Credit Facilities

6 Months Ended

Jun. 28, 2013

Debt Disclosure [Abstract]

Credit Facilities

NOTE 9: CREDIT FACILITIES

Harmonic has a bank line of credit facility with Silicon Valley Bank that provides for borrowings of up to $10.0 million and matures on August 23, 2013. As of June 28, 2013, other than standby letters of credit (Note 14), there were no amounts outstanding under the line of credit facility, and there were no borrowings during the six months ended June 28, 2013. As of June 28, 2013, the amount available for borrowing under this facility, net of $1.2 million of standby letters of credit, was $8.8 million.

This facility, which became effective in August 2011 and was amended in August 2012, contains a financial covenant that requires Harmonic to maintain a ratio of unrestricted cash, accounts receivable and short term investments to current liabilities (less deferred revenue) of at least 1.75 to 1.00. As of June 28, 2013, the Company’s ratio under that covenant was 3.97 to 1. In the event of noncompliance by Harmonic with the covenants under the facility, including the financial covenant referenced above, Silicon Valley Bank would be entitled to exercise its remedies under the facility, including declaring all obligations immediately due and payable. At June 28, 2013, Harmonic was in compliance with the covenants under the line of credit facility. Borrowings pursuant to the line would bear interest at the bank’s prime rate (3.25% at June 28, 2013) or at LIBOR for the desired borrowing period (an annualized rate of 0.20% for a one month borrowing period at June 28, 2013) plus 1.75%, or 1.95%. Borrowings are not collateralized.