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 June 30, 2013, we had substantially completed these restructuring projects. We do not anticipate further 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 year ended December 31, 2013, and the remaining expected restructuring costs as of December 31, 2013 are as follows:



	Total Expected Costs at December 31, 2013		Costs Recognized in Prior Periods		Costs Recognized During the Year Ended December 31, 2013			Remaining Costs to be Recognized at December 31, 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:
Electricity	$	28,805	$	27,712	$	1,093		$	—
Gas	24,580		25,478		(898		)	—
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 December 31, 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 as of December 31, 2013 were approximately $31.3 million, which is an increase of approximately $2.2 million from the total expected costs at September 30, 2013. The increase was the result of asset impairments recognized at a manufacturing site to be closed and a small increase in the total headcount reduction.

The total expected restructuring costs, the restructuring costs recognized during the year ended December 31, 2013, and the remaining expected restructuring costs as of December 31, 2013 are as follows:



	Total Expected Costs at December 31, 2013		Costs Recognized During the Year Ended December 31, 2013		Remaining Costs to be Recognized at December 31, 2013
	(in thousands)
Employee severance costs	$	29,186	$	29,186	$	—
Asset impairments	1,232		1,232		—
Other restructuring costs	931		681		250
Total	$	31,349	$	31,099	$	250

Segments:
Electricity	$	24,250	$	24,056	$	194
Gas	4,404		4,369		35
Water	1,973		1,957		16
Corporate unallocated	722		717		5
Total	$	31,349	$	31,099	$	250

In addition, the 2013 Projects resulted in approximately $850,000 of inventory obsolescence that was recorded in cost of revenues. This obsolescence expense resulted from the decision to stop manufacturing certain products in Latin America for which raw materials remained on hand.

The following table summarizes the activity within the restructuring related balance sheet accounts during the year ended December 31, 2013:



	Accrued Employee Severance			Asset Impairments & Net (Gain) 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	31,840			1,259			2,398			35,497
Cash payments	(14,511		)	—			(1,972		)	(16,483		)
Non-cash items	—			(1,259		)	—			(1,259		)
Effect of change in exchange rates	882			—			(10		)	872
Ending balance, December 31, 2013	$	32,709		$	—		$	3,632		$	36,341

Other restructuring costs include expenses to exit the facilities once the operations in those facilities have ceased. Costs associated with restructuring activities are generally presented in the Consolidated Statements of Operations as restructuring, 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 $30.3 million and $13.2 million as of December 31, 2013 and 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 related balances were $6.0 million and $4.5 million as of December 31, 2013 and 2012, respectively. The long term portion of the restructuring liability is classified within "Other long-term liabilities" 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 long-lived assets held for sale and long-lived assets held and used that were measured at fair value on a nonrecurring basis as of December 31, 2013 and 2012, and the related recognized losses for the years ended December 31, 2013 and 2012:



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

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, which was sold in 2013.

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.