Note 12: Severance, Restructuring, and Acquisition Integration Activities

During 2014, we incurred severance, restructuring, and acquisition integration costs primarily related to a productivity improvement program and the integration of our acquisition of Grass Valley. The productivity improvement program is focused on improving the productivity of our sales, marketing, finance, and human resources functions relative to our peers. The majority of the expected costs for the productivity improvement program relate to the Industrial Connectivity, Enterprise, and Industrial IT segments. The restructuring and integration activities related to our acquisition of Grass Valley are focused on achieving desired cost savings by consolidating existing and acquired operating facilities and other support functions. The Grass Valley costs relate to our Broadcast segment.

In 2014, we recorded severance, restructuring, and integration costs of $70.8 million related to these programs. The following table summarizes the costs by segment for the year ended December 31, 2014:


			Other
			Restructuring
			and Integration
	Severance		Costs		Total Costs
	(In thousands)
Broadcast Solutions	$	20,025	$	28,532	$	48,557
Enterprise Connectivity Solutions		2,183		1,135		3,318
Industrial Connectivity Solutions		9,732		2,221		11,953
Industrial IT Solutions		5,314		1,685		6,999

Total	$	37,254	$	33,573	$	70,827

The other restructuring and integration costs primarily consisted of costs of integrating manufacturing operations, such as relocating inventory on a global basis, retention bonuses, relocation, travel, lease termination, reserves for inventory obsolescence as a result of product line integration, costs to consolidate operating and support facilities, and other costs. The majority of the other restructuring and integration costs related to these actions were paid in 2014.

The table below sets forth severance activity that occurred during 2014 for the two significant programs described above. The balances are included in accrued liabilities.


	Productivity			Grass
	Improvement			Valley
	Program			Integration
	(In thousands)
Balance at December 31, 2013 and March 30, 2014	$	—		$	—
New charges		10,507			16,528
Cash payments		(1,774	)		(4,497	)
Foreign currency translation		(62	)		82

Balance at June 29, 2014	$	8,671		$	12,113
New charges		2,575			1,536
Cash payments		(1,171	)		(3,746	)
Foreign currency translation		(381	)		(191	)
Other adjustments		(1,697	)		(1,900	)

Balance at September 28, 2014	$	7,997		$	7,812
New charges		3,048			1,761
Cash payments		(2,244	)		(4,699	)
Foreign currency translation		(465	)		(218	)
Other adjustments		(1,195	)		—

Balance at December 31, 2014	$	7,141		$	4,656

The other adjustments in 2014 were due to changes in estimates, including an impact of forfeited severance amounts. We expect the majority of the liabilities for these programs to be paid in the first half of fiscal 2015.

Of the total severance, restructuring, and acquisition integration costs recognized in 2014, $20.7 million, $46.5 million, and $3.6 million were included in cost of sales; selling, general and administrative expenses; and research and development, respectively.

We expect to incur additional severance, restructuring, and acquisition integration costs in 2015 of approximately $21 million as a result of the activities discussed above, as well as the integration of ProSoft and Tripwire (see Note 26).

During 2013, we recorded severance, restructuring, and acquisition integration costs of $14.9 million. The majority of these costs were recorded in our Broadcast segment, which recognized $12.1 million of severance, restructuring, and integration costs for the year ended December 31, 2013. The restructuring and integration costs included relocation, equipment transfer, and other costs. These costs were incurred primarily as a result of facility consolidation in New York for recently acquired locations and other acquisition integration activities. These activities were contemplated as part of the decision to acquire PPC. The Industrial IT segment also recognized $1.7 million of severance expense in the year ended December 31, 2013.

Of the total severance and other restructuring costs recognized in the year ended December 31, 2013, $7.1 million, $6.5 million, and $1.3 million were included in cost of sales; selling, general and administrative expenses; and research and development, respectively.

During 2012, we implemented certain restructuring actions in response to the uncertain global economic environment. For the year ended December 31, 2012, we recognized severance and other restructuring costs in our Broadcast, Enterprise Connectivity, Industrial Connectivity, and Industrial IT segments of $4.9 million, $3.2 million, $9.2 million, and $0.5 million, respectively. The actions included reducing headcount and renegotiating procurement related contracts in order to reduce our cost structure. Of the total costs recognized, approximately $5.2 million consisted of contract termination costs related to our supply chain.

Of the total severance and other restructuring costs recognized, $6.5 million, $10.0 million, and $1.4 million were included in cost of sales; selling, general and administrative expenses; and research and development, respectively.

We continue to review our business strategies and evaluate potential new restructuring actions. This could result in additional restructuring costs in future periods.