Harmonic (HLIT) 8-K Harmonic Completes Sale of Cable Access HFC Business to

Exhibit 99.2

HARMONIC INC.

Unaudited Pro Forma Condensed Consolidated Balance Sheet

As of December 31, 2012

(In thousands)

	As reported		Pro forma adjustments			Pro forma
ASSETS
Cash and cash equivalents	$	96,670	$	46,000	(A)	$	142,670
Short-term investments		104,506		—		$	104,506
Accounts receivable, net		85,920		—			85,920
Inventories, net		64,270		(11,361	)(B)		52,909
Prepaid expenses and other current assets		45,506		(2,141	)(B)(E)		43,365
Total current assets		396,872		32,498			429,370
Property and equipment, net		38,122		(1,050	)(B)		37,072
Goodwill and intangibles, net		270,965		(14,547	)(C)		256,418
Other non-current assets		11,572		(1,650	)(E)		9,922
Total assets	$	717,531	$	15,251		$	732,782
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities	$	102,894	$	(662	)(B)(D)(E)	$	102,232
Other non-current liabilities		61,224		875	(E)		62,099
Total stockholders’ equity		553,413		15,038	(F)		568,451
Total liabilities and stockholders’ equity	$	717,531	$	15,251		$	732,782

See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements, which are an integral part of this statement.

HARMONIC INC.

Unaudited Pro Forma Condensed Consolidated Statement of Operations

For the year ended December 31, 2012

(In thousands, except per share data)

	As reported			Pro forma adjustments			Pro forma
Product revenue	$	448,340		$	52,016	(G)	$	396,324
Service revenue		82,124			1,577	(G)		80,547
Net revenue		530,464			53,593			476,871
Product cost of revenue		250,800			36,330	(G)		214,470
Service cost of revenue		43,109			1,276	(G)		41,833
Total cost of revenue		293,909			37,606			256,303
Gross profit		236,555			15,987			220,568
Research and development		106,219			3,746	(G)		102,473
Selling, general and administrative		130,938			3,741	(G)		127,197
Amortization of intangibles		8,705			—			8,705
(Loss) Income from operations		(9,307	)		8,500			(17,807	)
Non-operating income (expense), net		222			—			222
(Loss) Income before income taxes		(9,085	)		8,500			(17,585	)
Provision for (Benefit from) income taxes		1,852			3,415	(H)		(1,563	)
(Loss) Income from continuing operations	$	(10,937	)	$	5,085		$	(16,022	)
Loss per share from continuing operations:
Basic	$	(0.09	)				$	(0.14	)
Diluted	$	(0.09	)				$	(0.14	)
Shares used in computing per share amounts:
Basic		116,457						116,457
Diluted		116,457						116,457

See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements, which are an integral part of this statement.

HARMONIC INC.

Unaudited Pro Forma Condensed Consolidated Statement of Operations

For the year ended December 31, 2011

(In thousands, except per share data)

	As reported			Pro forma adjustments			Pro forma
Product revenue	$	477,346		$	56,258	(G)	$	421,088
Service revenue		71,986			2,200	(G)		69,786
Net revenue		549,332			58,458			490,874
Product cost of revenue		256,230			39,604	(G)		216,626
Service cost of revenue		38,588			1,204	(G)		37,384
Total cost of revenue		294,818			40,808			254,010
Gross profit		254,514			17,650			236,864
Research and development		102,732			3,610	(G)		99,122
Selling, general and administrative		131,091			4,023	(G)		127,068
Amortization of intangibles		8,918			—			8,918
Income from operations		11,773			10,017			1,756
Non-operating income (expense), net		(140	)		—			(140	)
Income before income taxes		11,633			10,017			1,616
Provision for (Benefit from) income taxes		2,854			3,605	(H)		(751	)
Income from continuing operations	$	8,779		$	6,412		$	2,367
Income per share from continuing operations:
Basic	$	0.08					$	0.02
Diluted	$	0.08					$	0.02
Shares used in computing per share amounts:
Basic		115,175						115,175
Diluted		116,427						116,427

See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements, which are an integral part of this statement.

