Restructuring Charges (Notes)

9 Months Ended

Sep. 30, 2020

Restructuring and Related Activities Disclosure [Text Block]

Restructuring Charges

The components of restructuring charges for 2020 and 2019 restructuring plans are listed below.


	Three months ended September 30,						Nine months ended September 30,
	2020		2019		2020		2019
Severance and termination costs	$	17.9	$	0.0	$	62.5	$	22.0
Lease impairment costs	26.6		0.0		92.3		11.9
Other restructuring costs	2.8		0.0		5.1		0.0
Total restructuring charges	$	47.3	$	0.0	$	159.9	$	33.9

2020 Restructuring Plan

In the second and third quarters of 2020, the Company took restructuring actions to lower our operating expenses structurally and permanently relative to revenue and to accelerate the transformation of our business (the “2020 Plan”). Most of these actions are based on our recent experience and learning in the COVID-19 pandemic and a resulting review of our operations, which continues, to address certain operating expenses such as occupancy expense and salaries and related expenses.

Net restructuring charges were comprised of $24.9 at IAN and $17.2 at CMG for the three months ended September 30, 2020, which include non-cash lease impairment costs of $14.3 and $12.8, respectively. Net restructuring charges were comprised of $93.7 at IAN and $53.9 at CMG for the nine months ended September 30, 2020, which include non-cash lease impairment costs of $50.1 and $39.6, respectively.

Restructuring actions under the 2020 Plan were identified and initiated during the second quarter of 2020, with additional actions in the third quarter and expected in the fourth quarter and all actions to be substantially complete by the end of the fourth quarter of 2020.

During the first nine months of 2020, severance and termination costs were related to a planned reduction in workforce of 971 employees. The employee groups affected include executive, regional and account management as well as administrative, creative and media production personnel.

Lease impairment costs, which relate to the office spaces that were vacated as part of the 2020 Plan, included impairments of operating lease right-of-use assets and associated leasehold improvements, furniture and asset retirement obligations. Lease impairments were calculated based on estimated fair values using market participant assumptions including forecasted net discounted cash flows related to the operating lease right-of-use assets.

A summary of the restructuring activities related to the 2020 Plan is as follows:


	2020 Plan
	Restructuring Expense		Non-Cash Items		Cash Payments		Liability at September 30, 2020
Severance and termination costs	$	62.5	$	1.0	$	34.0	$	27.5
Lease impairment costs	92.3		92.3		0.0		0.0
Other	5.1		2.4		2.7		0.0
Total	$	159.9	$	95.7	$	36.7	$	27.5

2019 Restructuring Plan

In the first quarter of 2019, the Company implemented a cost initiative (the “2019 Plan”) to better align our cost structure with our revenue primarily related to specific client losses occurring in 2018. All restructuring actions were identified and initiated by the end of the first quarter of 2019, with all actions substantially completed by the end of the second quarter of 2019, and there have not been any restructuring adjustments.