Charges Related to Business Realignment and Acquisition Integration

12 Months Ended

Jun. 30, 2020

Restructuring and Related Activities [Abstract]

The Company incurred business realignment and acquisition integration charges in 2020, 2019 and 2018. The business realignment 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. During 2020, business realignment charges also include actions taken to address the impact of COVID-19 on our business, especially within the Aerospace Systems Segment. The 2019 and 2018 acquisition integration charges relate to the 2017 acquisition of CLARCOR, Inc. ("Clarcor") and primarily consist of severance costs and expenses related to plant closures and relocations. A majority of the business realignment charges were incurred in North America and Europe. We believe the realignment actions will positively impact future results of operations but will not have a material effect on liquidity and sources and uses of capital.

Business realignment and Clarcor acquisition integration charges presented in the Business Segment Information are as follows:



	2020		2019		2018
Diversified Industrial	$	52,288	$	27,830	$	78,558
Aerospace Systems	22,101		—		3,428
Corporate administration	1,175		—		—
Other expense	50		305		1,009

Workforce reductions in connection with such business realignment and Clarcor acquisition integration charges in the Business Segment Information are as follows:



	2020	2019	2018
Diversified Industrial	2,394	598	1,757
Aerospace Systems	1,254	—	265
Corporate administration	31	—	—

The business realignment and Clarcor acquisition integration charges are presented in the Consolidated Statement of Income as follows:



	2020		2019		2018
Cost of sales	$	58,791	$	14,650	$	44,949
Selling, general and administrative expenses	16,773		13,180		36,813
(Gain) loss on disposal of assets	50		305		1,233

As of June 30, 2020, approximately $63 million in severance payments were made relating to business realignment and Clarcor acquisition integration charges. Remaining payments related to current-year and prior-year business realignment and Clarcor acquisition integration actions of $23 million, a majority of which are expected to be paid by June 30, 2021, 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 business realignment and acquisition integration actions described above, the timing and amount of which are not known at this time.

We also incurred the following acquisition integration charges related to the Lord and Exotic acquisitions:



	2020
Diversified Industrial	$	20,669
Aerospace Systems	1,908

These charges are primarily included in selling, general and administrative expenses within the Consolidated Statement of Income.