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Restructuring and Other Charges, Net | 12 Months Ended
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Dec. 31, 2017
Restructuring and Other Charges, Net |
Restructuring and Other Charges, Net | (3) Restructuring and Other Charges, Net The Company’s Board of Directors approves all major restructuring programs that may involve the discontinuance of significant product lines or the shutdown of significant facilities. From time to time, the Company takes additional restructuring actions, including involuntary terminations that are not part of a major program. The Company accounts for these costs in the period that the liability is incurred. These costs are included in restructuring charges in the Company’s consolidated statements of operations. A summary of the pre‑tax cost by restructuring program is as follows:
|  | Year Ended December 31, |
|  | 2017 |  | 2016 |  | 2015 |
|  | (in millions) |
Restructuring costs: |  |  |  |  |  |  |  |  |  |
2015 Actions |  | $ | 2.4 |  | $ | 2.1 |  | $ | 13.6 |
Other Actions |  |  | 4.4 |  |  | 2.6 |  |  | 7.8 |
Total restructuring charges |  | $ | 6.8 |  | $ | 4.7 |  | $ | 21.4 |
The Company recorded pre‑tax restructuring in its business segments as follows:
|  | Year Ended December 31, |
|  | 2017 |  | 2016 |  | 2015 |
|  | (in millions) |
Americas |  | $ | 3.1 |  | $ | 1.6 |  | $ | 9.4 |
Europe |  |  | 3.3 |  |  | 3.4 |  |  | 6.7 |
APMEA |  |  | 0.4 |  |  | 0.2 |  |  | 4.2 |
Corporate |  |  | — |  |  | (0.5) |  |  | 1.1 |
Total |  | $ | 6.8 |  | $ | 4.7 |  | $ | 21.4 |
2015 Actions In 2015, the Board of Directors of the Company approved a transformation program relating to the Company’s Americas and APMEA businesses, which primarily involved the exit of low-margin, non-core product lines, and enhancing global sourcing capabilities (“phase one”). The Company eliminated approximately $165 million of the combined Americas and APMEA net sales primarily within the Company’s do-it-yourself (DIY) distribution channel. As part of the exit of non-core product lines, the Company entered into an agreement to sell an operating subsidiary in China that was dedicated exclusively to the manufacturing of products being discontinued. The sale was finalized in the second quarter of 2016, and the Company recognized a pre-tax gain of $8.7 million and received proceeds from the sale of $8.4 million. The second phase of the program involved the consolidation of manufacturing facilities and distribution center network optimization, including reducing the square footage of the Company’s Americas facilities, which together with phase one, reduced the Americas net operating footprint by approximately 30%. This phase of the program was designed to improve the utilization of our remaining facilities, better leverage our cost structure, reduce working capital, and improve execution of customer delivery requirements. As of December 31, 2017, the second phase was complete. On a combined basis, the total pre-tax cost for the Company’s transformation program related to its Americas and APMEA businesses was approximately $59.8 million, including restructuring costs of $18.1 million, goodwill and intangible asset impairments of $13.5 million and other transformation and deployment costs of approximately $28.2 million. The other transformation and deployment costs included consulting and project management fees, inventory write-offs, and other associated costs. The program originally included estimated pre-tax charges totaling approximately $65 million. In the third quarter of 2017, the total expected costs of the planned actions were reduced to approximately $60 million, primarily related to reduced expected facility exit costs and reduced other transformation and deployment costs. All costs associated with the Americas and APMEA transformation program were incurred as of December 31, 2017. The following table summarizes by type, the total incurred pre-tax restructuring costs for the Company’s transformation program related to its Americas and APMEA businesses (phase one and phase two combined):
|  |  |  |  |  |  |  |  |  |  | Facility |  |  |  |
|  |  |  |  | Legal and |  | Asset |  | exit |  |  |  |
|  | Severance |  | consultancy |  | write-downs |  | and other |  | Total |
|  | (in millions) |
Costs incurred—2015 |  | $ | 8.5 |  | $ | 0.7 |  | $ | 1.6 |  | $ | 2.8 |  | $ | 13.6 |
Costs incurred—2016 |  |  | (1.5) |  |  | 0.2 |  |  | 2.9 |  |  | 0.5 |  |  | 2.1 |
Costs incurred—2017 |  |  | — |  |  | — |  |  | 2.2 |  |  | 0.2 |  |  | 2.4 |
Total restructuring costs |  | $ | 7.0 |  | $ | 0.9 |  | $ | 6.7 |  | $ | 3.5 |  | $ | 18.1 |
The following table summarizes pre-tax restructuring costs incurred for the year ended December 31, 2017 and total pre-tax restructuring costs incurred for the program, by business segment for the Company’s Americas and APMEA 2015 transformation program. There are no remaining costs to be incurred:
|  | Year Ended |  |  |  |  |
|  | December 31, |  | Total program |  |
|  | 2017 |  | costs |  |
