5. Restructuring Charges

During 2013 and 2012, we engaged in restructuring programs designed to reduce our cost structure and improve productivity. These initiatives consisted of realigning operations, reducing employee counts, rationalizing facilities, changing manufacturing sourcing, eliminating certain products, and other actions designed to reduce our cost structure and improve productivity. We also incurred inventory and long-term asset impairment charges in connection with our 2013 restructuring activities for assets sold or made obsolete. Our restructuring program activities and the balances of our accrued restructuring liabilities at December 31, 2014 and 2013 are described in greater detail below.

2013 Business Realignment Charges – During the fourth quarter 2013, we initiated a business realignment program, taking actions to realign our operations to gain cost and performance efficiencies. These actions, which primarily involved our LED lighting operations in our Energy Efficiency segment, consisted of the sale of manufacturing equipment and parts inventory, reorganization and consolidation of the leadership teams, closing facilities and re-sourcing manufacturing to low-cost manufacturers, eliminating certain products, and the reduction of our overhead cost structure by eliminating duplicative facilities and personnel involved in production, sourcing, warehousing and distribution activities. As a result of these 2013 business realignment initiatives, we incurred pre-tax restructuring charges totaling $0.7 million and $4.9 million during the years ended December 31, 2014 and 2013, respectively. These charges consisted of loss on the disposal of manufacturing equipment and parts inventory, severance and related costs from the elimination of employee positions, inventory write offs, lease abandonments, and long-lived asset impairment charges. The inventory write-offs in the amount of $0.3 million and $3.7 million during the years ended December 31, 2014 and 2013, respectively, are included in cost of sales. The expenses associated with the remaining 2013 business realignment charges total $0.4 million and $1.2 million during the years ended December 31, 2014 and 2013, respectively, and are included in restructuring charges as a component of operating expenses. We do not expect to incur any additional charges associated with the 2013 business realignment initiatives after December 31, 2014. The following table summarizes the 2013 business realignment plan activities and the balance of our accrued liabilities at and for the years ended December 31, 2014 and 2013:


			Inventory		Leasehold
	Employee		Writedowns and		Termination and
	Termination		Long Term Asset		Other Facility
2013 Business Realignment Charges:	Costs		Disposals		Exit Costs		Total
Accrued 2013 business realignment
charges, January 1, 2013	$	-	$	-	$	-	$	-
Costs incurred and charged to cost of sales		-		3,667		-		3,667
Costs incurred and charged
to restructuring expense		789		305		110		1,204
Costs paid or otherwise settled		(108)		(3,972)		-		(4,080)
Accrued 2013 business realignment
charges, December 31, 2013		681		-		110		791
Costs incurred and charged to cost of sales		-		312		-		312
Costs incurred and charged
to restructuring expense		162		116		149		427
Costs paid or otherwise settled		(729)		(428)		(259)		(1,416)
Accrued 2013 business realignment
charges, December 31, 2014	$	114	$	-	$	-	$	114

2012 Cost Reduction Program Charges – During the third quarter 2012, we initiated a cost reduction program, taking actions to restructure and streamline our organization to reduce our costs, and to set the framework to improve the scalability of our cost structure as we grow revenues. The goal of this cost reduction program was to reduce expenses as a percentage of revenues in future periods thereby improving our operating margin. As a result of these cost reduction initiatives, we incurred pre-tax restructuring and cost reduction charges of $2.7 million during the year ended December 31, 2012, consisting primarily of severance and related costs from the elimination of employee positions and costs associated with revisions to certain employment arrangements. A total of $2.2 million of the restructuring and cost reduction charges were incurred primarily at our Distributed Generation and Energy Efficiency segments, while the remaining $0.5 million of restructuring and cost reduction charges were incurred at the corporate level. All of the 2012 cost reduction program charges were complete at December 31, 2012. The following table summarizes the 2012 cost reduction program activities and the balance of the 2012 cost reduction program liabilities at and for the years ended December 31, 2014, 2013 and 2012:


	Employee		Employment
	Termination		Arrangement
2012 Cost Reduction Program Charges:	Costs		Revisions		Total
Accrued 2012 cost reduction program
charges, January 1, 2012	$	-	$	-	$	-
Costs incurred and charged to expense		1,250		1,425		2,675
Costs paid or otherwise settled		(541)		(1,425)		(1,966)
Accrued 2012 cost reduction program
charges, December 31, 2012		709		-		709
Costs incurred and charged to expense		-		-		-
Costs paid or otherwise settled		(535)		-		(535)
Accrued 2012 cost reduction program
charges, December 31, 2013		174		-		174
Costs incurred and charged to expense		-		-		-
Costs paid or otherwise settled		(174)		-		(174)
Accrued 2012 cost reduction program
charges, December 31, 2014	$	-	$	-	$	-

The balances of accrued restructuring charges at December 31, 2014 and 2013 are included in current liabilities in our consolidated balance sheet. We expect the majority of the balance of our accrued restructuring charges at December 31, 2014 will be paid or otherwise settled during 2015.