782		24,505		(18,203		)	(587		)	11,497		29,699		—
Lease termination losses and other (3)	9,132		2,598		(4,604		)	(3,373		)	3,753		8,358		—
Total other plans	14,914		27,103		(22,807		)	(3,960		)	15,250		38,057		—

Total restructuring plans	$	14,914	$	85,322	$	(22,807	)	$	(3,960	)	$	73,469	$	96,276	$	33,623

In Balance Sheets:
Accrued salary and related expenses	$	5,782									$	18,221
Accrued expenses	$	4,276									$	2,004
Other liabilities	$	4,856									$	1,750

(1) Charges and change in estimates are included in Severance and restructuring expenses in the accompanying Consolidated Statements of Income.

(2) Charges and change in estimates are included in Cost of goods sold in the accompanying Consolidated Statements of Income.

(3) Charges and change in estimates are included in Severance and restructuring expenses and Other operating expenses (income), net in the accompanying Consolidated Statements of Income.

San Jose Fab Shutdown

On October 23, 2014, the Company initiated a plan to shut down its San Jose wafer fabrication facility. The Company reached the decision that it was not economically feasible to maintain this facility, which is used primarily for fab process development and low volume manufacturing, as the Company intends to utilize other resources to complete such activities in the future. This plan includes cash charges related to employee severance and non-cash charges related to accelerated depreciation.

During the fiscal year ending June 27, 2015, the Company recorded accelerated depreciation charges of $51.5 million in “Cost of goods sold” and $6.7 million in “Severance and restructuring expenses” in the Consolidated Statements of Income. The Company expects to incur a total of approximately $33.6 million of accelerated depreciation and severance charges related to this plan which it expects to complete during the first quarter of fiscal year 2016.

Other Plans

During the fiscal year ending June 27, 2015, the Company recorded $24.5 million in “Severance and restructuring expenses" included in the Consolidated Statements of Income, primarily related to employee severance costs, associated with a major reorganization of the Company's business units. Multiple job classifications and locations were impacted by this activity. This reorganization was intended to consolidate the Company's R&D and Sales functions to allow for faster investment decisions, improved R&D efficiency, and facilitate stronger collaborations between internal organizations to increase productivity, improve customer satisfaction, and fuel revenue growth.

The Company also accrued for expected losses relating to lease terminations as a result of plans to consolidate office space. The need for consolidation resulted from acquisition and relocation activities.

Fiscal year 2014:

Volterra Restructuring Plan

The Company's management approved and initiated plans to restructure the operations of Volterra, including acceleration of certain stock-based compensation awards ($2.5 million), costs to vacate duplicative facilities ($2.6 million), severance for transitional and exiting employees ($4.6 million), contract cancellation costs and other items ($1.3 million). The total cost of the plan was $11.0 million which was recorded in Severance and restructuring expenses in the Company's Consolidated Statements of Income based upon the anticipated timing of planned terminations and facility closure costs. Expected severance and retention costs for transitional employees are being accrued over the transitional period. Payments against this restructuring plan were largely paid out during the fiscal year ended June 28, 2014, and amounts accrued and future estimated costs to be incurred as of June 27, 2015 and June 28, 2014 are immaterial.

Business Unit Reorganization

During the fiscal year ended June 28, 2014, the Company recorded $10.8 million in Severance and restructuring expenses in the Company's Consolidated Statements of Income, primarily related to employee severance costs, associated with the reorganization of certain business units. Multiple job classifications and locations were impacted as this was a company-wide action. The reorganization was driven by the desire to focus on specific investment areas and simplify business processes. Payments against this restructuring plan were largely paid out during the fiscal year ended June 28, 2014, and amounts accrued and future estimated costs to be incurred as of June 27, 2015 and June 28, 2014 are immaterial.