|  | (in millions) |
APMEA |  | $ | 0.2 |  | $ | 4.6 |  |
Americas |  |  | 2.2 |  |  | 13.5 |  |
Total restructuring costs |  | $ | 2.4 |  | $ | 18.1 |  |
Details of the restructuring reserve activity for the Company’s Americas and APMEA 2015 transformation program for the year ended December 31, 2017 are as follows:
|  |  |  |  |  |  |  |  |  | Facility |  |  |
|  |  |  |  | Legal and |  | Asset |  | exit |  |  |  |
|  | Severance |  | consultancy |  | write-downs |  | and other |  | Total |
|  | (in millions) |
Balance at December 31,2015 |  | $ | 5.0 |  | $ | 0.4 |  | $ | — |  | $ | 1.0 |  | $ | 6.4 |
Net pre-tax restructuring charges |  |  | (1.5) |  |  | 0.2 |  |  | 2.9 |  |  | 0.5 |  |  | 2.1 |
Utilization and foreign currency impact |  |  | (2.3) |  |  | (0.6) |  |  | (2.9) |  |  | (1.5) |  |  | (7.3) |
Balance at December 31, 2016 |  | $ | 1.2 |  | $ | — |  | $ | — |  | $ | — |  | $ | 1.2 |
Net pre-tax restructuring charges |  |  | — |  |  | — |  |  | 2.2 |  |  | 0.2 |  |  | 2.4 |
Utilization and foreign currency impact |  |  | (1.0) |  |  | — |  |  | (2.2) |  |  | (0.2) |  |  | (3.4) |
Balance at December 31, 2017 |  | $ | 0.2 |  | $ | — |  | $ | — |  | $ | — |  | $ | 0.2 |
Other Actions The Company periodically initiates other actions which are not part of a major program. Total “Other Actions” pre-tax restructuring expense was $4.4 million for the year ended December 31, 2017. Included in “Other Actions” are European restructuring activities initiated in 2017, the 2015 Europe restructuring actions, as well as certain other minor initiatives for which the Company incurred restructuring expenses for the year ended December 31, 2017. In the fourth quarter of 2017, management initiated certain restructuring actions related to reductions in force within the Company’s Europe segment. The restructuring activities primarily included severance benefits. The total pre-tax charges associated with the Europe restructuring activities were approximately $4.1 million with costs being fully incurred in 2017. The restructuring reserve associated with these actions is approximately $3.1 million as of December 31, 2017, and relates to severance benefits. In the fourth quarter of 2015 management initiated certain restructuring actions and strategic initiatives with respect to the Company’s Europe segment in response to the ongoing economic challenges in Europe and additional product rationalization. The restructuring actions included severance benefits and limited costs relating to asset write offs, professional fees and relocation. The total pre-tax charge for the Europe 2015 restructuring initiatives was expected to be approximately $10.0 million. As of December 31, 2017, the company revised its forecast to approximately $9.3 million. The reduction in estimated costs is primarily due to reduced expected severance costs. Through December 31, 2017, the Company has incurred approximately $7.7 million for the program to date. The remaining expected costs relate to potential additional severance and legal costs resulting from foreign statutes of limitations associated with the 2015 program; these statutes expire in 2018. The following table summarizes total expected, incurred and remaining pre-tax restructuring costs for the Europe 2015 restructuring actions:
|  |  |  |  |  |  |  | Facility |  |  |  |
|  |  |  |  | Legal and |  | Exit |  |  |  |
|  | Severance |  | consultancy |  | and other |  | Total |
|  | (in millions) |
Costs incurred—2015 |  | $ | 6.6 |  | $ | — |  | $ | 0.3 |  | $ | 6.9 |
Costs incurred—2016 |  |  | 1.3 |  |  | 0.5 |  |  | — |  |  | 1.8 |
Adjustments to restructuring costs—2017 |  |  | (1.0) |  |  | — |  |  | — |  |  | (1.0) |
Remaining costs to be incurred |  |  | 1.4 |  |  | 0.2 |  |  | — |  |  | 1.6 |
Total expected restructuring costs |  | $ | 8.3 |  | $ | 0.7 |  | $ | 0.3 |  | $ | 9.3 |
Details of the Company’s Europe 2015 restructuring reserve activity for the year ended December 31, 2017 are as follows:
|  |  |  |  | Legal and |  | Facility exit |  |  |  |
|  | Severance |  | Consultancy |  | and other |  | Total |
|  | (in millions) |
Balance at December 31, 2015 |  | $ | 6.4 |  | $ | — |  | $ | — |  | $ | 6.4 |
Net pre-tax restructuring charges |  |  | 1.3 |  |  | 0.5 |  |  | — |  |  | 1.8 |
Utilization and foreign currency impact |  |  | (2.9) |  |  | (0.5) |  |  | — |  |  | (3.4) |
Balance at December 31, 2016 |  | $ | 4.8 |  | $ | — |  | $ | — |  | $ | 4.8 |
Net pre-tax restructuring adjustments |  |  | (1.0) |  |  | — |  |  | — |  |  | (1.0) |
Utilization and foreign currency impact |  |  | (2.8) |  |  | — |  |  | — |  |  | (2.8) |
Balance at December 31, 2017 |  | $ | 1.0 |  | $ | — |  | $ | — |  | $ | 1.0 |

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 5.P.4) -URI http://asc.fasb.org/extlink&oid=27011515&loc=d3e140904-122747 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 5.P.3) -URI http://asc.fasb.org/extlink&oid=27011515&loc=d3e140864-122747 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 + Details
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