Hess 2014 Annual Report Download - page 77

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HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
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4. Exit and Disposal Costs
The following table provides the components of and changes in the Corporation’s restructuring accruals:
Exploration
Corporate,
Interest
and and Discontinued
Production Other Operations Total
(In millions)
Employee Severance
Balance at January 1, 2014 ................................................................................ $ 32 $ 26 $ 113 $ 171
Provision ........................................................................................................... 19 16 41 76
Payments ........................................................................................................... (35) (26) (109) (170)
Balance at December 31, 2014 .......................................................................... 16 16 45 77
Facility and Other Exit Costs
Balance at January 1, 2014 ................................................................................ 53 17 48 118
Provision ........................................................................................................... (15) 10 70 65
Payments, settlements and other ....................................................................... (38) (12) (108) (158)
Balance at December 31, 2014 .......................................................................... — 15 10 25
Total restructuring accruals at December 31, 2014 ................................................ $ 16 $ 31
$ 55 $ 102
The following table provides the financial statement classification of costs and expenses associated with the Corporation’s
restructuring program:
2014 2013
(In millions)
Employee Severance
Operating costs and expenses ....................................................................................................................... $ 5 $ 22
Exploration expenses, including dry holes and lease impairment ................................................................ 3 19
General and administrative expenses ........................................................................................................... 27 63
Income from discontinued operations .......................................................................................................... 41 148
Total employee severance ................................................................................................................................. $ 76 $ 252
Facility and Other Exit Costs
Other, net ...................................................................................................................................................... $ — $ 8
Operating costs and expenses ...................................................................................................................... — 1
General and administrative expenses ........................................................................................................... (2) 54
Depreciation, depletion and amortization..................................................................................................... (3) 16
Income from discontinued operations .......................................................................................................... 70 141
Total facility and other exit costs ...................................................................................................................... $ 65 $ 220
The employee severance charges primarily resulted from the Corporation’s divestiture program announced in March 2013. The
severance charges were based on probable amounts incurred under ongoing severance arrangements or other statutory requirements,
plus amounts earned under enhanced benefit arrangements. The expense associated with the enhanced benefits was recognized ratably
over the estimated service period required for the employee to earn the benefit upon termination.
The facility and other exit costs relate to charges associated with the cessation of use of certain leased office space, contract
terminations and professional fees associated with the divestitures as well as costs associated with the shutdown of Port Reading
refining operations.
For the accrued employee severance at December 31, 2014 totaling $77 million, the Corporation expects to pay approximately 95%
in 2015 and the remainder in 2016. For the accrued facility and other exit costs totaling $25 million, the Corporation expects to pay
approximately 45% in 2015 and the remainder in 2016 and beyond.