Repositioning Costs and Net Loss on Dispositions and Repositioning Liabilities

9 Months Ended

Sep. 30, 2020

Repositioning Costs and Net Loss on Dispositions and Repositioning Liabilities [Abstract]

Repositioning Costs and Net Loss on Dispositions and Repositioning Liabilities

In the second quarter of 2020, we took actions to align our cost structure and reduce our workforce and facility requirements and continued to review businesses for disposal and assets for impairment. As a result of these actions, we recorded a pre-tax charge of $277.9 million, which is comprised of incremental severance of $150.0 million, real estate operating lease ROU asset and other asset impairment charges of $55.8 million, other real estate exit costs of $47.0 million and dispositions and other charges of $25.1 million. The liability for certain real estate exit costs related to variable lease payments will be paid over the applicable lease term. The ROU asset and other assets impairment charges and the disposition and other charges are non-cash charges.

The balance of the charge for incremental severance and other real estate exit costs at September 30, 2020 was (in millions):


	Incremental Severance		Other Real Estate Exit Costs		Total
Opening balance	$	150.0	$	47.0	$	197.0
Payments	(83.1)		(5.9)		(89.0)

September 30, 2020	$	66.9	$	41.1	$	108.0

At September 30, 2020 and December 31, 2019, the liability for office lease consolidation and termination incurred in connection with our repositioning actions taken in the third quarter of 2018 was $8.7 million and $25.1 million, respectively.

We expect that the remaining liability for all repositioning costs will be substantially paid by the end of 2020.