Note 7:

Severance, Restructuring, and Acquisition Integration Activities

During the nine months ended September 28, 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.

For the three and nine months ended September 28, 2014, we recorded severance, restructuring, and integration costs of $9.2 million and $48.8 million, respectively, related to these programs. The following table summarizes the costs by segment:


Three Months Ended September 28, 2014	Severance			Other Restructuring and Integration Costs		Total Costs
	(In thousands)
Broadcast Solutions	$	54		$	5,740	$	5,794
Enterprise Connectivity Solutions		(347	)		573		226
Industrial Connectivity Solutions		1,282			824		2,106
Industrial IT Solutions		823			209		1,032

Total	$	1,812		$	7,346	$	9,158


Nine Months Ended September 28, 2014
Broadcast Solutions	$	18,156		$	16,605	$	34,761
Enterprise Connectivity Solutions		1,245			802		2,047
Industrial Connectivity Solutions		9,393			857		10,250
Industrial IT Solutions		1,409			342		1,751

Total	$	30,203		$	18,606	$	48,809

The other restructuring and integration costs primarily consisted of retention bonuses, relocation, travel, lease termination, reserves for inventory obsolescence as a result of product line integration, and costs to consolidate operating facilities. We expect the majority of the other restructuring and integration costs related to these actions will be 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 Improvement Program			Grass Valley Integration
	(In thousands)
Balance at December 31, 2013	$	-		$	-
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

The other adjustments in the three months ended September 28, 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 remainder of 2014 and the first half of fiscal 2015.

Of the total severance, restructuring, and acquisition integration costs recognized for the three months ended September 28, 2014, $5.3 million, $2.6 million, and $1.3 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 for the nine months ended September 28, 2014, $13.3 million, $32.6 million, and $2.9 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 the fourth quarter of 2014 of approximately $23 million as a result of the activities discussed above, as well as the integration of our acquisition of ProSoft.

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

For the three and nine months ended September 29, 2013, we recorded severance and other restructuring costs of $3.8 million and $9.5 million, respectively. The majority of these costs were recorded in our Broadcast segment, which recognized $3.2 million and $7.6 million of severance and other restructuring costs for the three and nine months ended September 29, 2013, respectively. The other restructuring 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. The majority of the remaining severance and other restructuring costs were recorded in our Industrial IT segment. These activities have been completed, and the costs have been paid.

Of the total severance and other restructuring costs recognized for the three months ended September 29, 2013, $1.9 million, $1.6 million, and $0.3 million were included in cost of sales; selling, general and administrative expenses; and research and development, respectively. Of the total severance and other restructuring costs recognized for the nine months ended September 29, 2013, $5.0 million, $3.2 million, and $1.3 million were included in cost of sales; selling, general and administrative expenses; and research and development, respectively.