Restructuring Charges

12 Months Ended

Dec. 31, 2014

15. Restructuring Charges

As discussed in Note 2, in November 2014, we announced that our board of directors had authorized management to pursue a plan to separate our international contract operations, international aftermarket services and global fabrication businesses into an independent, publicly traded company. During the year ended December 31, 2014, we incurred $2.2 million of costs associated with the planned Spinoff which were primarily related to legal and consulting fees. The separation costs have not been allocated to the segments because they consist mostly of professional service fees within the finance and legal functions. The costs incurred in conjunction with the planned Spinoff are included in restructuring charges in our consolidated statements of operations. This separation is expected to be completed in the second half of 2015. We cannot currently estimate the total restructuring costs that will be incurred as a result of the Spinoff.

In January 2014, we announced a plan to centralize our make-ready operations to improve the cost and efficiency of our shops and further enhance the competitiveness of our fleet of compressors. As part of this plan, we examined both recent and anticipated changes in the North America market, including the throughput demand of our shops and the addition of new equipment to our fleet. To better align our costs and capabilities with the current market, we determined to close several of our make-ready shops. The centralization of our make-ready operations was completed in the second quarter of 2014.

During the year ended December 31, 2014, we incurred $5.4 million of restructuring charges primarily related to termination benefits and a non-cash write-down of inventory associated with the centralization of our make-ready operations. These charges are reflected as restructuring charges in our consolidated statements of operations and are related to our North America contract operations and aftermarket services segments.

The following table summarizes the changes to our accrued liability balance related to restructuring charges for the year ended December 31, 2014 (in thousands):

	Restructuring Charges Accrual
Beginning balance at January 1, 2014	$	—
Additions for costs expensed	5,394
Less non-cash expense	(4,103		)
Reductions for payments	(1,291		)
Ending balance at December 31, 2014	$	—

In November 2011, we announced a workforce cost reduction program across all of our business segments as a first step in a broader overall profit improvement initiative. These actions were the result of a review of our cost structure aimed at identifying ways to reduce our ongoing operating costs and adjust the size of our workforce to be consistent with then current and expected activity levels. A significant portion of the workforce cost reduction program was completed in 2011, with the remainder completed in 2012. During the year ended December 31, 2012, we incurred $6.5 million of restructuring charges primarily related to termination benefits and consulting services. These charges are reflected as restructuring charges in our consolidated statements of operations.

- 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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