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Cost Reduction Actions

12 Months Ended

Dec. 31, 2015

Cost Reduction Actions

3. Cost reduction actions

In 2015, in connection with organizational initiatives to create a more competitive cost structure and rebalance the company’s global skill set, the company initiated a plan to incur pretax restructuring charges currently estimated at approximately $300 million through 2017.

During 2015, the company recognized pretax charges of $118.5 million in connection with this plan, principally related to a reduction in employees. The charges related to work-force reductions were $78.8 million and were comprised of: (a) a charge of $27.9 million for 700 employees in the U.S. and (b) a charge of $50.9 million for 782 employees outside the U.S. In addition, the company recorded pretax charges of $39.7 million, related to asset impairments ($20.2 million) and other expenses related to the cost reduction effort ($19.5 million).

The pretax charges were recorded in the following statement of income classifications: cost of revenue – services, $52.3 million; cost of revenue – technology, $.3 million; selling, general and administrative expenses, $53.5 million; and research and development expenses, $12.4 million.

A further breakdown of the individual components of these costs follows (in millions of dollars):

										Work-Force				Reductions
(in millions of dollars)		Headcount				Total				U.S.				Int’l.
Charges for cost reductions			1,482			$	78.8			$	27.9			$	50.9
Utilized			(1,227	)			(45.3	)			(23.7	)			(21.6	)
Translation adjustments							(.5	)							(.5	)
Balance at December 31, 2015			255			$	33.0			$	4.2			$	28.8
Expected future utilization:
2016			255			$	33.0			$	4.2			$	28.8
Beyond 2016							–				–				–

X

- 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://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 420
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB TOPIC 5.P.4)
-URI http://asc.fasb.org/extlink&oid=27011515&loc=d3e140904-122747

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 420
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 5.P.3)
-URI http://asc.fasb.org/extlink&oid=27011515&loc=d3e140864-122747

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 420
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 5
-Section P
-Subsection 3, 4

+ Details

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