Restructuring

During the fourth quarter of 2011, we announced the approval of projects to restructure our manufacturing operations to increase efficiency and lower our cost of manufacturing. We began implementing these projects in the fourth quarter of 2011, and we expect to substantially complete these projects by the end of 2013.

Certain projects are subject to a variety of labor and employment laws, rules, and regulations, which could result in a delay in implementing projects at some locations. Real estate market conditions may impact the timing of our ability to sell some of the manufacturing facilities we have designated for closure and disposal. This may delay the completion of the restructuring projects beyond 2013.

The total expected restructuring costs as of September 30, 2012 were $81.1 million, which is a decrease of approximately $7.9 million from the total expected costs at June 30, 2012. This decrease was primarily the result of gains on the dispositions of fixed assets and a correction to the amount of goodwill allocated to one of our non-core businesses sold as part of the restructuring process. In addition, expected severance costs were reduced as the result of certain employees in positions that were eliminated under the restructuring plan filling vacant positions within the Company.

The total expected restructuring costs, the costs recognized in prior periods, the restructuring costs recognized during the nine months ended September 30, 2012, and the remaining expected restructuring costs as of September 30, 2012 are as follows:



	Total Expected Costs at September 30, 2012		Costs Recognized in Prior Periods		Costs Recognized During the Nine Months Ended September 30, 2012			Remaining Costs to be Recognized at September 30, 2012
	(in thousands)
Employee severance costs	$	51,395	$	42,530	$	3,668		$	5,197
Asset impairments	21,356		25,144		(4,841		)	1,053
Other restructuring costs	8,368		408		4,628			3,332
Total	$	81,119	$	68,082	$	3,455		$	9,582

Segments:
Energy	$	59,312	$	51,873	$	3,536		$	3,903
Water	16,210		15,321		(871		)	1,760
Corporate unallocated	5,597		888		790			3,919
Total	$	81,119	$	68,082	$	3,455		$	9,582

Other restructuring costs includes expenses to exit the facilities once the operations in those facilities have ceased. Costs associated with restructuring activities are generally presented as restructuring expense in the Consolidated Statements of Operations, except for certain costs associated with inventory write-downs, which are classified within cost of revenues, and accelerated depreciation expense, which is recognized according to the use of the asset.

The following table summarizes the activity within the restructuring related balance sheet accounts during the nine months ended September 30, 2012:



	Accrued Employee Severance			Asset Impairments & Net Loss (Gain) on Sale or Disposal			Other Accrued Costs			Total
	(in thousands)
Beginning balance, January 1, 2012	$	28,168		$	—		$	399		$	28,567
Costs incurred and charged to expense	3,668			(4,841		)	4,628			3,455
Cash payments	(13,518		)	—			(1,737		)	(15,255		)
Non-cash items	—			4,841			—			4,841
Effect of change in exchange rates	197			—			(44		)	153
Ending balance, September 30, 2012	$	18,515		$	—		$	3,246		$	21,761

Asset impairments are determined at the asset group level. During the nine months ended September 30, 2012, we adjusted the estimated impairment of certain assets and recognized gains on the sale of various asset groups. As part of the sale of a non-core business in Europe, $675,000 of goodwill was allocated to the business and charged to asset impairment restructuring expense during the three months ended September 30, 2012. In addition, during the third quarter of 2012, we corrected an overstatement of $5.4 million in restructuring expense, originally recognized during the year ended December 31, 2011, for the goodwill allocated to a non-core business in North America that was sold in May 2012. See Note 5 for additional information related to the goodwill impairment correction.

The current and long-term portions of the restructuring related liability balance as of September 30, 2012 were $19.2 million and $2.6 million, which are classified within other current liabilities and other long-term liabilities, respectively, on the Consolidated Balance Sheets.

There were no significant long-lived assets that were recorded at fair value at September 30, 2012 and 2011, respectively.