FURMANITE CORP | 2012 | FY |

7. Restructuring

The Company committed to certain cost reduction initiatives beginning in the fourth quarter of 2009 and in the second quarters of 2010 and 2012, including planned workforce reductions and restructuring of certain functions. The Company has taken these specific actions in order to more strategically align the Company’s operating, selling, general and administrative costs relative to revenues.

2009 Cost Reduction Initiative

The Company committed to a cost reduction initiative in the fourth quarter of 2009 (the “2009 Cost Reduction Initiative”). The total costs incurred related to the 2009 Cost Reduction Initiative, which was completed in the year ended December 31, 2011, were approximately $3.4 million. For the twelve months ended December 31, 2010, restructuring costs incurred of $0.5 million and $1.8 million are included in operating costs and selling, general and administrative expenses, respectively. There was minimal restructuring activity during the twelve months ended December 31, 2011 related to this initiative and no activity related to this initiative during the twelve months ended December 31, 2012.

2010 Cost Reduction Initiative

In the second quarter of 2010, the Company committed to an additional cost reduction initiative (the “2010 Cost Reduction Initiative”) primarily related to the restructuring of certain functions within the Company’s EMEA operations in order to improve the operational and administrative efficiency of its EMEA operations. As of December 31, 2012, the Company has substantially completed the 2010 Cost Reduction initiative, with total costs incurred of approximately $4.0 million. Future cash payments of approximately $0.5 million are expected in connection with this initiative. For the twelve months ended December 31, 2011 and 2010, restructuring costs incurred of $0.2 million and $1.5 million, respectively, are included in operating costs. For the twelve months ended December 31, 2012, 2011 and 2010, restructuring costs incurred of $0.2 million, $0.2 million and $1.9 million, respectively, are included in selling, general and administrative expenses.

2012 Cost Reduction Initiative

In the second quarter of 2012, the Company committed to another cost reduction initiative (the “2012 Cost Reduction Initiative”) related to further restructuring of its European operations within EMEA. This restructuring initiative included additional workforce reductions throughout the Company’s operating, selling, general and administrative functions. The Company has taken these specific actions in order to further reduce administrative and overhead expenses and streamline its European operations’ structure for improved operational efficiencies in the wake of the continued challenging economic conditions in the region. As of December, 31, 2012, the Company has substantially completed the 2012 Cost Reduction Initiative, with total restructuring costs incurred of approximately $3.4 million for the year ended December 31, 2012, which primarily relates to one-time termination benefits. Future cash payments of approximately $1.6 million are expected in connection with this initiative. For the year ended December 31, 2012, restructuring costs of $2.3 million and $1.1 million are included in operating costs and selling, general and administrative expenses, respectively.

Estimated and actual expenses including severance, lease cancellations, and other restructuring costs, in connection with these initiatives, have been recognized in accordance with FASB ASC 420-10, Exit or Disposal Cost Obligations, and FASB ASC 712-10, Nonretirement Postemployment Benefits.

Restructuring costs associated with the cost reduction initiatives for the years ended December 31, consisted of the following (in thousands):

Restructuring costs incurred in the following geographical areas for the years ended December 31, are as follows (in thousands):

The activity related to reserves associated with the cost reduction initiatives for the year ended December 31, 2012, is as follows (in thousands):

The activity related to reserves associated with the cost reduction initiatives for the year ended December 31, 2011, is as follows (in thousands):

Total workforce reductions in which severance costs were incurred related to the cost reduction initiatives included terminations for 246 employees, which include reductions of 31 employees in the Americas, 214 employees in EMEA, and one employee in Asia-Pacific.

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