Charges Related to Business Realignment

12 Months Ended

Jun. 30, 2017

Restructuring and Related Activities [Abstract]

To structure its businesses in light of current and anticipated customer demand, the Company incurred business realignment charges in 2017, 2016 and 2015.

Business realignment charges presented in the Business Segment Information are as follows:



	2017		2016		2015
Diversified Industrial	$	52,939	$	91,404	$	30,882
Aerospace Systems	2,674		3,629		967
Corporate administration	—		2,215		458
Other expense	784		116		2,399

Work force reductions related to the business realignment charges in the Business Segment Information are as follows:



	2017	2016	2015
Diversified Industrial	1,102	3,515	668
Aerospace Systems	89	81	21
Corporate administration	—	53	18

The charges primarily consist of severance costs related to actions taken under the Company's simplification initiative aimed at reducing organizational and process complexity, as well as plant closures, with the majority of charges incurred in Europe and North America. In connection with a plant closure during 2016, the Company recognized an expense associated with enhanced retirement benefits (refer to Note 10 for further discussion). The Company believes the realignment actions taken will positively impact future results of operations, but will not have a material effect on liquidity and sources and uses of capital.

The business realignment charges are presented in the Consolidated Statement of Income as follows:



	2017		2016		2015
Cost of sales	$	35,932	$	76,197	$	19,419
Selling, general and administrative expenses	19,681		21,051		12,888
(Gain) loss on disposal of assets	784		116		2,399

As of June 30, 2017, approximately $23 million in severance payments have been made relating to charges incurred during 2017, the remainder of which are expected to be paid by June 30, 2018. Severance payments relating to prior-year actions are being made as required. Remaining severance payments related to current-year and prior-year actions of approximately $33 million are primarily reflected within the other accrued liabilities caption in the Consolidated Balance Sheet. Additional charges may be recognized in future periods related to the realignment actions described above, the timing and amount of which are not known at this time.