RESTRUCTURING AND RELATED CHARGES

The Company implemented several restructuring plans in the past few years. The goal of these plans was to bring 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 related charges are included in “Cost of revenue” and “Operating expenses - Restructuring and related charges” in the Condensed Consolidated Statements of Operations. The following table summarizes the restructuring and related charges (in thousands):



	Three months ended
	March 30, 2018		March 31, 2017
Restructuring and related charges in:
Cost of revenue	$	762	$	508
Operating expenses - Restructuring and related charges	1,086		1,279
Total restructuring and related charges	$	1,848	$	1,787

As of March 30, 2018 and December 31, 2017, the Company’s total restructuring liability was $7.2 million and $8.0 million, respectively, of which $4.3 million and $4.4 million, respectively, were reported as a component of “Accrued and other current liabilities”, and the remaining $2.9 million and $3.6 million, respectively, were reported as a component of “Other non-current liabilities” on the Company’s Condensed Consolidated Balance Sheets.

Harmonic 2018 Restructuring

In the first quarter of 2018, the Company approved and implemented a restructuring plan (the “Harmonic 2018 Restructuring Plan”). The restructuring activities under this plan primarily include worldwide workforce reductions of the Company. In the three months ended March 30, 2018, the Company recorded an aggregate amount of $1.8 million of restructuring and related charges for severance and employee benefits for 53 employees worldwide, primarily in the United States and across all functions. The Company made $1.4 million in payments for this plan in the first quarter of 2018, with the remaining $0.4 million liability outstanding at March 30, 2018. The activities under this plan are expected to be completed in 2018.

Harmonic 2017 Restructuring

In the third quarter of 2017, the Company implemented a restructuring plan (the “Harmonic 2017 Restructuring Plan”) to better align its operating costs with the continued decline in its net revenues. In 2017, the Company recorded $2.5 million of restructuring and related charges under this plan, consisting of $2.1 million of employee severance and $0.4 million related to the closure of one of the Company’s offices in New York. The activities under this plan were completed in 2017. As of March 30, 2018, the remaining $0.2 million liability outstanding relates to the accrual for the New York excess facility, which will be paid out over the remainder of the New York leased property’s term through August 2020.

Harmonic 2016 Restructuring

In the first quarter of 2016, the Company implemented a restructuring plan (the “Harmonic 2016 Restructuring Plan”) to reduce operating costs by consolidating duplicative resources in connection with the acquisition of Thomson Video Networks (“TVN”). The planned activities included global workforce reductions, exiting certain operating facilities and disposing of excess areas, and an employee voluntary departure plan in France (the “TVN VDP”).

In 2016, the Company recorded an aggregate of $20.0 million of restructuring and related charges under the Harmonic 2016 Restructuring Plan, of which $2.2 million was primarily related to the Company exiting from an excess facility at its U.S. headquarters and the remaining $17.8 million was related to severance and benefits for the termination of 118 employees worldwide, including 83 employees in France who participated in the TVN VDP. The restructuring and related charges under the Harmonic 2016 Restructuring Plan in 2016 were partially offset by approximately $2.0 million of gain from TVN pension curtailment.

TVN VDP

The Company recorded $1.1 million of TVN VDP costs in the three months ended March 31, 2017. The TVN VDP liability balance as of March 30, 2018 was $4.3 million, payable from 2018 through 2020.

Excess Facility in San Jose, California

In January 2016, the Company exited an excess facility at its U.S. headquarters in San Jose, California and recorded $1.4 million of facility exit costs. The fair value of this liability is based on a net present value model using a credit-adjusted risk-free rate. The liability will be paid out over the remainder of the leased properties’ term, which continue through August 2020. As of the cease-use date, the fair value of this restructuring liability totaled $2.5 million. Offsetting this charge was an adjustment for deferred rent liability relating to this space of $1.1 million. As a result of a change in the estimate of the sublease income, the restructuring liability was increased by $1.2 million as of December 31, 2017.

The following table summarizes the activity in the Company’s restructuring accrual related to the Harmonic 2016 Restructuring Plan during the three months ended March 30, 2018 (in thousands):



	Excess facilities			TVN VDP ⁽¹⁾			Total
Balance at December 31, 2017	$	2,426		$	5,128		$	7,554
Adjustments to restructuring provisions	34			(41		)	(7		)
Cash payments	(251		)	(880		)	(1,131		)
Foreign exchange gain	—			107			107
Balance at March 30, 2018	2,209			4,314			6,523
Less: current portion ⁽¹⁾	(892		)	(2,864		)	(3,756		)
Long-term portion ⁽¹⁾	$	1,317		$	1,450		$	2,767

(1) The current portion and long-term portion of the restructuring liability are reported under “Accrued and other current liabilities” and “Other non-current liabilities”, respectively, on the Company’s Condensed Consolidated Balance Sheets.