Western Union 2010 Annual Report Download - page 72

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Description Judgments and Uncertainties
Effect if Actual Results Differ from
Assumptions
Restructuring and Related
Expenses
We have engaged in restructuring
actions and activities associated
with productivity improvement
initiatives and expense reduction
measures. We also evaluate
impairment issues associated with
restructuring activities.
Restructuring and related expenses
consist of direct and incremental
costs associated with restructuring
and related activities, including
severance, outplacement and other
employee related benefits; facility
closure and migration of IT
infrastructure; and other expenses
related to the relocation of various
operations to existing Company
facilities and third-party providers,
including hiring, training,
relocation, travel, and professional
fees. Also included in the facility
closure expenses are non-cash
expenses related to fixed asset and
leasehold improvement write-offs
and acceleration of depreciation.
These costs represent
management’s best estimate, until
all such amounts are paid and
settled. As such, these costs
require assumptions about the
activities that may change over
time.
The decision to include a cost in
the restructuring disclosure
requires an assessment of whether
the cost is direct and incremental
to the productivity improvement
initiatives and expense reduction
measures. This assessment can
require judgment depending on
the nature of the cost.
The timing of recording these
costs was determined by the
applicable accounting guidance.
This judgment significantly
impacted the timing of the
recognition of restructuring and
related expenses on a quarterly
basis and between the years ended
December 31, 2010 and 2011.
The restructuring and related
expenses are evaluated
periodically to determine if an
adjustment is required. Should the
actual amounts differ from our
estimates, the amount of the
restructuring and related expenses
could be materially impacted.
For the year ended December 31,
2010, we incurred $59.5 million
of restructuring and related
expenses, of which $35.4 million
remains unpaid. We expect to
incur approximately $50 million in
additional restructuring and related
expenses during the nine months
ended September 30, 2011.
70