Restructuring and Impairment Charges

9 Months Ended

Dec. 31, 2013

Restructuring and Impairment Charges [Abstract]

Note 7: Restructuring and Impairment Charges

During fiscal 2013, the Company announced its intention to restructure its Europe segment. The Company’s restructuring actions and plans have included exiting certain non-core product lines based on its global product strategy, reducing manufacturing costs, implementing headcount reductions, and disposing of and selling certain underperforming or non-strategic assets. The restructuring activities are designed to align the cost structure of the segment with the segment’s strategic focus on the commercial vehicle, off-highway, and engine product markets, while improving gross margin and return on average capital employed.

Since commencement of the Europe segment restructuring program, the Company has recorded $26.1 million of asset impairment charges, $24.7 million of employee severance costs, primarily related to headcount reductions at two manufacturing facilities and the segment headquarters, and $7.1 million of repositioning expenses, primarily related to accelerated depreciation of production equipment that is no longer used because of manufacturing process changes and equipment transfer costs.

Restructuring and repositioning expenses related to the Europe segment restructuring program were as follows:

	Three months ended December 31,				Nine months ended December 31,
	2013		2012		2013		2012

Employee severance and related benefits	$	9.0	$	1.0	$	9.8	$	6.6
Accelerated depreciation		-		-		4.3		-
Other repositioning costs		0.4		0.4		0.7		0.7
Total restructuring and repositioning expenses	$	9.4	$	1.4	$	14.8	$	7.3

For the three and nine months ended December 31, 2013, $9.4 million and $10.5 million, respectively, of restructuring and repositioning costs were recorded as restructuring expenses in the consolidated statement of operations. For the nine months ended December 31, 2013, $4.3 million of restructuring and repositioning costs were recorded within cost of sales. For the three and nine months ended December 31, 2012, all restructuring and other repositioning costs were recorded in the consolidated statement of operations as restructuring expenses.

The Company accrues severance in accordance with its written plans, procedures, and relevant statutory requirements. Changes in accrued severance related to the Europe segment restructuring program were as follows:

	Three months ended December 31,
	2013			2012
Balance, September 30	$	10.7		$	4.7
Additions		9.0			1.0
Payments		(1.5	)		(0.9	)
Effect of exchange rate changes		0.3			0.2
Balance, December 31	$	18.5		$	5.0

	Nine months ended December 31,
		2013			2012
Balance, March 31	$	11.6		$	-
Additions		9.8			6.6
Payments		(3.7	)		(1.9	)
Effect of exchange rate changes		0.8			0.3
Balance, December 31	$	18.5		$	5.0

During the three months ended December 31, 2013, the Company recorded asset impairment charges of $2.0 million, primarily related to a manufacturing facility in Germany that the Company plans to close. During the three and nine months ended December 31, 2012, the Company recorded asset impairment charges of $8.3 million and $25.1 million, respectively, to reduce the carrying values of certain facilities held for sale in the Europe and North America segments to their estimated fair values, less costs to sell.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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