Restructuring Charges

6 Months Ended

Jun. 30, 2011

14. RESTRUCTURING CHARGES

On April 8, 2011, the Company announced and implemented a reduction in force program. The following represents a reconciliation of the charges that are accrued under the caption “Other accrued expenses” in the Condensed Consolidated Balance Sheet as of June 30 2011:


(In thousands)

Balance, December 31, 2010	$	—

Restructuring costs		1,839
Less: Payments		(1,665	)

Balance, June 30, 2011	$	174

In the second quarter of 2011, the Company recognized charges related to the reduction in force under the caption “Selling, general and administrative expenses” in the Condensed Consolidated Statement of Income totaling approximately $1.8 million, which include severance payments and COBRA subsidy medical benefits provided to severed employees. These amounts were recorded at the Corporate level then allocated to the Federal and Transportation segments based on direct labor. In addition, other savings initiatives were put in place that included a reduction in a portion of the employer match for the Michael Baker Corporation 401(k) Plan for the remainder of the year, a delay in annual salary increases until the fourth quarter of 2011 and the elimination of benefits for certain reduced-work-schedule employees. In June and July of 2011, the Company evaluated the impacts of the cost reduction program, the outlook for federal and state spending and the cost structure of the Company and determined that further cost reductions were necessitated. As such, in the early third quarter of 2011, the Company conducted a second reduction in force program. However, no change was made to the dates for salary increases or the resumption of the 401(k) match as a result of these further actions. The Company expects to incur additional restructuring charges of $0.6 million in the third quarter of 2011 for these supplemental reductions.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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