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Assets Held for Sale | 3 Months Ended
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Jun. 30, 2021
Assets Held for Sale [Abstract] |
Assets Held for Sale | Note 2: Assets Held for Sale Liquid-cooled Automotive Business On November 2, 2020, the Company signed a definitive agreement to sell its liquid-cooled automotive business to Dana Incorporated, subject to the receipt of governmental and third-party approvals and satisfaction of other closing conditions. During the first quarter of fiscal 2022, the Company and the buyer withdrew the regulatory filing for approval of the transaction in Germany. The Company and the buyer subsequently resubmitted a plan containing a modified sale perimeter for regulatory approval. In accordance with the modified sale perimeter, certain manufacturing operations will no longer convey to the buyer. In addition, the Company expects to inject additional cash into the business to counterbalance the impact of the perimeter modifications on the economic value of the pending transaction. The Company and the buyer are currently working to amend the definitive sale agreement to reflect the transaction modifications. The Company expects to record a loss on sale of approximately $30.0 million to $50.0 million upon transaction completion. The loss on sale recorded will be impacted by the final negotiated terms with the buyer and other impacts such as changes in working capital, costs to sell and net actuarial losses in accumulated other comprehensive loss related to the disposal group’s pension plans. It is possible that the loss on sale recorded could differ materially from the Company’s estimate. The Company has classified and reported the assets and liabilities within the modified sale perimeter as held for sale on the June 30, 2021 consolidated balance sheet. The Company believes it is probable that the sale will be completed within one year of the balance sheet date. The Company ceased depreciating the long-lived assets within the disposal group beginning on November 2, 2020 when it first met the criteria for held for sale classification. The Company has determined that this disposal group does not qualify as a discontinued operation for reporting under U.S. GAAP. As part of its discontinued operations assessment, the Company considered anticipated future sales to automotive and light vehicle customers as well as sales to other vehicular customers with similar product offerings and using similar heat-transfer technology within the Heavy Duty Equipment and Automotive segments. In addition, the Company will continue to operate in the same major geographical areas as it does today. In fiscal 2021, upon classification as held for sale, the Company compared the disposal group’s carrying value with its fair value, less costs to sell. Based upon the selling price for the transaction, the Company estimated implied losses in excess of the respective carrying value of the disposal group’s long-lived assets. The disposal groups’ long-lived assets consist entirely of property, plant and equipment and right-of-use lease assets. As a result, the Company recorded non-cash impairment charges of $138.3 million in fiscal 2021 to reduce the net carrying value of the disposal group’s long-lived assets to zero as of March 31, 2021. The Company reassesses the liquid-cooled disposal group’s fair value less costs to sell at each reporting period that it is held for sale until the transaction is completed. As a result of this evaluation for the first quarter of fiscal 2022, the Company recorded $5.3 million of additional non-cash impairment charges related to the Automotive segment’s held for sale assets. The impairment charges reduced the net carrying value of property, plant and equipment additions during the quarter to zero as of June 30, 2021. In connection with the modifications to the sale perimeter, the Company determined that the manufacturing operations that will not be sold to the buyer no longer meet the requirements to be classified as held for sale. U.S. GAAP requires companies to measure asset groups that revert back to held and used classification at the lower of their (i) carrying value, as if held for sale classification had not been met; or (ii) fair value at the date of the decision not to sell. As noted above, the long-lived assets within these businesses were previously impaired when they were classified as held for sale. As a result of its evaluation, the Company reversed $7.4 million of impairment charges to adjust the long-lived asset groups to their estimated fair value. For purposes of its evaluation, the Company estimated the fair value of the businesses primarily using the income approach, which is a valuation technique that focuses on future cash flows anticipated to be generated by a business. The Company’s determination of fair value involved judgement and the use of significant estimates and assumptions, including assumptions regarding future revenue projections and operating profit margins, risk-adjusted discount rates, business trends and market conditions. The fair value measurements of these businesses are categorized as Level 3 within the fair value hierarchy. Refer to Note 4 for the definition of a Level 3 fair value measurement. Previously-closed CIS Facility During the first quarter of fiscal 2022, the Company signed a definitive agreement to sell a previously-closed manufacturing facility in the U.S. As a result, the Company recorded an impairment charge of $0.3 million within the Commercial and Industrial Solutions (“CIS”) segment to write-down the property to fair value less costs to sell. During July 2021, the sale was completed and the Company received net cash proceeds of $0.7 million. Assets and Liabilities Held for Sale As of June 30, 2021, the Company presented the assets and liabilities within the modified sale perimeter of the liquid-cooled automotive business and the previously-closed CIS facility as held for sale on its consolidated balance sheet. As of March 31, 2021, the Company presented the assets and liabilities of the liquid- and air-cooled automotive businesses as held for sale. See Note 1 for additional information regarding the sale of the air-cooled automotive business, which was completed on April 30, 2021. The major classes of assets and liabilities held for sale were as follows:
|  | June 30, 2021 |  |  | March 31, 2021 |
ASSETS |  |  |  |  |  |
Cash and cash equivalents |  | $ | 11.1 |  |  | $ | 8.0 |
Trade accounts receivable - net |  |  | 31.7 |  |  |  | 54.4 |
Inventories |  |  | 14.1 |  |  |  | 24.7 |
Other current assets |  |  | 12.9 |  |  |  | 12.8 |
Property, plant and equipment - net |  |  | 115.9 |  |  |  | 164.0 |
Other noncurrent assets |  |  | 7.0 |  |  |  | 8.8 |
Impairment of carrying value |  |  | (116.6 | ) |  |  | (165.1 | )
Total assets held for sale |  | $ | 76.1 |  |  | $ | 107.6 |
LIABILITIES |  |  |  |  |  |  |  |
Short-term debt |  | $ | 10.1 |  |  | $ | 5.0 |
Accounts payable |  |  | 24.1 |  |  |  | 46.3 |
Accrued compensation and employee benefits |  |  | 8.0 |  |  |  | 15.5 |
Other current liabilities |  |  | 6.2 |  |  |  | 12.2 |
Pensions |  |  | 10.2 |  |  |  | 17.8 |
Other noncurrent liabilities |  |  | 3.9 |  |  |  | 6.5 |
Total liabilities held for sale |  | $ | 62.5 |  |  | $ | 103.3 |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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