Restructuring

2014 Projects

In November 2014, our management approved restructuring projects (2014 Projects) to restructure our Electricity business and related general and administrative activities, along with certain Gas and Water activities, to improve operational efficiencies and reduce expenses. The 2014 Projects include consolidation of certain facilities and reduction of our global workforce. The improved structure will position us to meet our long-term profitability goals by better aligning global operations with markets where we can serve our customers profitably.

We began implementing these projects in the fourth quarter of 2014, and we expect to substantially complete these projects by the end of 2016. During the six months ended June 30, 2015, the total expected restructuring costs decreased by approximately $11.3 million. This includes $9.7 million in restructuring expense release, recognized in the six months ended June 30, 2015, resulting from employees, originally identified to be terminated, voluntarily resigning or filling vacant positions in different departments or locations, as well as the results of employee negotiations and the need to keep additional employees to meet revised forecasted demand on certain projects. The remainder of the change in expected costs results from the translation impact of foreign exchange rates. 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 completing the projects at some locations.

The total expected restructuring costs, the restructuring costs recognized during the six months ended June 30, 2015, and the remaining expected restructuring costs as of June 30, 2015 were as follows:



	Total Expected Costs at June 30, 2015		Costs Recognized in Prior Periods		Costs Recognized During the Six Months Ended June 30, 2015			Remaining Costs to be Recognized at June 30, 2015
	(in thousands)
Employee severance costs	$	35,788	$	47,447	$	(11,659	)	$	—
Asset impairments	8,219		7,952		267			—
Other restructuring costs	11,343		401		1,711			9,231
Total	$	55,350	$	55,800	$	(9,681	)	$	9,231

Segments:
Electricity	$	32,440	$	29,660	$	(5,830	)	$	8,610
Gas	11,727		12,185		(684		)	226
Water	1,405		1,106		273			26
Corporate unallocated	9,778		12,849		(3,440		)	369
Total	$	55,350	$	55,800	$	(9,681	)	$	9,231

The following table summarizes the activity within the restructuring related balance sheet accounts during the six months ended June 30, 2015:



	Accrued Employee Severance			Asset Impairments & Net Loss on Sale or Disposal			Other Accrued Costs			Total
	(in thousands)
Beginning balance, January 1, 2015	$	59,333		$	—		$	3,526		$	62,859
Costs charged to (released from) expense	(11,659		)	267			1,711			(9,681		)
Cash payments	(6,188		)	—			(1,617		)	(7,805		)
Non-cash items	—			(267		)	—			(267		)
Effect of change in exchange rates	(4,448		)	—			(227		)	(4,675		)
Ending balance, June 30, 2015	$	37,038		$	—		$	3,393		$	40,431

Other restructuring costs include expenses for employee relocation, professional fees associated with employee severance, and costs 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. In addition, our restructuring activities related to the closure of certain facilities resulted in approximately $1.1 million of inventory impairment in 2015. This inventory impairment was recorded in cost of revenues in the Consolidated Statement of Operations.

The current portions of the restructuring related liability balances were $20.6 million and $49.1 million as of June 30, 2015 and December 31, 2014. 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 $19.8 million and $13.8 million as of June 30, 2015 and December 31, 2014. The long-term portion of the restructuring liability is classified within "Other long-term obligations" on the Consolidated Balance Sheets, and includes facility exit costs and severance accruals. The increase in the long-term portions of the restructuring liability is a result of the timing of headcount reductions resulting from negotiations with various works councils. The majority of the long-term liability is expected to be paid in the third quarter of 2016.

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.

2013 Projects

In September 2013, our management approved projects (the 2013 Projects) to restructure our operations to improve profitability and increase efficiencies. We began implementing these projects in the third quarter of 2013, and we expect to substantially complete project activities by the third quarter of 2016 and begin recognizing full savings in 2017. While project activities are expected to continue through September 2016, no further costs are expected to be recognized.

The 2013 Projects resulted in approximately $26.2 million of restructuring expense, which was recognized from the third quarter of 2013 through the fourth quarter of 2014.