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Restructuring, Exit, Impairment and Integration Activities | 12 Months Ended
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Dec. 31, 2019
Restructuring and Related Activities [Abstract] |
Restructuring Activities | Restructuring, Exit and Impairment Activities The Company has announced and implemented a number of initiatives designed to improve its cost structure, better utilize overall capacity and improve general operating efficiencies. These initiatives resulted in the recognition of restructuring, exit and impairment charges in the Consolidated Statements of Operations during 2019, 2018 and 2017. The costs incurred under these initiatives include: •Restructuring and Exit Activities – These amounts relate to:
• | Employee termination and other benefits
• | Inventory adjustments to lower of cost or net realizable value
• | Costs to retain and relocate employees
• | Consulting costs
• | Consolidation of manufacturing footprint
• | Facility shutdown costs
• | Costs associated with the wind-down of Sport Yacht & Yachts
• | Asset Disposition and Impairment Actions – These amounts relate to impairments of assets and gains on the sale of assets previously impaired as part of a restructuring or exit activity. The impairments recognized were equal to the difference between the carrying amount of the asset and the estimated fair value of the asset, which was determined using observable inputs, including appraisals from independent third parties when available. When observable inputs were not available, estimated fair value was determined using the Company’s assumptions, including the data that market participants would use in pricing the asset, based on the best information available in the circumstances. Specifically, the Company used discounted cash flows to determine the fair value of the asset when observable inputs were unavailable.
The Company has reported restructuring, exit and impairment activities based on the specific driver of the cost and reflected the expense in the accounting period when the Company has committed to or incurred the cost, as appropriate. The following table is a summary of the net expense associated with the restructuring, exit and impairment activities.
(in millions) | 2019 |  | 2018 |  | 2017
Restructuring and exit activities: |  |  |  |  |
Employee termination and other benefits | $ | 11.7 |  |  | $ | 9.5 |  |  | $ | 3.2 |
Current asset write-downs | 0.5 |  |  | 18.9 |  |  | 7.2 |
Professional fees | 3.1 |  |  | 8.0 |  |  | 1.1 |
Other (A) | 0.5 |  |  | 10.7 |  |  | 1.1 |
Asset disposition and impairment actions: |  |  |  |  |
Definite-lived and other asset impairments | 3.0 |  |  | 12.7 |  |  | 31.0 |
Valuation (reversal) allowance on disposal group | — |  |  | (5.0 | ) |  | 5.0 |
Total restructuring, exit and impairment charges | $ | 18.8 |  |  | $ | 54.8 |  |  | $ | 48.6 |
(A) The charges in 2018 relate to warranty adjustments in connection with the wind-down of Sport Yacht & Yachts. The following tables summarize the change in accrued restructuring, exit and impairment charges within Accrued expenses in the Consolidated Balance Sheets for the years ended December 31, 2019, 2018 and 2017:
| Dec 31, 2018 |  | 2019 Activity |  | Dec 31, 2019
(in millions) | Accrued Charges |  | Total Charges |  | Non-Cash Charges |  | Payments (A) |  | Accrued Charges (B)
Marine Engine | $ | — |  |  | $ | 4.7 |  |  | $ | — |  |  | $ | (3.4 | ) |  | $ | 1.3 |
Boat | 15.4 |  |  | 9.6 |  |  | (3.5 | ) |  | (15.5 | ) |  | 6.0 |
Corporate | 0.7 |  |  | 4.5 |  |  | — |  |  | (3.7 | ) |  | 1.5 |
Accrued balance | $ | 16.1 |  |  | $ | 18.8 |  |  | $ | (3.5 | ) |  | $ | (22.6 | ) |  | $ | 8.8 |
| Dec 31, 2017 |  | 2018 Activity |  | Dec 31, 2018
(in millions) | Accrued Charges |  | Total Charges |  | Non-Cash Charges |  | Payments (A) |  | Accrued Charges
Boat | $ | 3.7 |  |  | $ | 54.1 |  |  | $ | (26.6 | ) |  | $ | (15.8 | ) |  | $ | 15.4 |
Corporate | — |  |  | 0.7 |  |  | — |  |  | — |  |  | 0.7 |
Accrued balance | $ | 3.7 |  |  | $ | 54.8 |  |  | $ | (26.6 | ) |  | $ | (15.8 | ) |  | $ | 16.1 |
| Dec 31, 2016 |  | 2017 Activity |  | Dec 31, 2017
(in millions) | Accrued Charges |  | Total Charges |  | Non-Cash Charges |  | Payments (A) |  | Accrued Charges
Boat | $ | 0.7 |  |  | $ | 48.6 |  |  | $ | (43.2 | ) |  | $ | (2.4 | ) |  | $ | 3.7 |
(A) Cash payments may include payments related to prior period charges. (B) The accrued charges as of December 31, 2019 are expected to be paid during 2020. Reductions in demand for the Company’s products, further refinement of its product portfolio, further opportunities to reduce costs or the cost of integrating future acquisitions may result in additional restructuring, exit and impairment charges in future periods. Actions Initiated in 2019 During 2019, the Company recorded restructuring charges within the Boat segment related to consolidating its commercial and government products operations in order to rationalize its product line to better align with customer demand. In addition, the Company announced headcount reductions aimed at streamlining the cost structure of its enterprise-wide general and administrative functions, and recorded restructuring charges in 2019 as a result of these actions. The following table is a summary of the expenses associated with the restructuring, exit and impairment activities for the year ended December 31, 2019, related to actions initiated in 2019:
