Restructuring

In September 2013, the Company commenced certain restructuring initiatives including the closure of the Company’s development site in Calgary, Canada, and the consolidation of certain supply chain management activities (the “2013 Initiatives”). The 2013 Initiatives are expected to be completed in December 2016.

In June 2014, the Company commenced certain restructuring initiatives relating to the reorganization of executive level management (the “2014 Initiatives”), which included among other actions, the replacement of the former Chief Executive Officer. The 2014 Initiatives were completed during the first quarter of 2015.

On August 3, 2015, the Company approved a restructuring initiative to better position the Company to operate in current market conditions and more closely align operating expenses with revenues (the “2015 Initiative”), which included employee severance costs, which were paid in full during the third quarter of 2015, and facility exit related costs. The 2015 Initiative is expected to be completed in June 2020.

During the nine months ended September 30, 2015, the Company recorded reductions in restructuring related charges resulting from a reevaluation in the first quarter of 2015 of its expected remaining restructuring accrual for facility exit related costs and employment contract costs related to the 2013 Initiatives and 2014 Initiatives, respectively.

The Company accounts for facility exit costs in accordance with ASC 420, Exit or Disposal Cost Obligations, which requires that a liability for such costs be recognized and measured initially at fair value on the cease-use date based on remaining lease rentals, adjusted for the effects of any prepaid or deferred items recognized, reduced by the estimated sublease rentals that could be reasonably obtained even if the Company does not intend to sublease the facilities.

The Company is required to estimate future sublease income and future net operating expenses of the facilities, among other expenses. The most significant of these estimates relate to the timing and extent of future sublease income which reduce lease obligations, and the probability that such sublease income will be realized. The Company based estimates of sublease income, in part, on information from third party real estate experts, current market conditions and rental rates, an assessment of the time period over which reasonable estimates could be made, and the location of the respective facility, among other factors. Further adjustments to the facility exit liability accrual will be required in future periods if actual exit costs or sublease income differ from current estimates. Exit costs recorded by the Company under these provisions are neither associated with, nor do they benefit, continuing activities.

The following table sets forth activity in the restructuring liability for the nine months ended September 30, 2015 (in thousands):



	Balance at December 31, 2014		Costs Incurred			Payments			Balance at September 30, 2015		Cumulative Costs Incurred to Date		Total Expected Restructuring Costs
2013 Initiatives
Employee Severance Costs	$	—	$	—		$	—		$	—	$	3,986	$	3,986
Facility Exit Related Costs	232		(3		)	(141		)	88		2,622		2,630

2014 Initiatives
Employment Contract Costs	1,751		(151		)	(1,600		)	—		3,428		3,428
Share-based Compensation Costs	—		—			—			—		1,298		1,298

2015 Initiative
Employee Severance Costs	—		571			(571		)	—		571		571
Facility Exit Related Costs	—		372			—			372		372		500
Total	$	1,983	$	789		$	(2,312	)	$	460	$	12,277	$	12,413

The balance of the restructuring liability at September 30, 2015 consists of approximately $219,000 in current liabilities and $241,000 in non-current liabilities.