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Restructuring Charges
 6 Months Ended
Jun. 30, 2019
Restructuring and Related Activities [Abstract]  
Restructuring Charges Restructuring Charges
The Company is implementing certain principles of Precision Scheduled Railroading (“PSR”), which focus on providing reliable customer service, facilitating growth, improving asset utilization, and improving the cost profile of the Company. As a result of the PSR initiatives, management approved a restructuring plan during the first quarter of 2019, which resulted in restructuring charges of $67.5 million. Management approved a second restructuring plan during the second quarter of 2019, which coincided with the preparation of the Company’s quarterly financial statements, and recognized restructuring charges of $51.0 million in the consolidated statements of income.
Expenses related to these initiatives are shown in the following table (in millions):
 
 
2019
 
 
First Quarter
 
Second Quarter
 
Year-to-Date
Restructuring charges:
 
 
 
 
 
 
Asset impairments
 
$
62.5

 
$
50.7

 
$
113.2

Workforce reduction
 
3.2

 
—

 
3.2

Contract restructuring
 
1.8

 
0.3

 
2.1

Total restructuring charges
 
$
67.5

 
$
51.0

 
$
118.5


Asset Impairments. The Company committed to plans to dispose of certain locomotives and rail cars to increase operational fluidity, reduce maintenance expense, and improve labor and fuel efficiency. Accordingly, the Company performed an impairment analysis to adjust the carrying amount of the assets to the lower of its depreciated book value or its estimated fair value, less costs to dispose, and stopped recognizing depreciation expense. During the second quarter of 2019, the Company sold 48 of 97 locomotives
and 243 of 1,125 rail cars identified under the plans. The carrying amount of the remaining assets held for sale of $10.4 million is classified as an other current assets within the consolidated balance sheet at June 30, 2019.
Workforce Reduction. The Company recognized severance costs associated with a planned workforce reduction as a result of a lower active locomotive fleet and rail cars online.
Contract Restructuring. The Company terminated certain third party vendor contracts in order to drive operational efficiencies, which resulted in contract termination penalties.