Restructuring Activities

12 Months Ended

Dec. 31, 2018

Restructuring and Related Activities [Abstract]

Restructuring and Related Activities Disclosure [Text Block]

10. Restructuring Activities

The Company initiated various restructuring programs and incurred severance and other restructuring costs by segment as follows:

	Years Ended December 31,
	2018		2017		2016
Engineered Systems	$	21,040	$	12,066	$	4,097
Fluids	25,744		16,348		19,143
Refrigeration & Food Equipment	3,475		14,070		928
Corporate	8,244		9,776		837
Total	$	58,503	$	52,260	$	25,005
These amounts are classified in the Consolidated Statements of Earnings as follows:
Cost of goods and services	$	16,921	$	16,658	$	5,335
Selling, general and administrative expenses	41,582		35,602		19,670
Total	$	58,503	$	52,260	$	25,005

Total restructuring charges of $58,503 incurred during the year ended December 31, 2018, were a result of restructuring programs initiated in 2017 and 2018. Restructuring expense includes $56,138 related to two significant rightsizing programs for the year ended December 31, 2018. Rightsizing during the first half of the year were largely initiated in the fourth quarter of 2017 and designed to better align the Company's cost structure in preparation for the Apergy separation and included targeted facility consolidations, headcount reductions and other measures to further optimize operations. The rightsizing actions taken due to the Apergy separation are substantially complete. Rightsizing in the second half of 2018 were comprised primarily of broad-based selling, general and administrative expense reduction and footprint consolidation initiatives designed to increase operating margin, enhance operations and position the Company for sustained growth and investment. The Company expects to incur total charges of approximately $42 million related to selling, general and administrative expense reduction initiatives, $37 million of which was incurred during the year ended December 31, 2018 and approximately $5 million of which the Company expects to incur in 2019. The Company expects to incur total restructuring charges of approximately $15 million related to the footprint consolidation initiatives, $5 million of which was incurred during the year ended December 31, 2018 and approximately $10 million of which the Company expects to incur in 2019 and 2020. Additional programs, beyond the scope of the announced programs may be implemented during 2019 with related restructuring charges.

The $58.5 million of restructuring charges incurred during 2018 included the following programs:

•The Engineered Systems segment recorded $21,040 of restructuring charges related to programs across the segment focused on headcount reductions and manufacturing plant consolidation.

•The Fluids segment recorded $25,744 of restructuring charges principally related to headcount reductions and manufacturing plant and facility consolidations, focused on achieving long-term footprint optimization. 

•The Refrigeration & Food Equipment segment recorded $3,475, of restructuring charges primarily due to headcount reductions, product exit and manufacturing plant consolidation. 

•Corporate recorded $8,244 of restructuring charges primarily related to headcount reductions.

Restructuring expenses incurred in 2017 and 2016 also included headcount reduction, targeted facility consolidations at certain businesses and actions taken to optimize the Company's cost structure.

The following table details the Company’s severance and other restructuring accrual activities:

	Severance		Exit			Total
Balance at January 1, 2016	$	9,871	$	2,232		$	12,103
Restructuring charges	19,166		5,839			25,005
Payments	(17,111)		(5,138)			(22,249)
Other, including foreign currency translation	(1,268)		(1,703)		(1)	(2,971)
Balance at December 31, 2016	10,658		1,230			11,888
Restructuring charges	32,228		20,032			52,260
Payments	(16,898)		(5,707)			(22,605)
Other, including foreign currency translation	(1,033)		(9,239)		(1)	(10,272)
Balance at December 31, 2017	24,955		6,316			31,271
Restructuring charges	45,146		13,357			58,503
Payments	(43,287)		(8,713)			(52,000)
Other, including foreign currency translation	(2,530)		(7,080)		(1)	(9,610)
Balance at December 31, 2018	$	24,284	$	3,880		$	28,164

⁽¹⁾ Other activity in exit reserves primarily represents the non-cash write-off of certain long-lived assets and inventory in connection with certain facility closures and product exits.

The restructuring accrual balances at December 31, 2018 primarily reflects restructuring plans initiated during the year, inclusive of rightsizing-related restructuring and ongoing lease commitment obligations for facilities closed in prior periods.