Item 2.05 - Costs Associated with Exit or Disposal Activities
August 2022 Restructuring [Update]
As we continue to execute the August 2022 Restructuring, our lower headcount has
led us to evaluate our real estate portfolio. On September 30, 2022, we decided
to partially or completely close five additional offices as part of the August
2022 Restructuring, four of which are recent leases that have not been occupied.
No employees are being terminated as a result of these actions.
We expect these additional office closures will result in incremental
restructuring-related charges of approximately $45 million (substantially all of
which will be incurred in the third quarter of 2022), and we expect this
decision will generate additional run-rate savings of approximately $4 million
per quarter, starting in the fourth quarter of 2022 and running through the
first quarter of 2024, and savings of lesser amounts thereafter.
As a result of these actions, we are revising our originally estimated
restructuring charge range of $45 million to $60 million; our new estimate is
that we will incur total restructuring-related charges of approximately
$90 million to $105 million (excluding the impact of share-based compensation)
in connection with the August 2022 Restructuring, substantially all of which we
expect to incur in the third quarter of 2022. This updated range consists of
approximately $30 million to $40 million of cash restructuring and related
charges (as originally estimated) primarily related to employee severance and
benefits costs (excluding the impact of share-based compensation) and
approximately $60 million to $65 million of charges related to office closures
and contract termination fees (including impairments of approximately $50
million).
We continue to expect a net reversal of share-based compensation of $40 million
to $50 million in the third quarter of 2022 as a result of the August 2022
Restructuring, as described in the Original 8-K.
If we subsequently determine that we will incur additional material
restructuring costs or charges or there are material differences from the ranges
provided above, we will file another amendment to the Original 8-K to disclose
any such material costs, charges, or differences.
Item 2.06 - Material Impairments
The disclosures above in Item 2.05 of this Amendment No. 1 are incorporated by
reference into this Item 2.06.
2
--------------------------------------------------------------------------------
Cautionary Note Regarding Forward-Looking Statements
This Amendment No. 1 contains forward-looking statements, including with respect
to our estimates and expectations in connection with the August 2022
Restructuring. Our forward-looking statements are subject to a number of known
and unknown risks, uncertainties, assumptions, and other factors that may cause
our actual future results, performance, or achievements to differ materially
from any future results expressed or implied in this Amendment No. 1. Factors
that contribute to the uncertain nature of our forward-looking statements
include, among others, adverse legal, reputational and financial effects on the
Company resulting from the August 2022 Restructuring; and potential operational
disruptions as a result of the August 2022 Restructuring. Because some of these
risks and uncertainties cannot be predicted or quantified and some are beyond
our control, you should not rely on our forward-looking statements as
predictions of future events. More information about potential risks and
uncertainties that could affect our business and financial results is included
in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended
June 30, 2022 as well as our other filings with the SEC, which are available on
the SEC's web site at www.sec.gov. Except as otherwise noted, all
forward-looking statements are made as of the filing date of this Amendment
No. 1 and are based on information and estimates available to us at this time.
Except as required by law, we assume no obligation to update any of the
statements in this Amendment No. 1 whether as a result of any new information,
future events, changed circumstances, or otherwise. You should read this
Amendment No. 1 with the understanding that our actual future results,
performance, events, and circumstances might be materially different from what
we expect.
© Edgar Online, source Glimpses