RESTRUCTURING

On January 4, 2016, the Company’s board of directors approved the 2016 Restructuring to reduce its exposure to the upstream oil markets and to reduce consolidated expenses. During 2016, the Company completed its restructuring, which included repositioning Energy Services’ upstream operations in California, reducing Corrosion Protection’s upstream exposure by divesting its interest in a Canadian pipe coating joint venture, right-sizing Corrosion Protection to compete more effectively and reducing corporate and other operating costs. Cost savings were achieved primarily through office closures and reducing headcount by approximately 964 employees, or 15.5% of the Company’s total workforce as of December 31, 2015.

Total pre-tax 2016 Restructuring charges recorded since inception were $16.1 million ($10.3 million after tax) and consisted of employee severance, retention, extension of benefits, employment assistance programs and other restructuring costs associated with the restructuring efforts described above. The vast majority of 2016 Restructuring costs were cash charges.

There were no expenses incurred in the first quarter of 2017 related to the 2016 Restructuring. During the first quarter of 2016, the Company recorded pre-tax expense related to the 2016 Restructuring as follows (in thousands):



	Quarter Ended March 31, 2016
	Infrastructure Solutions		Corrosion Protection		Energy Services		Total
Severance and benefit related costs	$	1,912	$	2,420	$	1,309	$	5,641
Lease termination costs	—		—		969		969
Relocation and other moving costs	—		—		120		120
Other restructuring costs ⁽¹⁾	241		317		2,454		3,012
Total pre-tax restructuring charges (reversals) ⁽²⁾	$	2,153	$	2,737	$	4,852	$	9,742

__________________________


⁽¹⁾	Includes charges primarily related to downsizing the Company’s upstream operations in California, inclusive of wind-down costs, professional fees, fixed asset disposals and certain other restructuring charges.


⁽²⁾	Includes $1.0 million of corporate-related restructuring charges that have been allocated to the reportable segments.

2016 Restructuring costs related to severance, other termination benefit costs and early lease termination costs for the first quarters of 2017 and 2016 were zero and $6.7 million, respectively, and reported on a separate line in the Consolidated Statements of Operations in accordance with FASB ASC 420, Exit or Disposal Cost Obligations.

The following tables summarize all charges related to the 2016 Restructuring recognized in the first quarter of 2016 as presented in their affected line in the Consolidated Statements of Operations (in thousands):



	Quarter Ended March 31, 2016
Cost of revenues⁽¹⁾	$	49
Operating expenses⁽²⁾	2,963
Restructuring charges ⁽³⁾	6,730
Total pre-tax restructuring charges ⁽⁴⁾	$	9,742

__________________________


⁽¹⁾	All charges relate to Infrastructure Solutions.


⁽²⁾	Includes: (i) charges of $0.2 million related to Infrastructure Solutions; (ii) charges of $0.3 million related to Corrosion Protection; and (iii) charges of $2.5 million related to Energy Services.


⁽³⁾	Includes: (i) charges of $1.9 million related to Infrastructure Solutions; (ii) charges of $2.4 million related to Corrosion Protection; and (iii) charges of $2.4 million related to Energy Services.


⁽⁴⁾	All charges incurred during the quarter will be settled in cash, either during the current quarter or future periods.

The following tables summarize the 2016 Restructuring activity during the first quarters of 2017 and 2016 (in thousands):



	Reserves at December 31, 2016		2017 Charge to Income		Utilized in 2017				Reserves at March 31, 2017
	Reserves at December 31, 2016		2017 Charge to Income		Cash⁽¹⁾		Non-Cash		Reserves at March 31, 2017
Severance and benefit related costs	$	645	$	—	$	228	$	—	$	417
Lease termination costs	125		—		30		—		95
Relocation and other moving costs	10		—		10		—		—
Other restructuring costs	120		—		32		—		88
Total pre-tax restructuring charges	$	900	$	—	$	300	$	—	$	600

__________________________


⁽¹⁾	Refers to cash utilized to settle charges, either those reserved at December 31, 2016 or charged to income during the first quarter of 2017.



	2016 Charge to Income		Utilized in 2016				Reserves at March 31, 2016
	2016 Charge to Income		Cash⁽¹⁾		Non-Cash		Reserves at March 31, 2016
Severance and benefit related costs	$	5,641	$	3,062	$	—	$	2,579
Lease termination costs	969		583		—		386
Relocation and other moving costs	120		120		—		—
Other restructuring costs	3,012		2,906		—		106
Total pre-tax restructuring charges	$	9,742	$	6,671	$	—	$	3,071

__________________________


⁽¹⁾	Refers to cash utilized to settle charges during the first quarter of 2016.