Restructurings

The recent decline in crude oil prices to five-year lows has negatively impacted the economic outlook of the Company’s E&P customers, which has also negatively impacted the outlook for the Company’s seismic contractor customers. In response to the decline in crude oil prices, E&P companies have reduced their capital expenditures and shifted their spending from exploration- to production-related activities on existing assets. Seismic spending is discretionary; therefore, E&P companies have disproportionately cut their spending on seismic-related services and products.

During the first half of 2015, the Company continued its restructuring program by (i) focusing on centralizing the Company’s global data processing capabilities to core geographical hubs in the U.S. and the U.K., (ii) reducing the Company’s marine repair infrastructure to two locations in the U.S. and U.A.E., and (iii) making selected reductions in personnel across all segments of the Company. Under this program, the Company made additional reductions to its headcount. Including December 2014, these restructurings have resulted in approximately a 25% reduction of full-time employees. During the six months ended June 30, 2015, the Company recognized the following pre-tax charges and credits (in thousands):



	Severance Charges^(a)			Facility Charges^(b)			Total
Cost of goods sold	$	1,813		$	—		$	1,813
Operating expenses	198			1,324			1,522
Other (income) expense	—			1,913			1,913
Income tax benefit	—			(150		)	(150		)
Net income attributable to noncontrolling interest	(172		)	—			(172		)
Consolidated total	$	1,839		$	3,087		$	4,926


^(a)	Represents severance charges related to first half 2015 restructurings, a portion of which relates to a noncontrolling interest.


^(b)	Represents facility charges related to first half 2015 restructurings.

During the third quarter, the Company expects to incur additional restructuring charges in the range of $2 million to $3 million.