HARMONIC INC.

Unaudited Pro Forma Condensed Consolidated Statement of Operations

For the year ended December 31, 2010

(In thousands, except per share data)

	As reported			Pro forma adjustments			Pro forma
Product revenue	$	370,783		$	52,076	(G)	$	318,707
Service revenue		52,561			3,492	(G)		49,069
Net revenue		423,344			55,568			367,776
Product cost of revenue		201,057			36,232	(G)		164,825
Service cost of revenue		26,886			1,276	(G)		25,610
Total cost of revenue		227,943			37,508			190,435
Gross profit		195,401			18,060			177,341
Research and development		77,197			2,970	(G)		74,227
Selling, general and administrative		108,150			3,736	(G)		104,414
Amortization of intangibles		4,912			—			4,912
Income (Loss) from operations		5,142			11,354			(6,212	)
Non-operating income (expense), net		297			—			297
Income (Loss) before income taxes		5,439			11,354			(5,915	)
Provision for income taxes		9,774			4,221	(H)		5,553
(Loss) Income from continuing operations	$	(4,335	)	$	7,133		$	(11,468	)
Loss per share from continuing operations:
Basic	$	(0.04	)				$	(0.11	)
Diluted	$	(0.04	)				$	(0.11	)
Shares used in computing per share amounts:
Basic		101,487						101,487
Diluted		101,487						101,487

See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements, which are an integral part of this statement.

Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

1. Basis of Presentation

The unaudited pro forma condensed consolidated financial statements as of December 31, 2012 and for the years ended December 31, 2012, 2011 and 2010 presented are based on the historical audited statements of Harmonic Inc (“the “Company”) contained in its Annual Report on Form 10-K for the year ended December 31, 2012 after giving effect to the sale of its cable access HFC business (the “HFC Business”) completed on March 5, 2013 (the “Transaction”), and using the assumptions and adjustments described below.

The unaudited pro forma condensed consolidated balance sheet as of December 31, 2012 is presented as if the Transaction had occurred on December 31, 2012.

The unaudited pro forma condensed consolidated statements of operations for the fiscal years ended December 31, 2012, 2011 and 2010 are presented as if the Transaction had occurred on January 1, 2010, the first day of the 2010 fiscal year, and do not assume interest income on the cash proceeds.

The unaudited pro forma condensed consolidated financial statements are based upon available information and assumptions that the Company believes are reasonable under the circumstances and are prepared to illustrate the estimated effects of the Transaction. You should read this information in conjunction with the Company’s audited historical consolidated financial statements as of December 31, 2012 and for the years ended December 31, 2012, 2011 and 2010, included in the Company’s annual report on Form 10-K for the year ended December 31, 2012.

The unaudited pro forma condensed consolidated financial statements have been provided for informational purposes only and are not necessarily indicative of the financial position or results of operations that would have been achieved had the Transaction occurred as of the dates noted above, nor are they necessarily indicative of the Company’s future operating results or financial position.

2. Pro Forma Adjustments

The following pro forma adjustments are included in the unaudited pro forma condensed consolidated balance sheet:

(A) To record the gross proceeds received from the Transaction of $46.0 million.

(B) To eliminate the book value of the assets and liabilities sold in the Transaction, assuming the Transaction had been consummated on December 31, 2012.

(C) To eliminate the estimated fair value of the goodwill allocated to the HFC Business.

(D) To record the estimated third-party advisory and legal costs of approximately $2.3 million, which are directly attributable to the Transaction, but are not expected to have a continuing impact on the Company’s results of operations.

(E) To record the tax effect related to the estimated pro forma gain on the Transaction.

(F) To record the estimated pro forma gain on the Transaction. The actual gain on the Transaction is subject to adjustments.

The following pro forma adjustments are included in the unaudited pro forma condensed consolidated statements of operations:

(G) These pro forma adjustments represent the results of operations which (i) are directly attributable to the HFC Business and (ii) will not continue after the completion of the Transaction.

(H) To record the tax effect related to the HFC Business for the periods presented.