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Restructuring and Other Charges | 6 Months Ended
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Jun. 30, 2016
Restructuring and Related Activities [Abstract] |
Restructuring and Other Charges | 11. Restructuring and Other Charges In the first quarter of 2016, we determined to undertake a cost reduction program to reduce our on-going operating expenses, including workforce reductions and closure of certain make-ready shops. These actions are a result of our review of our businesses and efforts to efficiently manage cost and maintain our businesses in line with current and expected activity levels and anticipated make-ready demand in the U.S. market. During the three and six months ended June 30, 2016, we incurred $2.3 million and $9.3 million, respectively, of restructuring and other charges as a result of this plan primarily related to severance benefits and consulting fees. The following table presents the expense incurred under this plan by reportable segment (in thousands):
| Contract Operations |  | Aftermarket Services |  | Other (1) |  | Total
Three months ended June 30, 2016 | $ | 675 |  |  | $ | 432 |  |  | $ | 1,161 |  |  | $ | 2,268 |
Six months ended June 30, 2016 | 2,916 |  |  | 801 |  |  | 5,552 |  |  | 9,269 |
Estimated additional charges | 508 |  |  | 312 |  |  | 3,239 |  |  | 4,059 |
(1) | Represents expense incurred under this plan that is not directly attributable to our reportable segments because it represents severance benefits and consulting fees incurred within the corporate function.
These charges are reflected as restructuring and other charges in our condensed consolidated statement of operations. We expect to incur an additional $4.1 million through the remainder of 2016 related to consulting fees and severance benefits related to our corporate function. As discussed in Note 3 (“Discontinued Operations”), we completed the Spin-off of Exterran Corporation on November 3, 2015. During the three months ended June 30, 2016 and 2015, we incurred $0.7 million and $1.0 million, respectively, of costs associated with the Spin-off. During the six months ended June 30, 2016 and 2015, we incurred $1.8 million and $1.0 million, respectively, of costs associated with the Spin-off. The restructuring charges associated with the Spin-off were directly attributable to Archrock and are summarized in the table below. These costs are not directly attributable to our reportable segments as they primarily represent costs incurred within the corporate function. As of June 30, 2016, we had an accrued liability of $0.7 million primarily related to retention benefits incurred. We expect to incur an additional $1.4 million for the remainder of 2016 and $1.5 million in 2017 related to retention payments. In the second quarter of 2015 we announced a cost reduction plan primarily focused on workforce reductions. During the six months ended June 30, 2015, we incurred $0.2 million of restructuring and other charges as a result of this plan primarily related to termination benefits. These charges are reflected as restructuring and other charges in our condensed consolidated statement of operations. The following table summarizes the changes to our accrued liability balance related to restructuring and other charges for the six months ended June 30, 2015 and 2016 (in thousands):
| Spin-off |  | Cost Reduction Plan |  | Total
Beginning balance at January 1, 2015 | $ | — |  |  | $ | — |  |  | $ | — |
Additions for costs expensed | 1,000 |  |  | 193 |  |  | 1,193 |
Less non-cash expense (1) | (1,000 | ) |  | — |  |  | (1,000 | )
Reductions for payments | — |  |  | (193 | ) |  | (193 | )
Ending balance at June 30, 2015 | $ | — |  |  | $ | — |  |  | $ | — |
Beginning balance at January 1, 2016 | $ | 855 |  |  | $ | — |  |  | $ | 855 |
Additions for costs expensed | 1,800 |  |  | 9,269 |  |  | 11,069 |
Less non-cash expense(2) | (660 | ) |  | — |  |  | (660 | )
Reductions for payments | (1,333 | ) |  | (9,269 | ) |  | (10,602 | )
Ending balance at June 30, 2016 | $ | 662 |  |  | $ | — |  |  | $ | 662 |
(1) | Represents non-cash inventory write-downs, which primarily related to the decentralization of shared inventory components between our contract operations business and the international contract operations business of Exterran Corporation.
(2) | Represents non-cash retention benefits associated with the Spin-off to be settled in Archrock stock.
The following table summarizes the components of charges included in restructuring and other charges in our condensed consolidated statements of operations for the three and six months ended June 30, 2016 and 2015 (in thousands):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2016 |  | 2015 |  | 2016 |  | 2015
Retention and severance benefits | $ | 2,070 |  |  | $ | 193 |  |  | $ | 7,394 |  |  | $ | 193 |
Consulting services | 934 |  |  | — |  |  | 3,675 |  |  | — |
Non-cash inventory write-downs | — |  |  | 1,000 |  |  | — |  |  | 1,000 |
Total restructuring and other charges | $ | 3,004 |  |  | $ | 1,193 |  |  | $ | 11,069 |  |  | $ | 1,193 |

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 5.P.4) -URI http://asc.fasb.org/extlink&oid=27011515&loc=d3e140904-122747 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 5.P.3) -URI http://asc.fasb.org/extlink&oid=27011515&loc=d3e140864-122747 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 + Details
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