Impairment and Restructuring Charges

6 Months Ended

Jun. 30, 2011

Impairment and Restructuring Charges [Abstract]

Impairment and Restructuring Charges

Note 11 — Impairment and Restructuring Charges

Impairment and restructuring charges by segment are comprised of the following:

For the three months ended June 30, 2011:

	Mobile		Process		Aerospace
	Industries		Industries		& Defense		Steel		Corporate		Total
| | | | | |
Impairment charges	$	0.1	$	0.2	$	0.1	$	—	$	—	$	0.4
Severance expense and related benefit costs		0.2		—		—		—		—		0.2
Exit costs		5.4		0.2		—		—		—		5.6
Total	$	5.7	$	0.4	$	0.1	$	—	$	—	$	6.2

For the three months ended June 30, 2010:

	Mobile			Process		Aerospace
	Industries			Industries		& Defense		Steel			Corporate		Total
| | | | | |
Severance expense and related benefit costs	$	(0.6	)	$	—	$	0.8	$	(0.1	)	$	—	$	0.1
Exit costs		0.5			0.2		0.2		—			—		0.9
Total	$	(0.1	)	$	0.2	$	1.0	$	(0.1	)	$	—	$	1.0

For the six months ended June 30, 2011:

	Mobile		Process		Aerospace
	Industries		Industries		& Defense		Steel		Corporate		Total
Impairment charges	$	0.1	$	0.2	$	0.1	$	—	$	—	$	0.4
Severance expense and related benefit costs		0.1		—		—		—		—		0.1
Exit costs		6.6		0.2		—		—		—		6.8
Total	$	6.8	$	0.4	$	0.1	$	—	$	—	$	7.3

For the six months ended June 30, 2010:

	Mobile		Process		Aerospace
	Industries		Industries		& Defense		Steel			Corporate		Total
Severance expense and related benefit costs	$	1.6	$	1.6	$	1.4	$	(0.1	)	$	0.6	$	5.1
Exit costs		0.9		0.2		0.3		—			—		1.4
Total	$	2.5	$	1.8	$	1.7	$	(0.1	)	$	0.6	$	6.5

The following discussion explains the major impairment and restructuring charges recorded for the periods presented; however, it is not intended to reflect a comprehensive discussion of all amounts in the tables above.

Mobile Industries

In March 2007, the Company announced the closure of its manufacturing facility in Sao Paulo, Brazil. The Company has substantially completed the closure of this facility as of June 30, 2011. Pretax costs associated with the closure could be as high as approximately $60 million, which includes restructuring costs and rationalization costs recorded in cost of products sold and selling, general and administrative expenses. The increase in costs from $40 million to $60 million was due to uncertainty around higher environmental remediation costs. Mobile Industries has incurred pretax costs of approximately $40.7 million as of June 30, 2011. During the second quarter and first six months of 2011, the Company recorded $4.9 million and $6.0 million, respectively, of exit costs associated with the closure of this facility. The exit costs were primarily related to environmental remediation costs and workers compensation claims for former associates. The Company accrues environmental remediation costs and workers compensation claims when they become probable and estimable.

Workforce Reductions

In 2009, the Company began the realignment of its organization to improve efficiency and reduce costs as a result of the economic downturn that began during the latter part of 2008. This initiative was completed in 2010. During the first six months of 2010, the Company recorded $4.8 million of severance and related benefit costs related to this initiative, which included both selling and administrative cost reductions, as well as manufacturing workforce reductions. Of the $4.8 million charge recorded during the first six months of 2010, $1.5 million related to the Mobile Industries segment, $1.3 million related to the Process Industries segment, $1.3 million related to the Aerospace and Defense segment and $0.7 million related to Corporate positions.

The following is a rollforward of the consolidated restructuring accrual for the six months ended June 30, 2011 and the twelve months ended December 31, 2010:

	June 30,			December 31,
	2011			2010
| |
Beginning balance, January 1	$	22.1		$	34.0
Expense		6.9			17.0
Payments		(4.2	)		(28.9	)
Ending balance	$	24.8		$	22.1

The restructuring accrual at June 30, 2011 and December 31, 2010 was included in other current liabilities on the Consolidated Balance Sheets. The accrual at June 30, 2011 included $5.6 million of severance and related benefits, which are expected to be paid by the end of 2011. The accrual for severance and related benefits at June 30, 2011 primarily related to the closure of the distribution center in Bucyrus, Ohio, which was completed during the second quarter of 2011, and the closure of the manufacturing facility in Sao Paulo, Brazil. The remainder of the restructuring accrual at June 30, 2011 primarily represented environmental exit costs, which are principally related to Sao Paulo, Brazil. As of June 30, 2011, the Company has $10.9 million reserved for environmental matters in Sao Paulo, Brazil, which is its best estimate of its environmental liability at this time. The Company adjusts environmental remediation accruals based on the best available estimate of costs to be incurred, the timing and extent of remedial actions required by governmental authorities and the amount of the Company’s liability in proportion to other responsible parties. The Company’s estimated total liability for this site ranges from a minimum of $10.9 million to a maximum of $20.9 million. It is possible that the estimate may change in the near term.