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Restructuring Charges
3 Months Ended
Mar. 31, 2015
Restructuring Charges  
Restructuring Charges

12.  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 three months ended March 31, 2015, we incurred $4.8 million of costs associated with the proposed Spin-off which were primarily related to legal, consulting, audit and professional 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 proposed Spin-off are included in restructuring charges in our condensed consolidated statements of operations. This Spin-off 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 proposed Spin-off. As of March 31, 2015, we had an accrued liability balance of $1.8 million for planned separation charges incurred.

 

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 three months ended March 31, 2014, we incurred $4.8 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 condensed consolidated statements of operations and are related to our North America contract operations and aftermarket services segments.