Guarantees

12 Months Ended

Dec. 31, 2011

Guarantees [Abstract]

GUARANTEES

NOTE 17: GUARANTEES

Warranties. The Company accrues for estimated warranty costs at the time of product shipment. Management periodically reviews the estimated fair value of its warranty liability and records adjustments based on the terms of warranties provided to customers, historical and anticipated warranty claims experience, and estimates of the timing and cost of warranty claims. Activity for the Company’s warranty accrual, which is included in accrued liabilities, is summarized below:

	Year ended December 31,
	2011			2010			2009
	(In thousands)
Balance at beginning of period	$	4,811		$	4,186		$	5,361
Acquired warranty obligation from Scopus acquisition		—			—			2,379
Acquired warranty obligation from Omneon acquisition		—			949			—
Accrual for current period warranties		8,245			4,898			991
Warranty costs incurred		(7,498	)		(5,222	)		(4,545	)
Balance at end of period	$	5,558		$	4,811		$	4,186

Standby Letters of Credit. As of December 31, 2011, the Company’s financial guarantees consisted of standby letters of credit outstanding, which were principally related to performance bonds and state requirements imposed on employers. The maximum amount of potential future payments under these arrangements was $0.8 million.

Indemnification. Harmonic is obligated to indemnify its officers and the members of its Board of Directors pursuant to its bylaws and contractual indemnity agreements. Harmonic also indemnifies some of its suppliers and most of its customers for specified intellectual property matters pursuant to certain contractual arrangements, subject to certain limitations. The scope of these indemnities varies, but, in some instances, includes indemnification for damages and expenses (including reasonable attorneys’ fees). There have been no amounts accrued in respect of the indemnification provisions through December 31, 2011.

Guarantees. At December 31, 2011 and 2010, Harmonic had no other guarantees outstanding.