NOTE 4—RESTRUCTURING

In 2014 we completed a major review of our cost structure, and subsequently implemented a plan, which we referred to as the McDermott Profitability Initiative (the “MPI”), to increase our profitability and flexibility through reduced fixed and variable costs. The plan included personnel reductions, centralization of operational activities, other cost reduction initiatives and certain asset impairments. As part of MPI, the previously announced move of our ASA regional headquarters from Singapore to Kuala Lumpur, along with additional sourcing initiatives, is substantially complete. We completed the MPI restructuring during third quarter of 2016.

We continued our efforts to improve our cost structure by initiating the Additional Overhead Reduction program (“AOR”) during the fourth quarter of 2015. AOR actions, which have included personnel reductions affecting direct operating and selling, general and administrative expenses, were complete as of December 31, 2016.

During 2013 and 2014, we implemented a restructuring of our Americas operations, which involved our Morgan City, Louisiana, Houston, Texas, New Orleans, Louisiana and some Brazil locations. The restructuring involved, among other things, reductions of management, administrative, fabrication and engineering personnel, and the discontinued utilization of the Morgan City facility.

We completed a Corporate restructuring during 2014. Costs associated with our Corporate restructuring activities primarily included severance, relocation and other personnel-related costs and costs for advisors, as well as costs for certain executive management changes that became effective during the fourth quarter of 2013.

The following table presents restructuring costs incurred in 2016, 2015, 2014 and from inception, by major type of cost and by segment.

	Year ended December 31,								Incurred from inception to
	2016				2015		2014		December 31, 2016
	(In thousands)
Americas Restructuring	$	(1,350	)	⁽¹⁾	$	2,308	$	9,170	$	44,194

Corporate Restructuring		-				-		4,940		6,601

MPI
Severance and other personnel-related costs
AEA		-				6,646		-		6,646
MEA		-				856		-		856
ASA		2,590				6,104		-		8,694
Corporate and other		-				1,611		-		1,611
Asset impairment and disposal
ASA		-				7,471		-		7,471
Legal and other advisor fees
Corporate and other		222				7,414		4,003		11,639
Other
AEA		-				692		-		692
ASA		2,436				5,934		-		8,370
Corporate and other		-				983		-		983
Total MPI		5,248				37,711		4,003		46,962
AOR
Severance and other personnel-related costs
AEA		3,833				-		-		3,833
ASA		343				-		-		343
Corporate and other		836				-		-		836
Legal and other advisor fees
Corporate and other		1,968				800		-		2,768
Other
AEA		180				-		-		180
MEA		17				-		-		17
Corporate and other		188				-		-		188
Total AOR		7,365				800		-		8,165

Total	$	11,263			$	40,819	$	18,113	$	105,922

By Segment
AEA	$	2,663			$	9,646	$	9,170	$	55,545
MEA		17				856		-		873
ASA		5,369				19,509		-		24,878
Corporate and other		3,214				10,808		8,943		24,626
Total	$	11,263			$	40,819	$	18,113	$	105,922

(1)	This amount includes reversal of environmental liability established in connection with discontinued utilization of our Morgan City fabrication facility. For further discussion see, Note 18, Commitments and Contingencies.