Severance, Restructuring, and Acquisition Integration Activities

Grass Valley and SAM Integration Program: 2018

During the first quarter of 2018, we began a restructuring program to integrate SAM with Grass Valley. The restructuring and integration activities are focused on achieving desired cost savings by consolidating existing and acquired facilities and other support functions. We recognized $20.3 million and $29.5 million of severance and other restructuring costs for this program during the three and six months ended July 1, 2018, respectively. The costs were incurred by the Enterprise Solutions segment. We expect to incur approximately $22 million of additional severance and restructuring costs for this program, most of which will be incurred by the end of 2018. We also expect the program to generate approximately $44 million of savings on an annualized basis, which we will start realizing in the second half of 2018.

Industrial Manufacturing Footprint Program: 2016 - 2018

In 2016, we began a program to consolidate our manufacturing footprint. This program is expected to be completed by the end of 2018. We recognized $3.9 million and $11.4 million of severance and other restructuring costs for this program during the three and six months ended July 1, 2018, respectively. We recognized $8.2 million and $13.9 million of severance and other restructuring costs for this program during the three and six months ended July 2, 2017, respectively. The costs were incurred by the Enterprise Solutions and Industrial Solutions segments, as the manufacturing locations involved in the program serve both platforms. To date, we have incurred a total of $59.8 million in severance and other restructuring costs, including manufacturing inefficiencies for this program. We expect the program to generate approximately $13 million of savings on an annualized basis, which we began to realize in the third quarter of 2017.

The following table summarizes the costs by segment of the various programs described above as well as other immaterial programs and acquisition integration activities:



	Severance		Other Restructuring and Integration Costs		Total Costs

Three Months Ended July 1, 2018	(In thousands)
Enterprise Solutions	$	10,872	$	12,015	$	22,887
Industrial Solutions	190		1,851		2,041
Total	$	11,062	$	13,866	$	24,928

Three Months Ended July 2, 2017
Enterprise Solutions	$	1,275	$	7,836	$	9,111
Industrial Solutions	153		296		449
Total	$	1,428	$	8,132	$	9,560

Six Months Ended July 1, 2018
Enterprise Solutions	$	11,380	$	26,041	$	37,421
Industrial Solutions	242		7,659		7,901
Total	$	11,622	$	33,700	$	45,322

Six Months Ended July 2, 2017
Enterprise Solutions	$	2,176	$	12,216	$	14,392
Industrial Solutions	153		1,615		1,768
Total	$	2,329	$	13,831	$	16,160

Of the total severance, restructuring, and acquisition integration costs recognized in the three months ended July 1, 2018, $7.2 million, $14.5 million, and $3.2 million were included in cost of sales; selling, general and administrative expenses; and research and development, respectively. Of the total severance, restructuring, and acquisition integration costs recognized in the three months ended July 2, 2017, $8.2 million and $1.4 million were included in cost of sales and selling, general and administrative expenses, respectively.

Of the total severance, restructuring, and acquisition integration costs recognized in the six months ended July 1, 2018, $16.6 million, $23.9 million, and $4.8 million were included in cost of sales; selling, general and administrative expenses; and research and development, respectively. Of the total severance, restructuring, and acquisition integration costs recognized in the six months ended July 2, 2017, $14.1 million and $2.1 million were included in cost of sales and selling, general and administrative expenses, respectively.

The other restructuring and integration costs primarily consisted of equipment transfer, costs to consolidate operating and support facilities, retention bonuses, relocation, travel, legal, and other costs. The majority of the other restructuring and integration costs related to these actions were paid as incurred or are payable within the next 60 days.

Accrued Severance

The table below summarizes the significant severance activity that occurred during the year for the Grass Valley and SAM Integration Program described above. The balances are included in accrued liabilities.



	Grass Valley and SAM Integration Program

	(In thousands)
Balance at December 31, 2017	$	—
New charges	456
Cash payments	(50		)
Balance at April 1, 2018	$	406
New charges	10,714
Cash payments	(7,556		)
Foreign currency translation	(4		)
Balance at July 1, 2018	$	3,560