Severance, Restructuring, and Acquisition Integration Activities

Grass Valley and SAM Integration Program: 2018

During the first quarter of 2018, we began a restructuring program to integrate our acquisition of SAM with Grass Valley. The restructuring and integration activities are focused on achieving desired cost savings by consolidating existing and acquired operating facilities and other support functions. We recognized $9.2 million of severance and other restructuring costs for this program during the three months ended April 1, 2018. The costs were incurred by the Enterprise Solutions segment. We expect to incur approximately $41 million of additional severance and restructuring costs for this program, most of which will be incurred by the end of 2018. We also expect the program to generate approximately $44 million of savings on an annualized basis, which we will start realizing in the second half of 2018.

Industrial Manufacturing Footprint Program: 2016 - 2018

In 2016, we began a program to consolidate our manufacturing footprint. The manufacturing consolidation is expected to be completed in 2018. We recognized $7.5 million and $5.7 million of severance and other restructuring costs for this program during the three months ended April 1, 2018 and April 2, 2017, respectively. The costs were incurred by the Enterprise Solutions and Industrial Solutions segments, as the manufacturing locations involved in the program serve both platforms. To date, we have incurred a total of $55.9 million in severance and other restructuring costs, including manufacturing inefficiencies for this program. We expect the program to generate approximately $13 million of savings on an annualized basis, which we began to realize in the third quarter of 2017.

The following table summarizes the costs by segment of the various programs described above as well as other immaterial programs and acquisition integration activities:



	Severance		Other Restructuring and Integration Costs		Total Costs

Three Months Ended April 1, 2018	(In thousands)
Enterprise Solutions	$	508	$	14,026	$	14,534
Industrial Solutions	52		5,808		5,860
Total	$	560	$	19,834	$	20,394

Three Months Ended April 2, 2017
Enterprise Solutions	$	901	$	4,380	$	5,281
Industrial Solutions	—		1,319		1,319
Total	$	901	$	5,699	$	6,600

Of the total severance, restructuring, and acquisition integration costs recognized in the three months ended April 1, 2018, $9.4 million, $9.4 million, and $1.6 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 in the three months ended April 2, 2017, $5.9 million, $0.7 million, and $0.0 million were included in cost of sales; selling, general and administrative expenses; and research and development, respectively.

The other restructuring and integration costs primarily consisted of equipment transfer, costs to consolidate operating and support facilities, retention bonuses, relocation, travel, legal, and other costs. The majority of the other restructuring and integration costs related to these actions were paid as incurred or are payable within the next 60 days.

There were no significant severance accrual balances as of April 1, 2018 or December 31, 2017.