legacy cost


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Legacy Cost

Ongoing costs to a company that come from funding activities that, by definition, do not increase revenue. Perhaps the most prominent example of legacy costs is the funding of pension plans. Legacy costs often accrue when a company takes on too many responsibilities in times of strong performance or when it takes on an appropriate level of responsibility and then its priorities change. Critics of legacy costs contend that they make industry uncompetitive, while proponents, notably labor unions, argue they are part of an employer's moral obligation to its employees.

legacy cost

The financial expense of supporting retiree benefits, including pensions, heath care, and insurance. Legacy cost is especially burdensome for mature companies with declining markets and a shrinking labor force.
References in periodicals archive ?
2 billion net operating loss carryforwardCothe deductibility of which will augment GAAP capitalCoas well as the tentative settlement of legacy cost of insurance litigation announced in August 2006.
It also substantially reduces GM's legacy cost liabilities in Canada.
The second reason for abandonment was the desire to reduce legacy cost long-term.
Adjusted EBITDA includes adjustments to EBITDA for restructuring costs, former parent legacy cost (benefit) items, net, loss on the early extinguishment of debt, non-cash charges and incremental securitization interest costs, as well as pro forma cost savings for restructuring initiatives, the pro forma effect of business optimization initiatives and the pro forma effect of acquisitions and new franchisees, in each case calculated as of the beginning of the twelve-month period.
28, 2012 /PRNewswire/ -- Professor Luis Garicano of the London School of Economics, speaking today about the proposals of the Institute for New Economic Thinking (INET) Council on the Euro Zone Crisis (ICEC) at the Peterson Institute for International Economics, expressed his shock at the "betrayal" by Germany, the Netherlands and Finland of the agreements in the June 29 euro summit, and at the recent statements against a banking union and against legacy cost burden sharing by the Bundesbankos President Jens Weidman.
The problem is that Rangers have a legacy cost base and a legacy debt that had been built up under the Murray years.
The trust fund will finance health-care costs for its retirees, eliminating a key legacy cost.
That actually exacerbated the legacy cost question.
Legacy cost savings to the company will be about $100 million a year and an almost $130 million annual improvement in cash flow for the company compared to 2007.
What was a tough job to manage our legacy cost base while growing our new businesses has just got a whole lot tougher," said Mr Burnett.
It was a year in which two significant fundamental weaknesses in our North American operations were fully exposed -- our huge legacy cost burden and our inability to adjust structural costs in line with falling revenue.