NOTE 8: RESTRUCTURING AND RELATED CHARGES

Omneon Restructuring

The Company has restructuring accruals for excess lease facilities related to the closure of the Omneon headquarters in Sunnyvale, California. The accrual was based on future rent payments, net of expected sublease income, to be made through the end of the lease term in June 2013. The following table summarizes the activity in the Omneon restructuring accrual during the six months ended June 28, 2013 (in thousands):


	Excess Facilities
Balance at December 31, 2012	$	869
Cash payments		(897	)
Accretion		28

Balance at June 28, 2013		—

HFC Restructuring

As a result of the sale of the cable access HFC business in March 2013, the Company recorded a $0.6 million restructuring charge in the six months ended June 28, 2013 under “Income from discontinued operations”, of which $0.4 million and $0.2 million were recorded in the first and second quarter of fiscal 2013, respectively. Pursuant to the amended TSA with Aurora, if Aurora elects to terminate any of the U.S. employees hired from the Company on or before August 15, 2013, the Company is obligated to reimburse Aurora for specified severance payments payable to such employees. The restructuring charge for the six months ended June 28, 2013 consisted of $0.5 million of severance and benefits and $0.1 million of contract termination costs. The severance and benefits are related to the termination of nine employees and the accrual for estimated severance payable to Aurora according to the amended TSA. Three of the terminated employees were required to work to the end of the term of the TSA, and, therefore, the Company recorded their severance ratably over their service period. The following table summarizes the activity in the HFC restructuring accrual during the six months ended June 28, 2013 (in thousands):


	Severance			Contract Termination			Total
Balance at December 31, 2012	$	—		$	—		$	—
Restructuring charges in discontinued operations		403			124			527
Adjustments to restructuring provisions		103			(29	)		74
Cash payments		(341	)		(95	)		(436	)

Balance at June 28, 2013		165			—			165

The Company anticipates that the remaining restructuring accrual balance of $0.2 million will be paid out by the end of the third quarter of fiscal 2013.

Harmonic 2013 Restructuring

The Company implemented a series of restructuring plans in fiscal 2013 to reduce costs and improve efficiencies. As a result, the Company recorded a restructuring charge of $0.9 million, of which $0.6 million and $0.3 million were recorded in the first and second quarter of fiscal 2013, respectively. This restructuring charge consisted of severance and benefits of $0.7 million related to the termination of thirty-nine employees worldwide. In addition, the Company wrote–down, to its estimated net realizable value, leasehold improvements and furniture related to our Milpitas warehouse by $0.2 million. The following table summarizes the activity in the Harmonic 2013 restructuring accrual during the six months ended June 28, 2013 (in thousands):


	Severance			Impairment of Leasehold Improvement			Total
Balance at December 31, 2012	$	—		$	—		$	—
Restructuring charges in continuing operations		641			101			742
Adjustments to restructuring provisions		83			48			131
Cash payments		(698	)		—			(698	)
Non-cash write-offs		—			(149	)		(149	)

Balance at June 28, 2013		26			—			26

Of the restructuring charge in the six months ended June 28, 2013, $0.2 million is included in “Product cost of revenue” and the remaining $0.7 million is included in “Operating expenses-restructuring and related charges” in the Condensed Consolidated Statements of Operations. The Company anticipates that the remaining restructuring accrual balance of $26,000 will be paid out by the end of the third quarter of fiscal 2013.