10. Restructuring

In the third quarter of fiscal year 2017, the Company exited three facilities that were no longer being utilized, which were subject to operating leases.

The present value of the remaining lease payments was calculated using a credit adjusted risk-free rate and estimated sublease rentals for each lease. In aggregate, the Company recorded an impairment of $5.4 million for the three leases. The current portion of the liability of $1.7 million was included in accrued liabilities and the long-term portion of $3.7 million was included in other long-term liabilities on the condensed consolidated balance sheet. In addition to the lease impairment, the Company accelerated the useful life of each lease’s property and equipment to the cease-use date and recorded accelerated depreciation of $1.4 million. The Company also wrote off the deferred rent and the liability for tenant improvements associated with each lease which resulted in income of $1.9 million. The $4.9 million net impact of these actions was recorded in selling, administrative, and other operating expenses in the condensed consolidated statements of operations.

The following table summarizes the activity during the nine months ended March 31, 2018:


			Balance at		Payments, net of		Accretion				Balance at
Description	Initial Value		June 30, 2017		sublease income		Expense		Adjustments		March 31, 2018
		(In thousands)
Lease #1	$	1,652	$	1,421	$	(295)	$	27	$	—	$	1,153
Lease #2		1,311		1,138		(545)		14		47		654
Lease #3		2,443		2,282		(545)		44		(468)		1,313
Total	$	5,406	$	4,841	$	(1,385)	$	85	$	(421)	$	3,120