22. Business Restructuring and Asset Impairments

2014 Restructuring

In the fourth quarter of 2014, a restructuring plan was approved that affected certain Company functions, principally the research and development function and to a lesser extent product safety and compliance and plant site accounting functions (primarily impacting the Surfactants reportable segment). The objective of the plan was to better align staffing resources with the needs of the Company’s diversification and growth initiatives. In implementing the plan, management offered a voluntary retirement incentive to employees of the affected functions. By December 31, 2014, 13 employees accepted the voluntary termination incentive. As a result, the Company recognized a $1,722,000 charge against income for the three and twelve months ended December 31, 2014. The restructuring was not considered a cost savings initiative but rather an opportunity to create some staffing flexibility to reposition roles to meet changing business needs. The severance payouts were completed by June 30, 2015. Other costs for the restructuring were not material.

The following is a reconciliation of the beginning and ending balances of the restructuring liability:

(In thousands)	Severance Expense
Restructuring liability at December 31, 2014	$	1,722
Amounts paid		(1,695	)
Foreign currency translation		(18	)
Expense adjustment		(9	)
Restructuring liability at December 31, 2015	$	—

2014 Asset Impairments

In the fourth quarter of 2014, the Company wrote off the net book values of three assets, resulting in a pretax charge against income of $2,287,000 for the three and twelve months ended December 31, 2014. All three assets were part of the Company’s Surfactants segment, although the write-off charges were excluded from Surfactants segment operating results. At the Company’s Singapore location, $1,316,000 of engineering costs for an asset expansion project were reversed out of the Company’s construction-in-process account and into expense because management determined that, given the business environment at that time, the magnitude of the project could no longer be economically justified. At the Company’s Millsdale, Illinois, plant, a reactor used to manufacture certain surfactant products was no longer required and was retired and removed from service. The book value of the asset was $714,000. The remaining $257,000 of impairment charges related to an administrative building at the Company’s United Kingdom site that was vacated and abandoned in place.

2013 Restructuring

In the fourth quarter of 2013, the Company recorded a $1,040,000 restructuring charge for estimated severance expense related to an approved plan to reduce costs and increase operating efficiencies by consolidating a portion of the Surfactants segment’s North American manufacturing operations. In the third quarter of 2014, the Company shut down certain production areas at its Canadian manufacturing site, moving production in those areas to U.S. plants. This consolidation resulted in the elimination of 16 North American positions. Other restructuring costs for this plan were not material.

The following is a reconciliation of the beginning and ending balances of the restructuring liability:

(In thousands)	Severance Expense
Restructuring liability at December 31, 2013	$	1,040
Amounts paid		(420	)
Foreign currency translation		(57	)
Restructuring liability at December 31, 2014	$	563
Amounts paid		(464	)
Foreign currency translation		(42	)
Restructuring liability at December 31, 2015	$	57

In connection with the planned business restructuring, the Company reduced the useful lives of the manufacturing assets in the affected areas of the Canadian plant. The change in useful lives resulted in accelerated depreciation expenses of $1,825,000 in 2014 and $296,000 in 2013. The depreciation expense was included in the cost of sales line of the consolidated statements of income for the years ended December 31, 2014 and 2013, respectively.