Restructuring and Other Charges

6 Months Ended

Jul. 03, 2016

Restructuring and Other Charges [Abstract]

Restructuring and Other Charges

Note 3. Restructuring and Other Charges

During 2014, the Company announced a restructuring program that will result in a 10% permanent reduction of its workforce.  The reductions include elimination of duplicate corporate functions, deployment of our shared service model, and consolidation and alignment of various corporate functions and regional locations across the Company.

During the second quarter of 2015, the Company incurred an impairment charge of $15.8 million for underutilized equipment which was abandoned by the Company for its Coiled Tubing business, within the Energy Services segment and restructuring charges of $1.0 million associated with the Coiled Tubing service line.

During the second quarter of 2016, the Company incurred additional restructuring charges for lease termination costs, inventory write-offs and impairment of assets relating to its exit from the Nitrogen and Pipeline product lines and restructuring of other onshore services within the Energy Services segment as a result of the significant reduction in oil prices and overcapacity in the onshore oil service market. The company expects to realize annualized savings from this restructuring program of $11.5 million.

The following table outlines the amount of restructuring charges recorded within the Condensed Consolidated Statements of Income.

	Three Months Ended				Six Months Ended
	July 3, 2016		June 28, 2015		July 3, 2016		June 28, 2015
(millions of dollars)
Restructuring Charges	$	10.3	$	1.0	$	11.2	$	1.0
Impairment of Assets		18.5		15.8		18.5		15.8
Total restructuring and other charges	$	28.8	$	16.8	$	29.7	$	16.8

At July 3, 2016, the Company had $12.7 million included within accrued liabilities within our Condensed Consolidated Balance Sheets for cash expenditures needed to satisfy remaining obligations under these workforce reduction initiatives.  The Company expects to pay these amounts by the end of December 2016.

The following table is a reconciliation of our restructuring liability balance as of July 3, 2016:

		(millions of dollars)
Restructuring liability, December 31, 2015	$	7.9
Additional provisions		11.2
Cash payments		(6.1	)
Other		(0.3	)
Restructuring liability,  July 3, 2016	$	12.7