RESTRUCTURING AND ASSET IMPAIRMENT CHARGES

The Company implemented several restructuring plans in the past few years and recorded restructuring and asset impairment charges of $3.1 million and $2.2 million for the year ended December 31, 2014 and 2013, respectively, and there were no charges for the year ended December 31, 2012. The goal of these plans was to bring its operational expenses to appropriate levels relative to its net revenues, while simultaneously implementing extensive company-wide expense control programs.

The Company accounts for its restructuring plans under the authoritative guidance for exit or disposal activities. The restructuring and asset impairment charges are included in “Product cost of revenue” and "Operating expenses-restructuring and asset impairment charges” in the Condensed Consolidated Statements of Operations. The following table summarizes the restructuring and asset impairment charges (in thousands):



	Year ended December 31,
	2014		2013		2012
Product cost of revenue	$	315	$	823	$	—
Operating expenses-Restructuring and asset impairment charges	2,761		1,421		—
Total	$	3,076	$	2,244	$	—

Harmonic 2015 Restructuring Plan

In the fourth quarter of 2014, the Company approved a new restructuring plan "Harmonic 2015 Restructuring Plan" to reduce 2015 operating costs and the planned restructuring activities involve headcount reduction, exiting certain operating facilities and disposing excess assets. The Company started the restructuring activities pursuant to this plan in the fourth quarter of 2014 and expects to complete its actions by end of 2015. The $2.2 million of restructuring and asset impairment charges recorded under this plan in the year ended December 31, 2014 consisted of $1.1 million fixed asset impairment charge related to software development costs incurred for a discontinued information technology ("IT") project, $0.6 million of severance and benefits related to the termination of nineteen employees worldwide, $0.3 million of excess material costs associated with the termination of a research and development project and $0.1 million of other charges.

The following table summarizes the activity in the Harmonic 2015 restructuring accrual during the year ended December 31, 2014 (in thousands):



	Termination of an information technology ("IT") project			Severance and benefits			Termination of a research and development project			Other charges			Total
Charges for 2015 Restructuring Plan	$	1,138		$	599		$	307		$	125		$	2,169
Cash payments	—			(294		)	(307		)	—			(601		)
Non-cash write-offs	(1,138		)	—			—			(108		)	(1,246		)
Balance at December 31, 2014	$	—		$	305		$	—		$	17		$	322

The Company anticipates that the remaining restructuring accrual balance of $0.3 million will be paid out in 2015.

Harmonic 2013 Restructuring

The Company implemented a series of restructuring plans in 2013 to reduce costs and improve efficiencies. This restructuring plan extended to actions taken through the third quarter of fiscal 2014. As a result, the Company recorded restructuring charges of $2.2 million in the year ended December 31, 2013. The restructuring charge consisted of $1.7 million severance and benefits related to the termination of eighty-five employees worldwide. In addition, the Company wrote-down inventory to reflect $0.4 million of obsolete inventories arising from the restructuring of its Israel facilities and wrote-down, to its estimated net realizable value, leasehold improvements and furniture related to its Milpitas warehouse by $0.1 million.

The Company recorded restructuring charges of $0.9 million in the year ended December 31, 2014 under this plan. The restructuring charges consisted of $0.8 million of severance and benefits related to the termination of twenty-five employees worldwide and the remaining charges related to costs associated with exiting from a research and development project and vacating from an excess facility in France.

The following table summarizes the activity in the Harmonic 2013 restructuring accrual during the years ended December 31, 2014 and 2013 (in thousands):



	Severance			Impairment of Leasehold Improvement			Obsolete Inventories			Termination of a Research and Development Project			Excess Facilities			Total
Charges for 2013 Restructuring Plan	$	1,663		$	101		$	404		$	—		$	—		$	2,168
Adjustments to restructuring provisions	29			48			—			—			—			77
Cash payments	(1,513		)	—			—			—			—			(1,513		)
Non-cash write-offs	—			(149		)	(404		)	—			—			(553		)
Balance at December 31, 2013	179			—			—			—			—			179
Restructuring charges in continued operations	829			—			—			63			32			924
Adjustments to restructuring provisions	(17		)	—			—			—			—			(17		)
Cash payments	(991		)	—			—			(63		)	(32		)	(1,086		)
Balance at December 31, 2014	$	—		$	—		$	—		$	—		$	—		$	—

HFC Restructuring

As a result of the sale of the cable access HFC business in March 2013, the Company recorded $0.6 million of restructuring charge under “Income from discontinued operations” in fiscal 2013. The restructuring charge consisted of $0.5 million of severance and benefits and $0.1 million of contract termination costs. The severance and benefits was related to the termination of nine of the Company's employees by the Company, as a result of the sale of the HFC business, and the reimbursement to Aurora, pursuant to the amended TSA, of severance payable by Aurora as a result of its subsequent termination of ten U.S. employees hired from the Company, in connection with Aurora's purchase of the HFC business. The remaining restructuring accrual balance of $13,000 was fully paid in the first quarter of 2014.

The following table summarizes the activity in the HFC restructuring accrual during the years ended December 31, 2014 and 2013 (in thousands):



	Severance			Contract Termination			Total
Charges for HFC Restructuring Plan recorded in discontinued operations	$	403		$	124		$	527
Adjustments to restructuring provisions	102			(29		)	73
Cash payments	(492		)	(95		)	(587		)
Balance at December 31, 2013	13			—			$	13
Cash payments	(13		)	—			$	(13	)
Balance at December 31, 2014	$	—		$	—		$	—

Omneon Restructuring

In 2010, the Company recorded an excess facilities charge of $3.0 million related to the closure of the Omneon headquarters in Sunnyvale, California. The charge was based on future rent payments, net of expected sublease income, to be made through the end of the lease term in June 2013. Subsequent to the original accrual, the Company revised its estimate and additional provisions were recorded. The following table summarizes the activity in the Omneon restructuring accrual during the years ended December 31, 2013 (in thousands):



	Excess Facilities
Balance at December 31, 2012	$	869
Provisions	28
Cash payments, net of sublease income	(897		)
Balance at December 31, 2013	$	—