Real Estate Charges

6 Months Ended

Jun. 30, 2013

5.	Real Estate Charges

During 2010, we performed a comprehensive review of our real estate requirements in New York in connection with our workforce reductions commencing in 2008. As a result, during 2010 we decided to sub-lease over 380,000 square feet in New York (in excess of 80% of this space has been sublet) and largely consolidate our New York-based employees into two office locations from three.

During the third quarter of 2012, in an effort to further reduce our global real estate footprint, we completed a comprehensive review of our worldwide office locations and began implementing a global space consolidation plan. As a result, our intention is to sub-lease approximately 510,000 square feet of office space (nearly 50% of this space has been sublet), over 70% of which is New York office space (in addition to the 380,000 square foot space reduction in 2010), with the remainder composed of office space in England, Australia and various U.S. locations. We expect that the actions we are taking to vacate and market space for sublease will result over time in non-cash real estate charges of $225 million to $250 million, with $202.6 million of the charges having been recorded during 2012. These charges are in addition to the earlier non-cash real estate charges for New York City office space we recorded (related to the 380,000 square foot space reduction in 2010).

During the first six months of 2013, we recorded real estate charges of $2.6 million, composed of $2.5 million resulting from a change in estimates relating to previously recorded real estate charges ($2.2 million related to the 2010 and 2012 charges and $0.3 million related to other real estate charges) and $0.1 million relating to the write-off of leasehold improvements, furniture and equipment.

The following table summarizes the activity in the liability account relating to our 2010 and 2012 office space consolidation initiatives for the following periods:

	Six Months Ended June 30, 2013			Twelve Months Ended December 31, 2012
	(in thousands)

Balance as of beginning of period	$	238,784		$	71,164
Expense incurred		2,150			181,589
Deferred rent		122			27,000
Payments made		(36,719	)		(42,833	)
Interest accretion		2,274			1,864
Balance as of end of period	$	206,611		$	238,784

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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