Restructuring Charges

12 Months Ended

Jul. 31, 2016

The Company has taken numerous actions to align its operating and manufacturing cost structure with current and projected customer and end-market demand.

Fiscal 2016 Actions

In the first quarter of fiscal 2016, the Company took actions to further align its operating and manufacturing cost structure with current and projected customer and end-market demand. These actions consisted of one-time termination benefits from restructuring the salaried and production workforce in all geographic regions and in both reportable segments. Total charges related to this action were initially expected to be $7.2 million. These actions have been completed and resulted in a total pre-tax charge of $6.2 million during the year ended July 31, 2016.

In the third quarter of fiscal 2016, the Company took additional actions consistent with the purpose of the first quarter actions discussed above. Total charges related to this action were initially expected to be $5.5 million. These actions have been completed and resulted in a total pre-tax charge of $4.1 million during the year ended July 31, 2016.

In the fourth quarter of fiscal 2016, the Company took additional actions including the closure of the Company's Hong Kong location. These actions, consisting of lease termination costs and one-time termination benefits have been completed and resulted in a total pre-tax charge of $3.5 million during the year ended July 31, 2016, which was in line with expectations.

Fiscal 2015 Actions

In fiscal 2015, actions taken by the Company included: rebalancing and reducing the current salaried and production workforce globally, closing a production facility in Grinnell, Iowa and the write-off of a partially completed facility in Xuzhou, China. For these actions, the Company recorded pre-tax restructuring and impairment charges of $13.0 million for the year ended July 31, 2015. In addition, during the year ended July 31, 2015, the Company recorded a $3.9 million charge related to a lump-sum settlement of its U.S. Pension Plan. The Company recorded an additional $2.3 million related to these actions during the year ended July 31, 2016.

Restructuring charges for the above actions are summarized as follows (in millions):



	Year Ended July 31,
	2016		2015
Fiscal 2016 fourth quarter actions	$	3.5	$	—
Fiscal 2016 third quarter actions	4.1		—
Fiscal 2016 first quarter actions	6.2		—
Fiscal 2015 actions (1)	2.3		16.9
Total	$	16.1	$	16.9

(1)Expenses span both fiscal years due to shutdown of Grinnell, Iowa facility.

Restructuring charges for the above actions by segment are summarized as follows (in millions):



	Year Ended July 31,
	2016		2015
Engine Products segment	$	8.8	$	9.2
Industrial Products segment	7.3		3.8
Corporate & Unallocated	—		3.9
Total	$	16.1	$	16.9

Restructuring charges are summarized in the table below by statement of earnings line item (in millions):



	Year Ended July 31,
	2016		2015
Cost of sales	$	5.7	$	8.4
Selling, general and administrative	10.4		8.5
Total	$	16.1	$	16.9

As the restructuring charges were mainly incurred and paid in the same period, there was no material liability balance as of July 31, 2016 or 2015.