Restructuring

2011 Projects

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.

As of September 30, 2013, we have substantially completed these restructuring projects. We do not anticipate substantial expenses related to these restructuring projects to be recognized in the Consolidated Statements of Operations in future periods.

The total expected restructuring costs, the costs recognized in prior periods, the restructuring costs recognized during the nine months ended September 30, 2013, and the remaining expected restructuring costs as of September 30, 2013 are as follows:



	Total Expected Costs at September 30, 2013		Costs Recognized in Prior Periods		Costs Recognized During the Nine Months Ended September 30, 2013		Remaining Costs to be Recognized at September 30, 2013
	(in thousands)
Employee severance costs	$	46,850	$	44,196	$	2,654	$	—
Asset impairments	20,332		20,305		27		—
Other restructuring costs	6,963		5,246		1,717		—
Total	$	74,145	$	69,747	$	4,398	$	—

Segments:
Energy	$	53,385	$	53,190	$	195	$	—
Water	15,675		14,556		1,119		—
Corporate unallocated	5,085		2,001		3,084		—
Total	$	74,145	$	69,747	$	4,398	$	—

2013 Projects

On September 10, 2013, our management approved new projects to restructure our operations to improve profitability and increase efficiencies. These new restructuring projects will reduce headcount and close or consolidate several manufacturing and office facilities. Overall, we expect to reduce our work force by approximately 9%.

We began implementing these projects in the third quarter of 2013, and we expect to substantially complete these projects by June 30, 2014. Certain aspects of the projects are subject to a variety of labor and employment laws, rules, and regulations, which could result in a delay in implementing the projects at some locations.

The total expected restructuring costs, the restructuring costs recognized during the nine months ended September 30, 2013, and the remaining expected restructuring costs as of September 30, 2013 are as follows:



	Total Expected Costs at September 30, 2013		Costs Recognized During the Nine Months Ended September 30, 2013		Remaining Costs to be Recognized at September 30, 2013
	(in thousands)
Employee severance costs	$	28,151	$	28,151	$	—
Asset impairments	250		—		250
Other restructuring costs	700		228		472
Total	$	29,101	$	28,379	$	722

Segments:
Energy	$	24,863	$	24,243	$	620
Water	2,395		2,337		58
Corporate unallocated	1,843		1,799		44
Total	$	29,101	$	28,379	$	722

The following table summarizes the activity within the restructuring related balance sheet accounts during the nine months ended September 30, 2013:



	Accrued Employee Severance			Asset Impairments & Net Loss on Sale or Disposal			Other Accrued Costs			Total
	(in thousands)
Beginning balance, January 1, 2013	$	14,498		$	—		$	3,216		$	17,714
Costs incurred and charged to expense	30,805			27			1,945			32,777
Cash payments	(6,783		)	—			(1,668		)	(8,451		)
Non-cash items	—			(27		)	—			(27		)
Effect of change in exchange rates	195			—			(31		)	164
Ending balance, September 30, 2013	$	38,715		$	—		$	3,462		$	42,177

Other restructuring costs include expenses to exit the facilities, such as costs to relocate inventory and equipment, 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 current portions of the restructuring related liability balances were $38.4 million and $13.2 million as of September 30, 2013 and December 31, 2012, respectively. The current portion of the liability is classified within "Other current liabilities" on the Consolidated Balance Sheets. The long-term portions of the restructuring related liability balances were $3.8 million and $4.5 million as of September 30, 2013 and December 31, 2012, respectively. The long-term portion of the restructuring liability is classified within "Other long-term obligations" on the Consolidated Balance Sheets.

Asset impairments are determined at the asset group level. Assets held for sale are classified within other current assets and are reported at the lower of the carrying amount or the fair value, less costs to sell, and are no longer depreciated or amortized.

The following table includes assets that were measured at fair value on a nonrecurring basis as of September 30, 2013 and December 31, 2012, and the related losses recognized during the period:



	Net Carrying Value		Fair Value Measurement (Level 3)		Total Loss Recognized in Period
	(in thousands)
September 30, 2013
Long-lived assets held for sale	$	—	$	—	$	—

December 31, 2012
Long-lived assets held for sale	$	3,184	$	3,184	$	2

The fair values of the disposal groups included in long-lived assets held for sale were determined based on the estimated proceeds from their expected sales, net of estimated selling costs. Long-lived assets held for sale at December 31, 2012 consist of one asset group that includes land, a building, and building improvements.

Revenues and net operating income from the activities we have exited or will exit under the restructuring plan are not material to our operating segments or consolidated results.