First Data 2012 Annual Report Download - page 29
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were impacted by the 2012 restructurings. The Company expects to record additional restructuring charges in 2013 associated with
similar events and the departure of executive officers.
The Company estimates cost savings resulting from restructuring activities recorded during 2012 of approximately $11 million
in 2012 and approximately $31 million on an annual basis.
During 2012, within Financial Services, the Company recorded approximately $5.1 million in impairment charges related to an
adjustment to fair value of an investment.
The following table summarizes the Company’s utilization of restructuring accruals for the years ended December 31, 2011 and
2012 (in millions):
2011 Activities
The 2011 restructurings resulted from the elimination of management and other positions, approximately 750 employees, as part
of the Company aligning the business with strategic objectives. Partially offsetting the charges were reversals of excess 2009 and 2010
restructuring accruals as well as reversals resulting from the refinement of 2011 estimates.
2010 Activities
The 2010 restructurings resulted from the elimination of management and other positions, approximately 1,200 employees, as
part of the Company aligning the business with strategic objectives as well as domestic site consolidations and the reorganization of
executive officers. Partially offsetting the charges were reversals of excess 2008 and 2009 restructuring accruals as well as reversals
resulting from the refinement of 2010 estimates.
In the fourth quarter of 2010, within Retail and Alliance Services, the Company recorded approximately $1.6 million in
impairment charges related to other intangibles. Also during the fourth quarter of 2010, the Company recorded approximately $9.9
29
Employee
Severance
Facility
Closure
Remaining accrual as of January 1, 2011 $38.7 $0.2
Expense provision 45.0 6.3
Cash payments and othe
r
(62.2) (5.5)
Changes in estimates (4.8) (0.1)
16.7 0.9
Remaining accrual as of December 31, 2011
Expense provision 28.2
—
Cash payments and othe
r
(26.8) (0.8)
Changes in estimates (5.0) (0.1)
Remaining accrual as of December 31, 2012
$ 13.1
$
—
Pretax Benefit (Char
g
e)
Year ended December 31, 2011
(in millions)
Retail and
Alliance
Services
Financial
Services International
All Other
and
Corporate Totals
Restructuring charges $(2.8) $ (10.5) $ (34.2) $(3.8) $(51.3)
Restructuring accrual reversals 1.1
—
2.5 1.3 4.9
Litigation and regulatory settlements
—
—
—
2.5 2.5
Total pretax charge, net of reversals
$(1.7)$ (10.5) $ (31.7) $
—
$ (43.9)
Pretax Benefit (Char
g
e)
Year ended December 31, 2010
(in millions)
Retail and
Alliance
Services
Financial
Services International
All Other
and
Corporate Totals
Restructuring charges $(20.3) $ (11.3) $ (28.2) $ (27.7) $ (87.5)
Restructuring accrual reversals 0.7 0.8 10.9 3.1 15.5
Impairments (1.6)
—
(9.9)
—
(11.5)
Litigation and regulatory settlements
—
2.0
—
—
2.0
Total pretax charge, net of reversals
$(21.2) $ (8.5) $ (27.2) $ (24.6) $ (81.5)