Western Union 2008 Annual Report Download - page 59

5757
Notes to Consolidated
Financial Statements
All stock-based compensation to employees is required
to be measured at fair value and expensed over the req-
uisite service period and also requires an estimate of
forfeitures when calculating compensation expense. The
Company recognizes compensation expense on awards
on a straight-line basis over the requisite service period
for the entire award. Refer to Note 16 for additional dis-
cussion regarding details of the Company’s stock-based
compensation plans.
New Accounting Pronouncements
In March 2008, the FASB issued SFAS No. 161, “Disclosures
about Derivative Instruments and Hedging Activities, an
amendment of SFAS No. 133” (“SFAS No. 161”). SFAS No.
161 is required for financial statements issued for fiscal
years and interim periods beginning after November 15,
2008 and early adoption is permitted. SFAS No. 161
requires additional disclosures about how and why the
companies use derivatives, how derivatives and related
hedged items are accounted for under SFAS No. 133,
and how derivatives and related hedged items affect a
company’s financial position, results of operations, and
cash flows. The Company’s derivative disclosures already
incorporate many of the provisions outlined in SFAS
No. 161. Accordingly, the Company does not expect that
the adoption of this pronouncement in 2009 will have a
significant impact on the Company’s financial position,
results of operations and cash flows.
In December 2007, the FASB issued SFAS No. 141R,
“Business Combinations” (“SFAS No. 141R”). This state-
ment establishes a framework to disclose and account for
business combinations. The adoption of the requirements
of SFAS No. 141R applies prospectively to business com-
binations for which the acquisition date is on or after fiscal
years beginning after December 15, 2008 and may not be
early adopted. The impact of the adoption of SFAS No.
141R will depend upon the nature and terms of business
combinations that the Company consummates on or after
January 1, 2009.
In December 2007, the FASB issued SFAS No. 160,
“Noncontrolling Interests in Consolidated Financial
Statements—an amendment of ARB No. 51” (“SFAS No.
160”). The statement establishes accounting and report-
ing standards for a noncontrolling interest in a subsidiary.
The adoption of the requirements of SFAS No. 160 is
effective for fiscal years and interim periods within those
fiscal years, beginning after December 15, 2008 and may
not be early adopted. The Company does not expect the
impact of the adoption of SFAS No. 160 to be significant
on the financial position, results of operations and cash
flows, as the Company’s current non-controlling interests
are immaterial.
3. Restructuring and Related Expenses
Missouri and Texas Closures
On February 25, 2008, the Company decided to pursue
decision bargaining negotiations with our union employ-
ees regarding the possible closure of the Company’s
facilities in Missouri and Texas. On March 14, 2008, the
Company announced its decision to close substantially
all of its facilities in Missouri and Texas and enter into
effects bargaining with the union regarding severance
and other benefits for the approximately 650 affected
union employees, responsible for performing certain call
center, settlement and operational accounting functions.
On May 29, 2008, the Company and the union entered
into a Memorandum of Agreement which resolved the
effects of the restructuring decisions on the affected union
employees and concluded that the Company’s collec-
tive bargaining agreement with the union would not be
renewed. The decision also resulted in the elimination of
certain management positions in these same facilities. The
Company completed the transition of these operations
to existing Company facilities and third-party providers
during the fourth quarter of 2008.
In conjunction with the decision, the Company incurred
severance and employee related benefit expenses for all
union and certain affected management employees, facility
closure expenses and other expenses associated with the
relocation of these operations to existing Company facilities
and third-party providers, including costs related to hiring,
training, relocation, travel and professional fees. Included
in the facility closure expenses are non-cash expenses
related to fixed asset and leasehold improvement write-
offs and acceleration of depreciation and amortization.
Other Reorganizations
During 2008, in addition to the Missouri and Texas clo-
sures, the Company restructured some of its operations
and relocated or eliminated certain shared service and
call center positions. The relocated positions were moved
to the Company’s existing facilities or outsourced service
providers. The Company has incurred all of the expenses
related to these reorganization activities during 2008
and expects substantially all remaining accruals, primar-
ily related to severance for terminated employees, to be
paid in 2009.