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Severance and Restructuring Charges

9 Months Ended

Sep. 30, 2020

Restructuring and Related Activities [Abstract]

Severance and Restructuring Charges

Note 2 - Severance and Restructuring Charges

In February 2020, we announced our intention to implement certain cost re-engineering initiatives in 2020 to generate further cost savings. During the second quarter of 2020, we executed certain of these cost re-engineering initiatives, some of which qualify as restructuring charges under GAAP, with the partial abandonment of one of our leased properties and additional severance costs. As a result of these initiatives, we accelerated the depreciation of the related facility lease right of use (ROU) asset and leasehold improvements by $2.9 million in the second quarter of 2020, recorded a $3.2 million facility exit cost liability and a $1.0 million employee severance cost liability. During the third quarter of 2020, we incurred an additional $0.9 million of employee severance costs. At September 30, 2020, our remaining facility exit cost liability and employee severance cost liability are $2.8 million and $0.7 million, respectively, and are included in Other accrued expenses, a component of Other liabilities.

In February 2019, we announced our intention to execute cost re-engineering opportunities in order to drive stronger financial performance and, in the longer term, simplify our operations. Our cost re-engineering plan extended beyond eliminating redundant costs through the integration process and addressed organizational, process and control redesign and automation, human capital planning, off-shore utilization, strategic sourcing and facilities rationalization. Costs for this plan

included severance, retention and other incentive awards, facilities-related costs and other costs to execute the reorganization. While we continue to pursue additional cost re-engineering initiatives, this $65.0 million cost re-engineering plan announced in February 2019 was completed by December 31, 2019. Our remaining liability at September 30, 2020 is $2.2 million and is included in Other accrued expenses, a component of Other liabilities.

The following table provides a summary of plan costs incurred in 2019:

			Employee-related						Facility-related						Other						Total
First quarter			$	20,787					$	—					$	1,328					$	22,115
Second quarter			3,460						3,047						3,619						10,126
Third quarter			7,266						3,596						7,485						18,347
Fourth quarter			4,191						3,490						6,700						14,381
Total costs incurred			$	35,704					$	10,133					$	19,132					$	64,969

The above 2019 and 2020 expenses were all incurred within the Corporate Items and Other segment. Employee-related costs and facility-related costs are reported in Compensation and benefits expense and Occupancy and equipment expense, respectively, in the unaudited consolidated statements of operations. Other costs are primarily reported in Professional services expense and Other expenses.

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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://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 420
-URI http://asc.fasb.org/topic&trid=2175745

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