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Restructuring and Related Charges | 6 Months Ended
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Jul. 01, 2016
Restructuring and Related Activities [Abstract] |
Restructuring and Related Charges | RESTRUCTURING AND RELATED CHARGES The Company implemented several restructuring plans in the past few years. The goal of these plans was to bring operational expenses to appropriate levels relative to its net revenues, while simultaneously implementing extensive company-wide expense control programs. The Company accounts for its restructuring plans under the authoritative guidance for exit or disposal activities. The restructuring and asset impairment charges are included in “Product cost of revenue” and “Operating expenses-restructuring and related charges” in the Condensed Consolidated Statements of Operations. The following table summarizes the restructuring and asset impairment charges (in thousands):
| Three months ended |  | Six months ended
| July 1, 2016 |  | July 3, 2015 |  | July 1, 2016 |  | July 3, 2015
Restructuring and asset impairment charges in: |  |  |  |  |  |  |
Product cost of revenue | $ | 6 |  |  | $ | — |  |  | $ | (23 | ) |  | $ | — |
Operating expenses-Restructuring and related charges | 1,903 |  |  | 185 |  |  | 4,515 |  |  | 229 |
Total restructuring and related charges | $ | 1,909 |  |  | $ | 185 |  |  | $ | 4,492 |  |  | $ | 229 |
Harmonic 2016 Restructuring In the first quarter of 2016, the Company implemented a new restructuring plan (the “Harmonic 2016 Restructuring Plan”) to streamline the corporate organization, thereby reducing operating costs by consolidating duplicative resources in connection with the acquisition of TVN. The planned activities have primarily resulted, and will primarily result, in cash expenditures related to severance and related benefits and exiting certain operating facilities and disposing of excess assets. The Company anticipates spending approximately $22 million to $24 million in 2016, in aggregate, on the Harmonic 2016 Restructuring Plan and TVN acquisition- and integration-related expenses. The activities under the Harmonic 2016 Restructuring Plan are expected to take at least 12 months to complete and the estimated synergies from this plan and the TVN integration effort is approximately $20 million to $22 million, which the Company anticipates within two years. The Company recorded $1.9 million and $4.5 million of restructuring and related charges under the Harmonic 2016 Restructuring Plan, in the three and six months ended July 1, 2016, respectively. The restructuring and related charges in the three months ended July 1, 2016 consisted of $1.9 million of severance and benefits for the termination of eight employees worldwide. The restructuring and related charges in the six months ended July 1, 2016 consisted of $1.4 million of costs related to the Company exiting an excess facility at its U.S. headquarters, $3.0 million of severance and benefits for the termination of 21 employees worldwide and $0.2 million of other charges. The Company incurred $3.4 million and $6.5 million of TVN acquisition- and integration-related expenses in the three and six months ended July 1, 2016, respectively. (See Note 3, “Business Acquisition” for additional information on TVN acquisition-and integration-related expenses). In January 2016, the Company exited an excess facility at its U.S. headquarters in San Jose, California and recorded $1.4 million in facility exit costs. The Company accounts for facility exit costs in accordance with ASC 420, “Exit or Disposal Cost Obligations”, which requires that a liability for such costs be recognized and measured initially at fair value on the cease-use date based on remaining lease rentals, adjusted for the effects of any prepaid or deferred items recognized, reduced by the estimated sublease rentals that could be reasonably obtained even if it is not the intent to sublease. The fair value of these liabilities is based on a net present value model using a credit-adjusted risk-free rate. The liability will be paid out over the remainder of the leased properties’ terms, which continue through August 2020. Actual sublease terms may differ from the estimates originally made by the Company. Any future changes in the estimates or in the actual sublease income could require future adjustments to the liabilities, which would impact net income in the period the adjustment is recorded. As of the cease-use date, the fair value of this restructuring liability totaled $2.5 million. Offsetting these charges was an adjustment for deferred rent liability relating to this space of $1.1 million. In the second quarter of 2016, the Company initiated a consultative process with the works council for the acquired French subsidiary and applicable union representatives to establish a voluntary departure plan to enable French employees of TVN to voluntarily terminate with certain benefits. The Company expects the consultation process and the terms of the voluntary departure plan to be finalized in the third quarter of 2016. The following table summarizes the activity in the Company’s restructuring accrual related to the Harmonic 2016 Restructuring Plan during the six months ended July 1, 2016 (in thousands):
| Excess facilities |  | Severance and benefits (1) |  | Other charges |  | Total
Charges for 2016 Harmonic Restructuring Plan | $ | 1,418 |  |  | $ | 2,893 |  |  | $ | 246 |  |  | $ | 4,557 |
Reclassification of deferred rent | 1,087 |  |  | — |  |  | — |  |  | 1,087 |
Cash payments | (468 | ) |  | (1,331 | ) |  | — |  |  | (1,799 | )
Non-cash write-offs | — |  |  | — |  |  | (246 | ) |  | (246 | )
Foreign exchange gain (loss) | — |  |  | (5 | ) |  | — |  |  | (5 | )
Balance at July 1, 2016 | $ | 2,037 |  |  | $ | 1,557 |  |  | $ | — |  |  | $ | 3,594 |
(1) The Company anticipates that the remaining severance and benefits accrual at July 1, 2016 will be substantially paid out by the end of 2016. Harmonic 2015 Restructuring In the fourth quarter of 2014, the Company implemented a restructuring plan (the “Harmonic 2015 Restructuring Plan”) to reduce 2015 operating costs and the planned restructuring activities involve headcount reduction, exiting certain operating facilities and disposing of excess assets. The Company recorded $2.2 million and $1.5 million of restructuring and impairment charges under the Harmonic 2015 Restructuring Plan in fiscal 2014 and 2015, respectively, consisting primarily of severance and benefits for the termination of 56 employees worldwide as well as a fixed asset impairment charge related to software development costs incurred for a discontinued information technology (“IT”) project. No new activities are anticipated in 2016 for the Harmonic 2015 Restructuring Plan and the remaining restructuring accrual for this plan is expected to be fully settled in the third quarter of 2016. The following table summarizes the activity in the Company’s restructuring accrual related to the Harmonic 2015 Restructuring Plan during the six months ended July 1, 2016 (in thousands):
|  | Severance and benefits (2)
Balance at December 31, 2015 |  | $ | 264 |
Adjustments to restructuring provisions |  | (65 | )
Cash payments |  | (194 | )
Balance at July 1, 2016 |  | $ | 5 |
(2) The Company anticipates that the remaining restructuring accrual as of July 1, 2016 will be fully settled in the third quarter of 2016.

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- Definition The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB TOPIC 5.P.4) -URI http://asc.fasb.org/extlink&oid=27011515&loc=d3e140904-122747 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 5.P.3) -URI http://asc.fasb.org/extlink&oid=27011515&loc=d3e140864-122747 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 5 -Section P -Subsection 3, 4 + Details
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