Restructuring Charges

In the fourth quarter of 2014, in response to the significant decline in the price of crude oil and our anticipation of a lower level of exploration and production spending in 2015, we initiated a plan to reduce our overall costs and workforce to better align with anticipated activity levels. This cost reduction plan (the “2015 Plan”) includes a workforce reduction and other cost reduction measures initiated across our geographic regions. In connection with the 2015 Plan, we recognized restructuring charges of $41 million in the three months ended March 31, 2015. Our restructuring charges include termination (severance) benefits of $40 million and other restructuring charges of $1 million. Other restructuring charges include contract termination costs, relocation and other associated costs.

In the first quarter of 2014, we announced a cost reduction plan (the “2014 Plan”), which included a worldwide workforce reduction and other cost reduction measures. The 2014 Plan resulted in restructuring charges of $70 million primarily related to termination (severance) benefits in the three months ended March 31, 2014. As of December 31, 2014, we completed our planned headcount reductions and closures of underperforming operating locations in connection with the 2014 Plan.

The following tables present the components of the 2015 Plan and the 2014 Plan restructuring charges by segment for the three months ended March 31, 2015 and 2014.



	Three Months Ended March 31, 2015
			Other		Total
(Dollars in millions)	Severance		Restructuring		Severance and
2015 Plan	Charges		Charges		Other Charges
North America	$	8	$	—	$	8
MENA/Asia Pacific	5		1		6
Europe/SSA/Russia	7		—		7
Latin America	12		—		12
Subtotal	32		1		33
Land Drilling Rigs	5		—		5
Corporate and Research and Development	3		—		3
Total	$	40	$	1	$	41



	Three Months Ended March 31, 2014
			Other		Total
(Dollars in millions)	Severance		Restructuring		Severance and
2014 Plan	Charges		Charges		Other Charges
North America	$	9	$	—	$	9
MENA/Asia Pacific	4		—		4
Europe/SSA/Russia	15		4		19
Latin America	19		—		19
Subtotal	47		4		51
Land Drilling Rigs	3		—		3
Corporate and Research and Development	16		—		16
Total	$	66	$	4	$	70

The severance and other restructuring charges gave rise to certain liabilities, the components of which are summarized below, and largely relate to the severance accrued as part of both plans that will be paid pursuant to the respective arrangements and statutory requirements.



	Three Months Ended March 31, 2015
	2015 Plan				2014 Plan				Total Severance
			Other				Other		and Other
	Severance		Restructuring		Severance		Restructuring		Restructuring
(Dollars in millions)	Liability		Liability		Liability		Liability		Liability
North America	$	16	$	—	$	—	$	1	$	17
MENA/Asia Pacific	6		1		1		4		12
Europe/SSA/Russia	7		—		—		4		11
Latin America	3		—		—		—		3
Subtotal	32		1		1		9		43
Land Drilling Rigs	1		—		—		—		1
Corporate and Research and Development	—		—		5		—		5
Total	$	33	$	1	$	6	$	9	$	49

The following table presents the restructuring liability activity for the three months ended March 31, 2015.



			Three Months Ended March 31, 2015
(Dollars in millions)	Accrued Balance at December 31, 2014		Charges		Cash Payments			Other			Accrued Balance at March 31, 2015
2015 Plan:
Severance liability	$	53	$	40	$	(58	)	$	(2	)	$	33
Other restructuring liability	—		1		—			—			1
2014 Plan:
Severance liability	14		—		(6		)	(2		)	6
Other restructuring liability	12		—		(1		)	(2		)	9
Total severance and other restructuring liability	$	79	$	41	$	(65	)	$	(6	)	$	49