Restructuring

2013 Projects

On September 10, 2013, our management approved new projects to restructure our operations to improve profitability and increase efficiencies. These 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.

During the three months ended March 31, 2014, the total expected costs increased $5.8 million from our December 31, 2013 expected costs. This increase was primarily a result of additional workforce reductions from the planned consolidation of certain corporate functions, partially offset by lower than expected severance costs in the Electricity and Gas segments.

The total expected restructuring costs, the restructuring costs recognized during the three months ended March 31, 2014, and the remaining expected restructuring costs as of March 31, 2014 were as follows:



	Total Expected Costs at March 31, 2014		Costs Recognized in Prior Periods		Costs Recognized During the Three Months Ended March 31, 2014			Remaining Costs to be Recognized at March 31, 2014
	(in thousands)
Employee severance costs	$	33,381	$	29,186	$	4,195		$	—
Asset impairments	1,232		1,232		—			—
Other restructuring costs	2,510		681		1,329			500
Total	$	37,123	$	31,099	$	5,524		$	500

Segments:
Electricity	$	23,526	$	24,056	$	(530	)	$	—
Gas	4,066		4,369		(303		)	—
Water	2,514		1,957		557			—
Corporate unallocated	7,017		717		5,800			500
Total	$	37,123	$	31,099	$	5,524		$	500

The following table summarizes the activity within the restructuring related balance sheet accounts during the three months ended March 31, 2014:



	Accrued Employee Severance			Asset Impairments & Net Loss on Sale or Disposal		Other Accrued Costs			Total
	(in thousands)
Beginning balance, January 1, 2014	$	32,709		$	—	$	3,632		$	36,341
Costs incurred and charged to expense	4,195			—		1,329			5,524
Cash payments	(3,675		)	—		(88		)	(3,763		)
Non-cash items	—			—		—			—
Effect of change in exchange rates	(124		)	—		9			(115		)
Ending balance, March 31, 2014	$	33,105		$	—	$	4,882		$	37,987

Other restructuring costs include expenses to exit facilities, such as costs to relocate inventory and equipment and contract cancellation costs, 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 $32.0 million and $30.3 million as of March 31, 2014 and December 31, 2013, 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 $6.0 million as of March 31, 2014 and December 31, 2013. 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. 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.

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, resulting in approximately $74.1 million of restructuring expense, which was recognized from the fourth quarter of 2011 through the second quarter of 2013.