Special Charges

3 Months Ended

Mar. 30, 2012

Special Charges [Abstract]

Special Charges

11. Special Charges

Special charges consist of the following (in thousands):

	Successor			Predecessor		Successor			Predecessor
	Fiscal Quarter Ended March 30 2012			Fiscal Quarter Ended April 1 2011		Six Fiscal Months Ended March 30 2012			Six Fiscal Months Ended April 1 2011
Severance charges	$	76		$	879	$	1,839		$	2,783
Merger transaction (credits) charges		(88	)		11,570		—			11,570
Environmental remediation charges		180			145		217			145
Lease impairment charges		286			38		157			80
Restructuring (credits) charges		(323	)		316		(537	)		652
	$	131		$	12,948	$	1,676		$	15,230

For the Successor fiscal quarter ended March 30, 2012, special charges consisted primarily of a $0.3 million increase in the liability for impaired leases due to increases in projected expenses and a reduction in sub-tenant income, $0.2 million of charges for certain environmental matters and $0.1 million of severance charges resulting from a reduction in headcount after the Merger, offset by a $0.3 million reduction of restructuring liability due to a reduction of projected expenses and increases in sub-tenant income and a $0.1 million reduction of legal costs related to the Merger. For the Predecessor fiscal quarter ended April 1, 2011, special charges consisted primarily of $11.6 million for merger transaction charges, including payment of a $7.7 million fee for termination of the agreement with Standard Microsystems Corporation (“SMSC Agreement”) and $3.9 million of financial advisory, legal and other fees related to the terminated merger with SMSC and the Merger, $0.9 million of severance charges resulting from certain reductions in headcount, $0.3 million for restructuring charges related to accretion of lease liability and $0.1 million of charges for certain environmental matters.

For the Successor six fiscal months ended March 30, 2012, special charges consisted primarily of $1.8 million of severance charges resulting from a reduction in headcount after the Merger, $0.2 million of charges for certain environmental matters and a $0.2 million increase in the liability for impaired leases due to increases in projected expenses and a reduction in sub-tenant income, offset by a $0.5 million reduction of restructuring liability due to reduction of projected expenses and increases in sub-tenant income. For the Predecessor six fiscal months ended April 1, 2011, special charges consisted primarily of $11.6 million for merger transaction charges, including payment of a $7.7 million fee for termination of the SMSC Agreement and $3.9 million of financial advisory, legal and other fees related to the terminated merger with SMSC and the Merger, $2.8 million of severance charges resulting from certain reductions in headcount, $0.7 million increase in restructuring liability due to accretion of lease liability and $0.1 million of charges for certain environmental matters.

Restructuring Charges

The Company has implemented a number of cost reduction initiatives to improve its operating cost structure. The cost reduction initiatives included workforce reductions and the closure or consolidation of certain facilities, among other actions.

Restructuring Accruals — As of March 30, 2012, the Company has remaining restructuring accruals of $28.2 million, which consist of impaired facility leases. Of the $28.2 million of restructuring accruals at March 30, 2012, $4.4 million is included in other current liabilities and $23.8 million is included in other non-current liabilities in the accompanying consolidated balance sheet. The Company expects to pay the obligations for the non-cancelable leases and other commitments over their respective terms, which expire at various dates through fiscal 2021. The Company’s accrued liabilities at March 30, 2012 include the net present value of the future lease obligations of $46.7 million, net of contracted sublease income of $13.7 million, and projected sublease income of $4.8 million. The facility charges were determined in accordance with the accounting guidance for costs associated with exit or disposal activities. As a result, the Company recorded the net present value of the future lease obligations and will accrete the remaining amounts into expense over the remaining terms of the non-cancellable leases.

Fiscal 2008 Restructuring Actions — During fiscal 2008, the Company announced its decision to discontinue investments in standalone wireless networking solutions and other product areas. Charges to expense in the Successor fiscal quarter ended March 30, 2012 consist of accretion of lease liability on restructured facilities under non-cancelable leases.

Activity and liability balances recorded as part of the Fiscal 2008 restructuring actions through March 30, 2012 were as follows (in thousands):

	Facility and Other
Restructuring balance, September 30, 2011		39
Charged to costs and expenses		10
Cash payments		(37	)
Restructuring balance, March 30, 2012	$	12

Fiscal 2007 Restructuring Actions — During fiscal 2007, the Company announced several facility closures and workforce reductions. In total, the Company notified approximately 670 employees of their involuntary termination. Charges to expense in the Successor fiscal quarter ended March 30, 2012 consist of $0.4 million accretion of lease liability on restructured facilities under non-cancelable leases offset by $0.2 million net credits due to lower projected expense and higher sub-tenant rent income. Accretion and other expense of $0.4 million related to the Company’s discontinued BMP business was included in discontinued operations.

Activity and liability balances recorded as part of the Fiscal 2007 restructuring actions through March 30, 2012 were as follows (in thousands):

	Facility and Other
Restructuring balance, September 30, 2011		19,999
Charged to costs and expenses		382
Cash payments		(1,887	)
Restructuring balance, March 30, 2012	$	18,494

Fiscal 2006 and 2005 Restructuring Actions — During fiscal years 2006 and 2005, the Company announced operating site closures and workforce reductions. In total, the Company notified approximately 385 employees of their involuntary termination. Charges to expense in the Successor fiscal quarter ended March 30, 2012 consist of $0.1 million expense from accretion of lease liability on restructured facilities under non-cancelable leases.

Activity and liability balances recorded as part of the Fiscal 2006 and 2005 restructuring actions through March 30, 2012 were as follows (in thousands):

	Facility and Other
Restructuring balance, September 30, 2011		10,972
Charged to costs and expenses		(32	)
Cash payments		(1,221	)
Restructuring balance, March 30, 2012	$	9,719