First Data 2011 Annual Report Download - page 77

The following table summarizes the Company's utilization of restructuring accruals for the years ended December 31, 2010 and
2011:
(in millions)
Employee
Severance
Facility
Closure
Remaining accrual as of January 1, 2010 $ 58.5 $ 0.2
Expense provision 86.7 0.6
Cash payments and other (91.2) (0.4)
Changes in estimates (15.3)(0.2)
Remaining accrual as of December 31, 2010 38.7 0.2
Expense provision 45.0 6.3
Cash payments and other (60.9) (5.5)
Changes in estimates (4.8)(0.1)
Remaining accrual as of December 31, 2011 $ 18.0 $ 0.9
Impairments
In the fourth quarter of 2010, within Retail and Alliance Services, the Company recorded $1.6 million in impairment charges
related to other intangibles. Also during the fourth quarter of 2010, the Company recorded $9.9 million in asset impairment charges
related to the International segment. Approximately $6.2 million of the total impairment occurred because the Company did not
complete a software project and determined that there were no likely alternative uses for the software. The remaining $3.7 million of
impairment charges resulted from the write-off of assets the Company determined have no future use or value.
During the third quarter of 2009, the Company recorded a charge of $7.7 million related to an intangible asset impairment
within the International segment resulting from continuing and projected losses combined with a change in business strategy related to
an existing business.
In the fourth quarter of 2009, the Company recorded approximately $124 million in asset impairment charges related to the
International reporting unit and segment. Approximately $64 million of the total impairment charge related to the Company's business
in Germany and was allocated to impair the value of customer contracts and real property by approximately $58 million and $6
million, respectively. The impairment occurred because of the deterioration of profitability on existing business, higher risk of revenue
attrition in future years and lower projections of financial results compared to those used in prior periods. Approximately $47 million
of the total impairment charge related to impairment of customer contracts associated with the Company's card-issuing business in the
United Kingdom. The impairment occurred because of negative cash flow in the existing business and lower projections of financial
results compared to those used in prior periods. The remaining $13 million of impairment charges related to a trade name in Canada,
customer contracts in Brazil and Ireland and software.
Also, in the fourth quarter of 2009, domestically, the Company recorded approximately $33 million in impairment charges
related to customer contracts, a goodwill impairment charge of approximately $17 million and a software impairment charge of
approximately $3 million related to the Information Services reporting unit. The significant factor that drove most of the impairment
was lower projections of financial results as compared to those used in the 2008 impairment testing.
The Company followed a discounted cash flow approach in estimating the fair value of the reporting units, intangibles assets or
other affected asset groups discussed above. Discount rates were determined on a market participant basis. In certain situations, the
Company relied in part on a third-party valuation firm in determining the appropriate discount rates. The Company obtained an
appraisal from a third-party brokerage firm to assist in estimating the value of real property in Germany. All key assumptions and
valuations were determined by and are the responsibility of management.
Litigation and Regulatory Settlements
In 2009, the Company recorded anticipated settlements of several matters within the Financial Services segment. In the first and
second quarters of 2010, the Company released $2.0 million related to these settlements.
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