(in millions) | Marine Engine |  | Boat |  | Corporate |  | Total
Restructuring and exit activities: |  |  |  |  |  |  |
Employee termination and other benefits | $ | 4.7 |  |  | $ | 3.9 |  |  | $ | 3.1 |  |  | $ | 11.7 |
Current asset write-downs | — |  |  | 0.5 |  |  | — |  |  | 0.5 |
Professional fees | — |  |  | 1.7 |  |  | 1.4 |  |  | 3.1 |
Other | — |  |  | 0.5 |  |  | — |  |  | 0.5 |
Asset disposition and impairment actions: |  |  |  |  |  |  |
Definite-lived and other asset impairments | — |  |  | 3.0 |  |  | — |  |  | 3.0 |
Total restructuring, exit and impairment charges | $ | 4.7 |  |  | $ | 9.6 |  |  | $ | 4.5 |  |  | $ | 18.8 |
Actions Initiated in 2018 In the second quarter of 2018, the Company ended the sale process of Sea Ray. As a result, the Company recorded an additional impairment of long-lived assets. During the second, third and fourth quarters of 2018, the Company also recorded additional charges in connection with the wind down of Sport Yacht & Yachts, mainly relating to inventory write-downs, increased warranty liabilities and employee severance and retention bonuses. These costs were partially offset by the reversal of the valuation allowance in the second quarter of 2018 for estimated transaction costs which was recorded when the assets and liabilities of Sea Ray were initially classified as held for sale. In 2018, the Company executed headcount reductions in the Boat segment aimed at improving general operating efficiencies. The Company also recorded charges within Corporate related to the transition of certain corporate officers. The following table is a summary of the expenses associated with the restructuring, exit and impairment activities for the year ended December 31, 2018, related to actions initiated in 2018:
(in millions) | Boat |  | Corporate |  | Total
Restructuring and exit activities: |  |  |  |  |
Employee termination and other benefits | $ | 4.7 |  |  | $ | 0.7 |  |  | $ | 5.4 |
Current asset write-downs | 18.9 |  |  | — |  |  | 18.9 |
Professional fees | 3.9 |  |  | — |  |  | 3.9 |
Other | 10.7 |  |  | — |  |  | 10.7 |
Asset disposition and impairment actions: |  |  |  |  |
Definite-lived and other asset impairments | 12.7 |  |  | — |  |  | 12.7 |
Total restructuring, exit and impairment charges | $ | 50.9 |  |  | $ | 0.7 |  |  | $ | 51.6 |
Actions Initiated in 2017 In the fourth quarter of 2017, the Board of Directors authorized the Company to exit its Sea Ray business, including the Meridian brand. In conjunction with this decision, the Company evaluated the disposal group's fair value, less costs to sell, and compared that to its carrying value at the time. As a result, the Company recorded an impairment of long-lived assets as well as a valuation allowance for estimated transaction costs. In the second, third and fourth quarters of 2017, the Company implemented headcount reductions in the Boat segment aimed at improving general operating efficiencies. In the first quarter of 2017, the Company announced the closure of its boat manufacturing facility in Joinville, Santa Catarina, Brazil, as a result of continued market weakness due partially to unfavorable foreign currency impacts in the region. As a result, the Company recorded restructuring, exit and impairment charges including the write-down of inventory. The facility manufactured certain Bayliner and Sea Ray boat models for the Latin American market. The long-lived assets at this facility were previously fully impaired. The following table is a summary of the expense associated with the restructuring, exit and impairment activities within the Boat segment, for the years ended December 31, 2018 and 2017, related to actions initiated in 2017:
(in millions) | 2018 |  | 2017
Restructuring and exit activities: |  |  |
Employee termination and other benefits | $ | 4.1 |  |  | $ | 3.2 |
Current asset write-downs (reversals) | — |  |  | 7.2 |
Professional fees | 4.1 |  |  | 1.1 |
Other | — |  |  | 1.1 |
Asset disposition and impairment actions: |  |  |
Definite-lived and other asset impairments | — |  |  | 31.0 |
Valuation allowance (reversal) on disposal | (5.0 | ) |  | 5.0 |
Total restructuring, exit, integration and impairment charges | $ | 3.2 |  |  | $ | 48.6 |

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -URI http://asc.fasb.org/topic&trid=2175745 + Details
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