Restructuring Charges

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”) included a workforce reduction and other cost reduction measures initiated across our geographic regions. During 2015, we have increased the expected workforce reduction by 75% from the originally planned workforce reduction due to the continued weakness in the price and demand of crude oil, as well as lower than expected exploration and production spending in 2015.

In connection with the 2015 Plan, we recognized restructuring charges of $49 million and $159 million in the three and nine months ended September 30, 2015, respectively. For the three and nine months ended September 30, 2015, our restructuring charges include termination (severance) benefits of $40 million and $99 million, respectively, and other restructuring charges of $9 million and $60 million, respectively. Other restructuring charges for the nine months ended September 30, 2015 include asset write-offs of $23 million related to Yemen due to the political disruption and $28 million in other regions. Other restructuring charges also include exit costs, contract termination costs, relocation costs 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. In the three and nine months ended September 30, 2014, the 2014 Plan restructuring charges include one-time termination (severance) benefits of $21 million and $119 million, asset impairment charges of $117 million and $138 million and other restructuring charges of $16 million and $26 million, respectively. Other restructuring charges include contract termination costs, relocation costs and other associated costs.

The following tables present the components of the 2015 Plan and the 2014 Plan restructuring charges by segment for the three and nine months ended September 30, 2015 and 2014.



	Three Months Ended September 30, 2015
			Other		Total
(Dollars in millions)	Severance		Restructuring		Severance and
2015 Plan	Charges		Charges		Other Charges
North America	$	4	$	5	$	9
MENA/Asia Pacific	3		2		5
Europe/SSA/Russia	9		2		11
Latin America	10		—		10
Subtotal	26		9		35
Land Drilling Rigs	6		—		6
Corporate and Research and Development	8		—		8
Total	$	40	$	9	$	49



	Three Months Ended September 30, 2014
			Other		Total
(Dollars in millions)	Severance		Restructuring		Severance and
2014 Plan	Charges		Charges		Other Charges
North America	$	2	$	14	$	16
MENA/Asia Pacific	10		101		111
Europe/SSA/Russia	1		8		9
Latin America	7		6		13
Subtotal	20		129		149
Land Drilling Rigs	1		4		5
Corporate and Research and Development	—		—		—
Total	$	21	$	133	$	154



	Nine Months Ended September 30, 2015
			Other		Total
(Dollars in millions)	Severance		Restructuring		Severance and
2015 Plan	Charges		Charges		Other Charges
North America	$	16	$	22	$	38
MENA/Asia Pacific	14		26		40
Europe/SSA/Russia	21		11		32
Latin America	25		1		26
Subtotal	76		60		136
Land Drilling Rigs	12		—		12
Corporate and Research and Development	11		—		11
Total	$	99	$	60	$	159



	Nine Months Ended September 30, 2014
			Other		Total
(Dollars in millions)	Severance		Restructuring		Severance and
2014 Plan	Charges		Charges		Other Charges
North America	$	15	$	29	$	44
MENA/Asia Pacific	20		108		128
Europe/SSA/Russia	22		14		36
Latin America	29		7		36
Subtotal	86		158		244
Land Drilling Rigs	5		4		9
Corporate and Research and Development	28		2		30
Total	$	119	$	164	$	283

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.



	At September 30, 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	$	1	$	2	$	—	$	—	$	3
MENA/Asia Pacific	4		—		1		5		10
Europe/SSA/Russia	8		2		—		1		11
Latin America	1		—		—		—		1
Subtotal	14		4		1		6		25
Land Drilling Rigs	—		—		—		—		—
Corporate and Research and Development	4		—		5		—		9
Total	$	18	$	4	$	6	$	6	$	34

The following table presents the restructuring liability activity for the nine months ended September 30, 2015.



			Nine Months Ended September 30, 2015
(Dollars in millions)	Accrued Balance at December 31, 2014		Charges		Cash Payments			Other			Accrued Balance at September 30, 2015
2015 Plan:
Severance liability	$	53	$	99	$	(132	)	$	(2	)	$	18
Other restructuring liability	—		9		(8		)	3			4
2014 Plan:
Severance liability	14		—		(6		)	(2		)	6
Other restructuring liability	12		—		(4		)	(2		)	6
Total severance and other restructuring liability	$	79	$	108	$	(150	)	$	(3	)	$	34