Reduction In Workforce

6 Months Ended

Jun. 30, 2016

(3) REDUCTION IN WORKFORCE

In January 2016, the Company announced a 40% workforce reduction of approximately 1,100 employees as a result of lower anticipated drilling activity. This reduction was substantially completed in the first quarter of 2016. In April 2016, the Company also partially restructured executive management, which was substantially completed in the second quarter of 2016.

The following table presents a summary of the restructuring charges for the three and six months ended June 30, 2016:


	For the three months ended		For the six months ended
	June 30, 2016		June 30, 2016
	(in millions)
Severance (including payroll taxes) (1)	$	2	$	44
Stock-based compensation (2)		6		24
Pension and other postretirement benefits (3)		3		3
Other benefits		–		3
Outplacement services, other		–		1
Total restructuring charges (4)	$	11	$	75

(1)Includes $1 million related to executive management restructuring for the three and six months ended June 30, 2016.

(2)

Includes $3 million related to executive management restructuring for the three and six months ended June 30, 2016.

(3)

Includes non-cash charges related to the curtailment and settlement of the pension and other postretirement benefit plans. See Note 12 for additional details regarding the Company’s retirement and employee benefit plans.

(4)

Total restructuring charges were $11 million and less than $1 million for the Company’s E&P and Midstream segments, respectively, for the three months ended June 30, 2016. For the six months ended June 30, 2016, restructuring charges were $72 million and $3 million for the Company’s E&P and Midstream segments, respectively.

The following table presents a summary of liabilities associated with the Company’s restructuring activities at June 30, 2016, which are reflected in accounts payable on the unaudited condensed consolidated balance sheet (in millions):


Liability at March 31, 2016	$	24
Additions		2
Distributions		(24)
Liability at June 30, 2016	$	2

Severance payments and other separation costs related to restructuring will be completed by the end of the fourth quarter, resulting in the recognition of approximately $0.5 million of additional expense in the second half of 2016.