XML 22 R10.htm IDEA: XBRL DOCUMENT v3.7.0.1
Cost Reduction Actions
 3 Months Ended
Mar. 31, 2017
Restructuring and Related Activities [Abstract]  
Cost Reduction Actions
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 restructuring charges currently estimated at approximately $300 million through 2017. During 2016 and 2015, the company recognized charges in connection with this plan and other costs of $82.1 million and $118.5 million, respectively, principally related to a reduction in employees.
During the three months ended March 31, 2017, the company recognized charges in connection with this plan and other costs of $25.4 million. Charges related to work-force reductions were $12.5 million, principally related to severance costs, and were comprised of: (a) a charge of $0.5 million for 45 employees and $(0.1) million for changes in estimates in the U.S. and (b) a charge of $4.2 million for 75 employees, $8.2 million for additional benefits provided in 2017 and $(0.3) million for changes in estimates outside the U.S. In addition, the company recorded charges of $12.9 million comprised of $2.9 million for idle leased facilities costs, $3.3 million for contract amendment and termination costs, $1.4 million for professional fees and other expenses related to the cost reduction effort and $5.3 million for foreign currency translation losses related to exiting a foreign country. The charges were recorded in the following statement of income classifications: cost of revenue – services, $8.5 million; selling, general and administrative expenses, $11.3 million; research and development expenses, $0.3 million; and other income (expense), net, $5.3 million.
During the three months ended March 31, 2016, the company recognized charges of $26.9 million in connection with this plan, principally related to a reduction in employees. The charges related to work-force reductions were $22.1 million, principally related to severance costs, and were comprised of: (a) a charge of $4.2 million for 175 employees in the U.S. and (b) a charge of $17.9 million for 337 employees outside the U.S. In addition, the company recorded charges of $4.8 million for other expenses related to the cost reduction effort. The charges were recorded in the following statement of income classifications: cost of revenue - services, $11.5 million; selling, general and administrative expenses, $13.3 million; and research and development expenses, $2.1 million.
Liabilities and expected future payments related to these costs are as follows:
 
 
 
 
Work-Force Reductions
 
Idle Leased Facilities
 
 
Total
 
U.S.
 
Int’l.
 
Costs
Balance at December 31, 2016
 
$
36.6

 
$
1.8

 
$
33.4

 
$
1.4

Additional provisions
 
15.8

 
0.5

 
12.4

 
2.9

Payments
 
(8.0
)
 
(0.9
)
 
(6.8
)
 
(0.3
)
Changes in estimates
 
(0.5
)
 
(0.1
)
 
(0.3
)
 
(0.1
)
Translation adjustments
 
0.5

 
—

 
0.5

 
—

Balance at March 31, 2017
 
$
44.4

 
$
1.3

 
$
39.2

 
$
3.9

Expected future utilization on balance at March 31, 2017:
 
 
 
 
 
 
 
 
2017 remaining nine months
 
$
22.4

 
$
1.3

 
$
20.2

 
$
0.9

Beyond 2017
 
$
22.0

 
$
—

 
$
19.0

 
$
3.0