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. 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 March 31, 2013 were $75.5 million, which is a decrease of approximately $2.4 million from the total expected costs at December 31, 2012. The decrease in expected costs is a result of a majority of the restructuring projects nearing completion with lower asset impairment, exit, and severance costs incurred than had been initially estimated.

The total expected restructuring costs, the costs recognized in prior periods, the restructuring costs recognized during the three months ended March 31, 2013, and the remaining expected restructuring costs as of March 31, 2013 are as follows:



	Total Expected Costs at March 31, 2013		Costs Recognized in Prior Periods		Costs Recognized During the Three Months Ended March 31, 2013			Remaining Costs to be Recognized at March 31, 2013
	(in thousands)
Employee severance costs	$	47,658	$	44,196	$	84		$	3,378
Asset impairments	20,331		20,305		26			—
Other restructuring costs	7,480		5,246		903			1,331
Total	$	75,469	$	69,747	$	1,013		$	4,709

Segments:
Energy	$	52,930	$	53,190	$	(1,150	)	$	890
Water	16,042		14,556		609			877
Corporate unallocated	6,497		2,001		1,554			2,942
Total	$	75,469	$	69,747	$	1,013		$	4,709

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 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 three months ended March 31, 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	84			26			903			1,013
Cash payments	(2,190		)	—			(432		)	(2,622		)
Non-cash items	—			(26		)	—			(26		)
Effect of change in exchange rates	(472		)	—			(8		)	(480		)
Ending balance, March 31, 2013	$	11,920		$	—		$	3,679		$	15,599

The current portions of the restructuring related liability balances were $11.9 million and $13.2 million as of March 31, 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 related balances were $3.7 million and $4.5 million as of March 31, 2013 and December 31, 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 assets that were measured at fair value on a nonrecurring basis as of March 31, 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)
March 31, 2013
Long-lived assets held for sale	$	3,064	$	3,064	$	—

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 March 31, 2013 and 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.