12. SUBSEQUENT EVENT

On October 6, 2014, the Company’s board of directors approved the 2014 Restructuring Plan and delegated authority to the Company’s management to determine final actions with respect to 2014 Restructuring Plan. The 2014 Restructuring Plan is intended to exit low-return businesses and reduce the size and cost of the Company’s overhead structure to improve gross margins and profitability in the long term.

The 2014 Restructuring Plan includes exiting certain unprofitable international locations for the Company’s Water and Wastewater business, consolidating the Company’s worldwide Commercial and Structural business with the Company’s global Water and Wastewater business and eliminating certain idle facilities in the Company’s Bayou Louisiana coatings operations. Effective in the fourth quarter of 2014, the Company will realign its existing three reportable segments into three new reportable segments: Infrastructure Solutions; Corrosion Protection; and Energy Services. The reportable segments will be the same as the Company’s operating segments, which correspond to its management organizational structure. Each new reportable segment will have a operating president who will report to the CODM. The operating results and financial information reported by each of the new segments will be evaluated separately, regularly reviewed and used by the CODM to evaluate segment performance, allocate resources and determine management incentive compensation. All future SEC filings will reflect these new reportable segments.

As part of the 2014 Restructuring Plan, the Company recognized the following non-cash, pre-tax charges totaling $40.0 million for the quarter and nine months ended September 30, 2014 (in thousands):



	Fixed Asset Impairment		Definite-lived Intangible Asset Impairment		Non-Cash Restructuring Charges		Total Restructuring Charges
Cost of revenues	$	11,834	$	—	$	3,106	$	14,940

Operating expenses	36		—		14,081		14,117

Definite-lived intangible asset impairment	—		10,896		—		10,896

	$	11,870	$	10,896	$	17,187	$	39,953

The non-cash, pre-tax charge of $40.0 million includes $22.2 million related to the impairment of certain long-lived assets and definite-lived intangible assets for Bayou’s coating operations in Louisiana, which is reported in the Energy and Mining reportable segment, and $17.8 million related to inventory obsolescence, impairment of certain long-lived assets, bad debt expense, write-off of certain other current assets and a legal accrual related to disputed work performed for the Company’s European and Asia-Pacific operations, which are reported in the Water and Wastewater reportable segment.

Included in the 2014 Restructuring Plan is a reduction of the Company’s overhead expenses and related elimination of approximately 170 full-time positions out of approximately 6,000 employees worldwide. The Company expects pre-tax cash charges of $15 million to $18 million to be incurred from the fourth quarter of 2014 through the third quarter of 2015 for related employee severance, extension of benefits, employment assistance programs and other costs associated with the restructuring. Additional non-cash charges related to the various restructured operations could potentially be recorded between the fourth quarter of 2014 and the third quarter of 2015.