Impairment Charges

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Pretax impact of impairment charges is summarized in the following table:



	Year Ended
	2019		2018				2017
	Other Long-Lived Asset Impairments		Other Long-Lived Asset Impairments		Goodwill Impairment		Other Long-Lived Asset Impairments		Total Impairments
Residential Products	$	1.1	$	—	$	—	$	—	$	—
Industrial Products	—		.3		1.3		3.6		4.9
Furniture Products	6.7		5.1		—		—		—
Total impairment charges	$	7.8	$	5.4	$	1.3	$	3.6	$	4.9

Other Long-Lived Assets

As discussed in Note A, we test other long-lived assets for recoverability at year end and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Fair value and the resulting impairment charges noted above were based primarily upon offers from potential buyers or third party estimates of fair value less selling costs.

In 2018, management approved the 2018 Restructuring Plan, as discussed in Note F, which resulted in impairment charges of $7.6 and $5.1 in 2019 and 2018, respectively.

In 2017, impairments were primarily associated with selected operations that reached held for sale status, as discussed below.

Goodwill

As discussed in Note A, goodwill is required to be tested for impairment at the reporting unit level (the business groups that are one level below the operating segments) as triggering events may occur, or at least annually. We perform our annual goodwill impairment review in the second quarter of each year. We concluded that the 2018 Restructuring Plan (as discussed in Note F) was not a triggering event and believe that it is more likely than not that the fair values for the reporting units associated with this Plan exceed their carrying values. If actual results differ materially from estimates used in these calculations, we could incur future impairment charges.

2019 Goodwill Impairment Review

The 2019 annual goodwill impairment review indicated no goodwill impairments.

For 2019, we tested goodwill for impairment in all reporting units using a quantitative approach. The fair values of our reporting units in relation to their respective carrying values and significant assumptions used are presented in the table below:



Fair Value over Carrying Value divided by Carrying Value	December 31, 2019 Goodwill Value		10-year Compound Annual Growth Rate Range for Sales	Terminal Values Long-term Growth Rate for Debt-Free Cash Flow		Discount Rate Ranges
Less than 50% ¹	$	59.4	1.4% - 5.8%	3.0	%	8.0% - 9.5%
50% - 100% ²	722.9		5.0%	3.0	%	8.5%
101% - 300%	400.9		1.3% - 5.5%	3.0	%	7.5% - 8.0%
301% - 600%	223.1		.2% - 11.1%	3.0	%	8.5%
	$	1,406.3	.2% - 11.1%	3.0	%	7.5% - 9.5%

¹This category includes two reporting units:


•	The fair value of our Machinery reporting unit exceeded its carrying value by 12%. This unit has $33.4 of goodwill at December 31, 2019.


•	The fair value of our Hydraulic Cylinders reporting unit exceeded its carrying value by 29%. This reporting unit was acquired in the first quarter of 2018 and has $26.0 of goodwill at December 31, 2019.

²This category includes one reporting unit. The fair value of our Bedding reporting unit exceeded its carrying value by 50% at December 31, 2019 as compared to 198% at December 31, 2018. This decrease was due to the January 2019 ECS acquisition (as discussed in Note S). At our testing date, the carrying value approximates fair value for the ECS business.

2018 Goodwill Impairment Review

The 2018 annual goodwill impairment review indicated no goodwill impairments.

For 2018, we tested goodwill for impairment in all reporting units using a quantitative approach. The fair values of our reporting units in relation to their respective carrying values and significant assumptions used are presented in the table below:



Fair Value over Carrying Value divided by Carrying Value	December 31, 2018 Goodwill Value		10-year Compound Annual Growth Rate Range for Sales	Terminal Values Long-term Growth Rate for Debt-Free Cash Flow		Discount Rate Ranges
Less than 100% ¹	$	180.7	4.7% - 5.2%	3.0	%	9.0% - 9.5%
101% - 300%	502.5		1.8% - 5.0%	3.0	%	8.5% - 10.0%
301% - 600%	150.6		5.7% - 12.4%	3.0	%	9.0% - 10.0%
	$	833.8	1.8% - 12.4%	3.0	%	8.5% - 10.0%

¹All reporting units in this category exceeded 90%, except for the Hydraulic Cylinders reporting unit (acquired in 2018), to which carrying value approximated fair value.

2017 Goodwill Impairment Review

The 2017 annual goodwill impairment review indicated no goodwill impairments.

We performed a Step Zero Analysis for our annual goodwill review for each of our reporting units and we considered i) the excess in fair value of the reporting unit over its carrying amount from the most recent quantitative analysis, ii) macroeconomic conditions, iii) industry and market trends, and iv) overall financial performance. We concluded that it was more likely than not that the fair value of all reporting units, except for two, exceeded their carrying values. Because sales and profits for two reporting units were less than expected, we performed a quantitative analysis for our Work Furniture and Aerospace reporting units under the two-step model. These reporting units were determined to have fair

values in excess of their carrying amounts of at least 75%. Goodwill associated with these two reporting units was $157.4 at December 31, 2017.

During the third quarter of 2017, two Drawn Wire operations within the Industrial Products segment reached held for sale status. Because fair value less costs to sell had fallen below the carrying amount, we fully impaired $1.3 of goodwill and $3.3 of other long-lived assets. During 2018, one operation was closed. The other operation continues to operate and no longer meets the held for sale criteria.