RESTRUCTURING AND ASSET IMPAIRMENT CHARGES

The Company implemented several restructuring plans in the past few years and recorded restructuring and asset impairment charges of $1.5 million, $3.1 million and $2.2 million for the years ended December 31, 2015, 2014 and 2013, respectively. 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 restructuring charges of $1.5 million in 2015 were primarily related to the 2015 restructuring plan implemented during fourth quarter of 2014. Of the $3.1 million restructuring charges recorded in 2014, $2.2 million was recorded in the fourth quarter of 2014 related to the 2015 restructuring plan and the remaining $0.9 million, as well as the restructuring charges of $2.2 million recorded in 2013, were related to restructuring plan implemented in 2013.

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 Consolidated Statements of Operations. The following table summarizes the restructuring and asset impairment charges (in thousands):



	Year ended December 31,
	2015		2014		2013
Product cost of revenue	$	113	$	315	$	823
Operating expenses-Restructuring and asset impairment charges	1,372		2,761		1,421
Total	$	1,485	$	3,076	$	2,244

Harmonic 2015 Restructuring

In the fourth quarter of 2014, the Company implemented a restructuring plan (the “Harmonic 2015 Restructuring Plan”) to reduce operating costs and the planned restructuring activities involve headcount reduction, exiting certain operating facilities and disposing excess assets. The Company recorded $2.2 million of restructuring and asset impairment charges under this plan in fiscal 2014 consisting primarily of a fixed asset impairment charge related to software development costs incurred for a discontinued information technology (“IT”) project; severance and benefits related to the termination of 19 employees worldwide and other charges. In fiscal 2015, the Company recorded an additional $1.5 million of restructuring charges under this plan consisting primarily of severance and benefits for the termination of 37 employees worldwide. The Company expects to complete its actions under this plan by early 2016.

The following table summarizes the activities in the Harmonic 2015 restructuring accrual during the years ended December 31, 2015 and 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
Charges for 2015 Restructuring Plan	—			1,413			—			204			1,617
Adjustments to restructuring provisions	—			(126		)	—			(6		)	(132		)
Cash payments	—			(1,328		)	—			(13		)	(1,341		)
Non-cash write-offs	—			—			—			(202		)	(202		)
Balance at December 31, 2015	$	—		$	264		$	—		$	—		$	264

The Company anticipates that the remaining restructuring accrual balance of $0.3 million will be paid out in 2016.

Harmonic 2013 Restructuring

The Company implemented a series of restructuring plans in 2013 to reduce costs and improve efficiencies and the actions extended through the third quarter of fiscal 2014. The Company recorded restructuring charges of $2.2 million in fiscal 2013 under this plan consisting primarily of severance and benefits related to the termination of 85 employees worldwide and, to a lesser extent, the costs associated with writing down some of its inventory to net realizable value due to restructuring activities in its Israel facilities. The Company recorded an additional $0.9 million restructuring charges in fiscal 2014 under this plan primarily for severance and benefits related to the termination of 25 employees worldwide.

The following table summarizes the activities 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
Charges for 2013 Restructuring Plan	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 primarily of severance and benefits related to 19 employees terminated by the Company and Aurora.

The following table summarizes the activities 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	$	—		$	—		$	—