First Data 2009 Annual Report Download - page 116

FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Restructuring charges
2009
The 2009 restructurings resulted from the elimination of management and other positions, approximately
1,700 employees, as part of the Company’s cost saving initiatives as well as domestic site consolidations and the
elimination of certain information technology positions. Cost saving initiatives are expected to continue into
future periods resulting in additional restructuring charges. Partially offsetting the charges are reversals of 2009
and 2008 restructuring accruals related to the Company’s change in strategy related to global labor sourcing
initiatives as well as refining previously recorded estimates.
2008
The 2008 restructurings resulted from the planned termination of approximately 1,000 employees associated
with initial plans for call center consolidation and global labor sourcing initiatives primarily related to
information technology development. During the fourth quarter, the Company’s strategy related to global labor
sourcing initiatives changed resulting in delaying implementation of certain of the initiatives and 20% fewer
terminations than originally planned which resulted in the reversal of the associated charges. The Company
incurred additional charges through 2009 related to these plans. During the first three quarters of 2008, the
Company had additional severance costs which were recorded in purchase accounting as discussed in Note 2
above.
2007
A portion of the restructuring charges recorded in the 2007 predecessor period resulted from efforts to
improve the overall efficiency and effectiveness of the sales and sales support teams principally within the Retail
and Alliance Services segment. This action resulted in the termination of approximately 230 sales related
employees comprising approximately 10% of the merchant acquiring business’ regional sales, cross-sale and
sales support organizations. This restructuring plan was completed in the first quarter of 2007. The other
restructuring charges in the predecessor period resulted from the termination of approximately 140 employees
within the International segment. The terminations were associated with data center consolidation and global
sourcing initiatives. During the 2007 predecessor period, the Company also reversed prior period restructuring
accruals related to changes in estimates regarding severance costs from restructuring activities that occurred in
2005 through 2007.
The following table summarizes the Company’s utilization of restructuring accruals, excluding merger
related restructuring charges described in Note 2, for the years ended December 31, 2008 and 2009 (in millions):
Employee
Severance
Facility
Closure
Remaining accrual at January 1, 2008 .................................. $ 6.5 $0.1
Expense provision .............................................. 20.4 —
Cash payments and other ........................................ (4.1) (0.1)
Changes in estimates (1) ......................................... (11.7) —
Remaining accrual at December 31, 2008 ............................... 11.1 —
Expense provision .............................................. 101.6 0.5
Cash payments and other ........................................ (44.9) (0.3)
Changes in estimates ............................................ (9.3) —
Remaining accrual at December 31, 2009 ............................... $ 58.5 $ 0.2
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