Property, Plant and Equipment, net

6 Months Ended

Jun. 30, 2017

Property, Plant and Equipment [Abstract]

The Company evaluates long-lived assets for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. During the second quarter of 2017, an updated strategic plan was completed for Audio segment product lines. The updated strategic plan identified a decline of future demand for a specific product line, which indicated projected future cash flows may not be sufficient to recover the carrying value of the associated unpatented technologies and property, plant and equipment assets. The utilization of undiscounted future cash flows was used to determine recoverability of the long-lived assets. The fair value of the intangibles was determined through the use of discounted cash flows, and the fair value of fixed assets was determined using their liquidation value. As a result of this analysis, the Company concluded that the fair values of these long-lived assets were less than their respective carrying values as of June 30, 2017. The Company recorded total impairment charges of $21.3 million, of which $5.1 million is related to fixed assets and $16.2 million is related to intangible assets. The Company recorded $1.4 million of the charges within Impairment charges in Gross profit and recorded $19.9 million within the Impairment charges line item in Operating expenses within Knowles' Consolidated Statements of Earnings.

Property, Plant and Equipment, net

The following table details the major components of property, plant and equipment, net:



(in millions)	June 30, 2017			December 31, 2016
Land	$	9.2		$	9.2
Buildings and improvements	120.9			112.3
Machinery, equipment and other	498.3			464.8
Subtotal	628.4			586.3
Less accumulated depreciation	(436.9		)	(400.1		)
Total	$	191.5		$	186.2

During the three months ended June 30, 2017, the Company recorded a $5.1 million impairment charge on fixed assets. See Note 3. Impairments for more information.