Restructuring Charges

In response to continuing crude oil prices fluctuation and our anticipation of a lower level of exploration and production spending in 2016, we initiated an additional plan to reduce our overall costs and workforce to better align with anticipated activity levels. This cost reduction plan (the “2016 Plan”) included a workforce reduction and other cost reduction measures initiated across our geographic regions.

In connection with the 2016 Plan, we recognized restructuring charges of $51 million and $128 million in the second quarter and the first six months of 2016, respectively, which include termination (severance) benefits of $36 million and $108 million, respectively, and other restructuring charges of $15 million and $20 million, respectively. Other restructuring charges include contract termination costs, relocation and other associated costs.

In the fourth quarter of 2014, we announced a cost reduction plan (the “2015 Plan”), which included a worldwide workforce reduction and other cost reduction measures. In the second quarter and the first six months of 2015, we recognized restructuring charges of $69 million and $110 million for the 2015 Plan, which include termination (severance) benefits of $19 million and $59 million, respectively, and other restructuring charges of $50 million and $51 million, respectively. Other restructuring charges include contract termination costs, relocation and other associated costs.

The following tables present the components of the 2016 Plan and the 2015 Plan restructuring charges by segment for the second quarter and the first six months of 2016 and 2015.



	Three Months Ended June 30, 2016
					Total
(Dollars in millions)	Severance		Other		Severance and
2016 Plan	Charges		Charges		Other Charges
North America	$	5	$	10	$	15
MENA/Asia Pacific	9		2		11
Europe/SSA/Russia	8		2		10
Latin America	11		1		12
Subtotal	33		15		48
Land Drilling Rigs	1		—		1
Corporate and Research and Development	2		—		2
Total	$	36	$	15	$	51



	Three Months Ended June 30, 2015
					Total
(Dollars in millions)	Severance		Other		Severance and
2015 Plan	Charges		Charges		Other Charges
North America	$	4	$	17	$	21
MENA/Asia Pacific	6		23		29
Europe/SSA/Russia	5		9		14
Latin America	3		1		4
Subtotal	18		50		68
Land Drilling Rigs	1		—		1
Corporate and Research and Development	—		—		—
Total	$	19	$	50	$	69



	Six Months Ended June 30, 2016
					Total
(Dollars in millions)	Severance		Other		Severance and
2016 Plan	Charges		Charges		Other Charges
North America	$	24	$	15	$	39
MENA/Asia Pacific	18		2		20
Europe/SSA/Russia	23		2		25
Latin America	26		1		27
Subtotal	91		20		111
Land Drilling Rigs	5		—		5
Corporate and Research and Development	12		—		12
Total	$	108	$	20	$	128



	Six Months Ended June 30, 2015
					Total
(Dollars in millions)	Severance		Other		Severance and
2015 Plan	Charges		Charges		Other Charges
North America	$	12	$	17	$	29
MENA/Asia Pacific	11		24		35
Europe/SSA/Russia	12		9		21
Latin America	15		1		16
Subtotal	50		51		101
Land Drilling Rigs	6		—		6
Corporate and Research and Development	3		—		3
Total	$	59	$	51	$	110

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 the plans mentioned previously as well as our 2014 cost reduction plan (the “2014 Plan”) that will be paid pursuant to the respective arrangements and statutory requirements.



	At June 30, 2016
	2016 Plan				2015 and 2014 Plans				Total
									Severance
	Severance		Other		Severance		Other		and Other
(Dollars in millions)	Liability		Liability		Liability		Liability		Liability
North America	$	1	$	8	$	4	$	1	$	14
MENA/Asia Pacific	3		1		2		4		10
Europe/SSA/Russia	9		1		2		8		20
Latin America	—		—		—		—		—
Subtotal	13		10		8		13		44
Land Drilling Rigs	1		—		—		—		1
Corporate and Research and Development	3		—		1		—		4
Total	$	17	$	10	$	9	$	13	$	49

The following table presents the restructuring liability activity for the first six months of 2016.



			Six Months Ended June 30, 2016
(Dollars in millions)	Accrued Balance at December 31, 2015		Charges		Cash Payments			Other			Accrued Balance at June 30, 2016
2016 Plan:
Severance liability	$	—	$	108	$	(92	)	$	1		$	17
Other restructuring liability	—		20		(5		)	(5		)	10
2015 and 2014 Plan:
Severance liability	37		—		(23		)	(5		)	9
Other restructuring liability	14		—		(1		)	—			13
Total severance and other restructuring liability	$	51	$	128	$	(121	)	$	(9	)	$	49